FEDERAL COURT OF AUSTRALIA

ShoreForm (Qld) Pty Ltd v Millennium Coal Pty Ltd (No 4) [2015] FCA 605

THE COURT ORDERS THAT:

1.    The application be dismissed.

2.    Costs be reserved.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Introduction

1    By these proceedings, commenced on 23 December 2011, the applicant ShoreForm (Qld) Pty Ltd (ShoreForm) claimed $806,094.71 (including GST) plus interest. ShoreForm is a company that specialises in formwork. The events giving rise to the claim date back to late 2005 and early 2006.

2    By its originating application, ShoreForm claimed declarations that it entered into one or more contracts with either or both of the respondents, Millennium Coal Pty Ltd (Millennium) and Peabody Australia Mining Pty Ltd (Peabody), for the provision of formwork services for a reclaim tunnel and other works at a coal handling and preparation plant known as the “Millennium Coal Project” (the Millennium mine) located in the Bowen Basin about 22 km east of Moranbah, Queensland. In the alternative, ShoreForm claimed that either or both of the respondents, Millennium and Peabody, were estopped from denying the existence of one or more binding contracts for the provision of the formwork services. In the further alternative, ShoreForm claimed to recover payment for the services provided on a restitutionary basis. There was a further claim of misleading or deceptive conduct under s 52 and, in the alternative, unconscionable conduct under s 51AC of the Trade Practices Act 1974 (Cth) (Trade Practices Act).

3    The monetary claim was for damages for breach of contract on the part of Millennium or Peabody; in the alternative, ShoreForm claimed payment by Millennium and Peabody on a quantum meruit basis; and, in the further alternative, ShoreForm sought damages or compensation under s 87 of the Trade Practices Act in respect of Millennium’s or Peabody’s alleged misleading or deceptive conduct or unconscionable conduct.

Background

4    Millennium owned the Millennium mine. Excel Coal Ltd (Excel Coal), later called Peabody, the second respondent, was the parent company of Millennium.

5    On 28 January 2005, Australian Coal Technology Pty Ltd (Australian Coal Technology) agreed with Millennium to supply a coal handling and preparation plant, referred to as “a coal preparation plant and materials handling facility”, at the Millennium mine.

6    By letter dated 10 June 2005, Commercial Concrete Constructions Pty Ltd (CCC) submitted a tender to erect formwork, fix steel reinforcement and to place and finish concrete in relation to the reclaim tunnel concrete works at the Millennium mine. CCC stated as its proposed contractor for the formwork ShoreForm Pty Ltd, its principal Tony Saba.

7    Australian Coal Technology entered into a subcontract dated 24 June 2005 with CCC, including for the supply of concrete works in the reclaim tunnel forming part of the coal handling and preparation plant.

8    CCC entered into a contract with ShoreForm Pty Ltd in late June 2005 under which ShoreForm Pty Ltd agreed to supply the formwork and related services for the reclaim tunnel. From late July 2005, CCC and ShoreForm Pty Ltd proceeded on the basis that Commercial Concrete Constructions (Qld) Pty Ltd (CCCQ) and ShoreForm were the parties to this contract in place of CCC and ShoreForm Pty Ltd.

9    The Millennium mine was not the only coal mine in Queensland where Australian Coal Technology, CCCQ and ShoreForm were undertaking work: they were also working from time to time at the Newlands coal mine, owned by Xstrata Coal.

10    ShoreForm was registered on 4 July 2005. Mr Saba was the sole director and was the holder of the single share issued. ShoreForm had its registered office in Queensland and was established for the purposes of the work in Queensland. Mr Saba was also a director of ShoreForm Pty Ltd from 2004 to 2008. Both companies were engaged in the business of supplying concrete and formwork services but only ShoreForm, the company registered in Queensland, was involved in work at the Millennium mine.

11    Millennium CHPP Pty Ltd (Millennium CHPP) was formed as a new Millennium subsidiary.

12    Millennium came to regard the management of the work at the Millennium mine by Australian Coal Technology as unsatisfactory. Amongst other things, Australian Coal Technology was late in paying subcontractors. On 30 December 2005, Millennium, Millennium CHPP and Australian Coal Technology entered into heads of agreement for the novation of the contract between Australian Coal Technology and Millennium and all subcontracts relating to the construction of the coal handling and preparation plant, to Millennium CHPP with effect from 15 January 2006, subject to the continuing obligations of Australian Coal Technology set out in the heads of agreement.

13    A deed of novation between Australian Coal Technology, Millennium CHPP and Millennium was entered into on 18 January 2006. It was agreed that on and from 31 January 2006, the parties novated the contract between Australian Coal Technology and Millennium Coal dated 28 January 2005 so that Millennium CHPP replaced Australian Coal Technology under that principal agreement. One of the conditions precedent was that certain “A List Subcontracts” be novated on the terms of an annexed deed of novation. By clause 3.5(f), Australian Coal Technology agreed to cause the novation of the “Non-A List Contracts” on substantially the same terms as the deed of novation annexed and with effect from 31 January 2006. The subcontract between Australian Coal Technology and CCC was one of the “A List Subcontracts”.

14    By deeds of variation dated 31 January 2006, 8 February 2006 and 15 February 2006 the parties to the 18 January 2006 deed of novation agreed to vary its terms so that the effective date became 14 February 2006 and so that certain conditions precedent were waived.

15    In late January 2006, Australian Coal Technology, CCC and Millennium CHPP entered into a deed of novation whereby, subject to the novation of the head contract, Millennium CHPP would become a party to the CCC subcontract in place of Australian Coal Technology. By clause 1.1, this took effect on the same effective date as the 18 January 2006 deed of novation with respect to the head contract, 14 February 2006.

16    Neither Millennium nor Millennium CHPP became a party to a contract with ShoreForm. Millennium CHPP now stood in contractual relations with CCC and CCC remained obliged under its contract with ShoreForm to pay for the services provided to it by ShoreForm. Thus, if Millennium had paid ShoreForm directly for services ShoreForm provided to CCC, as a matter of contract and in the absence of any request by CCC, Millennium would have remained liable to pay CCC.

17    On 3 March 2006, Australian Coal Technology went into voluntary administration and on 26 May 2006 liquidators were appointed.

18    CCCQ was placed into external administration in October 2006.

Witnesses

19    The main witness called for ShoreForm was Mr Anthony Saba, the principal of ShoreForm Pty Ltd and of ShoreForm, who was located in Sydney and managed ShoreForm’s work at the Millennium mine remotely. Also called were Mr Ghayas Ramadan, formwork or project supervisor for ShoreForm and who was located on site in Queensland; Mr Henry McDonald, the owner and director of Centurion Construction Pty Ltd; Mr Kenneth Penfold; and Mr David Collins of the firm Altus Page Kirkland who gave evidence as an expert quantity surveyor. Mr Christopher Clancy, a principal of the firm Fraser Clancy Lawyers, solicitor on the record for ShoreForm, also swore an affidavit on the deed issue, which I consider at [161]-[199] below.

20    Mr Penfold was a representative of CCC and CCCQ. His evidence was largely limited to the deed issue. In January 2006 was a Director/Company Secretary of CCC. He deposed that as at May 2006 he was a director of CCCQ but did not make decisions about payments and could not write cheques or make any payments. At the time at which he gave evidence, he worked as a consultant for Mr Saba’s company ShoreForm Pty Ltd.

21    Further persons mentioned in evidence but who did not give written or oral evidence were: Mr George Karloveec, ShoreForm’s site supervisor; Mr Serge Ciaschetti, described as head of CCC and as the manager and controller of CCCQ; and Mr Anthony Clough of Australian Coal Technology. Mr Saba said in his evidence that Mr Clough was a director of Australian Coal Technology and his understanding was that he was looking after the Millennium project. As I have said, Mr Clough did not give evidence.

22    The main witnesses called for the respondents were Mr Stefan Mortenson, who gave evidence by videolink from Sweden; Mr Cameron Vorias; and Mr Tim Kelly, who gave evidence by videolink from Thailand.

23    Mr Mortenson was seconded to Millennium as project manager and agreed that, to all intents and purposes, in that role he was engaged by Millennium itself. He took instructions from Mr Vorias and Mr Kelly.

24    Mr Vorias was the general manager for Excel Coal in early 2006 and at the time of novation he took over as superintendent under the terms of the former contract between Excel Coal and Australian Coal Technology for the wash plant construction.

25    Mr Kelly’s evidence was that he was engaged by Millennium from mid-2004 to early 2007 as a consultant project specialist and was directly involved in managing the head contract with Australian Coal Technology.

26    An affidavit by Ms Julia Lawrence, solicitor, was read by the respondents on the deed issue, which I consider at [161]-[199] below.

27    The respondents served a report by Mr Neville Cottrell, quantity surveyor but ultimately did not call Mr Cottrell or tender his report. A joint report dated 30 March 2014, which Mr Collins and Mr Cottrell had prepared and which had been marked as Exhibit E, was not relied on by either party.

28    Another person referred to frequently in evidence was Mr Phil Toneguzzi. ShoreForm alleged that Mr Toneguzzi spoke on behalf of the respondents in early January 2006. An affidavit sworn by Mr Michael Spry dated 31 March 2014 was read. Mr Spry was employed by Peabody in the role of HR Manager Operations and, having referred to investigations made by him, deposed that he did not find any record of Mr Toneguzzi having been employed by any Australian Peabody company and said that he believed that Mr Toneguzzi had never been employed by an Australian Peabody company, including Millennium and Peabody. I find, as deposed to by Mr Saba, that Mr Toneguzzi, of H&M Engineering and Construction Pty Ltd, was the construction manager of Australian Coal Technology at the Millennium mine. As I have said, ShoreForm alleged that Mr Toneguzzi spoke on behalf of the respondents in early January 2006. In that respect I find that the affidavit sworn by Ms Lawrence on 3 April 2014 establishes that the respondents made reasonable attempts to locate Mr Toneguzzi and ultimately ascertained that he was working in Singapore, and made reasonable but unsuccessful attempts to contact him by telephone. I draw no Jones v Dunkel ((1959) 101 CLR 298) inference.

Brief chronology of events

29    The involvement of ShoreForm with work at the Millennium mine began in mid-June 2005 with discussions between Mr Penfold of CCC, on the one hand, and Mr Saba of ShoreForm Pty Ltd on the other.

30    I find that initially there was a contract between CCC and ShoreForm Pty Ltd and, as I have said, by late July 2005, CCC and ShoreForm Pty Ltd proceeded on the basis that CCCQ and ShoreForm were the parties to this contract in place of CCC and ShoreForm Pty Ltd. In what follows I shall refer to CCCQ.

31    As I set out more fully at [43] below, by early December 2005, ShoreForm was owed in excess of $500,000 under its contract with CCCQ.

32    On 4 January 2006, the following document dated 3 January 2006 (the 3 January 2006 Notice), under the logos of Millennium and of Australian Coal Technology, signed by Mr Tony Haggarty as Chairman of Millennium and by Mr Col Johnstone as Chairman and CEO of Australian Coal Technology, was received by ShoreForm at a “tool box” meeting. Mr Toneguzzi gave it to a number of people including Mr Ramadan of ShoreForm.

NOTIFICATION TO EMPLOYEES AND CONTRACTORS

MILLENNIUM AND ACT TO RESTRUCTURE MILLENNIUM COAL PREPARATION PLANT CONTRACT

Millennium Coal Pty Ltd (Millennium) and Australian Coal Technology Pty Ltd (ACT) have agreed to restructure the existing contract for ACT to design and construct Millennium’s coal preparation and handling plant (CHPP).

Millennium and ACT have agreed that Millennium will assume responsibility for completing construction of the CHPP. ACT will remain accountable for plant design and for the achievement of nominated plant performance during commissioning.

This restructure will involve the transfer of all sub-contracts associated with construction of the CHPP from ACT to Millennium. It is intended that these transfers will occur on 15 January, 2006. ACT and Millennium Management will be contacting all sub-contractors and suppliers shortly to make the necessary arrangements.

Millennium will honour all existing sub-contracts and commitments which it assumes from ACT and, with the support of its parent, Excel Coal Limited, is able to provide a high degree of financial security to sub-contractors and suppliers going forward.

The existing on-site management teams of Millennium and ACT will be merged. Stefan Mortenson will remain as Millennium’s Project Manager, with Phil Toneguzzi and Lyndon Harris continuing to manage construction. Details of the combined management structure will be finalised as soon as possible. In the meantime, it is business as usual.

Millennium and ACT want to emphasise that this contractual restructure is of a commercial nature and will not affect the on-site progress of the Project. We ask for your cooperation in implementing the changes as quickly and smoothly as possible, to ensure the Project continues to move forward as planned.

The representations

33    ShoreForm pleaded, in its amended statement of claim, that the following representations were made:

(a)    the contents of the 3 January 2006 Notice;

(b)    further, or alternatively, the Notice and oral representation made by Mr Phil Toneguzzi at the 4 January Meeting (together or individually referred to as “the 4 January Representations”);

(c)    further, or alternatively, the 4 January Representations and further oral representations made by Mr Toneguzzi at the 6 January tool box meeting (together or individually referred to as “the 6 January Representations”);

(d)    further, or alternatively, the 6 January Representations and further oral representations made by Mr Toneguzzi to Mr Saba by phone and by Mr Stefan Mortenson for and on behalf of the respondents and by Mr Karloveec on behalf of ShoreForm on 10 January 2006 (together or individually referred to as “the 10 January Representations”);

(e)    further, or alternatively, the 10 January Representations and further oral representations made by Mr Stefan Mortenson (representing both, or one of, the respondents) to Mr Saba by phone on 11 January 2006 (together or individually referred to as “the 11 January Representations”);

(f)    further, or alternatively, the 11 January Representations and further oral representations made by Mr Stefan Mortenson (representing both, or one of, the respondents) to Mr Saba by phone on 17 January 2006 (together or individually referred to as “the 17 January Representations”);

(g)    further, or alternatively, the 17 January Representations and further oral representations made by Mr Cameron Vorias and Mr Tim Kelly (representing both, or one of, the respondents) to Mr Saba by phone on 18 January 2006 (together or individually referred to as “the 18 January Representations”);

(h)    further, or alternatively, the 18 January Representations and further oral representations made by Mr Toneguzzi (representing both, or one of, the respondents) to Mr Saba by phone on 7 February 2006 (together or individually referred to as “the 7 February Representations”);

(i)    further, or alternatively, the 7 February Representations and further oral representations made by Mr Mortenson (representing both, or one of, the respondents) to Mr Saba by phone on 10 February 2006 (together or individually referred to as “the 10 February Representations”).

34    It was alleged that by these representations both or either of the respondents represented in trade or commerce to ShoreForm that:

A.    ShoreForm would be paid the CCC debt by the respondents, or either of them;

B.    ShoreForm could continue with providing formwork services for the CHPP as instructed or directed by Mr Toneguzzi on the terms and at the rates which it had agreed with CCC without fear of not being paid because the respondents, or either of them, would ensure or guarantee that ShoreForm would be paid for all work done by ShoreForm and would pay for that work if CCC did not pay ShoreForm.

The evidence

35    The evidence of Mr Saba, including his oral evidence, was as follows. He swore a number of affidavits being those made on 29 November 2012, 28 March 2014, 3 April 2014, 6 June 2014, and 18 June 2014. I required that evidence of disputed conversations be given orally.

36    On 5 December 2005, Mr Saba wrote to CCCQ and CCC, attention Mr Penfold, with the title “Issues That Have Been Developing in the Past Few Weeks”. So far as relevant to the Millennium project, the letter was as follows:

As you are aware there are a number of serious issues that have been developing over the last few weeks, these issues impact our confidence on moving forward with the project, we list them as follows.

1.    Resources Generally,

…

2.    Monies Outstanding

2.1    Today there is $893,000 odd outstanding

[the amount referable to the Millennium mine was stated to be $589,945.64]

2.2    The failure to make payments as per our agreement constitutes a substantial breach of that agreement, as you are aware we have both common and contract law rights, we reserve our right to exercise these in due coarse. (sic)

3.    Project Co Ordination,

…

Given the substantial variations, changes, and breaches to our agreement, we now elect to draw a line in the sand as of today 5pm Monday, 05 December 2005.

Moving forward – Option A or B

Moving forward from today ShoreForm will either A, walk away, or B, continue to work on dayworks as directed, either option attracts significant extra cost loss and damage.

We require payment of these extra costs and all outstanding monies by the 5pm Tuesday, 06 December 2005

Option A – ShoreForm’s Walk Away Costs $1,687,400.00 now claimed and invoiced

…

Option B – Continue to work as directed, extra cost $1,573,400.00 now claimed and invoiced

…

To move forward from here on Dayworks we also need

a.    Agreement that from 5pm Monday, 05 December 2005 all works performed by ShoreForm will be on a Dayworks basis, with downtime provisions as they stand.

b.    All Daywork dockets to be signed by ACT primarily and countersigned by [C]CCQ

c.    A written confirmation from ACT, and the owners of the Newlands and Millennium mines that they will underwrite and guarantee all monies owed to ShoreForm on theses (sic) jobs and that all such payments will be made within 14 days of the Invoice dates

d.    a written agreement from ACT that they will certify the dayworks at the rates as per our letter dated Thursday, 6 October 2005, being our proposed ordinary time rate $90.00 and overtime rate $105.00 or other new rates as negotiated to fully cover the Proposed EBA

…

We are negotiable in relation to our current stand.

Please get back to us we want to work with you guys and try and end this and or continue in a harmonious and productive fashion.

I find that the idea of a guarantee to be given by either Australian Coal Technology or Millennium or Peabody came from Mr Saba of ShoreForm.

37    Mr Saba gave evidence that as at 5 December 2005 he had lost confidence in Australian Coal Technology’s reliability in making progress payments and in Mr Ciaschetti and CCCQ passing on the payments to ShoreForm.

