FEDERAL COURT OF AUSTRALIA
Bective Station Pty Limited v AWB (Australia) Limited [2006] FCA 1596
TRADE PRACTICES – claim for relief under s 82 and s 87 of the Trade Practices Act – where damage suffered by applicant dependent on respondent making out its cross-claim and being able to recover damages – where held that damages not recoverable by cross-claimant – Held: applicant unable to maintain claim for relief as has not suffered or likely to suffer any relevant loss or damage
TRADE PRACTICES – whether applicant entered contract in reliance on conduct of respondent’s agent which was misleading or deceptive or likely to mislead or deceive – whether respondent’s agent said words to the effect that there will be no wheat available for purchase in Australia from March 2003 until the October 2003 harvest – Held: respondent’s agent did make the representation and the applicant entered into the contract in reliance on it
EVIDENCE – tendency evidence – evidence sought to be adduced by applicant that the respondent’s agent had made similar representations to other purchasers of wheat – whether significant probative value of evidence outweighed prejudice to respondent – whether tendency evidence sought to be adduced by respondent to contradict tendency evidence must comply with s 97(1)(b) of the Evidence Act – Held: tendency evidence of applicant received – tendency evidence to contradict must comply with s 97(1)(b) – tendency evidence adduced by respondent did not have significant probative value
Evidence Act 1995 (Cth) ss 60, 97, 108, 136
Limitation Act 1969 (NSW) s 14
Limitation of Actions Act 1958 (Vic) s 5
Trade Practices Act 1974 (Cth) ss 52, 82, 87
Carr v J A Berriman Pty Ltd (1953) 89 CLR 327 applied
Jacara Pty Ltd v Perpetual Trustees WA Ltd (2000) 106 FCR 51 applied
Port Jackson Stevedoring Proprietary Limited v Salmond & Spraggon (Australia) Proprietary Limited (1978) 139 CLR 231 cited
Ronnoc Finance v Spectrum Network Systems Ltd (1997) 45 NSWLR 624 referred to
Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 cited
BECTIVE STATION PTY LIMITED v AWB (AUSTRALIA) LIMITED)
NSD 1968 of 2004
BRANSON J
23 November 2006
SYDNEY
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
NSD 1968 of 2004 |
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BETWEEN: |
BECTIVE STATION PTY LIMITED (ABN 53 001 067 545) Applicant
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AND: |
AWB (AUSTRALIA) LIMITED (ABN 35 081 890 502) Respondent
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BRANSON J |
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DATE OF ORDER: |
23 november 2006 |
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WHERE MADE: |
SYDNEY |
THE COURT ORDERS THAT:
1. The application be dismissed.
2. The cross-claim be dismissed.
3. The Respondent pay the Applicant’s costs of the proceeding.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
NSD 1968 of 2004 |
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BETWEEN: |
BECTIVE STATION PTY LIMITED (ABN 53 001 067 545) Applicant
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AND: |
AWB (AUSTRALIA) LIMITED (ABN 35 081 890 502) Respondent
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JUDGE: |
BRANSON j |
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DATE: |
23 november 2006 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
introduction
1 Bective Station conducts a farming and grazing business near Tamworth, in northern New South Wales. The managing director of Bective Station is James Robert Vickery. Part of Bective Station’s business involves operating a feedlot for the intensive fattening of livestock.
2 In 2002 Australia was experiencing a severe drought. Bective Station’s feedlotting business expanded at this time. In August 2002 approximately 350 cattle per week entered Bective Station’s feedlot – ordinarily remaining there for 100 days before being replaced. In October 2002 approximately 4500 cattle were in the Bective Station feedlot.
3 Wheat constituted a significant portion of the ration fed to the cattle in the Bective Station feedlot in 2002. In August 2002 Bective Station entered into its first contract with AWB (Australia) Limited (‘AWBA’). It agreed to purchase 6000 tonnes of ‘general purpose wheat’ for delivery between September and December 2002. On 5 November 2002 Bective Station entered into a second contract to purchase wheat from AWBA (‘the Second Contract’). The Second Contract, which is the subject of this proceeding, provided for the delivery of 7000 tonnes of ‘feed wheat’ between March and August 2003. The terms and conditions of the Second Contract are considered below.
4 In December 2002 heavy rain fell in northern New South Wales. The price of wheat in Australia thereafter fell, in part it seems, because of the break in the drought. No wheat was ever delivered under the Second Contract and no payments have been made under it.
5 By a letter dated 20 October 2003 AWB Limited formally notified Bective Station of its default in relation to taking delivery of wheat under the Second Contract. This letter placed Bective Station on notice that ‘AWB’ proposed to ‘washout Bective Station’. In this context a ‘washout’ involves a notional sale of the wheat the subject of the contract whereby the difference in value between the contract price of the wheat and its fair market value as at the ‘washout’ date is determined. Bective Station responded by disputing that it was under any obligation to accept delivery of wheat under the Second Contract alleging that it had been ‘misled while under huge pressure battling the worst drought in 100 years.’ On 27 October 2003 AWB Limited issued an invoice to Bective Station claiming a ‘washout amount’ of $1 368 500.
6 On 24 December 2004 Bective Station initiated this proceeding claiming that it had entered into the Second Contract in reliance on misleading representations made by an agent of AWBA. It sought an order declaring the Second Contract void ab initio or alternatively an award of damages. In the further alternative, Bective Station sought a declaration that the Second Contract was duly terminated following the failure of AWBA to deliver wheat under it.
7 On 24 March 2005 AWBA filed a defence and cross-claim. By its defence AWBA denied that Bective Station is entitled to the relief claimed by it. Additionally AWBA cross-claimed for damages in the amount of $1 368 500 alleging that Bective Station had refused to take delivery of wheat under the Second Contract.
8 The primary issue for determination in this proceeding is whether AWBA is entitled to damages for any breach by Bective Station of the Second Contract. For this reason it is convenient to give consideration to AWBA’s cross-claim ahead of Bective Station’s claim for relief under the Trade Practices Act 1974 (Cth) (‘the TPA’). Unless AWBA would otherwise be entitled to recover damages for breach of contact from Bective Station, Bective Station will not be able to maintain its claims for relief under s 87(2)(a) and s 82 of the TPA because it will not have suffered, or be likely to suffer, any relevant loss or damage (see [44] below).
9 The only other relief claimed in the application filed by Bective Station is a declaration that the Second Contract was duly terminated by the failure of AWBA to deliver wheat under the Second Contract. This claim is considered below in the context of AWBA’s cross-claim.
THE SECOND CONTRACT
10 The Second Contract is a contract in writing dated 6 November 2002 for the sale of 7000 tonnes of Australian feed wheat. The parties are described as AWB Limited (ABN 99 081 890 459) as agent for AWB (Australia) Limited (ABN 35 081 890 502) as seller and Bective Station Pty Ltd as buyer. The contract provided for the wheat to be delivered to the buyer at Tamworth during the period 1 March 2003 to 30 August 2003. The contract price, exclusive of GST, is shown as follows:
‘Item 1 – 0203, AUSTRALIAN FEED WHEAT AUD/Tonnes
Delivery Periods Mar 03 Apr 03 May 03 Jun 03
Base Prices 378.00 381.50 385.00 388.50
Jul 03 Aug 03
392.0 395.50
The contract required payment ‘30 days EOW [ie from end of week] of delivery’.
