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Panel Logistics Pty Ltd v Wagners Concrete Brisbane Pty Ltd[2012] QDC 62

Panel Logistics Pty Ltd v Wagners Concrete Brisbane Pty Ltd[2012] QDC 62

DISTRICT COURT OF QUEENSLAND

CITATION:

Panel Logistics Pty Ltd v Wagners Concrete Brisbane Pty Ltd [2012] QDC 62

PARTIES:

PANEL LOGISTICS PTY LTD (ACN 095 647 653)

(Plaintiff)

AND

WAGNERS CONCRETE PTY LTD (ACN 111 389 256)

(Defendant)

FILE NO/S:

2597/2009

DIVISION:

Civil

PROCEEDING:

Trial

ORIGINATING COURT:

District Court, Brisbane

DELIVERED ON:

20 April 2012

DELIVERED AT:

Brisbane

HEARING DATE:

30 and 31 January, 1 February and 22 March 2012

JUDGE:

RS Jones DCJ

ORDER:

  1. The defendant is to pay to the plaintiff the sum of $56,129.70 as damages for breach of contract.
  1. I will hear from the parties if necessary in respect of interest and costs.

CATCHWORDS:

CONTRACT – for the supply and delivery of concrete by the defendant to the plaintiff

CONTRACT – where plaintiff a concretor and the defendant a manufacturer and supplier of concrete – where plaintiff and defendant entered into an agreement to purchase concrete to be manufactured and supplied by the defendant – where concrete to be used by the plaintiff to construct a floor slab for benefit of a third party – where plaintiff a subcontractor of builder of a commercial building for a third party – where concrete slab delaminated and required extensive repairs

CONTRACT – whether delamination the result of a breach of contract by the defendant in supplying defective concrete – whether delamination the result of faulty workmanship on  the part of plaintiff

CONTRACT – whether defendant not responsible for any defects in concrete arising out of prescribed acts without consent of defendant

NEGLIGENCE – whether commercial arrangements of parties governed solely by terms of an agreement entered into by them or whether defendant owed a co‑existent duty of care to plaintiff in tort of negligence

DAMAGES – CAUSATION – whether defendant liable for losses resulting from intervening causes or fault of plaintiff

IMPLIED TERMS UNDER STATUTE – whether terms and conditions implied under the Trade Practices Act 1974 (Cth) and/or Sale of Goods Act 1896 (Qld) – whether plaintiff a consumer for the purposes of the Trade Practices Act 1974 (Cth)

Civil and Criminal Jurisdiction Reform and Modernisation Act 2010 (Qld)

Sale of Goods Act 1896 (Qld), ss 3, 14, 17, 56

Trade Practices Act 1974 (Cth), ss 4B, 4C, 71

Associated Newspapers v Bancks (1951) 83 CLR 322; [1951] HCA 24

Astley v Anstrust Ltd (1999) 197 CLR 1; [1999] HCA 6

BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266; (1977) 45 LGRA 62

Darlington Futures Ltd (1986) 161 CLR 500; [1986] HCA 82

Goodman Fielder Consumer Foods Ltd v Cospak International Pty Ltd [2004] NSWCA 704

Grange v Sullivan (1966) 116 CLR 418

Henville & Anor v Walker & Anor (2001) 182 ALR 37; [2001] HCA 52

Nissho Iwai Australia Ltd v Malaysia International Shipping Corp (1989) 167 CLR 219; [1989] HCA 32

Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537; [1982] HCA 29

Queensland Ice Supplies Pty Ltd v Anco Australia Pty Ltd [2000] QSC 072 (unreported judgment)

COUNSEL:

Mr S. Hogg for the plaintiff

Mr C. Upton for the defendant

SOLICITORS:

Gall Standfield Smith for the plaintiff

Wonderley & Hall for the defendant

  1. [1]
    This trial is concerned with a claim for damages for breach of contract and/or negligence and/or breach of statutory duty brought by the plaintiff against the defendant. For the reasons given below the orders of the court are:
  1. The defendant is to pay to the plaintiff the sum of $56,129.70 as damages for breach of contract.
  1. I will hear from the parties if necessary in respect of interest and costs.

Glossary of terms

  1. [2]
    Various industry terms were used by witnesses during the conduct of the trial. The more relevant are the following which were agreed upon by the parties:

Admixture

A material other than water, aggregates and cementitious materials, used as an ingredient in concrete, and added to the batch in controlled amounts immediately before or during its mixing to produce some desired modifications to the properties of the concrete.

Agitator

An item of plant or equipment, fixed to the delivery truck, that maintains the plastic concrete in a mixed state.

Bleeding

[of water from concrete] A process whereby some of the water in the mix tends to rise to the surface of freshly placed concrete. This is caused by the inability of the solid constituents of the mix to hold all of the mixing water when they settle downwards, water having the lowest specific gravity of all the mix constituents.

Burnish[ed] finish

The finishing of concrete to provide a hard-wearing, durable finish with a surface lustre. A ‘burnished’ concrete finish will usually be specified where a surface free of trowelling marks is required. It is produced by repeatedly working the surface of the concrete using either a hand trowel or a mechanical trowelling machine until a lustre is produced on the surface of the concrete.

Crack inducer

A piece of material either cast or pressed into concrete to create a control joint in the concrete.

Control Joint

A form of contraction joint which is formed by building a plane of weakness. As the concrete shrinks, tensile stress is concentrated on this plane causing the concrete to crack there rather than elsewhere.

Delamination

The detachment of a thin (up to 5 mm) surface layer from the rest of the slab. It is initially manifested by a 'drummy' sound when the pavement is tapped or trafficked.

Finishing

Screeding, floating and/or trowelling the concrete surface to densify and further compact the surface layer of concrete, as well as giving it the look you want. Screeding is the initial stage of finishing; floating, trowelling, jointing, patterning, edging, etc is the final stage of finishing.

Going off

When the concrete is in the ‘setting state’, progressing from a plastic state to a hardened state, stiffening over time and eventually no longer being in a soft or workable state.

Laser screed

A powered screed with lasers mounted on it to facilitate the correction of concrete height and level.

Mix Design

The various components (including admixture) making up the concrete to be supplied.

MPa

The abbreviation for Mega Pascals, the unit of measurement for pressure. In concrete it is used to determine the compressive strength of the concrete. The compressive strength is a measure of the concrete’s ability to resist loads which tend to crush it.

Pozzolith 122R (Pozzolith)

A ready to use liquid admixture for making more uniform and predictable quality concrete while retarding its setting time to facilitate placing and finishing operations. It retards the setting time to facilitate placing and finishing.

Rheoplus 44 (Rheoplus)

A multi-component, non-chloride normal to mid range water reducing admixture designed to improve the performance of concrete both in the plastic and hardened states.

Screed

A device with a straight edge to level off the concrete. Screeds may be manual or powered, in this case powered. Hence, ‘screeding’ is the process of levelling off the concrete with said device.

Slump

A measure of consistence of concrete. Consistence is a term used to describe the ease with which the concrete will flow or the degree of wetness of the concrete. The term is derived from the standard test procedure for determining the consistence of concrete, known familiarly as the ‘slump test’. A measurement of slump is a measurement of how far concrete in a plastic state falls, or slumps, in a slump test.

Slump loss

The loss of slump in concrete over time. Freshly mixed concrete stiffens with time. This should not be confused with setting of cement. It is simply that some water from the mix is absorbed by the aggregate if not saturated, some is lost by evaporation and some is removed by the initial chemical reactions.

Slump test

A test done to measure a concrete mix’s consistence and workability. The test should be performed in accordance with AS1012.3.1:1998.

