ADXG Pty Ltd v My Top Australia Pty Ltd

Medium Neutral Citation: ADXG Pty Ltd v My Top Australia Pty Ltd [2025] NSWDC 531

Hearing dates: 20-22 October 2025 and 4 November 2025

Date of orders: 17 December 2025

Decision date: 17 December 2025

Jurisdiction: Civil

Before: Hollo SC DCJ

Decision: Amended Statement of Claim dismissed

Catchwords: CONTRACTS – Incorporation of terms in contract partly oral and partly in writing – where dispute as to the terms of conversation part of surrounding circumstances – approach to assessment of the reliability of evidence given by witnesses
PRINCIPAL AND AGENT – actual authority – whether Plaintiffs’ architect had express or implied actual authority to receive information concerning goods
PRINCIPAL AND AGENT – apparent or ostensible authority – whether architect held out as having authority to receive information concerning goods – whether principal imputed with knowledge of advice conveyed to architect
CONSUMER LAW – misleading or deceptive conduct – non-disclosure – conduct by silence or omission – whether reasonable expectation of disclosure – where information disclosed to architect – no reasonable expectation of disclosure to Second Plaintiff – conduct did not have tendency to lead into error
PRACTICE AND PROCEDURE – Admission of agency – Scope of agency or authority not raised in the pleadings – whether parties chose basis other than pleadings to determine rights and liabilities

Legislation Cited: Australian Consumer Law ss 18, 236, 238
Evidence Act 1995 (NSW) ss 53, 54

Cases Cited: 85 Princess Pty Ltd v Fleming [2025] NSWCA 261
A/S Rendal v Arcos Ltd [1937] 3 All ER 577
Addenbrooke Pty Ltd v Duncan (No 2) [2017] FCAFC 76
Armagas Ltd v Mundogas S.A. [1986] 1 AC 717
Arsalan v Rixon (2021) 274 CLR 606; [2021] HCA 40
Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640
Banque Commerciale SA v Akhil Holdings Limited [1990] HCA 11; (2017) 348 ALR 1; (2017) 121 ACSR 406
Bellgrove v Eldridge (1954) 90 CLR 613
Blackley v National Mutual Life Association of Australasia Limited [1972] NZLR 1038
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304
Crabtree-Vickers Pty Limited v Australian Direct Mailing Advertising & Addressing Company Pty Ltd (1975) 133 CLR 72
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50
Freeman & Lockyear v Buckhurst Park Properties (Mangal) Limited [1964] 2 QB 480
ING Bank (Australia) v O’Shea (2010) NSW ConvR ¶56-259; [2010] NSWCA 71 at [114]
Jeffreys v Sheer [2025] NSWCA 31
Kilcran, in the matter of Allco Finance Group Limited (Receivers and Managers Appointed) (In Liquidation) v Gothard [2014] FCAFC 6
Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] ATPR (Digest) ¶46,054
Left Bank Investments Pty Ltd v Ngunya Jarjum Aboriginal Corporation [2020] NSWCA 44
Masterton Homes Pty Ltd v Palm Assets Pty Ltd (2009) 261 ALR 382
Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited (2010) 241 CLR 357
Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146
Onassis v Vergottis [1968] 2 Lloyd’s Rep. 403
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
Penya v Penya [2025] NSWSC 805
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8
Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165; [2004] HCA 52
Toppi v Toppi (No 3) [2025] NSWSC 733
Watson v Foxman (1995) 49 NSWLR 315 at 319
Wilh. Wilhelmsen Investments Pty Ltd v SSS Holdings Pty Ltd [2019] NSWCA 32

Category: Principal judgment

Parties: ADXG Pty Ltd (First Plaintiff)
Andrew Daniel (Second Plaintiff)
Caroline Daniel (Third Plaintiff)
My Top Australia Pty Ltd (First Defendant)
Parisi Bathware Pty Ltd (Second Defendant)

Representation: Counsel:
J Raine, Solicitor (First, Second and Third Plaintiffs)
M Daniels (First and Second Defendants)
Solicitors:
Raine Litigation (First, Second and Third Plaintiffs)
Prominent Lawyers (First and Second Defendants)

File Number(s): 2024/00117008

Publication restriction: Nil

JUDGMENT

INTRODUCTION

1. These proceedings concern the supply of manufactured porcelain slabs by the First Defendant (My Top) to the Plaintiffs for the purpose of renovations that were conducted at a prestige home in the Eastern Suburbs of Sydney. It was common ground that the porcelain slabs were sourced from two separate batches of stock; one of these was on hand in Sydney and the other was sourced from Italy.

2. The essential complaint of the Plaintiffs, and which has given rise to these proceedings, is that after installation, a perceptible variation was discovered between the shade or texture of the batch of porcelain slabs that had been sourced from My Top’s stock in Sydney and those which had been sourced from stock in Italy. The Plaintiffs claim they had bargained for no such variation.

3. The porcelain slabs or tiles which are the subject of the proceedings are styled ‘Absolute Black’ and are manufactured in Italy and are not cut from natural materials.

The parties and the claims made in the proceedings

4. Before setting out the claims made by the Plaintiffs in these proceedings it is convenient to set out some uncontroversial background and context.

Background and context

5. The Second Plaintiff (Mr Daniel) and the Third Plaintiff (Mrs Daniel) are the owners, as joint tenants, of a prestige home and residential property at Bulkara Road, Bellevue Hill (the Home or the Property). The Property commands impressive city and harbour views and comprises three floors. These may be described as a First Floor, a Ground Floor and a Lower Ground Floor. A sizeable courtyard, entertainment area and swimming pool flow from the Ground Floor.

6. In the second half of 2023, Mr and Mrs Daniel were carrying out renovations at the Property, which involved significant landscaping and exterior building work. They decided to investigate options to replace the floorboards in their family home [1] . The common areas of the Home (including the entry, stairs, lounge, kitchen, dining room, hallways and laundry) had been furnished in black timber floorboards, which over time had faded. Mr Daniel said he thought it preferable, although not essential, to replace the aging black floorboards with new consistently coloured large format porcelain slabs, that would require less maintenance than timber.

7. Mr and Mrs Daniel also thought it preferable to complete all of the building work and interior renovations at the same time. Their architect, Mr Paul Brough (Mr Brough) was engaged to assist with design and material selections for all the building work being undertaken at the property [2] .

8. On 22 August 2023, Mr Daniel met Mr Brough to review a short list of samples of black porcelain slabs from various suppliers. One of the products which Mr Daniel preferred was a sample of a porcelain slab that Mr Brough had sourced from Ms Annalisa Caronna (Ms Caronna) who was a Business Development Manager for the Defendants [3] .

9. There then ensued, in the short period from 22 August to 25 August 2023 when an order was placed, a number of communications mostly by email or by text message, one in person meeting and some telephone calls between Mr Brough, Mr Daniel and Ms Caronna or combinations of them. It has been necessary to set out in some detail below the evidence in relation to these communications, meeting and telephone calls. Mrs Daniel was not involved in any of these interactions and did not give evidence at the hearing.

10. On 25 August 2023 Ms Caronna sent an invoice to Mr Daniel. The invoice from My Top was made out to the First Plaintiff (ADXG), a company of which Mr Daniel is the sole shareholder and director, for an amount of $75,124 for the sale of 55 porcelain slabs including freight charge. Mr Daniel effected payment of the invoice soon after it was sent. The invoice recorded the order of two products of the same type – Absolute Black Natural (6.5mm) 1600 x 3200mm in different quantities, and also a freight charge [4] . 19 of the porcelain slabs were, as the evidence revealed, sourced from stock in Australia (conveniently referred to as ), and 36 of the porcelain slabs were sourced from My Top’s supplier, Ceramica Fondovalle SpA () located near the town of Modena in Northern Italy ().

The claims in the proceedings

12. In these circumstances the Plaintiffs have brought two claims; the first claim for breach of contract and the second alleging conduct which was said to be misleading or deceptive, or likely to mislead or deceive in contravention of s 18 of the Australian Consumer Law (ACL).

13. The claim in contract is brought by ADXG against My Top. Neither Mr Daniel nor Mrs Daniel were alleged to be a party to the contract with My Top. The Plaintiffs also did not press a claim that the Second Defendant, Parisi Bathware Pty Limited (Parisi Bathware) was a party to the contract.

14. The Plaintiffs alleged that ADXG through its sole director, Mr Daniel, entered into an agreement with My Top for the supply of 55 porcelain slabs. Importantly, particulars were furnished as follows in the Amended Statement of Claim:

Particulars of the Agreement:

6.1 The Agreement was partly oral and partly in writing;

6.2 The part of the Agreement that was oral consisted of a conversation between the Second Plaintiff, the agent of the First Plaintiff and the Second Plaintiff and the Third Plaintiff, being their architect Paul Brough (hereinafter “Brough”), and an agent or employee of the First Defendant and/or the Second Defendant, Annalisa Caronna (hereinafter “Caronna”), in a meeting that occurred at the First Defendant’s and/or the Second Defendant’s warehouse in Strathfield South, at approximately 3.00pm on 23 August 2023 (hereinafter “the initial meeting”), as well as further conversations between Brough and Caronna;

6.3 The part of the Agreement that was in writing, or recorded in writing, consisted of emails passing between the Second Plaintiff, Brough and Caronna on 24 August 2023 and 25 August 2023, and an invoice issued by the First Defendant to the First Plaintiff on 25 August 2023. (emphasis added)

15. What is plain from this framing of the Plaintiffs’ case is that Mr Brough was said to be an agent for the Plaintiffs for the purpose of the formation and terms of the agreement. Insofar as the terms of the agreement were said to be oral, Mr Brough was party to conversation at a meeting at about 3.00pm on 23 August 2023 at the Defendants’ warehouse and also, “further conversations” between Mr Brough and Ms Caronna. Insofar as the agreement was in writing, the Plaintiffs relied on emails passing between Mr Daniel, Mr Brough and Ms Caronna on 24 and 25 August 2023. It will be necessary to return to this formulation of the claim in contract to address some of the arguments that were made in closing submissions.

16. The Plaintiffs pleaded that it was a term of the agreement that My Top would supply to ADXG the porcelain slabs in two batches, each described as “Absolute Black Natural (6.5mm) 1600 x 3200mm porcelain slabs” comprising Batch 1 and Batch 2. Critically then, the Plaintiffs alleged an express term of the agreement that there would be no variation between the porcelain slabs (the ‘no variation’ term). This term was said to have been breached because the shading and texture of the porcelain slabs comprising Batch 1 did not match the shading and texture of the porcelain slabs comprising Batch 2.

17. ADXG sued for damages for breach of the ‘no variation’ term in alternative amounts depending on whether it would be necessary to replace the Batch 1 slabs or the slabs from both batches.

18. In its Defence, My Top admitted that there was an agreement between it and ADXG to supply porcelain slabs and further admitted that the contract was partly oral and partly in writing but denied that the conversations and communications listed in paragraph 6 of the Amended Statement of Claim comprised the totality of conversations and communications. My Top admitted that Mr Brough was the agent of the Plaintiffs.

19. My Top asserted that it had expressly or impliedly refused to guarantee that there would be no variation between the porcelain slabs. It asserted that Mr Daniel was aware that the only way to avoid batch variance was to take the complete order in one batch. My Top also furnished particulars, which included reference to queries it made of Fondovalle in Italy whether the two batches would be identical. The particulars also referred to a conversation between Ms Caronna and Mr Federico Battaglia (whom the evidence identified as the Chief Operating Officer of the Defendants) (Mr Battaglia) the effect of which was that it would not be possible to match the batches, and, critically, a further telephone conversation between Ms Caronna and Mr Brough on the morning of 25 August 2023 in which Ms Caronna conveyed her earlier conversation with Mr Battaglia.

(a) the total price for the porcelain slabs was $75,124.50 inclusive of GST and freight charges; (b) ADXG remitted payment in full for those goods to My Top on 25 August 2023; (c) the first 19 porcelain slabs comprising Batch 1 were delivered to the Property on 29 August 2023; (d) the remaining 36 porcelain slabs comprising Batch 2 were delivered to the Property on 29 October 2023; and (e) that the slabs were cut and installed in the Property after the dates of their respective delivery.

22. There was also no dispute as to where the porcelain slabs were laid in the Home. Following Mr Brough’s design (to which I will refer below) the Batch 1 porcelain slabs were installed on the First Floor (upper level) common areas, including the laundry and on the steps from the First Floor to the Ground Floor, and then on the steps to the Lower Ground Floor. The Batch 2 porcelain slabs were installed on the Ground Floor (entry level) including in the kitchen and the lounge and dining room areas.

23. It was common ground that after the installation of Batch 1, the porcelain slabs were covered with soft foam and plywood which was taped down to ensure the porcelain slabs were not damaged by tradespersons during the ongoing renovation works [5] . The Defendants made no submission that any inconsistency between the batches should have been noticed by the Plaintiffs or their builder upon delivery of the Batch 2 slabs.

24. It did not appear to be in contest that the first time Mr Daniel observed some inconsistency between appearance of the porcelain slabs comprising Batch 1 and Batch 2 was in the course of a meeting at his home with his builder on 9 November 2023; that is, after the installation of the Batch 2 slabs. He gave evidence of placing two pieces of porcelain slabs from each batch side by side [6] .

