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Queensland Judgments
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  • Unreported Judgment

Holmwood Highgate Aust Pty Ltd v Imperial Machinery and Manufacturing Industries Pty Ltd

 

[2019] QDC 232

DISTRICT COURT OF QUEENSLAND

CITATION:

Holmwood Highgate Aust Pty Ltd v Imperial Machinery and Manufacturing Industries Pty Ltd & Ors [2019] QDC 232

PARTIES:

HOLMWOOD HIGHGATE AUST PTY LTD

(plaintiff)

v

IMPERIAL MACHINERY AND MANUFACTURING INDUSTRIES PTY LTD

(first defendant)

and

ARNO HEICK

(second defendant)

and

CAROL ANN STELLA HEICH

(third defendant)

FILE NO/S:

BD1510/2017

DIVISION:

 

PROCEEDING:

Civil trial

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

22 November 2019

DELIVERED AT:

Brisbane

HEARING DATE:

4, 5 September 2019

JUDGE:

McGill SC DCJ

ORDER:

Judgment that the first defendant pay the plaintiff $256,966.31, including $30,630.31 by way of interest.  Claims against the second and third defendants dismissed. Counterclaim dismissed.  

CATCHWORDS:

CONTRACT – Offer and acceptance – terms of the contract – whether repudiation – whether contract terminated – recovery of money paid and damages for breach.

Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 – cited.

Cooper v Australian Electric Co (1922) Ltd (1922) 25 WALR 66 – considered. 

Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 – cited.

Firestone Tyre Co v Vokins [1951] 1 Lloyd’s Rep. 32 – cited.

Istros v Dahlstroem [1931] 1 KB 247 – cited.

Nissho Iwai Australia Ltd v Malaysian International Shipping Corp (1989) 167 CLR 219 – cited.

Ownit Homes Pty Ltd v Batchelor [1983] 2 Qd R 124 – cited.

Shepherd v Felt Textiles of Australia Ltd (1931) 45 CLR 359 – applied.

Sindel v Georgiou (1984) 58 ALJR 515 – cited.

White Trucks Pty Ltd v Riley (1948) 66 WN (NSW) 101 – cited.

Zorba Structural Steel Co Pty Ltd v Watco Pty Ltd (1993) 115 FLR 206 – considered.

COUNSEL:

D de Jersey for the plaintiff
B A Hall for the defendants

SOLICITORS:

Ellem Warren Lawyers for the plaintiff

Everingham Lawyers for the defendants

  1. [1]
    It is common ground on the pleadings that the plaintiff and the first defendant entered into a contract for the supply by the first defendant to the plaintiff of a machine for a particular price. The plaintiff paid a “deposit” of 30% of the contract price, but no other payment has been made by it in respect of the contract. The defendant[1] has not constructed and delivered the machine.  The plaintiff claims a refund of the amount paid, together with damages assessed as the additional cost to which the plaintiff was put in acquiring a substitute machine elsewhere.  The defendant counterclaims for damages for breach of contract, alleged to be the difference between the contract price and the amount already paid.
  1. [2]
    The counterclaim can be easily dealt with. The contract was to build and deliver and install a machine, and it was clearly an entire contract.[2]  The machine was not built, delivered and installed, so the defendant has never become entitled to the contract price.  Its remedy, if any, is damages for breach of contract.  If the machine had been constructed, the quantification of the defendant’s loss would be the contract price less the amount already paid and less the market value of the machine.  But the machine was never completed.  In those circumstances, the measure of damages is the amount expended by the defendant on constructing the machine plus an allowance for the profit the defendant would have made had the contract been completed, minus the amount already paid by the plaintiff.[3]  But there was no evidence to quantify the first or second of these figures, and the defendant has failed to prove any damages for breach of contract, so at best it could recover only nominal damages.

