Grounds of Appeal - Principal Judgment
42Tinker's grounds of appeal against the principal judgment were that his Honour had: (1) erred in law by failing to give adequate reasons for the conclusions in paragraphs [12] to [16] that disposed of Tinker's contract, misleading conduct and quantum meruit claims; (2) erred in its construction of the contract by concluding that it was a lump sum contract; (3) erred in finding that FDC's alleged pre-contractual representations were incapable of founding a claim because they were not reflected in the contract made subsequent to them; (4) erred in applying an erroneous construction of the contract to reject Tinker's quantum meruit claim.
43Tinker's ground (2) represented the parties' central contest. These reasons will therefore deal with it first, followed by ground (3) and then ground (4). Tinker's complaint about lack of reasons - ground (1) - was that the principal judgment exposed insufficient of its findings and reasons to allow Tinker to exercise its rights of appeal on the other three grounds: cf Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 and Wainohu v State of New South Wales (2011) 243 CLR 181. So this ground will be analysed whilst dealing with the other three grounds.
44Tinker also appealed - grounds (5) and (6) - against the costs orders comprised in the June 2012 and August 2012 orders. These remaining grounds will be dealt with together, after the grounds relating to the principal judgment.
Ground (2) - Lump Sum Contract
45On ground (2) Tinker argues that his Honour erred in construing the contract as a lump sum contract. The contract is FDC's 2 February 2009 purchase order. In my view the principal judgment properly construes the contract as one "to supply sunshades as per the drawings for a fixed price": principal judgment, at [16]. I agree with his Honour's construction. But as the construction issue was extensively argued before me, I would add further reasons for reaching that conclusion than were expressed in the principal judgment.
46A number of factors point to the correctness of FDC'c construction of the contract, as one to supply all the sunshades necessary to conform to the drawings transmitted on 30 January, and to supply them for a fixed price of $59,243.84. This construction for which FDC contends should be preferred over Tinker's claimed construction (pleaded in the Amended Statement of Claim [12] and [13]): that the contract was one to supply sunshades at a particular price per frame, and initially to supply 102 sunshade frames. In my view the contract was neither one to supply sunshades at a price per frame, nor was it a contract to supply only 102 frames.
47First, the contract is not a schedule of rates contract for the supply of sunshade frames at a specific rate per frame unit supplied. The structure of FDC's 2 February 2009 purchase order is quite inconsistent with such a construction. The face of the purchase order form is structured to allow (on each line) for the supply of items or units of a particular product or service at a rate per item/unit, and for the total of each group of units or items so supplied then to be aggregated into a grand total, by adding up the line totals. It is difficult to look at the purchase order form, which the parties actually used without being confronted with its structural capacity easily to accommodate a schedule of rates contract.
48But the parties did not use the schedule of rates structure in the form at all. It is clear that they rejected it. The 2 February purchase order form contains a single grand total price of $59,243.84, without any break-up of that figure identifying rates per item/unit, or identifying any sub-totals for the supply of any group of items/units. The way the parties used the purchase order form on 2 February 2009 is really only consistent with the view that they could not see their way to breaking up their contract pricing into rates per item or per unit. Rejecting this part of Tinker's case means that it is difficult for Tinker to calculate a price per frame for frames supplied in excess of 102. But looking behind the front page of the purchase order provides no better support for Tinker's argument.
49Secondly, although Tinker's 2 February quotation is attached behind the front page of the purchase order it too does not clearly indicate that Tinker is proposing to supply frames at any particular price per frame. The note at the top of the Tinker 2 February quotation, "Note 102 frames at 1200mm centres" might be thought to indicate that this was a quotation for 102 frames as Tinker contends. But there is a difficulty with drawing this conclusion here. The difficulty, as the learned Magistrate found - principal judgment at [9] - is that the Tinker quotation still seems to carry the mathematical residue of earlier draft quotations, which had divided the total price up by 164 units, not by 102 units. It is very difficult to draw from such drafting a clear inference of a price per unit for 102 units.
50Thirdly, another element of the purchase order that is inconsistent with a contract to supply 102 frames at a particular price per frame is that there is no definition anywhere in the FDC purchase order or the Tinker quotation of just what is meant by a "frame" or "frame unit". What exactly the purchaser gets, when it gets 102 units, is not at all clear, particularly because many of the calculations are undertaken on the basis of multiplying items by 164, not by 102. For example with the material described as "30mm SS", 2 items are apparently required per frame. But the total of "30mm SS" items needed (and which is then priced) is 328, or 2 x 164 items. The pleadings before his Honour below, were no clearer: referring as they did to "sunshades' as often as "frames".