Claim for misleading or deceptive conduct

25. The claim for misleading or deceptive conduct was made by Mr and Mrs Daniel against both My Top and Parisi Bathware. It was not very clear to me why the claim against Parisi Bathware was continued in circumstances where the contract claim against it was abandoned.

26. The conduct which was alleged to be in contravention of s 18 of ACL was particularised to include three emails (which I will address in more detail below) as follows:

(a) an email from Mr Brough to Ms Caronna and to Mr Daniel on 24 August 2023 at 3.59pm; (b) an email from Mr Daniel to Ms Caronna (copied to Mr Brough) on 24 August 2023 at 4.05pm which included the following:

“And yes, as Paul states, consistency in appearance is critical for obvious reasons. If you don’t think that two batches (if they are in fact two batches) will be identical, for whatever reason, please let me know before I place the order”;

(c) an email from Ms Caronna to Mr Brough and Mr Daniel on 24 August 2023 at 4.33pm; and (d) that Ms Caronna did not advise Mr Daniel or Mr Brough that there would be variation between Batch 1 and Batch 2 prior to the placing of the order.

27. Despite the terms of (d) above, it was then alleged that the Defendants’ conduct, “in being on notice of the need to advise [Mr Daniel] of variation between [Batch 1] and [Batch 2] but accepting the order without giving [Mr Daniel] that explicit advice, was misleading or deceptive, or likely to mislead or deceive”.

28. In this way, the claim for misleading and deceptive conduct was, in essence, a silence case, being a failure to advise Mr Daniel of variation between the porcelain slabs comprising Batch 1 and Batch 2. In particular, the allegation of a failure to advise Mr Daniel was said to arise from the terms of his email of 24 August 2023 at 4.05pm, including the extract I have set out in paragraph [26(b)] above.

29. The Defendants denied that their conduct was misleading or deceptive or likely to mislead or deceive and repeated their response to the contract claim that My Top, through Ms Caronna, had expressly or impliedly refused to guarantee there would be no variation between the batches, including by referring to the confirmation that had been sought from Fondovalle in Italy and the conversation between Ms Caronna and Mr Brough on the morning of 25 August 2023 prior to the placing of the order.

Breach and concessions concerning the variation in the porcelain slabs

30. Although breach of the ‘no variation’ term was put in issue in the pleadings, the Defendants conceded in their closing submissions, that if the ‘no variation’ term formed part of the agreement, they did not contest that such a term had been breached. This was explained on the basis that reliance on expert evidence proffered by the Defendants going to this issue had been abandoned on the third day of the hearing and “in light of the numerous representations in evidence concerning variance between batch 1 and batch 2 of the porcelain slabs” [7] . That evidence included, by reason of s 54 of the Evidence Act 1995 (NSW), a view or inspection of the Property that the parties invited me to take pursuant to s 53 of that Act.

31. During the course of the view, I prepared a record of the vantage points from which I was asked to make observations and provided this to the legal representatives of the parties before it was tendered in evidence. As I indicated to the parties and recorded in the transcript, I observed during the view that from some vantage points (but not others) there was a perceptible difference between the shading of the tiles from the two batches. I invited the parties to comment on my observations or draw attention to any error I may have made in recording them: see ING Bank (Australia) v O’Shea (2010) NSW ConvR ¶56-259; [2010] NSWCA 71 at [114]. I also recorded that my perceptions, as to the difference in the shade of the tiles, appeared to have been impacted by the light, and the reflection of the light, coming into the Home at the particular time and the location I was asked to make my observations [8] .

The Relief Claimed

32. Under its contract claim, ADXG claimed the replacement cost of the porcelain slabs, depending on whether only the Batch 1 slabs needed to be replaced or whether slabs from both Batch 1 and Batch 2 needed to be replaced.

33. During the hearing, an affidavit of Franco Parisi sworn 21 October 2025 was filed and read without objection. Mr Parisi gave evidence that an additional 19 porcelain slabs from the same manufacture and production as the Batch 2 porcelain slabs sold to ADXG had been ordered from Fondovalle. Mr Parisi confirmed in his evidence that these further 19 porcelain slabs were being stored in a warehouse in an unopened “A frame”, which would signify that they are in good condition.

34. Following the giving of evidence by Mr Parisi, ADXG, by an Amended Statement of Claim, sought in the alternative to its contract claim, relief pursuant to s 238 of the ACL for an order that My Top deliver, in complete and undamaged condition, the porcelain slabs referred to in Mr Parisi’s affidavit. This relief was said to be available on the basis that My Top had been engaged in conduct in contravention of a provision of Chapter 2 of the ACL and that ADXG had suffered loss or damage by reason of My Top’s contravening conduct. The Defendants did not oppose the Plaintiffs’ application for leave to amend to include this relief.

35. Under the misleading and deceptive conduct claim, Mr and Mrs Daniel claimed the cost of remedial works depending on whether it was necessary to remove the Batch 1 porcelain slabs or both batches. The cost of the first scenario, that is, removing the Batch 1 tiles and installing replacement tiles, but not including the cost of such replacement tiles, was claimed to be $104,610.

36. Mr and Mrs Daniel also claimed the costs of alternative accommodation during the period of the remedial work, which would, on the evidence, take between two and a half weeks and five weeks on site, depending on the scope of the work.

Approach to the determination of the issues in dispute

37. It is not controversial then that there was an agreement for the supply of black porcelain slabs of a certain size – 6.5mm x 1600mm x 3200mm and this would be supplied in fixed numbers from Batch 1 (from stock in Australia) and Batch 2 (from stock held by Fondovalle in Italy).

38. The first issue for determination is whether it was a term of the agreement that there would be no variation, in the sense of the shade or texture of the porcelain slabs, between the two batches. This was a topic that had been raised in the communications prior to the placing of the order. While there were some differences in emphasis and in the accounts given by the witnesses of what occurred at the meeting of 23 August 2023 at the Defendants’ warehouse, as will be seen below, it is plain that, by the afternoon of 24 August 2023, both Mr Daniel and Mr Brough had stated, or restated, the importance of consistency in the tiles.

39. Ms Caronna had understood the significance of this. However, it is also clear that she arranged for clarification to be sought on “shade variation” from Fondovalle in Italy and that she expected “further instructions” from Italy overnight. In the circumstances, the terms of what were said in the conversation Ms Caronna said she had with Mr Brough at 11.30am on 25 August 2023 and in particular, whether she conveyed in effect that the consistency between the two batches could not be guaranteed, assumes a critical evidentiary significance in this case. This is because, if her account is to be accepted, she conveyed to Mr Brough expressly, or at least impliedly, that My Top could not contract on terms that required visual consistency between the batches. Mr Brough denied the terms of the conversation which Ms Caronna says took place.

40. The Plaintiffs submitted in closing address that, even if I were to accept Ms Caronna’s version of the 11.30am 25 August 2023 telephone call, that would not be fatal to the contract claim. This is because, it was argued, Mr Brough’s agency was limited and if the information Ms Caronna says was conveyed to him, it was outside the scope of his actual or apparent authority, and in breach of Mr Daniel’s express instruction to bring such information to him personally.

41. The claim for misleading and deceptive conduct in contravention of s 18 of the ACL followed similar lines. As has been seen above, the essence of that claim is that the Defendants accepted the order to supply the porcelain slabs, where they were on notice through Ms Caronna, of the need to advise Mr Daniel of variation between the batches and that they failed to do so.

42. Again, what was said at the 11.30am 25 August 2023 telephone call between Ms Caronna and Mr Brough assumes criticality; in effect, whether the Defendants failed to advise. But the Plaintiffs also submit that there is no evidence that Ms Caronna advised Mr Daniel of any differences or risks of differences between the two batches of porcelain slabs.

“19. This is in line with the appropriate approach to be taken by a trial judge in assessing the reliability of evidence given by witnesses in the course of trial proceedings. Among the salient principles that guide this undertaking are the following:

(1) In circumstances where events have taken place long ago, the orthodox and sensible approach for a trial judge to take in assessing the credibility and reliability of the evidence of a witness about those events is to place primary emphasis on the objective factual surrounding material and the inherent commercial probabilities, together with the documentation tendered in evidence: Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599; [1999] HCA 15, Gleeson CJ, Gaudron, Kirby and Hayne JJ at [15]–[16].

(2) A proper understanding of the chronology of events is critical and contemporaneous documents generally furnish the most reliable source of evidence as to what occurred or, at the very least, provide a generally reliable reference point from which to assess the reliability of witness testimony: ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24, Bell P (with whom Bathurst CJ and Leeming JA agreed) at [25].

(3) Judicial notice has been taken of scientific research which casts doubt on the ability of a trial judge to tell truth from falsehood accurately based on the appearance of witnesses such that trial judges should limit their reliance on the appearances of witnesses and develop their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events: Fox v Percy (2003) 214 CLR 118; [2003] HCA 22, Gleeson CJ, Gummow and Kirby JJ at [30]–[31].

(4) There are multiple problems with a trial judge making demeanour findings, ranging from systematic error or bias, memory malfunctions, the possibility that witnesses may be dishonest about only parts of their evidence, that a truthful witness may give accurate or inaccurate testimony and that a dishonest witness may appear to be truthful. A trial judge should keep in mind the guidance provided in Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186; [2006] NSWCA 187, by Ipp JA (with whom Mason P and Tobias JA agreed) at [26]:

These problems and doubts about demeanour findings explain why trial judges are expected to weigh their impressions as to demeanour carefully against the probabilities and to examine whether the disputed evidence is consistent with the incontrovertible facts, facts that are not in dispute and other relevant evidence in the case. Of course, demeanour may trump the probabilities, but it should be apparent from the judge’s reasons that the probabilities and consistency with other relevant evidence have properly been taken into account.

(5) A trial judge should exercise restraint when forming a view about the credibility of a witness based on demeanour in giving evidence because it is a stressful and unfamiliar experience for most people, and particular care must be exercised in making demeanour findings where a witness is from a different cultural and ethnic background to that with which the trial judge is familiar: Goodrich, Ipp JA at [21], citing Sir Thomas Bingham in “The Judge as Juror: the Judicial Determination of Factual Issues” (1985) 38 Current Legal Problems 1 at 10–11. As was observed in Société d’Avances Commerciales (Société Anonyme Egyptienne) v Merchants’ Marine Insurance Co (The Palitana*)* (1924) 20 Ll L Rep 140; [1924] 11 WLUK 83, by Atkin LJ at 152:

… an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour.

This passage was quoted with apparent approval by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy, at [30].

(6) The assessment of the credibility of a witness is a larger concept than demeanour and the latter is not to be overemphasised: White Constructions Pty Ltd v PBS Holdings Pty Ltd [2020] NSWCA 277, Bell P (with whom White JA agreed generally at [154]–[156]) at [106], citing Goodrich at [16]–[27]. See also Admiral International Pty Ltd v Insurance Australia Ltd [2022] NSWCA 277, Bell CJ (with whom Ward P and Macfarlan JA agreed) at [102]–[103], citing White Constructions, at [106] and [138] and Goodrich, at [16]–[27].

(7) It is important to bear in mind that the ordinary human experience of a witness makes their memory of conversations fallible, as eloquently stated in the following oft-cited passage in Watson v Foxman (1995) 49 NSWLR 315, by McLelland CJ in Eq at 319 (recently approved in Touma v Highfields Australia Pty Ltd [2024] NSWCA 160, Basten AJA at [18] (with whom White and Adamson JJA agreed)):

… human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

(8) Oral recollection of conversations still plays an important role as evidence in a case, as explained in ET-China.com, by Bell P (with whom Bathurst CJ and Leeming JA agreed) at [27]–[29] in the following terms (emphasis in original):

[27] Whilst the quality and accuracy of oral recollection of actual conversations should be treated with care and caution given the fallibility of human memory (of which there has been a growing appreciation within the judiciary in recent decades), oral testimony may still be of value and importance, as was recognised in the nuanced observations of Leggatt J (as his Lordship then was) in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC (Comm) 3560 at [22] (Gestmin):

the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth. (emphasis added)

[28] Documents and events have to be understood in their context, and evidence of context will often be furnished by witnesses in their oral evidence. Documents, moreover, will not always present a complete picture of events. Indeed it would be rare that they do. Nor do contemporaneous documents necessarily or invariably convey or record the background or context in which events took place. That background or context will be familiar to the actors at the time of those events but may not always emerge from documents.

[29] Context is critical for at least two reasons. Documents and events take their meaning from their context. The context in which events occurred may not necessarily be apparent to a court many years later when hearing a case. A clear understanding of context, both commercial and cultural, is also important where, as in the present case, some or all of the events under consideration occurred overseas and in settings that may differ from those usually dealt with in domestic litigation.”

46. In Jeffreys v Sheer [2025] NSWCA 31 Adamson JA (with whom Mitchelmore JA and Basten AJA agreed) referred to the approach outlined by Lord Pearce in Onassis v Vergottis [1968] 2 Lloyd’s Rep. 403 at 431:

“’Credibility’ involves wider problems than mere ‘demeanour’ which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be … Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness. And motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process. And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part.”

