075 883 626 Pty Ltd v CSR Ltd
[1998] FCA 841
•17 JULY 1998
FEDERAL COURT OF AUSTRALIA
PRACTICE AND PROCEDURE - Applications for interlocutory injunctions restraining termination of cartage contracts - whether serious question to be tried that applicants entitled to extensions of contracts because of misrepresentation, contraventions of Trade Practices Act 1974 (Cth) or breach of contract - whether balance of convenience favours grant of injunctions - whether damages are an adequate remedy.
Trade Practices Act 1974 (Cth) s88
Decro-Wall SA v Marketing Ltd [1971] 1 WLR 361
Hill v CA Parsons Ltd [1972] Ch 305
Moschi v Lep Air Services Ltd [1973] AC 331
075 883 626 PTY LTD, F AND R DUCROT PTY LTD, NAVYGROVE PTY LTD, ALDERED PTY LTD, RM AND S KING-GEE PTY LTD AND MAVOJET PTY LTD v CSR LIMITED
QG 59 of 1998
COOPER J
BRISBANE
17 JULY 1998
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QG 59 of 1998
BETWEEN:
075 883 626 PTY LTD ACN 075 883 626
FIRST APPLICANTF AND R DUCROT PTY LTD ACN 070 087 688
SECOND APPLICANTNAVYGROVE PTY LTD ACN 070 107 676
THIRD APPLICANTALDERED PTY LTD ACN 077 626 478
FOURTH APPLICANTRM AND S KING-GEE PTY LTD ACN 069 524 214
FIFTH APPLICANTMAVOJET PTY LTD ACN 077 574 451
SIXTH APPLICANTAND:
CSR LIMITED ACN 000 001 276
RESPONDENTJUDGE:
COOPER J
DATE OF ORDER:
17 JULY 1998
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
The application for interlocutory relief is dismissed.
Costs of and incidental to the notice of motion, including reserved costs, be each party’s costs in the proceedings.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QG 59 of 1998
BETWEEN:
075 883 626 PTY LTD ACN 075 883 626
FIRST APPLICANTF AND R DUCROT PTY LTD ACN 070 087 688
SECOND APPLICANTNAVYGROVE PTY LTD ACN 070 107 676
THIRD APPLICANTALDERED PTY LTD ACN 077 626 478
FOURTH APPLICANTRM AND S KING-GEE PTY LTD ACN 069 524 214
FIFTH APPLICANTMAVOJET PTY LTD ACN 077 574 451
SIXTH APPLICANTAND:
CSR LIMITED ACN 000 001 276
RESPONDENT
JUDGE:
COOPER J
DATE:
17 JULY 1998
PLACE:
BRISBANE
REASONS FOR JUDGMENT
Each of the applicants was at all material times a supplier of cartage services to the respondent for the delivery of readymix concrete. The services of each applicant are provided under a written contract entered into between the applicant and the respondent. Each contract is identical and the entry of the respondent into contractual arrangements with its carriers in such a form has been authorised under s88(1) of the Trade Practices Act 1974 (Cth) “the Act”).
The contract as to its term provides :-
“3.1The term of this contract will be two (2) years, commencing on 1st July 1996, regardless of the date on which the Carrier has accepted this contract as offered to him.
