DISTRICT COURT OF QUEENSLAND

CITATION:	Higgins Coatings Pty Ltd v Cure-It Chemical Applicators Pty Ltd [2014] QDC 130	
PARTIES:	HIGGINS COATINGS PROPRIETARY LIMITED
(plaintiff)
v
CURE-IT CHEMICAL APPLICATORS PROPRIETARY LIMITED
(defendant)	
FILE NO:	BD1830/2010	
DIVISION:		
PROCEEDING:	Trial	
ORIGINATING COURT:	District Court at Brisbane	
DELIVERED ON:	4 March 2014	
DELIVERED AT:	Brisbane	
HEARING DATE:	16, 17, 27-31 May, 5 June 2013	
JUDGE:	McGill SC DCJ	
ORDER:	Judgment that the defendant pay the plaintiff $74,116.23 including interest of $20,148.10.	
CATCHWORDS:	CONTRACT – Breach – subcontract – whether work done with due care and skill – damages 
CONTRACT – Subcontract – references to head contract in written contract – subcontractor not seen head contract – whether relevant terms incorporated
CONTRACT – Implied terms – provision of brochure about product – no implied warranty as to features of product in brochure
TRADE PRACTICES – Misleading and deceptive conduct – representations in brochure handed over by defendant – whether made by defendant – whether representations false – context of representations
Trade Practices Act 1974 (Cth) s 52
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 – cited.
Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 – cited.
Gardam v George Wills & Co Ltd (1988) 82 ALR 415 – cited.
Nemeth v Bayswater Road Pty Ltd [1988] 2 Qd R 406 – applied.
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 – cited.
Trustees, Executors and Agency Co Ltd v Peters (1960) 102 CLR 537 – cited.
Yorke v Lucas (1985) 158 CLR 661 – cited.
	
COUNSEL:	S McNeil for the plaintiff
J Wagner (16, 17 May),
N M Cooke (balance of trial), for the defendant	
SOLICITORS:	McKays Solicitors for the plaintiff
Cranston McEachern Lawyers for the defendant	
[1]	On 1 April 2009 the plaintiff was contracted by the body corporate for a town house development in Brisbane to recoat the driveways, roadways and paths within the common area of the development.  On 7 May 2009 the plaintiff and the defendant entered into a sub-contract for the defendant to clean the surface and to supply and apply Euco Diamond Hard as required under the contract with the body corporate.  That was subsequently done, but the body corporate was dissatisfied with the result, and complained to the plaintiff who took the matter up with the defendant.  Ultimately the plaintiff resolved its dispute with the body corporate on the basis that it would not pursue payment under its contract, and by this action seeks to recover that amount from the defendant as damages for breach of contract.  The plaintiff has paid the defendant the price under the sub-contract, less a retention of 5 per cent.
Background
[2]	The body corporate was formed in 1999 for a town house development covering four hectares.  It comprised 120 town houses, with roads and pathways within the common area.  The roadways were constructed in stencilled concrete with paths and some other areas like barbeque areas in coloured concrete.  A coating of some kind was put on in 2000 at the end of construction, and there was another coating of sealer before 2009, which did not last as long.    When the plaintiff tried to find out exactly what had been used before the previous contractor refused to say.  In July 2008 Mr McIntosh who was the resident manager for the body corporate phoned Mr Ridge of the plaintiff to obtain a quote for applying a new coating of sealer.  The plaintiff had previously done some painting work at the complex with which the body corporate was happy.  
[3]	As a result Mr Ridge and another employee of the plaintiff, Mr Butcher, met Mr McIntosh on site on 21 July 2008.  Mr McIntosh did not nominate a particular product but wanted a transparent coating with a low sheen finish to seal the roads and pathways, which would have a long life and produce a surface from which oil and leaf stains and lichens could be easily cleaned.  They measured up the complex, and Mr Butcher did some research on the internet to identify a suitable product.  As a result he spoke to someone at a company Tremco Pty Ltd, who gave him the name of the defendant to contact: p 33.  He rang the defendant’s number and spoke to a Tracey Purtell who told him they had a product and invited him to call for a brochure: p 34.  He did so, saw Ms Purtell who introduced him to Mr Haywood, the director of the defendant.  According to Mr Butcher he ran through the requirements of the body corporate and Ms Purtell gave him the brochure for Euco Diamond Hard: Exhibit 1.  Mr Butcher said he looked at this material, and the product seemed to match the requirements: p 36.
[4]	Mr Haywood on the other hand denied that he was there when Mr Butcher came to the office on this occasion:  p 42, 13.  This was not what was put in cross-examination, which was that on this occasion Mr Haywood had said certain things to Mr Butcher:  p 8-9.   It was also put to Mr Butcher, and denied by him, that he already knew about Euco Diamond Hard (“EDH”), and wanted that product, and that was why a brochure for that product was provided to him: p 6.  Mr Haywood said that on a later occasion (7 May 2009) Mr Butcher had said to him that he had been researching the product and that was why he wanted EDH: p 43.  Mr Butcher denied this (p 10), although it follows from his earlier evidence that he had done some research on the internet, that led to the company Tremco.  Mr Haywood said that if someone had come to him seeking a product to perform in the manner sought by the body corporate he would not have nominated EDH, which he described as one of the cheaper products on the market: p 43.  For reasons given later I prefer the evidence of Mr Butcher, and accept that it was the defendant that suggested this particular product.