47. Reference was also made in the Plaintiffs’ submissions to Penya v Penya [2025] NSWSC 805 where Williams J, after reciting the well-known observations of McLelland J in Watson v Foxman (Watson v Foxman) (1995) 49 NSWLR 315 at 319 (included in the extract from Toppi v Toppi above), stated at [163]:

“For that reason, when assessing the evidence of a witness about their memory of historic conversations, the court places primary emphasis on any objective surrounding facts that are either undisputed or established by contemporaneous documents, and the inherent probabilities and improbabilities, accepting, however the witness testimony may still be of value and importance, including providing evidence of the context in which relevant documents and events must be understood.” [Citations not included].

Communications and Events leading to the Order of the Porcelain Slabs

48. The principles that I have referred to make it appropriate to set out the events, communications and meetings which took place between 22 and 25 August 2023 against the background earlier referred to at [5] to [11].

22 August 2023

49. On 22 August 2023 Mr Brough called Ms Caronna advising that he was an architect working on a project for an important client who was looking for a black-coloured slab for a custom home that needed to be completed before Christmas. They exchanged text messages in which:

(a) Ms Caronna sent images of ‘Absolute Black’ slabs from the Fondovalle website; (b) Ms Caronna advised that she had “in stock now” 19 sheets of 1600mm x 3200mm and that she could organise a sample for Mr Brough; (c) Ms Caronna advised that Italy’s lead times were 18 to 20 weeks so that she could not match other companies who Mr Brough had indicated were estimating 12 weeks; (d) Mr Brough advised the “owner was very keen”’ and (e) Mr Brough wanted to see slabs of different thickness side by side [9] .

50. On the afternoon of 22 August 2023, Mr Brough attended a showroom at Silverwater where he was given a sample ‘Absolute Black’ tile (100mm x 200mm) to take away to his client.

51. Later that day, Mr Brough met with Mr Daniel at the Property to review the short list of samples from various suppliers. Mr Daniel preferred the My Top product based on its shade of black. Either on that occasion, or on the following morning, Mr Brough advised Mr Daniel that the My Top product was supplied from Italy although there was some stock in Australia.

23 August 2023

52. On the morning of 23 August 2023, Mr Brough sent what appears to be a series of texts to Ms Caronna as follows [10] :

“Annalisa

Any luck with Italy?

Please call

Annalisa

Is it possible to see thick and thin

slabs side by side”

53. Also during the course of that morning, Mr Brough and Mr Daniel exchanged text messages which indicated there were 19 ‘sheets’ in stock in Australia and 25 ‘sheets’ in Italy. In one of these texts Mr Daniel messaged:

“At some point we may need to check if they are the same batch for colour consistency?”

And then

“I’m thinking doing part now and part when the Italy batch arrives”.

Mr Brough responded:

“Yes I’ve already asked her to see them together” [11] .

54. Later that day, arrangements were made for both Mr Daniel and Mr Brough to meet Ms Caronna at a warehouse in Silverwater. Ms Caronna’s unchallenged evidence was that Mr Brough had requested the meeting to take place in order for her to show Mr Daniel a “side by side” comparison between the ‘Absolute Black’ slabs of different size and thickness at the warehouse [12] .

The 23 August 2023 Warehouse meeting

55. The meeting took place at about 3pm and was attended by Mr Daniel, Mr Brough and Ms Caronna. A warehouse contractor, Mr Tony Constantino, was also present.

56. The parties placed some emphasis of what occurred at the meeting on 23 August 2023 at the Defendants’ warehouse. There were some differences in the accounts of what was said at this meeting in the testimony of Mr Daniel and Mr Brough on the one hand and that of Ms Caronna on the other. Ultimately, I do not regard these differences as crucial because neither party suggested that a contract had been formed at that meeting, and because whatever was said was subject to further communications between the parties. However, what took place at the meeting does provide some significance to the events as they developed.

57. The fourth person present at the meeting was Mr Constantino. He did not give evidence. He was described variously as a warehouse contractor or a crane operator. I am not satisfied on the state of the evidence that I can draw any inferences by reason of the failure of the Defendants to adduce evidence from him about what occurred at this meeting.

58. The meeting lasted about 40 to 45 minutes. At the meeting Ms Caronna informed Mr Daniel and Mr Brough that there were 19 slabs of 6.5mm (thick) black porcelain in stock in Australia at that time [13] . Ms Caronna had already informed Mr Brough of this by an earlier text message.

59. It is clear that, at the meeting, the parties looked at samples of slabs of different thickness - 6.5mm and 20mm. I consider that some of the differences in the evidence may be attributable to the witness’ own perceptions of the comparisons that were made between the two different thicknesses of porcelain slabs.

60. The evidence establishes that initially, the sample that had been provided to Mr Brough on the previous day looked different to other porcelain slabs that were on display [14] .

61. As a consequence, two larger slabs of 6.5mm and 20mm porcelain products were then positioned on top of each other for inspection using a crane mechanism. I infer that Mr Constantino was operating the crane. The accounts of what was observed by the witnesses then differed slightly.

62. Mr Daniel said that the difference in the colour or consistency of the two slabs was “very, very close to each other and if not perfect, matched” [15] . Ms Caronna said in her oral testimony “there was definitely a shade variation that was detected but it was very close” so that the slabs were not identical [16] . Mr Brough, for his part, was adamant that there was no variation and the two different batches were ‘exactly the same’ [17] .

63. I accept that the slightly different accounts as to the comparison between the different batches may have been a matter of perception and impression. Importantly however, as set out below, in her later email of 24 August 2023 at 4.33pm, Ms Caronna described that the batches “”.

“I’m still working on Italy to receive an answer regarding freight for the (sic) more 6.5mm slabs if this is an option and will come back to you in a couple of hours.

In the meantime, here is the quote with both 6.5mm slabs and 20mm slabs mixed at your special rate”.

Plainly, Ms Caronna had arranged for enquiries to be made of Italy (Fondovalle), including for the cost of freight. Some reference appears to have been made to those enquiries also in Mr Brough’s text messages earlier that morning (see [52] above). I will return to the communications with Fondovalle below.

24 August 2023

72. On 24 August 2023 at 1.15pm, Ms Caronna sent through a second quote to Mr Brough [22] . Like the earlier one she had sent the previous day, it was sent to Mr Brough alone and not to Mr Daniel. This quote was for two lots of 6.5mm slabs as explained in the covering email and now included freight charges:

“1. 19 slabs (6.5mm) in stock

2. 25 slabs (6.5mm) required for tiling upstairs

3. Expedited Sea freight charge with 35-45 day lead time

NB We have adjusted the rates of slabs slightly to compensate for the sea freight charge.”

Again, Mr Brough was recorded as the customer ‘lead’. The evidence did not reveal how it came to pass that Ms Caronna recorded the 25 slabs as being required ‘for tiling upstairs’.

73. Then on 24 August 2023 at 3.37pm Ms Caronna received a text message from Mr Brough stating, “Please call we have a RESULT!” [23] . Soon after, Ms Caronna called Mr Brough. Her account in her affidavit evidence of that conversation was that Mr Brough advised that he was trying to work out a solution involving placing the tiles on different levels and that he would update her once he worked out stock numbers including wastage [24] . Mr Brough did not refer to this telephone conversation in his first affidavit. In his second affidavit, which was responsive, he did not dispute the account given by Ms Caronna but said that the reference to working out a ‘solution’ was a reference to planning the project into different stages to accommodate two delivery dates rather than to accommodate any variation in the materials [25] .

74. At 3.59pm Mr Brough then sent an email to Ms Caronna which was copied to Mr Daniel [26] :

“Dear Annalisa

Thank you for speaking with me just now

It has been a whirlwind experience, in a good way!

Can you please revise your price to suit 55 slabs instead of the 44 previously quoted (all in the 6.5mm)

Andrew

Annalisa thinks it’s less messy to pay all up front now

Andrew can you please advise who the invoice should be made out to

If you want to discuss full payment or part payment, that’s up to you guys

Annalisa

I know you checked with Italy and they confirmed

But please double check that slab shade will be a perfect match

Any variation between batches will NOT be accepted

Thanks again for all your help”. (emphasis added)

75. A few minutes later at 4.05pm Mr Daniel sent an email to both Mr Brough and Ms Caronna [27] . It contained the following:

“Hi Paul and Annalisa,

Yes I’m happy to pay in full. Thank you for the further adjustment in price Annalisa – it’s really appreciated.

Please address your invoice to my company

[ADXG Pty Limited]

…

And yes, as Paul states, consistency in appearance is critical for obvious reasons. If you don’t think the two batches (if they are in fact two batches) will be identical, for whatever reason, please let me know before I place the order.

I’ll pay your invoice as soon as you send it so we can get the slabs sooner rather than later.” (emphasis added)

76. A little more than 25 minutes later Ms Caronna responded to these earlier emails. The email gives important context as to the state of the parties’ discussions and communications up to that point, and to the clarification that was being sought from Fondovalle in Italy. Ms Caronna’s email to Mr Daniel and Mr Brough at 4.33pm stated [28] :

“Thank you, Andrew & Paul,

I understand the importance of the consistency, based on the open plan design. We are emailing Italy for further clarification on shade variation. The good news here, is that in the case of a 20mm and 6.5mm being identical in shade in most instances, this almost [sic] generally impossible to achieve due to them being fabricated at completely different stages of the manufacturing process and they still blended nicely, therefore, this gives us incredible hope.

Therefore, we will await further instructions from Italy overnight and confirm with you, as we had to email them checking stocks for the 36 x additional slabs that are now required (being a total of 55 slabs).

Once we hear back from them tomorrow, we will then proceed with invoice details etc…

Have a lovely evening.” (emphasis added)

Communications with Italy

77. Mr Federico Battaglia is the Chief Operating Officer of My Top and Parisi Bathware Pty Limited. He gave evidence concerning conversations that he had with Ms Caronna and communications he and other staff had with a customer service representative at Fondovalle in Italy, Ms Annalisa Vecchi, about the possible supply from Fondovalle of ‘Absolute Black’ porcelain slabs that it had in stock.

78. It seems that Ms Caronna had commenced discussions with Mr Battaglia late on 22 August 2023 for the purpose of seeking information about stock levels at Fondovalle, and freight rates and delivery times. Mr Battaglia indicated that stock was available from Fondovalle and he would let Ms Caronna know about possible lead times and transport costs [29] .

79. It is apparent that overnight on 22 August 2023 among questions relating to stock, quantity and the cost of transport, Mr Battaglia also asked “Is there any shade variation on this stock or is consistent (sic)?” [30] . At that stage the request was apparently being made for 25 x 6.5mm porcelain slabs. The response was that “All the 25 slabs are in one shade only”. The evidence did not reveal why enquiries were only being made for 25 slabs at that size from Italy, although this was the number recorded in the text messages exchanged between Mr Daniel and Mr Brough on the morning of 23 August (see [53] above) and in Ms Caronna’s second quote which she later sent on 24 August 2023 (see [72] above).

80. These communications are consistent with Ms Caronna’s evidence under cross-examination that the initial communications with Fondovalle were to check if they had sufficient stock of slabs of 6.5mm thickness, and if that stock was the same shade [31] . And it seems that Ms Caronna must have, at some stage, passed on advice to that effect to Mr Brough, which explains the reference in his email of 3.59pm to having checked ‘slab shade’ with Italy (see [74] above).

81. In any event, shortly following Mr Brough’s email of 3.59pm on 24 August 2023, Ms Janaine Tristacci (whom Mr Battaglia described as the purchasing coordinator) asked for confirmation from Fondovalle whether they had 55 x 6.5mm slabs in stock and to advise the final crate number to ship it.

82. And then significantly, overnight on 24 August 2023 (at 5.10pm AEST), Mr Battaglia himself sought further confirmation from Fondovalle about the shade of the stock [32] :

“I know you already confirm it but we need to be 100% sure about the colour shade, if there is any sort of variations, this project will not accept it. It’s a big open plan and consistency is the key in this case.”

The response which came from Ms Vecchi at Fondovalle (at 8.21pm AEST) confirmed that the material (that is the material in stock) “is in one shade only”, referring to a shade 51E [33] . She wrote:

“Absolute has no shade variation, its’ classified V1 (uniform appearance – the guideline is 1 to 4)”.

83. At this point (now 9.32pm AEST on 24 August 2023) Mr Battaglia continued this discussion with Ms Vecchi at Fondovalle [34] :

“Another difficult question, any chance the stock you have available has the same shading of stock we currently hold in our warehouse? Or being an old and different batch can be different?”

84. The response from Ms Vecchi was received at 10.00pm AEST [35] :

“Ciao Federico

Last time you took this item it was 2020 and it was shade 49D.

So shades are different, but I am not able to let you know how much they are (we do not have anything left in stock).” (emphasis added)

Pausing there, it is clear that Mr Battaglia had asked a direct question about the consistency of the stock held in Australia compared with the stock that was being held in Italy and was advised that they were a different shade – shade 51E as against the stock which had earlier been taken which was shade 49D. Mr Battaglia was advised that the “shades are different” but the extent of that difference was unknown because Fondovalle did not have any of the older stock on hand. That advice was provided to Mr Battaglia by email late in the evening on 24 August 2023.

