Jurisdiction: SUPREME COURT OF WESTERN AUSTRALIA Citation No: [2007] WASCA 13
Court: THE COURT OF APPEAL (WA)
Case No: CACV:92/2005 Heard: 6 SEPTEMBER 2006
Coram: MARTIN CJ
ROBERTS-SMITH JA
BUSS JA
Delivered: 2007-01-19
No of Pages: 18 Judgment Part: 1 of 1
Result: Appeal dismissed
Category: B
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On Appeal from: For File Number: CACV 92 of 2005
Jurisdiction: DISTRICT COURT OF WESTERN AUSTRALIA
Coram: COMMISSIONER STAVRIANOU
Citation: FIREPAT PTY LTD v CLYDEBANK PTY LTD
File Number: CIV 2894 of 2002
Parties: FIREPAT PTY LTD
CLYDEBANK PTY LTD
Catchwords: Appeal
Deficiencies in grounds of appeal and inadequacy of submissions
Allegations of breach of contract for manufacture and supply of greenhouse
Allegations of misleading and deceptive conduct and negligence
Ample evidence to sustain findings of fact made at first instance
No apparent error in evaluation of that evidence
Turns on its own facts
Legislation: Nil
Case References: Baltic Shipping Co v Dillon (1993) 176 CLR 344
Hoenig v Isaacs [1952] 2 All ER 176
House v The King (1936) 55 CLR 499
Marginson v Ian Potter & Co (1976) 136 CLR 161
Nil
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Last Updated: 2007-01-22
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION : FIREPAT PTY LTD -v- CLYDEBANK PTY LTD [2007] WASCA 13
CORAM : MARTIN CJ
ROBERTS-SMITH JA
BUSS JA
HEARD : 6 SEPTEMBER 2006
DELIVERED : 19 JANUARY 2007
FILE NO/S : CACV 92 of 2005
BETWEEN : FIREPAT PTY LTD
Appellant
AND
CLYDEBANK PTY LTD
Respondent
ON APPEAL FROM:
For File No : CACV 92 of 2005
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : COMMISSIONER STAVRIANOU
Citation : FIREPAT PTY LTD v CLYDEBANK PTY LTD
File No : CIV 2894 of 2002
(Page 2)
Catchwords:
Appeal - Deficiencies in grounds of appeal and inadequacy of submissions - Allegations of breach of contract for manufacture and supply of greenhouse - Allegations of misleading and deceptive conduct and negligence - Ample evidence to sustain findings of fact made at first instance - No apparent error in evaluation of that evidence - Turns on its own facts
Legislation:
Nil
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
Appellant : Mr B P Wheatley
Respondent : Mr P T Arns
Solicitors:
Appellant : Nicholson Clement
Respondent : Arns & Associates
Case(s) referred to in judgment(s):
Baltic Shipping Co v Dillon (1993) 176 CLR 344
Hoenig v Isaacs [1952] 2 All ER 176
House v The King (1936) 55 CLR 499
Marginson v Ian Potter & Co (1976) 136 CLR 161
Case(s) also cited:
Nil
(Page 3)
MARTIN CJ:
Summary
1 This appeal was brought from a decision of a Commissioner of the District Court. The proceedings before the Commissioner arose from a dispute relating to the sale of a kit for the construction of a greenhouse. For reasons which I will give, the grounds of appeal are without substance. The decision of the Commissioner should be affirmed and the appeal dismissed.
The Issues in the Case
2 The proceedings in the District Court were commenced by Mr Barry McFarlane and Firepat Pty Ltd ("Firepat"). Mr McFarlane is a director of Firepat. Firepat carries on business as a commercial producer of vegetables under the name of Amarillo Hydroponics at a property at Karnup.
3 The respondent, Clydebank Pty Ltd, carries on business as Advanced Environmental Structures ("AES"). AES designs, manufactures and supplies greenhouses in both kit form and as erected on site.