[5]	The plaintiff subsequently asked the defendant to provide a quotation, and one was provided on 7 October 2008: Exhibit 2.  Based on this, the plaintiff provided a quotation to the body corporate – Exhibit 3 – which after a long delay was accepted by a purchase order on 25 February 2009: p 39.  Mr Butcher got in touch with the defendant, and met its business development manager, Ms Zinko, at the body corporate premises: p 40.  There was some discussion of the mechanics of the job, to minimise the inconvenience to residents.  Ms Zinko said she explained to Mr Butcher some limitations of the product in this use: pp 40-42.  Mr Butcher was not cross examined about this.  A sub-contract was signed between the plaintiff and the defendant on 7 May 2009: Exhibit 5.
[6]	The work was duly done on the site by the defendant.  Mr McIntosh had little recollection of the work being done (p 44), but he recalled being disappointed by the result (p 61), in that there was no visible seal and no wet look after the job was done.  With this product there was initially little or no visible change: p 46.  He tested the surface with water and it just soaked in.  He said that it just felt and behaved like bare concrete, and it did not do the job that he had expected:  p 47.  He also found that the process of cleaning off mildew, oil and stain was not any easier after this coating had been put on:  p 48, p 53, p 56.  Leaves were continuing to stain the concrete.
[7]	The body corporate complained to the plaintiff, and forwarded a number of photographs of the site taken by Mr or Mrs McIntosh; these were forwarded by Mr Butcher to the defendant.  Mr Ridge and Mr Baldwin went to the site, and described areas of a white milky substance over a lot of the driveways and paths, but said that otherwise there was no sealant visible, or any particular indication that one had been applied.  There was also some leaf staining visible on the walkways, tyre marks and some oil stains: p 50.  Mr Butcher also took some photographs of the site:  Exhibit 17.  There was evidence from some witnesses that the photographs did not do justice to the seriousness of the problem.
[8]	Various people looked at the white residue at different times but there was some conflict of evidence as to its nature and characteristics.  The defendant organised a cleaning exercise with a powered broom, which the defendant’s witnesses claimed removed the white material.  They claimed it was a powdery substance on the surface which could be brushed or washed away.  Other witnesses described it as a hard substance which could not be rubbed off, and which was much the same after the cleaning exercise.  As well they thought that the oil and leaf staining was still occurring in much the same way as before the sealer was applied.  Mr Haywood said that this was a housekeeping issue, that the sealer would not prevent staining, and that it remained for the body corporate to clean up stains that occurred.
[9]	Subsequently two test areas were recoated, one by the defendant for part of which the sealant was broomed over the surface before it set.  There was limited evidence about the result of that test, but the plaintiff’s witnesses did not regard it as satisfactory.  The plaintiff also arranged for Tremco, the company which was the distributor of the product in Australia, to do a test applying EDH to a different area.  This was regarded by the plaintiff’s witnesses as producing a better result, but the body corporate’s witnesses did not describe that outcome as satisfactory.
Expert evidence
[10]	The body corporate site was inspected by Mr Medland of Tremco Pty Ltd.  He had had eight to nine years experience with EDH, including working with applicators on various projects, and including three visits to the manufacturer in the U.S.: p 35, p 72.  He had had no prior experience of the use of EDH over stencilled concreted: p 38.  He subsequently prepared a report addressed to the plaintiffs: Exhibit 23.  His opinion that a poor application procedure had been followed was based on what he had been told of the application procedure by Mr McIntosh, something Mr McIntosh was not now able to recollect and hence confirm in evidence. Accordingly this opinion was inadmissible.  
[11]	Mr Medland said that the surface was not showing a true sealing in accordance with product specification of EDH, but oil stains were still prevalent and crystallisation was occurring in carports.  He expressed the view that this was not a suitable application for EDH, particularly given the prior application of acrylic sealers.  He said that the white deposit which he saw considerable amounts of over the stencilled concrete was not efflorescence, but it appeared to be a crystalline material like EDH which had been left to set on the surface: p 39-40.  He was able to scrape bits off with a key: p 56.  He said that the only way to remove it generally from the surface was to scrub it off, using a citrus detergent.
[12]	Mr Medland said that if EDH was applied to new concrete then as it dries the surface becomes clear with a low sheen: p 37.  He said that if properly applied it would repel water rather than allowing the water to soak in (p 37, p 75-6) and would make it easier to clean off oil stains on the concrete, one of its benefits: p 37.  He considered however that there were grease marks, which looked like oil stains, which had been present on the concrete before EDH was applied over them: p 63.  It emerged during cross-examination that there were two versions of Mr Medland’s report, though he maintained he had only ever prepared one: p 66-68.  He confirmed later that the version he had prepared and approved was that in Exhibit 23. 
[13]	Mr Medland’s evidence was based essentially on practical experience with the product EDH.  A more theoretical perspective was provided by Mr Haig of Uniquest Pty Ltd, a material scientist who had provided reports to the plaintiff’s solicitors on 30 April 2012 (Exhibit 24) and 14 November 2012: Exhibit 25.  Mr Haig has a degree in applied science and post graduate diploma in environmental studies, and had worked as an analytical chemist and subsequently as a material scientist for various entities in the power industry before moving to a commercial consultancy.  He was able to explain the operation of EDH, and noted that if it was applied too generously and allowed to pond it would produce a powdery white deposit.  He expressed the opinion that EDH was not a suitable product for application over acrylic stencilled and sealed surfaces: Exhibit 24, p 7.  