Background

  1. [3]
    The plaintiff, Panel Logistics Pty Ltd, is a company actively involved in the building industry and, in particular, the construction of concrete panelling and floor slabs. The defendant, Wagners Concrete Brisbane Pty Ltd, is a company relevantly concerned with the manufacture and supply of concrete.
  1. [4]
    Sometime prior to 31 March 2008, the plaintiff entered into a subcontract agreement with MBS Constructions Pty Ltd (MBS) to lay a concrete floor slab in a commercial building being constructed at Leitches Road, Brendale.  The plaintiff was required to carry out other building work under the contract,[1] but only the floor slab is relevant.
  1. [5]
    On or about 31 March 2008, the plaintiff entered into a contract, described as an “Application For Credit Account”, which included a number of conditions under the heading “Standard Conditions of Sale”.[2]
  1. [6]
    Acting under that contract, Mr Love, a director of the plaintiff, ordered a quantity of concrete from the defendant to be delivered to the building site.  According to Mr Love, the specifications of the order he placed were that the concrete was to have a strength grade of 32 MPA, an average aggregate size of 20 mm, and a slump of 80 mm.[3]  He also specified that the concrete was to have less “bleed” than a previous batch of concrete supplied by the defendant on a previous job.  The specifications of the concrete ordered and supplied will be dealt with in more detail below.
  1. [7]
    According to the evidence of Mr Johnson, the concrete began arriving at the site at about 6 am on 15 May 2008.[4]Mr Johnson was a concreter with some 25 years’ experience employed by the plaintiff.  He operated the laser screed during the concrete pour.  The arrival time of the first agitator is corroborated by the first of the delivery documents tendered.[5]
  1. [8]
    According to Mr Johnson, the first batches of concrete were consistently workable but during the pour it “progressively changed”[6] and started “going off really quick”.[7]  It was too dry.[8]
  1. [9]
    Mr Johnson was not asked to and did not express an opinion about how far into the job the characteristics of the concrete started to change.  However, Mr M Mennes said the change occurred about one to 1½ hours into the job.[9]  Mr M Mennes was also of the opinion that the concrete was going off “very, very fast”.[10]  Mr M Mennes was a director of MBS and was essentially the project manager of that company on the job.
  1. [10]
    That the characteristics of the concrete began to change after about 1½ hours is, to an extent, corroborated by the evidence of Mr Love who, after receiving a concerned phone call from Mr M Mennes, arrived at the site “probably around 8 o’clock” when the job was about one-third completed.[11]
  1. [11]
    The delivery dockets also suggest that things started going wrong between 7.30 and 8 am.  At or about that time, the time taken to offload the concrete from the agitators after arrival markedly increased.[12]
  1. [12]
    That situation continued until the slab was about two-thirds completed. The characteristics of the concrete then, according to Mr Love, “was all back to normal.”[13]  The return of the concrete batches to “normal” coincided with an increase in the amount of the set retardant Pozzolith 112R (Pozzolith) added to the mix.
  1. [13]
    Despite the difficulties, the floor was completed. Unfortunately, sometime later areas of delamination were detected. The extent of the delamination was such that significant rectification works had to be carried out. The costs of those works were retained by MBS from the plaintiff from this job and one other job involving MBS and the plaintiff.
  1. [14]
    On behalf of the plaintiff, it was contended that the concrete manufactured and delivered by the defendant was unfit for its intended purpose and/or was not of merchantable quality. The defendant contended that the delamination was caused by the plaintiff’s unworkmanlike laying of the slab including, among other things, adding water to some of the concrete on arrival at the site without its approval.
  1. [15]
    The following evidence was not challenged:
  1. (i)
    that the repair work to the concrete floor was reasonably required as a consequence of the delamination;
  1. (ii)
    that the cost of the repairs in the sum of $56,129.70 was reasonable;
  1. (iii)
    that MBS had retained $56,129.70 from the plaintiff.

Accordingly, there being no issue as to quantum, the case was concerned with the cause of and the responsibility for the delamination.

The pleadings

  1. [16]
    In paragraphs 6 and 7 of its amended statement of claim, the plaintiff alleges:[14]

“6. In breach of the said agreement and/or in breach of the implied terms referred to in paragraphs 3, 4 and 5 herein,[15] the concrete was not reasonably fit for the purpose and/or of merchantable quality in that it dried to a blistered and/or delaminated finish.

  1. Further, or in the alternative, the blistered and/or delaminated finish was caused by the negligence and/or breach of duty of the defendant, particulars of which are as follows:

PARTICULARS

  1. (a)
    failing to ensure that the concrete would dry with satisfactory water bleed behaviour;
  1. (b)
    failing to supply appropriate chemically blended concrete;
  1. (c)
    failing to ensure that the chemical compound resulted in satisfactory slump and water bleeding during the drying of the slab;
  1. (d)
    failing to advise that the concrete mix provided had unique drying and water bleed behaviour warranting an alteration in the finishing programme;
  1. (e)
    failing to advise the plaintiff of the altered characteristics of the concrete supplied.”
  1. [17]
    Paragraphs 3, 4 and 5 of the amended statement of claim alleged that certain terms were implied into the agreement between the parties pursuant to s 71(2) of the Trade Practices Act 1974 (Cth) (TPA), s 17(2) of the Sales of Goods Act 1896 (SGA) and at common law.  Essentially it is pleaded that pursuant to those Acts, it was an implied term of the contract that the concrete manufactured and supplied by the defendant would be reasonably fit for use and/or be of merchantable quality.  It is further alleged that the defendants breached those implied terms.
  1. [18]
    In paragraphs 5(b)-(c) of the second amended defence of the defendant those allegations are refuted:

“(b) [The defendant] denies that because the concrete dried to a blistered and delaminated state it was not fit for purpose and not of merchantable quality, and says such blistering and delamination was caused by the actions of the plaintiff, namely:

  1. (i)
    accepting and placing concrete where the time between batching and discharge from the delivery units exceeded the maximum time permitted in the relevant Australian Standards;
  1. (ii)
    without the approval or consent of the defendant, by its servants or agents, adding water to some, but not all batches of the concrete at the job site altering the designed water content of the concrete and adversely affecting the properties of the concrete;
  1. (iii)
    finishing the concrete slab before the concrete beneath the top layer of the slab had hardened, trapping air and bleed water under the surface of the concrete slab; and
  1. (iv)
    finishing the concrete slab using a burnished finish.”

(c) [The defendant] further says, if such terms can be implied (which is denied), the plaintiff can not rely upon them because by its conduct as pleaded in paragraphs 5(b)(i) and 5(b)(ii) above, the plaintiff altered the state of the concrete supplied to it by the defendant.”

  1. [19]
    Paragraph 6 of the further amended defence denied that the defendant owed a duty of care and otherwise denied any liability in negligence by essentially repeating the allegations contained in paragraph 5 of the defence.  The allegations concerning implied terms under the TPA and/or the SGA and/or at common law were also denied.
  1. [20]
    Before dealing with the specific matters raised in paragraph 5(b) of the further amended defence, it is convenient at this stage to deal with the allegations concerning negligence, the TPA, the SGA and implied terms at common law.

The allegations of negligence

  1. [21]
    In this case both parties are commercial entities with considerable expertise in their respective areas within the building industry. The only reasonable inference on the evidence is that the parties intended and expected their commercial relationships to be governed and dictated in accordance with the terms of the contract entered into between them. There are no special circumstances which would require the court to import concurrent or co-existent obligations in tort.
  1. [22]
    In this context, the observations of Gleeson CJ, McHugh, Gummow and Hayne JJ in Astley v Anstrust Ltd are pertinent:[16]

“Why should the law of negligence have any say in regulating the relationship of the parties to the contract?  The contract defines the relationship of the parties.  Statute, criminal law and public policy apart, there is no reason why the contract should not declare completely and exclusively what are the legal rights and obligations of the parties in relation to their contractual dealings.”[17]

  1. [23]
    For the reasons given, I conclude that the defendant did not owe a duty of care in negligence to the plaintiff in addition to its obligations under the contract.