4 In the amended statement of claim Mr McFarlane and Firepat alleged that in September 2001 Mr McFarlane, as undisclosed principal for Firepat, entered into a contract with AES for the manufacture and supply of a greenhouse kit for a price of $57,697.20. It was alleged that it was a term of the agreement that the first of the parts of the greenhouse would be supplied by 3 October 2001 and that the greenhouse would be operational in time for the summer growing season in order that the summer crop could be picked by January 2002.
5 It was also alleged that the contract was preceded by a number of representations as to the time of delivery and a further representation to the effect that AES had previously designed, developed, manufactured and supplied greenhouses of this particular kind; namely, a greenhouse in which the roof could be opened.
6 The statement of claim advanced causes of action for breach of contract, including breach of an alleged implied term of merchantable quality; failure to supply; and failure to perform on time. Causes of action for negligent misrepresentation and misleading and deceptive conduct were also advanced. Damages were claimed for the cost of rectifying the greenhouse additional operating costs because of defects in the greenhouse and loss of profits due to alleged late delivery.
(Page 4)
7 AES denied the various causes of action asserted and counterclaimed for the balance due under the contract after allowing a credit for certain items removed from site following an alleged repudiation of the contract by Firepat's refusal to pay the balance due.
The Commissioner's Reasons
8 The Commissioner commenced his reasons by making a number of findings of fact which provide the background to the dealings between the parties. He then set out his findings as to the key events in the chronological course of dealings between the parties.
9 Those findings were to the effect that on 26 September 2001, Mr McFarlane signed an agreement for the supply of a greenhouse kit by AES and handed a cheque for the deposit due under the agreement to Mr Sadler on behalf of AES, who initialled the agreement, which was later (on 2 October 2001) signed by another officer of AES.
10 On 9 October 2001, the spigots, which were the first parts used in the construction of the greenhouse, were delivered by AES to Firepat. On 29 October 2001, Mr McFarlane attended AES's premises and inspected a prototype of the greenhouse.
11 Delivery of the greenhouse kit commenced on 14 November 2001 and on 28 November 2001 Firepat commenced construction of the greenhouse. Firepat had finished construction of the main structure of the greenhouse by 5 March 2002. It had always been agreed that the covers to the greenhouse would be installed by AES.
12 However, difficulties arose in relation to a number of items of the kit, including sagging gutters. Issues also arose in relation to the structural integrity of the greenhouse. AES attended site and offered to undertake some erection and installation work. That work was performed between 11 and 22 March 2002.
13 An employee of AES asked Mr McFarlane to sign time-sheets for the work done by AES on site during March 2002, but he refused and indicated that he would not pay for the work being done. As a result, AES removed certain items of the greenhouse kit which had not then been installed. Firepat eventually completed construction of the greenhouse about the end of September 2002.
(Page 5)
14 The Commissioner then proceeded to review the pleadings, after observing that the cases advanced by the parties had moved substantially during the course of the trial.
15 The Commissioner then made a number of general observations relating to the evidence before him, including his observation that he generally preferred the evidence adduced on behalf of AES to that adduced on behalf of Firepat. Specifically, he preferred the evidence of Mr Sadler to that of Mr McFarlane and his son. He recorded his impression that Firepat's case exaggerated the effect of the problems encountered and the extent of the delay. He was entirely unconvinced by the evidence adduced in support of the claim for loss of profits, both as to the facts giving rise to the claim and the expert evidence given in support of the claim.
The Parties to the Contract
16 The Commissioner then dealt with the issue concerning the identity of the parties to the contract. He accepted Firepat's contention to the effect that Mr McFarlane had entered into the contract as agent for and on behalf of Firepat as undisclosed principal.
The Terms of the Contract
17 The Commissioner's findings as to the terms of the contract, including those written terms which he considered to be material were then set out.
The Claim for Misleading and Deceptive Conduct
18 Next, the Commissioner dealt with Firepat's claim for misleading and deceptive conduct. He observed that Firepat relied upon three express representations in support of its claim and a course of conduct during which various alleged failures to supply information resulted in the conduct being properly characterised as misleading and deceptive.