38    Mr Saba’s oral evidence in chief as to a telephone conversation on 6 January 2006 with Mr Clough was as follows. As I have said, Mr Clough was a director of Australian Coal Technology and he was looking after the Millennium project.

Doing the best you can, can you tell his Honour what you said to Mr Clough and what he said to you about the subject matter that you spoke to him about? What did you speak to him about? --- I spoke to him about the fact that there were these rumours going around the site that ACT were going to get taken over. I spoke to him about the – at that time I was owed a significant amount of money on Millennium and Newlands, and they were both his jobs, and that money was owed by [C]CCQ, but I had lost confidence in getting paid by [C]CCQ.

Did you tell Mr Clough that?---I told Mr Clough that, and I also told him that Christmas was coming because this is at 5 December, so, in my mind, I’m wondering how the – how I’m going to be able to cash flow this large resource commitment I had on Newlands.

Well, that was what you had in your mind, but did you speak to Mr Clough about that? --- Yes. I spoke to - - -

What did you say to him? --- I said to him something like, “Christmas is coming around the corner. I’m going to have to fork out a lot of money for Christmas for these people, you know, and I’ve got no faith that [C]CCQ is going to pay me.”

Did you ask him to do anything? --- I said to him, “I’ve got no faith [C]CCQ is going to pay me. I’m trying to work out myself what my best position is”, and he responded to me words to the effect of, “It’s very important that we maintain progress onsite, Tony.” Something like, “[C]CCQ are in the process of being paid”, or, “We’re processing claims.” He was aware that there was some outstanding moneys, and he - - -

Did he tell you that?---Yes.

Right. What did he say? He was aware of what?---That there was some money outstanding. Money was – you know, money was an issue.

Right? --- And he gave me an undertaking that if [C]CCQ didn’t pay me, that he would ensure that I would be paid, and he specifically - - -

In relation to that undertaking that you’ve just told his Honour about, what did he actually - - -? --- He said words like, “Don’t worry. If [C]CCQ don’t pay you, I will make sure they pay you.”

What did you say when he said that? --- I said - - -

Did you say anything when he said that?---I did. I said, “As long as you guarantee that I’m going to be paid, I will keep smashing the job for you.”

Smashing? --- Well, words – I mean, they’re my words. When I say that, I mean I will ensure that, you know, I provide your project with ample resources to ensure that whatever your program requirements are – you know, aka smashing the job.

And when you told him that, did he say anything? --- He did. He – he did say to me, “Look, can we – can we keep this” – he said, “I would suggest we keep this between ourselves. We don’t want to upset [C]CCQ. In particular, we don’t want to upset Serge [Ciaschetti].” Serge was the boss at [C]CCQ, and, you know, he really didn’t want to – didn’t want to upset the apple cart there.

Was there any other part of that conversation that you can recall, or have you exhausted your memory about that? --- No. I think we’ve pretty well covered all of it.

39    There was cross-examination of Mr Saba on this point as follows:

Now, on the same day as sending this letter you had a telephone conversation with Mr Clough of ACT? --- That’s correct.

Correct. And during that telephone conversation Mr Clough confirmed to you that ACT was behind in its payments to CCC[Q]?---That’s correct.

And that corroborated what Mr Penfold had told you the week earlier, correct, namely, that CCC[Q] weren’t paying you because ACT hadn’t paid them?---Yes.

You certainly did not say to Mr Clough in your discussion with him on 5 December 2005 that you had no faith that CCC[Q] was going to pay you, did you? --- I told him that I had grave concerns. I definitely told him that. I just want to go back to context. I’m on a 14-day payment deal, and at no time was I meant to be the finance company funding these coal mine developments to the tune of $890,000 that I made here. That wasn’t the deal. That wasn’t my deal. I’m not a finance company. I’m providing formwork services. 14-day payments.

When you spoke to Mr Clough on 5 December – I think you already told us that he told you that ACT was behind in its payments to CCC[Q]?---Yes.

You understood that that was the reason for CCC[Q] not paying ShoreForm, correct?---Yes.

At that point in time, 5 December 2005, you had absolutely no reason to believe that CCC[Q] would not pass on to your company what it was owed when CCC[Q] received payment from ACT, correct?---I had some reason to believe it. I had some reason to start suspecting, but Clough confirmed it. Clough said some other things, so that, you know, regardless of whether they actually paid [C]CCQ or not, he said that, you know, I wasn’t to worry and he would make sure that I got paid, so.

Well, there wasn’t any issue in your mind as at 5 December 2005 of CCC[Q] not paying you unless ACT didn’t pay CCC[Q], correct?---No. I’m sorry, but I really can’t cast my mind back to 5 December because I know that subsequent to that period I had lost total faith in [C]CCQ paying me, so I lost total faith in [C]CCQ paying me here. I had total faith in [C]CCQ paying me here, and there’s a transition point, and we’re about to hit it if we haven’t already hit it, okay, and I don’t know – without looking at all the documents, looking at it in context, I don’t know, but it’s around this time.

You certainly don’t have any file note of your conversation with Mr Clough of 5 December 2005, correct? --- I don’t know. I don’t know if I do or don’t.

…

Mr Saba, the basic problem, as you understood it, as at 5 December was that ACT were late in paying CCC[Q], and that’s why CCC[Q] weren’t paying ShoreForm. That’s right, isn’t it? --- Certainly, that’s what I was told.

40    It was not put that Mr Clough was speaking on behalf of either of the present respondents. More importantly, I find that Mr Clough did not say that Australian Coal Technology guaranteed that any amounts owing by CCCQ to ShoreForm would be paid by Australian Coal Technology and he did not represent that Australian Coal Technology would pay any amounts owing by CCCQ to ShoreForm if CCCQ did not pay those amounts to ShoreForm. Mr Saba’s evidence in chief did not rise that high. It is, however, the first of a number of occasions by reference to which ShoreForm claimed that there was a promise by an entity with which ShoreForm was not in a contractual relationship to pay ShoreForm amounts owing to it by CCCQ with which ShoreForm was in a contractual relationship. These conversations followed from the suggestion of a guarantee made by Mr Saba to Australian Coal Technology in the letter of 5 December 2005, which I have set out at [36] above.

41    Mr Saba deposed that on 6 and 9 December 2005 CCCQ paid ShoreForm a total of $396,742.32.

42    ShoreForm closed for Christmas on Wednesday, 21 December 2005. The Christmas shutdown for the Millennium project was from 22 December 2005 to 2 January 2006.

43    As at 22 December 2005, Mr Saba deposed, the outstanding balance owed to ShoreForm for the works at the Millennium project was $570,356.32.

44    Mr Saba deposed that on 3 January 2006 he had decided to engage the Construction, Forestry, Mining and Energy Union (the CFMEU) to put pressure on Australian Coal Technology’s Anthony Clough and Millennium and to take legal action if necessary against CCCQ and Australian Coal Technology to obtain payment, and he was considering putting his men in the sheds until ShoreForm was paid what was owing or a contract and/or a guarantee of payment was formalised. He said he was also considering pulling out of the project to cut ShoreForm’s losses.

45    The first day of work after the Christmas break was Wednesday, 4 January 2006. I have set out at [32] above the terms of the 3 January 2006 Notice received by ShoreForm on 4 January 2006.

The 3 January 2006 Notice

46    Before turning to the oral evidence of the pleaded representations, I consider ShoreForm’s claim that the 3 January 2006 Notice itself constituted a misrepresentation. In my opinion, a correct reading of the 3 January 2006 Notice, both by reference to its terms and its context, does not support ShoreForm’s contention. The context was the lack of performance by Australian Coal Technology with which Millennium was in a contractual relationship. In my opinion, that was the context in which the 3 January 2006 Notice was given by Mr Toneguzzi to Mr Ramadan, as more fully set out at [50] and [52] below. The reference to “the transfer of all sub-contracts associated with construction of the CHPP from ACT to Millennium” is a reference to those in a contractual relationship with Australian Coal Technology. This is confirmed by the statement “Millennium will honour all existing sub-contracts and commitments which it assumes from ACT” (emphasis added). I do not accept ShoreForm’s submission that the use of the word “suppliers” is to be construed as including an entity such as ShoreForm which was not in a contractual relationship with Australian Coal Technology. It is not at all apparent that at that time Millennium was aware that ShoreForm had not been paid by CCCQ. The first documentary evidence to that effect was the letter dated 28 February 2006, received by Millennium on 1 March 2006, to which I refer at [92] below.

47    I reject ShoreForm’s submission that the 3 January 2006 Notice made it clear that Millennium would honour all existing commitments which it assumed from Australian Coal Technology not just all existing subcontracts. As I have found, there were no such relevant commitments by Australian Coal Technology to ShoreForm. I also reject the submission that the 3 January 2006 Notice made it clear that Millennium was able to provide a high degree of financial security to subcontractors and suppliers going forward to the extent that ShoreForm contended that it brought ShoreForm into the category of subcontractors and suppliers. There is, in my opinion, no reason to construe the Notice as dealing with more than the relationship between Australian Coal Technology and its subcontractors and suppliers.

48    I also reject ShoreForm’s submission that the phrase “all existing … commitments” was a representation which included the alleged commitment by Australian Coal Technology that it would not only guarantee payment to ShoreForm of any amount owing by CCCQ but also would guarantee payment for any future services provided by ShoreForm if ShoreForm continued work, which, as I have found at [40] above, was not made. I also reject the submission that the phrase “all existing … commitments” was a representation which included a commitment that ShoreForm could continue to provide formwork services as instructed or directed by Mr Toneguzzi on the terms and at the rates which it had agreed with CCCQ without fear of not being paid because the respondents, or either of them, would ensure or guarantee that ShoreForm would be paid for all work done by ShoreForm and would pay for that work if CCCQ did not pay ShoreForm.

49    I find the 3 January 2006 Notice representations as pleaded were not made.

The pleaded 4 January 2006 Representations

50    Mr Saba gave evidence that on 4 January 2006 he had a telephone conversation with Mr Ramadan, the ShoreForm supervisor at the Millennium project, and the conversation was as follows:

So I got a call from Gayaz [Ghayas Ramadan] very early in the morning, and he goes – he goes something like, “There was a big meeting this morning, big tool box pre-start, the whole site sitting in the sheds. They handed out some notice that said Millennium is taking over. ACT has been kicked off the job.” And – and – and so all our guys were sitting in the shed. So he goes – he goes, “What do you want me to do?” So I go, “Well, read the notice to me.” So he read me the notice, and, you know, [Ghayas]– I speak fluent Arabic. [Ghayas] is Syrian. We can communicate in Arabic together.

Was the conversation in Arabic, was it?---All my conversations with [Ghayas] are partly in Arabic, partly in English. Okay?

So you speak Arabic?---Fluently.

And [Ghayas] speaks Arabic?---He speaks Syrian Arabic.

Right. So doing the best you can, can you translate - - -?---Yes. I can translate.

- - - the Arabic into English for us?---He goes, “What do you want me to do?” I said, “Well, stay in the sheds. See what – you know, see what everybody else is doing.” So it wasn’t one conversation. It would have three or four conversations over an hour or two, and that conversation – those conversations culminating in him telling me that they were in their sheds, and Phil – this after the big meeting. We were still in our sheds, and Phil Toneguzzi came up to him, and he had the notice in his hand, and he gave it to [Ghayas] because Phil is going, you know, “What’s going, boys? Are you going to go to work?” He goes, “Well, you know” – because I told [Ghayas] that we hadn’t been paid. [Ghayas] was aware of the situation, and [Ghayas] told me that Phil told them Millennium is taking over. There’s no need to worry about payment. Excel and Millennium – sorry. Excel – ACT and Millennium are working out a situation where ACT is getting taken over by Millennium on site, and we should go back to work. And [Ghayas] goes, “What about the money we’re owed?” He goes, “Don’t worry about the money you’re owed. ACT – Millennium is going to guarantee payment for everybody.”

Was there any discussion about organisational changes on site?---There was some discussion about that.

What was the discussion about that?---Well, that Millennium had taken over and had taken over from ACT.

Now, you referred to the tool box meeting as [Ghayas] referred it to you. Was there any discussion about [Ghayas] attending that meeting?---Yes. There was – there was a discussion.

What did [Ghayas] say about his attendance at the meeting?

…

He – he said he attended the meeting with all the boys. It was a pre-start meeting.

Right. Did he tell you what happened at the meeting?---He said that Mr Toneguzzi and some other people from Millennium addressed the site, spoke about the – the – the notice – this is the 3 January notice – and, you know, basically read the notice and told the people that Millennium were taking over from Excel – sorry – Millennium were taking over from ACT, and, you know, it was business as usual.

Had you met Mr Toneguzzi before this or spoken to him?---We had had - - -

No. You personally?---I had never seen him. I haven’t personally met him, but I had spoken to him.

Right. Did you and Mr Ramadan talk about Mr Toneguzzi’s position after 4 March?---After 4 January.

Sorry. In the discussion to which you’re referring did you and Mr Ramadan speak about what Mr Toneguzzi’s position would be on the site?---[Ghayas] read the notice to me, and [the] notice says that he’s managing construction for Millennium.

51    In cross-examination about this conversation, Mr Saba’s evidence was as follows:

Can you go to tab 87, page 1543. Is that the notice which you received on the evening of 4 January?---That’s a copy of the notice, but that’s not the actual notice. My actual notice has got the fax transmission stuff at the top of it, but that’s the notice.

When you read the notice, you understood that Millennium and ACT had agreed to restructure the ACT contract to design and construct the plant, didn’t you?---Yes. That’s correct.

When you read the notice, you understood that the restructure would involve the transfer of subcontracts from ACT to Millennium?---That’s what it says. Yes, I understood that.

When you read the notice, you understood that it was intended that those transfers would occur on 15 January 2006?---That’s correct.

When you read the notice, you understood that Millennium was notifying that it would honour all subcontracts and commitments which it assumes from ACT. Correct?---There’s the other bit about:

ACT and Millennium management will be contacting all subcontractors and

suppliers shortly to make necessary arrangements.

Just pausing there?---Yes.

You understood the necessary arrangements to be the arrangements to transfer subcontracts from ACT to Millennium?---Well, the general arrangements spoken about in this notice. That’s right. It could be arrangements to provide a higher degree of financial security to subcontractors and suppliers going forward.

Well, didn’t you understand that the sentence referring to “make the necessary arrangements” - - -?---Yes.    

- - - was a sentence concerning the arrangements appearing in the immediately preceding sentences, namely, the transfers of subcontracts from ACT to Millennium?---I can see where it says that.

…

When you saw the reference to “make the necessary arrangements” in the notice, you understood that sentence to be referring to arrangements to transfer subcontracts from ACT to Millennium. Correct?---Well, no, not really. I understood it – it says:

ACT and Millennium management will be contacting all subcontractors and

suppliers shortly to make the necessary arrangements.

That’s what I understood, not just those subcontractors they’re transferring. Look, this notice obviously was drafted by, you know, some major, major barrister.

I’m just asking you what your understanding was - - -?---Well, no. It says - - -

- - - when you read - - -?--- - - - “will be contacting all subcontractors and all suppliers” – “all subcontractors and suppliers”. The previous – the previous sentence doesn’t mention suppliers. So no, I didn’t absolutely understand that.

So your evidence was that you understood that the necessary arrangements referred to in that sentence were not the transfers of subcontracts from ACT to Millennium referred to immediately above that sentence. Is that - - -?---Are you saying that’s what it says in my statement?

    …

I will have to go back. When you read the notice in January 2006 you understood Millennium and ACT had agreed to restructure the ACT contract, correct?---Yes.

When you read the notice in January 2006 you understood that the restructure would involve the transfer of subcontracts from ACT to Millennium, correct?---Yes.

When you read the notice you understood it was intended those transfers would occur on 15 January 2006?---Yes.

When you read the notice you understood that Millennium was notifying that it would honour all subcontracts and commitments which it assumed from ACT, correct?---Yes.

When you read the notice you understood that the transfer of subcontracts from ACT to Millennium was the mechanism by which Millennium would provide financial security to subcontractors and suppliers?---No. No, I – that’s not plainly expressed. No, I didn’t understand that. That’s not plainly expressed to me, okay. I’m sorry. I didn’t clearly understand that, but there are some other paragraphs that I clearly understood and sentences.

You certainly understood that CCC[Q] had a subcontract with ACT as at 3 January 2006, correct?---I understood that.

You certainly understood as at January 2006 that ShoreForm had a contract with CCC[Q] and did not have a subcontract with ACT, correct?---That’s correct. But in context to this notice, you know, I had employees there, I was a contractor, I was a supplier, and that’s how I read the notice.

After reading the notice you understood that pursuant to the arrangements set out in the notice ShoreForm would have to continue relying on CCC[Q] to pass on payments that CCC[Q] received, didn’t you?---Not so much from the notice, but from my discussions with subsequent people I understood that, absolutely. I understood that.

Mr Penfold and you had a discussion shortly after this notice in which you discussed

that matter, correct?---That’s correct.

Mr Penfold said, “We’re still going to have to deal with ACT”?---That’s correct.

And ShoreForm would still have to rely on CCC[Q]?---That’s correct.

To receive ShoreForm’s payments, correct?---Is that what it says in my statement? Does it actually say that?

Well, isn’t that the conversation – the substance and effect of the conversation that you had with Mr Penfold?---Mr Penfold said we have to continue to deal through ACT.

When you read the 3 January notice in January 2006 you understood that Millennium and ACT were intending to finalise a merger of the onsite management teams as soon as possible, correct?---No. No, because at the time of reading the notice on January 5 I was already under the impression that Phil Toneguzzi and Stefan Mortenson were running the job for Millennium. That what I was under the impression. When I read the notice in January 4 that’s what I thought the notice says regardless of – you know, if you break it down, it actually says, “We will be merged, blah, blah, blah”, but I had the understanding from discussions with [Ghayas] that Toneguzzi was running the job for Millennium, so when I read the notice that’s what I read.