11 The Second Contract incorporated by reference the AWBA ‘Standard Contract Terms and Conditions effective 1 July 1990’. The parties agree that the standard terms and conditions which thereby became part of the Second Contract are those set out in a document headed ‘AWB Standard Terms and Conditions (Stockfeed)’ (‘the Standard Terms’).
12 The following clauses are extracted from the Standard Terms:
‘3. DELIVERY AND WEIGHTS:
a. …
b. Sales on a delivered basis. The Seller undertakes to advise the Buyer of all despatches as soon as possible after despatch stating the haulier’s name or railway wagon number and the number and gross or net weight of bags (if weighed) or approximately weight if in bulk. Advices should be available at the premises specified by the Buyer on or before arrival of delivery vehicles at those premises. …
…
6. PASSING OF OWNERSHIP: Ownership shall remain with the Seller until the goods are delivered to the Buyer. If delivery has not taken place through no fault of the Seller, then risk shall pass to the Buyer at one of the following times:
a. If a delivery date has been agreed in this contract immediately on the expiration of that date.
b. If a period for delivery date has been agreed in this contract immediately upon the expiration of the last day of that period or, in the case of any portion of the goods subject to this contract which is due to be delivered within a particular month during that period, the last day of that particular month.
c. If a spot delivery or no delivery date has been agreed, at the expiration of one calendar month from the date of sale as evidenced by the date on this contract provided in each case that the Seller has before the expiration of such of the above time limits for delivery as is applicable notified the Buyer in writing that the goods are in a deliverable state and appropriated to the contract.
…
8. CLAIMS:
a. Claims based on defect of quantity, quality or condition which shall be apparent upon reasonable inspection must be advised as soon as possible and confirmed by telegram, telex or by letter sent by first class post within three business days from the arrival of the goods at their destination under this contract. …
b. Technical claims, i.e. all others than those under (a) above, must be notified so as to be received by the Seller within 90 consecutive days from the last day of the delivery period with the same proviso as to series of contracts as in (a) above.
9. DEFAULT: If either part [sic] defaults in the observance of any obligation imposed on him under or by virtue of this contract the other party shall be entitled to terminate this contract and thereafter to sue the party in default for breach of contract and if the Seller, to resell the commodity as owner or, if the Buyer, to purchase the commodity from another source and the loss (if any) arising on such resale or purchase and all expenses of and incidental to such shall be recoverable by the other party from the party in default as damages provided that proceedings for the recovery thereof be commenced within 12 months of the termination of this contract.
10. ARBITRATION: Any dispute, controversy or claim arising out of or relations [sic] to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force. The appointing authority shall be the Secretary General at the Australian Centre for International Commercial Arbitration in Melbourne. The number of arbitrators shall be one. The place of arbitration shall be Melbourne.
11. TIME LIMITS FOR CLAIMING ARBITRATION: Arbitration shall be claimed in relation to quantity, quality or condition within 28 consecutive days from the date of the arrival of the goods at their ultimate destination in Australia and in relation to technical claims within 120 consecutive days from the last day of the delivery period.
12. NON PAYMENT: The Seller reserves the right to withhold deliveries under this contract until all and any overdue payments under this or any other contract with him by the Buyer have been received and reserves a lieu [sic] upon – and the right to sell or otherwise dispose of – all goods the subject of this contract whether appropriated to it or not, in respect of any such payments.
…
15. TIME: The stipulations in the contract as to time are of the essence of the contract.’
The Cross-Claim
AWBA Claim
13 After pleading the formation of the Second Contract and its terms, including the delivery period, AWBA’s cross-claim alleges:
‘7. In breach of the Contract, [Bective Station] refused to take delivery of the Wheat during the aforesaid period or at all.
PARTICULARS
(a) Letter from [Bective Station] to [AWBA] dated 24 October 2003.
8. As a result of the aforesaid breach of the Contract, [AWBA] has suffered damage.
PARTICULARS
(a) [AWBA] is entitled to the difference between the Contract price of $395.50 per tonne and the fair market price of the Wheat as at October 2003, determined as being $200.00 per tonne being one million, three hundred and sixty eight thousand five hundred dollars ($1,368,500.00)
(b) Letter from Shearwater International Pty Ltd to [AWBA] dated 20 October 2003.’
Bective Station’s Defence
14 Bective Station defended AWBA’s cross claim on the following bases:
(a) that Bective Station is entitled to an order under s 87 of the TPA declaring the Second Contract void ab initio;
(b) that AWBA breached and repudiated the Second Contract by failing to deliver any wheat to Bective Station in the period 1 March 2003 to 31 March 2003 or at all and Bective Station accepted the breach in termination of the Second Contract;
(c) if AWBA was entitled to bring proceedings for the recovery of damages for breach of contract it was required to, but did not, commence such proceedings within 12 months of the termination of the Second Contract;
(d) AWBA failed to mitigate its damage by failing to accept various offers made by Bective Station to purchase the wheat.
15 For the reason identified above, it is appropriate to leave aside for present purposes Bective Station’s claim to be entitled to relief under the TPA.
Was the Contract Terminated, and if so, when?
16 Bective Station contended that the Second Contract was terminated on one or other of:
(a) a date between 1 March 2003 – 31 March 2003 because of the non-delivery of wheat during that period;
(b) a date on or before 31 August 2003 by virtue of effluxion of time;
(c) 20 October 2003 when a notice of ‘washout’ was given to Bective Station; or
(d) 25 October 2003 (ie 5 days after the notice of ‘washout’).
17 AWBA contended the Second Contract has never been terminated but rather remains on foot. AWBA asserted that it remains willing and able to perform the Second Contract.
18 It is common ground that Bective Station did not make full payment under its first contract to purchase wheat from AWBA until a date which the evidence does not fix precisely but which was shortly after 19 August 2003. It was on 19 August 2003 that AWB Limited (presumably acting on behalf of AWBA) issued a statement of liquidated claim against Bective Station in the District Court of New South Wales. Clause 12 of the StandardTermsauthorised AWBA to withhold delivery under the Second Contract until all overdue payments were made under the first contract. AWBA was thus entitled to withhold delivery throughout March 2003 and, indeed, until at least late August 2003. Bective Station did not thereafter request delivery of wheat or purport to terminate the Second Contract for breach because of AWBA’s failure to deliver wheat under the Second Contract. Clause 15 of the Standard Terms, which provided that stipulations as to time were of the essence, did not operate to bring the contract to an end; assuming clause 15 to have not earlier ceased to operate because of Bective Station’s overdue payments, it authorised an innocent party to elect to terminate the contract (Carr v J A Berriman Pty Ltd (1953) 89 CLR 327 per Fullagar J at 348).