[14]	Mr Haig also made comments about the application procedure on the basis of reports of those procedures which were attributed to Mr McIntosh; again because Mr McIntosh did not provide evidence verifying details of those procedures this evidence was not admissible.  He did say that, to the extent that the acrylic stencil and sealer coat had the effect of still sealing the concrete, this would tend to prevent EDH from soaking into the concrete in the way it was designed to as part of the process by which it seals concrete, and in such a situation it would tend to pond on the surface.  That would explain the formation of the milky colour on the surface of the driveway after the application.  
[15]	In his further report, Mr Haig pointed out that when the stencil concrete is laid, the material which is distributed above the stencil is not just a coloured powder, but is a compound which includes a polymer modifier, commonly an acrylic modifier, necessary in order to enable the material which is being spread to bond with the concrete underneath.  That the surface was laid in this way was shown by close examination of the current surface; this was illustrated by photographs in the second report.  He would agree that the acrylic coating would tend to wear away, but would expect it to have a life expectancy of three to five years, and noted that the same type of product would be easily applied over the residue of the previous coating.  He also said that, even if the acrylic coating had worn off the surface, to the extent that it had soaked into pores in the concrete it would not have worn off and those pores would remain sealed; however he would not expect a worn seal to leave a surface on which water would bead.  The fact that water soaked in rather than beaded on the surface would not however mean that the surface was suitable for the application of EDH.  
[16]	Mr Haig had investigated the application of EDH on a previous occasion in about 2006, where it had been applied over line marking in a car park, and then there was a significant white, crusty deposit above the line marking:  p 17.  He expressed the view that when stencilled concrete is produced using a colour hardener product it leaves a very dense, nonporous, high strength material on the surface, and it would be difficult for EDH to soak into that material because of its limited porosity:  p 19.  EDH requires porosity in untreated concrete so that it can soak into those pores and seal them off:  p 20.  Putting an acrylic seal above that again would further reduce the ability of EDH to penetrate the concrete.
[17]	The defendant called evidence from a forensic materials engineer from CMET Technology Pty Ltd, Mr May, who produced three reports which went into evidence, dated 22 April 2013 (Exhibit 32), 10 May 2013 (Exhibit 33) and 27 May 2013:  Exhibit 34.  In his initial report Mr May expressed the opinion that there was insufficient information available to establish whether or not EDH was suitable for the site, or whether it had been applied in accordance with the instructions in the product data sheet, and that this would require further investigation involving the taking of shallow core samples from the concrete surface.  
[18]	The second report was provided on the basis of information supplied to Mr May, including photographs provided by the defendant, but without the benefit of actually inspecting the site.  Mr May understood that the white colour on the surface of various parts of the site could be readily removed and a similar white deposit was also present on brick gateposts (p 4), and he said that those factors indicated that the deposits could be associated with salt efflorescence, though he qualified his opinion by suggesting testing and examination of the deposits supported by chemical analysis.  This evidence depends on establishing those factual propositions about the white deposits, which were the subject of a conflict of evidence before me.
[19]	The third report was written after he had visited the site, and examined the stencilled finish.  He expressed the opinion that the stencilled finish had been constructed using a dry shake stencil process, which he described at p 5 of his report, and said cures to form a hard cementitious surface with a textured finish.  In relation to the causes of the white bloom on the surface, he adhered to his previous opinion that this was probably caused by salt efflorescence, noting that he observed some salt efflorescence in the brickwork at the south-east entry to the property, and that the body corporate was in a low-lying area bounded by a watercourse.  It also appeared to him that evidence suggesting that the white deposit was relatively easily removed from the affected areas of the driveway supported the view that it was salt efflorescence.  He did note however that the composition of the deposit could have been conclusively established by a chemical analysis of samples.  
[20]	With regard to the suitability of the surface of the application of EDH, Mr May noted the absence of polymer modifiers in the data sheets for various dry shake stencil products which were available at the time, and accordingly expressed the view that this surface in its original state would readily absorb moisture into the surface pores.  An acrylic seal coating applied to concrete after the stencilled finish would be expected to impede the uptake of moisture when the coating was new but its barrier properties would be gradually reduced over time until the seal coating was reinstated:  p 9.  Mr May had been informed that the surface preparation prior to the application of EDH included the application of a CCS sealer stripper, followed by the application of a degreaser and a high pressure water wash and acid wash, and expressed the opinion that this would be effective to remove any prior acrylic coating.  An acrylic coating would tend to bridge across the pores of a concrete surface, only filling larger pores which were less than 10% of the capillary porosity in concrete, unlike EDH which because of its low viscosity would tend to be absorbed readily into the fine pore structure of the concrete.  Accordingly he expressed the opinion that with this treatment the surface was suitable for the application of EDH:  p 9.
White material on the surface
[21]	One major issue to be resolved in this matter is the nature of the white material on the surface of the treated area which was referred to frequently in the course of the evidence.  All the witnesses there at the time spoke of its being present, and it appears to some extent at least in various photographs which are in evidence.  On the basis of the evidence before me, the likely candidates for the identity of this material are surplus EDH which set on the surface, and efflorescence.  There are some difficulties with either explanation, and it is possible that this substance was actually something else again, but there was no evidence to support any specific third explanation.
[22]	The difficulty with the “surplus EDH” theory is that the other complaint the body corporate had was that the surface had not been given an effective seal, so that for example water and stains would soak into it.  If there was surplus EDH on the surface, it suggests either that the surface already had an effective seal so that the EDH could not soak into it, or that more EDH than was necessary to provide an effective seal was applied to the surface.  Perhaps the explanation is simply that the outcome was patchy, with some areas where there was insufficient EDH properly to seal the surface, and other areas where there was too much EDH so that a surplus was left on the surface.  If there were surplus EDH left on a surface, apparently it does hardens and turn into a whitish substance, consistent with some of the observations of the witnesses.  