So are you saying that you didn’t rely upon what the notice said, but rather upon what Mr Ramadan told you as regards the arrangements of the onsite management teams?---No, I relied on the notice and my – just conversations. I relied on both of them. We were talking about January 4. Now in 2014 after, you know, obviously, people have told me that the notice says this, this and that, now I can see the notice doesn’t say that. The notice doesn’t say that.

Doesn’t say what?---It doesn’t say Stefan Mortenson will remain as project – and Phil Toneguzzi and continuing, you know – once the merger occurs – because they’re saying once – what the notice is saying is after this novation that’s what’s going to happen, but in actual fact that’s not what happened. In actual fact what happened onsite is there was this grey zone, this transition period between January 4 and February 15. February 15 is when the effective date of the – I only know this because of the documents they’ve shown me. The effective day is here in February 15, and in actual fact in this grey zone, regardless of what the notice says, Stefan Mortenson and Phil Toneguzzi ran the job for Millennium.

Well, I’m just asking you about your understanding – if you have one – when you read this notice in January 2006. Can you try and just focus on that period?---Yes, I will. I will, I will. I’m sorry.

I know it’s hard because you cannot separate out what has happened subsequently. Is that the difficulty?---No, it’s just the reality is that that isn’t what happened.

Well, when you read the notice in January 2006 carefully, as you say you did, you understood that Millennium and ACT were intending to finalise a merger of the onsite management teams as soon as possible?---Yes.

And you understood that in the meantime it was business as usual?---Absolutely. Absolutely.

…

Now, very soon after receiving and reading the notice, you had a discussion with Mr Penfold about the notice. Correct?---Yes.

And Mr Penfold told you that CCC[Q] still had to deal with ACT until the restructure was implemented. Correct?---Yes.

You agreed with him? Correct?---That that’s what [C]CCQ had to do?

Yes?---Yes. Yes.

And you understood you had a contract with CCC[Q], I think you’ve already agreed with me. Correct?---Yes.

You understood at the time that you had the discussion with Mr Penfold in early January 2006 that ShoreForm would have to continue to rely upon CCC[Q] to be paid, at least until the restructure was implemented. Correct?---No, no, no. No, I didn’t understand that. So after I get the notice, I was speaking to Penfold, and, okay, we’re talking about the notice, but we’re talking about my 570,000 bucks that I’m – that I’m outstanding. So, you know, no, I didn’t understand that my sole source of receiving financial remuneration for my work on Millennium was [C]CCQ, absolutely not, after reading the notice, and specifically because I have Mr Clough promising me that I would get paid. Now, [C]CCQ have already missed payments. They’ve missed payments. They’ve broken promises of payment.

I see. So the point at which we – I withdraw that. You thought you had an entitlement to obtain payment from ACT because Mr Clough had - - -?---That’s right.

- - - given you certain oral promises, you say?---That’s right. That’s – and – and made good on them.

When you say “and made good on them”, CCC[Q] had made payments to you in December 2005?---Yes, which was the promise that Mr Clough gave me. He promised me that he would make sure I got paid. I got paid. Two days – three days after he says, “I promise you will get paid,” I got paid.

So as at January 2006, you believed you had a right to be paid by ACT pursuant to a

telephone conversation that you had had with Mr Clough in December 2005? Correct?---A month ago, yes.

And you also understood as at early January 2006 that you had a contract with CCC[Q] under which you were entitled to be paid for work? Correct?---That’s correct.

You understood that CCC[Q] had a contract with ACT? Correct?---Correct.

You understood that following receipt of the notice, CCC[Q] would still have to deal with ACT to get paid until the arrangements were completed? Correct?---That’s correct.

And you also understood that even once the arrangements were completed, they would involve the transfer of CCC[Q]’s contract with ACT to Millennium. Correct?---Is this at the time when I read the 4 January notice? Are you saying do I – did I understand that? When you say – or when I spoke to Penfold I understood that?

Immediately following your conversation with Mr Penfold - - -?---Yes, yes. Did I understand - - -

- - - your understanding was that even once the restructure of the ACT contract referred to in the notice had been implemented - - -?---Yes, yes. Yes, yes. And

- - - ShoreForm would have to continue to rely on CCC[Q] to get paid because CCC[Q] had a subcontract with ACT but ShoreForm did not. Correct?---What I understood was I had the commitment of ACT. I had – I had this – this – this “Don’t worry. You will be paid. Go out and smash the job.” I had this:

Millennium and ACT want to emphasise that this contractual restructure is of a commercial nature and will not affect on-site progress of the project.

That’s what I understood. I understood – what I understood was that I had promises that if I smashed the job, I would get paid. What I understood was if I had sat my men in the sheds and suspended work because of the breaches of contract by [C]CCQ for non-payment, that I would have forced my hand, and I would have guaranteed payment because of all this – all these – all these high degrees of security. That’s what I understood.

52    Mr Ramadan’s evidence of his conversations with Mr Toneguzzi and his telephone conversations with Mr Saba was as follows:

All right. Now, when you rang Mr Saba do you recall what you and he spoke about?

Do you remember what the conversation was between you and Mr Saba?---Yes, exactly.

What did you say to him?---I said to him, “Look, all the boys onsite from different contractors they sitting in the shed. They was mentioning something, they didn’t get paid, or, like, they on the strike”, so and I told him, “What do you want us to do because we get paid, so it’s your call?”

So you had been paid over the December break, but others weren’t, and they were in the sheds?---Yes, they didn’t get paid.

You asked Mr Saba what he wanted you to do. What did Mr Saba say?---He said to me – said to me, “Get the boys in the shed”, so he told me, “I pay you guys, but I didn’t get paid, so I’m still waiting, so get the boys to sit down in the shed.”

All right. So what did you do?---I called the boys. I said, “Stay in the shed. We’re waiting for the call what’s going to happen.”

Right. How many people did you have under your supervision at that stage, Mr Ramadan?---Between 18 to 21. Yes, I remember exactly.

So having told them, then, that you should sit in the shed, did you go and sit in the shed?---Yes ..... with them.

All right. Now, what time did you have the conversation with Mr Saba that morning?---Around –between 6 to 6.30.

Did something happen shortly after you went into the sheds?---Yes ..... from ACT, he come down ..... - - -

…

… Mr Toneguzzi from ACT, had you met that gentleman before?---Yes, I – I met him before.

And in what circumstances had you met him? Who was he, so far as you understood?---He was – he was ..... construction manager for ACT.

And what did you see him do on the site? What was his job?---We see him very much every day, inspecting all the – all the work. Walk through all the jobs. Sometimes walk through the ..... go – go through the program we do every day.

Right. Now, when you saw Mr Toneguzzi that morning, what happened?---Yes. He was – he was ..... a note. I don’t know. It’s maybe some – something happened ..... that’s what he ..... bring the paper with him. He said to me, “Look, I know some people – some people here on the shed, they mentioned they didn’t get paid or something.” I said, “Look, I call my boss. We get paid. But your guys, you didn’t pay them.” He said to me, “Look, I give you this notice. Just give it to Tony. Call him, or read it through the phone for him.” And that, “We got to get this problem solved. So get the boys back to work, and we can sort that problem later.”

…

I’m showing you this document. Have you seen that before?---Yes. That’s the one.

What do you mean “that’s the one”?---That’s the one Phil – Phil had give to me on the – on the 4th, on the morning.

And where were you when he gave it to you?---In the shed. Yes.

All right. Do you recall any other discussion with Mr Toneguzzi at the time when he

gave you the notice?---No. I told him, “Look ..... give me this.” And he told me to ring Mr Tony, and I told him about that, and, “Let’s get the boys back to work .....

get the boys back to work,” go discuss that with my boss. So I called Tony. He told

me, “That’s okay. Stay in the shed till I ring you.” And - - -

All right. Did you do anything with this document?---Yes. I faxed it on afternoon when I get back from ..... I fax it to my boss.

Now, Mr Toneguzzi told you to read it to your boss; is that correct?---To Tony. Yes.

And did you do that?---I did.

When did you do that?---It’s in the morning, when I told him.

And did you read it word for word? What did you do?---No. I read some – some of it ..... first couple of ..... something. Tony told me, “I know what that means. That’s just - - -“

Do you remember what part of this you read to Mr Saba?---Yes. The first – the first stage.

Can you just tell his Honour what parts of this you read?---You want me to read it? Yes.

Just read the bits that you read to Mr Saba, would you?---Yes:

Millennium Coal Pty Ltd – that’s Millennium – and Australian Coal Technology Pty Ltd (ACT) have agreed to structure the existing ..... for ACT to design and ..... the Millennium Coal preparation and … CHPP.

That’s what I read for Tony.

Right. Is that all you read? Or did you read any more?---To be honest, I can’t remember. But I didn’t read it all.

So you can’t remember what parts – is what you’ve just said to his Honour that you can’t remember what parts you read?---Yes.

But you didn’t read it all. Is that what you’ve just said?---Yes. Yes. I didn’t read it all the way to the end, so. Actually, I can’t remember if I read it all.

Right. Did you have any other discussion with Mr Toneguzzi that day?---Yes, we did.

All right. How many times did you speak to Mr Toneguzzi that day?---He was – he was speaking to everyone. There were other contractors, as well, on site. So maybe four/five – four to five times in the morning.

Were all the workers in the one shed? What were the arrangements up there? Was there one shed for all the workers? How was it - - -?---No. It’s like – there’s, like, three to five sheds there ..... whatever. So they – every contractor, they got their own sheds.

And did you have your own shed?---Yes.

Right. The times when Mr Toneguzzi saw you later that day, do you recall what he said to you, or what you said to him?---Yes. So from ..... we sit down ..... the shed, I think, for another half an hour to hour. And he – he came back to us, and said, “Look, we’ve got to – I’m running this site. So I want – I want the boys to go back to work.” I told him, “It’s not my call. It’s my boss call.” And ..... some other conversation, he came down and said, “Look, I called Tony. Everything is going to be okay. I promise him. So we agreed we’ve got to pay all the contractors on site. ACT, that’s finished. Millennium is taken over. So I’m working now with Millennium.” Sorry. Before that – before that, he told me, when he give me this note, he told everyone – he called everyone outside ..... “Look, we’re going to have a big ..... meeting in the side office, and we get back to you.” And I think when he came to me maybe he called Tony ..... so he told me, “I told Tony all the problems can be solved.” So ..... guarantee he going to pay everyone on site ..... contractors.

Did you go to the tool box meeting?---What? In the side – the side office?

Yes. Yes?---No .....

Right?---It’s only for the management.

Do you recall any other discussion with Mr Toneguzzi that day, that is, 4 January?---Yes. When – when he told me that’s – he called Tony about all this agreement ..... he said ..... going to guarantee the payment. So I – I called Tony straight away. I told him, “Look, he said to me this,” blah, blah, blah. And - - -

Sorry. Unless you said “blah, blah, blah” don’t say that?---No. So the whole - - -

We want to know what the conversation - - -?---Sorry. So I said to him, “Look, he told me to call you, and he guaranteed the payment for everyone on site. So is that correct?” And Tony said, “That’s okay. Get the boys back to work.” And we – “And ..... ring me if anything happen.” So that’s ..... do every day.

And did you go back to work?---Yes. We did.

Did everyone else go back to work that day?---No. No. It’s only us.

Right. What other workers remained in the sheds, and didn’t go back to work that day?---Look ..... not all the boys come back on that day. So there’s still some people coming the next day or something. But, for that day, it was, I think – I think H&M boys, or Commercial Concrete boys, were still – was still in the shed.

And did you tell Mr Saba that other people were in the sheds, or not?---Yes, I did.

When did you do that?---Straight away in the morning. When we go back to work, I said, “Look, we’re ..... back. But the other – but the other contractors, they’re still in the – in the shed.”

Is it after you went back you - - -?---Yes. After we started working.

What, during the day, or at night, or when was that?---No. During the day. Around 9, 9.10, something ..... – when we start working.

And when you rang him and said, “We’ve gone back to work, but other contractors are still in the sheds,” what did Mr Saba say to you?---He said – he said to you, like, what Phil told me ..... the payments are going to be guaranteed. So we are there to do the job to work, not to ..... So ..... keep going working ..... next couple of days.

And did you give the men directions to go back to work?---Straight away. Yes.

You did that? You told them - - -?---I did. Yes.

Do you know the notice that I asked you to read a moment ago?---Yes.

Have you still got it in front of you? What did you do with that notice?---I faxed it to Tony.

When did you do that?---After work.

After work?---Yes.

And where did you fax it from? Did you have a fax machine, did you?---No. From the camp; from the Neebo ..... camp. That’s where we stayed.

Right. Neebo – where was Neebo? Neebo was away from the mine, was it?---Yes. It’s away from the mine. About hour – hour away.

53    In cross-examination, it was put to Mr Ramadan that the events of 4 January 2006 took place eight years before and that his memory about what had happened on that day was not very good. Mr Ramadan agreed that his memory was not a hundred per cent but he remembered “that’s the reason what happened in that – in the job.”

54    The evidence of Mr McDonald is also relevant to these events. He was present at the meeting on 4 January 2006. His recollection was as follows:

And do you recall [Ghayas Ramadan] being present at that meeting, being one of the ShoreForm workers?---Hundred per cent surety – not sure. Like, it was a big meeting held, and you’re really racking your brain. I was – you know, we were all called into this meeting to say that we’re going to be taken over. So to be a hundred per cent perfect, I can’t say yes.

When you said in your statement that you remember the ShoreForm workers, who do you recollect from ShoreForm being there?---The only one I really thought was there was [Ghayas]. I can’t - - -

That’s your - - -?---Yes.

All right. Now, at that meeting, did someone speak to those that were there?---Toneguzzi. Phil Toneguzzi was the – the main speaker.

Right. Doing the best you can, do you recall the exact words that were spoken by Mr Toneguzzi?---He was basically saying that ACT is being terminated, and they’re going to be taken over by the main contractor, and basically we – it was business as usual. We carry on, and we’ve got no worries. Just – he’s going to be working for them also, and a few of the other guys are going to be moved over. And basically that was the conversation sort of thing.

…

Was there any discussion about how arrangements might be restructured on the site?---There was a word called “novation” or something like that.

Do you recall what was said about that?---Just that word sort of sticks out to me. There was going to be a novation, and further details are going to be sent to us.

Was the issue of payment discussed?---Yes, because a few of the guys there weren’t paid, and they were sort of hanging on.

What was said on the subject on payment, if anything?---My recollection – Phil just sort of reassured us that all things are going to be good, don’t worry about it, because I hadn’t been paid either.

What did he say when he reassured you? Can you remember more or less the words?---More like business as usual. Everything is going to be sort of taken over by the main contractor.

Do you recall anything else that Mr Toneguzzi might have said that day?---Basically “Don’t worry about it. Let’s get back into it,” basically.

55    In cross-examination Mr McDonald was asked and answered as follows:

Is the position, Mr McDonald, that you really have no memory one way or another as to whether Mr Ramadan was at the meeting to which you’ve referred or not?---That’s correct.

…

Do you accept that your recollection of the events at the Millennium site in January 2006 to which you’ve referred is very hazy, to say the least?---Well, that could be correct, yes, because it’s a fair while ago.

56    I find from this evidence that what was said was in the context of the 3 January 2006 Notice and referred to the position of those in contractual relations with Australian Coal Technology, rather than the position of ShoreForm or indeed other sub-subcontractors. I find that Mr Toneguzzi did not say to a representative of ShoreForm “Millennium is going to guarantee payment for everybody.” So to say would be inconsistent with the 3 January 2006 Notice and, in my opinion, it is inherently unlikely that Millennium would seek by these means to override the contractual arrangements between CCCQ and ShoreForm. As I later state, at [133] below, I find that Mr Kelly, at Millennium, knew of the contractual arrangement between CCCQ and ShoreForm and that ShoreForm was a sub-subcontractor. What Millennium was concerned with was the removal of Australian Coal Technology and the debts that Australian Coal Technology owed to its subcontractors. I do not accept Mr Saba’s evidence that he did not understand that what Mr Ramadan told him on 4 January 2006 that Mr Toneguzzi had said was referable to the arrangements referred to in the 3 January 2006 Notice. Neither do I accept Mr Saba’s evidence that he understood the 3 January 2006 Notice to be a guarantee by Millennium of payment of all money past, present or future for everyone supplying resources to the Millennium project, including ShoreForm. I accept that Mr Saba was concerned about payment by CCCQ to ShoreForm and I accept that Mr Toneguzzi and Millennium were keen to have the works, including the formwork, continue. However, having seen and heard Mr Saba and Mr Ramadan in the witness box, I am unpersuaded that Mr Toneguzzi said that Millennium, or Excel Coal, would guarantee that ShoreForm would be paid.

57    I reject ShoreForm’s submission that on or about 4 January 2006, Mr Toneguzzi provided Mr Ramadan with an assurance that Millennium was going to guarantee payment for everybody on site.

58    I find the 4 January Representations as pleaded were not made.

The pleaded 6 January 2006 Representations

59    Mr Saba gave evidence of a telephone conversation on 6 January 2006 with Mr Toneguzzi in which, Mr Saba claimed, Mr Toneguzzi provided a further assurance that the respondents were guaranteeing payment. The evidence was as follows:

Right?---But because it was after Christmas and resources were being remobilised after the Christmas break on 6 January a reiteration of what happened on 4 January happened.

Before you do that, there was a tool box meeting on the 6th, I think you say. Did you speak to Mr Ramadan?---Yes, he rang me in the morning, and he goes, “Tony, everybody is sitting in the sheds again”, and I go, “What happened?”, and he goes, “Blah, blah, blah, you know, everyone’s sitting” - - -

No, no?---No, no. He goes, “Everyone is sitting in the sheds. Phil has addressed the site again.”

Who did you understand Phil to be?---Phil Toneguzzi is a – addressed the site again. He has spoken about the notice, and, you know, he said that – he told me that Phil had said that, you know, Excel and Millennium were guaranteeing payment, etcetera. I spoke to – and I said to him, “Well, you know” – I said to him – you know, I can’t recall what I said to him.