Implied Terms

The Trade Practices Act 1974

  1. [24]
    The defendant’s central position is that the commercial dealings between the parties were governed by its application for credit and standard conditions of sale.[18]  The plaintiff says that the conditions of sale did not form part of the contract between the parties.  That is so according to the plaintiff, because Mr Love’s wife, as co‑director of the plaintiff, did not provide a guarantee.  It is contended that the requirement for Mrs Love to provide a guarantee was a condition precedent to the formation of a contract which incorporated the defendant’s standard conditions of sale.  And, as that condition precedent was not satisfied, those conditions formed no part of the contract between them.[19]  This argument is critical to the plaintiff’s case that, to a material extent, the obligations of the parties are the subject of implied terms and conditions under statute and/or common law.
  1. [25]
    The evidence was clearly to the effect that it was the defendant’s usual business practice to require director guarantees and that in this case it requested both Mr and Mrs Love to sign as guarantors.  It is also uncontroversial that while Mr Love gave his guarantee, Mrs Love did not.
  1. [26]
    The purpose of the guarantee is to provide, as far as is practical, security over debts of the plaintiff arising out of purchases by it from the defendant. Absent personal guarantees by its directors, in the case of default, the defendant would be limited to seeking relief from the company only. The primary, if not the sole, beneficiary of the condition that company directors act as guarantors is the defendant. In those circumstances, even if the requirement for Mrs Love to sign the credit application as a guarantor was a condition precedent (a matter I seriously doubt), it was capable of being, and was, waived by the defendant.[20]
  1. [27]
    Notwithstanding this finding, it is necessary to deal with the other matters raised by the plaintiff concerning the scope and operation of implied terms.
  1. [28]
    Section 71(1) of the TPA is concerned with the supply of goods by a corporation to a “consumer”.  Section 4B(1) of that Act relevantly provides:

“For the purposes of this Act, unless the contrary intention appears:

  1. (a)
    a person shall be taken to have acquired particular goods as a consumer if, and only if:
  1. (i)
    the price of the goods did not exceed the prescribed amount; or
  1. (ii)
    where the price exceeded the prescribed amount—the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption or the goods consisted of a commercial road vehicle

and the person did not acquire the goods, or hold himself or herself out as acquiring the goods, for the purpose of re‑supply or for the purpose of using them up or transforming them, in trade or commerce, in the course of a process of production or manufacture or of repairing or treating other goods or fixtures on land.” (emphasis added)

  1. [29]
    The prescribed amount under the TPA was $40,000. Pursuant to s 4C(e), unless a contrary intention appears, a reference to the re-supply of goods includes a reference to a supply of goods to another person in an altered form or condition.
  1. [30]
    Accordingly, for the plaintiff to be a consumer for the purposes of the TPA:
  1. (i)
    the price of the concrete was $40,000 or less; or
  1. (ii)
    if the price exceeded $40,000, the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption.
  1. [31]
    No evidence was led to establish the price the plaintiff paid for the concrete. It is also clear that the concrete was not a good ordinarily acquired for personal, domestic or household use or consumption.
  1. [32]
    Further, in the circumstances of this case, I accept the defendant’s submission to the effect that the concrete was purchased by the plaintiff for the purpose of re‑supplying it to another person (MBS) in an altered state or condition.  The concrete arrived in the defendant’s agitators in a plastic form.  As I understand the process, the concrete was then emptied from the agitator (under the control of a servant or agent of the defendant) and thereafter delivered to the location of the floor slab via a pumping process (controlled by a subcontractor of the defendant).  Thereafter, the plaintiff’s employees spread, levelled and finished the concrete to a hardened state as a floor slab.
  1. [33]
    It was also submitted on behalf of the plaintiff that, in reality, the plaintiff did not re‑supply the concrete to MBS; it was instead delivered directly to MBS on the site.[21]  That submission cannot be accepted.  There is no evidence to suggest that the agreement entered into between the plaintiff and the defendant was for the benefit of MBS.   Further, apart from the fact that it had subcontracted the plaintiff to construct the concrete floor for the eventual benefit of the owners of the premises, MBS had no direct involvement with the concrete.  The concrete was not delivered to MBS and it did not accept its delivery.
  1. [34]
    For these reasons, I conclude that the plaintiff was not a consumer within the meaning of the TPA and, accordingly, no terms or conditions were implied under that Act into the business affairs between the parties.

The Sale of Goods Act 1896

  1. [35]
    Section 17 of the SGA relevantly provides:

“Implied conditions as to quality or fitness

Subject to the provisions of this Act and of any statute in that behalf, there is no implied warranty or condition as to the quality or fitness of any particular purpose of goods supplied under a contract of sale, except as follows—

  1. (a)
    when the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which is in the course of the seller’s business to supply (whether the seller is the manufacturer or not), there is an implied condition that the goods shall be reasonably fit for such purpose;

…

  1. (c)
    when goods are bought by description from a seller who deals in goods of that description (whether the seller is the manufacturer or not) there is an implied condition that the goods shall be of merchantable quality;

…

  1. (f)
    an express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith.”
  1. [36]
    I accept that the concrete was a good purchased by description. Its particular purpose was known by the defendant and the plaintiff relied on the defendant’s skill and judgment in the preparation of the concrete. It was not in dispute in this case that the defendant was responsible for determining the appropriate mix design for the concrete.
  1. [37]
    It was also submitted on behalf of the plaintiff that while there is no dispute about the force and effect of s 14(3) of the SGA, it has no application in this case.  That is so, it is argued, because there was no acceptance of the concrete for the purposes of the SGA.
  1. [38]
    Section 14(3) of the SGA provides:

“When a contract of sale is not severable, and the buyer has accepted the goods, or part thereof, or when the contract is for specific goods the property in which has passed to the buyer, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty and not as a ground of rejecting the goods and treating the contract as repudiated, unless there is a term of the contract, express or implied to that effect.” (emphasis added)

Section 36 provides:

“Buyer’s right of examining the goods

  1. (1)
    When goods are delivered to the buyer, which the buyer has not previously examined, the buyer is not deemed to have accepted them unless and until the buyer has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.
  1. (2)
    Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, the seller is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.”

Section 37 provides:

“Acceptance

The buyer is deemed to have accepted the goods when the buyer intimates to the seller that the buyer has accepted them, or when the goods have been delivered to the buyer, and the buyer does any act in relation to them which is inconsistent with the ownership of the seller, or when after the lapse of a reasonable time, the buyer retains the goods without intimating to the seller that the buyer has rejected them.”

  1. [39]
    The plaintiff asserts that it did not accept the concrete for the purposes of the SGA because:[22]
  1. (i)
    the contract between the parties was formed before delivery of the concrete and therefore it was not possible to examine it before or at the time of sale; and/or
  1. (ii)
    the plaintiff was effectively forced to use the concrete and had no reasonable opportunity to examine the concrete before acceptance.
  1. [40]
    I cannot accept those submissions. While it is true that the contract was created before delivery, there was no evidence to support the assertion that it was not possible for the plaintiff to inspect the concrete before using it. Indeed, it is a condition of the contract that the plaintiff check that the concrete delivered complied with the job specification at the time of delivery.[23]  Further, while Mr Love might have felt he had been “forced” into using the concrete to save the floor slab and/or for other commercial reasons, the fact of the matter is that he turned down an offer to reject some of the delivered loads.
  1. [41]
    The evidence establishes that the plaintiff did, for the purposes of the SGA, accept the concrete. As a consequence, pursuant to s 14(3), any breach of an implied condition of the contract by the defendant could only be treated as a breach of an implied warranty.
  1. [42]
    The defendant contended that the force and effect of s 14(3) of the SGA was to, when the pre-conditions to its operation exist, require what would otherwise be implied conditions to be classified and treated as warranties.  And, as such, are expressly excluded by the operation of Clause 8 of the contract.[24]  That proposition seems to be accepted, at least in part, by Mr Hogg, counsel for the plaintiff.[25]
  1. [43]
    Section 56 of the SGA provides:

“Exclusion of implied terms and conditions

When any right, duty, or liability would arise under a contract of sale by implication of law, it may be negatived or varied by express agreement or by the course of dealing between the parties, or by usage, if the usage is such as to bind both parties to the contract.”

Clause 8 of the agreement between the parties provides:

“All warranties in relation to goods we supply to you, whether arising by statute or otherwise are excluded except to the extent that exclusion is prohibited by statute.”

  1. [44]
    With respect to counsel, I do not consider the argument to be correct. In my view, s 14(3) does no more than require that, in certain circumstances, a breach of a condition (e.g. that the goods be reasonably fit for purpose or be of merchantable quality) is to be treated as if it was a breach of warranty.  When the pre-conditions of s 14(3) are met, the innocent party loses the right to reject the goods and repudiate the contract, instead his remedy is effectively limited to damages.  Section 14(3) limits the relief available to the innocent party but it does not in some way convert a condition into a lesser contractual obligation under the SGA, namely a warranty.
  1. [45]
    Clause 8 of the contract is to be construed according to the natural and ordinary meaning of the words used in the light of the contract as a whole.[26]
  1. [46]
    While the term “warranty” is expressly defined in s 3 of the SGA to be limited to something “collateral to the main purpose of the contract …”, when given its ordinary meaning in the context of the whole of the contract, it is tolerably clear that the parties intended to exclude from operation any assurances or promises (conditions) implied by the operation of statutes such as the SGA and that they intended to have their commercial arrangements governed by the conditions expressed in the contract.