Background

  1. [3]
    The plaintiff company is a metal fabricator, and in early 2016 wanted a machine to roll metal plates into particular shapes for a job that was due to commence in October 2016. To that end Mr Maddox, a contract administrator then employed by the plaintiff, telephoned Mr Heick in February 2016 and asked whether the defendant could supply a plate rolling machine capable of rolling plate sections 5 metres long in a variety of shapes, to work on a job due to start in October.[4]  He was invited by Mr Heick to go to the defendant’s workshop and did so, and it appeared to him that the workshop was capable of producing such equipment: p 13.  He said that Mr Heick told him that the steel for the rollers “would be hard to come by”.  He was also shown photographs of rollers that had previously been produced there, and given an address where he could look at one such machine that day.  He went to that address and looked at the machine; it was somewhat different from the machine they were looking for, but showed good workmanship and he regarded it as satisfactory: p 14.
  1. [4]
    Mr Maddox said that while at the defendant’s workshop he told Mr Heick that they wanted a roller capable of rolling conical shapes, because of other work that they do from time to time, and that Mr Heick told him that that was difficult but they had someone who could design a control system that could do it.[5]  Mr Heick denied this: pp 76, 101.  He said that no one can do that successfully on a standard machine, i.e. without tapered rollers; but a skilful operator could produce cones manually, and he had said this to Mr Maddox.  
  1. [5]
    On 28 February 2016 Mr Heick sent Mr Maddox an email saying “attached quote as discussed”.[6]  There were two attachments, one of which was a document described as “quotation no. Q16-HPR4R” dated 26 February 2016, which the contract administrator agreed was attached to the email (p 16),[7] and another document “terms and conditions.doc.”  The defendant said this was the document at pp 61, 62 of Exhibit 1, but Mr Maddox said that that was not attached: p 15.  The second page of the “quotation” listed some brief specifications, one of which was “rolling width 4500 mm.”  Mr Maddox said that this was not the width specified in the conversation he had with Mr Heick, which was 5010 mm, and in late February he spoke to Mr Heick about the quote and asked him to change the width.[8] 
  1. [6]
    A revised quote was sent as an attachment to an email dated 21 March 2016 from Mr Heick (Exhibit 1, p 12) which specified a rolling width of 5010 mm, although somebody has at some point written “6000 mm” on the document.[9]  Mr Maddox said that after he received that document he had a telephone call from Mr Heick and told him that thereafter the matter would be handled by Mr Reynolds, a project engineer of the plaintiff: p 17.[10]  It was accepted that there were no terms and conditions attached to the email which had the second quote as an attachment.
  1. [7]
    On 24 May 2016 the plaintiff emailed to the defendant a purchase order no. 82786 for the plate roller with a programmable controller “as per quote Q16-HPR-4R/REV210416” for a total price of $283,200 plus GST.[11]  The purchase order went on to reproduce information about what the quote included, and the payment schedule, and said: “completion required early October”.  It also said at the top under the number of the purchase order: “date required 3/10/2016”.
  1. [8]
    Mr Heick said that when he did the revised quote the material for the rollers were available in Western Australia: p 78. Accordingly the revised quote allowed extra time because of the need to transport it from Western Australia: pp 79, 94. He said that on 25 May after he received the order he telephoned Mr Maddox and told him there was “no way in the world we can build a machine in that time period”, referring to the nominated delivery date of 3 October: p 79. He said that he told Mr Maddox that there was no deposit paid, they had been caught before and until the deposit was paid they do not do a thing: p 80. He said Mr Maddox told him that he would sort out payment, and said: “don’t worry about the delivery, just do the best you can”: p 80.  Mr Maddox said there was no such call: p 29. 
  1. [9]
    I do not accept that Mr Heick made the phone call that he claims to have made on 25 May, or that he ever advised the plaintiff that the delivery requirement in the purchase order was unacceptable. At that stage the available time before the date nominated in the plaintiff’s order, 3 October, fell in about the middle of the range of time to deliver the machine contained in the quote of 21 March, 16 to 23 weeks, namely 19.5 weeks. The time nominated in the purchase order was therefore broadly consistent with the delivery time nominated in the quote, subject to work starting promptly. Mr Heick said that he could not do anything until he received the first payment, and that is plausible enough, but it took him a week even to send an invoice for the first payment.[12]  It is unlikely that he would have been complaining to the plaintiff about the failure to make the first payment when he had not sent an invoice for it himself.  Apart from anything else, his own terms and conditions document specified that payments were to be made “upon receipt of our invoice”.[13] 
  1. [10]
    There is also the consideration that at that stage, according to Mr Heick’s evidence, he had the materials arranged from Western Australia, and he only lost access to them (or became aware of that loss) on 13 June,[14] so that the difficultly that he complained about in relation to the availability of materials to produce the rollers did not at that stage exist.  His version was that that difficulty arose because of the delay in making the payment on the invoice, but that does not explain why in a phone call on 25 May he would reject in such extravagant terms a delivery date of 3 October.  As well, if the plaintiff did have a contract coming up for which it needed the machine, Mr Maddox would surely not have responded in the way Mr Heick claimed. 
  1. [11]
    On the whole I regard Mr Heick’s account of this telephone call as contrived and implausible. I have some other concerns about his evidence, which reflect on his credibility, as discussed below, and on the whole I do not accept that he made this phone call in the terms described. Indeed, I do not accept that there was any express rejection or disavowal by Mr Heick of the delivery time specified in the plaintiff’s purchase order. It follows that, if a contract subsequently came into existence through the acceptance of that offer by conduct, it was a contract which incorporated that provision about the required delivery time.
  1. [12]
    On 30 May 2016 the defendant sent the plaintiff invoice no. 8487 which referred to the plaintiff’s order number 82786 and the defendant’s revised quote, and said it was for “30 per cent deposit due on placement of order” plus GST.[15]  Mr Maddox said that in June 2016 he received a phone call from Mr Heick to say that he had not received the payment and if they wanted the machine on time they had to make sure the payment was made: p 18, p 29.  He immediately told Mr Reynolds about this conversation, and Mr Reynolds said that he arranged for payment to be made the following day.  The payment in fact was made on 14 June 2016, which would be consistent with Mr Heick chasing up payment which had not been made immediately on invoice.
  1. [13]
    Mr Heick said he made the call on 13 June, but said he told Mr Maddox that the material that they had had on hold was gone and at that stage, no one had paid a deposit: p 80. He said that on this occasion he told Mr Maddox that the delivery of the machine would depend on what was available, and that he was investigating obtaining material from other merchants, or obtaining the rollers from a machine that the plaintiff had already looked at but rejected. For reasons given later, I prefer the evidence of Mr Maddox, and reject Mr Heick’s version of this conversation.[16] 
  1. [14]
    Mr Heick did pursue the option of obtaining the second-hand rollers, although he said that the negotiations to acquire them dragged on. On 27 July he deposited money to the vendor’s account to encourage them to sell, and a week later they agreed to accept his offer: p 81. Later when he had been crossed-examined and I asked Mr Heick some questions he said that he had access to the second-hand machine “nearly towards the end of July,” and that the rollers were removed from the premises where they were over a period of a month: p 2-36.
  1. [15]
    The next communication between the parties occurred on 19 August 2016 when Mr Reynolds sent an email to the defendant asking Mr Heick to provide “a schedule update on the plate rollers”: Exhibit 1, p 20.  It elicited no response.  Mr Heick said that he probably received the email but did not respond to it because he did not know who Mr Reynolds was.[17]  The same fate befell another email from Mr Reynolds to the defendant sent on 7 September 2016, which pointed out that they were now four to five weeks away from needing the machine, and asked what the electrical power requirements were for installing the machine: Exhibit 1 p 22. 
  1. [16]
    On 25 October there was a further email from Mr Reynolds asking about progress and electrical requirements, and when the machine would be completed as the expected delivery time had already passed: Exhibit 1 p 23. This elicited some response, possibly because it also enquired about the next progress payment. An email was sent by the defendant, apparently composed by the third defendant, on the same day: “will pass on to Arno”, a reference to Mr Heick: Exhibit 1 p 24.  Whether or not that occurred, no further response was forthcoming.  On 24 November 2016 Mr Reynolds sent yet another email to the defendant referring to a visit by Mr de Mink of the plaintiff on 22 November, when he was told the machine would not be ready until January 2017.[18]  He expressed concern about the delay, and pressed for details of progress, but as usual was ignored. 
  1. [17]
    In the latter part of 2016 there were visits of various people from the plaintiff to the defendant’s premises. It is unfortunately not possible to reconcile all this evidence, in part because Mr Heick, who gave evidence after the plaintiff’s case had been closed, said that the first visit was made by a Mr de Mink, who was not called in the plaintiff’s case.[19]  Mr Heick said that on about 30 September 2016 Mr de Mink rang and asked how the machine was going, and was told that they were at the stage of stripping the used machine which they had acquired to get the rollers for modification and reuse in this machine at the site where it was stored, where access was difficult: p 81.[20]  He said that he told Mr de Mink that he had had an email from Mr Reynolds enquiring about the power requirements; he told Mr de Mink what they were, and asked him to pass that on: p 82.[21]  There was at that stage no discussion about when the machine would be delivered.  He said that Mr de Mink next arrived at the factory briefly for a general discussion about the machine in October or early November, and came out again, alone, on about 22 November.  He told Mr de Mink that the machine would now run into January, and that the second payment had not been made for the machine: p 82, p 2-3. 
  1. [18]
    Mr Reynolds said that a couple of days after his email of 24 November he went to visit the defendant’s workshop with a couple of other employees of the plaintiff (p 36) including the then works manager, Mr de Wet, who had started work with the plaintiff in the middle of November 2016, and dated his first visit as occurring on 29 November 2016: p 47.  Mr Heick was in the factory, and there were another couple of employees there.  They were shown some second-hand rollers that were on the ground, which they were told were going to be modified and machined, and in another area a flat piece of steel which had not been worked on at all.[22]  They were told that the rollers had to be shortened and machined to the required diameter.  They said that Mr Heick told them he was having difficulty getting labour to do the work. 
  1. [19]
    Mr de Wet asked for a schedule of when the work would be completed and the machine delivered, and in response Mr Heick simply said that under the contract he was not obliged to provide that: p 48. He said that Mr Heick said that the work should be completed by 24 December but would probably be finished in January 2017: p 49.  There was also some discussion about the control unit, which he said Mr Heick told him was being supplied by a subcontractor from the south, for whom he refused to provide contact details.
  1. [20]
    Mr Heick said this visit was on 30 November 2016, when Mr de Mink was accompanied by Mr Reynolds and Mr de Wet: p 82.  He said he had some conversation with Mr de Wet, who was critical of how the work was being done, and the meeting did not last long.[23]  Mr Heick said that at that stage they were working on the machine, and they would have been close to getting it out at the end of December if they had received the second instalment of the price: p 83.  He said Mr de Wet came out by himself one evening three days later, presumably 3 December, and apologised for his behaviour on the previous occasion.[24] 
  1. [21]
    Mr de Wet said he went back on 6 December when he saw that one of the rollers had been machined down to some specified diameter, but the other three were still in the same state: p 50. The surface finish of the machined roller struck him as very rough. He was shown some other pieces of the machine, bearing caps, which had been flame cut from some steel but had not been machined to the correct size. He was also shown some motors for the machine, stored in a box. He said that apart from Mr Heick he only saw two people working in the factory: p 51. Again Mr Heick refused to provide any documentation of progress on the machine. Mr de Wet asked to see some design drawings of the machine, and was shown some drawings for a significantly smaller machine which he was told were being used to construct the machine for the plaintiff.  Mr Heick identified the subcontractor doing the control unit as Presstek, but refused to provide contact details: p 52.
  1. [22]
    Mr Heick said, apparently of this meeting, that Mr de Wet came again a few days later. Mr Heick brought up again the progress claim, and was told that the plaintiff wanted a weekly report to know exactly where the defendant was and what was happening, which Mr Heick refused to give. Mr Heick said they would issue another invoice and that if it was not paid by 20 December they would slow up the job completely: p 84.
  1. [23]
    There was another visit by Mr de Wet on 13 December, by which time three of the four rollers had been machined but they were not connected to anything, the bearing caps had been machined, and there was a plate on the floor which had been cut but had not been machined yet: p 53.[25]  Again Mr Heick refused to provide a progress schedule for the work, but said that the machine would be ready in January: p 54.  There still appeared to be only two other people working at the plant.  The invoice for the second payment was issued by the defendant on 14 December 2016.[26]  Mr Reynolds responded the following day that they required a written schedule of the build and completion times/dates as requested in an earlier email.  This was characterised by Mr Heick as proof that the plaintiff was starting to play games: p 84. 
  1. [24]
    Mr de Wet went back on 21 December when he found one roller still unmachined, and the bearing caps were machined. He said that during this visit Mr Heick indicated that he needed a second payment before he carried on any other work: p 55.[27]  Mr de Wet expressed some concern about whether the machine would be finished in January, and in response, Mr Heick became aggressive towards him and said that no further work would be carried out until he received the second payment: p 55.
  1. [25]
    Mr Heick said that there was another meeting on 27 December, when he told Mr de Wet that no payment had been made so they were slowing up.  Mr de Wet replied that there was nothing he could do, and that “they” want the progress schedule.  Mr de Wet said he went back on 11 January 2017 at which time he saw that the four rollers had been completed, but no other progress made, and he was told by Mr Heick that no other work would be done until he received the second payment: p 56.  Mr Heick told him that if the second payment was not made he would finish the machine and sell it on the internet, and threatened to get lawyers involved.  Mr Heick agreed there was another meeting at his plant in January: p 85. 
  1. [26]
    Mr Heick said there was a further meeting at the plant with Mr de Wet in late January when two other people also came, which led to a heated exchange, and he told Mr de Wet to talk to their solicitors: p 85. Mr de Wet also referred to this visit, which he said was on 22 January. He said that it appeared that no further progress had been made,[28] and after it, he started to investigate acquiring a suitable machine from another source: p 58. 