Thank you?---But that was the thrust of the conversation. The thrust of the conversation was Phil addressed the site again, you know.

60    It is to be noted that this evidence of Mr Saba was of a telephone conversation he had had with Mr Ramadan as to what, according to Mr Ramadan, Mr Toneguzzi said to him. Yet Mr Ramadan himself gave no evidence of this conversation. Further, in cross-examination, Mr Saba agreed that he understood that Mr Toneguzzi was speaking to Mr Ramadan “generally in line with the notice” dated 3 January 2006.

61    In my opinion, Mr Saba’s oral evidence is an insufficient basis on which to find that Mr Toneguzzi made a representation on 6 January 2006 that Millennium or Excel Coal were guaranteeing either payments by them to ShoreForm or that CCCQ would pay ShoreForm. Mr Saba’s evidence is too vague for this purpose, and, in any event, Mr Saba accepted that Mr Toneguzzi was speaking to Mr Ramadan generally in line with the 3 January 2006 Notice which, as I have found, did not represent that the respondents would guarantee payments to ShoreForm.

62    As to Mr Saba's typed file note relating to the 6 January 2006 tool box meeting, its terms are as follows:

Discussions regard restructure of ACT on site.

All men and sub contractors told not to be concerned Excel Coal would guarantee they would be paid.

Excel wants the job to push forward and that the restructuring without ACT would not impact the progress of the job.

Excel were going to take ACT’s role.

In my view, this file note takes the matter no further. It can go no higher than Mr Saba’s oral evidence which, to repeat, was Mr Saba’s account of what Mr Ramadan had told him Mr Toneguzzi had said to Mr Ramadan, generally in the context of the 3 January 2006 Notice. The respondents submitted that the typed file note was not reliable evidence of anything said on site by Mr Toneguzzi on 6 January 2006 because Mr Saba, who wrote the file note, was not on site and no one who was on site gave evidence that Mr Toneguzzi said anything on 6 January 2006. I accept this submission. I reject ShoreForm’s submission that on 6 January 2006, Mr Toneguzzi provided a further assurance that the respondents were guaranteeing payment.

63    I find the 6 January Representations as pleaded were not made.

64    Mr Saba sent to Mr Clough of Australian Coal Technology an email dated 6 January 2006. The email was copied to CCCQ (Mr Ciaschetti) and Mr Penfold. So far as relevant, the email was as follows:

Anthony,

We have elected to address this issue with Australian Coal Technology Pty Ltd directly.

Given the events of recent weeks on our Newlands and Millennium Projects it is understandable that we (ShoreForm) are very concerned with the current level of outstanding invoices.

As shown below we are owed in excess of 1.4 mil

[There was then set out a table, the total in relation to the Millennium mine being shown as $570,356.32]

… ourselves committed in debt all over town, trying to carry this heavy financial burden, we are fully extended at the banks, with our employees and suppliers, the tax office, my family friends etc etc

[C]CCQ have always promised 14 day payments and [C]CCQ advised that you guys would help out cash flow wise when we were in trouble.

The last time I had the opportunity to address this issue with [C]CCQ’s Serge he offered to help was out with 50k, clearly, whilst the offer is appreciated it is well short of the mark.

The last payment received by ShoreForm was @ 12 December 2005, notwithstanding assurances of payments on the 15/12, 23/12, 30/12 and 3/01.

We are happy to put it all behind us and to move forward and work together but we need our money and or some form of structured payment plan and a guarantee from Australian Coal Technology Pty Ltd

We are practical people and want a timely and effective resolution, we do not want this to crystallize into an extended commercial dispute.

Please contact me soon to address these issues.

65    I note the reference to “[C]CCQ advised that you guys would help out cash flow wise when we were in trouble”. That statement, in my opinion, does not sit comfortably with the representations Mr Saba said in his evidence that Mr Clough made to him in the telephone conversation to which I now turn.

66    Mr Saba gave evidence that on 9 January 2006, he telephoned Mr Clough of Australian Coal Technology. His evidence of that conversation was as follows. Since it sets the context for subsequent events, I set out this evidence in detail:

And can you just tell his Honour how did it happen? Did he ring you? Did you meet on site? How was the conversation that day? How did it initiate? --- Following on from my conversation with Penfold I wrote an email to Clough which summarised my position.

Yes, don’t worry about that. I’m more concerned about the conservation? --- I rang Clough up.

Right. Okay. Thank you?---I rang up Clough.

Right. Yes, and can you just tell us what you and he spoke about in connection with your concerns and - - -?---Yes.

- - - cash flow and Millennium?---Yes. I said to him words to the effect of, “Did you get my email?” He goes, “Yeah, I got your email.” I said, “What’s happening with my payment?” No, no, just to go back, I said “You know following on from my email and our previous discussions I believe that you helped me get paid after our last discussions” because we had some discussions in early December about – about [C]CCQ not paying me so, you know, I thanked him for his help there, told him that a couple of days after we had the chat the payments came through and, you know, we did have a fair bit of conversation about Millennium – sorry, Newlands but I won’t mention that.

… I said to him “Mate, you know, as I sit here now, specifically in relation to Millennium I’m owed close to $600,000 and we’re in another position as we were a month ago whereby [C]CCQ haven’t paid me. They’ve made promises of payment. Those payments haven’t been forthcoming. Now, I hear about this – the January 3 notice, you know, the takeover”. I said “I’m getting very concerned now”, and he said to me in terms of Millennium he said to me “Look, there’s some payments coming through for [C]CCQ. You’ve got no reason to be concerned. ACT – Millennium and [Excel] are guaranteeing payment on this job and you’ve just got to make sure you perform onsite. Don’t worry about payment, and if [C]CCQ don’t pay you, I will make sure you get paid.” So that was the extent of the conversation with Anthony Clough on the Monday – Monday, 9 January.

Mr Karloveec only came back to work on 9 January 2006, I think, you tell us in the affidavit?---Yes.

And you deal with the facsimile you sent to him that day in your affidavit?---Yes.

Did you speak to him that day?---I – I spoke to him that day.

Yes. What did you say to him?---I said “Mate, we’re owed a hell of a lot money on –specifically about Millennium. We’re owed a hell of a lot money on Millennium. I’ve spoken to Anthony Clough. I sent an email to Anthony Clough. I want you to get – I am going to email you this”. Sorry, “I’m going to fax you this email” and faxing him this email means when he goes back to camp that night I fax him the email so I faxed him the email.

No, but don’t worry about what you did. What did you say to him?---I told him, “I am going to fax you the email, and when you get the email I want you go and see Stefan Mortenson and tell Stefan Mortenson how much money we’re owed and see how we are going to get paid.”

And was there a follow up conservation about that?---Yes, there was.

67    Again, Australian Coal Technology is not a party to the present proceedings and it was not put that Mr Clough was speaking on behalf of either of the present respondents. More importantly, I do not accept Mr Saba’s evidence that Mr Clough said to him that if CCCQ did not pay ShoreForm, Australian Coal Technology would pay ShoreForm. It is unlikely, in my opinion, that in the context of Australian Coal Technology making payments to CCCQ, Mr Clough would make an assurance which would in effect mean that Australian Coal Technology would pay twice. It is likely, in my opinion, that Mr Clough said what he had said before to Mr Saba, which was to the effect that he would help to get ShoreForm paid by CCCQ. There was also a file note of this conversation in Mr Saba’s diary for 9 January 2006. In my view, the diary note does not support Mr Saba’s version of this telephone conversation with Mr Clough. I also do not accept that Mr Clough said to Mr Saba that Millennium and Excel Coal were guaranteeing payment, meaning guaranteeing payment to ShoreForm. As I have said at [36] above, the idea of a guarantee from a party with which ShoreForm was not in a contractual relationship was Mr Saba’s and, in my opinion, that idea has coloured his recollection of the conversations on which ShoreForm founds its case.

The pleaded 10 January 2006 Representations

68    There was evidence given by Mr Saba as to a conversation on 9 or 10 January 2006 with Mr Toneguzzi as follows:

Was it – when was that? When did you speak to Mr Toneguzzi?---I believe it was the same day [as the conversation with Mr Clough].

All right. Thank you. Now, again, can you recall the precise words?---No, I can’t.

Can you recall the substance and effect?---No. Yes, the substance and effect.

Just tell his Honour – just tell his Honour the substance and effect?---I rang up Phil. I said, “Phil, I hear now – I hear you’re now looking after the job for Millennium.” He goes “Yes, that’s right, mate.” And I go, “Mate, we’re owed a hell a lot of money both on Millennium and on Newlands.” And he goes “Yeah, we’re owed a lot of money as well.” And I – and – and I said, “Well, what’s going to happen with ShoreForm’s payment?” He goes, “You don’t need to worry about payment. Millennium and [Excel] are going to make sure everybody is going to be paid. They’ve got heaps of money, and you just need to worry about performing the site.” I said, “Yeah, but, you know, what about my payment? I don’t have any faith in CCQ paying me anymore” and he said “Well, I would suggest you speak to Stefan Mortenson about that.”

69    In cross-examination, Mr Saba accepted that he did not record the contents of his conversation with Mr Toneguzzi in his diary or anywhere else. Mr Saba also accepted that had Mr Toneguzzi said anything to him during their conversation that Mr Saba regarded as helpful to ShoreForm, he would have written it in his diary. Mr Saba further accepted that when he had this conversation with Mr Toneguzzi, any reference that Mr Toneguzzi made to Millennium or Excel Coal making sure everyone gets paid was a reference to the restructure of the Australian Coal Technology contract generally as referred to in the 3 January 2006 Notice.

70    In relation to this conversation I find that Mr Toneguzzi did not represent to Mr Saba that ShoreForm need not worry about payment and that the respondents would make sure that everybody, including ShoreForm, would be paid. I reject the contrary submission.

71    There was a further pleaded representation referable to 10 January 2006. In his oral evidence Mr Saba said that he spoke to Mr Karloveec, ShoreForm’s site supervisor, and told him, with reference to the 6 January 2006 email to Australian Coal Technology (Mr Clough) I have set out at [64] above:

“I am going to fax you the email, and when you get the email I want you go and see Stefan Mortenson and tell Stefan Mortenson how much money we’re owed and see how we are going to get paid.”

And was there a follow up conservation about that?---Yes, there was.

…

- - - you spoke to Mr Karloveec?---I said to him, “Did you take the notice over to see – did you take the email to Stefan? Did you show it to him? Did he read it?” He goes “Yes, Tony, I read it. Stefan said “We’ve got no concerns. Millennium are guaranteeing payment. There are no issues. We will make sure you get paid.”

Can I - - -?---Can I just add that the crux of the email is that I made [sc. I’m owed] a hell of a lot of money and I am not getting paid by [C]CCQ. That’s the crux of that email.

72    The context, the subject matter of the email, concerned seeking a payment or a guarantee from Australian Coal Technology. In my opinion, the context makes it unlikely that Mr Mortenson said the words attributed to him by Mr Saba as relayed to Mr Saba by Mr Karloveec. I further note that Mr Karloveec was not called to give evidence by ShoreForm. Mr Mortenson’s evidence, given in cross-examination, was that he had a vague recollection of a meeting with Mr Karloveec and the question of payment being raised, but that ShoreForm’s invoices came through CCCQ and he did not have the means or authority to arrange direct payment to ShoreForm. I accept Mr Mortenson’s evidence and find that he did not represent to Mr Karloveec that Millennium was guaranteeing or would guarantee payment to ShoreForm.

73    I find that the 10 January Representations as pleaded, said to have been made by Mr Toneguzzi and, separately, by Mr Mortenson, were not made.

The pleaded 11, 17 and 18 January 2006 Representations

74    As to the representations claimed by ShoreForm to have been made by Mr Mortenson to Mr Saba by telephone on 11 January 2006, I consider the matter more fully below at [107]-[110]. For the reasons there given, I find that the 11 January Representations, as pleaded, were not made.

75    As to the representations claimed by ShoreForm to have been made by Mr Mortenson to Mr Saba by telephone on 17 January 2006, I consider these more fully below at [111]-[120]. For the reasons there given, I find that the 17 January Representations, as pleaded, were not made.

76    As to the representations claimed by ShoreForm to have been made by Mr Vorias to Mr Saba by telephone on 18 January 2006, I consider them more fully below at [125]-[128]. For the reasons there given, I find that the 18 January Representations, as pleaded, said to have been made by Mr Vorias were not made.

77    As to the representations claimed by ShoreForm to have been made by Mr Kelly by telephone to Mr Saba, on 18 January 2006, the oral evidence of Mr Saba being that that telephone conversation took place on 17 January 2006, I consider them more fully below at [129]-[136]. For the reasons there given, I find that the 18 January Representations, as pleaded, said to have been made by Mr Kelly were not made.

78    As to the balance of what was said on 11 and 17 January 2006 between Mr Saba and Mr Mortenson and on 18 January 2006 between Mr Saba and Mr Vorias, these conversations relate also to the claim the subject of the amendment, the alleged future contract misrepresentation, and I consider this evidence at [104]-[137] below.

The pleaded 7 February 2006 Representations

79    As to what was said by Mr Toneguzzi on 7 February 2006, Mr Saba’s evidence was as follows:

… I believe on 7 February I spoke to Phil Toneguzzi.

Right. I want to ask you about that conversation?---Yes.

So, firstly, do you recall the precise words?---No.

Do you recall the substance and effect?---Yes.

All right. Tell his Honour what you recall about that?---I rang up Phil. I said, “Morning, Phil”, and he goes, “Yes, morning, Tony”, and I go, “Look, mate, I’m still owed a bucket-load of money on Millennium”, and he goes, “Mate, we’re owed a hell of a lot of money as well.” When he goes “we’re” he’s talking about his primary employer, being H&M Engineering. Even though he’s in that role as the boss of Millennium. He goes, “We’re owed a hell of a lot of money as well”, but, you know, he goes, “But there is no concern for payment. Millennium have undertaken to pay everybody on the job”, and then I go – and then he says something like, “But what has happened, Tony, is that Millennium have decided that they no longer want [C]CCQ on the project, and as a result of that they’re getting rid of [C]CCQ, and [C]CCQ will be removed from the project today, and, consequently, because [C]CCQ is going you’re going to have to go as well. We’re going to have to terminate your arrangements.” He goes, “I’m very sorry for that. I’m very happy with the work you did. You did a good job. There’s no issues with ShoreForm, but we want to get rid of [C]CCQ, and, unfortunately, we have to get rid of you as well.” I go, “Mate, that’s not right. You guys – you know, I’ve brought all these resources up here. I’ve, you know, given you the benefit of all my resources and all my – and I’ve committed all these funds to the job, and it’s not right that you just flick me”, and then I go, “What about all my money that’s outstanding?”, and he goes, “You better speak to Stefan about that.”

80    There is a diary note of Mr Saba referable to 7 February 2006 and a typed file note. The diary note reads as follows:

Long telephone chat with Phil Tomaguzzu (sic), does not need our men on site, H&M are worried about payment too, no more ShoreForm on the job, said we should talk to Stefan.

81    The diary note does not support Mr Saba’s oral evidence that on that date Mr Toneguzzi said to him, in relation to ShoreForm, words to the effect that there was no concern for payment: Millennium had undertaken to pay everybody on the job. The typed version of the file note has more detail about other matters but relevantly states: “Phil told me to talk to Stephan about payment.” It does not support Mr Saba’s oral evidence as to the representation.

82    In cross-examination, the following exchanges occurred:

Now, you gave evidence yesterday that Mr Toneguzzi said to you during the 7 February conversation that there’s no concern for payment. Millennium has undertaken to pay everyone on the job. Do you recall giving that evidence?---That’s correct.

That, I suggest to you, is not what Mr Toneguzzi said during the 7 February 2006 conversation, is it?---Yes, it’s exactly what he said.

Well, you haven’t recorded anything about that in your typed file note of page 1936 correct?---That’s correct.

In your handwritten file note on page 1935 you’ve recorded that Mr Toneguzzi said that H&M, which was his company, correct?---Mm.

Was worried about payment too, correct?---That’s what it says in the file note.

What Mr Toneguzzi said to you during the conversation was that he was worried about payment as well as you being worried about payment, correct?---I don’t think H&M were worried about payment. H&M were in a much different position to ShoreForm. You know, worried about payment – they weren’t worried about payment like me. You know, I’m – they were in a very different position to me. They had a major contract. They had major – you know, they had 50 per cent of the people – well, you know, 25 per cent of the people onsite. They were doing all the mechanical equipment, and their contract – you know, the coal mine was never going to be commissioned without H&M – without H&M being secure. Look, I don’t know.

Mr Saba, had Mr Toneguzzi said to you on 7 February 2006, “There’s no need to be concerned about payment. Millennium has undertaken to pay everyone on the job”, you would have recorded that in either your diary note or your typed file note, wouldn’t you?---My file notes are very – these diary notes are very brief, and it’s not in the file note.

83    In my opinion, it is unlikely that if Mr Toneguzzi had said to Mr Saba on 7 February 2006 in relation to ShoreForm words to the effect that there was no concern for payment as Millennium had undertaken to pay everybody on the job, Mr Saba would not have recorded it in his note of the conversation made on that day. I find that Mr Toneguzzi did not say words to this effect in the course of this conversation.

84    I find that the 7 February Representations as pleaded were not made.

The pleaded 10 February 2006 Representations

85    As to what was said on 10 February 2006, this relates to a telephone conversation between Mr Saba and Mr Mortenson on 10 February 2006. Mr Saba’s recollection of the conversation was as follows:

And do you recall the exact words?---No, I don’t.

Do you recall the substance and effect of the conversation?---Yes.