Implied terms at common law

  1. [47]
    The defendant also contends that Clause 8 of the contract prohibits any term being implied into the contract “on any other basis.”[27]
  1. [48]
    Counsel for both parties referred to me to the High Court decision of BP Refinery (Westernport) Pty Ltd v Hastings Shire Council[28] on this issue and agree that the relevant principles to be derived from that case are that to justify the implication of a term into a contract:

(1) it must be reasonable and equitable;

  1. (2)
    it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;
  1. (3)
    it must be so obvious that ‘it goes without saying’;
  1. (4)
    it must be capable of clear expression;
  1. (5)
    it must not contradict any express term of the contract.
  1. [49]
    I was not taken to any specific part of the contract concerned with the standard of the concrete to be manufactured and supplied. However, from my reading of it, pursuant to Clause 16, all concrete sold is to accord with Australian Standard Specification AS1379[29] (unless otherwise stated).  That standard is particularly concerned with setting minimum standards for:[30]
  1. (i)
    the materials, plant and equipment used in the supply of concrete;
  1. (ii)
    the production and delivery of concrete in the plastic state;
  1. (iii)
    specifying, sampling, testing and compliance of concrete;
  1. (iv)
    the uniformity of mixing.
  1. [50]
    Clause 5 of the contract also provides that the defendant is liable (save where its liability is excluded)[31] in the event that it supplies “defective” product.  Pursuant to Clause 29, it was a term of the contract that (save for the exclusion set out) the defendant would supply concrete in conformity with the specifications given by the purchaser.
  1. [51]
    In my opinion, the contract does not require the implication of terms of the type advanced by the plaintiff to give it business efficacy. There is otherwise no justification to avoid the intent of Clause 8 of the contract.
  1. [52]
    I now turn to consider each of the issues raised in paragraph 5(b) of the amended defence, but not necessarily in order.

A burnished finish?

  1. [53]
    I reject the allegation that the slab was completed with a burnished finish. According to Mr Love, it was a normal trowelled (but smooth) finish.[32]  Mr Johnson’s evidence was also that it was a “normal finished concrete” floor.[33]  Not only are Messrs Love and Johnson very experienced concreters, I also found them to be honest and reliable witnesses.  Their evidence was not seriously challenged or contradicted.  I do not accept Mr Munn’s evidence that “the floor was subjected to a burnished finish.”[34]  This finding of course does not necessarily mean that no fault can be attributed to the plaintiff in the finishing off process.

Delays on site

  1. [54]
    In his report dated 12 November 2010, Mr Munn stated:[35]

“8.2 Having considered the referenced documents set out in section 4 of this report it is my opinion that the quality of the concrete supplied was adversely affected by delays on the site during placement causing concrete deliveries to exceed acceptable time limits and that water was added to these batches at the request of Panel to restore workability. This added water increased the design water content of the concrete significantly and increased the slump so it frequently exceeded the permitted maximum tolerance. Concrete with properties outside acceptable limits should have been rejected but were accepted by Panel for placement in the floor. As a result of the variable water content of the concretes placed in my opinion the bleeding and setting properties of the concrete floor were also highly variable resulting in uncertain, optimal finishing time and localised blistering and delamination.” (Emphasis added).

  1. [55]
    It was accepted by all relevant witnesses that delays in having concrete removed from the agitators can adversely impact on the characteristics of the concrete being delivered and make it less pliable and more difficult to work.[36]
  1. [56]
    The delivery invoices[37] reveal that a number of loads remained in the agitators for more than ninety minutes from loading at the defendant’s plant to unloading at the site.  However, there are two relevant steps involved.  First, the time taken from the beginning of the loading process at the plant to delivery at the site.  Second, the time the agitators are standing at the site from arrival to unloading.  The plaintiff has no real control over the first of those steps, but clearly a significant level of control over the second.  There was no suggestion during the course of the trial that the defendant was responsible for any delay in respect of the first step.  I reject the argument that, at face value, the information contained in the delivery dockets could be regarded as containing inaccurate or unreliable information.  Such an inference is not open on the face of the documents and no such proposition was put to any of the witnesses.
  1. [57]
    As I have already said, on behalf of the defendant, it was contended that unacceptable delay between the time of arrival and the time of unloading the concrete was caused by the unworkmanlike conduct of the plaintiff and, in particular, the unreasonable time it took the plaintiff to place the concrete over the floor area.
  1. [58]
    No specific allegations of unworkmanlike conduct were levelled. Instead, a number of possible causes of delay were suggested or put. Particular reference was made to the number of crack inducers over the slab, the number of columns projecting from the slab and the shape of the slab. It was not suggested to any of the witnesses that the time taken to add water to the concrete caused any significant delay.
  1. [59]
    The evidence of Mr Love,[38] Mr Johnson[39] and Mr M Mennes,[40] all experienced builders, was clearly to the effect that none of those matters caused any significant delays in the placing of the concrete.  The effect of their evidence was that the subject floor slab was a relatively routine job for experienced concretors.  I much prefer their evidence to that of Mr Beard on this topic[41] for at least two reasons.  First, as a sales representative with four years’ experience, I do not consider him to have either the experience or qualifications to contradict the other witnesses.  Second, given the number of times Mr Beard responded to questions by, in effect saying, “I do not recall”, I am not at all convinced that he had an accurate memory of all that occurred that day.  I also consider that Mr Dawson’s evidence on these matters has little probative value.  He had neither the relevant qualifications nor the experience, and his recollection of some matters was revealed to be wrong.
  1. [60]
    I also consider the delivery invoices support the evidence of the plaintiff’s witnesses. The time taken for unloading, from about 6 am to 7.30 am,[42] fluctuated around the 30‑minute mark. From at or about 7.30 am to about 10.30 am that time increased significantly, at times to in excess of one hour.[43]  Thereafter, the time taken to unload tended to return to earlier levels.[44]
  1. [61]
    On the evidence before me, I find it more likely than not that the delays in placing the concrete were not as a consequence of any unworkmanlike conduct by the plaintiff and/or its agents or as a consequence of any particular characteristics of the slab. More likely than not, the delays in placing the concrete were the direct consequence of the difficulties caused by the physical characteristics of the concrete delivered by the defendant from about 7.30 am to about 10.30 am.  Thereafter, to use Mr Johnson’s words, the workmen “battled” hard to stay on top of things.[45]  In this regard, I also accept Mr Love’s evidence that “the only reasons there was delays [in the placement of the concrete] was because the concrete wasn’t workable.  There was something wrong with it.”[46]
  1. [62]
    Mr Johnson knew there was a problem with the concrete being delivered and at one stage told the defendant’s representative on the site that someone had to sort out the problem.[47]  Mr Johnson could not remember the representative’s name, but the evidence makes it tolerably clear that it was Mr Beard.
  1. [63]
    At one stage Mr Beard recommended that, because of the age of the concrete, “there was no need to accept it and it was their choice to reject it”.[48]  Mr Beard could not recall who he said this to, but in all likelihood it was Mr Love.  As I have said, Mr Beard’s evidence was not particularly convincing in many respects.  It was clear to me that he had a poor memory of what occurred that day.  Despite this, I do accept that he did make the recommendation and that he made it to Mr Love.  Mr Love could not recall if Mr Beard recommended that he reject concrete loads, but accepted that he could have.[49]
  1. [64]
    While I find that the plaintiff’s workmanship was not the reason or cause of the concrete being left in the agitators for an unacceptable time, the evidence is clearly to the effect that the plaintiff continued to accept and place concrete for a period of time despite knowing that it had unsatisfactory slump.
  1. [65]
    The primary reasons why Mr Love did not reject any of the loads of concrete was that to do so would have meant the floor would have been lost.  By that, Mr Love meant not only would the job not be completed but the concrete already poured would have to be removed before a new floor could be poured.  The other reason was that he thought the plaintiff might have been required to pay for the rejected concrete.
  1. [66]
    When asked in cross-examination why he did not reject the concrete if he thought it was not adequately workable, Mr Love said, “… it just doesn’t work like that when you’re out there working the stuff.”[50]  Mr Love now regrets that decision.  During cross-examination Mr Upton asked:

“Wouldn’t commonsense tell you that if concrete is no good because it has some defect in it, you should stop accepting the concrete [and] tell Wagners to fix it [before] you accept any more?”

Mr Love replied:

“What I probably should have done from hindsight was just stop the pour and pull the concrete up and [the defendant] would have had to have paid for that.”[51]

  1. [67]
    Notwithstanding that the issues of election and/or estoppel were raised during the course of this proceeding, the defendant neither pleaded nor otherwise contended that those potential defences operated against the plaintiff.