25 August 2023

85. At 8.24am on 25 August 2023 Mr Battaglia sent a company internal (Teams) message to Ms Caronna advising her of the communications he had with Fondovalle overnight. His message stated [36] :

“Morning ..

can confirm that the stock that Fondovalle have is 100% unique shade ..

best grade they have

if you let me know the final number the customers want .. I will order that, and not consider the x19 we have in stock

is too old, there’s going to be different (sic) with what we have + what they have

so if x55 the number they want .. i will order around x60/x65 so we are cover (sic) for any sort of damage, or possible problem .. please confirm the final number …”

86. Ms Caronna’s evidence was that she received this text while driving and that she pulled into the carpark at the Silverwater premises, saw the message from Mr Battaglia and responded by asking him to call her [37] .

87. It is not in dispute that Mr Battaglia and Ms Caronna had a telephone discussion which followed his Teams message to her. Mr Battaglia was not cross-examined. His account of the conversation in [75] of his affidavit was:

“Me: As I had mentioned in my message to you, Annalisa Vecchi from Fondovalle advised they have the Absolute Black slabs in stock, that stock is the best grade they have. Ask the customer how many slabs they want from Fondovalle Italy, because the 19 slabs we have in our warehouse are too old and there is going to be a difference between the Absolute Black slabs (Batch 1) we have in our warehouse here in Australia and the Absolute Black slabs (Batch 2) that Fondovalle have in Italy. Annalisa Vecchi advised they do not have any stock left of the (Batch 1) slabs we have here in Australia to compare the shade difference and variation. We also don’t have any samples of the slabs (Batch 2) from Italy to compare with ours. It would be impossible to match the two batches as they are in two separate countries. The two batches will be different, and we can’t guarantee that there is no shade variation between the two as we cannot do a comparison, I recommend to order 65 slabs all at one from Fondovalle Italy.

Annalisa Caronna: Thanks for letting me know the two batches are different we can’t guarantee there is no shade variation between the two batches, I will speak to the customer to let them know and get back to you.”

88. Ms Caronna’s evidence of the conversation in her affidavit and under cross-examination was consistent with the evidence of Mr Battaglia. In cross-examination, she said that Mr Battaglia confirmed that Italy had an abundance of stock in the 6.5mm slabs and that it was A grade quality; he said “however, there was no way we could guarantee a perfect match between the sizes (sic) we have in Australia or the Italian stock, as they don’t have a sample of our Australian stock nor do we have a sample of their Italian.” She recalled that Mr Battaglia told her that “we could probably order the entire amount of 55 slabs to be safe”: She said that Mr Battaglia suggested that “we can discard the fact that we have 19 slabs in stock” [38] .

89. Ms Caronna’s evidence was that she made notes of the conversation in a notebook while still in her car [39] . She made an entry dated 25 August 2023 at 8.24am as follows [40] :

“Federico confirmed extra ‘Absolute Black’ 6.5 1600 x 3200mm Stock in Italy.

- 100% unique shade. best grade

- He can order 65 sheets/slabs at once, as Italy can’t guarantee variation without seeing current stocks.

- Give customer options and freight times with fast ship clearance. Air freight is Not an option.

- Variation in colour is Impossible to know without comparison.

- Call Paul Brough to discuss options.” (emphasis in original).

90. Ms Caronna said that she tried to call Mr Brough immediately after her conversation with Mr Battaglia but could not get through. She said that she did later speak to Mr Brough at 11.30am [41] . In giving her evidence, she plainly had looked at her telephone records [42] . Her affidavit evidence was that she advised Mr Brough that she had heard back from the factory in Italy and that “we won’t be able to have a perfect match in shade”. She said when Mr Brough asked why, she explained that the factory in Italy did not have a sample of the batch in Australia and “we don’t have a sample of the Absolute Black Batch 2 because it’s in Italy*.* That’s why it would be impossible to guarantee a perfect match of shade between Batch 1 and Batch 2” [43] . She also said that the factory in Italy did confirm that they could provide all 55 slabs in Batch 2 in Italy. She said:

“You can purchase the 55 slabs from Italy so that it is from one batch and just wait for the shipping time, or you can take the stock we have”.

She says that Mr Brough responded:

“This project is time sensitive. I have an idea. I will see if I can use the different batches by separating the batches between different floors of the property” [44] .

Mr Brough, for his part, disputed that there was any discussion to this effect; his evidence is considered below.

91. In cross-examination Ms Caronna said that the conversation lasted about 5 or 6 minutes. She confirmed that Mr Brough had suggested a ‘work around’ by separating the batches between the floors of the Property. She said that there was some discussion about whether something could be done with the 19 slabs [in Australia], but Mr Brough was not certain during the conversation what “he was going to run with”. She said she left Mr Brough to problem solve based on the information she had provided him [45] .

92. Ms Caronna did not take a note of the conversation that she had with Mr Brough; however, as can be seen, she did make a note during her conversation with Mr Battaglia to call Mr Brough “to discuss options”. She said that expressed her intention to call Mr Brough. She confirmed that the entirety of the note was made at the same time [46] .

93. Later, on 25 August 2023 at 12.46pm, Mr Brough sent an email to Ms Caronna which he copied to Mr Daniel and Mr Daniel’s builder [47] . Relevantly it contained the following:

“Andrew

Looks like we need all 19 for upstairs when we add the laundry benchtop, sink and stairs!

In regards to the ground floor I assume we will stick with the 36, giving us a total of 55. There are plenty of spare slabs for this level essentially slabs 1 2 3 4 and 17 are all spares as they could be taken out of 5 6 7 8 instead (hope that makes sense)

Annalisa

Andrew would like delivery asap

I have included Tai (our fabulous builder) into this email

Can you please advise Tai how delivery will be done”

The email made no reference to any earlier conversation that day between Mr Brough and Ms Caronna. However, the email attached colour coded lay-out plans which showed how many slabs were required on each level. The plans showed that 19 slabs were required for the First Floor (described in the lay-out plans as ‘Upstairs’) including the stairs and the laundry and sink area. The lay-out plans also showed the Ground Floor requiring 36 slabs, including 5 empty spaces for what Mr Brough described as ‘spares’.

94. At 1.23pm Mr Daniel sent an email to Ms Caronna and Mr Brough thanking her and advising that he would pay the invoice “as soon as I get it” [48] . As he was in meetings that afternoon, he asked for the invoice to be provided by 2pm.

95. On the same day at 1.32pm, Ms Caronna sent an email to Mr Daniel attaching an invoice “as requested before your 2pm deadline” [49] . Ms Caronna explained in the email she had organised the delivery and packing of the 19 sheets ready for delivery on the following Tuesday to Bellevue Hill. The invoice recorded two Absolute Black Natural 6.5mm (1600mm x 3200mm) batches, one for 19 and the other 36 in quantity.

96. The total amount of the invoice was $75,124.50 including an $8,400 charge for inbound freight. The invoice was issued in the name of My Top, and Ms Caronna’s email confirmed the bank account details for a direct credit to an account named “My Top Australia Pty Limited”.

97. Mr Daniel organised payment of the invoice as soon as he received it and added the following in an email at 1.37pm to Ms Caronna and copied to Mr Brough [50] :

“Can you please organise the overseas transport as soon as the funds clear and provide us with tracking details? As you know we really need this completed asap so it would be good to keep an eye on it”. (emphasis added)

Later that afternoon, Ms Caronna confirmed the receipt of payment and that “we are ordering slabs with overseas as we type” [51] .

The Contract Claim

Principles

98. The question the parties put for consideration was whether the ‘no variation’ term formed part of the agreement to supply two batches of porcelain slabs. The parties accepted that the question of finding the terms of the agreement is to be determined objectively, rather than by reference to the subjective intentions of the parties.

99. This approach is illustrated by the reasons of the High Court in Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165; [2004] HCA 52 at [40]:

“This Court, in Pacific Carriers Ltd v BNP Paribas (20), has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction (21).”

100. Here, there was no all-encompassing document setting out the terms of the contract. The terms of the contract fell to be determined by reference to the exchange of emails and messages, to the invoice issued by My Top and, importantly, to the conversations between the parties. Both parties pleaded that the terms of the contract were partly oral and partly in writing.

101. In Masterton Homes Pty Ltd v Palm Assets Pty Ltd (Masterton Homes) (2009) 261 ALR 382; [2009] NSWCA 234, Campbell JA (with whom Allsop P and Basten JA agreed) considered at [90] the principles that are applicable in deciding whether an agreement the parties have entered into is wholly in writing, or partly written and partly oral. In his Honour’s close analysis of the authorities, he stated:

“(4) Where a contract is partly written and partly oral, the terms of the contract are to be ascertained from the whole of the circumstances as a matter of fact [authorities and citations omitted].

(5) In determining what are the terms of a contract that is partly written and partly oral, surrounding circumstances may be used as an aid to finding what the terms of the contract are … If it is possible to make a finding about what were the words the parties said to each other, the meaning of those words is ascertained in the light of the surrounding circumstances … If it is not possible to make a finding about the particular words that were used (as sometimes happens when a contract is partly written, partly oral and partly inferred from conduct) the surrounding circumstances can be looked at to find what in substance the parties agreed …” [authorities and citations omitted].

Consideration – the Contract Claim

102. No party suggested that the outcome of the warehouse meeting on 23 August 2023, or the exchange of emails on 24 August 2023 – first by Mr Brough at 3.59pm and then by Mr Daniel at 4.05pm, and Ms Caronna’s email in response to them at 4.33pm – caused a contract to be formed between the parties. That is for good reason.

103. Ms Caronna’s 4.33pm email made it clear that she understood the importance of consistency (that is of shade) based on the open plan design. She also made it abundantly clear that she was emailing Italy (that is Fondovalle) “for further clarification on shade variation”. Based on what she observed at the warehouse meeting on 23 August 2023, she conveyed “incredible hope” of favourable advice from Italy because the comparison of the porcelain slabs which had been observed at the warehouse meeting were fabricated at different stages of the manufacturing process, but (or, at least, to her perception) “they still blended nicely”.

104. She then repeated “therefore we will await further instructions from Italy overnight and confirm with you”, that is, confirm shade variation and stock numbers, as her colleagues were also checking stocks for the additional slabs that were now required. She wrote “Once we hear back from them tomorrow, we will then proceed with invoice details”. At this stage the communications with Fondovalle revealed that confirmation had been received that the stock in Italy was of the same shade, but there is no evidence of any enquiry of variation between the stock in Sydney and the stock in Italy.

105. The evidence of Mr Battaglia establishes that the further clarification and advice which Ms Caronna contemplated in her email was in fact sought and obtained overnight on 24 August 2023. Ms Vecchi indicated initially that the stock held in Italy was in one shade (described as “51E”) and it had no shade variation. Importantly, Mr Battaglia then asked (at 9.32pm AEST) whether “stock you have available has the same shading as stock we currently hold in our warehouse”. The response from Fondovalle (at 10.00pm AEST) was that the last stock purchased was in “Shade 49” so that shades were different and Fondovalle was not able “to let you know how much they are [different]” because there was no further stock in Italy.

106. I find that Mr Battaglia conveyed the essence of this information to Ms Caronna by his Team’s message on the morning of 25 August 2023 and in his telephone call to Ms Caronna when they spoke soon after the message was sent. Ms Caronna then, still in her parked car, took a note of the conversation with Mr Battaglia which is set out at [88] above.

107. It is in this context that Ms Caronna says that she had a conversation with Mr Brough at 11.30am (which I have set out at [90] above) and which Mr Brough denies. The Defendants submitted that by advising Mr Brough that they would not be able to have a perfect match in shade, and it would not be possible to guarantee a perfect match of shade between Batch 1 and Batch 2, My Top expressly (or at least impliedly) negated the ‘no variation’ term by refusing to contract on the basis of the Plaintiffs’ requirements.

The 11.30am telephone call between Ms Caronna and Mr Brough

109. While there was a dispute as to what was said between Ms Caronna and Mr Brough at the 11.30am telephone call, much of the events leading up to the conversation are established by emails and messages between the parties and contemporaneous records including Ms Caronna’s diary note taken earlier on the morning of the telephone conversation.

110. I recorded my observations of each witness as they gave evidence. I have evaluated each witness’ evidence, not only in light of the responses in cross-examination, but also in light of the contemporaneous documents and objectively established facts, the apparent logic of events and patterns of human behaviour, along with the existence and nature of corroborative evidence and the effect and impression given by the evidence as a whole. In doing so, I have endeavoured to apply the principles which I have set out above at [45] to [48].

111. For the reasons that follow, I am persuaded that, on the balance of probabilities, Ms Caronna did convey to Mr Brough that the advice from Italy (Fondovalle) was that it would not be able to have a perfect match in shade and that it would not be possible to guarantee a perfect match of shade between Batch 1 and Batch 2.

112. First, although the Plaintiffs submitted to the contrary, there was corroborative and contemporaneous evidence which was consistent with the account of the conversation which Ms Caronna gave in her evidence. And most of that evidence was in the form of contemporaneous documents.

113. As I have explained above, in her email of 4.33pm on 24 August 2023, Ms Caronna had acknowledged the importance of visual consistency and explained that further clarification was being sought. She did not guarantee in her email that the two batches would match, but expressed ‘incredible hope’ of a favourable response to the clarification being sought from Italy on shade variation between the two batches.

114. That clarification was in fact obtained from Fondovalle by Mr Battaglia and his colleague, Ms Tristacci, and conveyed to Ms Caronna by Mr Battaglia’s Teams message and his subsequent telephone call with her. Mr Battaglia was not cross-examined. His account of the conversation is, in any event, consistent with his Teams message. Ms Caronna’s account of the conversation was also consistent with Mr Battaglia’s evidence.