19 The contentions of Bective Station that the Second Contract was terminated in March 2003 by reason of non-delivery of the wheat as required by the Second Contract, or alternatively on or before 31 August 2003 by effluxion of time, therefore fail.
20 Bective Station’s further alternative contention that the Second Contract was terminated on 20 October 2003, or five days thereafter, is founded on AWB Limited’s letter dated 20 October 2003. Omitting formal matters that letter was in the following terms:
‘The purpose of this correspondence is to formerly [sic] notify Bective Station Pty Ltd of their default in relation to taking delivery of AWB sales contract 2301055 (AWB reference) dated 6th November 2002. The expiration date of the contract was 30th August 2003.
Under the terms and conditions of the contract AWB has the right, at AWB’s discretion, to resell the quantity of grain in default at fair market value. Bective Station Pty Ltd, as the party in default, is liable for the loss incurred by AWB as a result of reselling the grain at a reduced price.
If AWB does not receive direction from Bective Station Pty Ltd within 5 business days of receiving this letter, AWB in accordance with the terms and conditions of the contract will washout Bective Station. AWB have obtained third party independent advice quoting fair market value for wheat delivered into a buyers nominated store in the Liverpool Plains region. Should you accept a washout AWB will apply market value as at the end of the contract the price being $215/MT, if not AWB will apply spot market price to determine fair value, indication as at 20/08/03 of $200/MT.
A washout cost per metric tonne is based off the contract (2301055) price for August of $395.50 less fair market value, the net cost of the washout is on 7000MT and is due 30 days end of week. AWB will issue a tax invoice within 5 business days. For your information the cost of a washout basis the October price is $1,368,500.
Should you wish to formerly [sic] accept washout of the contract as at the end of August please contact me directly on [telephone number given].’
21 Bective Station responded to the letter of 20 October 2003 by a letter dated 24 October 2003 signed by Mr Vickery. That letter advised AWB Limited that:
‘Bective disputes the advice we received in November of 2002 directing us to buy forward for March-August 2003 delivery. We believe Steve Adams of AWB was not in touch with the forward market and supply of wheat.
For the reasons that have been stated previously, Bective believes we were misled while under huge pressure battling the worst drought in 100 years. We believe the AWB should revisit the advice given and accept the fact the market and supply were not evaluated in a factual manner. The AWB took a position of advantage while advising Bective to take a position of disadvantage.
Bective is not prepared to accept a washout, due to the reasons stated above. Bective is not in default when the advice given is evaluated against supply and delivery of wheat during 2003. Therefore the sales contract and advice from AWB did not take into account “duty of care” considering AWB’s protected position.’
22 On 27 October 2003 AWB Limited issued an invoice to Bective Station for $1 368 500 described as ‘Washout Amount – w/out payable 25/11/2003’. The due date for payment was shown as 2 December 2003.
23 On 6 April 2004, Mr Vickery received a letter by facsimile transmission on AWB Limited stationery signed by Peter Jones, General Manager Trading. The letter advised Mr Vickery that Mr Jones was satisfied that AWB had ‘conducted itself diligently and professionally and in no way contributed to the debt incurred … as a result of the contracts [sic] being washed out.’ The letter requested payment of $1 368 000 [sic] on the invoice issued on 27 October 2003 and advised that, in the event of non-payment, legal action would be initiated to recover the amount.
24 On 24 August 2004, Eakin McCaffery Cox solicitors sent to McMahon & Broadhurst, then solicitors for Bective Station, a notice of arbitration with an attached statement of claim. Paragraphs 1-3 of the notice of arbitration were in the following terms:
‘1. This Notice is given to you pursuant to clause 10 of the Standard Terms and Conditions (Stockfeed) which forms part of Sales Contract No 2301055 dated 6 November 2002 (“Contract”) between us and you.
2. AWB Pty Ltd [sic] ACN 081 890 459 (“AWB”) claims that you have breached the Contract by refusing to take delivery of the wheat referred to in the Contract. AWB claims damages against you for breach of the Contract.
3. In accordance with Article 3 of the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL Arbitration Rules), AWB notifies you that it requires that the dispute which is more particularly set out in the Statement of Claim annexed to this Notice be referred for arbitration by a single arbitrator appointed by the Secretary-General of the Australian Centre for International Commercial Arbitration in Melbourne (which is required by clause 10 of the Contract).’
25 The attached statement of claim was headed ‘Australian Wheat Board Ltd ‑v‑ Bective Station Pty Ltd’. After referring to the formation of the Second Contract it pleaded as follows:
‘STATEMENT OF CLAIM
AUSTRALIAN WHEAT BOARD LTD - v- BECTIVE STATION PTY LTD
…
5. It was a term of the Contract that the Respondent would take delivery of the Wheat between 1 March 2003 and 30 August 2003.
6. It was a term of the Contract that the Respondent would pay to the Claimant the amounts per tonne in the right hand column below for delivery of the Wheat in periods in the left hand column below:
March 2003 $378.00
April 2003 $381.50
May 2003 $385.00
June 2003 $388.50
July 2003 $392.50
August 2003 $395.00
7. In breach of the Contract, the Respondent refused to take delivery of the Wheat during the aforesaid period or at all.
Particulars
Letter from Respondent to Claimant dated 24 October 2003.
8. As a result of the aforesaid breach of the Contract, the Claimant has suffered damage.
Particulars
The Claimant is entitled to the difference between the Contract price of $395.00 per tonne and the market price of the Wheat at 30 August 2003.’
26 AWBA did not suggest that AWB Limited was not authorised to act on its behalf in respect of dealings with Bective Station concerning the Second Contract. AWBA contended that notwithstanding the ‘washing out’ of the Second Contract and the issue of the invoice to Bective Station dated 27 October 2003, the Second Contract had not been terminated and AWBA remained ready, willing and able to perform the Second Contract. It placed reliance on the fungible nature of wheat. It submitted that the ‘washing out’ merely demonstrated AWBA’s attempt to mitigate its loss by crystallising an amount to sue for and that its conduct did not result in termination of the Second Contract and was not inconsistent with the continued performance of the Second Contract.
27 I reject the above contention of AWBA on two separate bases.
28 First, by the letter of 20 October 2003, AWB Limited invoked the terms and conditions of the Second Contract in asserting the discretionary right ‘to resell the quantity of grain in default at fair market value.’ The terms and conditions referred to must, at the least, include clause 9 of the Standard Terms (see [11] above). Clause 9, in the case of default, gives the innocent party an entitlement ‘to terminate this contract and thereafter to sue the party in default for breach of contract and if the Seller, to resell the commodity as owner’ (emphasis added). For this reason the letter of 20 October 2003 is to be understood as formal notice to Bective Station that, unless within five business days of receiving the letter it remedied its default in relation to taking delivery of wheat under the Second Contract, AWB Limited (presumably as agent for AWBA) would exercise its contractual right to terminate the contract for breach and fix the damages payable by Bective Station by reference to the fair market value of the wheat at that time (ie in October 2003).