19 One of the express representations relied upon was an allegation that AES represented that it had previously designed, developed, manufactured and supplied roof-opening greenhouses. The Commissioner found that if such a representation was made, it was true. He accepted Mr Sadler's evidence to the effect that he had not represented that a roof-opening greenhouse had actually been manufactured and constructed by AES.
(Page 6)
20 The second express representation relied upon was a representation to the effect that the first parts of the greenhouse would be supplied by 3 October 2001 with the balance to be supplied from 11 October 2001. The Commissioner found that although there may have been some slight delay in the supply of the spigots beyond that represented, it was not material because they were delivered well in advance of the balance of the rest of the kit. He further found that no representation was made to the effect that the balance of the kit would be supplied as and from 11 October 2001.
21 The third express representation relied upon was an alleged representation to the effect that the greenhouse would be operational in time for the summer growing season and ready for picking the summer crop by January 2002. Mr McFarlane gave evidence to the effect that such a representation was made. However, Mr Sadler's evidence was to the effect that he stated that the greenhouse would be operational by the end of January 2002. The Commissioner preferred the evidence of Mr Sadler and found that his statement was, of course, dependent upon Firepat's performance in the construction of the kit.
22 The Commissioner observed that in the course of the various amendments to the statement of claim, a number of different representations dealing with the topic of the time at which the greenhouse would be ready had been pleaded.
23 After then referring to some of the evidence before him, the Commissioner accepted Mr Sadler's evidence and rejected that of Mr McFarlane and his son. He did so largely on the basis of his finding that Mr Sadler was well aware of the time that it would take to manufacture, construct and fit out the greenhouse and that he was, therefore, well aware that those steps could not be taken in sufficient time for a crop to be grown and picked by January 2002. Implicit in the Commissioner's observations is a conclusion that Mr Sadler would not have wilfully misrepresented the time that would be required to manufacture, construct and fit out the greenhouse.
24 The Commissioner also found that at the time when Mr Sadler made a representation to the effect that the greenhouse would be operational by the end of January 2002, he had reasonable grounds for making that representation. That was because Mr Sadler was aware that the usual time for construction of such a greenhouse was between four and six weeks which, after allowing time for the manufacture and supply of the
(Page 7)
greenhouse, left ample time for the process to be completed by the end of January 2002.
25 The Commissioner then turned to the allegations of misleading and deceptive conduct based upon alleged failures to provide information. The first alleged failure addressed by the Commissioner was the allegation of a failure to inform Firepat that AES had not previously manufactured or supplied a roof-opening greenhouse. The Commissioner reiterated his finding that what had been said by AES about its previous experience in the design and manufacture of roof-opening greenhouse was true.
26 The next allegation addressed by the Commissioner was an alleged failure to advise Firepat that a prototype was to be constructed. The Commissioner found that the failure to advise that a prototype was to be constructed was irrelevant because AES had assumed the contractual obligation to supply the agreed greenhouse. Inferentially, his view was that whether or not AES intended to construct a prototype in order to meet its contractual obligations was a matter for it.
27 The next allegation was that of a failure to advise that the greenhouse may not be operational in time for the summer growing season and ready for picking a summer crop by January 2002. In response to this allegation, the Commissioner repeated his finding that there was no representation to the effect that the greenhouse would be ready for the summer growing season so that the summer crop could be picked by the end of January 2002. He further observed that the time at which the greenhouse would become operational was dependent upon when the greenhouse kit was delivered and how long it took Firepat to construct the greenhouse. The time for delivery was governed by the contract. Accordingly, the Commissioner concluded that there was nothing in the conduct of AES that could be characterised as misleading and deceptive in relation to the time at which the greenhouse would become operational.
28 It was further alleged by Firepat that AES failed to advise that the kit supplied would not contain instructions required for construction and that Firepat would have to obtain oral instructions from AES. In relation to this allegation, the Commissioner noted Mr Sadler's evidence was to the effect that he told Mr McFarlane that oral instructions would be provided. The Commissioner accepted that evidence.