On that occasion when you spoke to Mr Mortenson, what happened? Who said what?---I said, “Morning, Stefan. Look, I’ve been speaking to Phil, and Phil has advised me that you guys don’t want me on the job any more.” I said, “That’s just not right. You know, I’ve done a good job out here. I’ve committed all these resources, and now you’re telling me that I’m – now you’re terminating my services. And, you know, I’m owed, you know, X amount of dollars, and what are you going to do about that?” And he said to me, “I’m very sorry, Tony. You know, Millennium don’t want you on site any more, but have no concern about the payment. I will make sure you get paid.” No. He said to me, “I will make sure you get paid before you leave – before you leave the site,” because when I got terminated – when Phil’s termination was, “I want you guys to hang around for a couple of weeks just to finish the job off,” whereas [C]CCQ were terminated immediately, because I was doing formwork, you just can’t tell a formworker to leave. There’s a demob process. Finish the formwork that you’re doing. So – so Stefan Mortenson said to me, “Don’t worry, Tony. I will make sure before you leave the site – that I will sort out your payments.”

So let me see if I understand this correctly. CCCQ left the site. You remained on?---That’s correct.

What did you do in those two weeks while you remained on and CCCQ had left?---We worked under the direction of Phil Toneguzzi, keeping Tom – not Tom Toneguzzi. It’s Phil Toneguzzi. Working under his direction.

And were you paid for that work?---No.

…

…… and did you record anything in your diary that day following the conversation with Mr Mortenson?---Yes, I did.

Where do we find that on that page?---At – at – at 2 o’clock. I see. Does that read:

Chat with Stefan. Not to worry. We will be paid. Sorry Phil does not want us.

86    Mr Mortenson’s evidence about this conversation was that it came back to the same issue: he was of the understanding everybody should be paid for the work they had done but he was not in a position to promise direct payment or to sign those cheques. It was always his understanding that ShoreForm would be paid for the work it did. He was asked whether it was likely that he told Mr Saba and made it clear to him that Mr Saba would have no concerns about being paid if he remained on the site doing what he had to do to finish the work because Millennium was going to pay. His reply was “Yes. Yes. Millennium would pay for the work that was done.” In my opinion, having heard Mr Mortenson give evidence and having regard to the form of the question and the context of his answer, I do not take this evidence as meaning that Mr Mortenson accepted that it was likely that he told Mr Saba that Millennium was going to pay ShoreForm directly. I find that Mr Mortenson did not say to Mr Saba that Millennium was going to pay ShoreForm directly.

87    I find that the 10 February Representations as pleaded were not made.

88    In relation to the evidence of Mr Saba that CCCQ left the Millennium site on or about 10 February 2006 and for a ten day period ShoreForm remained on site and continued to work at the direction of Mr Toneguzzi, I accept and prefer the evidence of Mr Ramadan of ShoreForm who was on site and stated that CCCQ was itself on site throughout the period after Mr Toneguzzi told ShoreForm to finish up and remained on the site when ShoreForm did in fact finish up on or about 20 February 2006. I also find that ShoreForm’s timesheets in that period were signed by CCCQ’s supervisor on the site.

Consideration of global submissions as to the representations

89    ShoreForm submitted that it was likely that the alleged representations were made, for a number of reasons. First, ShoreForm submitted, the respondents had a keen desire that work continue as normal on the Millennium project. Second, there was a real likelihood that in the period prior to the novation the individuals who were said to have made the representations would not in the period 4 to 18 January 2006 have been aware of the terms of the novation or that the documentation had not been formalised or finalised, and would not have known or would not have concerned themselves as to whether ShoreForm was a subcontractor to Australian Coal Technology or a sub-subcontractor, and would not have had any reason prior to 4 January 2006 to distinguish between subcontractors and sub-subcontractors. Third, ShoreForm pointed to Excel Coal’s half-year results reports published in February 2006, which stated that the matter was Excel Coal’s number one priority, and to the presence of a potential joint venture partner at the 4 January 2006 meeting. ShoreForm pointed to Millennium CHPP’s need to get control of the job prior to Australian Coal Technology going into liquidation to ensure the progress on the job was not interrupted. ShoreForm also pointed to the entirety of the discovered documents in the tender bundle as confirming the likelihood that the representations were made. ShoreForm also referred to what it said was the remarkable consistency between ShoreForm’s pleadings and Mr Saba’s evidence. ShoreForm submitted that the proposition that the respondents would not have given the assurances alleged was so far removed from reality that the Court would reject it outright given (a) the critical nature of the work being performed by ShoreForm; (b) the respondents’ keen desire that work continue as normal; (c) ShoreForm’s threat to suspend work; (d) the threats to suspend work by others on site; and (e) the assurances given by the respondents to other contractors, employees, suppliers and subcontractors on site.

90    In my opinion, these matters, individually or collectively, do not displace the conclusions which arise from a consideration of the detail of the objective circumstances, particularly the contemporaneous documents, and the evidence of what was said to the representatives of ShoreForm, especially Mr Saba. Where appropriate, I have taken into account the matters relied on by ShoreForm in assessing the documentary and affidavit and oral evidence, especially the oral evidence of Mr Saba. For example, I accept that the respondents had a keen desire that work continue as normal on the Millennium project and I accept the critical nature of the work being performed by ShoreForm, but I do not accept that none of those alleged to have made the pleaded representations to ShoreForm would have known whether ShoreForm was a subcontractor to Australian Coal Technology or a sub-subcontractor and none of them would have had any reason to distinguish between subcontractors and sub-subcontractors. Neither do I accept that there was a remarkable consistency between ShoreForm’s pleadings and Mr Saba’s evidence or that “the entirety of the discovered documents in the tender bundle” confirmed the likelihood that the representations as pleaded were made. Indeed, a consideration of the relevant contemporaneous documents strongly supports the conclusion that the representations as pleaded were not made. Threats by ShoreForm to suspend work did not, in my opinion, lead to the making of the representations as pleaded. I do not accept the submission on behalf of ShoreForm that the very fact that Millennium made payments to CCCQ supported ShoreForm’s case and made it likely that the respondents’ assurances were made to ShoreForm. In my opinion, the mere fact of payment to CCCQ followed from the novation whereby Millennium or Millennium CHPP stood in place of Australian Coal Technology in its contractual relationship with CCCQ. Neither was it established that payments were made by Millennium or Millennium CHPP to CCCQ, or to other subcontractors with Australian Coal Technology, contrary to the contractual arrangements between CCCQ, or the other subcontractors, and Australian Coal Technology.

91    I refer to and adopt, with respect, what McLelland CJ in Eq said in Watson v Foxman (1995) 49 NSWLR 315 at 318-319:

Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as “misleading”) within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court “must feel an actual persuasion of its occurrence or existence”. Such satisfaction is “not … attained or established independently of the nature and consequence of the fact or facts to be proved” including the “seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding”: Helton v Allen (1940) 63 CLR 691 at 712.

Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a cause of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), in the absence of some reliable contemporaneous record or other satisfactory corroboration. That is the position in the present case. There is no contemporaneous document in evidence which supports the making of any such promise or representation as is relied on and no other satisfactory corroboration.

…

What I have said above as to the cause of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act) is equally applicable, mutatis mutandis, to the causes of action based on contract and on equitable estoppel (with the added requirements, in the case of contract that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding, and in the case of equitable estoppel that any representation alleged was clear and unequivocal and was relied on to the substantial detriment of the representee).

Later events

92    On 28 February 2006, Mr Saba of ShoreForm wrote to Mr Ciaschetti of CCCQ with a copy to, amongst others, Mr Vorias of Millennium, received by Mr Vorias on 1 March 2006. The complaints as to outstanding monies were directed to Mr Ciaschetti of CCCQ. There was no reference in that letter to any guarantee by Millennium.

93    A further letter on the next day, 1 March 2006, was sent to both CCCQ and Millennium, amongst others, stating there was no legal justification for ShoreForm not getting paid, and asking that no further funds be released to CCCQ and/or Australian Coal Technology until all monies due and owing to ShoreForm were paid and cleared. It was stated by Mr Saba in that letter, correcting obvious typographical errors:

By virtue of today’s and yesterday’s correspondence the Principal is now aware that monies due and owing to ShoreForm have not been paid. Given that knowledge, continuing to pay [C]CCQ without documentary evidence of ShoreForm being paid would give ShoreForm grounds for proceedings against the Principals and ACT.

Furthermore pursuant to Clause 43 of the General Conditions of Contract AS 2124-1992 between ACT and [C]CCQ, we hereby advise of Breaches by the Contractor.

We hereby request that Principals pay the amounts due and owing on behalf of [C]CCQ.

There is no mention, in a context where one would expect it to be mentioned if it had been made, of a previous promise to pay ShoreForm by Millennium.

94    On 2 March 2006, Mr Saba sent a letter to CCCQ and Millennium, amongst others, in terms similar to his letter of 1 March 2006, referred to at [93] above. Relevant to the present question the letter included the following:

We ask Millennium CHPP Pty Ltd and or Excel Coal Limited to please ensure that no further funds are released to [C]CCQ and or ACT until all monies due and owing to ShoreForm are paid and cleared, and the written confirmation of the undersigned is received to confirm payment.

.…

Please note our Correspondence of 28 February and 1 and 2 March 2006, makes the Principal aware that monies due and owing to ShoreForm have not been paid. Given that knowledge, continuing to pay [C]CCQ without the documentary evidence of ShoreForm being paid would give ShoreForm grounds for proceedings against the Principals and or ACT.

Furthermore pursuant to Clause 43 of the General Conditions of Contract AS 2124-1992 between ACT and [C]CCQ, we hereby advise of Breaches by the Contractor.

We hereby request that Principals pay the amounts due and owing on behalf of ACT and or CCCQ.

Again, there is no mention, in a context where one would expect it to be mentioned if it had been made, of a previous promise to pay ShoreForm by Millennium.

95    Similarly, there is a handwritten annotation by Mr Saba on a facsimile cover sheet dated 2 March 2006 to Mr Vorias of Millennium “Your efforts in trying to get us paid are appreciated …” The same annotation appears on facsimile cover sheets to Mr Mortenson and to Mr Haggarty, amongst others.

96    There is a diary note of Mr Saba on 15 March 2006 in relation to a conversation with Mr Vorias on that day which says “can’t do much for us right now, but will see about paying us directly”. Again, if earlier representations more favourable to ShoreForm had been made, as alleged, one would not expect to see a report of a telephone conversation with a senior official of Millennium in those terms.

97    On 20 March 2006, Mr Saba sent an email to Mr Vorias which again, in my opinion, does not support the case for the earlier representations in the terms alleged. The email contains the following: “I believe that if you talk to Mr Ken Penfold, [C]CCQ’s director, he will be receptive to a proposal by Millennium to pay ShoreForm directly. Your efforts in paying us this money direct would be greatly appreciated.” If Millennium had made earlier representations to Mr Saba more favourable to ShoreForm then, in my opinion, given the tone and terms of the balance of his correspondence, Mr Saba would have referred to such representations. The absence of any contemporaneous mention of those representations supports the conclusion that they were not made in the terms alleged.

98    On 18 April 2006, Mr Saba wrote a diary note: “Cameron [Vorias], said he would see about paying us direct.” In my opinion, taken at its highest, this entry is neutral. In cross-examination Mr Saba accepted that the diary entry did not record that Mr Vorias said to him, “I will ensure that ShoreForm is paid.”

99    An email sent on 5 May 2006 by Mr Saba to Mr Vorias referred to the 3 January 2006 Notice and said “I will be maintaining that Excel/Millennium made representations about security and promised to honour etc, to entice the minimal impact on progress and so contractors like me did not stop work.” Again, there are no references to oral representations but there is a reference to the 3 January 2006 Notice. The email was written some four months after the events in question.

100    By reason of my findings in relation to the pleaded representations, I find that the respondents did not represent to ShoreForm that it would be paid the CCCQ debt by the respondents, or either of them. I also find that the respondents did not represent to ShoreForm that it could continue with providing formwork services for the Millennium mine as instructed or directed by Mr Toneguzzi on the terms and at the rates which it had agreed with CCCQ without fear of not being paid because the respondents, or either of them, would ensure or guarantee that ShoreForm would be paid for all work done by ShoreForm and would pay for that work if CCCQ did not pay ShoreForm. Also, by reason of my findings in relation to the pleaded representations, no question of unconscionable conduct arises.

101    In relation to Mr Saba’s diary notes generally, his evidence was that if he was sitting at his desk and his diary was there and he had a pen he would take a note. I doubt the accuracy of this evidence. The pattern of diary notes suggests that Mr Saba made a note of anything which he regarded as important. In any event, the more limited practice referred to by Mr Saba does not assist ShoreForm’s case where there is in fact a diary note of a particular conversation but it does not mention the representations of which Mr Saba gave evidence some eight years later. However, I do not accept the respondents’ submission to the effect that all the “longhand” entries by Mr Saba in his diary were not contemporaneous notes because he had inserted them after the fact for the purposes of preparing his case against the respondents. It is correct to say that Mr Saba gave evidence that in one instance he made a note but at some later point, for the purposes of preparing the case, he wrote it out in longhand so that the longhand was not a contemporaneous note, but I do not take that evidence as applying as a matter of Mr Saba’s general practice. It was not put to him on that basis.

Contract and estoppel

102    ShoreForm submitted that by its conduct in reliance on one or more of the respondents’ assurances a contract or contracts came into existence between ShoreForm and both, or either of, the respondents for the continued provision of formwork services after 4 January 2006. ShoreForm submitted that the terms of the contract included a term that the respondents would pay to ShoreForm the amount owing to it from CCCQ as at 4 January 2006, and a term that ShoreForm would continue providing formwork services at the Millennium mine as instructed or directed by the respondents on the terms and at the rates at which ShoreForm was performing work for CCCQ, with the respondents ensuring or guaranteeing that ShoreForm would be paid for all work done by it and that the respondents would pay for that work if CCCQ did not pay ShoreForm. ShoreForm also submitted that given the representations made by the respondents and ShoreForm’s conduct in reliance upon them, and the provision of services for the benefit of the respondents during January and February 2006, the respondents were estopped from relying upon an interpretation of what was said or written by them inconsistent with the representations alleged by ShoreForm and from relying upon a defence to the claim in restitution that some or all of the amounts owed to ShoreForm were paid to a third party.

103    It follows from my findings that the representations, including the pleaded Australian Coal Technology commitment considered at [38]-[40] and [66]-[67] above, were not made that ShoreForm’s contract claim fails and no estoppel has been established.

The amendment

104    For reasons which I gave on 1 April 2014, ShoreForm (Qld) Pty Ltd v Millennium Coal Pty Ltd (No 2) [2014] FCA 326, I granted leave to ShoreForm to amend its Statement of Claim to plead that either or both of the respondents, Millennium and Peabody, represented that it or they would consider contracting directly with ShoreForm to ensure that all work done by ShoreForm would be paid for by Millennium and Peabody, or either of them. A further amendment pleaded that ShoreForm relied on these representations as to a future contract by deciding not to suspend work and by continuing to provide formwork services to the respondents.

105    ShoreForm submitted that it was clear from Mr Mortenson’s affidavit evidence and Mr Vorias’ oral evidence that the respondents never intended to contract directly with ShoreForm. Accordingly, the representations made by Mr Mortenson and Mr Vorias on 17 and 18 January 2006 respectively that Millennium would consider engaging ShoreForm directly were misleading or deceptive in breach of s 52 of the Trade Practices Act. Alternatively, those representations gave rise to a reasonable expectation of disclosure in the event that the respondents, or either of them, were no longer considering contracting directly with ShoreForm and the respondents’ failure to disclose to ShoreForm that they did not intend to contract directly with ShoreForm constituted misleading or deceptive conduct in breach of s 52. Alternatively, ShoreForm submitted, those representations constituted conduct in acquiring the services provided by ShoreForm that was unconscionable in breach of s 51AC of the Trade Practices Act. ShoreForm submitted that had it been made aware that the respondents did not intend to contract directly with it and would be terminated then ShoreForm would not have performed any further work until it had received the monies owed to it and had a written commitment from the respondents to pay to ShoreForm what it was owed.

106    The respondents’ primary submission on this issue was that the representations were not made and were not established by ShoreForm’s evidence.

107    Mr Saba’s oral evidence as to his conversation with Mr Mortenson on 11 January 2006 was as follows:

I think, you know, I’m owed about $570,000 on Millennium, and I’ve got no faith that [C]CCQ are going to pay me, you know, they’ve missed payment dates, you know, they’ve told me they’ve been paid and they tell me they haven’t been paid. I think they have been paid, you know, and I’ve got no confidence in – in getting paid”, and he said to me, “You don’t need to worry about being paid. I will make sure that if [C]CCQ don’t pay you I will make sure you get paid either directly through Millennium or we will make [C]CCQ pay you.” He goes “What you need to be concerned about is ensuring that Phil Toneguzzi has got – he’s happy, you know, you got to keep Phil happy”. Phil was actually driving the job so, you know, Stefan Mortenson said to me words to the effect of “You make sure Phil Toneguzzi is happy. In other words make sure he’s got enough resources, you know, to do the job, and he will look after the payment”, and then the conversation went on to say “Look, in terms of these future works, the future works that I’m doing because of my uncertainty with [C]CCQ it would be my preference if I could contract directly with Millennium for the future works”, and he goes – we had some discussions about that. He goes something like, “Well, send me an expression of interest with, you know, your rates and what have you and we will consider – we will consider engaging you directly.”

108    Mr Saba had made a diary note for 11 January 2006 stating, relevantly: “SM said to send them an EOI, the mechanics of who pays who will be sorted later, but ShoreForm are to make sure Phil T is happy with our workforce and our men do the works as directed on site by Phil.”

109    The contemporaneous documents show that on 13 January 2006, two days after Mr Saba’s conversation with Mr Mortenson on 11 January 2006, Mr Saba, on behalf of ShoreForm, wrote to Millennium, attention Mr Mortenson. That letter was an offer to supply Millennium with a team of skilled formwork tradesmen and project managers. The letter said:

We are currently engaged by [C]CCQ, given the amounts outstanding and their capacity to meet their debts our preference is to be engaged directly by Millennium Coal Pty Ltd.

