i JUDGMENT No. 16.2.3: a FOR LIMITED DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA ) ) TASMANIA DISTRICT REGISTRY ) TAS NO G8 of 1984 ) ) GENERAL DIVISION Coram: Date: Place: Between: MONTILE PTY. LTD. (Applicant) And: ACRYDUR AUSTRALIA PTY. LTD. (Respondent) Ryan J. 21 December 1987 Hobart MINUTES OF ORDER THE COURT ORDERS: That there be judgment for the applicant on the claim in the sum of $2191 with costs to be taxed, excluding any costs of amending the statement of claim. That there be judgment for the respondent on the cross claim in the sum of $6714.70 with costs, including, in default of agreement, any costs incurred by the ndent, in respect of Count Court action } responden in Pp y eee $405494 in the County Court of Victoria. That judgment on the claim and cross claim each bear interest under 0.35 r.8 from the date of this Order. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) TASMANIA DISTRICT REGISTRY ) TAS NO G8 of 1984 ) GENERAL DIVISION ) Between: MONTILE PTY. LTD. (Applicant) And: ACRYDUR AUSTRALIA PTY. LTD. (Respondent) Coram: Ryan J. Date: 21 December 1987 Place: Hobart EX TEMPORE REASONS FOR JUDGMENT By this application, the applicant ("Montile") claims damages arising from breaches by the respondent of s.53 of the Trade Practices Act 1974 ("the Act"), an order under s.87 of the Act relieving the applicant from liability to pay the moneys claimed from the applicant by the respondent in action number $405494 in the County Court of Victoria, and an injunction restraining the respondent from proceeding any further in that County Court action. In or about May 1983, Montile, which carries on business as a floor-laying contractor, was engaged by G.J. Coles & Coy. Limited ("Coles") to resurface the floor of a meat processing area and cool room at its supermarket at Kings Meadows in Tasmania. The applicant had previously received from Coles several valuable contracts of a_ similar kind which had been performed by laying quarry tiles and grouting them with epoxy resin. It appears that one Broomhall of Coles was concerned to minimise the cost to that company of having its floors resurfaced. Accordingly, Mr Broomhall suggested to Mr Anthony Montauban, a co-director of the applicant, that a cheaper surface may he achieved by using a product known as "Acrydur" marketed by the respondent, Acrydur Australia Pty. Ltd. That suggestion led Mr Montauban to speak by telephone to Mr Laeuger, the joint managing director of the respondent, in Melbourne. Mr Montauban told Mr Laeuger that the floor to be resurfaced at Kings Meadows was in a meat processing area and cool room and consisted of a granolithic topping which had become impregnated with fat. Mr Laeuger advised Mr Montauban that "Acrydur" was suitable for that application and forwarded to the applicant a brochure apparently issued by the Danish manufacturer of "Acrydur" which contained information and recommendations for use of two floor compositions, ""Acrydur Industri" and "Acrydur Standard". The brochure reproduced, amongst other photographs, one of two butchers treating meat above the caption, "Acrydur for impeccable hygiene requirements". Another photograph of a large floor area surmounted by stainless steel benches and trolleys had the caption, "Acrydur flooring at a caterer's". Under the heading "Recommendations for use", the following statements were made: "Acrydur is excellent for the renovation of old floors. Acrydur has a short setting time (approx. 2 hours) reducing production shut-downs to a minimum when renovating. Naturally the selection of Acrydur must be make Csicl taking due account of the special conditions that apply to each specific job." In the same section of the brochure under the sub-heading ""Acrydur Industri" appeared the following claims:- "Acrydur Industri is particularly suitable for floors in the food processing, paper and chemical industries, as well as for printing shops, heavily loaded transport areas, catering establishments, shower and scrubbing areas, etc. Acrydur Industri can be supplied in two hot water resistance grades: Acrydur Industri for +70°C Acrydur Industri V for +90°C." Then under the heading "Product Description", and the sub-heading "Technical Data", these specifications were detailed in two columns, one headed "Acrydur Industri" and the other headed "Acrydur Standard":- Working temperature: Max, cont. water load. Minimum Temperature of application Max. Min. ° Curing time +20°C Then under the further heading "General" on the last page Acrydur Industri Acrydur Standard +70°C +70°C +90°C, Grade V -55°C -55°C +35°C +35°C -20°C ~10°C Approx. 2 hours Approx. 