29 The Commissioner also referred to evidence given by Mr McFarlane to the effect that the plans that were provided were not to scale and were
(Page 8)
insufficiently detailed. The Commissioner did not accept that evidence. He did accept the evidence of Mr Dann, a supervisor of AES, to the effect that he regularly attended the property and provided assistance and advice as required. He also accepted Mr Dann's evidence to the effect that Firepat's construction of the greenhouse was intermittent and that there were significant periods of time during which Firepat undertook no construction work.
30 The Commissioner also referred to the evidence given by a practising engineer, Mr Frank Maroni. He did not accept his criticisms of the plans that had been supplied. Instead, he accepted the evidence of Mr Youngson, a director of AES, to the effect that during the period to which this dispute related, the plans contained the dimensions necessary to enable construction to proceed. For these various reasons, he rejected the allegation of misleading and deceptive conduct pertaining to the plans and instructions.
31 The final allegation of misleading and deceptive conduct arising from a failure to disclose concerns an allegation of a failure to advise that the gutters supplied for the greenhouse would not be trafficable. In that regard, the Commissioner noted that there was no allegation that there was an express term of the contract to the effect that the gutters would be trafficable, nor was there any allegation that there was an express representation to the effect that the gutters would be trafficable.
32 The Commissioner then reviewed the conflicting evidence given by two consultant engineers on the topic of the adequacy of the gutters. For reasons which he gave, he preferred the evidence given by the expert called on behalf of AES and accepted the evidence that the guttering supplied was adequate for a one in 20-year storm which the Commissioner considered to be appropriate given that the greenhouse would not have a life in excess of 25 years.
33 The Commissioner also reviewed the evidence in respect of the extent to which it was possible to walk along the gutters. He did not accept evidence to the effect that a capacity to walk on gutters was industry standard and in any event, observed that there was no term of the contract to the effect that the greenhouse would be supplied to industry standard. Moreover, on the evidence, he found that the gutters on the greenhouse supplied by AES could be walked in, albeit with some difficulty.
(Page 9)
34 Accordingly, the Commissioner rejected the allegation that there was any misleading and deceptive conduct in relation to the gutters. Nevertheless, he found that the claim for additional expense occasioned by the alleged inadequacy of the gutters had not been sustained by any evidence.
Reliance
35 The Commissioner then addressed the question of the extent to which Firepat had relied upon what was said by Mr Sadler on behalf of AES. For reasons which he gave, he concluded that Firepat did not in fact rely upon anything said by Mr Sadler to enter into the agreement for the supply of the greenhouse kit. Prominent amongst those reasons was his finding that a decision had been made to enter into the agreement prior to the meeting of 26 September 2001 in which it was alleged that the contentious representations were made.
The Contractual Claim
36 Turning to the contractual claim, the Commissioner concluded that the terms of the agreement were constituted by the writing signed by the parties. He rejected the proposition that there were oral terms as alleged by Firepat or that there was a collateral contract in the terms alleged by Firepat.
37 The Commissioner further found that the time taken to deliver the kit was reasonable and would, in any event, have enabled the greenhouse to have been completed by the middle or perhaps the third week of January.
38 The Commissioner considered the various allegations of breach of contract and accepted the following: that AES incorrectly or mistakenly supplied the wrong drive motor which necessitated the acquisition of a replacement at a cost of $1380; that an extractor fan supplied by AES failed following delivery, which cost Firepat $150; and that it was necessary to engage contractors to complete work which AES had been obliged to perform after AES left site. After reviewing the evidence, he allowed a sum of $10,000 for the cost of such work. He also allowed a claim by Firepat for $133.66 for the acquisition of TEK screws because an insufficient number was supplied to enable construction of the kit. He further allowed Firepat a sum of $251.70 in respect of work it was required to do installing "pops".