51Fourthly, the "Note 102 frames at 1200mm centres" is just that - a note. It is not a calculation to which Tinker shows very great commitment. This note is worded more as an indication of what Tinker then estimated was the number of sunshade frames that would be required to be fitted onto the space on the drawings. The "note" for example, bears no clear indication that Tinker was not prepared to supply any more than 102 sunshade frames for the stated price of $59,243.84, if its estimate of 102 was wrong. And other parts of the quotation support this interpretation: the words "Sun Shades Approximate 118 lineal meters @ 1.200 centres gives 102 frame units" (emphasis added) infer that 102 frame units is the product of a calculation which is itself based on a declared approximation of the number of lineal metres involved.
52Fifthly, the purchase order describes what is to be provided as being both "As per the attached quotation dated 02 Feb 2009," and "as per the attached drawing schedule... and seven Architect's dimensioned sketches attached." The purchase order assumes that the supply can and must conform with both the drawings in the identified drawing schedule and also with the quotation. It is difficult to see how a contract to supply only 102 frames could conform with the drawing schedule/dimensioned sketches if, as was the case here, 102 frames were well short of the number required to fit out the space described in these drawings/sketches. But the language of the purchase order is more internally consistent on FDC's construction: on that construction the supply will readily conform with both the drawings/sketches, by filling the area they depict, and will conform with the quotation, which is for a lump sum price.
53The parties were in contest as to whether in order to construe their contract the Court should look at anything more than the 2 February FDC purchase order, together with its attachments. For the Court to draw its conclusion that the learned Magistrate was right and that there was no error in his conclusion on this issue, it has only been necessary for the Court to look at the 2 February purchase order. But were it necessary to look at the parties' earlier communications the position would have been no different.
54For example, FDC's call for a quotation from Tinker on 8 January requests "a firm price tender for the above work in accordance with the attached Specifications/Drawings/Special Conditions of contract and other enclosed documentation". This wording reinforces the idea that a "firm price" is required for supply in accordance with the drawings. Moreover, the earlier Tinker quotations of 21 January and 23 January are structured in the same way as the final 2 February quotation, and are of no greater assistance to Tinker's case than the 2 February quotation.
55But Mr Pesman also argued - under ground (1) - that the learned Magistrate had failed, in relation to ground (2) issues, to give adequate reasons for his decision, resulting in an error of law: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 278 and Workers Compensation (Dust Diseases) Board of NSW v Smith [2010] NSWCA 19, see especially Basten JA(at [136] and [138]). Alternatively, Mr Pesman says that the form of the reasons actually given is so inadequate that it demonstrates other errors. For the reasons that follow I do not find these various contentions persuasive.
56First Mr Pesman argues that in the principal judgment (at [10]) the learned Magistrate refers to the well known passage in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, at 352 (per Mason J) to the effect that the evidence of surrounding circumstances is not admissible to contradict the language of a contract which has a plain meaning, but his Honour nevertheless goes on to make findings about surrounding circumstances.
57Mr Pesman says that in the absence of clear reasons showing how he used these surrounding circumstances findings that it should be inferred that he used them impermissibly to construe the parties' contract. But these findings have another purpose. They do not show that his Honour has construed the contract outside permissible principles. The findings his Honour made as to the surrounding circumstances and other communications are all relevant to the misleading and deceptive conduct case and require no special explanation for their presence in his Honour's reasons. Moreover, the principal judgment (at [12]) construes the written 2 February purchase order as "clearly expressed".
58Mr Pesman also argued that his Honour's conclusion in [12] that "the contract is clearly expressed" is either wrong, because of the debatable content of the 2 February purchase order, or lacks sufficient reasons to explain what is being "clearly expressed". Mr Pesman say if the contract is clear his Honour has not anywhere said exactly what its terms are.
59But as Mr Corsaro SC pointed out for FDC, the answer to this lies in principal judgment [16], which is a finding as to the terms of the contract that his Honour found to be clear: "the agreement was to supply sunshades as per the drawings for a fixed price".
Ground (3) - Pre-contractual Representations
60On ground (3) Tinker argues that his Honour erred in finding that FDC's alleged pre-contractual representations were incapable of founding a claim because they were not reflected in the contract made subsequent to them. The first question is whether his Honour did make the finding that this ground assumes was made. For the reasons that follow in my view he did not.
61Mr Pesman argues that the principal judgment at [14] demonstrates a significant reasoning error. His Honour's reasons at [14] are set out above. Mr Pesman submits that his Honour's reasoning on the misleading representation "assumed as a matter of legal conclusion if you enter into a contract inconsistent with an earlier representation you, of necessity, can't have relied on the previous representation and that is plainly wrong. It might be right in a particular instance but his Honour does not take his reasoning that far." So Mr Pesman's point is that there has either been an error shown in the learned Magistrate's reasoning, or there has been a failure to give adequate reasons on his Honour's part.