Credibility – Mr Heick

  1. [27]
    Mr Heick did not present well as a witness, being argumentative, dogmatic and evasive.[29]  As well there was much in his evidence that was inherently implausible.  An example was his claim that Mr Maddox initially said nothing about how big the roller was to be, and when the machine was wanted,[30] because of the fundamental importance of these matters.  The plaintiff did not just want any rolling machine, it wanted a machine of a certain size at a certain time, for a specific contract.  I find it very hard to believe that Mr Maddox did not mention these matters when he spoke to Mr Heick.[31] 
  1. [28]
    Mr Heick’s failure to respond to emails from Mr Reynolds, and his explanation for the failure, were also very odd. The obvious explanation is that he did not respond because he did not want to admit that he had in fact done nothing, or, later, virtually nothing, towards building this machine. On the view I take of the evidence, that no actual work on the rollers or on any other part was done before the end of November, there is a period of three months when nothing was done, which is unexplained by Mr Heick’s evidence. Yet his attitude was that, in mid-December 2016, it was unreasonable for the plaintiff to ask for information about how the work was going: p 88. He said that one of the reasons he did not reply to Mr Reynolds emails was that he did not know who he was: p 81, p 107.[32]  Yet he had had two earlier emails from Mr Reynolds, on 24 May attaching the purchase order[33] and one on 27 May chasing up the invoice,[34] to which he replied on 31 May with an email addressed “Hi Mike” attaching the invoice.  He had no difficulty about who Mr Reynolds was then. 
  1. [29]
    The subcontractor doing the control unit complained that he did not receive an electrical or hydraulic schematic from Mr Heick, whose response was that “I told him” he did not need them: p 114.[35]  At one point Mr Heick sought to justify his claim for the second payment by reference to the amount of the first payment having been spent: p 115, 6. 
  1. [30]
    There are difficulties with Mr Heick’s evidence of timing. He said that at the time of the first meeting on 30 September the second-hand machine was still being stripped at the premises of the people from whom he bought it, yet he subsequently told me that he had access to that machine nearly at the end of July, and that it took him a month to get the rollers out,[36] which would have meant that he had the rollers out at the end of August, well before 30 September.  It follows that some of his evidence at least must be wrong, unless perhaps he spent a month doing nothing before he even started to get the rollers out, and at a different point, he said he started that at the beginning of August: p 112.[37]  The evidence is however consistent with that of Mr Reynolds, who said that when he went to the workshop in late November the second-hand rollers were at the workshop, but no work had been done on them; they had not yet been modified by being shortened or machined.  Overall, I do not regard Mr Heick as a reliable witness, and in the event of a conflict, prefer the evidence of the other witness unless there is some objective support for Mr Heick. 

