See also Hughes v Clubb (1987) 10 NSWLR 325.
68 If a person carries out a particular type of activities on repeated occasions and with a view to profit, such that the overall course of carrying on those activities can be described as carrying on a business, then even the first of the activities of that type can be part of the carrying on of that business. However if (as the evidence in the present case seems to suggest) J&J and Mr Srbin had applied Rockcote product to a building only once before embarking on the Finns' house, and carried out no contract for the application of Rockcote products after the contract relating to the Finns' house, performance of the two contracts to apply Rockcote products may well not count as J&J carrying on a business of applying Rockcote product. Furthermore, it could be the case that J&J did not carry on the business of an applicator of Rockcote products even if J&J was an approved applicator of the Rockcote product. For these reasons, I do not regard Rockcote's pleading to para 12 as involving a denial that J&J was an approved applicator.
69 Ms Carelli's defence did not plead to the allegation in para 12. Thus, she is taken to have admitted it.
70 Para 52 of the pleading against Rockcote specifically alleged a representation by Rockcote, through the agency of the Niven company, that J&J was an approved applicator. To that, Rockcote denied the Niven company's agency, and did not admit the representation was made.
71 In para 58 the Finns allege that Rockcote "breached the contractual warranties in para 52 above in that …" J&J was "not an approved applicator of the Rockcote Product". Para 58 took that form because the Finns alleged that the representations alleged in para 52 were also contractual warranties.
72 The response of Rockcote's pleading to para 58 was a simple denial. In the context of its defence, that denial is equivocal. One basis upon which Rockcote could deny it had breached the warranties was because (as Rockcote had already specifically alleged) the warranties had not been made on its behalf, because Mr Niven was not acting as its agent. Another basis on which the breach of the warranties might have been denied was that J&J was an approved applicator. The pleading simply did not make clear whether the latter was Rockcote's contention.
73 So far as the representation case against Rockcote was concerned, the pleading alleged that Rockcote's "representations in paragraph 52 above were false, misleading and deceptive". Rockcote denied that allegation. Again, it was not made clear whether the denial was on the basis that Mr Niven was not its agent, or on the basis that J&J was an approved applicator, or both.
74 The representation case pleaded against Ms Carelli and J&J alleged that each of them represented that J&J was an approved applicator of the Rockcote product. Ms Carelli's defence denied that allegation. As well, she specifically pleaded that she did not make any of the representations pleaded against her.
75 The pleading against J&J and Ms Carelli went on to allege that the representation was false, misleading and deceptive, without any intermediate step of an allegation of by virtue of what facts it was said to be false, misleading and deceptive. Ms Carelli denied that the representation was false, misleading and deceptive.
76 In that state of the pleadings, there was no admission by either Rockcote or Ms Carelli that J&J was not an approved applicator. Thus, the Finns bore the onus of establishing that J&J was not an approved applicator.
77 The trial judge stated on several occasions in her judgment that either Mr Srbin, or Update, was not an approved applicator (paras 43, 59, 61, and 67). She referred (at [47]) to some of the evidence relating to whether Mr Srbin or Update was an approved applicator, and concluded, "[t]hat evidence does not substantiate any claim that Update was an approved applicator". Putting it that way wrongly reverses the onus of proof. Other statements by the trial judge that "there was no clear evidence that Srbin had undertaken any specific course of training with Rockcote …" (at [56]) and "there was no evidence that Srbin had undertaken the necessary training with Rockcote…" (at [59]) are also consistent with the trial judge having incorrectly reversed the onus of proof. The question she should have been asking is whether the evidence established that J&J was not an approved applicator.
78 If a plaintiff has the onus of proving a negative proposition, the fact that the defendant has greater means to produce evidence which contradicts that negative proposition, does not mean that the plaintiff ceases to have the onus of proof of that negative proposition. However, once the plaintiff establishes sufficient evidence from which, if that evidence is accepted, the negative proposition may be inferred, an evidential onus shifts to the defendant to adduce evidence that tends to show that the negative proposition is incorrect. If a defendant adduces such evidence, the plaintiff must then, as part of its overall burden of proof, deal with that evidence either by submission or argument. See generally Apollo Shower Screens Pty Ltd v Building and Construction Industry Long Service Payments Corporation (1985) 1 NSWLR 561; Hampton Court Ltd v Crooks [1957] HCA 28; (1957) 97 CLR 367 at [1]-[2], 371-2; Baiada v Waste Recycling & Processing Service of NSW [1999] NSWCA 139; (1999) 130 LGERA 52 at [55], 64-65. As Hunt J put it in Apollo at 565:
"… provided that the plaintiffs have established sufficient evidence from which the negative proposition may be inferred, the defendant carries what has been called an evidential burden to advance in evidence any particular matters with which (if relevant) the plaintiffs would have to deal in the discharge of their overall burden of proof …. [T]he plaintiffs' burden of proof of the negative proposition for which they contend is not as difficult in this case as it might otherwise have been because of the defendant's greater means to produce evidence which contradicts that proposition."