62But paragraph [14] of the principal judgment itself gives the short answer to Mr Pesman's argument. His Honour has simply inferred, using in part Mr Tinker's conduct in accepting, not rejecting the purchase order, that Mr Tinker did not rely in this case on any representation that Mr Semple may have made. That in my view is a quite available inference to draw in the circumstances of this case about Mr Tinker's reliance. Mr Tinker gave evidence and the learned Magistrate could make this assessment of him. But it is merely an available inference based on the particular facts of this case. Paragraph [14] does not contain reasoning that as a matter of legal necessity a subsequent contract inconsistent with a representation must mean that the representation was not relied upon.
63Mr Pesman next argues that his Honour's misleading representation findings, in [14], only deal with one part of Tinker' pleaded misleading conduct case, namely Tinker's paragraph 6.3 of the Amended Statement of Claim that charging would be on a "per unit" basis. But the short answer to this is that all the other pleaded representations (paragraphs 6.1, 6.2, 6.4 and 6.5 of the Amended Statement of Claim) are nothing more than machinery provisions to facilitate the performance of a per unit contract. His Honour's findings and reasoning disposes of them all at once, in dealing with 6.3.
Ground (4) - Quantum Meruit
64On ground (4) - Tinker's final ground of appeal relating to the principal judgment - Tinker argues that his Honour erred in rejecting Tinker's quantum meruit claim for the remaining 81 frames, because his Honour had construed the contract as requiring the supply of the whole 183 frames, concluding that there was no room for the operation of quantum meruit.
65As Mr Corsaro SC pointed out Mr Pesman's characterisation of the contract as one to supply 183 frames is not correct. It was never a contract to supply any particular number of frames - either 102 or 183. Rather it was a contract to supply in accordance with the architectural drawings. Even if these drawings were not fully adequate for all the fabrication decisions required for the job, they were nevertheless the contract guide to the fabrication and supply that was required, rather than any number of frames.
66But Mr Pesman appropriately conceded that if the contract for which FDC contended was found to have been made, than there was no basis to complain about his Honour's reasoning in paragraph [15] of the principal judgment. This is in accordance with accepted principle that quantum meruit is not available whilst an inconsistent contractual promise exists: Pavey & Mathews Pty Limited v Paul (1987) 162 CLR 221, at 256 per Deane J
Grounds (5) & (6) - Offer of Compromise
67Finally there was a short argument about his Honour's costs orders. In his April 2012 judgment the learned Magistrate found that Tinker was entitled to judgment for $4,904.62, and that prejudgment interest was payable for a period. But he found that a FDC offer of compromise for $5000 expired on 11 March 2011, so that Tinker should have its costs up to 11 March 2011 and FDC its costs after that date. When interest was factored into Tinker's claim, it came to $5,152 and therefore exceeded the offer of compromise.
68But his Honour rejected Tinker's motion to vary the costs order so that FDC paid all Tinker's costs before trial : August 2012 order. Tinker now seeks to appeal from that decision. Being a costs order leave to appeal against this decision is required: Local Courts Act s 40(2).
69But even if leave were granted there is no basis from his Honour's reasons to conclude that his broad Civil Procedure Act s 98 costs discretion miscarried. His Honour was appropriately influenced not to vary his April 2012 costs order because: Tinker was minimally successful, the offer of compromise substantially covered the additional work on which Tinker succeeded, and Tinker failed on the other contentious grounds.
70Mr Pesman's argument on these grounds is not persuasive.
Conclusion and Orders
71In the result the Court agrees with the learned Magistrate's construction of the parties' agreement and the Court concludes that there was no error demonstrated in his Honour's reasons in his principal judgment. Nor has the Court found that the learned Magistrate has failed to give adequate reasons or to make sufficient findings. Nor is any error in the exercise of his Honour's cost discretion evident in the subsequent judgments.
72The FDC appeal was not pursued and has been dismissed. The Tinker cross-appeal was unsuccessful after the argument that took place before me.
73FDC, the cross-respondent has been substantially successful. The appropriate orders in these circumstances, which I will make are:
(1)The Cross-Summons is dismissed.
(2)Order the cross-appellant (Condensing Vaporisers Aust. Pty Ltd t/as RJ Tinker and Son) pay the cross-respondent's (FDC Constructions & Fitout Pty Limited) costs of these proceedings.
I certify that this and the preceding pages are a true copy of the reasons for judgment of Justice Slattery delivered on 9 August 2013
Associate..................................