[23]	There are on the other hand difficulties with the efflorescence explanation, mainly arising from the fact that EDH is supposed to provide a seal for the surface.  Efflorescence occurs when water containing dissolved salts comes to the surface and then evaporates, leaving the salts behind.  Mr Haywood sought to explain the presence of efflorescence on the EDH sealed surface on the basis that EDH still permits the concrete to breathe, that is it is not impermeable to water vapour, but that explanation is not consistent with his other evidence, that the powder was on the top of the surface rather than building up underneath the EDH.  Had water containing dissolved salts come up through the concrete to underneath the EDH coat and the water vapour then passed through the coat, it would have left the salts below the EDH seal, not on the surface above the seal where it could be easily brushed or washed away.  Both experts agreed that a properly applied EDH coating on concrete would be waterproof,  and it follows that if the coating had been properly applied the water could not come out and leave dissolved salts on the surface.
[24]	There are other difficulties with the efflorescence theory.  Efflorescence is commonly a continuing problem, and although this point was not raised in cross-examination neither of the witnesses from the body corporate suggested that the white substance on the surface after the EDH was applied was something which had occurred in the driveways and pathways previously.  Also by the time the expert witnesses inspected the site not long before trial the white substance had disappeared, which would be consistent with its being excess EDH which had over the years worn off, but not consistent with a continuing efflorescence issue.  It is of course possible that the application of a further effective seal by the body corporate prevented any recurrence of an efflorescence issue, but I have difficulty in seeing how the application of an EDH coating, whether or not applied properly, could give rise to an efflorescence problem which had not been there previously.
[25]	There is also the consideration that it seemed to me that all of the witnesses except the defendant's witnesses gave a description of the white material which was quite inconsistent with the appearance and behaviour of efflorescence.  There was no obvious reason why the body corporate witnesses, and Mr Medland, should have been giving an incorrect description of the nature of this white material in order to assist the plaintiff against the defendant.  Mr Medland was quite clear that it was not efflorescence (p 39), although he accepted that he saw efflorescence in some brickwork on the site, where it is commonly seen:  p 57.  On the whole I consider that the weight of the evidence is to the effect that the white material seen on the surface was a hard material which was difficult to remove from the surface, not a white powder which was easily brushed or washed away, and I accept that evidence.  It follows that the white substance seen was not efflorescence, and in those circumstances the more plausible explanation is that it was surplus EDH.  I so find.
[26]	It follows that the evidence of Mr Haywood and Ms Zinko, to the effect that this was a white, powdery substance which was easily cleaned away, was not true.  That impacts on their credibility.  There is also the difficulty for their credibility that there seems to be a substantial difference between the evidence of the body corporate witnesses about the nature of their complaints about the surface and the evidence of the defendant's witnesses about the nature of their complaints.  Mr McIntyre said that he was concerned about the fact that it seemed to be no easier to clean away stains including oil stains from the surface after this had been applied (p 48, p 56) which seems inconsistent with the evidence of Mr Haywood that he told, and later showed, the defendant how stains could easily be cleaned off:  p 50.  The complaints about the white material on the surface seem to be inconsistent with the notion that it was easy to clean away and was effectively removed by the treatment provided by the defendant.  
[27]	The defendant’s argument about this was that the real problem in the eyes of the body corporate was that EDH had not provided the sort of gloss surface they had previously obtained from acrylics, and that the problem lay with Mr Butcher who had researched products on the internet and found one which would not in fact satisfy the body corporate’s desire for a gloss finish.  Although there were some references to a gloss finish in the evidence, there was no evidence from anyone other than the defendant's witnesses of a complaint about the absence of a gloss finish, and no evidence from anyone on behalf of or connected with the body corporate that that was the true nature of its complaint.  
[28]	There are other difficulties with the evidence of the defendant's witnesses.  They claimed that as part of the surface preparation for this site they had applied a chemical stripper to remove any residue of the acrylic coating previously applied, a fairly complicated process.  Yet there was no documentation which emerged at the trial referring to the fact that this had been used prior to earlier in 2013, and there were statements made in a letter where reference was made to water blasting the surface, but not to the application of the stripper.  That letter is on its face inconsistent with the idea that a chemical stripper was applied, as is the fact that the quote for the job did not cover the cost of the chemical stripper, but only the cost of water blasting and coating with EDH.  Ms Zinco’s explanation, that this was not charged for in order to build a commercial relationship with the plaintiff (p 63), struck me as unconvincing, in circumstances where large quantities of the chemical stripper alone would have been required for this job (p 73) and on the defendant’s account most of the physical work done was associated with the stripping process rather than the application of EDH.
[29]	Counsel for the plaintiff submitted that this idea surfaced only after the defendants had the opportunity to see a copy of the report from the plaintiff’s expert indicating that the presence of the previous acrylic coat would have been an impediment to the use of EDH on this surface, that the explanation was invented, and that I should find that this had not occurred.  She pointed out that an email to Mr May of 4 April 2013 made no reference to the use of a stripper, just saying “we cleaned the entire area” and “the concrete was extremely porous”:  Exhibit 29.  In an email to her solicitor on 20 May 2013 Ms Zinco had said the stripper was applied “as per manufacturer’s specifications” with the additional use of a pH neutral soap (Exhibit 30) but she had admitted that one step specific by the manufacturer had not been followed:  p 74 (cf. p 63).  Given that I otherwise have doubts about the reliability of the evidence of the defendant’s witnesses, and that there was an absence of any independent evidence or documentation supporting the proposition that this stripper had in fact been used, on the whole I am not persuaded that the defendant’s surface preparation of the site included the use of the chemical stripper.