Misleading and Deceptive Conduct

  1. [31]
    The plaintiff pleaded that it entered into the contract with the defendant in reliance on representations by Mr Heick that the defendant could satisfy the plaintiff’s timing requirement and capability requirement. The timing requirement was that the machine would be available for use by 3 October 2016; the capability requirement was that the machine would be capable of rolling up to 10 mm thick sheets of mild steel and 6 mm thick sheets of 304 stainless steel in 5 metre lengths, including conical, elliptical or special shapes.[38]  It was alleged that these representations were misleading and deceptive, and made without reasonable grounds, on the basis that the defendants did not know whether the machine could satisfy the capability requirement, and that they were unable to say whether the defendant could meet the timing requirement, because the defendant had no experience producing such a machine.[39]  There are however problems with this claim. 
  1. [32]
    There was no clear evidence that Mr Heick ever represented specifically that the machine would satisfy the capability requirement or the timing requirement as pleaded. The quotes provided for a rolling capacity of 10 mm, and for a programmable control for elliptical, square or special shapes. There was no clear evidence that Mr Heick enlarged on this orally, except that Mr Maddox said that Mr Heick said he had someone who could produce a control system to roll conical shapes: p 13. This was denied by Mr Heick (p 76), but I prefer the evidence of Mr Maddox.
  1. [33]
    As to the timing requirement, there was no clear evidence that Mr Heick ever said to Mr Maddox that the defendant could produce the machine by 3 October, and the terms of the quotes were to the contrary; their language, read with the terms and conditions document as discussed above, were clearly to the effect that no such promises were being made. So at best the capability requirement was not represented in full, and the timing requirement was not represented at all.
  1. [34]
    Apart from that, there was no evidence that the plaintiff relied on these representations in entering into the contract. If the person who decided to contract was Mr Reynolds, he specifically did not rely on any representation as to timing, because he said that he understood that the effect of the quote and the terms and conditions document was that the defendant was not promising to deliver the machine by any specific time: pp 39, 41. This evidence is not relevant to the interpretation of the contract, but is relevant to the question of reliance. There was also no evidence that Mr Reynolds was ever told of anything Mr Heick had orally represented about the capability of the machine, or that he relied on any such representation.
  1. [35]
    Even if the relevant person for reliance was Mr Maddox, there was again no evidence of any reliance by him on any representations by Mr Heick. As to timing, he said that he expected from the period for availability specified in the quotes that delivery would occur in a way to meet the plaintiff’s needs: p 18. He did not say that the order would not have gone ahead if he had not been told that the machine could be programmed to roll conical shapes. If it comes to that, there was no evidence that either man made the decision to go ahead with the purchase order to the defendant; for all I know, the decision might have been made by someone else, who knew nothing about any representations. There is, therefore, no evidentiary basis for a finding of reliance.
  1. [36]
    Apart from that, the specific grounds on which the representations were alleged to be false were not made out. There was no evidence that the defendant had never produced such a machine before. The evidence of Mr Heick was that the defendant had built lots of steel rolling machines, and there is no reason to doubt that.[40]  So far as conical shapes are concerned, the true position appears to be that the machine could not be programmed to roll conical shapes, but a skilful operator could roll conical shapes by deft manual control.  On the face of it, therefore, the machine would have been capable of producing conical shapes, just not capable of doing so automatically.  So far as building the machine in time was concerned, the effect of Mr Gibson’s evidence was that, at least so long as the defendant had access to the steel for the rollers by the end of July, which on the evidence it should have been able to achieve if the first invoice had been paid promptly, it could have been done. 
  1. [37]
    The problem was not that the defendant could not build such a machine in 12 weeks once it secured the materials; the problem was that Mr Heick never got on with the job in the way assumed in the instructions to Mr Gibson.[41]  It appears that this was because he believed he would have difficulty in extracting the purchase price from the plaintiff,[42] a belief which may have been fed by the minor delay in paying on the first invoice.[43]  Overall, the pleaded claim for damages for misleading and deceptive conduct was not made out.  It follows that the claim against the second defendant fails, and is dismissed.  In the circumstances, I do not need to make any other findings about it, although it is clear enough that, if there had been actionable misleading and deceptive conduct by the defendant, Mr Heick was knowingly concerned in it.  The claim against the third defendant was not pressed, and is also dismissed. 

Breach of duty

  1. [38]
    There was also in the statement of claim a claim for damages for breach of duty of care, pleaded as duties to “take reasonable care in providing the supply” and to “provide the supply” so as to satisfy the capability requirement and the timing requirement. Subject to the express terms of the contract, the law would imply a contractual duty to undertake the work with reasonable care and skill, and there may well be a parallel duty arising in tort. This, however, is concerned with whether the machine has been carefully and skilfully made, rather than an obligation to avoid delay. Since the machine never came to be completed, there is necessarily no issue as to whether it had been carefully and skilfully made.[44] 
  1. [39]
    As to the other alleged duties, the plaintiff relied on Cooper v Australian Electric Co (1922) Ltd (1922) 25 WALR 66 and Zorba Structural Steel Co Pty Ltd v Watco Pty Ltd (1993) 115 FLR 206.  These cases however turned on the existence of implied terms in a contract: see Zorba at p 208.  They provide no support for the existence of the tortious duty relied on here by the plaintiff.  In the circumstances, I am not persuaded that such a duty existed, so the defendant is not liable on this basis.   