…

The last payment received by Shoreform was @ 12 December 2005, notwithstanding assurances of payments on the 15/12, 23/12, 30/12 and 3/01.

We are happy to put it all behind us and to move forward and work together but we need our money and or some form of structured payment plan and a guarantee from Millennium Coal Pty Ltd.

110    In my opinion, the absence from the diary note of what, if made, would have been an important representation by Mr Mortenson indicates that a representation to the effect that Mr Saba did not need to worry about being paid and that Mr Mortenson would make sure ShoreForm got paid, either directly through Millennium or because Millennium would make CCCQ pay ShoreForm, was not made. Further, the absence of a reference to such a representation in the 13 January 2006 letter from Mr Saba to Mr Mortenson makes it improbable that that representation was made two days earlier, on 11 January 2006. I do not accept Mr Saba’s evidence that the reference in his 13 January 2006 letter to Millennium to ShoreForm needing “a guarantee from Millennium” should be read as limited to a guarantee “in a formal business sense” and thereby distinguished from the pleaded oral guarantee. In any event, if the pleaded representation had been made there would, in my opinion, have been a reference to it in the letter, particularly because it touched on the question of a guarantee from Millennium. I also accept Mr Mortenson’s evidence that given his knowledge as to the relationship between ShoreForm and CCCQ and the scope of his responsibilities he would not have promised direct payment by Millennium.

111    Mr Saba gave evidence that he had a further telephone conversation with Mr Mortenson on 17 January 2006. This conversation was to the following effect:

“… What about our future works?” And he said something like, “We’re still going through the throes of this novation process. You know, there’s people on holidays. It’s a process they’re working through, and – they’ve received my offer, and – and they’re considering it.”

Sorry. Who had received your offer? Could you explain who had - - -?---Millennium have received my offer. That was the offer that we spoke about earlier that – in our last conversation.

112    Mr Saba had made a diary note for that day stating: “Stephan, long chat, said he would do his best and make sure we got paid, he will talk with Cameron [Vorias] about it.”

113    The evidence of Mr Mortenson was that following the novation of Australian Coal Technology’s contracts to Millennium, all payment issues concerning those contracts were handled by Millennium’s head office in Brisbane. He deposed that he did not have any responsibility for the novation of Australian Coal Technology’s contracts or in connection with payment and the assessment of claims, prior to novation, more generally. He said that he did not deal with payment matters and did not have the authority to do so. He recalled the conversation with Mr Saba seeking to have ShoreForm’s contract novated so that they would have an agreement directly with Millennium. In his oral evidence, Mr Mortenson said that after Millennium took over the works, in his role as project manager he assessed claims.

114    Mr Mortenson exhibited an email to his affidavit, which he had sent on 17 January 2006 to Mr Vorias and Mr Tim Kelly. It stated, relevantly, as follows:

Tony Saba called me again today, expressing concern about his payment from CCC, to which I replied that it was out of Millenniums (sic) hands.

He also reiterated his desire to novate his contract with CCC directly to Millennium, to ensure future payments.

As this is out of my hands, I gave him your phone numbers for him to state his case.

Our view here on site has not changed, the intention is for CCC and ShoreForm to complete the tunnel, but no more. Probably another 4-6 weeks of work. I understand the CCC contract is made up of schedules of rate for formwork, steel fixing and concrete pours, however I have not seen an invoice. Should the invoices be split into these three areas, I see no problem with paying ShoreForm directly for their portion of the work, however I see no benefit if we have to spend time splitting up the claim.

115    In relation to the alleged representation, Mr Mortenson’s further oral evidence in cross-examination was to the following effect. He agreed that he did not have to have any real understanding of the contractual relationships that existed on the site, beyond the head contract between Millennium and Australian Coal Technology, or how it was that Australian Coal Technology had contracted with the various trades on the site for the purposes of delivering the infrastructure it had agreed to provide under the head contract. Nevertheless, he did not agree with the suggestion that he was not aware in January 2006 that there was any subcontract arrangement between Australian Coal Technology and CCCQ and Australian Coal Technology and ShoreForm. His understanding was that ShoreForm was subcontracting to CCCQ although he could not recall why he had that understanding or when he got it. He said he did not recall how the information got to him that the payments to ShoreForm went through CCCQ but that was his understanding at the time.

116    He agreed that his instructions from Millennium were to do whatever he had to do to get the job finished as quickly as possible. He agreed that the formworker was an absolutely critical contractor on the site. Mr Mortenson stated that Millennium’s objective was ensuring that everyone working on site continued to work and they would get paid. He said that what he was talking about was the mechanisms of the payment and his understanding at the time was that the payments to ShoreForm went through CCCQ. He was not personally responsible for making the payments, but he could speak with Brisbane and urge them to pay so as not to delay works on site and he would have done that. Mr Mortenson said that he believed that Mr Saba asked if his contract with CCCQ could be novated directly to Millennium and that was an area with which Mr Mortenson was not involved, but that reinforced that ShoreForm was actually being paid by CCCQ so Mr Saba’s complaints were more towards making sure CCCQ paid him rather than Millennium paying him. It was Mr Mortenson’s understanding that the right thing was going to be done.

117    Mr Mortenson’s evidence was that from his perspective CCCQ was the contractor building the reclaim tunnel and he did not have the means of arranging for direct payment to ShoreForm; the invoices came through and he did not have the authority to make the arrangement whereby ShoreForm would be paid by Millennium directly. His understanding was that CCCQ had not been paid by Australian Coal Technology and that was the reason, or the main reason, that ShoreForm had not been paid. His understanding was that if Millennium could arrange for CCCQ to be paid then CCCQ would be responsible for paying ShoreForm.

118    Later it was put to Mr Mortenson in another context that unless Mr Saba had mentioned CCCQ he was not in a position to know whether or not ShoreForm was engaged directly by Australian Coal Technology or someone else because he had seen no contract and his answer was “That’s correct, yes.” He then answered he was not aware that there was no written contract between Australian Coal Technology and CCCQ, However, in my opinion, those questions and answers do not detract from Mr Mortenson’s earlier evidence as to his understanding because these questions were put as to his knowledge and by reference to whether or not he had seen a contract. It was put to him that he said to Mr Saba “I will make sure that if [C]CCQ don’t pay you, that you will get paid, either directly through Millennium, or we will make the [C]CCQ payment directly to you.” His evidence was that he was not sure he could have used the words “I will make sure”, because he did not have the authority to make that call, but that he would have said he would certainly try or he would do his best.

119    The cross-examination of Mr Mortenson in relation to the conversation he had with Mr Saba on 17 January 2006 continued by reference to the email he sent on that day, the substance of which I have set out at [114] above. Mr Mortenson did not recall exactly what words he would have used but his evidence was that it was his understanding that Millennium would pay the outstanding invoices; the intention was for contractors to be paid, but his understanding was that if Millennium paid CCCQ and CCCQ did not do the right thing and pay ShoreForm, the mechanisms of that would have been out of his hands. He did not have authority to promise that ShoreForm would get paid directly from Millennium: it was Millennium’s intention that ShoreForm would be paid and Mr Mortenson accepted that it was most likely that he would have said that he would do his best to arrange it. That he made a statement to Mr Saba that, if CCCQ did not pay, Millennium would pay ShoreForm directly did not ring true and he doubted whether he could have said that but he did not deny it as he simply did not recall.

120    In summary, he stated his understanding was that if Millennium paid CCCQ than Millennium had fulfilled its obligation but he was unsure how Millennium could make CCCQ pay ShoreForm. He was not in a position that he could promise that Millennium would pay ShoreForm directly but he could certainly help as much as he could to make that happen if ShoreForm did not get paid from CCCQ. Mr Mortenson did not know whether CCCQ was being paid but he did know they had a claim on Australian Coal Technology as well. He said he was not in a position to direct money from Millennium bypassing contractual arrangements. In addition, he said he did not have the means of arranging for direct payment to ShoreForm as that would have meant separating out ShoreForm’s work in the overall concrete works. He said ShoreForm only did the formwork, they did not do the pours etcetera, and his understanding was that the invoices did not come through that way but they came through CCCQ.

121    As to the claim based on the alleged representations made by Mr Mortenson on 17 January 2006, I prefer the evidence of Mr Mortenson to that of Mr Saba. Mr Mortenson gave his evidence in a frank and considered manner and I am not persuaded that he said to Mr Saba that if CCCQ did not pay, Millennium would pay ShoreForm directly. I find that Mr Mortenson was not, as a matter of fact, in a position that he could promise that Millennium would pay ShoreForm directly. I find that it was more probable than not that Mr Mortenson said words to the effect that he would do his best to make sure ShoreForm got paid, and for that purpose he would talk with Mr Vorias. I find that Mr Mortenson did not say to Mr Saba that Millennium would pay to ShoreForm the CCCQ debt or that Millennium would ensure or guarantee that ShoreForm would be paid for all work done by ShoreForm and would pay for that work if CCCQ did not pay ShoreForm.

122    Turning to the issue raised by the amendment, it was put to Mr Mortenson in cross-examination that he was content that ShoreForm had a chance, if Mr Saba put in an expression of interest, about getting the job directly with Millennium for future works. Mr Mortenson said that he felt that the expression of interest would be considered. It was then put to him that a decision had already been taken internally that there could be no further contract with ShoreForm and that, in fact, ShoreForm was going to be removed from the site. His answer was: “No, they weren’t going to be removed. They were going to complete the tunnel.” The contractual arrangements for that completion were open, whether there was one contract between Millennium and CCCQ or two contracts, one with CCCQ and one with ShoreForm.

123    In relation to the question of work in the future for ShoreForm on the Millennium site, Mr Mortenson agreed that there might have been a possibility of ShoreForm getting some additional work. It was put to him that Mr Mortenson led Mr Saba to understand that he should tender and that he had a real chance of winning work beyond the tunnel but in truth there was no prospect that he was ever going to get it. Mr Mortenson said he could not accept that and that he would have asked for an expression of interest and asked for a schedule of rates anyway just to have a checkpoint for the ongoing work on the tunnel. He was not sure that Millennium had at that stage decided who was going to do exactly what on the additional slabs. He did not think a definite decision had been made as at 17 January 2006 not to engage CCCQ and ShoreForm for the future auxiliary works.

124    It was put to Mr Mortenson that if he had recommended in his email that ShoreForm was not to get any work other than the tunnel, then they were not going to get any work other than the tunnel. His answer was that he would not put it at 100 per cent but that it was the view of those on site that ShoreForm should complete the tunnel. The immediately following question moved from that hypothesis, which in previous answers Mr Mortenson had not accepted, to the proposition that Mr Mortenson had made a recommendation that CCCQ and ShoreForm were not to get any other work than the tunnel. In context, that question and answer should be seen as testing the “not put it at 100 per cent” proposition in the immediately preceding answer, Mr Mortenson accepting that it seemed likely that if he had recommended that ShoreForm was not to get any work other than the tunnel then it would not get that other work.

125    Mr Saba gave evidence of a conversation on 18 January 2006 with Mr Vorias as follows:

I said to him, “Good morning, Cameron. It’s Tony Saba – ShoreForm. I’m doing a lot of work out there at – on the Millennium site. You know, at this point of time, I’m – I’m owed, you know, a significant amount of money on the project. At the moment” – I can’t recall the amount of money I was owed, but I would have said to him, you know, 600, 700, but right now I’m having trouble pinpointing the amount, and, you know, that “I’m a Sydney-based contractor. We’ve mobilised our resources onto your project. Some of those resources may have come from Sydney or Brisbane, but – but I’ve mobilised resources on your job. We’re there pushing your job at the moment. We’re working at the – at the direction of – of Millennium. And, you know, I’m very concerned about my payment.” And he said – he responded to me that – that, you know – “thank you, Tony. Nice to – it’s nice to hear from you. I’m very happy that you’re on the site producing for us. It’s very important to us that we maintain progress and that there aren’t any stoppages.” He’s aware that other contractors haven’t been paid or that contractors haven’t been paid, payment was an issue on the job and that – and that – and it was very important that, you know, progress be maintained. I said to him, you know, “That’s all good, Cameron, but, you know, I’m – right at this point in time, you know, I need – I need some – I need more money.” And he said to me words to the effect of – yes, he reiterated this – this – this whole novation issue that – you know, at the moment, the process of novation is still getting worked out. It’s complicated. It’s not as simple as – as, you know, perhaps they considered. I don’t know. And – but regardless, he had spoken to Stefan specifically about me, and I should have no concerns about payment. Either way, they would either pay direct or make sure that [C]CCQ paid me.

126    Mr Vorias’ evidence as to the latter part of this conversation, relating to the alleged assurance as to payment, was as follows.

127    In his evidence in chief Mr Vorias rejected the suggestion that he said to Mr Saba words to the effect that Mr Saba should have no concerns about payment and that either way Millennium would either pay direct or make sure that CCCQ paid ShoreForm. He said it was a very clear strategy within Excel Coal at that particular point as Excel Coal was novated across a number of different contractors. The ShoreForm contract itself was directly with CCCQ. There was no need to novate the ShoreForm contract in its own right. All dealings were with CCCQ on its own. All invoices had been paid out prior to that through CCCQ, and there was no need to continue any further novation beyond the CCCQ contract. In terms of payment, Mr Vorias said, “we paid all our invoices and kept our main contractors whole. Any sub-subcontractor would have to be then paid by the contractor, and that is the way that we – we dealt with all sub- subcontractors.” He did not recall discussing with Mr Saba, during a conversation on or about 18 January 2006, Mr Saba’s desire for ShoreForm to have a direct contract with Millennium. He said he did not recall a conversation about paying directly from Millennium. He said “We were never going to pay directly to the sub-subcontractor. It was always only going to be done through the primary contractor. We didn’t hold a contract with ShoreForm directly.”

128    I prefer the evidence of Mr Vorias to that of Mr Saba. Mr Vorias gave his evidence clearly and frankly while, in my opinion, Mr Saba gave his evidence after many years of thinking about the matter and having persuaded himself that what was said was what he now claims was said. I also find, by reference to the objective circumstances at the time in the course of the formal novation of the contracts then occurring, that it was unlikely that Mr Vorias said to Mr Saba that he should have no concerns about payment or that Millennium would either pay ShoreForm directly or make sure that CCCQ paid ShoreForm. I conclude that Mr Vorias did not say the claimed words or words to that effect to Mr Saba. I also find that at the time of this conversation with Mr Saba, Mr Vorias knew that ShoreForm was a sub-subcontractor on the Millennium site.

129    Mr Saba also gave evidence of a telephone conversation with Mr Tim Kelly on 17 January 2006 as follows:

I said, “Tim, it’s Tony from – Tony Saba – ShoreForm. I’m doing some work on the Millennium mine, you know, under the direction of – of – of Millennium site team. And I’ve submitted an offer to Stefan Mortenson with the anticipation of entering into a contract with Millennium on the project.” And he said to me – it was Mr Kelly – it was Mr Kelly that explained to me the process, and he said to me, “Look, Tony, at the moment, the whole novation” – he said to me, “Millennium are not in a position to enter into contracts with anybody until the novation process is completed, and there is” – and he said that was complex and – but I don’t need to worry because – because of the 3 January guarantee document, and that once they were in a position to – once the novation was complete, then they would look at entering into new arrangements with contractors.

130    Mr Tim Kelly’s evidence as to this conversation was as follows.

131    First, Mr Kelly said his view in 2006 was that ShoreForm was not affected by the novation of the head contract with Australian Coal Technology or by the novation of the CCCQ subcontract, and that Millennium CCHP did not assume responsibility for the contractual liabilities owed to ShoreForm by CCCQ. He said that at the time of his telephone conversation with Mr Saba he was aware that ShoreForm did not have a contractual relationship with Millennium or Peabody and that they or Millennium CHPP did not assume by novation, and were not taking steps to assume, contractual responsibility for satisfying any outstanding payments owed to ShoreForm by CCCQ.

132    In his oral evidence, given by videolink from Thailand, Mr Kelly said that due to the passage of time he did not recall whether he told Mr Saba during the phone conversation that once the novation process was completed, Millennium would look at entering into new arrangements with contractors. He said the only clear thing that he remembered was about the payment.

133    In cross-examination Mr Kelly agreed that it was not part of his responsibility or duty to concern himself as to what arrangements Australian Coal Technology had made with any of its suppliers or contractors or subcontractors for the work. He was aware, however, because he visited the site quite regularly (every two to three weeks he would to go to the site for a couple of days), that ShoreForm, the formworker engaged on the reclaim tunnel works, had a contract with CCCQ. He said he was certainly aware that ShoreForm was subcontracted to CCCQ before Mr Saba rang him. He gave evidence that if it was 17 January 2006 that he spoke to Mr Saba, it would have been at least a week before that that he knew that CCCQ had a direct contract with Australian Coal Technology and not with ShoreForm.

134    Mr Kelly agreed that the formworks were critical to the project. He agreed that Mr Saba rang him out of the blue about payment, and he gave evidence that he said to Mr Saba words to the following effect in a telephone conversation that lasted only a couple of minutes: “You need to talk to CCC[Q] about your payment because you have a contract with CCC[Q]. You don’t have a contract with ACT. ACT doesn’t have a contract with you, I can’t help you, you will need to go and talk to CCC[Q] about it.” The following questions were put and answers given:

- - - the last thing you would do is allow the formworker to put the phone down with the formworker being concerned about whether or not he’s going to get paid on that job. Do you agree?---I’m – that – that wasn’t in my mind at – at the time. There were so many people wanting payment in the time, and I had these phone calls coming in, and if they were subcontractors I said, “You have to talk to CCC[Q] about it”. It’s not about giving an answer to – to ShoreForm or to ..... to keep them happy. I acted and responded in the way according to my job, and if I believed they had a contract with CCC[Q] or H&M, or whoever it was, I said, “You have to talk to those people about payment”.