Analysis – breach of contract
[30]	The plaintiff claims damages for breach of contract, or in the alternative for breach of s 52 of the Trade Practices Act.  With regard to the claim for breach of contract, there was a contract in writing entered into between the plaintiff and the defendant:  Exhibit 5.  The terms of the written contract included express provisions the effect of which was summarised in paragraph 4 of the amended Statement of Claim.  It was submitted that those referred to in paragraphs 4.1 and 4.3 were not incorporated in the contract because a copy of the head contract was not provided at or before the time when this contract was entered into.  That however is not to the point.  Such a contract existed, and its terms were able to be ascertained, by the parties at the time had they sought to do so, as can the court now.  It would have been open to the defendant to decline to enter into the contract without examining the terms of the head contract, but the defendant having chosen to contract on these terms was bound by them whatever the head contract in fact provided.  This does not have the effect of imputing into the contract between the plaintiff and the defendant the terms of the head contract generally, but where the head contract is referred to in the contract between these parties then effect will be given to the terms of that contract by reference to the content of the head contract.
[31]	The plaintiff also pleaded that it was a term of the contract between the parties that the product as applied would display certain characteristics, being the characteristics referred to in the brochure, and pleaded in paragraph 5 of the amended Statement of Claim.  There is no express term to that effect in the contract, and the issue is whether that term is to be implied.  I apply the test laid down by the Privy Council in BP Refinery (Westernport) Pty Ltd v Shire of Hastings.  It seems to me that that test is not satisfied in respect of this alleged term.  What the parties have contracted is that the defendant will apply to a certain area a particular product identified by name.  It is not necessary for the business efficacy of the contract for the defendant to warrant that that product will have the characteristics held out as possessed by it by the manufacturer, nor is there any particular reason for the implied term to be confined to the particular characteristics identified in the pleading.  
[32]	The mere fact that statements had been made in the brochure provided by the defendant to the plaintiff before the contract was signed does not mean that the substance of those statements is to be implied into the contract.  The Sale of Goods Act in s 17(b) provides that where a product is sold under its trade name the usual statutory implied terms of fitness for purpose is not to be implied.  The parties for whatever reason decided that they would contract for the application of EDH to this property, but I do not consider that the circumstances justify the implication of a warranty that that product when applied to this property will have any particular characteristics or qualities.
[33]	Most of the breaches of contract alleged in paragraph 7 of the Amended Statement of Claim appear to be breaches of the terms alleged in paragraph 5.  Paragraph 7.8 alleged in substance that there was a breach of contract because the product EDH was not appropriate for concrete with a decorative or stencilled surface, presumably said to be a breach of the express term referred to in paragraph 4.4 of the Statement of Claim.  This gives rise to the question whether the surface was in fact suitable for the use of EDH, a point on which the experts differed.  Mr Haig thought that the surface was not suitable, because the concrete hardener which was used to form the fake brick effect on the surface produced a particularly dense form of concrete coating, which would not be as porous as normal concrete.  EDH operated by soaking into the pores in the concrete and by reacting with the surface of the concrete there to block those pores so as to produce a layer of concrete on the surface which would be in theory at least impervious to liquids.  
[34]	I can understand that if the effect of placing colour hardener on top of the concrete was to produce a particularly dense and hard concrete which was much less porous than ordinary concrete, there would be fewer pores to be treated in this way, and in that sense less work for the EDH to do, but it would seem to me that in principle, to the extent that the colour hardener did not dry to a surface which was impervious anyway, the effect of the EDH ought to be to create such a surface, to the extent that it would anyway, even though less of it might be required to do the job.
[35]	The other matter relied on by Mr Haig was the presence of the previous acrylic coating.  Although this would largely have worn off, he considered that, to the extent that it had soaked into the pores in the concrete, that part would not have worn off even if the surface coating had worn off, so that it would continue to block pores in much the same way as EDH when it was operating.  Mr May expressed the view that the higher viscosity of the acrylic sealer would have meant it was much less likely to penetrate pores, particularly the smaller pores, in the concrete than would EDH, and that the chemical stripper would have removed enough of it so that much of the previous porosity of the concrete would have been restored.  In circumstances where I am not prepared to accept that the chemical stripper was used this opinion ceases to be of significance, and in those circumstances I accept that the presence of a prior acrylic coat, even substantially worn, would have impaired the suitability of this surface for EDH.  
[36]	What I have difficulty with however with this analysis is that the proposition that the surface was unsuitable for the application of EDH really depends on the proposition that the EDH could not properly soak into the surface in the way it would with ordinary concrete.  That strikes me as another way of saying that the surface would not be suitable for EDH if it was already effectively sealed against liquids such as EDH anyway, in which case there should have been an effective seal in place.  To the extent that there was not an effective seal in place, it is not immediately apparent from Mr Haig’s reasoning why the application of EDH would not have produced such a seal, even if it was not as good a seal as EDH ought to produce, and would produce with the usual concrete surface of a slab or driveway.  