The contract

  1. [40]
    It is common ground on the pleadings that there was a contract between the parties, and that was the position supported in submissions by both sides. Despite this, it is a little difficult to conjure a contract out of what passed between the parties in this case. On 26 February 2016 the defendants sent the plaintiff a document which described itself as a quotation, and which said among other things: “Should you accept the attached quotation, please sign and return it with your company purchase order”. The front of the document also referred to “terms and conditions (attached)”. There were no actual terms and conditions incorporated into the two-page document which was the quotation, but I accept that a two-page “terms and conditions” document was sent with the original quotation to the plaintiff.
  1. [41]
    One of the terms and conditions was: “Acceptance of order. An order received whether based on our quotation or otherwise shall not be binding until it has been accepted by us in writing”. There was also a statement that orders “once accepted by the company” may not be cancelled or varied by the purchaser without the agreement of the company in writing. It seems to me that the effect of these terms and conditions was that the quotation did not amount to an offer capable of immediate acceptance, but rather the defendant was specifying that a purchase order based on the quotation would be the offer, and would produce a contract only if accepted by the defendant. Indeed, the defendant purported to limit the method of acceptance to acceptance “in writing”, which, as Mr Heick accepted, never occurred: p 2-36. There are cases where it has been said that an offeror can expressly prescribe the method of communicating acceptance,[45] but I am not aware of any authority which supports the proposition that an offeree may in advance stipulate that it will be bound only by an acceptance given in a particular manner. 
  1. [42]
    What happened here however was not that the first quote was signed and returned, nor was a purchase order sent; there was a second quotation provided on 21 March 2016 for a larger machine which was otherwise in essentially the same terms: again it invited the plaintiff to sign and return the quotation with a purchase order, and it included the statement “terms and conditions (attached to original quote)”. That I think purported to incorporate the terms and conditions attached to the earlier quote, and was sufficient to do so by reference. Again, therefore, this was expressly not an offer capable of immediate acceptance. However, whether or not it was is to some extent academic, because it seems to me clear enough that the purchase order which was sent on 24 May 2016 can only be characterised as an offer. It could not amount to an acceptance because, apart from the fact that the quotes were expressly made not offers capable of immediate acceptance, it did not correspond precisely with what had been offered by the defendant.[46]  There are two differences identifiable between the terms of the quote and the purchase order. 
  1. [43]
    The first was that payment of the final 10 per cent of the price was to be made after “commissioning and training at our works” whereas the defendant’s quote provided that it was payable “after commissioning at your works”.[47]  The other and more relevant difference is that the purchase order stated “completion required early October,” and indeed specified as the date required 3 October 2016.  That proposition was inconsistent with the terms of the quote, in a number of respects.  In the first place the quote under the heading “Availability”, gave a period of 16-23 weeks from receiving an official order and payment of the deposit, but said that the period must be “confirmed on placement of order”.  In addition, one of the terms and conditions was that: “Delivery time is given in good faith according to information available to us from manufacturers and shippers and items used in the manufacture of Imperial machines, but it is not guaranteed.  Every effort will be made to complete the delivery within the specific period, however we cannot be held liable for any delay or non-delivery by any cause whatsoever either direct or indirect”.  In short, the quotation was made on terms which included that the delivery time was not guaranteed, and which purported to exclude liability for any delay by any cause whatsoever. 
  1. [44]
    A statement that “completion [is] required early October” is inconsistent with that; in effect, the plaintiff was offering to purchase the machine subject to the manufacture and supply being completed by early October, indeed, by 3 October 2016. One way or another, the purchase order was an offer, not an acceptance of an offer. The question then is whether that offer has been accepted. Acceptance involves unqualified assent to the offer which has been communicated to the offeror.[48]  There was no express acceptance in writing.  Acceptance can be by conduct, and it is true that the defendant went ahead and began work on the construction of such a machine.  Ordinarily, of course, a contract comes into existence only when the acceptance of an offer is communicated to the offeror. 
  1. [45]
    There was a communication from the defendant to the plaintiff after the purchase order was sent, in the form of an invoice for the 30 per cent deposit. Under the terms of payment specified in both the quotation and the purchase order, a “deposit” of 30 per cent was payable at “placement of order” and it could be argued that the offer was not complete until the 30 per cent deposit had been paid. That is, the sending of the purchase order was not complete as an offer until payment of the deposit had been made, and therefore the anterior dispatch of the invoice could not amount to acceptance of that offer. Apart from that, there was nothing communicated; indeed the defendant seems to have gone out of its way to refrain from communicating with the plaintiff, and the plaintiff was not even aware that the defendant was working on the machine[49] until the first occasion when a representative of the plaintiff called at the defendant’s property. 
  1. [46]
    Acceptance ordinarily involves something which is communicated, even in the case of a unilateral contract, where the offer is accepted by performance, so that a contract comes into existence by the fact of performance by the offeree. One would expect that the offeror would be told of that fact by the other party claiming the consideration offered. In the present case however there cannot be a unilateral contract, because if it was, acceptance required the manufacturer and supply of the machine, and that never occurred. There is however authority that, in the case of acceptance by conduct, communication of the acceptance to the offeror is not necessary, so long as the conduct amounts to performance under the contract.[50]
  1. [47]
    Accordingly, I am prepared to accept that there was a contract between the parties in the present case. The starting point must be the offer constituted by the plaintiff’s purchase order, which referred to and incorporated such of the terms of the second quotation from the defendant as were consistent with it. Relevantly, that meant everything except the terms about when supply of the machine was to occur. The use of the word “required” seems to me to be inconsistent with the mere aspirational character of the delivery time specified in the defendant’s quote and the exclusion of liability. The offer can be seen to have been accepted either by sending the invoice for the 30 per cent deposit and accepting payment of that invoice, or by commencing work under the contract, or both. Accordingly, I find there was a contract between the parties, and that it was a term of the contract that the machine was to be manufactured and supplied by early October 2016.
  1. [48]
    It was submitted for the plaintiff that the defendant’s “terms and conditions” document was not part of the contract between the parties. This was on the basis that the terms and conditions were not attached to the first email from the defendant on 28 February 2016, nor the second email on 21 March 2016. The latter is certainly true; the covering email referred only to one attachment, the revised quote. On the other hand, the earlier email referred expressly to two attachments, one of which was described as “terms and conditions.doc”, and in those circumstances, I accept the evidence of Mr Heick that the terms and conditions document was attached to this email.[51]  His evidence was that that was the practice of the defendant, and is supported by the covering email.  The evidence of Mr Maddox to the contrary may be explained simply on the basis that he did not look at it, given that he was handing responsibility for the contract over to Mr Reynolds.[52] 
  1. [49]
    It was not suggested that there was a document setting out terms and conditions attached to the email which was different from the document in evidence. The revised quote was expressly subject to the terms and conditions said to be attached to the earlier email, and the earlier quote referred to attached terms and conditions. That in my view would in any event amount to reasonable notice that the defendant did have terms and conditions to which the quotation was subject, and accordingly if somehow the document was not sent as an attachment to the email from the defendant, it would have been open to the plaintiff to obtain a copy.[53]  The terms and conditions of the defendant were therefore incorporated in the second quote by reference. 
  1. [50]
    At one point in response to a question from me Mr Heick appeared to assert that there was no contract between the parties, on the basis that there had never been a written acceptance as required by the terms and conditions of the defendant “acceptance of order”: p 2-36. This position, which was not adopted by counsel for the defendants in submissions, is I think really only of relevance in relation to the credibility of Mr Heick, and in showing that he did not in practice himself adhere to the detail of the contractual mechanism set out in the defendant’s standard form documents.  In submissions counsel for the defendants sought to draw a distinction between acceptance of an order and acceptance of the terms and conditions of the contract, but in circumstances where the relevant term provides that an order shall not be binding “whether based on our quotation or otherwise”, it seems to me that the only sensible interpretation is that the defendant is declining to be bound merely by receipt of an order even if it is one based on a quotation, so that it is expressly not being bound if the procedure followed in the letter covering the two quotations provided to the plaintiff, of signing the quotation and returning it with a company purchase order, is followed.  In those circumstances, it seems to me that the only sensible interpretation of this provision is to make it clear that a quotation is not an offer capable of immediate acceptance. 
  1. [51]
    If the purchase order had purported simply to accept the quotation, that would have been an offer which, if accepted, would have incorporated the terms in the quotation, including those set out in the terms and conditions document and incorporated by reference. In the present case, however, the purchase order contained a term as to delivery which was inconsistent with the quotation, read with the terms and conditions provided by the defendant, so that as an offer it did not incorporate any terms in the quotation or terms and conditions with which the express term as to delivery was inconsistent. It follows in my opinion that if that offer was accepted it made a contract which contained an express term for delivery of the completed machine in early October 2016.

Construction of the exclusion clause

  1. [52]
    On the view that I take of the matter, the provision in the terms and conditions in relation to delivery time did not form part of the contract between the parties. Nevertheless, in case a different view may be taken elsewhere, I should on a precautionary basis say something about the interpretation of that term, and in particular the effect of the second sentence of that term:  

“Every effort will be made to complete the delivery within the specified period, however we cannot be held liable for any delay or non-delivery by any cause whatsoever either direct or indirect”. 