115. The situation then was that Ms Caronna had been told by her Chief Operating Officer that clarification had been sought from Fondovalle and that it would not be possible to guarantee a match between the two batches and that there would not be a perfect match between them. Mr Battaglia’s Teams message in terms stated “The x19 we have in stock is too old, there’s going to be different (sic) with what we have and + what they have”. The Teams message advised that the total order could be obtained from Fondovalle.

“Yes, but I believe I already took those notes and the contents of that phone call that morning”

And then:

“I didn’t see the point of repeating it twice because I had already made the notes that morning and just repeated it”.

132. I accept the thrust of Ms Caronna’s evidence as to why she had only made a file note of the Teams message and call from Mr Battaglia. It must also be taken into account that, as I have observed earlier, the file note itself made a note to call Mr Brough about options. Any discussion of options needed, it seems to me, to capture the potential mismatch between the batches, as the basis for the opportunity to purchase the entire order from the stock in Italy. This was what Mr Battaglia was recommending, in the circumstances.

133. The other aspect of the conversation, according to Ms Caronna’s account, was Mr Brough’s response that the project was time sensitive and that he would see if he could use the different batches by separating them between the different floors of the property. In her oral evidence, Ms Caronna elaborated that there was some discussion with Mr Brough whether the 19 slabs from Batch 1 might be deployed, but that Mr Brough was not certain and that he would come back to Ms Caronna (see [91] above). That part of the conversation is also consistent with the email that Mr Brough sent later that day at 12.46pm when he attached the design for the installation of the tiles. The time sensitive nature from the customer’s point of view was also confirmed in that email: ‘Andrew would like delivery asap’.

134. Ms Caronna was also challenged in cross-examination as to why she did not respond to Mr Brough’s 12.46pm email by confirming the conversation that she had had with Mr Brough. Ms Caronna’s response was that she just assumed that the conversation she had with Mr Brough was relayed to Mr Daniel. As she said, Mr Brough’s email and the tile layout attached to it, confirmed that Mr Brough had separated the batches between the different floors of the Property. She did not think it was her position to respond in the manner that was suggested ‘because I’m not the project representative, Mr Brough is’ and that Mr Brough had been her contact from the beginning [58] . I considered the assumptions that Ms Caronna made fair and her responses in cross-examination reasonable in the circumstances. Ms Caronna also made it quite plain in her email of 1.21pm on 25 August 2023 that in arranging the invoice she would “split between current stocks and stocks required overseas”. She made it very clear that the purchase involved two separate batches.

135. It is true that Ms Caronna’s evidence was not entirely without blemish. In her evidence under cross-examination Ms Caronna was adamant that she did not know about the open plan design at the property following the 23 August warehouse meeting [59] , but her email at 4.33pm the following day opens with a reference to the importance of an open plan design. And that design was plainly conveyed to Mr Battaglia.

136. I was not prepared to accept Ms Caronna’s account of what Mr Constantino said at the warehouse meeting to the effect that shade variations in tiles are always present (see [69] above). Her affidavit evidence also excluded reference to Mr Daniel or Mr Brough specifically enquiring about colour consistency at the warehouse meeting, but the email correspondence with Fondovalle set out in Mr Battaglia’s evidence, makes it clear that such enquiries were made of her and she acted on them. However, as I have found (see [65]-[66] above), Ms Caronna did readily accept in her oral evidence that Mr Brough or Mr Daniel told her that they were looking for consistency at that meeting.

“Q. Yes, and do you recall whether or not you took that at the time to mean that there would – it would require further inquiries? Is that fair to say?

A. I didn’t think further inquiries were required at that stage.

Q. You did, however ask her to double check. If you didn’t think there was further inquiries required, why only 34 minutes before this did you ask for a double-check?

A. I’m not sure.

Q. And at the end of this email, she says she’s going to await further instructions from Italy overnight and confirm with you—

A. Okay. Well, yeah. Okay.

Q. But that—

A. Sorry, I didn’t read that bit. No. Yeah.” (emphasis added)

Later, he conceded that he accepted that he expected some communication the next day about what Italy had to say about the batches [63] .

143. Although Mr Brough ultimately said that he had no recollection of the telephone conversation with Ms Caronna at 11.30am, his evidence on the topic displayed inconsistencies which, in my assessment, affected the reliability of his evidence and the weight to be attributable to his denial of Ms Caronna’s account.

144. In his first affidavit dated 10 October 2024, Mr Brough made no mention of the 11.30am telephone conversation with Ms Caronna. In his second affidavit dated 27 August 2025, made in response to Ms Caronna’s affidavit dated 7 August 2025, Mr Brough denied that Ms Caronna’s evidence accurately recorded the conversation, implicitly agreeing that there was a conversation but categorically denying Ms Caronna’s account of it [64] .

145. In his oral evidence Mr Brough said, on the other hand, that he could not recall whether he had a conversation with Ms Caronna on the morning before his 12.46pm email was sent [65] . He was then asked whether he had mentioned the telephone call in his first affidavit, and he was clearly not sure in the witness box whether he had or had not [66] . Mr Brough was then taken to paragraph 17 of Ms Caronna’s affidavit and asked whether he remembered that conversation and said that he did not recollect having a conversation with Ms Caronna on the telephone at all [67] . He was then taken to his second affidavit and asked whether at paragraph 4 of that affidavit he was agreeing that there was a conversation and said [68] :

“I think – maybe I’m not as clear as I should have been. What I was – there were various conversations with Annalisa”.

The cross-examination continued as follows [69] :

“Q. Because you sent an email at 12.46, and that email seems like it's out of the clear blue sky to me, but I'd like to know whether or not you had spoken to Annalisa Caronna at 11.30, approximately 46 minutes before that email was sent. You've told this Court that you don't recall--

A. Yeah.

Q. --but you are saying in an affidavit you swore ten months after the first one that you do recall the conversation?

A. I—

Q. What is the situation?

A. The situation is, I would remember such a conversation, because there's – I would never have agreed or gone along with anything that's said in there.

Q. Can we agree that the words on the page here are true, and that you remember having a conversation?

A. You're asking me to agree that the words in paragraph 4 are true?

Q. Your words say, "I deny that paragraph 17 accurately records the conversation". So you're implying there was a conversation, aren't you?

A. I don’t know that that was my intent, but –

Q That's what it says; doesn't it?

A. Well, as you said, it implies it, yep.”

146. Mr Brough’s second affidavit acknowledges that he had a telephone conversation with Ms Caronna at 11.30am but denies Ms Caronna’s account accurately recorded that conversation. However, in his oral evidence, Mr Brough had no recollection of the conversation at all. He seemed not to have a good understanding of what was in his first affidavit and said that the implication in paragraph 17 of his affidavit may not have conveyed his intent, but conceded that is what it did imply.

147. As McLelland CJ in Eq observed in Watson v Foxman at 319, human memory of what was said in a conversation some time ago can be fallible for a variety of reasons. As a matter of ordinary experience, a witness may reliably say that they do not remember a particular matter being raised in a conversation which took place some time ago, or the conversation at all, but if that particular matter had been raised, they surely would have remembered that. However, in this case there were inconsistencies in Mr Brough’s evidence including as to whether he recalled the 11.30am telephone conversation, or remembered it but disputed Ms Caronna’s account. I accept Mr Brough’s oral evidence that he had no recollection of the conversation at all, but the inconsistencies in his evidence and the entire lack of recollection of the conversation, impacted the reliability of his evidence and the weight to be attributed to his denial of Ms Caronna’s account.

148. A further difficulty with Mr Brough’s evidence is that it does not assist the Plaintiffs in seeking to explain what it was that was discussed between Ms Caronna and Mr Brough, if Ms Caronna’s account is not to be accepted.

149. Mr Brough’s evidence did not provide any context for the delivery of the tile lay-out plans attached to his email of 12.46pm (see [93] above). Mr Brough ultimately accepted that he expected “some communication the next day about what Italy had to say about the batches” [70] . That must have been the position given his own request that slab shades be ‘double checked’ and the content of Ms Caronna’s email of 4.33pm. Yet Mr Brough’s email does not refer to any query as to whether clarification had in fact been sought or what advice had been received from Italy. The absence of such query or questioning, in the circumstances, tends to suggest that the topic was discussed during the 11.30am conversation. The lay-out plan provided by Mr Brough following the conversation with Ms Caronna had the Batch 1 tiles to be laid on the First Floor and the stairs, and Batch 2 (to come from Italy) on the Ground Floor areas. Whilst such a lay-out allowed the Batch 1 tiles to be laid and the renovation works to be progressed before the delivery of Batch 2, they are at least consistent with a design which sought to accommodate, to some extent, any variance in the shading or consistency of the two batches.

150. Fourth, I accept that the totality of the circumstances surrounding the 11.30am conversation needs to be assessed having regard to the conduct of the parties in light of the evidence of Mr Daniel.

(a) Mr Daniel’s evidence was that the tiles had to be supplied in or before November 2023 so that the interior renovations could be undertaken in tandem with the exterior renovation work which was due to be completed at the end of 2023 [72] ; (b) in line with this time frame, Mr Daniel’s evidence was that prior to Mr Brough’s email of 12.46pm on 25 August he instructed Mr Brough to use the first batch of 19 slabs in a logical and prudent manner so as to complete various whole sections of his Home in the course of the renovations [73] . That is consistent with his text message to Mr Brough of 23 August 2023 that he was thinking of “doing part now and part when the Italy batch arrives” [74] ; (c) having regard to that instruction, I do not regard it as improbable that Mr Brough attempted to accommodate the variance or possible variance in the batches. The lay-out plan attached to his 12.46pm email is consistent with such an attempt (see [93] above). In his email of 3.59pm on 24 August 2023 Mr Brough had requested a revised price for 55 slabs. He was clearly working on a design to accommodate the stock available in Australia. So much is clear from the discussion in the email about the possibility of part payment by Mr Daniel. However, it was only in Mr Brough’s email on 25 August 2023 at 12.46pm that he confirmed with Mr Daniel that “it looks like we need all 19 for upstairs” and assumed that the remaining 36 tiles would be used for the Ground Floor, including ‘spares’. This suggests that it was only prior to the sending of that email that he had finalised the design for the placement of the tiles, and he had done so in a manner which contemplated all tiles in Batch 1 being used on the First Floor (referred to in his email as ‘upstairs’). (d) the finalisation of the design for the installation of the Batch 1 tiles in this way, using them on a different floor to the Batch 2 tiles, is consistent with accommodating, to the extent Mr Brough could, any variance in the tiles between the two batches because the only direct interface between them would be where the stairs joined the Ground Floor; (e) as I have observed above (at [149]), Mr Brough’s email of 12.46pm does not refer to any query or follow up as to the clarification which Ms Caronna said she was seeking from Italy. Mr Brough ultimately accepted in his oral evidence that he expected to receive some information about the clarification being obtained from Italy (see [142] above) [75] . Given that expectation and the significance that both he and Mr Daniel had placed on consistency of the shade of the tiles, this was a topic that might have been expected to be raised in Mr Brough’s email if the results of the clarification had not, at that time, been conveyed to him; and (f) Mr Brough had seen displayed at the warehouse meeting, two different batches of product with different thicknesses which had been fabricated at different stages in the manufacturing process as Ms Caronna had identified in her 4.33pm email. His observation, however, was that they were exactly the same (see [62] above). In those circumstances, he would not necessarily have regarded what he was told by Ms Caronna as a significant risk jeopardising the outcome of the project or his relationship with Mr Daniel. In this connection, it is necessary to observe that Ms Caronna advised that she wasn’t able to guarantee a ‘perfect match’ in shade because no-one had compared the two batches. Mr Brough evidently did not consider this was such a grave risk, given what he had observed and the layout of the tiles from the two batches he had been able to design and which he provided to Mr Daniel in his 12.46pm email.

158. There was also evidently some pressure to complete the project in time with the other significant renovations Mr and Mrs Daniel were conducting at the Property so that they could move back into their Home. The urgency for the completion of the project was a matter that Mr Brough was attempting to manage. He conveyed the need to complete before Christmas to Ms Caronna in his first initial conversation with her on 22 August 2023 (see [49] above). The urgency of delivery had also been conveyed to Ms Caronna at the warehouse meeting (see [70] above). Ms Caronna’s second (amended) quote on 24 August 2023 referred to expedited shipping with 35-45 days lead time, as opposed to the earlier advice of 18-20 weeks.

159. In these circumstances, Mr Brough was under instructions to use the Batch 1 tiles so that installation could commence on their delivery and to have the remaining tiles (Batch 2) ordered and delivered as soon as possible. Thus, in his email of 24 August 2023 at 4.05pm, Mr Daniel indicated that he would pay the invoice “as soon as you send it so we can get the slabs sooner rather than later”. And in his email of 25 August 2023 at 12.46pm, Mr Brough urged Ms Caronna that “Andrew would like delivery asap”. Using the Batch 1 tiles for the First Floor and the stairs, with the much shorter delivery time for the tiles stocked in Australia, meant that consistently with Mr Daniel’s instruction, work on the installation of the tiles could get underway as soon as possible.