79 In the present case, there is really no doubt that Rockcote had greater means than the Finns of proving whether or not J&J or Mr Srbin was an approved applicator. Ms Carelli gave evidence that at the time of the trial she did not have access to any documents of Mr Srbin or Update. The trial judge did not say explicitly whether or not she accepted this evidence of Ms Carelli, but in some significant other respects the trial judge did not accept Ms Carelli's evidence. It would therefore not be safe for this Court to proceed on the basis that Ms Carelli did not have greater means than the Finns of showing whether or not Update or Mr Srbin was an approved applicator.
80 On the appeal Ms Olsson SC, counsel for the Finns, pointed to evidence from which she submitted the Court could and should infer that neither Mr Srbin nor Update was an approved applicator. First was the deplorable standard of the work. In particular, the opinion of Mr Bullen (para [40] above) was to the effect that not only had the necessary skills not been exercised, but as well Update "did not have the requisite skill and experience …". (emphasis added) The correct inference to draw, she submits, is that it is unlikely that a workman who was so bad had been approved.
81 I would not be prepared to draw that inference. The evidence does not establish whether the status of "approved applicator" is one that Rockcote itself bestowed, or whether Rockcote left it to its distributors to decide who was fit to be an "approved applicator".
82 There was no evidence about what the criteria were for being an "approved applicator", beyond the hint in the technical specifications that it might involve training in application of particular individual Rockcote products (paras [14] and [15] above), and the hint in the brochure that it might have something to do with on-site workshops that Rockcote conducted (para [17] above) - though that statement in the brochure might mean that the on-site workshops were conducted for people who were already approved applicators. Those hints are not enough to enable one to conclude that either training in some particular product, or attendance at on-site workshops, was a prerequisite for being an approved Rockcote applicator.
83 In my view, the poor standard of the work might be explained by Update and Mr Srbin not being approved applicators, or might be explained by them being approved applicators but Rockcote's (or Mr Niven's) process for conferring that approval having been inadequate. I see no basis for preferring one of these alternatives over the other.
84 Ms Olsson SC submitted that if the evidence adduced by a plaintiff was such that one inference that was open was that the negative proposition of which the plaintiff bore the onus of proving is correct, but another inference is equally open that did not involve the truth of the proposition, the evidential onus still shifted to the defendant. Put in the concrete terms of this case, she submitted that if the poor standard of the workmanship, and other matters to which she pointed in the evidence, might be explained by Update not being an approved applicator, or might equally be explained by Update being an approved applicator who ought never have been approved by Rockcote, that is sufficient to shift the evidential onus. I do not accept that proposition. Before an evidential onus shifts from a plaintiff, the plaintiff must have adduced enough evidence for the court to infer, if the evidence that the plaintiff adduced was accepted by the court and was the only evidence on that topic in the case, that the proposition concerning which the plaintiff had the onus of proof was more likely than not true. In that situation, one says that an onus of adducing evidence shifts to the defendant because the defendant is then in a situation in which, if the defendant does not adduce evidence concerning that proposition, the plaintiff might succeed in establishing that proposition. Counsel for a defendant has to decide whether to adduce evidence on a topic at a time in the course of the trial when counsel necessarily cannot be absolutely sure of two matters that are of critical importance to whether the onus of adducing evidence has actually shifted - will the judge accept the plaintiff's evidence on the topic, and if so will the judge regard that evidence, if no other evidence is adduced, as enough to make it more likely that the plaintiff's contention concerning that topic is correct. The type of "onus" that the defendant is then under is one of practical necessity - either adduce evidence, or risk losing on that issue. But before a defendant is in that situation, the evidence that the plaintiff has put forward on the topic must be such that, if accepted and the only evidence on the topic, it would justify the court in deciding it is more likely than not that the proposition for which the plaintiff bears the onus of proof is true. If the evidence that a plaintiff adduces is equally consistent with that proposition being true, or that proposition not being true, so that the plaintiff would fail to discharge its onus of proof if that were the only evidence on the topic, the defendant does not come under the sort of practical compulsion that I have been describing.