2 hours" of the brochure, further information was provided as follows:- "Sales Acrydur products are marketed as finished floor contracts, with the usual guarantees by the relevant contractor, either Ulfcar AB or their authorised contractors. Product designations Acrydur Industri Acrydur Industri V Surface Structure:H G Ss Working conditions For For For For For Acrydur products give off methylmetacrylate resin. disappears when curing is approximately 2 hours. Cleaning max, +70°C warm water max. +90°C hot water anti-slip surface stippled surface smoothed surface a smell of The smell completely completed, i.e. after Acrydur products withstand normal cleaning methods, including high-pressure hosing." On the basis of the information provided by Mr Laeuger, and his assurance that representatives would attend in Launceston to supervise one of the respondent's and assist in laying the floor, Mr Montauban submitted a quotation to Coles which was accepted. Arrangements were then made for a "scabbling" machine to be sent to 'Tasmania for use in preparing the surface to receive the "Acrydur" treatment, and Mr Laeuger himself arrived in Launceston on the evening of Friday, 1 July 1983. Work commenced under his direction early next morning. Doors giving on to the supermarket area were sealed with tape to prevent fumes and dust from escaping. The floor was "scabbled" to break up the surface to assist in binding the "Acrydur" treatment to it. Mr Laeuger then mixed an "Acrydur" priming compound which was applied to the floor. The resin, to which a fine sand aggregate, colour oxide and a catalyst had been added by Mr Laeuger, was then applied by Mr Theodorus Montauban, another co-director of Montile, and others of its employees under the supervision of Mr Laeuger. Early on the morning of Sunday, 3 July 1983, Mr Laeuger, Mr Anthony Montauban, Mr Theodorus Montauban and other employees of Montile returned to the Kings Meadows premises. The pungent odour given off by "Acrydur" could still be detected, but the floor appeared to have cured to a hard surface and Mr Laeuger pronounced himself satisfied with the result which had been achieved. However, he suggested that a sealing coat should be applied to achieve an even colour and to remove some other minor blemishes from the surface. Mr Laeuger himself mixed at least the first batch of the sealer coat, which consisted of "Acrydur" resin, colour oxide and catalyst without any sand aggregate. Because he believed that the Montile employees would be anxious to finish the work and leave the premises as soon as practicable on that Sunday morning, Mr Laeuger added a higher than usual proportion of catalyst to accelerate the curing of the sealing coat. Mr Laeuger was then taken by Mr Anthony Montauban to the airport, leaving Mr Theodorus Montauban and the other Montile employees still applying the sealer coat, which was completed by about 8.30 a.m. on that morning. On the next day, Monday, 4 July 1983, the applicant was advised by Coles that something was wrong with the new floor, whereupon Mr Theodorus Montauban returned to the Kings Meadows supermarket and found that the distinctive pungent odour was still present and that Coles butchers had refused to work in the meat preparation room. Mr Anthony Montauban then telephoned Mr Laeuger, who suggested that the walls of the meat processing area and the cool room should be washed down with disinfectant. That was apparently done, and, in the expectation that it would prove effective, meat was moved into the cool room, but ona later inspection it appeared to be contaminated and on the next day, 5 July 1983, samples of it were taken by a health surveyor for the City of Launceston and found on analysis to be adulterated. All the unwrapped meat was then seized and removed to a vacant cool room in the neighbouring municipality of St. Leonards. After being kept for two days, during which it continued to give off what was described as a "pungent sort of sweet acid smell", it was removed and, presumably, destroyed. In the light of that effect on the meat and after another complaint from Coles, Mr Laeuger was then persuaded to return to Launceston on 6 July 1983, when he inspected the affected area and ventured the opinion that the continued presence of the smell was due to a film of dust generated by the ""scabbling" of the floor having settled on the walls and becoming impregnated by the fumes while the "Acrydur" was curing. The whole area was then thoroughly cleaned and further advice was received by telephone from Mr Bellomo, the other joint managing director of the respondent, to apply a coat of "Durathene" polyurethane sealer to the floor. After that had been done, on 8 July 1983, the offensive smell was apparently diminished. However, on the next working day, 11 July 1983, when the floor was washed down with hot water, the "Durathene" sealer peeled off and the underlying "Acrydur" surface began again to give off the offending fumes which had earlier contaminated the meat. In the meantime, Mr Bellomo, on behalf of the respondent, had indicated to the applicant that the respondent would stand by its product and would re-lay the floor at no extra cost to the applicant. The applicant accepted that offer, with the proviso that a different resin be used. Accordingly, the defective surface was