29 The conduct of AWB Limited thereafter was entirely consistent with the above view of the purport of its letter of 20 October 2003. On 27 October 2003 it issued an invoice to Bective Station claiming payment of a ‘washout amount’of $1 368 500; that is, the amount which its letter of 20 October 2003 advised would be the cost of a ‘washout’ based on the October price for wheat. The issuing of this invoice to Bective Station is consistent only with AWB Limited (presumably as agent for AWBA) having terminated the Second Contract and formulated a claim for damages calculated by reference to the difference between the contract price and the fair market price as at October 2003 (ie the ‘washout’ amount).
30 Bective Station, by its counsel at the hearing, explicitly waived any entitlement that it may have had to object to the ‘washout’ procedure on the ground that it involved a notional, rather than an actual, sale of wheat. AWBA did not ever allocate wheat to the Second Contract.
31 The second basis on which I reject the contention of AWBA that the Second Contract has not been terminated is that by each of the invoice of 27 October 2003, the statement of claim which formed part of the notice of arbitration and the cross-claim in this proceeding, AWB Limited or AWBA has claimed common law damages for loss of bargain. That is, by each of those instruments it has advanced a claim for damages calculated by reference to the complete value to AWBA of the Second Contract had it been performed.
32 As Mason CJ, with whom Deane, Dawson and Toohey JJ agreed, observed in Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 at 260-261:
‘Loss of bargain damages are recoverable only if the contract is at an end. Once termination due to the defendant’s wrongful conduct is established the plaintiff is entitled to damages for loss of bargain … Barwick C.J. suggested in Ogle [Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444 at 450], that termination is not an essential element in an action for loss of bargain damages, except in the case of anticipatory breach, but the preponderant opinion in Australia and England is against his view’. (citations omitted)
33 In Sunbird Plaza Gaudron J at 273 said:
‘… there is no loss of bargain whilst the contract remains on foot. It is for this reason that a vendor must bring his contractual obligation to sell to an end before he can maintain an action for damages for loss of bargain’. (citations omitted)
See also Ronnoc Finance v Spectrum Network Systems Ltd (1997) 45 NSWLR 624.
34 I therefore conclude that the Second Contract was terminated, at the latest, on 27 October 2003 when AWB Limited issued an invoice to Bective Station claiming payment of $1 368 500 being the difference between the contract price of the wheat the subject of the Second Contract and the fair market value of that amount of wheat as at October 2003.
Is AWBA’s Claim Time Barred?
35 A claim for damages for breach of contract must ordinarily be brought within six years from the date on which the cause of action accrued (Limitation of Actions Act 1958 (Vic) s 5; Limitation Act 1969 (NSW) s 14). However, the parties to the contract may agree a shorter limitation period (Port Jackson Stevedoring Proprietary Limited v Salmond & Spraggon (Australia) Proprietary Limited (1978) 139 CLR 231 per Barwick CJ at 239-9).
36 The parties are in agreement that the time within which AWBA was obliged to institute a proceeding to recover damages from Bective Station for breach of the Second Contract is governed by the Second Contract, and in particular by the Standard Terms. However, there is a dispute between the parties as to the proper construction of the Standard Terms in this regard.
37 Bective Station placed reliance on clause 9 of the Standard Terms and argued that as the cross-claim was not filed within 12 months of the termination of the Second Contract it is time barred. The cross-claim was filed on 24 March 2005.
38 AWBA contended that the Second Contract has not been terminated and thus the 12 month period referred to in clause 9 has not commenced to run. I reject this contention for the reasons given above. The Second Contract was terminated, at the latest, on 27 October 2003.
39 AWBA alternatively contended that it commenced proceedings for the recovery of damages by giving Bective Station a notice of arbitration within the twelve month period referred to in clause 9. The validity of this contention depends on the proper construction of clauses 8, 9, 10 and 11 of the Standard Terms. In particular it depends on whether an action to recover damages pursuant to clause 9 is a ‘dispute, controversy or claim’ within the meaning of clause 10.
40 Clause 10 required a dispute, controversy or claim arising out of or in relation to the Second Contract, or the breach, termination or invalidity thereof, to be settled by arbitration. In my view, clauses 8 and 11 provide insight into the intended ambit of clause 10. Subclause 8(a) refers to claims based on defect of quantity, quality or condition which is apparent on reasonable inspection. Subclause 8(b) refers to technical claims which are ‘all others than those under (a) above’. Clause 11 fixes time limits for claiming arbitration. For claims of the kind identified by clause 8(a), the time limit is 28 days from the date of the arrival of the goods at their ultimate destination in Australia. For claims of the kind identified in clause 8(b), the time limit is 120 days from the last day of the delivery period. The language of clause 8, when viewed together with the short time limits fixed by clause 11, tends to suggest that claims under clause 8 are claims directly relating to the goods sold under the contract.
41 This construction of clause 8 is consistent with the distinction drawn by the Standard Terms between ‘claims’ (clause 8) and ‘default’ (clause 9). Clause 9 provides a means whereby an innocent party may quantify its loss, if any, following termination of the contract because of the other party’s default. It is, in my view, unlikely that the parties would have intended that arbitration was an appropriate means of recovering the loss so quantified. Support for this view is found in the language of clause 9 which authorises the innocent party ‘to sue the party in default for breach of contract’ (emphasis added). This language is in contrast to the language of clauses 10 and 11 pursuant to which arbitration is ‘claimed’ and disputes ‘settled’ by arbitration. I conclude that an action to recover damages following the termination of the contract pursuant to clause 9 is not a ‘dispute, controversy or claim’ within the meaning of clause 10. I therefore reject AWBA’s argument that the final words of clause 9 provide for a time limit for claiming arbitration which is additional to the time limits fixed by clause 11. In my view, clause 9 fixes the time within which a party who terminates the contract in reliance on the default of the other party may institute legal proceedings for breach of contract and to recover damages in accordance with the clause.
42 I note incidentally that the conduct of AWB Limited in instituting proceedings in the District Court of New South Wales against Bective Station in respect of non-payment of the full purchase price under the first contract was consistent with the view which I have taken of the proper construction of clauses 9 and 10 of the Standard Terms.
43 The only legal proceeding in which AWBA has sued Bective Station to recover damages in accordance with clause 9 is the cross-claim in this proceeding. As the cross-claim was not commenced within 12 months of the termination of the contract, I conclude that it is time barred.
trade practices act claims
44 My above conclusions lead necessarily to the conclusion that Bective Station is unable to maintain its claims for relief under s 87 and s 82 of the TPA. Section 87 authorises the Court to make such order or orders as it thinks appropriate to compensate an applicant for loss or damage which the applicant has suffered or is likely to suffer because of a contravention of the Act. Section 82 allows a person who suffers loss or damage because of a contravention of the Act to recover the amount of that loss or damage. The only loss and damage pleaded by Bective Station in its statement of claim is based upon the invoice for $1 368 500 dated 27 October 2003 issued to it by AWB Limited. I have concluded that AWBA’s claim to recover $1 368 500 from Bective Station is time barred. Unless and until my conclusion is overturned on appeal, Bective Station is under no legal obligation to pay the invoiced amount. It has thus suffered no loss and damage, and is not likely to suffer loss and damage, based on the invoice.