a)The Carrier (except in the case of a Short Term Carrier), during the initial two (2) year term may at any time on or after the Contract commencement date of 1st July, 1996, apply to CSR to have the term of his Contract extended on the following basis:
i)If the Carrier (except in the case of a Short Term Carrier), as at the date of an approved application to extend his Contract, operates a truck less than or equal to five (5) years of age from the date of manufacture of the truck, then subject to Clause 11.3, the term will be extended for the appropriate period to adjust the term of the Contract to a maximum of ten (10) years from the original Contract commencement date of 1st July, 1996, to 30th June, 2006, or;
ii)If the Carrier (except in the case of a Short Term Carrier), as at the date of an approved application to extend his Contract, operates a truck less than or equal to six (6) years of age from the date of manufacture of the truck, then subject to Clause 11.3, the term will be extended for the appropriate period to adjust the term of the Contract to a maximum of nine (9) years from the original Contract commencement date of 1st July, 1996, to 30th June, 2005, or;
iii)If the Carrier (except in the case of a Short Term Carrier), as at the date of an approved application to extend his Contract, operates a truck less than or equal to seven (7) years of age from the date of manufacture of the truck, then subject to Clause 11.3, the term will be extended for the appropriate period to adjust the term of the Contract to a maximum of eight (8) years from the original Contract commencement date of 1st July, 1996, to 30th June, 2004, or;
iv)If the Carrier (except in the case of a Short Term Carrier), as at the date of an approved application to extend his Contract, operates a truck less than or equal to eight (8) years of age from the date of manufacture of the truck, then subject to Clause 11.3, the term will be extended for the appropriate period to adjust the term of the Contract to a maximum of seven (7) years from the original Contract commencement date of 1st July, 1996, to 30th June, 2003, or;
v)If the Carrier (except in the case of a Short Term Carrier), as at the date of an approved application to extend his Contract, operates a truck less than or equal to nine (9) years of age from the date of manufacture of the truck, then subject to Clause 11.3, the term will be extended for the appropriate period to adjust the term of the Contract to a maximum of six (6) years from the original Contract commencement date of 1st July, 1996, to 30th June, 2002, or;
vi)If the Carrier (except in the case of a Short Term Carrier), as at the date of an approved application to extend his Contract, operates a truck less than or equal to ten (10) years of age from the date of manufacture of the truck, then subject to Clause 11.3, the term will be extended for the appropriate period to adjust the term of the Contract to a maximum of five(5) years from the original Contract commencement date of 1st July, 1996, to 30th June, 2001, or;
vii)If the Carrier (except in the case of a Short Term Carrier), as at the date of an approved application to extend his Contract, operates a truck less than or equal to eleven (11) years of age from the date of manufacture of the truck, then subject to Clause 11.3, the term will be extended for the appropriate period to adjust the term of the Contract to a maximum of four (4) years from the original Contract commencement date of 1st July, 1996, to 30th June, 2000, or;
viii)If the Carrier (except in the case of a Short Term Carrier), as at the date of an approved application to extend his Contract, operates a truck less than or equal to twelve (12) years of age from the date of manufacture of the truck, then subject to Clause 11.3, the term will be extended for the appropriate period to adjust the term of the Contract to a maximum of three (3) years from the original Contract commencement date of 1st July, 1996, to 30th June, 1999, or;
b)Within two (2) years from the date of commencement, the term of extension of this Contract will be determined according to Clause 3.1a) and Schedule D herein completed, and signed by the Carrier and a representative of CSR.
c)Subject to Clause 11.3, after two (2) years form the date of commencement the Carrier may, after giving reasonable notice to CSR, replace the Truck with another Truck of the same configuration, provided that the replacement Truck is no older and is in better condition than the original Truck, however the term of the agreement as originally determined under Clause 3.1a) will not be varied.”
Each of the applicants within the two year period applied for an extension of the term to be calculated in accordance with clause 3.1(a).
The respondent refused to agree to an extension and save for the third and fourth applicants, continues to refuse to agree to any extension.
The refusal of the respondent was communicated to the first applicant by letter dated 18 March 1998, which read :-
“Re: Application for Contract Term Extension
Further to your letter dated 31 October 1997 and the CSR reply dated 24 November 1997, I take this opportunity to advise you CSR has now completed it’s [sic] review of the size and configuration of it’s [sic] fleet as mentioned in the CSR letter dated 24 November 1997.
As a result of this review we must formally advise you that CSR does not approve your application, dated 31 October 1997, for an extension of the term of your contract.
The term of your contract will therefore expire at the completion of normal trading hours on 30 June 1998.
Pursuant to clause 15.2 of the Queensland CSR Readymix Concrete Contract Carriers Contract, please present your concrete truck at 9.00am, 1 July 1998, to the address below for the mixer to be removed from your truck;
Agifix
8 William Banks Drive
Burleigh GardensShould the above time be inconvenient to you please advise me of a time which would be more suitable to you. However, I draw your attention to clause 15.2(a) and the contractual requirement that the mixer be removed from your truck within forty-eight (48) hours upon the termination of the contract.
I thank you in anticipation of your co-operation in this matter and for your passed [sic] association with CSR.
May I wish you every success in your future endeavours.”
A letter in similar terms was sent to each of the other applicants.
By application filed 25 June 1998 the applicants seek injunctive and declaratory relief to prevent the respondent from taking any steps to prevent the applicants from continuing to perform each applicant’s contract with the respondent and for relief under the Act in relation to conduct which the applicants contend is in contravention of s52, s53(g), s53B and s51AB of the Act.