39 In relation to deficiencies in performance of the contract, the Commissioner otherwise rejected the various claims made by Firepat.
(Page 10)
The Negligence Claim
40 The Commissioner observed (correctly) that Firepat's claim in negligence relied upon the same pleaded representations and failure to disclose information as its claim in misleading and deceptive conduct. Without determining whether there was in fact a duty of care as between vendor and purchaser in the circumstances of the case before him, the Commissioner held that the findings of fact he had made when considering the claim for misleading and deceptive conduct necessarily meant that the negligence claim must also fail.
Credit for Items Removed on 22 March 2002
41 The Commissioner observed that there was a minor dispute between the parties as to the amount of the credit to be allowed to Firepat in respect of the materials removed by AES on 22 March 2002. AES proposed a credit of $4043.64, whereas Firepat proposed a credit of $5159.05. The Commissioner allowed the latter sum.
The Counterclaim by AES
42 As the Commissioner observed, there were two components to the counterclaim by AES. The first, being the payment of the final instalment due pursuant to the contract ($5769.72), was conceded by Firepat in closing submissions. Notwithstanding that concession, the Commissioner went on to find that the contract had been substantially performed, with the result that AES was entitled to the balance of the contract price subject to adjustments to reflect any deviation from the agreed standard of performance.
43 The second aspect of the counterclaim by AES was for work done in relation to erection and installation of the greenhouse. The Commissioner reviewed the evidence relating to the claim and accepted the evidence adduced on behalf of AES, which resulted in him allowing the claim in the amount of $13,574.
Combined Effective Claims and Counterclaim
44 It followed from the findings made by the Commissioner that he had allowed Firepat's claims in a total amount of $11,915.36 and the counterclaim by AES in the total amount of $14,184.67. Judgment was accordingly entered in favour of Firepat in the amount of $11,915.36 and in favour of AES in the amount of $14,184.67.
(Page 11)
Costs
45 After hearing argument, the Commissioner ordered that there be no order as to costs save that "the plaintiff" [sic] pay the costs of AES of that part of the trial which related to proof of "the plaintiff's" claim for loss of profits. As that was a claim by Firepat rather than Mr McFarlane, it is reasonable to construe the costs order as having been made against Firepat.
The Appeal
46 The appeal was brought only by Firepat. No appeal was lodged by Mr McFarlane. It has had a tortured history. A notice of appeal was lodged on 26 July 2005. Grounds of appeal and submissions in support of those grounds were lodged on 22 September 2005. At a hearing before the Registrar of the Court of Appeal on 22 November 2005, the Registrar pointed out what she (correctly) perceived to be various deficiencies in the grounds of appeal. The Registrar also referred to the inadequacy of the submissions which had been filed in support of those grounds. Leave was accordingly given to the appellant to amend its grounds of appeal and submissions. Amended grounds of appeal were filed on 22 December 2005. However, the essence of the amendments was simply the insertion of a number of evidentiary references against the existing grounds of appeal. No attempt was made to remedy the substantive deficiencies in the grounds. Nor was any attempt made to amend the submissions, which were manifestly inadequate and failed to correspond in any meaningful sense to the grounds of appeal. The appeal was listed for hearing on 6 September 2006. On 25 August 2006, the appellant applied to file and serve substituted submissions. While those substituted submissions at least attempted to address some of the grounds of appeal, they remained manifestly deficient in a number of respects. For example, they made no reference to grounds 1, 8 or 13, but did not advise whether or not those grounds were abandoned.
47 When the appeal was called on for hearing, counsel for the appellant moved to substitute the revised submissions in place of those which had been filed almost a year earlier and in respect of which leave to amend had been granted but not taken up. Notwithstanding the manifest deficiencies in the proposed substituted submissions and their failure to comply with the Supreme Court (Court of Appeal) Rules 2005 (WA), because there was no objection to the application to substitute those submissions and because the Court was left in the invidious position of having to choose between two deficient sets of submissions, the Court reluctantly granted the leave sought.