85 Ms Olsson also submitted that the preferable view of the evidence was that Update did not have the licence that was necessary to carry out the work at the Finns' house, and that the lack of licence made it more likely than not that Update was not an approved applicator. In my view that submission fails, because its premise is not made out - the better view of the evidence is not that Update lacked the necessary licence.
86 Ms Olsson also relied upon the fact that Update had asserted to the Finns that the work was completed, and demanded final payment, when the work was manifestly defective. I do not see that fact as making more likely that Update was not an approved applicator. While it might be explained by Update's skill and knowledge being so poor that it did not realise how bad the job it had done was, it might equally be explained by Mr Srbin trying to receive whatever money he could.
87 Ms Olsson also relied upon the fact that Update did not hand over a Rockcote performance guarantee at the time it said the work was complete. Even if it had been within Mr Srbin's own power to hand over a Rockcote guarantee (itself not necessarily the most likely situation) I see nothing unusual in his not doing so until he had been paid for the work.
88 There was some evidence consistent with Update being an approved applicator, albeit one who had done the work incompetently on this particular occasion. In my view, Rockcote had authorised Mr Niven to communicate, to potential customers who wanted the information, the names of approved applicators - that emerges not only from the conversations that Mr Finn had with the telephone operators at the Rockcote head office, but also by the answer it gave to question 4 on the "most frequently asked questions" list on its website, which identified "your nearest Rockcote outlet" as one of the ways to find an approved Rockcote applicator. That Mr Niven, when specifically asked for an approved applicator, gave Mr Srbin's name is some evidence, though slight, that he was approved.
89 There was evidence from Ms Carelli that in or around March or April 2003 she attended Mr Niven's factory, where Mr Niven "gave some training to Jonel and his boys". Ms Carelli also gave evidence that Mr Niven:
"… got a few painters together and organised for them to pay for an advertisement in a magazine known as 'Your Sydney Home' in May 2003. I recall that this was the second time this advertisement had been placed in this magazine. I am also aware that Greg Niven sent an invoice to Jonel to pay for part of the cost of the advertisement."
90 The advertisement was for Rockcote products, and included a prominent statement "for more info or a no obligation free quote by an approved applicator contact: Render Texture Paint Supplies" and gave a telephone number. Ms Carelli annexed the tax invoice from DCS Coatings to Update, charging for "Your Sydney Home advertisement - May issue".
91 It is not clear whether or not the trial judge accepted Ms Carelli's evidence about her factory visit and the advertisement - the judge said concerning it "that evidence does not substantiate any claim that Update was an approved applicator" (at [47]). As well, if the judge accepted the evidence, it is somewhat unsatisfactory as proof that Update was an approved applicator. This is because it does not make clear whether the training of which it speaks occurred before or after 20 March 2003, the critical date for the representations alleged against Ms Carelli. When it is not clear that the trial judge has accepted the evidence, I shall adopt the basis most favourable to the Finns, and leave that evidence out of any consideration of whether, overall, Update was an approved applicator.
92 Another matter relevant to whether or not Update was an approved applicator was that, after the Finns had become dissatisfied with the work, Mr Niven attended on 9 August 2003 to inspect it, and said, "the job is a complete mess. I am furious. I want his licence cancelled." Mr Niven did not, however, say anything about Update or Mr Srbin not being approved applicators. Little weight can be placed on that, however, when Mr Niven did not give evidence, and there must be room for doubt about whether, even if it were true that Update and Mr Srbin were not approved applicators, Mr Niven would have volunteered that information when he had been responsible for them coming to the job in the first place.
93 The most significant evidence on the topic, not mentioned by the trial judge, is that on 8 March 2003 Rockcote issued a performance guarantee relating to work done on a residence in Bowen Street, Seven Hills. It gave a guarantee for 10 years, relating to a coating system consisting of:
"Rockcote Quick Render - pumped
2 coats Rockcote Armour."
94 The "applicator" named in the performance guarantee relating to the Bowen Street property was "Update Paint & Texture Finishes". The trading name of J&J was "Update Paint Texture & Roof Restoration". However, the proper inference is that both names refer to J&J.
95 In my view, the matters to which Ms Olsson referred are insufficient to enable an inference to be drawn that it is more likely than not that Update and Mr Srbin were not approved applicators. Nothing in the other evidence relevant to this topic enables that inference to be drawn either. In my view, the Finns failed to establish that Update and Mr Srbin were not approved applicators of the Rockcote product.