…

Mr Kelly, what I’m suggesting to you is that as a competent project manager and contracts person, you wouldn’t have allowed Mr Saba to hang up with any concern about payment; do you agree or disagree?---It’s – no. I’m not sure where this question is leading, and when you get a question – someone ringing you up unannounced asking about payment and you – you tell them that they need to go and talk to the person they’ve got the contract with, that’s what I did.

…

Do you reject that you told him that he didn’t have a need to worry, Mr Kelly?---I don’t recall saying that at all, and what – on what basis could I say it? Because I’m not talking for CCC[Q]. I’m not – don’t have anything to do with CCC[Q]. It’s a matter between ShoreForm and CCC[Q] how CCC[Q] paid ShoreForm’s bills.

…

Is there any document that you can recall being in existence that would establish that you were aware as at the time you spoke to Mr Saba that he had an arrangement with CCCQ rather than with ACT?---As I explained before, Frank, from my regular visits to site, which were a couple of days every three to four weeks, I was aware that ShoreForm were working on the site doing the formwork as one of CCC[Q]s subcontractors, as there were other people up there working as subcontractors to H&M and to the electrical subcontractor. There was a lot of subcontractors and contractors on-site.

135    I note that Mr Saba made a diary note of the conversation as follows:

Big chat with Tim Kelly, not very helpful, but mentioned the guarantee.

In my opinion, the diary note is not consistent with the representations which Mr Saba claimed in his oral evidence Mr Kelly made in this telephone conversation.

136    I accept the evidence of Mr Kelly. I prefer Mr Kelly’s evidence to that of Mr Saba. I find that he did not say to Mr Saba that he did not need to worry about payment and I find that he did not make that statement either at all or with reference to any guarantee in the 3 January 2006 Notice. In my opinion, Mr Kelly’s state of mind in early 2006 was governed by his view of contractual relations between the entities and his knowledge that ShoreForm had a contract with CCCQ and not with Millennium or with Australian Coal Technology. Further, the objective circumstances at the time of the alleged conversation make it unlikely that it occurred in the terms of which Mr Saba gave evidence.

137    In my opinion, ShoreForm’s claim based on the so-called future contract misrepresentation fails. Neither limb of it succeeds on the evidence. Millennium did not represent to ShoreForm that there was a real prospect that Millennium would agree to contract directly with ShoreForm, but did no more than ask for an expression of interest. Neither am I persuaded that Millennium never intended to contract directly with ShoreForm. I accept the evidence of Mr Vorias that the correct position was that ShoreForm would be judged on its own merits.

Payments made by Millennium to CCCQ

138    In my opinion, any payments made by Millennium to CCCQ are relevant both to the claims made by ShoreForm of representations that entities other than CCCQ would pay ShoreForm and to ShoreForm’s restitutionary claim against the respondents.

139    The respondents submitted that CCCQ’s progress claims (which included claims for work undertaken by ShoreForm under the CCCQ/ShoreForm sub-subcontract) were paid in full after allowing for a credit note issued by CCCQ on 27 April 2006.

140    Prior to 24 February 2006, CCCQ had made 14 progress claims, numbered 1 through to 13 but including progress claim 2a, in the amount of $4,067,660.96 (including GST), and those claims had been paid. The payments were made by Australian Coal Technology or, in respect of claims numbered 12 and 13, by Millennium CHPP.

141    On 24 February 2006, CCCQ issued to Australian Coal Technology its progress claim, numbered 14, in the amount of $843,921.19 plus GST which included claims for the work done by ShoreForm.

142    On 1 March 2006, CCCQ, by Mr Penfold, sent a letter to ShoreForm stating that all outstanding claims had been paid by Millennium CHPP to CCCQ for work completed up to 19 January 2006. The letter referred to three outstanding invoices received by CCCQ from ShoreForm in relation to Millennium, being claims 13, 14 and 15, in the “amount claimed before GST” of $686,862.85 and stating as an “amount assessed before GST” the sum of $174,623.87. The letter continued:

As you are aware a number of your Company’[s] claims have been assessed at a value less than that claimed and these adjustments include an increase in hourly labour rates above that agreed on engagement, 7 day’s (sic) wages paid in lieu of notice, interest charges and your latest invoices include a large mobilization claim.

We have rejected these claims but as you are aware we have recently agreed to submit them to our client for further consideration.

143    On 6 April 2006, Millennium CHPP, by Mr Vorias, wrote to CCCQ, attention Mr Penfold, about CCCQ’s recent claim for payment and confirmed that the claim was being processed. The letter also asked for a statutory declaration to be provided in accordance with clause 43 of the General Conditions of Contract, stating that all workers and all subcontractors had been paid as prescribed under that clause.

144    On 11 April 2006 CCCQ, by its general manager Mr Ciaschetti, sent a fax to Millennium consisting of a statutory declaration by Mr Ciaschetti on behalf of CCCQ in relation to the subcontract for concrete works at the Millennium project between CCCQ and Millennium CHPP. The declaration was as follows:

All workers and sub-subcontractors who have at any time been employed/engaged by the Subcontractor on work under the Subcontract have as at the date of this declaration been paid all monies, entitlements and benefits (including superannuation and redundancy fund payments payable) due to them in respect of their employment/engagement, in accordance with their applicable award or industrial agreement, on work under the Subcontract during the payment period.

145    A letter dated 18 April 2006 from Millennium, Mr Vorias, to CCCQ, Mr Penfold, referred to this statutory declaration and proceeded on the basis that ShoreForm had been paid by CCCQ the money due to it.

146    On 21 April 2006, Millennium CHPP, by Mr Vorias, issued to CCCQ, Mr Penfold, an assessment of CCCQ’s claims which had been reissued by CCCQ on 20 March 2006. Mr Vorias stated he had made an initial assessment of the claims amounting to $350,300.76 plus GST. Detailed reasons were provided for this initial assessment. The assessment included a number of items referable to works performed by ShoreForm for which ShoreForm had claimed payment from CCCQ. The letter referred to ShoreForm’s letter “Outstanding Monies Due and Owing” dated 1 March 2006 (reference A), and to the statutory declaration made by Mr Ciaschetti (reference C), and concluded as follows:

PAYMENT OF EMPLOYEES AND SUBCONTRACTORS

As you are aware, your subcontractor issued a letter at reference A which set out a number of matters that were of serious concern to Millennium Coal. As you are aware, your novated contract contained a provision for you to assure the Superintendent that all such payments have been made, and I am pleased that you have resolved this matter as evidenced by your statutory declaration at reference C.

147    On 26 April 2006, CCCQ, by Mr Penfold, sent Millennium CHPP an amended invoice in the amount of $302,830.84 including GST, being the amount of $350,300.76 less advances totalling $75,000 plus GST.

148    On 27 April 2006 CCCQ sent to Millennium CHPP a credit note in the amount of $928,313.31, including GST.

149    On 28 April 2006, Millennium CHPP paid $302,830.84 to CCCQ.

150    On 8 May 2006, CCCQ, by Mr Penfold, sent a number of receipts to Millennium CHPP, Mr Bruce Mallett.

151    On about 2 June 2006, Millennium CHPP, by Mr Vorias, issued a payment certificate in the amount of $47,658.37 excluding GST. As before, reasons were given for rejecting the balance of the claims. The total certification in respect of formworkers was $46,962.00. On 2 June 2006, CCCQ issued a progress claim to Millennium CHPP for the amount of $47,658.37, plus GST. On the same day, that amount, being in total $52,424.21 including GST, was paid by Millennium CHPP to CCCQ.

152    I therefore find that CCCQ was paid in full by either Australian Coal Technology or Millennium CHPP for the work that it performed on the Millennium project. The payments included work performed by ShoreForm under its contract with CCCQ.

The quantum meruit claim

153    This claim for restitution relates to ShoreForm providing services after 4 January 2006 and a claim that it is entitled to be paid for those services by the respondents, Millennium and Peabody.

154    ShoreForm said little in oral or written submissions about this claim. The written submissions contain a bare statement that in the alternative to contractual damages ShoreForm claimed $749,025.61 as a fair and reasonable assessment of the amounts owing to ShoreForm.

155    The respondents submitted that this was not a case of performance by ShoreForm of services for Millennium at the request of Millennium, but performance by ShoreForm of its contractual obligations to CCCQ. Importantly, ShoreForm’s dayworks dockets for the period were authorised by a CCCQ representative. The dockets authorised by Australian Coal Technology or Millennium were CCCQ dockets. Accordingly, the respondents submitted, ShoreForm’s remedies lay under its contract with CCCQ and ShoreForm had no additional or alternative restitutionary claim against Millennium. Further, the respondents submitted, Millennium paid for ShoreForm’s work by paying CCCQ after having received a statutory declaration from Mr Ciaschetti of CCCQ declaring that CCCQ’s subcontractors had been paid. The respondents submitted that if ShoreForm had not been paid by CCCQ, that did not give rise to any relevant unconscionability in Millennium retaining the benefit of ShoreForm’s work. The respondents also submitted that ShoreForm’s evidence did not in any event establish the reasonable remuneration for the work it did from 4 January 2006 and did not establish that ShoreForm was not paid that amount.

156    In my opinion, in light of my findings as to the representations as pleaded, ShoreForm’s restitutionary claim fails for the following combination of reasons. First, the respondents were not, but CCCQ was, in a contractual relationship with ShoreForm. Secondly, no representative of the respondents represented to ShoreForm that the respondents, or either of them, would pay ShoreForm for the work. Thirdly, CCCQ was paid either by Australian Coal Technology, under CCCQ’s contract with Australian Coal Technology, or by Millennium CHPP under CCCQ’s contract with Millennium CHPP, and those amounts included what CCCQ had claimed for the work done by ShoreForm. I have already set out at [143]-[144] the circumstances under which Millennium CHPP asked for, and was provided with, a statutory declaration stating that all workers and all subcontractors of CCCQ had been paid. Fourthly, the dockets authorised by Australian Coal Technology or Millennium were CCCQ dockets. Mr Ramadan of ShoreForm agreed in cross-examination that the day labour dockets annexed to his affidavit were dockets which he had submitted; that they were dockets with a CCCQ letterhead; and that he used those dockets to seek to obtain the signature of an Australian Coal Technology representative. In my opinion, in these circumstances ShoreForm has no restitutionary claim against the respondents.

Section 56 of the Property Law Act 1974 (Qld)

157    Section 56 of the Property Law Act 1974 (Qld) (Property Law Act) provided:

56 Guarantees to be in writing

(1)    No action may be brought upon any promise to guarantee any liability of another unless the promise upon which such action is brought, or some memorandum or note of the promise, is in writing, and signed by the party to be charged, or by some other person by the party lawfully authorised.

(2)     A promise, or memorandum or note of a promise, in writing shall not be treated as insufficient for the purpose of this section merely because the consideration for such promise does not appear in writing or by necessary inference from a written document.

158    The respondents submitted that the alleged representations were in substance promises to be answerable for the debt of CCCQ and were not in substance promises to indemnify or hold harmless ShoreForm for losses incurred as a result of its dealings with CCCQ irrespective of whether or not a debt from CCCQ to ShoreForm was owed or became owed. Accordingly, the respondents submitted, the alleged representations were promises to guarantee liability of CCCQ and were not enforceable by virtue of s 56 of the Property Law Act. The respondents referred to Sunbird Plaza Pty Ltd v Maloney [1988] HCA 11; (1988) 166 CLR 245; Actionstrength Ltd v International Glass Engineering IN.GL.EN SpA [2003] UKHL 17; [2003] 2 AC 541 (Actionstrength) and to Seapeace Ltd v Meridian Marine Sales Ltd [1997] FCA 1482. They also referred to O’Donovan J and Phillips J, Modern Contract of Guarantee (Lawbook Co, 2013) at [3.420] and [3.430].

159    ShoreForm submitted that the respondents’ reliance on s 56 was misconceived because the assurances given by the respondents were not, strictly, a guarantee of payment but rather “appear to be an assurance that [ShoreForm] would be paid by whatever means”, and in any event the respondents were estopped from relying on s 56 in circumstances where the respondents had encouraged and/or induced ShoreForm to rely, to its detriment, on its promise to ensure and/or guarantee payment to ShoreForm by the representations made on 6, 10, 17 and 18 January 2006 after the respondents had issued the 3 January 2006 Notice and made representations to ShoreForm on 4 January 2006 that Millennium was going to guarantee payment for “everybody” on site. ShoreForm also referred to Actionstrength and to Powercell Pty Ltd v Cuzeno Pty Ltd (2004) 11 BPR 21, 429; [2004] NSWCA 51.

160    In light of my findings that the pleaded representations were not made, it is neither necessary nor possible for me to decide this issue. It would not, in my opinion, be a useful exercise to speculate, contrary to my findings, on the terms and substance of the assurances I have found were not made. If, as submitted by ShoreForm, the assurances “appear to be an assurance that [ShoreForm] would be paid by whatever means”, it would follow that s 56 of the Property Law Act was not engaged.

The deed issue

161    In the course of the trial I granted leave to the respondents, Millennium and Peabody, to amend their defence to plead that CCCQ paid $200,000 to ShoreForm on 5 May 2006 in respect of progress claims 13, 14 and 15 in relation to the work at the Millennium mine. Further, the respondents pleaded, by the same amendment, that on or about 5 May 2006, without the knowledge or consent of the respondents, ShoreForm released, or promised to release, CCCQ from all claims ShoreForm had or may in the future have against CCCQ in connection with the provision of formwork services by ShoreForm, and/or altered the nature of CCCQ’s obligations to ShoreForm, and ShoreForm thereby discharged the respondents from any liability they may otherwise have had under the alleged contract or by the alleged making of the respondents’ assurances in that the claims were brought on an alleged promise to guarantee liability of CCCQ to ShoreForm. A further amendment to the defence pleaded that if the respondents engaged in the alleged conduct contrary to the Trade Practices Act, the loss and damage claimed by ShoreForm to have been suffered was caused by ShoreForm releasing or promising to release CCCQ from its liabilities to ShoreForm and altering the nature of CCCQ obligations under that contract.

162    In light of my earlier conclusions, these issues do not arise for determination but I consider the circumstance of the drafts of the deed since they go, in part, to Mr Saba’s credit.

163    In my opinion, apart from the matter of Mr Saba’s credit, the relevance of the deed issue is that on 5 May 2006 Mr Saba as director and secretary of ShoreForm signed a formal document. It is not a case where one party seeks to enforce a deed so that the question would arise whether one party was bound but the other was not: see the discussion in Seddon N, Seddon on Deeds (Federation Press, 2015) at [2.30] with reference to 400 George Street (Qld) Pty Ltd v BG International Ltd [2010] QSC 66 and, on appeal, [2010] QCA 245; [2012] 2 Qd R 302.

164    There is a document entitled “Deed of release” between CCCQ (Mr Penfold) and ShoreForm (Mr Saba) with a note in Mr Penfold’s handwriting: “Copy of ShoreForm’s Final Signed Deed of Release $200K paid on 05.05.06.” This version was produced on subpoena issued to Mr Pleash, a partner at Hall Chadwick, being one of the external administrators of CCCQ when it was placed into external administration in October 2006.

165    The document recited an agreement between ShoreForm and CCCQ to construct formwork at both the Millennium mine and the Newlands mine. Recital B stated that on or around 22 June 2005, ShoreForm agreed to provide labour to CCCQ to construct formwork for the coal washes at the Millennium mine and the Newlands mine. Recital C stated that ShoreForm provided the labour to CCCQ and constructed the formwork (Services) between 17 July 2005 and 28 February 2006. So far as relevant, the terms of the Agreement stated (CCCQ being given the short form name CCC in the document):

2. Agreement

The parties have agreed to resolve all disputes between them on the following terms.

(a)    Without admitting liability, in full settlement and satisfaction of all Claims made by any person or body claiming through, by or under ShoreForm against CCC concerning the Services, the Agreement and the circumstances recited in this deed, CCC will:

(i)    pay ShoreForm $200,000 including GST and costs (Agreed Sum) within 5 days of executing this deed; and

(ii)    use its best endeavours to pursue Claims of CCC in respect of the CCC entitlements under the Head Contracts, including any entitlements in respect of the Services, against the Official Manager, Newlands Coal Pty Ltd and Millennium Coal CHPP Pty Ltd for 2 years from the date of this deed provided that CCC remains solvent; and

(iii)    pay to ShoreForm the ShoreForm Amount within 14 days of receipt by CCC of any payment by either the Official Manager, Newlands Coal Pty Ltd or Millennium Coal CHPP Pty Ltd.

3. Release and indemnity

In consideration of receipt of the Agreed Sum and the obligation referred to in clause 2.1(b) (sic):

(a)    ShoreForm releases and forever discharges CCC from all Claims which ShoreForm, or any person or body claiming under or by virtue of ShoreForm, has now or may in the future have against CCC by reason of or in any way connected with the or arising from the Services, the Agreement and the circumstances recited in this deed.

(b)    ShoreForm indemnifies CCC against all Claims which have arisen or may arise in the future by reason of or in any way connected with the Services, the Agreement and the circumstances recited in this deed or any thing arising from those circumstances by or on the part of ShoreForm or any person or body claiming under or by virtue of ShoreForm.

166    I refer to other versions of the deed, as executed by Mr Saba on behalf of ShoreForm, below. I note here, however, that the draft of the deed which Mr Saba contends was the latest draft, considered at [167] below, also recited as background the agreement between ShoreForm and CCCQ to construct formwork at both the Millennium mine and the Newlands mine and that ShoreForm provided the labour to CCCQ and constructed the formwork (Services) between 17 July 2005 and 28 February 2006. As I describe more fully below, the document referred to part settlement and part satisfaction of all Claims concerning the Services.