The gravamen of the case contended for by the applicants is that, as a matter of construction, each was entitled, as of right, to an extension of the contractual term upon communicating that wish within the initial contract period of two years. Further, that the respondent represented to the applicants and others that the form of contract would provide for long term employment as carriers which meant, in the context in which the representations were made, employment for a period of up to ten years dependent upon the operation of the formula in clause 3.1(a).
The applicants contended that the respondent’s assertion that it is not bound to agree to a further term and that the contract was terminated at the expiration of two years from its commencement, amounts to a repudiation by the respondent of its obligations under each contract.
Although the proper construction of clauses 3.1, 22 and 24 of the contract are in dispute, there is no dispute that the respondent had at all times during the duration of the contract, the right to terminate the contract by recourse to clause 28 of it. Clause 28 provided :-
“28.1CSR may terminate a Carriers contract without compensation in the event of theft or serious or persistent and wilful misconduct by the respective Carrier, or upon use by the Carrier of the truck for transporting materials other than the products specified, without the prior approval of CSR.
In the event of non-agreement, both CSR and the Carrier will refer to the Disputes Procedure as detailed in clause 24.0, Disputes Resolution Procedure, herein.
28.2If CSR wishes to terminate this Carriers Contract with the Carrier other than pursuant to the provisions of Clause 28.1, herein, CSR will:
a)give the Carrier a minimum of ninety (90) days written notice of termination, or payment in lieu of notice, at the rate of the average daily respective Carrier Fleet over the ninety (90) day period or part thereof, immediately prior to termination.
b)pay to the Carrier on the date of termination compensation equal to:
i)the amount of termination payment after the initial two (2) years, is to reflect the remaining term of this Contract as defined in Clause 3.1a) and Schedule D. Compensation upon termination is determined in Clause 28.2(c) and based on annualised earnings, as described in Clause 28.2(b)(ii), meaning an amount equivalent to the average earnings of the prior two (2) years gross earnings by the Carrier under this Contract calculated from the last completed month of engagement.
ii)the compensation amount for the first two (2) years shall be fixed at 30% of annualised earnings for a Carrier who has not applied for or who has not received approval for an extension of it’s initial two (2) year Contract. Annualised earnings meaning an amount equivalent to the average earnings of the prior two (2) years gross earnings by the Carrier prior to the Contract commencement date of 1st July, 1996.
iii)a Short Term Carrier is not entitled to compensation for termination as detailed in Clause 28.2b)i) and c).
c)Table for compensation determination for the remaining term of the Contract;
Remaining Term
of ContractCompensation Value
(% of Annualised Earnings)10 years 100 9 90 8 80 7 70 6 60 5 50 4 40 3 30 2 20 1 10 0 Zero For the purpose of determining the remaining term of the Contract, any part years will be rounded up and will be considered a full year.
(Example:Three (3) years and one (1) month remaining agreement term will be considered as four (4) years.)
d)Upon termination, the cab and chassis will remain the property of the Carrier.”
The applicants have sought interlocutory injunctive relief pending trial or earlier order restraining the respondent from :-
(a)taking any steps to prevent each of the applicants from continuing to perform its cartage contract with the respondent;
(b)taking any steps to prevent each of the applicants from performing cartage work for the respondent;
(c)taking any steps to hinder the disputes resolution procedure involving each applicant and the respondent under clause 24 of each cartage contract.
The applicants submitted that there is a serious question to be tried :-
(a)as to whether the respondent has a discretion to refuse to approve an application for an extension beyond the initial two year period;
(b)as to whether the ability to adjust fleet size pursuant to clause 22 is subject to an obligation to approve extension pursuant to clause 3.1;
(c)as to whether clause 28 applies to non-approval of an application extension pursuant to clause 3.1;
(d)as to whether clause 22 requires referral to the “consultative committee” before non-approval of an application for an extension pursuant to clause 3.1;
(e)as to whether, if there is ambiguity in the contract in suit, the extrinsic circumstances of the alleged representations can be taken into account;
(f)as to whether the respondent is estopped from denying that the contracts with the applicants are long term;
(g)as to whether clause 24.1 operates to preserve the status quo once a dispute has been referred to arbitration pursuant to that clause;
(h)as to whether the applicants’ claims relating to the contravention of sections of the Act are made out.
These submissions are based primarily on the argument that, on a proper construction of the contract, the respondent does not have a discretion to not approve an application for an extension. It was submitted that the use of the phrase “will be extended” in clause 3.1 indicates the lack of a discretion. It was also submitted that “approved application” in clause 3.1 means an application to which no reasonable objection could be made and which ought to be approved.