The addition of water

  1. [68]
    Broadly speaking, the addition of water improves the workability of concrete by increasing the slump. The addition of water can be used to compensate for slump loss which has occurred because, by way of examples, delays in pouring and/or increases in temperature. Common effects of the addition of water, particularly in significant quantities (as is the situation here), include that it will increase the level of bleeding and setting time. If significantly different amounts of water are added to different batches of concrete, this can result in variable setting patterns across the floor slab.
  1. [69]
    The evidence is clear that water was added to some of the concrete on delivery at the site. The delivery dockets reveal that water was being added off and on from the second delivery through to about 7.25 am.  Thereafter, water was added consistently through to about 9.00 am.  From then on, water was again added on an off-and-on basis through to 12.30 pm.
  1. [70]
    The water was not added by the plaintiff but by the pump operators[52] who were subcontracted by the plaintiff to, as I understand it, receive the concrete from the agitator on arrival and pump it to where it is to be finally placed.
  1. [71]
    According to Mr Love, the only reason why water was added on a consistent basis was because the concrete was unworkable.[53]  That water was being added from the second delivery is somewhat at odds with the evidence that the quality of the concrete drastically fell about one-third of the way through the job and then improved again about two-thirds of the way through.
  1. [72]
    Despite this unexplained anomaly, I do not consider that it materially affects the evidence about when the quality of the concrete began to become noticeably defective. I have reached this conclusion not only because of the evidence of Messrs Love, Johnson and M Mennes, but also because it was not until about 7.50 am that the turnaround time for the agitators began to materially increase and, from that time onwards, water was not only being consistently added, but was being added in increased amounts.[54]  That the concrete started off in a satisfactory state, then deteriorated before recovery, is also, to an extent, supported by Mr Beard.[55]
  1. [73]
    Mr Love thought that Mr Beard told the pump operators to add water to the concrete as early as the second delivery.[56]  In the absence of evidence supporting Mr Love’s belief it can only be treated as speculation, as he was not on site until about one and a half hours later.  Mr Beard’s evidence was clearly to the effect that he did not authorise the addition of water.[57]  The most likely explanations are that the pump operators added the water to make it easier to pump, or did so at the request of one of the plaintiff’s employees.
  1. [74]
    I reject the contention that the batch records provide probative evidence of the defendant’s approval for the plaintiff to add water on site. That this document constituted some form of consent was not suggested to any witness and there is no evidence that the plaintiff was aware of, and acted upon, the information contained in either the batching records or the delivery documents. The evidence also fails to establish that the defendant in some way gave its approval for water to be added on site through actions or inactions of Mr Beard.
  1. [75]
    While the evidence proves that it was more likely than not that the water was being added to the concrete on site to make it workable, the evidence does not establish that it was consented to or otherwise approved by the defendant. The contractual ramifications of this are discussed below.

Finishing off and cause of delamination

  1. [76]
    The evidence leads me to conclude that the immediate cause of the delamination was that the surface of the concrete was finished off prematurely. This resulted in the surface of the concrete being sealed while the concrete was still bleeding, thereby trapping the water rising up through the concrete during the drying process.
  1. [77]
    The responsibility for determining when the concrete should be finished off rests squarely on the shoulders of the plaintiff.
  1. [78]
    For the reasons set out below, I have concluded that it is more likely than not that a significant number of the concrete batches delivered to the site were so defective as to render it unfit for the purpose for which it was manufactured. To put it in the terms used by Mr Love and Mr Johnson, a significant number of the deliveries were unworkable.
  1. [79]
    However, the allegation that the concrete dried to a blistered and/or laminated finish is wrong.[58]  The evidence establishes that the immediate cause of the delamination was the premature finishing of the concrete.
  1. [80]
    Mr John Reid, a structural engineer, expressed the following opinion about the cause of the delamination:[59]

“It is my opinion that your concretors were caught out by the changed behaviour of this concrete when compared with the material they were used to, and were effectively fooled into finishing it before it was really ready.

This was probably due entirely to the changes in slump and bleeding induced by the new admixture, which apparently changed these indicators without changing the actual setting time.

Given the radical changes produced in the concrete behaviour, it would be reasonable to expect the concrete supplier to communicate those differences to the concretors.”

  1. [81]
    Mr Reid’s opinion is clearly founded upon a version of events given to him by Mr Love and/or his staff some time after 15 May 2008.[60]  While his opinion was not really shaken in cross-examination, it is, however, apparent that he was not aware or fully aware of other material facts and, in particular, the levels of water added on the site and the delays in unloading some of the agitators.[61]  On balance, I consider that the opinions expressed by Mr Reid are of some probative value but should be treated cautiously.
  1. [82]
    Mr Reid’s opinions are, however, consistent in a number of respects to the opinions given by Mr Munn and Dr Baweja.[62]  Mr Reid, Mr Munn and Dr Baweja all agree that the immediate cause of the delamination was the premature finishing of the concrete.  They also agreed it was likely that the plaintiff’s employees were “caught out” or fooled by the variable characteristics of the concrete across the floor slab.
  1. [83]
    In this context, the evidence shows that more likely than not the plaintiff was delivered concrete with three different mix designs. The first 6 batches were comprised of a substitute mix. Thereafter, a different mix design (ID10012449) was delivered up until about batch 20. Following that, the balance of the concrete delivered involved a mix design incorporating 2 marked increases in the dosage of Pozzolith added.[63]  The consequences of this were that the plaintiff was required to work with, and in particular, finish off a concrete slab with markedly variable setting and bleeding characteristics across the floor slab.
  1. [84]
    The fundamental point of difference between the experts is what caused the plaintiff’s employees to be caught out by the behaviour of the concrete. In Mr Reid’s opinion, it was “probably due entirely to the changes in the slump and bleeding induced by the new admixture …”[64]  To similar effect is the opinion of Dr Baweja:[65]

“It is concluded that the inclusion dosage of the set retarding admixture into the concrete was inappropriate for the project, largely due to its high variability.  In Australian Standard AS1478 (Admixtures for Concrete), it is noted that unless an adequate history of the effect of a particular admixture is available, comprehensive testing of the concrete mix involved should be undertaken.  This becomes more important when combinations of admixtures are prepared for use as is the case here.  The observed variations in set retarder admixture dosage would have significantly influenced early age characteristics of concrete, making the complex placement and finishing operations unable to be achieved with success.” (emphasis added)

  1. [85]
    While Mr Munn was prepared to accept that the “concrete mix” might have contributed to the delamination, in his view the primary cause was the addition of water on the site:[66]

“Whilst I agree with references and many observations made by John Reid and Daksh Baweja in their reports I do not agree with their conclusions in relation to the cause of the defective floor surface being poor concrete mix design and the use of inappropriate and uncontrolled concrete admixtures.  The concrete mix was varied significantly by water addition during the site placement at the request of Panel and in my opinion this variation of mix design is the prime cause of the variation in concrete quality.” (emphasis added)

  1. [86]
    In paragraph 8 herein, I identified that Mr Love ordered the concrete to meet the following specifications:  32MPA strength grade, an average aggregate size of 20 mm and a slump of 80 mm.  That the features of the concrete are identified in such a short-hand way is common industry practice.  As a consequence of an experience the plaintiff had with the defendant’s concrete on an earlier job, Mr Love also required the concrete for this job to have less bleed.  It was the responsibility of the defendant to ensure that the other ingredients added to the concrete were appropriate and in correct quantities,[67] save as expressly specified by the purchaser.[68]
  1. [87]
    It was Mr Beard who submitted the proposed mix design, including the additives Rheoplus and Pozzolith, to the defendant’s technical staff for approval.  His mix design was approved and used.[69]  At the relevant time, Mr Beard was taking advice from Mr Dawson from BASF.[70]
  1. [88]
    Consistent with the evidence of other witnesses, Mr Beard said that at first the concrete “arrived in good condition” but then it got stiffer before returning back to a more workable state.  However, unlike the other witnesses, Mr Beard considered the problem was caused by the age of the concrete in the agitators and not because of any inherent fault in the concrete mix.[71]  I do not accept his evidence about this.
  1. [89]
    During the job, Mr Beard, after consulting with Mr Dawson, did two important things.  He contacted the defendant’s plant and told the operators to slow down the delivery rate of the concrete and to increase the level of Pozzolith being added to the mix.[72]  In fact, the levels of Pozzolith were materially increased on two separate occasions at or about batches 20 and 28.[73]  The evidence establishes that the dominant reason for Mr Beard changing the levels of Pozzolith was to delay or slow down the setting of the concrete not, as Mr Munn assumed, because of changes in temperature during the day.
  1. [90]
    Implicit in the evidence of both Mr Beard and Mr Dawson is that these steps were taken to offset the slow placing of the concrete by the plaintiff.
  1. [91]
    I have already rejected the proposition that the plaintiff’s work practices caused delay in unloading of the agitators. The evidence establishes that the most probable cause of placement delay was the delivery of defective concrete.
  1. [92]
    Mr M Mennes gave the following evidence:[74]

“And did you speak to anybody about the concrete?--  Look, I spoke – when we first saw the problem I spoke to Dave Love, who’s the owner of Panel Logistics, to say that – you know, that the – there was – it was moving quite quickly and it probably needed his attention.