160. These factors, in combination, it seems to me, provide explanation as to why Mr Brough proceeded with the layout plans which were attached to his 12.46pm email after receiving the advice that Ms Caronna says she gave him. I do not find it inherently improbable or unlikely that Mr Brough acted as he did.

161. Ultimately, I am persuaded that on the balance of probabilities Ms Caronna did advise Mr Brough during the 11.30am telephone conversation of the clarification that had been sought and received from Italy substantially conveying that it would not be able to have a perfect match in shade and that it would not be possible to generalise a perfect match between the batches.

162. Ms Caronna’s account of the conversation with Mr Brough is consistent with the contemporaneous documentary evidence of the communications which Mr Battaglia and his colleague had with Fondovalle, with Mr Battaglia’s Teams message and the conversation Ms Caronna had with him while still in her car. While Ms Caronna did not take a diary note of the call with Mr Brough, her account is consistent with the note she took of her discussions with Mr Battaglia and that note expressly referred to the need to call Mr Brough to discuss options. Those options only made sense if she intended to discuss the option of purchasing all of the slabs from Italy, which, it seems to me, necessarily involved raising the proposition that the matching of the tiles from the two batches could not be guaranteed.

Agency and authority

168. In final submissions the Plaintiffs submitted that even if the Court were to accept Ms Caronna’s evidence of the 11.30am conversation, that was not fatal to the contract claim because the information conveyed by Ms Caronna came to Mr Brough outside the scope of his actual or apparent authority, contrary to what they characterised as Mr Daniel’s “express instruction” in his 4.05pm email of 24 August 2023:

“If you don’t think the batches (if they are in fact two batches) will be identical, for whatever reason, please let me know before I place the order”.

So, it was argued, whatever information may have been provided to Mr Brough during the 11.30am telephone conversation, would not be imputed to either Mr Daniel or ADXG [76] .

169. I reject these submissions for the following reasons.

170. I do not think the argument is properly open on the pleadings. In both the Statement of Claim and the Amended Statement of Claim the Plaintiffs alleged that the agreement was partly oral and partly in writing. Insofar as it was oral, the Plaintiffs alleged in their particulars that the agreement consisted of a conversation between Mr Daniel and Mr Brough, as agent for each of the Plaintiffs, and Ms Caronna at the 23 August 2023 warehouse meeting “as well as further communications between Brough and Caronna”: [6.2] of the Particulars at [14] above. Insofar as the agreement was said to be in writing, it consisted of emails passing between Mr Daniel, Mr Brough and Ms Caronna on 24 August 2023 and 25 August 2023 and an invoice to ADXG from My Top: [6.3] of the Particulars.

171. In its Defence and its Amended Defence (filed in response to the Amended Statement of Claim), in answer to paragraph 6, My Top admitted there was an agreement to supply porcelain slabs and further admitted “that Brough was the agent of the P**laintiff[s]” [77] .(paragraph 4b of each of the Defence and Amended Defence).

172. Accordingly, the Plaintiffs alleged that Mr Brough was an agent of each of the Plaintiffs (including ADXG) for the purpose of conversations which formed part of the agreement and the Defendants have admitted that agency. To my observation, the parties had not deliberately chosen some different basis for the determination of their respective rights and liabilities: see Banque Commerciale SA v Akhil Holdings Limited (1990) 169 CLR 279; [1990] HCA 11 at 286-287 (per Mason CJ and Gaudron J) and 288 (per Brennan J). It is notable that the Plaintiffs did not, in their opening outline of submissions or their oral opening, contend that Mr Brough’s agency or authority was qualified or had been revoked.

173. While there was some cross-examination of Mr Daniel on the role that Mr Brough was performing for Mr Daniel, his wife and his company (which I consider below), that was explicable by reference to the claim for misleading or deceptive conduct and it did not indicate that the Defendants were deliberately choosing a basis other than the pleadings for the determination of their defence of the proceedings. There was no indication in the Amended Statement of Claim (which was filed in Court on 4 November 2025 after the conclusion of the evidence during final submissions) that the scope of Mr Brough’s agency was in issue in the pleadings or in the written or oral opening submissions. No reply was filed responding to the Defendants’ express admission of Mr Brough’s agency seeking to qualify the scope of that agency by reference to any subject or temporal limitations.

174. In the circumstances it does not seem to me to be open for the Plaintiffs now to submit that information received during the conversation between Mr Brough and Ms Caronna was beyond the scope of the agency they pleaded, so as to be incapable of being imputed to Mr Daniel and ADXG. Indeed the 11.30am telephone conversation fell squarely within the ‘’ that were particularised in paragraph 6.2 of the Amended Statement of Claim. If Mr Brough was an agent of the Plaintiffs for the purpose of meetings and conversations to which he was a party, or emails which he sent or received, and those communications form part of the agreement for the supply of the porcelain slabs (and from which its terms could be found), then, absent any pleaded limitation or qualification, the scope of that agency must have included the authority to receive information from the supplier about the consistency of the slabs.

Actual Authority

177. Even if not bound by the pleadings or implicitly open to the Plaintiffs on a proper reading of them, for the reasons that follow, in my judgment the evidence establishes that Mr Brough had actual authority from Mr Daniel and his company to receive information relating to the porcelain slabs for the purpose of the order which was placed with My Top.

178. It is trite that a principal may confer authority upon an agent. The conferral of authority can be express or implied from the conduct of the parties. Actual authority requires a consensual agreement between the principal and agent and arises where a principal grants and an agent accepts, authority for the agent to perform specific tasks on behalf of the principal: Left Bank Investments Pty Ltd v Ngunya Jarjum Aboriginal Corporation (Left Bank) [2020] NSWCA 44 at [44], [63] per Gleeson JA (Bathurst CJ and Bell P agreeing); Equiticorp Finance Ltd (in liq*) v Bank of New Zealand* (Equiticorp) (1993) 32 NSWLR 50 at 132 (Clarke JA and Cripps JA).

179. As Gleeson JA explained in Left Bank at [63], notwithstanding the absence of express agreement, there may be implied authority where the parties “conduct themselves in such a way that it is proper to infer that the relevant authority has been conferred on the agent”: Left Bank at [63]; Equiticorp at 132E; Gerard Cassegrain & Co Pty Ltd v Cassegrain (2013) 87 NSWLR 284; [2013] NSWCA 453 at [32] (Beazley P). Accordingly, where the question is whether the agent has implied authority to act in a particular way, the Court directs its attention to the conduct of the parties to decide whether the inference of authority should be drawn: Equiticorp at 132F.

180. As to actual authority, there was no written contract or scope of works before the Court as to the services Mr Brough was performing for either ADXG or Mr and Mrs Daniel. This is quite possibly because the scope of agency was not thought to be a live issue. Mr Daniel had known Mr Brough for seven or eight years and Mr Brough had worked for him in the past on different jobs [78] . Mr Brough was not an employee of ADXG. Mr Brough’s unchallenged evidence was that he had been retained by Mr and Mrs Daniel to provide design and material selection services in relation to their renovation of the Property from about August 2023 [79] . In the course of his work on the renovation, he was asked to source and provide a number of samples for possible flooring materials for Mr and Mrs Daniel to consider [80] .

181. One of the samples Mr Brough sourced was the ‘Absolute Black’ from Ms Caronna which he showed to Mr Daniel on the afternoon of 22 August 2023. He communicated by text with Ms Caronna on 22 August and on 23 August asking her to call him (see [52] above). He then attended the warehouse meeting with Mr Daniel in the afternoon of 23 August. He received quotes from Ms Caronna after the warehouse and on the following day. Mr Brough evidently saw it as part of, and consistent with, his role to text Ms Caronna on 24 August 2023 to ask her to call him as ‘we have a RESULT’ (see [73] above). She did call Mr Brough. Following that conversation, in the course of the provision of services to Mr Daniel and ADXG, in his 3.59pm email on 24 August Mr Brough advised Ms Caronna that more slabs were needed, requesting her to ‘revise your price’ and to check the shade of the porcelain slabs.

Ostensible Authority

189. The Defendants submitted that if the pleading point was not dispositive, then Mr Daniel clothed Mr Brough with apparent or ostensible authority to generally transact with My Top and to bind ADXG. Given my conclusions on the issue of Mr Brough’s actual authority, it is not strictly necessary to deal with these submissions; however, in case I am wrong, and in deference to the arguments made, I will endeavour to do so.

190. There are, however, difficulties in addressing these arguments in the absence of either party seeking to establish in their pleadings that Mr Brough had the requisite, apparent or ostensible authority. But it would in my view be quite unfair to criticise the Defendants for a failure to articulate in their pleading a defence of this kind having regard to their admission of Mr Brough’s agency. Further, as explained below, ostensible authority operates as an estoppel, preventing a principal from denying an agent’s authority, yet neither party sought to address the issue of apparent or ostensible authority by reference to that underlying principle.

191. In Freeman & Lockyear v Buckhurst Park Properties (Mangal) Limited (Freeman & Lockyear) [1964] 2 QB 480 Diplock LJ at 503 described ostensible authority in the following terms:

“‘An apparent’ or ‘ostensible’ authority … is a legal relationship between the principal and the contractor created by representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal in to a contract of a kind within the scope of the ‘apparent’ authority, so as to render the principal liable to perform any obligations imposed upon him by such contract. … The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract. It is irrelevant whether the agent had actual authority to enter into the contract.”

This passage was endorsed by the High Court in Crabtree-Vickers at 78, and subsequently in Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 and Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451.

192. In the circumstances of this case, and in the manner the Plaintiffs belatedly submitted Mr Brough’s want of authority, the apparent or ostensible authority in issue need not extend to authority to enter into legal relations; it is sufficient that Mr Brough had ostensible authority to receive information in relation to the porcelain slabs for the purpose of the parties’ discussions and the possible placement of an order with My Top for the purchase of the porcelain slabs. I accept that this is an unusual formulation of ostensible authority having regard to some of the decided cases, but I do not see why such a more limited scope of authority cannot be assessed by reference to the underlying principles. Those principles have been described, albeit in a different context, as very fact-sensitive: Left Bank at [105], [107]; Kilcran*, in the matter of Allco Finance Group Limited (Receivers and Managers Appointed) (In Liquidation) v* Gothard [2014] FCAFC 6 at [78].

193. Moreover, ostensible authority may provide a basis to impute knowledge or notice to the principal. In Blackley v National Mutual Life Association of Australasia Limited [1972] NZLR 1038 (Blackley) Turner P explained at 1049 that the knowledge disclosed to an agent may be imputed to the principal in reliance upon the agent’s ostensible authority to receive it; this is an application of the principles of estoppel:

“Though the agent may not in fact have the principal’s authority to receive the disclosure so as to bind the principal as if the latter had knowledge of it, yet the principal may not aver that he was not notified of the facts disclosed, for by holding out the agent he must be deemed, as against the third party, to have given the authority which in fact the contract of agency may not have conferred.”

Turner P continued at 1050:

“But the rule fixing the principal with notice goes further when the ostensible authority with which the agent is clothed includes ostensible authority to receive disclosures or communications. When this is the case it is virtually impossible, once due notice to the agent is proved, for the principal to escape the imputation of notice to him.”

194. A course of conduct or dealing may constitute a relevant representation for the purpose of establishing ostensible authority. On this topic in Freeman & Lockyear, Diplock LJ at 503-504 said:

“The representation which creates ‘apparent’ authority may take a variety of forms of which the commonest is representation by conduct, that is, by permitting the agent to act in some way in the conduct of the principal’s business with other persons. By so doing the principal represents to anyone who becomes aware that the agent is so acting that the agent has authority to enter on behalf of the principal into contracts with other persons of the kind which an agent so acting in the conduct of his principal’s business has usually ‘actual’ authority to enter into”.

See Also Wilh. Wilhelmsen Investments Pty Ltd v SSS Holdings Pty Ltd [2019] NSWCA 32 at [78] (Beazley ACJ).

195. In Armagas Ltd v Mundogas S.A. [1986] 1 AC 717 at 777 Lord Keith said:

“Ostensible authority comes about where the principal, by words or conduct, has represented that the agent has the requisite actual authority, and the party dealing with the agent has entered into a contract with him in reliance on that representation. The principal in these circumstances is estopped from denying that actual authority existed.”

196. Mr Daniel’s evidence was that he asked Mr Brough to source black porcelain samples from suppliers other than those had had himself visited. It was in this context that Mr Brough had contacted Ms Caronna and sourced the sample porcelain slabs from her. Mr Daniel was aware that Mr Brough was dealing with Ms Caronna in relation to the acquisition of samples prior to the 23 August 2023 warehouse meeting. Mr Brough attended with Mr Daniel at the warehouse meeting with Ms Caronna. Mr Daniel must have expected that quotes would be received from Ms Caronna after the warehouse meeting, and the second of these was annexed to his first affidavit. Mr Brough copied in and addressed Mr Daniel in his 3.59pm email on 24 August 2023 in which Mr Brough requested Ms Caronna to “revise your price” to accommodate the larger number of slabs which were now under consideration. In that email, Mr Brough thanked Ms Caronna ‘for speaking with me just now’. Mr Daniel must be taken to have known that his architect and Ms Caronna had spoken prior to Mr Brough sending that email.