removed on 14 July 1983 and a new surface was laid with the assistance and under the direction, this time, of Mr Bellomo. The resin used in that application was not the "Acrydur" acrylic substance of Danish manufacture which had been used before, but a vinyl ester resin manufactured in Australia by the Dow Chemical Company and distributed by Fibreglass International Pty. Ltd. under the name "Derricane". That substance, after the addition of "promoters" needed to commence polymerisation, was marketed together with an appropriate catalyst, methyl-ethyl-ketone peroxide, to effect curing, and, as so compounded, was in turn marketed by the respondent under the name "Acryder V.E.". The different spelling was presumably adopted in the belief that any property of the Danish manufacturer in the name or mark "Acrydur" would not thereby be infringed. Throughout the night of Friday, 15 July 1983, the applicant's employees cleaned the floor of the meat processing area and cool room, which was again "scabbled" on the following Saturday. The "Acryder V.E." primer and a Main coat with aggregate were then applied with Mr Bellomo's assistance and under his direction. On this occasion, perhaps at Mr Hellomo's suggestion, two large exhaust fans were operated, one mounted ona sink in the meat processing area and the other suspended from meat hooks in the cool room. A smell similar to that given off by the Acrydur resin used on the earlier occasion was emitted by the "Acryder V.E." whilst it was curing. The exhaust fans were left on all night after the application had finished, and it appears that the curing process was completed successfully and that no odour could be detected when the area was handed over to Coles on 18 July 1983. - 10 - e At some time after the second treatment of the floor at Kings Meadows, Mr Bellomo sent to the applicant instructional material dated August 1983 headed "ACRYDUR: ACRYLIC FLOORING SYSTEMS." which contained the following introductory paragraphs:- "L.1l Introduction: Acrydur resins are combinations of Acrylic Esters and Polymers, which are pre-accelerated, and are cured by the addition of a catalyst (Benzyol Peroxide) over a temperature of between -10°C to +35°C. When polymerised, Acrydur resins have excellent resistance to abrasion, weather and most chemicals. 1.2 Storage: Acrydur resins should be stored in a cool place, (not above 25°C), and if stored properly have a shel Csicl life of at least 12 months. 1.3 General Precautions: Acrydur resins have a flash point of +13°C and as such should not be stored or worked in the vicinity of open fire. Adequate ventilation of working areas should always be provided, as Acrydur resins contain Methylmethacrylate, with a maxigum allowable concentration of 100 PPM or 410 MG/M?. Acrydur resins are in general harmless when in contact with the skin but normal cleanliness and cautions must be observed. Contaminated parts of the skin should be washed with soap and water. If Acrydur resin comes in contact with the eyes, wash with plenty of water and if necessary, seek medical help." Then references were given to product information contained in twelve attached sheets, including a reference to - 11 - . sheet 9, "Acrydur V.E. Csicd for highly corrosive areas and solvent resistance". Sheet 9 was in the following terms:- "Product: Acrydur V.E. Csicd A medium viscosity reactive Vinyl Ester resin, for areas which require resistance to Hydrocarbon solvents and which possesses outstanding resistance to Alkalies and Acids at both room and elevated temperatures. Acrydur V.E. Esicl] is cured by the addition of 2- 4% jcatalyst, and the speed of cure is controlled by the use of a promoter at the rate of ¥- 1% depending on temperature. Can also be used for tank lining, and may be pigmented with standard Acrydur pigments. Before the application of Acrydur V.E. Csicl the normal preparation of surfaces and priming with Acrydur GRB.1. should be observed. Good ventilation is essential and respirators must be worn. Not suitable for exterior applications. shogad not be applied at temperatures below Apparently encouraged by the success of the second attempted floor treatment at Kings Meadows, Coles, in about mid-August 1983, requested the applicant to apply an "Acryder V.E." surface to the floor of a similar but considerably larger meat processing area and cool room at its K-Mart store in Racecourse Crescent, Launceston. Mr Anthony Montauban thereupon placed an order with Mr Bellomo for the requisite amount of the V.E. resin and appropriate additives. That was supplied and on 10 - 12 - e September 1983 the floor to he treated was cleaned and scabbled by employees of the applicant. Then, on 11 September 1983, the primer coat was applied, after which the resin and aggregate, mixed as demonstrated by Mr Bellomo at Kings Meadows, was applied in substantially the same way. However, ventilation was provided by erecting a "Forticon" plastic tunnel from a door, leading from the cool room into a