(Page 12)
48 The Court was then advised by counsel for the appellant on no less than seven occasions that ground 1 of the appeal had been abandoned "because it was considered that it would be difficult to challenge the findings that have been made as to credibility by virtue of the learned Commissioner's findings". However, after it was pointed out in argument that it was difficult to see how ground 2 could survive the abandonment of ground 1, counsel for the appellant sought to proceed with ground 1 (in respect of which no written submissions had ever been filed).
49 After further argument and the luncheon adjournment, the application to proceed with ground 1 was pressed. The Court then indicated that it would hear oral argument in support of that ground and then reserve its decision on the question of whether the ground would be entertained.
50 It further emerged during the course of argument that grounds 8(c) and 13 were, in fact, pursued, even though no written submissions had ever been filed in support of those grounds.
51 It must also be observed that on numerous occasions during the course of oral argument, counsel for the appellant sought to advance propositions that went well beyond any of the grounds of appeal, notwithstanding their prolixity.
52 Unfortunately, this case provides a paradigm example of how not to prepare and present an appeal. Because of the various deficiencies in the preparation and presentation of the appellant's case, it has been necessary for me, in the interests of justice, to undertake a detailed review of the evidence adduced at trial in order to satisfy myself that the evidence sustained the findings of fact made by the Commissioner and that the appellant has not suffered an injustice. Having undertaken that task, I am satisfied that the evidence adduced amply sustains the findings of fact made by the Commissioner. I will refer below to particular evidence only to the extent necessary to dispose of the specific grounds of appeal. There was no significant contention before us to the effect that the Commissioner had erred in law in the approach which he took to the case.
The Grounds of Appeal
Ground 1
53 I have already referred to the chequered history of ground 1. Like many of the grounds, this ground is prolix and relies upon some particulars which are irrelevant to the basic proposition advanced
(Page 13)
challenging the Commissioner's finding that Mr Sadler had reasonable grounds for making a representation to the effect that the greenhouse would be operational by the end of January 2002.
54 There was ample evidence to sustain the finding of fact made by the Commissioner to the effect that Mr Sadler had reasonable grounds for his representation that the greenhouse would be operational by the end of January 2002. The representation was made on 26 September 2001. The evidence established that although AES had not committed to a particular delivery date, to get everything on site usually took six to eight weeks. That meant that the delivery of the greenhouse kit was likely to occur from mid to late November 2001. In fact, delivery did occur over that period and erection of the greenhouse had commenced on or about 28 November 2001.
55 The evidence also established that a reasonable estimate of the labour time required for the erection of the greenhouse was 44 man days. Of course, erection of the greenhouse was the responsibility of Firepat, and Mr Sadler could not be expected to have known the extent of the resources which it would apply to the task. Had three men been applied full-time to the task, construction could have been completed in approximately three weeks. As the Commissioner found, if two men were applied to the task, construction would take from four to six weeks. On either scenario, there was ample time to complete construction by the end of January 2002.
56 Notwithstanding the appellant's equivocation in relation to ground 1, I have assessed its merits. I am satisfied that it is without substance.
Ground 2
57 Like ground 1, this ground is prolix and relies upon eleven particulars in support of its basic premise that the Commissioner erred in finding that there was no misleading or deceptive or negligent conduct in AES failing to advise Firepat that the greenhouse may not be operational by January 2002. Many of those particulars are simply irrelevant.
58 As an example of the irrelevance of the particulars advanced in support of the ground, the first subparagraph relied upon the Commissioner's acceptance of evidence from Mr Sadler to the effect that, "[T]here was a real push by Firepat in the negotiation stage to have the greenhouse finished by the end of January 2002". However, that evidence does not go to the critical question of whether the representation made was misleading or deceptive, or made negligently, but only to the question
(Page 14)
of whether there was a representation made that the greenhouse would be operational by January 2002, or perhaps to the question of reliance. As the Commissioner expressly found that Mr Sadler had in fact represented that the greenhouse would be operational by January 2002, reference to evidence that supports that finding does not assist Firepat's case. The finding was subject to the Commissioner's observation that the achievement of that objective was to an extent within the control of Firepat, given its responsibility for erection.