Sorry.  What was moving quite quickly?--  The concrete was going off quite quickly-----

Oh, I understand?--  -----and probably needed his attention.  I believe I made a phone call to him and I spoke to Darren who was looking after the concrete pour for Panel Logistics that day.  Yeah, he was managing the pour for that day, and I’m not sure what time the rep from Wagners turned up.  I spoke to him when he was there on site and just mentioning, you know, telling him, ‘Hey, look, there seems to be issues with this.  Can you find out what’s going on at the plant?’, and to sort out the issue.

Can you remember the rep’s name?--  No, I can’t, I’m sorry.

So what did the rep say to you after you spoke to him?--  Look, he spoke to the plant.  He acknowledged that there was – you know, that it – he had to acknowledge it was happening right before his eyes, that it was moving quite quickly, and he spoke to the plant.  I’m not privy to what he actually said to them, but he did – he did speak to the plant where they were batching the concrete.”

  1. [93]
    To a similar effect Mr Johnson in exasperation told Mr Beard to sort it out,[75] as did Mr Love.[76]
  1. [94]
    In response to a question asked concerning two emails exchanged between Mr Beard and his company,[77] Mr P Mennes[78] gave the following evidence:[79]

“Do you know why that would – why that was written?--  Well, it was contrary to what Martin Beard had told me on site on the day of the first meeting, which was on the 29th of September.  I was reassured by Martin Beard that Wagners was a family run concrete firm – or family run business.  He had also told me that the – on that particular day, there was an issue with the moisture retardant on the day of the pour that he had reviewed – he had reviewed the concrete dockets from that day and he had undertaken his own investigation prior to our meeting on the 29th.  That there was a [sic] issue with the moisture retardant placed in the concrete, but it resolved some time during the pour.  That also – that they would stand behind their product and they would work with Dave to resolve the matter as we were – as MBS Constructions were the – it was our reputation, it was our money that was on the line at that point.  Because Panel Logistics and Wagner’s [sic], I believe, would have been paid up because this was well and truly at the – at the end of the job when this became evident.  So, basically, I read the first letter.  There was, as stated on the second email, there was a – there was a – a sentence in the last paragraph where David Love, Panel Logistics were accused of poor placement as – as the cause.  When I rang Martin Beard, I – I basically said that this was contrary to what you promised me was going to happen and that this is – I – that this letter basically washes their hands and absolves them of any particular problem.  He obviously took that on board and said, ‘Leave it with me’ and it was obviously near a month later that he reissued the same letter, but retracted the statement where he accused Panel Logistics or Dave Love from poor placement.”

  1. [95]
    In my opinion, the evidence of these witnesses was not shaken or put in issue in any material way. On the other hand, when Mr Beard was asked about these matters and conversations, on most occasions his memory failed him.[80]
  1. [96]
    The evidence of what occurred on the site that day leads me to conclude that Mr Beard knew or strongly suspected that the concrete behaved as it did because of an error made in the addition of the admixtures Rheoplus and/or Pozzolith into the concrete mix.
  1. [97]
    That a mistake was made in the preparation of the mix design was suspected by Mr Reid but, in my view, confirmed by Dr Baweja.
  1. [98]
    After conducting a detailed analysis of the data concerning the concrete which was initially disclosed, Dr Baweja stated:[81]

“Of specific concern is the inclusion of set retarding admixture into the supplied concrete.  In Tables 3 and 4, data for admixture inclusion into the concrete are shown as well as data for recommended minimum and maximum dosage of each admixture as recommended by the manufacturer in data sheets published for each admixture.  In this analysis, actual values of admixture inclusion have been used as opposed to target values given on the batch records.  It is noted that the conclusions inferred are independent of what data set (target or actual) is used for analysis.  It can be observed that whilst the water reducing admixture dosage is marginally outside the suggested minimum limit provided by the admixture manufacturer, its inclusion into the concrete is very consistent.  The set retarding admixture, however, has a very highly variable inclusion into the concrete ranging between 150mls/m3 to 657 mls/m3 (Table 4).

To further illustrate this observation, a plot of individual batch records versus set retarder dosage is presented in Figure 1.  The following is concluded from these data:-

  • The dosage of set retarder is highly variable;
  • Batch record 7 shows a significantly lower dosage when compared with other data indicating a process problem with concrete batching specific to the set retarding admixture; and
  • Significant changes in set retarder dosage are observed in batch records 20 through to 30.”
  1. [99]
    Figure 1 of Dr Baweja’s first report[82] shows a diagrammatic representation of Pozzolith dosage analysis.  It shows that (save for batch 7) for the first 21 loads the Pozzolith dosage was consistently just above the manufacturer’s recommended minimum dosage.  At or about batch 20, it was increased significantly before being significantly increased again at or about batch 28.  Save for batch 7, which fell well below the recommended level, the dosage of Pozzolith sat consistently at just above 300mls/m3 for 20 batches, then increased by in excess of 50 per centum for some 10 batches, before being set at just under 700mls/m3, an increase of over 100 per centum, for the final batches.
  1. [100]
    In response to a question by me about his Figure 1, Dr Baweja said:[83]

“Your Honour, the addition of admixtures that basically – a manufacturer gives you limits to what you work with, which are a guide, which is something that should be looked at in a mixed design but every concrete has different aggregates, different cements, different components and those admixture changes – those admixture levels might vary.  So, whilst – whilst you have a guide for the admixture, the admixture addition really does affect the fresh concrete properties on the job.  So, just because you’re within the limit doesn’t mean that, in fact, it can’t cause a problem and one of the issues that – from what I’ve seen on this project is that there seems to have been a lack of control or a lack of understanding of how much admixture needed to be added in for the on-site conditions of temperature for example and it seems that really very long way into the process that someone has all of a sudden come in and added admixture.  So, if you look at that chart there’s been a very big increase in admixture dosage right say two-thirds of the way through the – through the job.” (emphasis added)

  1. [101]
    According to Dr Baweja, the fluctuations in the quantities of Pozzolith being added to the mix suggested a “process out of control.”[84] 
  1. [102]
    The reference to there being a significant increase in the levels of Pozzolith at about two-thirds through the job is consistent with the other evidence about when the concrete started to behave normally again. Exhibits 1, 4, 7 and 9 establish with sufficient certainty that the delaminations was, if not entirely, significantly concentrated into those areas of the slab poured before the increase in the dosage of Pozzolith.
  1. [103]
    While Dr Baweja’s major concerns were initially directed at the defendant’s use of the Pozzolith, he did note that while the defendant used the Rheoplus in a consistent way, its dosages were “marginally outside” the manufacturer’s recommended minimum limits.[85]
  1. [104]
    Following further disclosure, including relevant bills of materials (BOM),[86] Dr Baweja and Mr Munn provided further reports.[87]  While Mr Munn’s opinion remained materially the same, Dr Baweja’s concerns became more focused on the Rheoplus dosages.  At pages 4 and 5 of his further report, Dr Baweja states:

“It is also noted that the recommended minimum dose rate for RheoP44 as specified by the admixture supplier is 400mls per 100kg cementitious.  Given Mix ID contains 335kg cementitious per cubic metre, this translates to 1340mls per cubic metre.  Thus the admixture dose rate has been reduced by 25% lower than the minimum dose rate recommended the day before the concrete was supplied. […] The dose rate of Rheoplus 44 utilised by 25% below the minimum dose rate specified by the manufacturer.  As a consequence, the slump retention characteristics of the concrete would be expected to be below the minimum recommended.  This factor, combined with rising ambient temperature on the day of supply and major fluctuations in delivered slump as illustrated in the test records would see the concrete demonstrating variable behaviour with respect to slump.” (emphasis added)