[37]	The evidence was that after the coating the body corporate was complaining about was that there was not an effective seal in place.  Mr McIntyre said that water tossed on the surface would just sink in (p 46), and that it appeared to be as difficult to clean off stains or oil as it had been before the EDH had been applied:  p 48.  If there was any substance in this aspect of the complaints of the body corporate there must have been a certain amount of porosity left in the surface, notwithstanding the effects of the colour hardener, any residue of the previous acrylic coatings, and such sealing effect as EDH had produced.  Nevertheless, the weight of the evidence, from Mr Haig and Mr Medland (p 5, p 53), was that this surface was not suitable for the use of EDH as a sealer, and I so find.  That was because the EDH would not be able to work the way it is designed to work on such a surface, because it could not soak into the concrete, to the desired extent.
[38]	The effect of all the evidence was that if EDH were properly applied to a suitable surface the result would be to produce a surface which was sealed, that is which was essentially waterproof.  Whether water sprinkled on it would bead on the surface, or simply spread out as a film, it ought not just to soak in.  That it was soaking in after the EDH had been applied seems to me to demonstrate that the surface was not effectively sealed.  That conclusion appears to lead irresistibly to the conclusion that the EDH had not been properly applied to this surface.  
[39]	If a substance which is capable of producing a seal and which ought to produce a seal if properly applied does not produce a seal the natural inference is that it has not been properly applied.  It follows that the defendant was in breach of the contractual obligation pleaded in paragraph 4.2 of the amended statement of claim, to carry out the works in a professional, workmanlike manner with due care and skill.  Accordingly I find breaches of the obligations pleaded in paragraphs 4.2 and 4.4.  This had the effect that the defendant had not carried out the subcontract work to the same quality as that required under the head contract, and that the defendant had therefore failed to ensure that in performing the subcontract work it would not cause the plaintiff to be in breach of the head contract.  The head contract did not expressly require the application of EDH, but referred to the plaintiff’s quote Exhibit 3, which did specify EDH.  It would also have been a term of that contract, implied if not express, that the work would be done with due care and skill.  The defendant’s failure to do so had the effect of putting the plaintiff in breach of its contract with the body corporate, so the defendant is also liable for breach of contract on that basis.
[40]	The measure of damages for breach of contract is the amount that will put the plaintiff in the same position as if the contract had been performed.  Had the contract been performed in this case, the plaintiff would have been entitled to be paid the price payable by the body corporate under its contract with the plaintiff, and there is no reason to think that that amount would not in fact have been paid.  In fact the body corporate refused to pay:  Exhibits 17, 18.  Accordingly the plaintiff’s loss is the amount which would have been paid by the body corporate, $55,686, less the amount retained by the plaintiff from the payments otherwise made to the defendant.  Presumably if there had been no breach of contract the balance of $1,717.87 would have been paid to the defendant, so that amount should be deducted to give the loss suffered by the plaintiff, in the sum of $53,968.13.  
Analysis – misleading and deceptive conduct
[41]	The plaintiff’s case was based on the proposition that the relevant representations were those contained in the brochure handed over by the defendant to Mr Butcher, Exhibit 1.  The representations alleged in the pleadings were all contained in that brochure, so the question of whether those representations were made by the defendant depends on whether by handing over the brochure the defendant made the representations contained in it.  On the face of the brochure it was produced by the manufacturer, not by the defendant, although the defendant was identified as a distributor/applicator in what looks like an addition to the brochure.  
[42]	As a general proposition, if a person merely passes on information which has obviously been sourced from someone else, in circumstances where there is no express or implied assertion by the person passing on the information that it is being put forward by that person as something which can be relied upon, that person will not be regarded as having represented that information, and hence will not be liable if the information turns out to be wrong.  A person who is “a mere conduit” (as it has been expressed) is not regarded as personally making a representation in terms of what has been passed on.  
[43]	This comes back to the question of what passed between the representatives of the defendant who were present and Mr Butcher on the occasion of his first visit to the defendant's office.  That was the subject of some conflicting evidence.  As I have already indicated, I did not regard Mr Haywood as being a generally reliable witness, and accordingly prefer the version of this conversation given by Mr Butcher.  On the basis of that conversation he indicated that he was seeking a product with certain characteristics, and it was in response that he was given the brochure in question, in the presence of and with the implied approval of the director of the defendant.  In those circumstances, the proper characterisation of what occurred is that the defendant was impliedly representing that the product the subject of the brochure had the characteristics identified in the brochure, and for that reason was suitable for the requirements of the plaintiff.  
[44]	The position would I think have been different if Mr Butcher had come in and just asked for a brochure for EDH, and been given the brochure.  In the circumstances  as I have found them, however, the defendant was not a mere conduit but is to be taken to have made the representations contained in the brochure, because the brochure was passed on in circumstances which implied that the defendant was holding it out as one the contents of which could be relied upon.  
[45]	The next issue is whether the representations were false.  The difficulty for the plaintiff here is that the representations in the brochure are concerned with the characteristics and behaviour of the product EDH in a general sense, rather than those characteristics in the context of this particular application.  There is also the consideration that it seems to me that the representations must, in order to make sense, be interpreted as representations that these characteristics will be possessed by the product if it has been properly applied to a suitable surface.  It follows that the representations are not shown to be false merely because the surface in the present case, which I have found was not in fact suitable for the product, and to which I have found the product was not properly applied, did not demonstrate the characteristics referred to in the brochure.   The evidence of the plaintiff’s witness who was familiar with the product was to the effect that as a general proposition EDH had the characteristics referred to in the representations alleged in paragraph 5 of the statement of claim.  There was no evidence that when properly applied to a suitable surface EDH did not produce the characteristics referred to in paragraph 5 of the statement of claim.  In those circumstances the plaintiff has failed to prove that the representations relied on were misleading or deceptive.