197. When Ms Caronna responded to Mr Daniel’s email of 4.05pm she addressed both Mr Daniel and Mr Brough when she indicated that she would seek further clarification on shade variation from Italy and “confirm with you” (plainly a reference which included Mr Brough who was referenced in the salutation in the opening sentence of the communication). Mr Daniel did not suggest in his earlier communication or in any response to Ms Caronna’s email at 4.33pm, that the clarification that was being sought overnight should not be conveyed to Mr Brough.

198. Through the short course of dealings between the parties from 22 August 2023, Mr Daniel clothed Mr Brough with ostensible authority to receive disclosures and communications from Ms Caronna in connection with the porcelain slabs which were under consideration.

199. Ms Caronna, as the agent of My Top, plainly relied on the sufficiency of her telephone conversation with Mr Brough to convey the clarification that had been sought from Italy on the consistency of the shading between the two batches. Ms Caronna’s evidence, which I accept, was that she regarded Mr Brough as her contact from the beginning and expected that the information which she imparted to Mr Brough would be conveyed to Mr Daniel. It was on this basis that, following Mr Brough’s email of 1.46pm, she indicated she would arrange the invoice between the current stock in Australia and the stock required from Italy.

200. In these circumstances I find that by permitting Mr Brough to source samples from Ms Caronna, and to continue to have discussions with her and receive quotes from her, Mr Daniel clothed Mr Brough with ostensible authority to receive information concerning the porcelain slabs, and in particular, the results of the clarification which Ms Caronna sought and arranged to be obtained from Italy. ADXG should not be permitted to deny that such authority existed.

“In my opinion, a similar principle should be held to apply in commercial transactions, in this sense, that, in the absence of sufficient evidence to the contrary, an agent, acting for his principal in a transaction, but not authorised to accept for his principal a notice in regard to matters appertaining to the same transaction, should be presumed to have acted in the usual way of business by passing on the notice to his principal.”

Lord Maugham said at 591D-F:

“That there is a like presumption of fact that a mercantile agent will send or hand on a notice intended for his principal received in the ordinary course of business – unless there is some special reason, such as that the agent was intending some fraud in the matter, and therefore would not be likely to send on the notice – is, in my opinion, not open to doubt. The circumstance that there is a certain paucity of authority directly in point is due, I think, mainly to the fact that it is generally impossible for the principal in a modern case, where there is adequate discovery of documents, to deny the receipt of the notice.”

205. There was no reason to think, on the evidence in this case, that Mr Brough would not relate the information he had received from Ms Caronna during the 11.30am conversation. While the reasoning in A/S Rendal may be explained by reference to the principles of ostensible authority (see Dal Pont at [22.64]), it would seem to me to be applicable in the circumstances of this case and, accordingly, to provide an additional, or alternative basis, to impute to Mr Daniel knowledge of the advice that Ms Caronna conveyed to Mr Brough in the 11.30am telephone conversation.

Claim for misleading or deceptive conduct

Nature of claim and principles

206. The nature of the misleading and deceptive conduct claim has been set out in [25] to [29] above. Its key elements are that the Defendants were on notice of the need to advise of variation between Batch 1 and Batch 2 and that accepting the order without giving Mr Daniel that explicit advice, was misleading or deceptive or likely to mislead or deceive.

207. The parties were not in dispute about the applicable principles concerning misleading or deceptive conduct by non-disclosure or silence. Those principles were considered by the High Court in Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited (Miller) (2010) 241 CLR 357. The question of whether conduct is misleading or deceptive is one of fact to be resolved by a consideration of the whole of the impugned conduct in the circumstances in which it occurred: Miller at [14] (French CJ and Kiefel J); Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [102]. Conduct is misleading or deceptive or likely to mislead or deceive, if it has a tendency to lead into error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [39]; Miller at [15].

208. In Miller, French CJ and Kiefel J at [18] referred to the judgment of Gummow J in Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 where his Honour said at [41]:

“… unless the circumstances are such as to give rise to the reasonable expectation that if some relevant fact exists it would be disclosed, it is difficult to see how mere silence could support the inference that the fact does not exist.” [87]

209. Their Honours then continued at [19]-[22] (citations omitted):

“19. The language of reasonable expectation is not statutory. It indicates an approach which can be taken to the characterisation, for the purposes of s 52, of conduct consisting of, or including, non-disclosure of information. That approach may differ in its application according to whether the conduct is said to be misleading or deceptive to members of the public, or whether it arises between entities in commercial negotiations. An example in the former category is non-disclosure of material facts in a prospectus.

20. In commercial dealings between individuals or individual entities, characterisation of conduct will be undertaken by reference to its circumstances and context. Silence may be a circumstance to be considered. The knowledge of the person to whom the conduct is directed may be relevant. Also relevant, as in the present case, may be the existence of common assumptions and practices established between the parties or prevailing in the particular profession, trade or industry in which they carry on business. The judgment which looks to a reasonable expectation of disclosure as an aid to characterising non-disclosure as misleading or deceptive is objective. It is a practical approach to the application of the prohibition in s 52.

21. To invoke the existence of a reasonable expectation that if a fact exists it will be disclosed is to do no more than direct attention to the effect or likely effect of non-disclosure unmediated by antecedent erroneous assumptions or beliefs or high moral expectations held by one person of another which exceed the requirements of the general law and the prohibition imposed by the statute. …

22. However, as a general proposition, s 52 does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party. A fortiori it does not impose on a party an obligation to volunteer information in order to avoid the consequences of the careless disregard, for its own interests, of another party of equal bargaining power and competence. Yet that appears to have been, in practical effect, the character of the obligation said to have rested upon Miller in this case.”

210. The Plaintiffs drew my attention to the decision of the Full Court of the Federal Court of Australia in Addenbrooke Pty Ltd v Duncan (No 2) (Addenbrook) (2017) 348 ALR 1; (2017) 121 ACSR 406; [2017] FCAFC 76 at [480]-[483] where Dowsett, Gilmour and White JJ helpfully summarised the relevant principles as follows:

“[482] On our understanding, the principles concerning misleading or deceptive conduct by non-disclosure or silence which emerge from the authorities and which are pertinent in the present appeal may be summarised as follows:

(a) conduct involving silence or non-disclosure may, in some circumstances, constitute misleading or deceptive conduct;

(b) in considering whether conduct is misleading or deceptive, silence or non-disclosure is to be assessed as a circumstance like any other;

(c) mere silence without more is unlikely to constitute misleading or deceptive conduct. However, remaining silent will constitute misleading or deceptive conduct if the circumstances are such as to give rise to a reasonable expectation that, if some relevant fact does exist, it will be disclosed;

(d) the existence or otherwise of such a reasonable expectation is to be determined objectively;

(e) it is not possible to categorise all of the circumstances in which a reasonable expectation of disclosure may arise. Such circumstances may exist when either the law or equity imposes a duty of disclosure, when a statement conveying a half-truth only is made (see Winterton Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97; 111 ALR 649 at [75]), when the representor has undertaken a duty to advise, when a representation with continuing effect, although correct at the time it was made, has subsequently become incorrect, and when the representor has made an implied representation;

(f) in considering whether a party engaged in commercial dealing may have a reasonable expectation that a fact, if it exists, will be disclosed, it is to be remembered that it will often be the case that one party to a commercial dealing has more knowledge about a relevant matter than the other and yet will not, in accordance with ordinary commercial expectations, be guilty of misleading or deceptive conduct in failing to make that knowledge known to the other

[483] Ultimately, as indicated at the commencement of this reference to the principles, the determination of whether a failure to disclose a matter is misleading or deceptive requires an examination of all the circumstances. If in the circumstances, assessed objectively, a representee would have been entitled to expect or infer (have a reasonable expectation) that an undisclosed matter would be disclosed, that may well constitute misleading or deceptive conduct: Clifford v Vegas Enterprises Pty Ltd [2011] FCAFC 135 at [198].”

211. As set out earlier in these reasons, I have found that in the 11.30am telephone conversation, Ms Caronna did convey to Mr Brough the clarification that had been sought overnight from Italy to the effect that there would not be a perfect match between the batches in Australia and in Italy and it was not possible to guarantee a perfect match of shade between them.

212. On this basis, the Defendants did not remain silent or fail to disclose the risk of variance in the porcelain slabs the subject of the different batches as such. However, the Plaintiffs claim that the Defendants’ conduct is misleading or deceptive or likely to mislead or deceive nonetheless because of the failure to provide that information to Mr Daniel.

213. As explained above, I was not asked to find, and do not find, that Mr Brough passed on or relayed, the information he received from Ms Caronna. There is, as the Plaintiffs submit, no evidence that Ms Caronna did anything to check whether Mr Daniel had been advised by Mr Brough of the 11.30am telephone conversation, or any differences or risk of difference, between the two batches. However, as explained above, Mr Brough sent his email at 12.46pm attaching the plans for the layout of the tiles to both Mr Daniel and Ms Caronna, and Ms Caronna had made it pellucidly clear in her email of 1.21pm on 25 August 2023 that the order she was arranging would be “split between current stock [in Australia] and stock required overseas with a separate freight charge”.

214. The Defendants submitted that the Plaintiffs should be held to their pleading. They argued that their admission that Mr Brough was the agent of the Plaintiffs for the purposes of the communications upon which the agreement was formed must lead to the claim being dismissed. If Mr Brough received the information as to the possible variance of the batches from Ms Caronna, that knowledge is to be imputed to his principals, Mr and Mrs Daniel, and the claim must fail.

215. While there is some attraction to this argument, the agency of Mr Brough is pleaded by the Plaintiffs in relation to the claim in contract. The claim for misleading or deceptive conduct, as I have explained earlier at [25]-[28] above, relies explicitly on the effect of the communication from Mr Daniel in his email at 4.05pm on 24 August 2023. For this reason, I think it is preferable not to resolve the misleading or deceptive claim on the pleading point.

Misleading or deceptive conduct – consideration

216. To resolve whether the conduct is misleading or deceptive or likely to mislead or deceive, the whole of the impugned conduct in the circumstances in which it occurred must be considered: see Miller at [78]; Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [102] ; Addenbrook at [480].

217. The circumstances of the impugned conduct are set out in [49] to [76] above and included that:

(a) Mr Brough had been retained by Mr and Mrs Daniel to provide design and material selection in relation to the renovation of the Property. The selection of black porcelain slabs fell within that retainer; (b) Mr Daniel requested Mr Brough to obtain samples of black porcelain tiles which included the ‘Absolute Black’ product; (c) Mr Brough and Ms Caronna exchanged text messages on 22 and 23 August 2023 (including in relation to the appearance of the tiles) and Mr Brough requested on 23 August that Ms Caronna call him; (d) Mr Brough picked up the sample tiles from Ms Caronna on the afternoon of 22 August 2023 from the Silverwater premises; (e) there was an attendance at the Defendants’ warehouse on the afternoon of 23 August 2023 where Mr Brough accompanied Mr Daniel, and as I have found, included the participants observing the consistency of the 6.5mm and 20mm porcelain slabs and discussing the consistency of those tiles; (f) Ms Caronna provided quotes on 23 August 2023 and again on 24 August 2023 to Mr Brough alone (that is not copied to Mr Daniel); (g) the text message from Mr Brough and the subsequent telephone call between Mr Brough and Ms Caronna on the afternoon of 24 August 2023 which preceded Mr Brough’s 3.59pm email, observing that Mr Brough had again requested Ms Caronna to call him; (h) Mr Brough’s 24 August 3.59pm email, copied to Mr Daniel, which identified what parts of the communication were directed to each of Ms Caronna and Mr Daniel; (i) Mr Daniel’s email of 4.05pm which was sent to both Mr Brough and Ms Caronna; (j) Ms Caronna’s email in response to both Mr Daniel and Mr Brough at 4.33pm; (k) the 11.30am telephone conversation between Mr Brough and Ms Caronna and Mr Brough’s subsequent email at 12.46pm; and (l) Ms Caronna’s email to Mr Daniel and Mr Brough at 1.21pm and Mr Daniel’s email responding to it at 1.23pm, requesting that the invoice be provided to him before 2pm because he was in meetings.

218. Without attaching legal labels to the relationship, it is plain from these circumstances and communications that Mr Brough was Mr Daniel’s representative on the project, and for the sourcing of the porcelain slabs. Ms Caronna described him as the “project representative” [88] , which I consider an apt description of the role that Mr Brough was performing for Mr and Mrs Daniel. Ms Caronna also said in her oral evidence that Mr Brough was her contact from the very beginning [89] , again an observation which I think is consistent with the evidence. As I have observed earlier, Mr Brough was described as the customer ‘lead’ on the first and the second (amended) quotes provided by Ms Caronna to Mr Brough.

219. The Plaintiffs placed particular reliance on Mr Daniel’s statement in his 4.05pm email that if the batches were not to be identical for any reason, “please let me know before I order”.

220. They submitted that Mr Daniel’s email was in effect, a direction, or should be understood as, requiring Ms Caronna to advise him directly or personally in the event that the tiles were not identical. And Mr Daniel gave evidence that if there were reasons Ms Caronna thought “she couldn’t meet my expectations, that she would tell me” [90] . His evidence was that he was operating on the basis that unless Ms Caronna advised him of a problem, he could assume the batches would match [91] .