  1. [53]
    The question is whether that operates as a complete exclusion from liability for late delivery, or whether the exclusion is subject to or conditional upon the defendant’s making every effort to complete delivery within the specified period, or at least taking reasonable steps to do so. There are cases where an exemption clause, which is in substance “all care taken but no responsibility,” has been interpreted as meaning that there is no liability even if all care was not taken,[54] despite the fact that it has been suggested that it is illusory to say “we promise to do X, but we are not liable if we do not do it”.[55]  On the other hand, given that the earlier sentence under this heading refers to sourcing “items used in the manufacture of Imperial machines” an alternative interpretation of the exclusion clause is that it excludes liability for delay for a cause other than a failure to make every effort to complete delivery within the specified period.[56]  Exemption clauses do not usually provide protection against liability for deliberate conduct, such as just not doing work on the machine.  Ultimately however an exclusion clause is to be interpreted according to its natural and ordinary meaning, read in the light of the contract as a whole and giving due weight to the context in which it appears, and, where appropriate, construing the clause contra proferentem.[57] 

The second payment

  1. [54]
    One of the matters that caused some difficulty between the plaintiff and the defendant was the timing of the second payment due under the contract. The “terms of payment” stated in the quote provided for the second payment of 30 per cent of the price “at week 10 of manufacture”, and that was reproduced in the purchase order. I would note that that refers to “manufacture”, not to 10 weeks after placement of the order, or 10 weeks after making the first payment. The structure of the quote contemplates in effect that there will also be 30 per cent paid at the beginning of the job and 30 per cent on completion but prior to delivery, with the final 10 per cent payable after delivery and commissioning. The meaning of “week 10 of manufacture” also takes some colour from the expected delivery time stated in the quote; the midpoint of the range given is 19.5 weeks, so for practical purposes a payment after 10 weeks of manufacture falls in about the middle of the job. In effect, when half the process of manufacture of the machine has been completed.[58] 
  1. [55]
    I do not think however that it means 10 weeks after the process of assembling materials commences;[59] in my opinion the word “manufacture” connotes actual work on building the machine.  I accept that that includes the process of working on parts for incorporation of the machine, but it seems to me that it was a long time after the first payment before the defendant actually began to “manufacture” this machine.  There is some inconsistency in the evidence as to exactly when that started.  Mr Heick said that it took him a month just to get the rollers from the second-hand machine and into his workshop before any work was done on them at all: p 2-36.  This was due to the difficulty in extracting them from the machine they had previously been in, and getting them out of the vendor’s premises, and transporting them, none of which I would regard as included in the concept of “manufacture”.[60] 
  1. [56]
    It seemed to me extraordinary that it would take as long as a month to extract the rollers from the machine and get them out of the vendor’s premises, even if it was necessary to construct some special piece of equipment in order to enable two cranes to work together in the process of lifting. In any event, on the evidence, once the rollers were extracted and delivered to the defendant’s premises, nothing had been done to them by the time of the visit by Mr Reynolds and Mr de Wet to the defendant’s workshop on 29 November 2016. Nor had anything been done to the flat piece of steel which was on the ground, and which evidently was to be the source of some part or parts made by the defendant. There may have been some other things acquired for use in the machine, but in terms of actually manufacturing a machine, the effect of the evidence of the plaintiff’s witnesses was that nothing had been done by late November 2016. It looks to me very much as though the defendant was just not trying to get this work done with anything remotely close to the “every effort … to complete the delivery within the specified period” referred to in the terms and conditions.
  1. [57]
    Even on Mr Heick’s evidence, nothing had been done at the time when he first spoke to Mr de Mink, on 30 September 2016. I accept that the word “manufacture” is not limited to “assembly”, and that it would include things like the work done on the second-hand rollers to make them suitable for use in the new machine, or for that matter work done in cutting parts out of stock slabs of steel for use in the machine, and dealing with them in a way which enabled them to be put into a state where they could be used in the process of assembling the new machine. But on the defendant’s evidence nothing of this nature had happened before late September, and on the plaintiff’s evidence nothing of this nature had happened as at 29 November. On the plaintiff’s version, which I prefer, I consider it was quite unrealistic to claim in the middle of December that the defendant had reached week 10 of “manufacture”. It was equally unrealistic for Mr Heick to be complaining on 22 November, as he said he did (p 82), of a failure to pay the second instalment.[61]  Indeed, even if one treats the process of getting the rollers as part of “manufacture”, this took only one month, or at most five weeks, and nothing was done after that before late November at the earliest.  Time spent doing nothing cannot count towards “week 10 of manufacture”. 
  1. [58]
    There is also the consideration that, if one looks at the matter in terms of how much work had been done out of all the work required in order to manufacture the machine, as at the middle of December 2016 clearly nothing like half the work had been done. Whether it took the defendant until the end of August, or the end of October, to get the rollers from the second hand machine into its workshop ready to work, it seems to me clear that the process thereafter proceeded extraordinarily slowly.
  1. [59]
    That is shown by comparing the length of time taken with the length of time which the process ought to have taken. There is evidence of that in two forms. The first was the estimate of Mr Heick that the process of building the machine would take 16 to 20 weeks on the basis of material being available locally, the figures he put in the first quote. The second quote extended the time by three weeks, but that was on the basis of an expectation that the rollers would have to be transported from Western Australia, that is, on the basis of extra time required to assemble the necessary materials; that is consistent with a period of 20 weeks for actual manufacture.
  1. [60]
    The other piece of evidence was the opinion of the defendant’s expert, Mr Gibson, who provided a report dated 8 August 2019.[62]  His evidence was that, on the basis of staff working a standard 40 hour week and not working statutory holidays, if the defendant started work on 1 December 2016 it ought to have finished the machine on 24 February 2017, prior to delivery.  That is about 12 weeks, which if reliable suggests that Mr Heick’s estimates in his quotes were quite conservative.  It is apparent that the use of the starting point of 1 December 2016 was determined by the instructions to Mr Gibson: see p 676 item 1.2.  Of course, there was no reason at all why the defendant should have waited until 1 December 2016 to start work, if he in fact had the rollers on his premises prior to then; there was no evidence from Mr Heick of any difficulty in obtaining any other parts or supplies that he needed.[63]  Given the other evidence however, and particularly evidence as to the absence of any indication that any actual manufacturing work had been done as at 29 November 2016, the selection of the date of 1 December 2016 may well have been because that was when the defendant actually started to manufacture this machine. 
  1. [61]
    If it took until about the end of August for the defendant to get possession of the rollers from the second-hand machine it purchased, the machine should have been finished and ready for delivery by the end of November, on the basis of Mr Gibson’s evidence as to the progress that ought to have been achieved in the construction of the machine. Instead, it had not even been started.
  1. [62]
    In the circumstances the defendant has not proved at what point week 10 of “manufacture” was reached, but if nothing was done except get possession of the used rollers prior to the beginning of December, that point had certainly not been reached at the time when the second invoice was sent by the defendant to the plaintiff. There is no evidence that manufacture started around the end of September, so that week 10 of manufacture had been reached by the time the second invoice was sent by the defendant to the plaintiff. Accordingly, whether one counts 10 weeks from the beginning of when manufacture of the machine actually commenced, or whether one looks at the issue of whether half of all of the work required to manufacture the machine had been done, on neither view was the defendant entitled to a second payment at the time when its second invoice sought that payment.[64] 
  1. [63]
    I accept that Mr Heick then stated that in the absence of payment of that second invoice he would not do further work on the machine. That is consistent with the evidence that, apart from some machining of the fourth roller, nothing useful was done on the machine after the end of December. Insofar as Mr Heick gave evidence in the contrary of that, I reject it. 