[46]	One matter that concerns me is whether the relevant representation was simply as to the general characteristics of this product once applied to a suitable surface, or whether the substance of the relevant representation was as to the characteristics the product would display if applied to stencilled concrete.  It was pleaded that the brochure was handed over in response to advice that the plaintiff was seeking a clear coating product to go over stencilled concrete, and in those circumstances the relevant representations could be characterised as applying to the use of the product over stencilled concrete.  There was evidence that the product was not suitable for use over stencilled concrete, based on the difficulty that EDH would have in penetrating stencilled concrete because of the greater density of the concrete, and because it might be expected that the stencilled concrete would have been subsequently sealed with an acrylic sealant.  These would prevent the EDH from working in the way it was designed to work on the concrete, and prevent it from giving the long-lasting seal which it was otherwise supposed to produce.  On the other hand, as I have indicated it is not immediately apparent from the evidence that EDH would have done anything other than add, at least temporarily, to such sealing effect as the greater density of the colour hardener, and any residual acrylic coating, otherwise produced.  It might well not have produced a surface as hard wearing and as durable as it would with ordinary concrete, but it seems to me that at least in the short term it still should produce a surface having the characteristics referred to in paragraph 5 of the statement of claim.  
[47]	Perhaps the most doubtful one is that in paragraph 5.3, in that a worn concrete surface would be less likely to be left with a low sheen after coating with EDH than would a new concrete surface, but there was some evidence that if properly applied EDH did produce a surface with a low sheen here, in the case of the test sample which was laid by Tremco.  Overall, even if one confines the operation of the representations to the use of EDH on stencilled concrete, on all the evidence that the plaintiff has not shown that the relevant representations were misleading or deceptive.  It follows that, even if the relevant representations can be interpreted in this way, the plaintiff’s case for damages for breach of s 52 of the Trade Practices Act necessarily fails.
[48]	In these circumstances it is probably unnecessary for me to go on and deal with the remaining issues in this part of the case, but I should make findings in relation to disputed questions of fact, in case a different view may be taken elsewhere.  The next matter that was disputed was the matter of reliance.  The plaintiff’s evidence was that after Mr Butcher obtained a copy of the brochure he studied it and met with his superior Mr Ridge, and in the light of that and the quote which had been obtained from the defendant Mr Ridge decided that the plaintiff would quote the body corporate to apply EDG at a figure based on the defendant's quote, and that is what occurred.  Ultimately the body corporate accepted that quote and the contract between the body corporate and the plaintiff came into existence.  
[49]	Accordingly the plaintiff in putting forward to the body corporate the quote which it in due course accepted relied on the information contained in the brochure provided by the defendant in order to ascertain that EDH applied by the defendant would be suitable for the requirement to the body corporate, and therefore something which could be appropriately the basis of a quote to it.  That involves the process of relying on the representation from the defendant.  The defendant’s challenge to that proposition really depended upon my acceptance of the evidence from Mr Haywood that Mr Butcher had said that he had researched EDH extensively on the internet, so that it was this information rather than the brochure which had been relied upon.  The short answer to that proposition is that I am not prepared to accept the evidence from Mr Haywood to that effect.  The evidence of Ms Zinco did not go that far, but was consistent with Mr Butcher’s evidence that he had obtained the defendant’s details from Tremco which company he had in turn located on the internet.  
[50]	Even apart from that, it seems to me that the effect of Mr Ridge’s evidence was that the material presented to him as containing relevant information about the characteristics of EDH was the brochure obtained from the defendant rather than any information which Mr Butcher had obtained independently about EDH on the internet, and if I accept that evidence, as I do, this shows that the plaintiff did rely on the brochure in putting in its quote on the basis that it would use EDH supplied and applied by the defendant.  That is also shown by the fact that Mr Ridge was also relying on the quote from the defendant to price that work.  It is not necessary for the plaintiff to show that the misleading and deceptive representations were the only thing relied on, so long as they were something relied on, and that was shown by the evidence of Mr Ridge.  Reliance was therefore proved.
[51]	The remaining issue in relation to the breach of s 52 is the question of damages.  The difficulty here is that the measure of damages is the loss or damage caused by the misleading or deceptive conduct, something which is usually ascertained by comparing the position the plaintiff is in with the position the plaintiff would have been in if the misleading or deceptive conduct had not occurred.  The plaintiff led no evidence as to what it would have done if it had not been persuaded of the suitability of EDH for this job, and the relevant alternative is by no means obvious.  Presumably it would have identified some other product as meeting the requirements of the body corporate, and would have quoted on that instead.  Apparently ultimately there was another coat of an acrylic coating put on this driveway, but I have no evidence as to what the financial position of the plaintiff would have been had it instead contracted to apply acrylic coating; I do not know whether it would have applied that itself, at what cost, or whether it would have arranged for some other specialist subcontractor to apply the coating.  
[52]	The question of the quantum of damages in relation to the misrepresentation claim was not something addressed particularly in the submissions of either counsel, and in circumstances where this claim fails anyway I do not think that I should address it further.  The answer may be that, because the plaintiff was induced to enter into a contract with the body corporate on the basis that it would be performed by the application of EDH by the defendant, the plaintiff has undoubtedly suffered some loss, and it would be just a matter of the court doing the best it could on the evidence available.  Perhaps this is an example of one of those cases where it would be appropriate to award the contractual measure of damages for breach of s 52 rather than the torts measure.  