45 Nonetheless, lest an appeal is instituted from this judgment, it is appropriate for me to determine whether Bective Station entered into the Second Contract in reliance on conduct of AWBA which was misleading or deceptive, or likely to mislead or deceive, within the meaning of s 52 of the TPA.
Section 52 of the TPA
46 Section 52(1) provides:
‘A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.’
47 It is admitted on the pleadings that AWBA is a corporation. AWBA did not formally admit that, if the representations upon which Bective Station allegedly placed reliance were made, they were made in trade and commerce. However, it did not seek to establish otherwise. I am satisfied that if the alleged representations were made, they were made in trade or commerce.
48 The issues that it is therefore appropriate for me to determine are whether AWBA engaged in conduct that was misleading and deceptive, or likely to mislead or deceive (s 52) and, if it did, whether Bective Station, assuming it to have suffered loss and damage as a result of entering into the Second Contract, suffered that loss or damage ‘by conduct of’ AWBA (s 82).
The Telephone Conversations
49 Bective Station’s case under the TPA is based upon three telephone conversations between Mr Vickery and Steven Martin Adams, a customer manager employed by AWBA.
50 The statement of claim pleads in par 19 that on 30 and 31 October 2002 Mr Adams orally represented in the course of telephone conversations with Mr Vickery that:
‘(a) there will be no wheat available for purchase in Australia from March 2003 until the 2003 harvest begins in October;
(b) wheat for delivery in Australia in the period March to October 2003 will be unprocurable at a price equal to or less than $375 per tonne plus holding charges of $3.50 per tonne per month after March 2003, if not ordered promptly.’
51 The statement of claim further pleads in par 20 that on 4 November 2002 Mr Adams orally represented to Mr Vickery in the course of a telephone conversation that:
‘(a) wheat for delivery in Australia in the period March to October 2003 will be unprocurable at a price equal to or less than $378 per tonne plus holding charges of $3.50 per tonne per month after March 2003, if not ordered promptly.
(b) the price per tonne for such wheat as presently remains available for delivery in Australia in March to October 2003 will continue to rise until the available supply is exhausted’.
52 It is not in dispute that Mr Adams spoke to Mr Vickery by telephone on each of 30 and 31 October 2002 and 4 November 2002. However, AWBA denies that Mr Adams made the representations alleged. AWBA did not dispute that if the representations, or any of them, were made, they were representations with respect to future matters which AWBA did not have reasonable grounds for making (s 51A of the TPA).
53 Mr Vickery had negotiated his first contract to purchase wheat from AWBA with Mr Adams. Mr Vickery gave affidavit evidence that on 30 October 2002 he received a message to return a telephone call from Mr Adams and that when he did so a conversation to the following effect ensued:
‘Adams: “Rob, it’s Steve Adams here. I thought I’d better give you a ring because as you know the wheat harvest is going to be poor and supplies of wheat are getting low. Your current contract ends in March 2003. Will you need wheat after that, because if you don’t purchase now, there will be no wheat in Australia from March 2003 until the harvest begins in October.”
…
Vickery: “You say there’ll be no wheat available after March next year?”
Adams: “That’s right. We’re seeing heavy demand at the moment, but there’s wheat available if you buy now. I’m holding some for you, but if you don’t buy now you’ll have to import wheat from March 2003 onwards.”
Vickery: “What is the price for wheat in March?”
Adams: “For March delivery it will be $370 per tonne.”
Adams: “As I said, if you don’t buy now, your only option would be to import wheat from Chicago. Let’s do a hypothetical exercise. If you bought wheat from the US you’d have to pay Chicago prices, US freight, shipping, the cost of treatment of the wheat on arrival in Australia, you’d have to pay Australian customs duties and you’d have to pay the inland freight costs.”’
54 Mr Vickery’s affidavit evidence was that Mr Adams then mentioned approximate costs for the items to which he had referred except inland freight and that the conversation then continued:
‘Adams: “Unless the exchange rate changes a lot in your favour, the cost of importing wheat is going to be more than $370 per tonne.”
Vickery: “Steve, I’ll have to look at my requirements from March forward, and get back to you.”’
55 Mr Vickery’s diary for 30 October 2002 contains the following note:
‘Rang Adams AWB
U.S. Wheat:-
Chicago prices
U.S. Freight
Shipping
Treatment Aust.
Customs. Aust.
Inland Freight
Price around $370
or higher
No wheat in Australia 2003 March
on if purchase not
affected
now.’
56 Mr Vickery further gave affidavit evidence that he telephoned Mr Adams the next day and that they had a telephone conversation to the following effect:
‘Vickery: “I’d like to speak to you Steve about an extra 7,000 tonnes for delivery March to August next year.”
Adams: “Rob the price will be $375 per tonne for March and $3.50 per month holding charge. I’ve already sold 25,000 tonnes of wheat this week. If you want to get some you’d better move quickly because otherwise there won’t be any available.”
Vickery: “Who have you sold the 25,000 tonnes to?”
Adams: “Pet Food at Gunnedah’s taken 10,000 tonnes, Gunnee Feedlot has taken 6,000 tonnes, Henry Moses has taken 5,000 and Killara has taken 5,000 tonnes.”
Adams: “As I said, there’s little wheat available. If you don’t order promptly wheat will be unprocurable at the price we are now offering, and there’ll be no wheat available from March onwards.”’
57 Mr Vickery’s diary for 31 October 2002 contains the following note:
‘Rang AWB ‑
$375 tonne
March + $3.50’
‘Pet Food Gunnedah 10,000 tonnes
Gunnee 6,000 “
Moses 5,000 “
Killara Gunnee 5,000 “ ’
58 Mr Adams’ affidavit evidence was that he spoke to Mr Vickery by telephone on 30 October 2002 and advised him that Bective Station needed to start drawing down wheat under its first contract to purchase wheat from AWBA. Mr Adams’ version of the conversation was that Mr Vickery then asked him for a current price for March-April 2003 wheat and that he replied:
‘A price indicator is $375 per tonne for March/April 2003 delivery.’
59 Mr Adams gave affidavit evidence that Mr Vickery then asked him about the possibility of grain being imported into Australia and possible prices:
‘RV: What prices would be expected for the imported wheat?
SA: I don’t know but about the only thing I can look at is the US wheat futures and do a rough calculation based on current Chicago futures for wheat, using a spot Australian / US conversion. (can not recall quoted price). Rob, there is a likelihood that market prices will come off in the event that there is general rain and a sorghum crop is planted.’