Repudiation

  1. [64]
    The defendant, by not completing the machine by early October 2016, was in breach of contract, but there was no provision making that time of the essence of the contract, so that breach in itself did not entitle the plaintiff to terminate the contract. The issue then becomes one of whether the defendant repudiated the contract. That occurs if the defendant behaves in such a way as to manifest an unwillingness to comply with the contract at all, or other than in a manner which is significantly inconsistent with the terms of the contract.[65]  That in my opinion was the situation here.  The defendant not only did not comply with the contractual obligation to finish the machine by the beginning of October, but made no effort at any time to progress the manufacture of the machine in a reasonable way.[66]  It was not manufactured within the time estimate given by Mr Heick himself in his quote, even after he had the rollers, or within the period specified by Mr Gibson as in effect a reasonable time within which to manufacture the machine.  Further the defendant, by sending an invoice which it was not entitled to send at that time, and refusing to do further work on the machine until that invoice was paid, was also acting in a manner fundamentally inconsistent with the terms of the contract.  Overall, in my opinion, there was a clear repudiation of the contract by the defendant by the time the plaintiff decided to terminate the contract.  In those circumstances, the plaintiff’s termination was valid. 
  1. [65]
    The defendant submitted that the plaintiff had purported to terminate the contract on the basis that the defendant was refusing to provide a schedule of the work, but under the contract there was no obligation on the defendant to do so. In my opinion that is not the proper characterisation of what happened. The plaintiff took the attitude, which was understandable if not indeed justified by the true construction of the contract, that the defendant needed to have done at least half the work involved in manufacturing the machine before the second payment became due, and the defendant had not done that.[67]  The purpose of seeking a schedule of the works was to get some understanding of how the defendant was alleging that it had reached the point where it was entitled to the second payment under the contract.[68]  In effect, the plaintiff was calling on the defendant to demonstrate that it did have an entitlement to the second payment, something that the defendant never did demonstrate. 
  1. [66]
    This however does not matter. Whether or not the plaintiff was purporting to terminate the contract on the basis of the ground that I have found did exist, it is clear law that if in fact there exists grounds upon which a party is entitled to terminate a contract, the fact that the party purports to rely on some other ground which does not justify termination is irrelevant, and the termination remains valid.[69]  In those circumstances, there is no point investigating the basis on which the various employees of the plaintiff thought they were entitled to terminate, or otherwise.  What matters is my finding that the plaintiff had an entitlement to terminate the contract at the time when it did so, so that termination was valid. 

Conclusion

  1. [67]
    The consequences of the termination are that the plaintiff is entitled to recover the payment made under the contract, $93,456, and is also entitled to damages for breach of contract, the contract having been breached by the defendant prior to the termination. The money paid by way of the first instalment was money paid for a consideration which has entirely failed, and is therefore recoverable. The plaintiff’s damages for the loss of the benefit of the contract are measured by the extra cost of acquiring elsewhere what was to have been provided under the contract.[70]  There was no dispute at the trial about this: on the pleadings it was admitted that the plaintiff acquired a machine from an alternative supplier at a cost of $444,400, being $132,880 more than what would have been paid to the defendant had the contract been completed by it.[71]  In those circumstances, that additional amount is recoverable as damages by the plaintiff from the first defendant.  Although there was some mention in the evidence about the plaintiff being exposed to penalties under the contract for which the machine had been sought in the first place, there was no claim for consequential loss.  The total recoverable is therefore $226,336. 
  1. [68]
    There is also a claim for interest by statute. In respect of the refund of the instalment paid, the entitlement arose on the termination of the contract on 7 March 2017, and interest from then in accordance with the practice direction comes to $13,862.85. In the case of the extra cost of acquiring the machine from another source, the entitlement to interest on that amount arose only from the time when that payment was made to the supplier of that machine. There is no evidence of this. There was in evidence a purchase order for it, dated 7 March 2017.[72]  It provides that most of the price is payable on completion, and specified a delivery time of 13 weeks.  The wording of the statement of claim suggests that a contract had been signed when the proceeding commenced on 2 May 2017, but that payment had not yet been made.  In the circumstances I am prepared to allow interest on the extra cost from 13 weeks after 2 May 2017, which is 1 August 2017.  Interest from then in accordance with the practice direction comes to $16,767.46.  Total interest therefore comes to $30,630.31. 
  1. [69]
    To return briefly to the counterclaim, that sought damages for breach of contract based on the allegation that the plaintiff was in breach of the contract by wrongfully purporting to terminate it when the plaintiff did not have a right to terminate. I have held that the plaintiff did have a right to terminate and the termination was valid. It follows that this termination did not amount to an actionable breach of contract by the plaintiff. It is therefore appropriate to dismiss the counterclaim.

Footnotes

[1]I shall refer to the first defendant as “the defendant” for simplicity, except where it is necessary to distinguish between the defendants.

[2]Ownit Homes Pty Ltd v Batchelor [1983] 2 Qd R 124 at 134-5.  The position is more complicated if progress payments are related to completion of defined stages in the work, such as can occur with a contract to build a house, but here there were no such defined stages, and part performance was of no value to the plaintiff. 

[3]Cheshire & Fifoot’s Law of Contract (9th Aust Ed 2008) paras 23.11, 23.13.  If the defendant would have made a loss completing the contract, there would be no profit added and the loss would be deducted: ibid, para 23.12. 

[4]Maddox p 12; Mr Heick agreed there was an enquiry but without mention of size or when the machine was needed: p 73.  He agreed Maddox said they had a contract coming up: p 104. 

[5]Maddox p 13. 

[6]Exhibit 1 Vol 1 page 10.  For no apparent reason, the attached quote is not with it, but in Vol 3 at p 587-8.  The trial bundle was inconvenient, and contained many documents the relevance of which did not emerge, such as the whole of Vol 2, which I have not looked at. 

[7]At that page the document is described as being at pp 584 and 585 of the trial bundle.  It is described in the same way as the index to the trial bundle, but on the bundle which became Exhibit 1 the relevant documents are in fact at pp 587 and 588.  This sort of thing is not helpful.

[8]Maddox p 16.  He knew from the outset that the plates to be rolled for the initial job were 4.6 m wide: p 72.  Mr Heick agreed this conversation occurred, but said it was presented as a request for something different: p 77. 

[9]The period for the work to be done changed from 16 – 20 weeks to 16 – 23 weeks.  For Mr Heick’s explanation of this, see p 95: largely for materials to come from Western Australia. 

[10]Maddox p 17.  Mr Heick denied this conversation: p 108.

[11]Exhibit 1: email Vol 1 p 15; purchase order Vol 1 p 67!  In the covering email, Mr Reynolds asked for an invoice for the first payment, and bank details. 