general store, to an external fire escape door. Three fans were used, one mounted at the door from the supermarket to the meat processing area, another at the door from the meat processing area to the cool room anda third at the other cool room door to which the "Forticon" tunnel was attached. As explained by Mr Theodorus Montauban, the effect of that disposition of fans was to suck air from the supermarket into the meat processing area from where it was directed into the cool room and thence along the tunnel and out the fire escape door. After the work was completed on Sunday, 11 September 1983, the fire escape door was closed by Coles security officers and the fans were turned off. According to a certified extract from the book of meteorological observations kept by the Bureau of Meteorology at Ti Tree Bend, Launceston, the minimum air temperature for the 24 - 13 - . hours from 9 a.m. oni1l September 1983 to 9 a.m. on 12 September 1983 was 1.69 C. In evidence-in-chief, Mr Theodorus Montauban estimated the temperature inside the K-Mart premises while the work was being done during the day, on 11 September 1983, at 15 to 16°C. On 12 September, following a complaint from Coles, Mr Theodorus Montauban returned to the K-Mart and found that the new floor had not completely cured, being soft in patches, and was still giving off an offensive odour. He telephoned Mr Bellomo in Melbourne and, at his suggestion, introduced two large kerosene jet heaters which were operated at maximum temperatures during the next two days. That expedient did not complete the curing process or dispel the odour, so, apparently at Coles' instigation, the applicant removed the whole of the defective surface and replaced it with quarry tiles grouted with epoxy resin. Largely on the basis of the evidence of Mr Richter, the technical manager of Fibreglass International Pty. Ltd., who was qualified as an expert in the properties and behaviour of polymer resins, I am able to make the following findings on the balance of probabilities in respect of the failure of the first "Acrydur" floor at Kings Meadows, and of the "Acryder V.E." floor at the Racecourse Crescent K-Mart:- ~14- . The sealer coat of "Acrydur" applied at Kings Meadows failed to cure properly because the roller-door which permitted the passage of air through the meat processing area and the cool room was closed too quickly after the application of the sealer coat on the morning of Sunday, 3 July 1983. As a result, the monomer gas given off in the course of the exothermic reaction settled over the floor inhibiting the completion of the curing process. It remains an open question on the state of the evidence whether the curing of the layer of "Acrydur" resin and aggregate had itself been similarly inhibited as a result of the roller-door being closed overnight after work had finished for the day on 2 July 1983. The application of a sealing coat of "Durathene" polyurethane on top of the two coats of "Acrydur" resin was ineffectual to overcome the problem created by the incomplete curing of the second, or both, of those coats, either because the polyurethane itself had not cured sufficiently before it was hosed with very hot water by Coles employees in the course of cleaning the meat processing area and the cool room, or because the polyurethane was not resistant to that form of cleaning. - 15 - e 3. The curing of the "Acryder V.E." floor at the K-Mart was slowed or inhibited by the low night temperatures which prevailed after the surface had been laid in the afternoon of 11 September 1983. Patches of that floor were prevented from curing altogether by the inhibiting presence of areas of styrene monomer gas which was not dispelled after the three exhaust fans had been switched off and the fire escape door closed at the end of work on that afternoon. 4. When properly mixed and laid so that excess monomer gas is dispersed and the surface is completely cured, both "Acrydur N" acrylic and "Acryder V.E." vinyl ester resins are entirely suitable for the formation of floors in food preparation areas including cool rooms where meat and other foods are exposed and stored. By paragraphs 4 to 8 of its amended statement of claim, wnich are related to the premises at Kings Meadows, the applicant has pleaded:- "4, On or about the llth day of May, 1983 the Respondent in the course of carrying on its business as aforesaid represented to the Applicant that its resin was suitable for food processing areas and in particular for tiling butcher shops and freezers. 5. Acting on the said representation:- - 16 - . (a) The Applicant entered into a _ contract with the Respondent whereby the Respondent was to supply resin to the Applicant to be applied at the G. J. Coles & Co. Ltd. supermarket at Kings Meadows in Tasmania; and (b) The Applicant entered into a _ contract with G. J. Coles & Co. Ltd. whereby the Applicant was to supply and fix such resin at that place. 