60 Mr Adams’ notebook, under the date 30 October 2002, contains an entry beside the name ‘Rob Vickery’:
‘→ Rang & discussed need to draw down wheat.
→ $375/t Mch/April’
61 Mr Adams’ affidavit evidence concerning his conversation with Mr Vickery on 31 October 2002 was that it was to the following effect:
‘RV: Steve, what is the current value of wheat for November / December 2002 delivery?
SA: $365.00 per tonne for November / December. The quality of the wheat is being quoted is 72 kilograms per hectolitre and a maximum of 15% screenings.
RV: Can you give me a price for March / April 2003 for 3,000 to 4,000 tonnes.
SA: $375.00 per tonne for March plus $3.50 a tonne for April.
RV: What other prices have you quoted other feedlots recently?
SA: We indicated to Stanbroke prices of $355 per tonne for November / December. Price indicators at the moment for imported wheat ex-store the metropolitan area for January 2003 is $360 per tonne with a minimum test weight of 70 kilograms per hectolitre.
RV: I’ll come back to you about what I want to do.’
62 Mr Adams’ notebook, under the date 31 October 2002, contains an entry beside the name and description ‘Rob Vickery Bective F/Lot’. The relevance of the first line of the entry is not apparent. The remainder of the entry is as follows:
‘• 350 t ←discussed
• 375/t 1 March 03
$3.50 t from 1/4/03.’
63 Under the same date Mr Adams’ notebook contains an additional entry relevant to his dealings with Mr Vickery. This later entry includes the note ‘$375 → Mch + $3.50/t APRIL’.
64 Mr Adams gave affidavit evidence that he had a conversation with Mr Vickery on 4 November 2002 to the following effect:
‘RV: Steve, can you provide me with a price indicator for wheat for November to March 2003.
SA: Current prices are $370 per tonne for November / December 2002, plus $3.50 per tonne per month carry onwards through to March 2003.
…
RV: I am willing to give you $378.00 per tonne for delivery in March 2003 with carry of $3.50 per tonne a month through to the end of August for 7,000 tonnes.
SA: I will have to contact Melbourne to confirm that they are willing to accept this price. I will get back to you.’
65 Mr Adams also gave affidavit evidence that he contacted AWBA’s Melbourne office the same day with respect to Mr Vickery’s offer and received advice to accept it. He said that he passed this information on to Mr Vickery who asked him to book the tonnage.
66 Mr Adams’ notebook, under the date 4 November 2002 contains two entries beside the name ‘Rob Vickery’. The first includes the notes ‘378 + $3.50/t to 30/8/02’ and ‘7k tonne’. The second includes the note:
‘$370 N/Dec + Jan 3.50
$380.50 Feb
Mch’
67 Mr Adams asserted that he definitely did not say anything to the effect that ‘there will be no wheat in Australia from March 2003 until the harvest begins in October’ and that such a statement, in his opinion, is ridiculous and he would not have believed it to be true. He also asserted that he did not say anything to the effect:
(a) ‘if you don’t buy now, your only option would be to import wheat from Chicago’ because it was not his opinion at the time; or
(b) ‘the cost of importing wheat is going to be more than $370 per tonne’ because he did not have an opinion on that topic and would have been very careful not to express such an opinion; or
(c) ‘you’d better move quickly because otherwise there won’t be any available’ or ‘there’s little wheat available’ because such statements would have been to his understanding false.
68 Mr Adams also expressed his confidence that Mr Vickery did not say to him anything like ‘As you’ve told me that there will be no wheat available next year …’ as it would have struck him as extraordinary.
69 However, Mr Adams agreed in cross-examination that topics discussed between him and Mr Vickery in October and November 2002 included the availability of wheat for feedlotting in 2003 and the importation of wheat. Mr Adams agreed that one of the things that feedlotters were worried about at the time was the supply of grain in the future.
Prior Consistent Statement: Sections 60 and 108(3)(b) of the Evidence Act
70 It was suggested to Mr Vickery in cross-examination that his version of the conversations between him and Mr Adams in later October 2002 was a recent invention. Bective Station was thereafter granted leave to file and read an affidavit sworn by Christina Maria Vickery, Mr Vickery’s wife. I made an order under s 136 of the Evidence Act 1995 (Cth) (‘the Evidence Act’), on the application of AWBA, that Mrs Vickery’s evidence of what was said to her by Mr Vickery was only to be used to prove what Mr Vickery said to her and was not to be used to prove the truth of anything that Mr Vickery said to her.
71 Mrs Vickery gave evidence of a conversation between her and her husband which took place on about 1 November 2002 while they were driving to Noosa for a holiday. Her recollection was that the conversation was to the following effect although she was unable to recall the wheat price that was mentioned:
‘Robert: “Steve Adams from the AWB called me and said that there is not going to be any wheat available in Australia from March 2003. If we don’t lock in wheat now, he said that there will be no wheat available.
He went through with me the cost of bringing in wheat from the US. But if we were to do that we would have to bring in a whole shipment, which is way beyond Bective’s needs and means.
Steve offered me a price of $X per tonne.
It’s a huge worry for me buying at this price, but if we are going to continue feeding cattle next year, I think we have to take it.”
Me: “If there is not going to be any wheat available, we have no alternative.”’
72 Mrs Vickery also gave evidence that the car trip was on a Friday, that her husband was tense in the early part of the holiday but that after he confirmed the order for additional wheat he suggested that they relax and enjoy their holiday.
73 While I accept that Mrs Vickery’s recollection of the details of what Mr Vickery said to her in November 2002 may have become tainted by later conversations between them on the same topic, I am satisfied that Mrs Vickery was an honest and credible witness.
Tendency Evidence: Section 97 of the Evidence Act
74 Section 97 of the Evidence Act provides as follows:
‘(1) Evidence of the character, reputation or conduct of a person, or a tendency that a person has or had, is not admissible to prove that a person has or had a tendency (whether because of the person’s character or otherwise) to act in a particular way, or to have a particular state of mind, if:
(a) the party adducing the evidence has not given reasonable notice in writing to each other party of the party’s intention to adduce the evidence; or
(b) the court thinks that the evidence would not, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value.
(2) Paragraph (1)(a) does not apply if:
(a) the evidence is adduced in accordance with any directions made by the court under section 100; or
(b) the evidence is adduced to explain or contradict tendency evidence adduced by another party.’
75 Bective Station filed affidavits from five deponents in reliance on s 97(1) of the Evidence Act. Notice of Bective Station’s intention to adduce evidence from these deponents was given to AWBA pursuant to s 97(1)(a). AWBA thereafter filed affidavits from ten deponents on the basis that the evidence in the affidavits could be adduced in reliance on s 97(2)(b) to contradict the evidence sought to be adduced by Bective Station in reliance on s 97(1). AWBA later indicated that it only wished to read the affidavits of five (or perhaps four) of those deponents.