59 The second paragraph of the particulars relied upon in support of ground 2 is the observation that the Commissioner found that Mr Sadler had made a representation to the effect that the greenhouse "would be operational by the end of January 2002". But, of course, that finding only goes to the question of whether or not the representation was made and does not go to the question of whether there were reasonable grounds for making it or whether it was negligent to make the representation.
60 The third paragraph of the particulars relied upon in support of ground 2 is an allegation that Firepat entered into the contract for the purpose of achieving operational status by January 2002 and after receiving the representation made by Mr Sadler. But, of course, that evidence goes only to the question of reliance; not to the basic proposition contained in ground 2 concerning the existence of reasonable grounds for the making of a representation as to the time at which the greenhouse would become operational.
61 I think it is unnecessary for me to deal with the remaining eight paragraphs of particulars specifically enunciated in support of ground 2. Some of them do go, albeit indirectly, to the question of whether there were reasonable grounds for making a representation to the effect that the greenhouse would be operational by January 2002. However, for the same reasons I have given in relation to ground 1, there was ample evidence to justify the Commissioner's finding that there were reasonable grounds for making that representation and his conclusion that in making the representation, AES had not engaged in misleading or deceptive conduct, nor had it been negligent.
62 It follows that ground 2 is without substance and must fail.
Ground 3
63 This ground challenges the Commissioner's finding that Firepat did not rely upon what was said by Mr Sadler. The particulars relied upon in support of this ground appear to rely substantially upon the evidence of
(Page 15)
Mr McFarlane and his son and are those which the Commissioner subsequently rejected. As the appellant's challenges to the Commissioner's findings in those respects are without substance, it is therefore unnecessary for me to deal substantively with the ground because, of course, the issue of reliance only arises if the appellant succeeds in disturbing the Commissioner's conclusion that there was neither misleading or deceptive conduct, nor negligence.
Grounds 4 - 7
64 Each of these grounds is concerned with aspects of the Commissioner's rejection of Firepat's attempt to quantify its claim for lost profits. Obviously, those grounds only arise if the appellant succeeds in challenging the findings of fact which led the Commissioner to dismiss the claim for lost profits in its entirety. Because the appellant has not succeeded in shaking those findings of fact in any way, it is unnecessary to determine issues relating to the quantification of the unsuccessful claim for lost profits.
Ground 8
65 Only one aspect of this ground was pursued on the hearing of the appeal, although, as I have observed, it was not supported by any written submissions. The aspect pursued complains of the Commissioner's rejection of Firepat's claim for an amount of $2310, being engineering fees incurred to obtain a report on the structural stability of the greenhouse. However, as the Commissioner found that no structural problems with the greenhouse were established on the evidence, his rejection of the claim was plainly correct. There is therefore no substance in this ground.
Grounds 9 and 10
66 These grounds challenge the Commissioner's conclusion that the final payment of $5769.72 was due to AES because the contract had been substantially performed. The grounds are pressed despite the Commissioner's observation that the entitlement of AES to a credit in this amount was conceded by Firepat in its closing submissions.
67 Although not quite enunciated in these terms, Firepat's argument, put simply, appears to be that the contract, properly construed, was an entire contract, so that complete performance was a condition precedent to its liability to pay the stipulated price: see for example, Prof Glanville Williams, "Partial Performance of Entire Contracts" (1941) 57 Law
(Page 16)
Quarterly Review 373 referred to Baltic Shipping Co v Dillon (1993) 176 CLR 344.
68 This implicit proposition as to the construction of the contract is patently untenable when the contract provides, as it did in this case, for payment of the price by instalments. Although the contract stipulated that the final instalment was payable 60 days from complete delivery of materials, in my view, this is a provision stipulating the time at which payment was to be made, rather than a provision stipulating a condition precedent which had to be completely performed before any payment was due.