6. Pursuant to its contract with the Applicant the Respondent duly supplied to the Applicant a quantity of resin in about late June or early July 1983. 7. Pursuant to its contract with G. J. Coles & Co. Ltd. the Applicant duly supplied and fixed the resin supplied to it by the Respondent as aforesaid to G. J. Coles & Co. Ltd. at the butcher shop and freezer at its supermarket at Kings Meadows as aforesaid. 8. The representation referred to in paragraph 4 hereof was false in that the said Acrydur resin supplied by the Respondent were completely unsuitable for fixing in butcher shops and freezers in that they produced strong fumes making it impossible to work in the area of application and contaminating food at the premises." Although it is not referred to in the amended statement of claim, the applicant, by counsel's closing address, has the Act which provides:- its application and in invoked that part of s.53 "A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services- (c) represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;" its of - 17 - e The representation made by the respondent in or about May 1983 is to be identified and construed in the light of all the circumstances in which it was made. Approached in that way the effect of the representation made by the respondent to the applicant was that "Acrydur" acrylic resin, if laid as a floor on a first occasion by the respondent or under its direction, and on subsequent occasions in accordance with techniques demonstrated by the respondent on that first occasion, was suitable for use in food processing areas, including areas given over to the preparation and storage of meat. In that unqualified form, without importing any reference to the need to ensure adequate ventilation during laying and afterwards while curing was taking place, the representation did falsely attribute to "Acrydur" acrylic resin a performance characteristic which it did not have, or amounted to conduct likely to mislead or deceive in breach of s.52 of the Act. If it be necessary, I am prepared, even at this late stage, in accordance with the principles laid down, for example, in Cropper v Smith (1884) 26 Ch.D. 700, and the Duke of Buccleuch [18921 P. 201, to grant the applicant leave to amend its application to invoke 8.52 as well as s.53(c) of the Act. It thus becomes necessary to determine what, if any, damages were suffered by Montile as a result of the - 18 - e respondent's failure to qualify its representation about the suitability of "Acrydur N" for use at Kings Meadows. It seemed to be accepted by counsel on each side, in the light of observations to be found in cases such as Frith v_ Gold Coast Mineral Springs Pty. Limited (1983) 47 A.L.R. 547, and by the High Court in Gates _v City Mutual Life Assurance Society Limited (1986) 63 A.L.R. 600, especially at 607, that this question is to be answered by quantifying the loss which it can be said reasonably flowed to the applicant as a result of its reliance on the offending representation. Clearly, the present applicant did not lose the money which it had expended on the first batch of resin used at Kings Meadows, because that was replaced by the respondent with "Acryder V.E." free of any further charge. Equally clearly, the applicant is entitled to recover any costs incurred by it in applying the abortive coat of "Durathene", removing the defective coatings of "Acrydur N", and again preparing the floor to receive the replacement coatings of "Acryder V.E.". I am satisfied on the evidence that those costs amounted to $2191. The other head of damages said to have flowed from the respondent's conduct in respect of the Kings Meadows premises was particularised as follows in paragraph 9(b) of the amended statement of claim:- - 19 - . "(b) the Applicant suffered damage as follows:- (i) an inspector under the Public Health Act 1962 seized meat to the value of $4,980.00 from G. J. Coles Limited which meat was contaminated by fumes from the said resin; (ii) G. Jd. Coles & Co. Ltd. suffered other damages totalling $4,135.00; (iii) G. J. Coles & Co. Ltd. recovered their total damages of $9,115.00 from the Applicant by setting it off against other moneys owed by it to the Applicant;" The only attempt to prove that those damages were suffered by the applicant was the tender of a letter dated 11 July 1983 from the state accountant for Coles to the applicant. Omitting formal parts, that letter read as follows:- "We herewith advise of losses sustained by G.J. Coles & Coy Limited as a result of contractual arrangements completed by your Company in as such the resurfacing of the meat cool rooms at the above store, and the compounds used for such resurfacing resulted in the adulteration of meat stock stored in the meat cool rooms. We advised that at all times we complied with your instructions as to when the cool rooms could be used for storage purposes. However, the adulteration caused as a result of complying with your instructions was to such an extent that the Health Department of the