The applicants also contended that the letters to the applicants advising of the non-approval do not amount to notices pursuant to clause 28, as they do not purport to terminate the contracts under clause 28, and make no reference to compensation payable under clause 28.2 as a particular sum payable to each applicant or at all.
The respondent submitted in opposition to the interlocutory relief, that there was no serious question to be tried and that the balance of convenience was wholly against the making of an order.
In support of the no serious question, the respondent submitted that without its agreement or approval, the applicants had no right to an extended term and that in any event the respondent, in refusing to approve a request for a further term, was merely exercising the power to terminate under clause 28 of the contract. In respect of the first applicant, it was submitted that it was terminating for cause under clause 28.1, and in respect of the remaining applicants who remain without an extended term, it was exercising the power under clause 28.2. In respect of those applicants the respondent submitted that the notification that an extended term would not be granted had been given in excess of ninety days prior to the end of the two year period. The respondent also submitted that the cheques for the compensation payments were being raised on 23 June 1998, notwithstanding that the applicants were unaware of this fact, and that no statement that compensation would be payable in any amount or at all had been communicated to the applicants.
I am satisfied that there is a serious question to be tried as to the applicants’ entitlement to an extended term on the proper construction of the contract, or alternatively, that the respondent was estopped from denying an entitlement to such an extension. I am also satisfied that there is a serious question to be tried that the respondent did not at any stage purport to exercise the power under clause 28 to terminate the contracts in suit. The communications from the respondent on one view contended that, absent an agreement for a further term, the contracts terminated by the effluxion of time after two years. Such a construction would not have involved the respondent in any obligation under clause 28 to pay compensation. Further, the cheque requisitions only arose after the legal advisers to the applicants had demanded undertakings as to continuity of employment under the contracts and threatened proceedings in default of the undertakings.
Absent a proper exercise of the power under clause 28 to terminate the contract during its term, there is a serious question to be tried that the contract remains on foot and that the conduct of the respondent is repudiatory of it.
On the question of balance of convenience, the applicants submitted that :-
(a)the livelihood of the principals of the second, fifth and sixth applicants depended on their contracts continuing;
(b)damages would be an inadequate remedy because nothing would be received until the conclusion of the trial;
(c)if the contracts were to continue, that is if the injunctions they seek were granted, there would be very little loss to the respondent because the applicants are independent contractors who are paid according to the amount of concrete supplied;
(d)on the worst case, other carriers’ (that is, other than the applicants) income will be marginally reduced by the maintenance of the contracts with the applicants;
(e)the applicants and their directors all offered undertakings as to damages;
(f)the granting of injunctive relief gives the applicants the opportunity to attempt to persuade the respondent not to give notice under clause 28.
The respondent submitted that the balance of convenience favoured refusal of injunctive relief because :-
(a)damages would be an adequate remedy;
(b)the court would not, by mandatory injunction, oblige the respondent to both maintain the contract and supply to each applicant work under the contract;
(c)to require the respondent to supply work to the applicants would impact on the earnings of other contractors for cartage services to the respondent.
Although each of the applicants is a company, in reality the contractual arrangements are designed to operate in a way whereby an owner driver of a concrete delivery truck obtains work from the respondent. The arrangement is to avoid the creation of the relationship of employer and employee, although the way in which the arrangements operate between each applicant and the respondent bear some similarity to a relationship of employer and employee.
The situation which presently confronts the applicants is that at best, from the applicants’ position, the respondent has repudiated its obligations under the contracts in suit. The respondent cannot unilaterally by its repudiating conduct terminate each contract. Faced with the repudiation the applicants may either accept the repudiation and seek damages or elect to treat the contract as remaining on foot.
In the present case, to elect to keep the contract on foot raises difficulties because, subject to the safety net provisions in clause 5 of the contract, the entitlement to remuneration only arises when the services are provided and that requires that the respondent provide the applicants with work to perform. In this situation there is an analogy between the position of an employee whose employment is wrongfully repudiated by an employer and the position of the present applicants.
In Decro-Wall SA v Marketing Ltd [1971] 1 WLR 361, which was not an employer/employee relationship, but a commercial agency arrangement for the distribution of goods, Sachs LJ said (at 375 - 376) :-
“The general law as to the effect of repudiation has long been settled. The locus classicus for reference purposes is the statement in plain and simple terms in the speech of Viscount Simon LC in Heyman v Darwins Ltd [1942] AC 356, 361: ‘But repudiation by one party standing alone does not terminate the contract. It takes two to end it, by repudiation, on the one side, and acceptance of the repudiation, on the other.’ Whether the other party accepts is a matter for his option: if he does not, the contract remains alive, as was recently emphasised in the White and Carter (Councils) Ltd case [1962] AC 413.