69 As contractual construction is the search for the intention of the parties, to be ascertained through the language they have used and the commercial context of its use, it cannot reasonably be supposed that the parties intended that no final payment had to be made if one TEK screw was not delivered. In any event, all materials were fully delivered to site, albeit that some materials were later removed by AES upon the occurrence of what it reasonably took to be repudiatory conduct on the part of Firepat.
70 Reference was also made in argument to the notion of practical completion. It was asserted for Firepat that by reason of various deficiencies, the greenhouse never reached practical completion. That proposition suffers two fundamental defects:
(a) the Commissioner found, and it was not disputed, that the greenhouse was operational by at least October 2002;
(b) there is no contractual provision conditioning payment by reference to the achievement of practical completion.
71 Accordingly, in my opinion, the Commissioner was entirely correct to rely, as he did, upon the doctrine of substantial performance to conclude that AES was entitled to payment of the price in full, subject to any adjustments due to deficient performance: see Hoenig v Isaacs [1952] 2 All ER 176. The finding that the contract had been substantially performed was amply justified by the evidence.
Ground 11
72 This ground challenges the Commissioner's acceptance of the counterclaim by AES for payment at an hourly rate for work it had done in relation to erection and installation of the greenhouse. However, that conclusion was amply justified by the evidence given by Mr McFarlane to
(Page 17)
the effect that the hourly rate charged by AES was reasonable and that the work had been done by AES. Although the appellant asserted at first instance and again on appeal that the work was, in fact, only rendered necessary because of defects in the greenhouse kit supplied, the Commissioner found otherwise and there was ample evidence to sustain that finding.
Ground 12
73 Ground 12 complains that judgment on the counterclaim was entered against Firepat when it should have been entered against Mr McFarlane. Leaving to one side the fact that Mr McFarlane and Firepat were jointly represented at trial and that no point was taken at trial as to the party against whom judgment on the counterclaim should be entered, the ground is, in any event, entirely without substance given that the plaintiffs themselves asserted that Mr McFarlane was acting as agent for Firepat as undisclosed principal.
74 In those circumstances, it is clear that AES was entitled to move for judgment against either Mr McFarlane as agent or Firepat as undisclosed principal: see Marginson v Ian Potter & Co (1976) 136 CLR 161 at 169 (per Gibbs and Mason JJ). While judgment cannot be obtained against both the agent and the undisclosed principal (see Marginson (supra)), on Firepat's own case, AES plainly had a claim against it as the undisclosed principal of Mr McFarlane. This ground is therefore totally misconceived.
Ground 13
75 This ground challenges the order made by the Commissioner in respect of costs on the ground that the evidence established that the conduct of AES delayed the completion of the greenhouse causing Firepat to suffer loss to profits. The first and most obvious difficulty with this ground is the fact that the Commissioner found that AES were not, in fact, responsible for substantial delay in completion of the greenhouse and that finding has not been successfully challenged. Needless to say, before the discretionary exercise of the power to award costs can be challenged, it must, of course, be established that there was an error of principle in the exercise of the discretion: see for example, House v The King (1936) 55 CLR 499. In the present case, no such error of principle has been identified. For my part, if there was any error on the part of the Commissioner in relation to the award of costs, he seems to have been perhaps a little harsh in only allowing AES its costs in respect of that portion of the proceedings relating to the claim for loss of profits, given
(Page 18)
that Firepat and Mr McFarlane were substantially unsuccessful in their claim and ended up receiving less by way of judgment than was entered against them. In those circumstances, there is, I think, a cogent argument to the effect that AES should have received its costs of the entire proceedings, but no cross-appeal to that effect was brought and again, an error of principle would have to be established before the discretionary award of costs could be disturbed.
76 For these various reasons, in my opinion, this appeal must be dismissed.
77 ROBERTS-SMITH JA: I agree with the Chief Justice.
78 BUSS JA: I agree with the Chief Justice.