Launceston City Council found fit to condemn the meat stored in the cool room for sale to our customers. We also advise that as of Friday 8th July 1983 the meat cool rooms are still not fit to be used for storage purposes, the result of which could be additional losses by G.J. Coles & Coy Limited. - 20 - . As a result of the non-availability of storage facilities at our Kings Meadows store and to ensure that we keep faith with our customers requirements we have been compelled to use the facilities at our Mowbray Supermarket andas a result we have incurred additional costs and loss of sales and profit in being unable to supply a full range of products for sale at our Kings Meadows store. List attached, of the losses sustained forthwith and we advise that if written denial of liability is not received from you within the 14 days then liability is accepted by your Company." The attached list contained these particulars of the loss claimed by Coles:- "TOTAL MEAT LOSS cost $4,980 HIRE OF VAN EX LIQUORLAND 5 DAYS @ $20 PER DAY 100 HIRE OF TRUCK EX BLUE RIBBON 220 OVERTIME (STAFF) RESULTING FROM TIME LOST EX 7507 (anticipated) 200 STAFF COST OF TRAVELLING TO MOWBRAY EX 7507 (anticipated) 50 OVERTIME RESULTING FROM WORKING IN DOUBLING-UP SITUATION - 7614 MOWBRAY 100 LOSS OF PROFIT - BY SALE LOST 1,400 STAFF SICK PAY 35 $7,085 It was indicated by counsel for the applicant that the applicant did not persist in seeking to recover damages in - 21 - . respect of the loss of profit of $1400 or the amount of $35 for "staff sick pay" claimed in that list. In my view, this part of the applicant's claim must by justified, if at all, as a payment made or deduction allowed by way of a settlement of a claim brought or threatened against Montile by Coles. Such an amount is recoverable from the respondent only if the settlement represented a reasonable figure. The type of evidence to establish that a settlement was reasonable was indicated in this passage from the judgment of Somervell L.J. in Biggin & Co. Ld. v. Permanite Ld. £1951] 2 K.B. 314, at 321:- "The law, in my opinion, encourages reasonable settlements, particularly where, as here, strict proof would be avery expensive matter. The question, in my opinion, is: what evidence is necessary to establish reasonableness? I think it relevant to prove that the settlement was made under advice legally taken. The client himself could do that, but I donot think that the advisers would normally be relevant or admissible witnesses. I say 'normally'. It may be that in special cases they might be. The plaintiff must, I think, lead evidence, which can be cross-examined to, as to facts which the witnesses themselves prove and as to what would probably be proved if, as here, the arbitration had proceeded, so that the court can come to a conclusion whether or not the sum paid was reasonable. The defendant may, by cross-examination, as was done here, seek to show - and perhaps successfully show - that it was not reasonable. He may do so, or call evidence which leads to the same conclusion. He might in some cases show that some vital matter had been overlooked." - 22 - r In the absence of any evidence as to the terms of the contract between the applicant and Coles, and since the facts do not suggest that the applicant was liable in negligence for the losses sustained by Coles at Kings Meadows, I am unable to find any amount which it is reasonable for the applicant to have allowed to Coles in settlement of its clain. It is significant that the applicant apparently declined the invitation by Coles in the concluding paragraph of its letter, which I have quoted, to deny liability to Coles. There is nothing to suggest that that invitation was so declined on legal advice. Counsel for the applicant suggested that the applicant was dependent on Coles for future work and that since Coles was holding moneys due to the applicant from other contracts, the applicant being in "an inferior trading position" had no alternative but to settle with Coles on its terms. In my view the answer to that argument is provided by a passage in the judgment of Singleton L.J. in Biggin and Co. Id. v. Permanite Ld. (supra) at 326, where his Lordship observed, and the emphasis is mine:~ "After full examination of all the evidence, I do not think it was sufficient to displace the case which the plaintiffs had set up, that this was a reasonable settlement. The question is not - 23 - e whether the plaintiffs acted reasonably in settling the claim, but whether the settlement was_a reasonable one; and, in considering it, the court is entitled to bear in mind the fact that costs would grow every day the litigation was continued. That is one reason for saying that it is sufficient for the purpose of the plaintiffs if they satisfy the judge that somewhere around the figure of settlement would have been awarded as damages." It follows that I am not satisfied on the evidence that the settlement, if it can be called one, with Coles was a reasonable one. Accordingly, I do not allow any amount to the applicant in respect of that item of the damages claimed. By paragraphs 11, 12 and 15 of the amended statement of the claim, which are related to the K-Mart premises at Racecourse Crescent, the applicant has pleaded:- "11. On or about the 23rd day of August 1983, the Respondent represented to the Applicant that 'Acrydur V.E.' ECsicl resin was suitable for tiling food processing areas and in particular butcher shops and freezers. 