  1. [105]
    In respect of the “major fluctuations in delivered slump”, Dr Baweja reported:[88]

“There appears to be inconsistency of concrete supply procedures that has caused a lack of consistency on site. This is confirmed by the following:-

Slump testing is designed to determine the typical quality of supply with respect to consistency for a given concrete mix supplied to a project. Referencing the slump results recorded, the average slump attaind was 132.5 mm with a standard deviation of 41 mm. Given that the target concrete slump was 80 mm, the test results indicate that 95% of test results would lie within two standard deviations of the mean namely (50.5 mm and 224.5 mm). This is an extremely high level of variability and can be quite detrimental to the plastic and hardened properties of the concrete including but not limited to:

oVariable setting time

oVariable bleed rate due to varying water content

oDifficulty in applying finishing practices given variation in setting time and bleed characteristics …” (emphasis added)

  1. [106]
    Despite the apparent shift in emphasis concerning the admixtures in his two reports (Exhibits 13 and 28), Dr Baweja gave evidence that it was not his intention to shift the emphasis or highlight one of these issues over the other.[89]  I accept his explanation.
  1. [107]
    Mr Munn was critical of Dr Baweja’s conclusions, in the main because he did not consider 4 slump tests out of 27 loads was a sufficient sample. Dr Baweja disagreed saying that, given the volume of concrete involved in this job, four slump tests satisfied the testing requirements of the relevant Australian standard, a matter Mr Munn agreed with under further cross examination. According to Dr Baweja, the four slump tests were enough to give him an “idea” of how the concrete was behaving.  In this regard, I note that this was generally in accord with Mr Munn’s original evidence.[90]
  1. [108]
    On balance, I prefer the evidence of Dr Baweja where it is in conflict with that of Mr Munn.  In my view, Dr Baweja’s analysis of the available data was more detailed and balanced.  Also, in my opinion, Mr Munn proceeded on the basis of a number of facts or assumptions which proved to be incorrect or at least incomplete.  First, he proceeded on the basis that the concrete trucks were held up because of the plaintiff’s incompetence.  The evidence does not support that view.  Second, Mr Munn proceeded on the mistaken belief that the floor was finished to a burnished finish.  Third, it is tolerably clear that Mr Munn proceeded on the basis that the increases in Pozzolith were primarily a response to increasing temperature during the day.  While acknowledging that increasing the dosage of Pozzolith could offset any premature setting of the concrete, he would have been “slightly surprised” if that was the reason.[91]  Finally, Mr Munn initially proceeded, at least in part, in reliance on the data provided by four slump tests.[92]  However, in cross-examination he said that four tests were not “statistically significant”.[93]  In his later report, in reaction to Dr Baweja’s reliance on those test results, Mr Munn described them as providing “problematical and unreliable” data.[94]   However, in further cross examination Mr Munn acknowledged that the four slump tests more than satisfied the testing requirements of AS 1379 and that they “indicated” that the concrete supplied by the defendant did not “strictly meet the Australian standards”.[95]  This contradictory evidence was not explained.
  1. [109]
    Of course Mr Munn is correct when he states that the addition of the water on site could also affect the properties or characteristics of the concrete.  In this regard, Clause 17(a) of the contract provides:

“WAGNERS accepts no responsibility in respect of either the strength of the concrete we supply or any defect that may develop in it if:

  1. (a)
    water is added to concrete either before or after discharge for the delivery unit without the approval of our representative.”
  1. [110]
    Clause 17(b) of the contract also seeks to absolve the defendant of responsibility in circumstances where admixture is used at the request or specification of the customer.  In this case, it is uncontroversial that the only request or specification made by the plaintiff in this context is that the concrete have “less bleed” than the concrete delivered on a previous job.  As I have said, the mix design, including the selection and the quantities of the admixtures Rheoplus and Pozzolith, was the responsibility of the defendant.
  1. [111]
    The evidence in this case leads me to conclude that up until the defendant increased the dosages of the set retardant Pozzolith, it, in breach of contract, supplied concrete that failed to meet the plaintiff’s specifications and, in breach of clause 16 of the contract, failed to meet the standards of AS1379. Thereafter, in breach of Clause 17(a) of the contract, the plaintiff added or caused to be added, without the approval of the defendant, significant quantities of water to achieve a workable level of slump.  That process continued until an appropriate level of slump was achieved through the increased levels of Pozzolith added to the concrete mix, as directed by Mr Beard.
  1. [112]
    The evidence is that up until about one third of the way through the job, the concrete was workable in that it had an acceptable level of slump. However, the evidence is also that areas of the first part of the slab poured also delaminated. The concrete supplied up until about batch 7 involved a substitute design mix. I am sufficiently satisfied that no areas of delaminations were a consequence of unworkmanlike conduct on the part of the plaintiff. Rather, the underlying cause of the delamination, up until the increased dosages of Pozzolith, was the defective concrete manufactured and supplied by the defendant which resulted in unacceptable variability in the setting and bleeding characteristics of the concrete across the floor slab.
  1. [113]
    While the exact cause of the loss of slump will never be known, it is more likely than not that it was caused by a miscalculation on the part of the defendant concerning the admixture dosages of the water reducing agent Rheoplus and the set retardant Pozzolith. If not properly controlled, the combination of the admixtures Rheoplus and Pozzolith can lead to “synergistic” and “unexpected effects”.[96]
  1. [114]
    The plaintiff probably contributed to this situation by adding water to some of the concrete. However, it is clear that this action was taken only for the purpose of rectifying and making workable the defective concrete. That water would be added on site to make the defective concrete workable was a risk or eventuality created by the defendant’s breach. In the circumstances of this case, I do not consider the plaintiff’s action of adding water to the already defective concrete to be either an exceptional or abnormal event. In this regard, it seems to be a regular occurrence that concreters would prefer to try to solve problems on the site rather than reject concrete and potentially jeopardise the completion of the job.
  1. [115]
    The defendant’s breach of contract was not the immediate cause but it was the underlying material cause of the delamination. In Henville & Anor v Walker & Anor[97] McHugh J said:

“If the defendant’s breach has ‘materially contributed’ to the loss or damage suffered, it will be regarded as a cause of the loss or damage, despite other factors or conditions having played an even more significant role in producing the loss or damage.  As long as the breach materially contributed to the damage, a causal connection will ordinarily exist even though the breach without more would not have brought about the damage.  In exceptional cases, where an abnormal event intervenes between the breach and damage, it may be right as a matter of common sense to hold that the breach was not a cause of damage.  But such cases are exceptional.” (footnotes deleted)

  1. [116]
    In Queensland Ice Supplies Pty Ltd v Anco Australia Pty Ltd[98] Chesterman J (as he then was) relevantly said:

“Applying the ‘but for’ test it may be said that Mr Bradley’s failure to look at and clean the strainer was the cause of the disruption and subsequent loss.  It remains equally true that ‘but for’ the defendant’s failure to clean the strainer in November there would have been no disruption and loss.  There are two concurrent causes of the loss.  In these circumstances I do not apprehend that the law requires a plaintiff to prove that the breach of contract was the ‘dominant’ or the ‘effective’ cause.  It is enough if it was a cause of the loss or, put differently, that the breach of contract causally contributed to the loss.”

Orders

  1. [117]
    For the reasons given, I find that the defendant breached its contract with the plaintiff and, as a result of that breach, the plaintiff suffered the damages claimed.
  1. [118]
    Accordingly, the orders of the court are:
  1. The defendant is to pay to the plaintiff the sum of $56,129.70 as damages for breach of contract.
  1. I will hear from the parties if necessary if necessary in respect of interest and costs.

Footnotes

[1]  Evidence of Mr Love T1-11 – 1-12.

[2]  Exhibit 2.

[3]  T1-12.

[4]  T1-54 L 10.

[5]  Exhibit 3.

[6]  T1-54 L 45.

[7]  T1-55 L 9.

[8]  T1-56 L 15.  See also T1-14 LL55-60 per Mr Love.

[9]  T1-78 LL 40-50.

[10]  T1-80 L 35.

[11]  T1-15 LL 10-15.

[12]  According to the delivery dockets, the first eight batches of concrete to arrive on site between 6.05am and 7.20am stayed on site for an average time of 23.45 minutes.  The next seven batches of concrete delivered between 7.25am and 8.15am stayed on site for an average of 55 minutes. The final twelve batches between 9.05am and 12.30am stayed on site for an average of 32 minutes.