221. However, Mr Daniel’s subjective expectation is not conclusive. On its face, Mr Daniel’s email asked to let him know if the two batches were not to be identical. This was a communication to both Mr Brough and Ms Caronna, and it did not specify how, if it became necessary, that information was to be conveyed to him; whether it was something that needed to be conveyed personally or through Mr Brough who had consistently acted as his representative on the transaction. The email was silent as to how information should be conveyed to him, only that he should be armed with such knowledge before he placed the order.

222. In her email in response at 4.33pm Ms Caronna replied to both Mr Daniel and Mr Brough advising them what she proposed to do, which included seeking clarification from Italy on the very topic about which Mr Daniel wanted to know. Ms Caronna addressed both Mr Daniel and Mr Brough when she wrote “*[T]*herefore, we will a**wait further instructions from Italy and confirm with you”. This was not as the Plaintiffs submitted, an acknowledgement by Ms Caronna that the results of the clarification from Italy would be conveyed personally to him. Ms Caronna did not differentiate between Mr Daniel and Mr Brough. There was no indication from Mr Daniel in response to this email that he insisted that the results of the clarification in Italy be conveyed to him directly, rather than to his architect, Mr Brough.

“I just assumed the conversation that I had with Paul Brough was translated to Mr Andrew Daniel”.

But the expectation of disclosure has to be reasonable and is determined objectively.

228. Mr Brough was Ms Caronna’s contact from the very beginning for the purpose of the dealings between the parties and Mr Daniel must have appreciated this. Mr Brough was recorded as the customer ‘lead’ on both of the quotes Ms Caronna had sent on 23 and 24 August 2025, without comment or complaint from either Mr Brough or Mr Daniel. The importance of visual consistency of the tiles had been the subject of discussion at the warehouse meeting and raised by Mr Brough on 24 August in his 3.49pm email and confirmed by Mr Daniel in his 4.05pm email. The topic had evidently been discussed before that by Mr Brough and Ms Caronna on the basis of the earlier information received from Fondovalle (see [80] above). There was no reason to believe that on this topic or indeed any other relating to the suitability of the tiles, Mr Brough would not pass on information of apparent significance to his clients.

229. There was nothing in the circumstances that would have given rise to a particular concern that the information, if provided to Mr Brough, would not have been in the ordinary course related to Mr Daniel. There was for instance, no indication that Mr Brough might have had some difficulty in conveying such information because of his location, or other personal or professional commitments, so as to pass on this information to his client. The information was not confidential to Mr Daniel in the sense that there was some sensitivity in advising Mr Brough. And there was no suggestion that this aspect of the transaction was outside of, or inconsistent with, the role that Mr Brough had been performing in respect of the proposed transaction; rather he had been centrally involved in communications on the topic.

230. The Defendants’ conduct also needs to be assessed in light of what occurred after the 11.30am telephone conversation between Mr Brough and Ms Caronna on my findings. Mr Brough specifically addressed Mr Daniel in his 12.46pm email on the specific placement and number of the tiles to be allocated to each floor. There was no apparent restriction or inability on the part of Mr Brough to communicate with his client, and following the telephone conversation with Mr Brough, the manner of the layout of the tiles would have reasonably suggested to Ms Caronna that potential variance between the batches was being addressed by separating the batches between the different floors.

231. Ms Caronna made it clear in her email at 1.21pm that the invoice would be split between current stocks (in Australia) and stocks required from overseas. There was no attempt by her to avoid, or gloss over, the issue of the purchase between different batches of stock. That is consistent with a reasonable assumption that the clarification had been conveyed to Mr Daniel or that he was content with the layout plan designed by Mr Brough. Mr Daniel then did not exhibit any concerns in finalising the order, when he responded by return two minutes later, requesting that the invoice be sent to him with expedition because of his engagements that afternoon.

The liability of the Second Defendant

238. In the circumstances it is also unnecessary to decide the liability of the Second Defendant, Parisi Bathware.

239. The Plaintiffs submitted that the misleading conduct they alleged created a joint and several liability for My Top and Parisi Bathware on the basis that this was a ‘reasonable interpretation’ of the entire circumstances that Ms Caronna represented both Defendants.

240. The references to the conduct of Parisi Bathware were made on the basis of matters such as the description of email addresses, branding on signature blocks, telephone numbers and roles of individuals (including Ms Caronna) which referred to the ‘Parisi’ brand. Ms Caronna’s evidence was that My Top was an in-house brand for the Parisi network of stores. However, My Top Australia products were not exclusive at a national level to the Parisi network [94] . She said that Parisi was a wholesale supplier merchant [95] . Ms Caronna also gave evidence that, although she was a business development manager for the Parisi network, she was in fact employed by My Top [96] . The evidence of Ms Caronna did not establish that she was representing Parisi Bathware for the purposes of the supply or possible supply of the porcelain slabs to Mr Daniel or ADXG.

241. Neither of the first or second quotes sent by Ms Caronna to Mr Brough indicated that Parisi Bathware was providing the quote or was treating with Mr Brough’s clients to sell them the porcelain slabs. The final invoice that was prepared and sent to Mr Daniel was plainly issued by My Top and with directions for payment into My Top’s account.

242. I do not consider that the Plaintiffs have discharged their onus in establishing that the impugned conduct was engaged in by Parisi Bathware. Even if I had found a contravention of s 18 of the ACL by My Top, I would not have found that Parisi Bathware engaged in the pleaded conduct.

Breach, contravention and damages

243. I have found that the contract for the supply of the porcelain slabs did not contain the alleged ‘no variation’ term. Had I done so, and the ‘no variation’ term was part of the contract, I would have determined that there was a breach of such a term. As explained earlier in these reasons, in final submissions, the Defendants conceded such breach “in light of the numerous representations in evidence concerning variation between batch 1 and batch 2 of the porcelain slabs” (see [30] and [31] above).

244. There was also not a great deal of argument concerning any damages that would flow from such a putative breach. I would have found, subject to any relief available to it under s 238 of ACL, that ADXG’s loss was the cost of the supply of the Batch 1 tiles, namely $22,760.10. This is on the basis that it was ultimately accepted by both parties that the Defendants had available in safe keeping in their warehouse in Sydney, sufficient replacement slabs from the same manufacture as the Batch 2 slabs to replace the Batch 1 order. As I have observed earlier, this evidence was adduced through an affidavit of Mr Franco Parisi sworn 21 October 2025. The cross-examination of Mr Parisi’s evidence went to confirming that the replacement Batch 2 stock was in safe-keeping and was likely to be in good condition [97] .

245. As the Plaintiffs submitted, in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 at [13] the High Court reiterated the ‘ruling principle’ with respect to damages that the innocent party to a breach of contract was to be put in the position that would have eventuated had the contract been performed. Had the contract been performed in the present case, ADXG would have received two batches of consistent porcelain slabs; that is if they conformed to the contract. As it stands, Batch 1 must be replaced with new stock to achieve that result. The measure of ADXG’s loss can therefore be stated as either the cost of obtaining the replacement value or, the costs wasted on the Batch 1 slabs; see Bellgrove v Eldridge (1954) 90 CLR 613 at 617. There was no suggestion in this case that there was any difference in these two amounts.

246. I have also found that the claim for contravention of s 18 of ACL must fail. Had I been persuaded that there was a contravention, I would have found that Mr and Mrs Daniel had suffered loss in the amount of $104,610. There was unchallenged evidence that this was the cost of remedial or rectification work to remove the Batch 1 slabs currently in situ, and to install the replacement slabs [98] .

247. As I have explained earlier, had Ms Caronna disclosed that she could not guarantee that the two batches would be a perfect match to Mr Daniel directly, Mr Daniel’s evidence was that he had options. But the Defendants did not explore in cross-examination or submissions which of the options Mr Daniel said were available to him, he would have exercised, and they appeared to have been content to argue the quantum of damages on the basis of the costs of rectifying and remediating the Batch 1 tiles.

COSTS

253. Both parties have indicated that, depending on my conclusions, that they wish to be heard on the question of costs. In those circumstances I will make orders for the exchange of short written submissions so that each party can make such application and have an opportunity to respond to the opposing party. This will allow the parties to ventilate any entitlement to a special costs order, based on my reasons.

254. I understand that the parties are content for any dispute in relation to costs to be determined on the papers, without a further oral hearing.

255. In the absence of any application by either party for a special costs order, it is my view that costs should follow the event. If the parties do not file submissions in accordance with the orders I will make, then I propose to order the Plaintiffs to pay the Defendants’ costs of the proceedings.

CONCLUSION

256. For the reasons set out above, the Plaintiffs’ claims in contract and for contravention of s 18 of the ACL fail. I will make an order that the Amended Statement of Claim be dismissed.

257. I will also make orders for the exchange of submissions in relation to costs, should any party wish to make an application for a special costs order.

258. Accordingly, the orders of the Court are:

259. The Amended Statement of Claim be dismissed.

260. If any party wishes to make any application for a costs order in relation to the costs of the proceedings then:

(a) that party file and serve submissions (not more than 5 pages in length) together with any affidavit in support on or before 30 January 2026; and (b) the opposing party file and serve any submissions (not more than 5 pages in length) and any affidavit in response on or before 6 February 2026.

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Endnotes

Affidavit of Andrew Daniel sworn 19 August 2024 (Daniel 1) at [3]-[4], Court Book (MFI-1) (CB) 71.

Daniel 1 at [5]-[6], CB 71.

Daniel 1 at [12]-[13], CB 72; Affidavit of Annalisa Caronna sworn 7 August 2025 (Caronna) at [1]-[5], CB 620.

CB 111.

Daniel 1 at [47], CB 78.

Daniel 1 at [51]-[54], CB 78-79.

[5] of the Defendants’ Closing Submissions.

Transcript p162 – p164; Transcript 4 November 2025 at p2.

CB 628-629.

CB 630.

CB 89.

Caronna at [6], CB 620.

Caronna at [7], CB 621.

Transcript p105 line 42, Affidavit of Paul Brough sworn 27 August 2025 (Brough 2) at [2], CB 292.

Transcript p81 line 15.

Transcript p125 line 45.

Transcript p108 line 25, Transcript p109 line 6, Brough 2 at [2], CB 292.

Transcript p127 lines 25-40.

Transcript p82 line 8.

CB 632.

CB 631.

CB 91.

CB 633.

Caronna at [11], CB 621.

Brough 2 at [3], CB 292.

CB 94, CB 634.

CB 97, CB 635.

CB 99, CB 636.

Annexure A to the affidavit of Federico Battaglia sworn 18 October 2025 (Battaglia).

Annexure B to the Battaglia affidavit at pp 5-6.

Transcript p131 line 10.

Annexure B to Battaglia affidavit at p.4.

Annexure B to Battaglia affidavit at p.3.

Annexure B to Battaglia affidavit at p.3.

Annexure B to Battaglia affidavit at p.2.

Annexure A to Battaglia affidavit.

Caronna at [15]-[16], CB 622, Transcript p136 lines 35-40.

Transcript p136 line 40 – p137 line 2, Caronna at [15], CB 622.

Caronna at [16], CB 622, Transcript p137 lines 1-5.

CB 637.

Transcript p137 lines 1-5, Transcript p141 lines 22-26.

Transcript p129 line 15.

Caronna at [17], CB 622-623.

Caronna at [17], CB 623.

Transcript p137 line 40 – p138 line 20.

Transcript p141 lines 16-20.

CB 103-105, CB 261-263, CB 638-639.

CB 107.

CB 109-112, CB 640.

CB 114-115, CB 641.

CB 117.

Transcript p83 line 45.

Transcript p104 line 32.

Transcript p111 line 40.

Transcript p145.

Transcript p146 lines 21-44.

Transcript p138 line 44 – p139 line 12.

Transcript p141 line 45 – p143 line 1.

Transcript p132 lines 20-43.

Brough 2 at [3], CB 292.

Transcript p114 line 15.

Transcript p114 lines 30-44.

Transcript p115 lines 1-21.

Brough 2 at [4], CB 292.

Transcript p116 lines 35-45.

Transcript p116 line 46 – p117 line 31.

Transcript p117 line 41 – p119 line 1.

Transcript p120 lines 15-25.

Transcript p120 line 30 – p121 line 2.

Transcript p115 lines 13-17.

Transcript p86 lines 15-25.

Daniel 1 at [9(c)], CB 72.

Daniel 1 at [38], CB 76.

CB 89.

Transcript p115 lines 1-15.

Plaintiff’s Closing Submissions at [53]-[55].

Paragraph 4b of each of the Defence and Amended Defence.

Transcript p71 lines 7-14.

Brough 2 [2], CB 241.

Brough 2 [3]-[4], CB 241.

Transcript p72 line 4.

Transcript p70 lines 10-12.

Transcript p70 line 28 – p71 line 5.

Transcript p70 line 48.

Transcript p70 lines 35-40.

Transcript p71 lines 24-33.

Quoting Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] ATPR (Digest) ¶46,054 at 53,195 per French J.

Transcript p142 lines 31 and 41.

Transcript p143 line 1.

Transcript p89 lines 20-34.

Transcript p86 lines 15-38.

Transcript p142 lines 15-25.

Daniel 1 at [33], CB 75-76.

Transcript p124 lines 12-28.

Transcript p124 lines 40-50.

Transcript p124 lines 5-10.

Transcript p157 lines 4-28.

Report of Darcy Shaw dated 11 December 2024 at p8, CB 302.