76 I heard argument on the admissibility of the evidence sought to be adduced in reliance on s 97 ahead of the matter being called for hearing. My rulings were that Bective Station could adduce the affidavit evidence of three only of its deponents, namely Duncan Rowland, Troy Setter and Allan Edward Gillogly, but that AWBA could not adduce the affidavit evidence of any of its deponents. I indicated at the time of my rulings that I would give expanded reasons for the rulings in this judgment. These are those expanded reasons.
77 Mr Rowland stated in his affidavit that on or around 4 November 2002 Mr Adams said to him words to the following effect:
‘If you don’t order now, there will be no wheat available until the harvest begins next year because contracts are filling up. There are other feedlots who are also short of grain, and they will be out of grain in the next few months. Prices will continue to rise until supplies run out.’
78 Mr Setter stated in his affidavit that in late October/early November 2002 he had a conversation with Mr Adams to the following effect:
‘Adams: “There is not a lot of grain left in Northern New South Wales. This year’s harvest is going to be very small, and you need to ensure that you’re covered for grain so that you can keep operating the feedlot. There is more demand for feed wheat than supply.”
Adams or Setter: “So prices will rise higher until supply runs out.”
Setter or Adams: “That would be expected.”
Adams: “There is only 50,000 to 60,000 tonnes of wheat in Northern NSW and it has nearly all been purchased.
People who have bought include Bective Feedlot, Courallie Feedlot, Killara Feedlot and Myola Feedlot.
There is a parcel of wheat remaining, and you can buy it. But if you don’t buy now, there will be none left until the next harvest. You may leave yourself short and you will not be able to get grain for the feedlot until next October.”’
79 Mr Gillogly stated in his affidavit that on or about 7 November 2002 Mr Adams said words to the following effect to him:
‘If you don’t order grain now, grain will be short and the price will keep on going up. We could run out of grain.’
80 The nature of tendency evidence was considered in Jacara Pty Ltd v Perpetual Trustees WA Ltd (2000) 106 FCR 51 by Sackville J, with whom Whitlam and Mansfield JJ agreed. In that case the appellant alleged that the respondent’s agent had made misrepresentations which induced the appellant to lease certain premises in a shopping centre. The appellant sought to adduce evidence that the agent had made similar representations to other prospective tenants of the shopping centre. Sackville J accepted that the admissibility of the evidence sought to be adduced was to be determined by reference to s 97 as evidence that the agent had a tendency to act in a particular way.
81 In my view the affidavit evidence of Messrs Rowland, Setter and Gillogly referred to above is not relevantly distinguishable from the kind of evidence sought to be adduced in Jacara Pty Ltd v Perpetual Trustees WA Ltd. It is therefore to be regarded as tendency evidence falling within s 97. I note incidentally that in each case the evidence may, in any event, have been admissible in reply because of the evidence of Mr Adams that, in effect, he would never have said anything to the effect that ‘there will be no wheat in Australia from March 2003 until the harvest begins in October’. The application on which I was invited to rule, however, was an application to adduce the evidence pursuant to s 97(1).
82 For the evidence of Messrs Rowland, Setter and Gillogly to be admissible under s 97(1) it was necessary for the requirements of both paragraphs (a) and (b) of the subsection to be satisfied. As mentioned above, Bective Station had given the notice required by paragraph (a).
83 In determining that their evidence had significant probative value I took into account that:
(a) each of them gave evidence of a conversation with Mr Adams which took place within a few days of the conversation between Mr Vickery and Mr Adams;
(b) each of them gave evidence of Mr Adams using language similar to the language which Mr Vickery claimed that Mr Adams had used in conversation with him;
(c) each of them gave evidence of Mr Adams saying words to the effect that the supply of wheat could or would run out; and
(d) Mr Adams’ affidavit evidence was that he definitely did not say words to the effect that ‘there will be no wheat in Australia from March 2003 until the harvest begins in October’ as such a statement was, in his opinion, ridiculous because he could not conceive of any circumstances where the supply of wheat in Australia would ever run out.
84 I was not satisfied that I should refuse to admit the evidence of any of Messrs Rowland, Setter or Gillogly on the basis that its probative value was substantially outweighed by the danger that the evidence might be unfairly prejudicial to AWBA or be misleading or deceptive or cause or result in undue waste of time. Rather, I considered that in each case the probative value of the evidence substantially outweighed any danger of the kind identified in s 136 of the Evidence Act.
85 AWBA argued that evidence was admissible under s 97 if it was adduced to explain or contradict tendency evidence adduced by another party notwithstanding that neither of paragraphs (a) nor (b) of s 97(1) was satisfied. Section 97(2) plainly relieves a party who seeks to adduce evidence to explain or contradict tendency evidence called by another party from the requirement to give notice to the other party in compliance with s 97(1)(a). However, the language of s 97(2) provides no basis for an inference that s 97(1)(b) has no application in respect of tendency evidence adduced to explain or contradict tendency evidence adduced by another party. I conclude that such evidence must satisfy the requirement of s 97(1)(b).
86 The evidence which AWBA sought to adduce to contradict the evidence of Messrs Rowland, Setter and Gillogly was, in effect, evidence from other clients of Mr Adams that Mr Adams had not made statements to them anything like the statements which Mr Vickery claimed that Mr Adams had made to him and that they regarded Mr Adams as honest and a man of integrity. It is not necessary for me to express a concluded view on whether this evidence was appropriately characterised as tendency evidence. I accept that it was evidence of the character and conduct of Mr Adams. I formed the view that the probative value of this evidence, if adduced, would have been, at best, slight. The evidence sought to be adduced by Bective Station was not intended to establish, and did not tend to establish, that Mr Adams had an invariable practice of making statements to a particular effect. Having regard to Mr Adams’ evidence that he would never have said words to the effect that the supply of wheat in Australia would run out, evidence that he did not say words to that effect on nominated occasions is of little, if any, probative weight. By contrast, evidence that he did say words to that effect may have, and I concluded in the circumstances to which Messrs Rowland, Setter and Gillogly deposed, did have, significant probative value. Similarly, I did not think that evidence that a number of Mr Adams’ clients regarded him as honest and as a man of integrity had any significant probative value in the circumstances of this case.
87 Had I taken the view that any of the evidence which AWBA sought to adduce under s 97 of the Evidence Act was admissible, I would nonetheless have refused to admit it on the basis that its probative value was substantially outweighed by the danger that the evidence might cause or result in undue waste of time. My concern was that, notwithstanding the limited probative value of the evidence, significant time would be spent at trial cross- examining the deponents of AWBA’s affidavits to elucidate details of the history and nature of all their previous dealings with Mr Adams.
What Did Mr Adams Say?
88 Although each of Mr Vickery and Mr Adams was at times uncomfortable under cross-examination, no aspect of the demeanour of either of them caused me to think that either was seeking to mislead the Court so far as any significant aspect of his evidence was concerned. However, each of them was giving evidence of telephone conversations which took place approximately four years earlier.