12. Acting on the said representation:- (a) the Applicant entered into an agreement with the Respondent for the Respondent to supply 'Acrydur V.E.' Csic] resin to it; and (b) entered into an agreement with G. J. Coles & Co. Ltd. to supply and fix such resin at the butcher shop and freezer at the Coles K-Mart at Racecourse Crescent, Launceston in Tasmania. - 24 - - 15. The representation referred to in paragraph 12 hereof was false in that the said 'Acrydur V.E.' Csicd resin was not suitable for application in food processing areas and in particular unsuitable for fixing in butcher shops and freezers in that they produced strong fumes making it impossible to work in the area of application and contaminating food at the premises." Again, that representation is to be identified and construed in the light of all the documents and circumstances which provided the context in which it was made, They include the original brochure issued in respect of "Acrydur" products by their Danish manufacturer, since I find nothing in the evidence to suggest that the respondent acquainted the applicant with the fact that "Acryder V.E.", as applied on the second occasion at Kings Meadows, was obtained from a different source from that of the "Acrydur" which was. the subject of the brochure. Also relevant is the successful application of "Acryder V.E." at Kings Meadows under the direction of Mr Bellomo. That was attended by the use of two large fans which were kept in operation all night after the application had been completed. A third part of the representation which can be imputed to the respondent is comprised by part of the introductory section of its production information sheets, and the - 25 - . reference on sheet 9 to ""Acryder V.E.", to the following effect:- "Adequate ventilation of working areas should always be provided, as Acrydur resins contain Methylmethacrylate, with a maximum allowable concentration of 100 PPM or 410 MG/M3. Good ventilation is essential and respirators must be worn. Should not be applied at temperatures below + 5 Cc." Viewed in that context, it cannot be said that the respondent's representation about ""Acryder V.E." was to the effect that it was suitable for the flooring of food processing areas, irrespective of whether any, or any adequate, ventilation was provided during application and curing. By 23 August 1983, any representation by the respondent as to the suitability of "Acryder V.E." had become conditioned on the provision of adequate ventilation in the manner successfully demonstrated by Mr Bellomo at Kings Meadows. From the findings of fact which I have earlier recited, it will be apparent that the evidence does not establish that any representation of the respondent, so understood, as to the performance characteristics or fitness for purpose of "Acryder V.E." was false or amounted to conduct which was misleading or deceptive. Accordingly, the applicant's - 26 - e claim, insofar as it is related to the K-Mart premises at Racecourse Crescent, must fail. The respondent has cross claimed for an amount of $6746.60, which was agreed to give effect to the undertaking by Mr Bellomo that the floor at Kings Meadows would be replaced without any further cost to Montile. That sum, which it has further been agreed should be reduced to $6714.70, represented the price of resin and ancillary products supplied to Montile after allowing it an appropriate credit in accordance with Mr Bellomo's undertaking. The applicant did not suggest that it had paid any part of the price claimed, but was content to rely on the defence that both consignments were supplied in breach of implied warranties that the consignments would be of merchantable quality and would be reasonably fit for the purpose of flooring food processing areas, and, in particular, butchers' shops and cool rooms. It will be apparent, from the findings of fact which I have already made, that the applicant had not discharged the onus of proving a breach of either of those implied warranties. Accordingly, there must be judgment for the respondent on its cross claim in the sum of $6714.70. - 27 - . In the result, therefore, there will be judgment for the applicant on the claim in the sum of $2191 and for the respondent on the cross claim in the sum of $6714.70. I shall hear counsel on the question of costs and interest. I certify that this and the twenty-six (26) preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Ryan. DP Vv banaiks Associate Dated: <r- -2- +9 7