[13]  T1-15 LL 25-35; T1-47 LL 30-40.

[14]  See also plaintiff’s written submissions at paragraph 1.

[15]  The implied terms refer specifically to those implied under s 71 of the Trade Practices Act 1974 and s 17 of the Sale of Goods Act 1896.

[16]  (1999) 197 CLR 1 at 22.

[17]  See also Goodman Fielder Consumer Foods Ltd v Cospak International Pty Ltd [2004] NSWCA 704 at paras 96-99.

[18]  Exhibit 2.

[19]  Plaintiff’s written submissions, paras 4-22.

[20] Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at 543 and 553; Grange v Sullivan (1966) 116 CLR 418 at 429.

[21]  Written submissions, para 73.

[22]  Written submissions, paras 50-59.

[23]  Exhibit 2 Clause 18.

[24]  Defendant’s written submissions, paras 33-35.

[25]  Plaintiff’s written submissions, at para 55.

[26] Nissho Iwai Australia Ltd v Malaysia International Shipping Corp (1989) 167 CLR 219 at 227; citing Darlington Futures Ltd (1986) 161 CLR 500 at 510.

[27]  Its written submissions, paras 55-56.

[28]  (1977) 180 CLR 266 at 283.

[29]  Exhibit 21, Tab 12.

[30]  Exhibit 21, Tab 12, p 5.

[31]  E.g. Clause 17.

[32]  T1-19 LL 30-50.

[33]  T1-57 L 50.

[34]  Exhibit 18, p 17, para 8.3.

[35]  Exhibit 18 pp 17-18.  (Mr Munn is a scientist and consulting engineer with extensive experience in matters concrete.)

[36]  E.g. Mr Johnson T1-60 L 35; Dr Baweja T2-19 LL 1-40.

[37]  Exhibit 3.

[38]  T1-40 LL 1-30.

[39]  T1-61 – T1-64.

[40]  T1-86 LL 40-60.

[41]  T2-62 LL 20-30.

[42]  Exhibit 3 pp 501-510.

[43]  Ibid pp 512-519.

[44]  Ibid pp 520-526.

[45]  T1-57 L 48.

[46]  T1-45 L 30.

[47]  T1-56 LL 28-40.

[48]  T2-36 LL 10-20.

[49]  T1-45 L 47.

[50]  T1-45 L 15.

[51]  T1-45 LL 5-10.

[52]  T1-29 L 45.

[53]  T1-30 L 10.

[54]  Between 9.00 am and 9.50 am one agitator was apparently unloaded out of sequence.

[55]  T2-51 LL 40-60 and T2-52 LL 1-15.

[56]  T1-28 LL 10-55.

[57]  T2-37 LL 25-50.

[58]  Statement of claim, para 6.

[59]  Exhibit 5, p 2.

[60]  T1-71 L 50.

[61]  T1-74 LL 40-60; T1-75 LL 1-20.

[62]  Dr Baweja is a highly qualified engineer and is a part-time Associate Professor of Civil Engineering (see Exhibit 15).  Dr Baweja was the expert witness relied on by the plaintiff.

[63]  Exhibit 28, p 3; Exhibit 13, p 16.

[64]  Exhibit 5, p 2.

[65]  Exhibit 13, p 18.

[66]  Exhibit 18, para 8.4.

[67]  T1-13 LL 5-55.

[68]  Exhibit 2, p. 4, Clause 17(b).

[69]  T2-34 LL 5-30.

[70]  T2-48 L 5.

[71]  T2-51 LL 40-60; T2-52 LL 1-30; T2-55 L 8.

[72]  Mr Dawson at T2-105 LL 20-30; Mr Beard at T2-38 LL 1-15.

[73]  See Exhibit 13, p 16, Fig 1.

[74]  T1-79 LL 20-50.

[75]  T1-56 LL 28-45.

[76]  T1-16 LL 5-35.

[77]  Exhibits 10 and 11.

[78]  Mr P Mennes is Mr Mennes’ brother and a director of MBS.

[79]  T1-97 LL 5-32.

[80]  E.g.: T2-38 L 18, T2-40 LL 5-12, T2-52 LL 30-60, T2-53 LL 1-35, T2-57 LL 1-5, T2-58 LL 40-50.

[81]  At p 15.

[82]  At p 16.

[83]  T2-25 LL 10-27.

[84]  T2-25 L 30.

[85]  Exhibit 13, p.15.

[86]  Exhibit 27.

[87]  Exhibits 28 and 29.

[88] Summary at pp. 2-3.

[89]  T4-20 L1-30.

[90]  Exhibit 18, paras 6.7 – 6.8.

[91]  T3-22 LL 40-55; T3-23 LL 1-5.

[92]  See for example, Exhibit 18, paras 6.7 – 6.8.

[93]  T3-15 L 18.

[94]  Exhibit 29, paras 6.3 and 7.3.

[95]  T4-26 L28-60 – T4-27 L1-22.

[96]  Mr Munn T3-36 LL 8-30.

[97]  (2001) 182 ALR 37 at para [106].  See also Cheshire and Fifoots “Law of Contract” (9th Aust. ed.) at para 23.38, p 1116.

[98]  [2000] QSC 072 at para [25].

Close

Editorial Notes

  • Published Case Name:

    Panel Logistics Pty Ltd v Wagners Concrete Brisbane Pty Ltd

  • Shortened Case Name:

    Panel Logistics Pty Ltd v Wagners Concrete Brisbane Pty Ltd

  • MNC:

    [2012] QDC 62

  • Court:

    QDC

  • Judge(s):

    Jones DCJ

  • Date:

    20 Apr 2012

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
Associated Newspapers Ltd v Bancks (1951) 83 CLR 322
1 citation
Jump To
Cite 1 - (1951) 83 CLR 322
Associated Newspapers v Bancks [1951] HCA 24
1 citation
Jump To
Cite 1 - [1951] HCA 24
Astley v Austrust Ltd (1999) 197 CLR 1
2 citations
Jump To
Cite 1 - (1999) 197 CLR 1
Cite 2 - (1999) 197 CLR 1
Astley v Austrust Ltd (1999) HCA 6
1 citation
Jump To
Cite 1 - (1999) HCA 6
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
2 citations
Jump To
Cite 1 - (1977) 180 CLR 266
Cite 2 - (1977) 180 CLR 266
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 45 LGRA 62
1 citation
Jump To
Cite 1 - (1977) 45 LGRA 62
Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500
2 citations
Jump To
Cite 1 - (1986) 161 CLR 500
Cite 2 - (1986) 161 CLR 500
Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82
1 citation
Jump To
Cite 1 - [1986] HCA 82
Goodman Fielder Consumer Foods Ltd v Cospak International Pty Ltd [2004] NSWCA 704
2 citations
Jump To
Cite 1 - [2004] NSWCA 704
Cite 2 - [2004] NSWCA 704
Grange v Sullivan (1966) 116 CLR 418
2 citations
Jump To
Cite 1 - (1966) 116 CLR 418
Cite 2 - (1966) 116 CLR 418
Henville v Walker (2001) 182 ALR 37
2 citations
Jump To
Cite 1 - (2001) 182 ALR 37
Cite 2 - (2001) 182 ALR 37
Henville v Walker [2001] HCA 52
1 citation
Jump To
Cite 1 - [2001] HCA 52
Nissho Iwai Australia Ltd v Malaysia International Shipping Corp [1989] HCA 32
1 citation
Jump To
Cite 1 - [1989] HCA 32
Nissho Iwai Australia Ltd v Malaysian International Shipping Corporation Berhad (1989) 167 CLR 219
2 citations
Jump To
Cite 1 - (1989) 167 CLR 219
Cite 2 - (1989) 167 CLR 219
Perri v Coolangatta Investment Pty Ltd (1982) 149 CLR 537
2 citations
Jump To
Cite 1 - (1982) 149 CLR 537
Cite 2 - (1982) 149 CLR 537
Perri v Coolangatta Investments Pty Ltd [1982] HCA 29
1 citation
Jump To
Cite 1 - [1982] HCA 29
Queensland Ice Supplies Pty Ltd v Anco Australasia Pty Ltd [2000] QSC 72
2 citations
Jump To
Cite 1 - [2000] QSC 72
Cite 2 - [2000] QSC 72

Cases Citing

Case NameFull CitationFrequency
Legal Services Commissioner v Jackson [2017] QCAT 2071 citation
1

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