89 I accept that the earliest complaints made by Mr Vickery about the Second Contract concerned the contract price. By February 2003 the price of wheat had dropped significantly below the price payable under the Second Contract. I also accept that Mr Vickery then believed, and may well still believe, that ‘AWB’ was in a position to manipulate the price of wheat in Australia and had in fact done so to his serious disadvantage. However, notwithstanding Mr Vickery’s jaundiced view of ‘AWB’, I accept his evidence that he caused Bective Station to enter into the Second Contract because of a concern that, if he did not, Bective Station may have been unable, after March 2003, to obtain the wheat which it would require to operate its feedlot. The explanation for Mr Vickery’s early complaints being complaints about price is found, I am satisfied, in the fact that Mr Vickery would not have bothered to complain about being contractually bound to take future deliveries of wheat from AWBA were the contract price reasonably competitive with the spot price for wheat at the time of delivery.
90 While I did not form the view that Mr Adams endeavoured positively to mislead the Court, I am satisfied that he has little genuine recollection of the content of his telephone conversations with Mr Vickery on 30 and 31 October and 4 November 2002. This is no more than would ordinarily be expected. Mr Adams spoke with a number of prospective purchasers of wheat every day during the relevant period and made only limited notes of the conversations. Mr Adams had no occasion to recall the details of his conversations with Mr Vickery until well after they had taken place. Moreover, it would not be unnatural for Mr Adams to have convinced himself in the intervening period that, notwithstanding the severity of the 2002 drought, he had never expressed views which in retrospect might seem alarmist about the future supply of wheat in Australia.
91 By contrast, Mr Vickery conveyed the tenor of his conversations with Mr Adams on 30 and 31 October 2002 to Mrs Vickery within a day or so of the conversations taking place. I accept Mrs Vickery’s evidence that Mr Vickery was tense in a way which affected their holiday until after he confirmed an order for additional wheat. This evidence provides support for a finding that at least something was said to Mr Vickery by Mr Adams which caused him serious concern and which, additionally, precipitated the placing of an order for the future delivery of wheat to Bective Station. No basis for such a concern is readily found in Mr Adam’s version of their conversations.
92 I attach significance to the fact that Mr Vickery made more extensive notes of the conversations than Mr Adams. It was not suggested to Mr Vickery that he had at any later time supplemented his notes. Nor was it suggested to him that his diary note for 30 October 2002, to the extent that it records ‘no wheat in Australia 2003 March on if purchase not affected now’, reflected information provided to him by a person other than Mr Adams or an inference which he had himself drawn from pricing information given to him by Mr Adams.
93 I am satisfied that Mr Adams did tell Mr Vickery on 31 October 2002 of significant contracts for the future delivery of wheat entered into by other buyers. Mr Adams conceded this possibility. Moreover, the evidence suggests that Mr Vickery’s diary note of that date is substantially accurate as to the volumes of wheat contracted to be purchased by the other clients of AWBA. Mr Adams is the only logical source of that information. The information may be assumed to have been conveyed in an endeavour to persuade Mr Vickery that it would be wise for Bective Station also to commit itself to a contract to purchase wheat to be delivered in 2003.
94 Finally, I accept the evidence of Mr Rowland and Mr Setter that in conversations which occurred in late October or early November 2002 Mr Adams told them that wheat would at some time become unavailable until the harvest commencing in October 2003. AWBA accepted that Mr Rowland was an impressive witness although it sought to characterise Mr Setter as dishonest. I reject this characterisation. However, even if I did not, it is beyond dispute that Mr Rowland’s evidence, if accepted, contradicts Mr Adam’s evidence that he definitely did not say anything to the effect that ‘there will be no wheat in Australia from March 2003 until the harvest begins in October’.
95 I accept the submission of AWBA that the degree of animosity shown by Mr Gillogly towards ‘AWB’ renders it dangerous to rely on his evidence.
96 I do not consider it necessary to determine whether, as AWBA submitted, any thoughtful person would realise that the supply of wheat would never run out in Australia because market forces would result in imported wheat entering the market. Quarantine restrictions would, it is accepted, impinge on the availability of imported wheat for stock feed. In the context in which the conversations between Mr Adams and Mr Vickery took place, I am satisfied that ‘wheat’ meant wheat that would be available for use in a feedlot. The representation pleaded in par 19(a) of the statement of claim is to be similarly understood.
97 I am satisfied on the balance of probabilities that in the telephone conversations that took place between Mr Vickery and Mr Adams on 30 and 31 October 2002, Mr Adams said to Mr Vickery words to the effect that if you (ie Bective Station) do not purchase now there will be no wheat in Australia from March 2003 until the harvest begins in October. On that basis I am satisfied that Mr Adams, as agent for AWBA, made the representation pleaded in par 19(a) of the statement of claim (see [50] above). As mentioned above, AWBA accepted that if the representation was made it is to be taken to be misleading (see s 51A of the TPA). I therefore find that AWA contravened s 52 of the TPA.
98 I am not satisfied that the representations pleaded in par 19(b) and par 20 of the statement of claim (see [50]-[51] above) were made.
99 I am also satisfied on the balance of probabilities that Mr Vickery caused Bective Station to enter into the Second Contract in reliance on the representation made to him by Mr Adams. Mrs Vickery’s evidence seemed to me to be particularly compelling in this respect. Nothing in her evidence suggested that, in the early days of the holiday in Noosa which she and her husband shared, her husband was in contact with others whose views on the future supply of wheat he might have regarded as significant. Nor was it suggested to her that her husband told her of conversations that he had had with others on that topic. I accept that Mr Vickery regarded ‘AWB’ as the most reliable source of information available as to the future supply of wheat.
Conclusion
100 As stated in [8] above, the primary issue for determination in this proceeding is whether AWBA is entitled to damages for Bective Station’s breach of the Second Contract. I have concluded that AWBA is not entitled to recover any amount from Bective Station pursuant to the Second Contract because it did not commence proceedings to recover its damages within 12 months of the termination of the Second Contract. The cross-claim must therefore be dismissed.
101 As a consequence Bective Station’s claim for relief under the TPA also fails. Bective Station is unable to show that it has suffered, or is likely to suffer, any relevant loss or damage because of conduct of AWBA. Bective Station’s application must therefore also be dismissed notwithstanding my finding that AWBA contravened s 52 of the TPA.
102 The following orders will be made:
1. The application be dismissed.
2. The cross-claim be dismissed.
3. AWBA pay Bective Station’s costs of the proceeding.
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I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. |
Associate:
Dated: 23 November 2006
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Counsel for the Applicant: |
Mr D.L Williams SC and Mr A.T.S Dawson |
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Solicitor for the Applicant: |
Dibbs Abbott Stillman |
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Counsel for the Respondent: |
Mr C.R.C Newlinds SC and Mr F Assaf |
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Solicitor for the Respondent: |
Eakin McCaffery Cox |
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Date of Hearing: |
10 – 17 October 2006 |
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Date of Judgment: |
23 November 2006 |