Other matters
[53]	It was asserted for the defendant that the evidence of Ms Zinco about her conversation with Mr Butcher on 2 April 2009 should be accepted because Mr Butcher was not cross-examined about the difference between what he said and what she said about that conversation.  In circumstances where Ms Zinco’s evidence about what he said was broadly consistent with what Mr Butcher had said in his evidence, though he denied saying that to Ms Zinco on that occasion, there was I think no pressing reason for the matter to be dealt with in cross-examination; Ms Zinco’s evidence about the subject really does not assist this part of the defendant's case, in showing that Mr Butcher was aware of EDH and its characteristics prior to the time when he first contacted the defendant, so that the plaintiff had not relied on the defendant in selecting EDH as the product to use on this occasion.  
[54]	It is true that the cross-examination in relation to the conversation in April did not include putting that other statement referred to by Ms Zinco had not been made: p 69.  Nevertheless, I do not consider that this means that I am bound to accept Ms Zinco’s evidence.  In circumstances where, for reasons quite apart from this part of her evidence, I have doubts about the reliability of her evidence generally, it is open to me not to accept her evidence as positive evidence that a particular statement was made, even if there was no cross-examination about it.  If I find myself in a position where I regard a particular witness as being unreliable, I will generally not accept anything that the witness says unless it is supported by independent, reliable evidence, or it strikes me as inherently plausible.  I am entitled not to accept other evidence from such a witness, whether or not it has been the subject of specific cross-examination.  This is particularly the case when the evidence is in respect of a matter on which the party calling that witness carries the onus.  
[55]	It was submitted that the effect of what Ms Zinco had said to Mr Butcher on 2 April 2009 was to qualify any representations made in the brochure, so that those representations could thereafter be said to have been “spent”.  I accept that in principle written representations can be the subject of oral qualification, or even complete retraction, so long as this occurs before the time which is relevant in terms of reliance.  The difficulties for the defendant with that argument are, first, that it depends on my acceptance of Ms Zinco’s evidence, which I do not, and second, that it involves the proposition that what she said amounted to a relevant modification to the relevant written representations.  I do not consider that it did.  Nothing she said was inconsistent with, or qualified, the representations relied on in the statement of claim.  The problems with the EDH coating as it was applied, and the matters which I accept ultimately displeased the body corporate, were not the matters which were addressed in those oral qualifications.  The body corporate’s complaint was not that the concrete had not been rejuvenated, nor was it that there had been a failure to remove longstanding staining on the surface before the application of the EDH.
[56]	There was an issue about whether the contract between the plaintiff and defendant provided for EDH to be applied to car parks which were attached to, and presumably allocated to, particular units within the body corporate, as distinct from visitors’ car parks which were effectively part of the road system.  It appears that the former had previously been painted, and were said to be unsuitable for treatment with EDH.  The defendant's case was that EDH was not applied to the carports, and Ms Zinco said that some trouble was taken to prevent EDH from getting onto the carports:  p 49, p 59.  Yet there was evidence that the white substance visible on the surface of the roads after the defendant's treatment was also visible, and indeed prominent, on some carports.  There are photos in evidence which show this, and the defendant submitted that the presence of the white material on the carports which on its evidence had not been coated with EDH demonstrated that the white material was not caused by excess EDH which had dried there.  
[57]	It does occur to me however that if the carports had previously been painted they would have been particularly likely to resist the penetration of EDH if it were applied to them, so that EDH which had not soaked in and had not been properly applied could easily be left on the surface there and harden into a cloudy white substance.  In these circumstances, having found for other reasons that the white substance seen on the driveways was excess EDH which had been incorrectly applied, it seems to me that the obvious explanation for the white substance seen on the carports was that this was also excess EDH which had also been inappropriately, and probably unnecessarily, applied by the defendant to those carports.  Rather than being a basis for supporting the defence, the presence of this excess EDH in the carports provides further support for the proposition that the EDH was not properly applied generally in this job.
[58]	In the particular circumstances of this case and in the light of all of the evidence I do not think that the absence from the witness box of the Mr Reardon who was referred to as the plaintiff’s employee who was responsible for supervising the defendant's work on this site, to the extent that it was supervised, is of any real significance.  I have reached my conclusions on the basis of the evidence that I did hear, and do not consider that in the circumstances there is any reason to be suspicious about his absence.  I note that the defendant's witnesses said that in fact he was never there and never saw anything, indeed that they had no contact with him.  This is not a case where the defendant relies on something having occurred involving Mr Reardon as providing it with some defence.  In these circumstances, I do not think that his absence is of any real significance.
Conclusion
[59]	The plaintiff is entitled to recover damages for breach of contract assessed in the sum of $53,968.13.  I will allow interest by statute for four and two-thirds years on that sum.  This is a commercial matter, but interest rates have come down somewhat in recent years.  There was no evidence from the plaintiff that it is operating on an overdraft at any particular rate of interest.  In the circumstances I will allow interest for the whole period at a rate of 8% per annum, which comes to $20,148.10.  There will therefore be judgment that the defendant pay the plaintiff $74,116.23.  There was also a counterclaim in respect of the unpaid price on the part of the plaintiff, but the only part shown to have been unpaid was the retention money which has been setoff against the damages for breach of contract.  Accordingly the counterclaim is dismissed.  I will invite submissions as to costs when the reasons are delivered, but unless another order is appropriate I will order that the defendant pay the plaintiff’s costs of the action to be assessed.