[12]On 31 May: Exhibit 1 Vol 1 p 17.  Sent after a reminder from Mr Reynolds: p 17. 

[13]At one point under cross-examination, he claimed that despite this most customers pay automatically: p 2-4. 

[14]He said that “materials were available up until 13 June”: p 2-35. 

[15]Exhibit 1 p 585.  It was not disputed that this was received.  It made no reference to delivery time. 

[16]There must however have been some communication of the fact that the defendant was planning to use second-hand rollers in the machine: Reynolds p 37. 

[17]Heick p 81.  He also said in effect that he was too busy to respond. 

[18]Exhibit 1 Vol 1 p 25. 

[19]An email by him, summarising his involvement, is in Exhibit 1 Vol 3 p 579. 

[20]This is inconsistent with Mr Heick’s evidence at p 2-36, unless there was some (unexplained) delay between when he obtained access to the machine and when he actually began the month-long process of getting the rollers out. 

[21]The first such email was sent on 7 September 2016: Exhibit 1 Vol 1 p 22.  But the request was repeated in an email of 25 October: ibid, p 23.  It is possible Mr de Mink did not pass on what he had been told, or that he was not told this.  

[22]Reynolds p 36; de Wet p 47. 

[23]See also Heick p 2-8. 

[24]Heick p 83.  It was not suggested to Mr de Wet in cross-examination that this occurred.   

[25]Under cross-examination he also agreed that one of the bearing ends had been machined: p 63.

[26]Heick p 84; exhibit 1 Vol 3 p 586; sent under cover of an email to Mr Reynolds from the third defendant, exhibit 1 Vol 1 p 26.

[27]He denied he had been told this on 13 December: p 63.  Mr Heick claimed he had said he would slow down work if it was not paid: p 2-26. 

[28]The defendant accepted that work had stopped by then: p 2-32. 

[29]See for example p 91 line 24, line 30; p 114 lines 3, 5; p 119 lines 34 - 37; p 2-11 lines 11 – 36; p 2-17 line 20; p 2-29 line 30. 

[30]Heick p 73.  He said at the first visit he was told the machine was to roll 6 mm stainless steel 4.5 m wide, but nothing was said about when it was wanted: p 74.  Conical rolling was raised: p 99.   

[31]He even asserted that delivery time had not been mentioned by the time he gave the quote: p 89. 

[32]He later claimed that he did not respond to the email of 7 September because “there was no requirement that day” (p 126) and he was too busy: p 127. 

[33]Exhibit 1 Vol 1 p 15. 

[34]Ibid p 16.

[35]But see the email Exhibit 1 Vol 1 p 21. 

[36]Elsewhere that became “over a month”: p 112, where he also said the rollers did not arrive at his workshop until October.  This delay was unexplained. 

[37]He then claimed that time was spent doing new engineering drawings: p 112.  But the drawings for this machine that Mr Gibson was shown were incomplete: p 2-74, 77.

[38]Statement of claim para 4.  This was denied: defence para 13.

[39]Statement of claim para 24A(b).  There does not appear to be a specific plea to this paragraph, but I assume it is denied. 

[40]See Maddox p 13; shown photos of other similar machines the defendant had produced. 

[41]A reference to his report Exhibit 1 Vol 3 p 672, discussed below.

[42]See Heick p 97 line 19 (and they rubbed him up the wrong way: line 43); p 116 line 25.  It may also be because he could not get the labour he needed: Reynolds p 37. 

[43]Mr Reynolds said that this occurred through human error by the accounts person: p 41.  There is no basis in the evidence to doubt this. 

[44]There was some evidence that it was not skilfully designed – Exhibit 1 Vol 3 p 569 – but this was not in issue on the pleadings. 

[45]Cheshire & Fifoot, op cit, para 3.42.

[46]See Cheshire & Fifoot, op cit, para 3.25.

[47]Emphasis added.

[48]Cheshire & Fifoot, op cit, para 3.22. 

[49]Though the terms of Mr Reynolds’ emails assumed that that was the situation.

[50]Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 at 691; White Trucks Pty Ltd v Riley (1948) 66 WN (NSW) 101 at 103.

[51]Page 77.  He said they go with every quotation, which was not true as they did not go with the revised quote to the plaintiff.

[52]Mr Reynolds said he did not see this document: p 40.  But it was referred to in the quote, and he could have chased it up.

[53]Cheshire & Fifoot, op cit, para 10.27.

[54]For example Istros v Dahlstroem [1931] 1 KB 247.

[55]Firestone Tyre Co v Vokins [1951] 1 Lloyd’s Rep. 32 at 39 per Devlin J.

[56]Presumably that would be interpreted as a failure to make reasonable efforts to complete the machine.

[57]Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 at 510.  See also Nissho Iwai Australia Ltd v Malaysian International Shipping Corp (1989) 167 CLR 219 at 227.

[58]Mr de Wet put the figure at 60 per cent rather than 50 per cent (p 65), but it is not obvious to me that that is the way this clause would work.

[59]As asserted by Mr Heick, who regarded it as independent of progress towards completion of the machine: p 2-7, p 2-111.

[60]He said elsewhere that he started moving in September to bring the rollers back, presumably to his workshop: p 2-37.

[61]Particularly when he did not respond to Mr Reynolds’ email enquiry on 25 October 2016 about the second payment.

[62]Exhibit 1, Vol 3, p 672.  There are difficulties with this report as it is based to a large extent just on what he was told by Mr Heick, where evidence is not reliable: Gibson pp 60, 63, 72, 73, 81, 94, 100.  But assuming it is admissible, it does not assist the defendant.

[63]Or from Mr Gibson: p 2-98.

[64]Mr Gibson said that the work that he saw done on his inspection would have taken about a month: p 99.  It represented about 50 per cent of the work required, other than securing parts and materials, and assembly, and fitting and getting the controller working: p 99.

[65]Cheshire & Fifoot, op cit, para 21.12.

[66]Sindel v Georgiou (1984) 58 ALJR 515 at 519.

[67]Reynolds p 38; p 45; de Wet p 65 (609).

[68]See letter Exhibit 1 Vol 1 p 31.

[69]Shepherd v Felt Textiles of Australia Ltd (1931) 45 CLR 359, esp at 378. It is not necessary to specify any ground for termination: Cheshire & Fifoot, op cit, para 21.23. 

[70]Alternatively, if the first payment is not refundable, it is additional damages.

[71]Statement of claim para 25.  This was not pleaded to in the defence, and is therefore taken to have been admitted: UCPR r 166(1).

[72]Exhibit 1 Vol 3 p 657.  It is unsigned, and it is not clear if it was accepted by the vendor.

Close

Editorial Notes

  • Published Case Name:

    Holmwood Highgate Aust Pty Ltd v Imperial Machinery and Manufacturing Industries Pty Ltd & Ors

  • Shortened Case Name:

    Holmwood Highgate Aust Pty Ltd v Imperial Machinery and Manufacturing Industries Pty Ltd

  • MNC:

    [2019] QDC 232

  • Court:

    QDC

  • Judge(s):

    McGill SC DCJ

  • Date:

    22 Nov 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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