167    A version of the deed supplied by the solicitors for ShoreForm to the solicitors for the respondents under cover of a letter dated 16 April 2014 was signed by Mr Saba, marked in his handwriting as “Final” but contained other handwritten changes. It did, however, recite that ShoreForm had agreed to provide labour to CCCQ to construct formwork for the coal washes at both the Millennium mine and the Newlands mine and that ShoreForm provided the labour to CCCQ and constructed the formwork (Services) between 17 July 2005 and 28 February 2006. The handwritten changes were that the amount of $200,000 was in part settlement and part satisfaction of all Claims, and the best endeavours clause had the two-year limitation deleted. It also added a provision that CCCQ would pay to ShoreForm all monies received to date in relation to claims made by ShoreForm and certified by CCCQ as per the Building and Construction Industry Payments Act 2004 dated 9 March 2006 either in cash or by supplying labour to that effect.

168    An earlier copy of the deed, dated 2 May 2006, signed by Mr Saba but again not by CCCQ was provided by the solicitors for ShoreForm to the solicitors for the respondents on 15 May 2014. That draft also referred to ShoreForm agreeing to provide labour to CCCQ to construct formwork for the coal washes at the Millennium mine and Newlands mine and ShoreForm providing the labour to CCCQ and constructing the formwork (Services), this time between 17 July 2005 and 21 December 2005. It contained the handwritten annotation by Mr Saba “Att, Ken here is the deed you want signed before you/Serge gives us the $200K.” Other parts of the draft, in clause 2, contained blank spaces in relation to the agreed sum.

169    The solicitors for the respondents also served subpoenas for the production of any executed copy of the deed of release or any other documents evidencing a settlement of ShoreForm’s claims against CCCQ in connection with the Millennium mine. Minter Ellison produced a single document being a file note apparently of a meeting by a solicitor of that firm with Mr Penfold on or about 1 June 2006 stating “Sureform has signed up on the release.” Minter Ellison stated they did not hold an executed copy of the deed of release.

170    The copy of the draft deed last obtained by the solicitors for the respondents was from Hall Chadwick and I have set out the relevant parts of that draft deed at [165] above.

171    The events as deposed to by Mr Saba in an affidavit made by him on 6 June 2014 following his initial cross-examination by senior counsel for the respondents were as follows. He said that his negotiations with CCCQ up to early March 2006 in relation to the payment of $200,000 were about Newlands. Discussions were about monies that CCCQ owed ShoreForm on the Newlands project for works up until approximately 23 December 2005, being the date that ShoreForm was terminated from Newlands.

172    As to the sequence in which the various drafts of the deed were created, Mr Saba deposed that in relation to a draft deed created on 8 March 2006, his understanding was that the deed dealt with the amounts owing on the Newlands project. He said that a further draft was forwarded to ShoreForm on 15 March 2006 which proposed to settle the issues between ShoreForm and CCCQ and also specified how CCCQ would pay the amounts owing by CCCQ to ShoreForm on the Millennium project.

173    Mr Saba said the only issue with respect to the Millennium project was in relation to CCCQ’s failure to make payment to ShoreForm. He said that as at 6 April 2006 he was of the view that Millennium had guaranteed payment to everyone on the Millennium site including CCCQ and ShoreForm so he did not consider that ShoreForm and/or CCCQ were in any real risk of not being paid in full eventually for work at the Millennium mine.

174    Mr Saba said that on 2 May 2006 he “signed Draft 1 of the Deed and I faxed it over to CCCQ to indicate to Serge that I was willing to discuss, negotiate and settle the issues subject to final agreement.” Mr Saba said that he recalled that CCCQ sent many versions of the Deed to him. He said that on 5 May 2006 he received two different versions of the same Draft 4 deed and he said he had retained copies of one of those versions. He said that at 12.06 pm on 5 May 2006 he signed and faxed over to CCCQ the draft that he had received at 9.26 am that morning. Mr Saba deposed that he then telephoned Mr Ciaschetti saying that he needed to amend the deed and that the version Mr Penfold picked up was the version with Mr Saba’s handwritten amendments on it. He said he then put the original of the cancelled version in a sealed envelope together with the original of the version on which he had made handwritten changes. Mr Saba said that when he received the $200,000 he allocated the payment to the Newlands project and this was shown in ShoreForm’s ledger.

175    Mr Saba also stated that after 5 May 2006 he continued to have discussions with Mr Penfold and Mr Ciaschetti about CCCQ paying more money to ShoreForm. Mr Saba forwarded an email to Mr Penfold on 16 May 2006 and a further email on 23 May 2006. The former email said that ShoreForm was expecting a letter from CCCQ along the following lines:

CC (sic) to make up the difference between moneys received from the QLD jobs and amounts paid to ShoreForm in either money, or by day labour services supplied free of charge, or some other way to be proposed.

The latter email said that ShoreForm was expecting a letter from CCC or CCCQ along the following lines:

CC (sic) or CCCQ to make up the difference between moneys received/certified by CC (sic) for the formwork from the QLD jobs and amounts paid to ShoreForm by either money paid, or by day labour services supplied by CC (sic) free of charge or some other way to be agreed.

As may be seen, this evidence tends to confirm rather than deny that the $200,000 paid by CCCQ to ShoreForm was referable both to the Millennium project and to the Newlands project.

176    I do not accept Mr Saba’s statement in his affidavit of 6 June 2014 that, because Millennium had guaranteed payment to everyone on the Millennium site, he did not consider that ShoreForm and/or CCCQ was in any real risk of not being paid in full eventually for work at the Millennium mine, in support of the proposition that therefore the $200,000 was not referable to Millennium.

177    In further cross-examination, on 24 June 2014, Mr Saba said that his affidavit of 6 June 2014 answered why the deed was not referred to in his 29 November 2012 affidavit. Mr Saba did not accept that the material at the bottom of the page of his diary entry for 5 May 2006, as to which see [190]-[199] below, was relevant to the issues in the proceedings. He agreed that he understood as at August-September 2007 that the $200,000 was the amount of money referred to in the deed which he had faxed to CCCQ on 5 May 2006. It was put to Mr Saba that he wanted to keep the deed secret from the respondents but in answer he denied that that was the true position. Mr Saba was unable to explain the implicit reference in his 6 June 2014 affidavit to his understanding, by 9 March 2006, of the draft deed. He agreed in cross-examination that he had not been provided with any copy of the deed as at 9 March 2006.

178    As to the draft deed sent to him by Mr Penfold under cover of an email dated 15 March 2006, Mr Saba agreed in cross-examination that, when he read clause 2 of the proposed deed, he understood it proposed full and final settlement of ShoreForm’s claims in respect of the Millennium job and in respect of the Newlands job and that a meeting with Mr Penfold and some representatives of the CFMEU on or about 6 April 2006 was to discuss the proposed settlement between CCC[Q] and ShoreForm relating to the Millennium and Newlands projects.

179    I take into account that Mr Saba maintained at one point that CCCQ had received $200,000 from Australian Coal Technology and that was only in respect of the Newlands mine and was an amount not passed on to ShoreForm, but his evidence was less than persuasive on that point in that he agreed that Mr Penfold had told him at the meeting on 6 April 2006 that about $200,000 had been received by CCCQ on the Millennium job but had not been passed on to ShoreForm. Neither does it contradict or qualify the terms of the drafts of the deed which described the Services as referable both to the Millennium mine and to the Newlands mine. I note also Mr Saba’s close attention to the terms of the drafts of the deed, as evidenced by his handwritten changes to the draft or drafts dated 5 May 2006. Further, Mr Saba accepted that the first draft, the 15 March 2006 draft, covered both the Millennium job and the Newlands job. Also relevant, in my opinion, is that at paragraph 48 of his affidavit of 6 June 2014, Mr Saba referred to a payment “By ACT/Millennium to CCCQ” in the amount of $302,830.84 on 28 April 2006, but denied that he knew this was from Millennium even though Australian Coal Technology was by then in liquidation. Although Mr Saba accepted that he knew that so far as the Millennium mine was concerned there was an ongoing contractual relationship between CCCQ and Millennium, he denied that he understood that the $302,830.84 related to the Millennium job.

180    Mr Saba also gave unsatisfactory evidence in relation to a draft Deed of Agreement discussed on 6 April 2006 at the offices of the CFMEU which by paragraph 2, if made, would have involved CCCQ ensuring that Millennium and Newlands Coal Pty Ltd would pay any monies directly to ShoreForm. He gave evidence that he was not told by Millennium and did not otherwise understand at that time that Millennium would be unwilling to pay ShoreForm unless its contractual counterparty, CCCQ, agreed that it could do that, but agreed that that was why he wanted the agreement proposed in paragraph 2.

181    There was extensive cross-examination as to which version of the draft deed was “the final deed” as referred to by Mr Saba and whether or not two draft deeds were put in the envelope collected by Mr Penfold or whether the “final” draft was faxed to CCCQ. However, the important fact, as I find, is that ShoreForm received a payment of $200,000 with reference to a draft deed which referred to the Services supplied by ShoreForm to CCCQ both at the Millennium mine and at the Newlands site. I do not accept Mr Saba’s evidence that the $200,000 which ShoreForm received from CCCQ was not or may not have been against the draft deed or that he was never going to agree to CCCQ’s proposed deed, given that he signed it and received the $200,000 from CCCQ on the same day. I accept that there was no final or agreed deed but I do not accept Mr Saba’s evidence that there was no connection between the payment of $200,000 and what he referred to as the final draft of the deed merely because the deed was never agreed.

182    It is necessary to separate out the different issues which arose under this head.

183    There can be no doubt that a payment of $200,000 was made by CCCQ to ShoreForm on 5 May 2006. A Commonwealth Bank remittance to that effect was in evidence.

184    The main issue was whether, by reference to various versions of a deed or draft deed, the payment of $200,000 was referable to the work done by ShoreForm at the Millennium mine or the work done by ShoreForm at the Newlands mine.

185    In my opinion, it is clear from the terms of the drafts that the payment was in respect of the work done by ShoreForm at both the Millennium mine and the Newlands mine. I find that it was referable to both.

186    A second issue flowed from the respondents’ contention that the alleged contractual promise sued on was a promise to guarantee the liability of CCCQ and under a contract of guarantee the guarantor is discharged if the principal and creditor, without the guarantor’s consent, agreed between themselves to alter the nature of the principal obligation. In the present case, the respondents submitted, ShoreForm and CCCQ, without the consent of the respondents, altered the nature of CCCQ’s obligations to ShoreForm in that, so it was submitted, ShoreForm released CCCQ from its liability to ShoreForm. As I have said, it is neither necessary nor possible for me to decide the guarantee issue. It follows that this aspect of the deed issue falls away.

187    A third issue was the attack on Mr Saba’s credibility. The first aspect of this attack was Mr Saba’s oral evidence as to the contents of the deed:

Mr Saba, what was the deed in the sealed envelope that Mr Penfold picked up from your office on 5 May 2006?---It was a deed that allowed for [C]CCQ to pay me $200,000 to settle the debt on Newlands and specifically excluded anything to do with payments on Newlands – on Millennium.

I find this evidence was incorrect.

188    Mr Saba also said in his oral evidence:

The other matter of fact is, I will go to my grave firmly believing the $200,000 was a payment from Newlands and nothing to do with Millennium, nothing whatsoever. I will go to my grave believing that. I – I saw what the submissions are in terms of – I’m not sure what the word is – dishonest or whatever. That’s just not the case.

189    However, this sits ill with his oral evidence about an earlier proposed deed, forwarded on 15 March 2006, as follows:

When you read clause 2 of the proposed deed you understood that what was being proposed was a full and final settlement of ShoreForm’s claims against CCC concerning the Millennium job and the Newlands job upon payment to ShoreForm of amounts to be agreed. Do you agree?---To be agreed. To be agreed.

Yes?---Amounts to be agreed.

Amounts to be agreed, but it was proposing full and final settlement of ShoreForm’s

claims in respect of the Millennium job and in respect of the Newlands job.

Correct?---To be agreed. It was proposed, yes.

190    A second aspect of the attack on Mr Saba’s credibility was the non-discovery of his diary entry for 5 May 2006.

191    The part of the diary entry which is presently relevant reads:

Penfold came to our Ryd (sic) office & picked up the edited DEED, in a sealed envelope, I thought we were going to argue over the amendments, but he did not look in the envelope.

192    In relation to the non-disclosure of the diary entry for 5 May 2006, the respondents submitted that Mr Saba offered no credible explanation for his failure to provide a copy of the diary entry to his solicitors or to discover it in the proceedings. In cross-examination, Mr Saba was questioned and answered as follows:

Mr Saba, the reason you did not include any reference in your affidavit to the 5 May 2006 diary entry, is that you did not want to disclose to the respondents the existence of the deed referred to in the bottom part of that diary entry. Correct?---No. No, I don’t think that is – I don’t know what the reason is. I don’t think it’s specifically that reason.

193    Mr Saba accepted, as he had to, that the first part of the page of his diary for 5 May 2006 concerning a conversation with Mr Vorias was directly relevant and should have been disclosed. He used his diary when deposing to other conversations and included copies of the diary entries he had so used in the bundle which was exhibited to his affidavit of 29 November 2012. He referred to the conversation with Mr Vorias on 5 May 2006 in that affidavit but did not include a copy of that diary entry.

194    I accept the evidence of Ms Lawrence, which was not challenged, that the solicitors for the respondents had made a number of requests before the trial to inspect Mr Saba’s original diary. I also find that the diary entry for 5 May 2006 was not available to the respondents before the commencement of the trial when the original of Mr Saba’s diary for 2006 was brought to court. I also find that no version of the deed referred to in that diary entry had been produced to the respondents before 16 April 2014.

195    As I have said, the cross-examination of Mr Saba was as follows:

Mr Saba, what was the deed in the sealed envelope that Mr Penfold picked up from your office on 5 May 2006?---It was a deed that allowed for [C]CCQ to pay me $200,000 to settle the debt on Newlands and specifically excluded anything to do with payments on Newlands – on Millennium.

196    The respondents did not at that stage have access to the deed. A call was made for the deed.

197    ShoreForm submitted, under this head, that the attack on Mr Saba’s credibility demonstrated a fundamental misunderstanding of the evidence.

198    I take into account the evidence of the solicitor for ShoreForm, Mr Christopher Clancy, to the effect that his understanding from Mr Saba was that the 5 May 2006 deed had not been finalised; CCCQ had never advised Mr Saba that they accepted the terms; and CCCQ had never provided Mr Saba with a signed deed. As to the payment of $200,000, Mr Clancy said that he was aware that CCCQ had made a payment of $200,000 on or around 5 May 2006 but said his instructions and understanding were that CCCQ had issued a progress payment on 5 May 2006 of $200,000 to ShoreForm as monies owed to ShoreForm for work performed on the Newlands mine site. He said he did not understand there to be any relevant connection between the payment and the 5 May 2006 document. I accept Mr Clancy’s evidence except to the extent that in paragraph 28 of his affidavit he states that the first time that the respondents sought access to the entirety of Mr Saba’s diary was during cross-examination of Mr Saba on day three of the hearing (3 April 2014). As Mr Clancy accepted in cross-examination, the solicitors for the respondents had requested access to the original diary on a number of occasions from mid-March 2014.

199    Taking all these matters into account, I find that Mr Saba’s evidence as to the masking of the page of his diary referable to 5 May 2006; the consequent non-disclosure of the draft deed; the evidence of Mr Saba that the draft deed had nothing to do with the Millennium project; and non-disclosure of the fact that ShoreForm received $200,000 from CCCQ make it more difficult to accept as the truth the balance of Mr Saba’s evidence.

Rulings on evidence

200    There was one unresolved objection, by the respondents, to parts of a document in the tender bundle. The document was a letter dated 25 July 2006 from ShoreForm to Excel Coal “and or” Millennium. It stated that amounts totalling $862,905.95 remained due and owing but contained an offer of compromise in the amount of $627,420.16 plus GST. Enclosed with the letter were other documents. The one to which objection was taken, item G, was described as “Alternative Compromised Cost assessment dated 25 July 2006.” It is this document which sets out the basis upon which the figure of $627,420.16 was calculated as a schedule of alternative compromised cost.

201    The respondents submitted that item G and the part of the letter referring to the offer of compromise were inadmissible under s 131 of the Evidence Act 1995 (Cth) (the Evidence Act) as evidence of a settlement negotiation. They also submitted that that part of the letter and item G were hearsay because they were not a business record as proceedings against Excel Coal seeking recovery were in contemplation and the material was prepared in contemplation of legal proceedings. The respondents submitted that the particular difficulty with the document was that it purported to set out the number of man hours spent on the site between January and April 2006.

202    ShoreForm submitted that this material had already been admitted and referred to paragraphs 230-232 of Mr Saba’s affidavit of 29 November 2012. ShoreForm also submitted that the letter did not comprise a step in the negotiation of a dispute but was rather a without prejudice offer which could be withdrawn. There was no joint privilege because there had been no negotiation. Further, ShoreForm submitted, there was no evidence to ground the respondents’ submission that the “representation … was prepared … for the purpose of conducting, or for or in contemplation of or in connection with, an Australian … proceeding” within the meaning of s 69(3)(a) of the Evidence Act.

203    In my opinion, the document itself had not already been admitted as the status of the documents in the tender bundle had been expressly reserved at the time that Mr Saba’s affidavit was read. Next, the document is admissible as a business record as I am not satisfied that the representation was prepared for or in contemplation of or in connection with an Australian proceeding within s 69(3)(a). As to the s 131 objection, it seems to me that the document falls within the terms of s 131(1)(a) and evidence of the document is therefore not to be adduced. In my view, whether or not there is a dispute is a question of fact, being a question affected by the terms of s 131(5)(a). If I am wrong in that conclusion, I have not found it necessary to consider item G as proving the hours worked by the employees there listed, in the absence of primary documentary material.

Damages

204    In light of my findings on liability, it is not necessary to deal with the question of damages.

Conclusion

205    The application is to be dismissed. I will reserve costs in case either party wishes to contend that costs should not follow the event.

Associate:

Dated:    23 June 2015