Mr Ross-Munro pressed on this court as his primary submission that whenever it was necessary for the completion of the contract for the repudiating party to co-operate by doing or refraining from doing some act - affording the other side some facility or at least not barring him from access to work - then the innocent party is bound to accept the repudiation save in exceptional circumstances such as when the remedy of specific performance is available. He argued alternatively that if this proposition was too wide, nonetheless contracts for personal service were an exception to the general rule that the innocent party has an option and that, the instant contract being analogous to a contract for personal service, the defendants here were bound to accept the plaintiffs’ repudiation.
In aid of the wider submission he relied on certain passages in the speech of Lord Reid in White and Carter (Councils) Ltd v McGregor [1962] AC 413, a case where there was no need for any co-operation by the repudiating party. He referred for instance at p 429, where it was said:
‘Of course, if it had been necessary for the defender to do or accept anything before the contract could be completed by the pursuers, the pursuers could not and the court could not have compelled the defender to act, the contract would not have been completed and the pursuers’ only remedy would have been damages.’
This echoed what was said earlier at p 428: ‘In most cases by refusing co-operation the party in breach can compel the innocent party to restrict his claim to damages.’ To my mind, however, neither these nor any other passages in Lord Reid’s speech conflict with that of Lord Hodson (with which Lord Tucker agreed) who restated the law regarding an unaccepted repudiation in plain terms, which can be summarised by quoting the sentence at p 445: ‘The true position is that the contract survives and does so not only where specific implement is available.’ That sentence unequivocally disposes of the primary submission.
The truth of the matter is that there are a great many cases in which it is of no benefit to the innocent party to keep the contract alive for the simple reason that, in the long run, unless the repudiating party can be persuaded or impelled to change his mind and withdraw his repudiation, the only remedy available to the innocent party will lie in damages. So there are vast numbers of cases where the innocent party can in one sense be said to be forced to adopt the only practicable course because any other would be valueless. In such cases it is the range of remedies that is limited, not the right to elect.
That does not alter the position that the innocent party can, if he so chooses, elect no [sic] to accept the repudiation and may thus in suitable cases keep open, maybe at certain risks, the chances either that the other party may yet take a different course or that it may be one of those special cases where the court will in its discretion grant some form of declaration or injunction on the basis that the contract has not yet been discharged.”
It is true that in exceptional cases interlocutory injunctive relief will be granted to restrain an employer from unlawfully terminating the employment of an employee. However, those circumstances are regarded as exceptional and ordinarily require that there is something which shows that damages are an inadequate remedy. The majority decision in Hill v CA Parsons Ltd [1972] Ch 305 dealt with such a case. There, Lord Denning M.R., after referring to the ordinary situation where a worker is wrongfully dismissed, said (at 314 - 315) :-
“I would emphasise, however, that that is the consequence in the ordinary course of things. The rule is not inflexible. It permits of exceptions. The court can in a proper case grant a declaration that the relationship still subsists and an injunction to stop the master treating it as at an end. That was clearly the view of the Privy council in the latest case on the subject, Francis v Kuala Lumpur Councillors [1962] 1 WLR 1411, where Lord Morris of Borth-Y-Gest said, at pp 1417, 1418:
‘when there has been a purported termination of a contract of service, a declaration to the effect that the contract of service still subsists will rarely be made’ adding that ‘Special circumstances will be required before such a declaration is made.’
Let me give an example taken from the decided cases. Suppose that a senior servant has a service agreement with a company under which he is employed for five years certain - and, in return, so long as he is in the service, he is entitled to a free house and coal - and at the end to a pension from a pension fund to which he and his employers have contributed. Now, suppose that, when there is only six months to go, the company, without any justification or excuse, gives him notice to terminate his service at the end of three months. I think it plain that the court would grant an injunction restraining the company from treating the notice as terminating his service. If the company did not want him to come to work, the court would not order the company to give him work. But, so long as he was ready and willing to serve the company, whenever they required his services, the court would order the company to do their part of the agreement, that is, allow him his free house and coal, and enable him to qualify for the pension fund. I take this illustration from the cases of Ball v Coggs (1710) 1 Bro Parl Cas 140; East India Company v Vincent (1740) 2 Atk 82, 83; Cuckson v Stones (1858) 1 E & E 248 and Warburton v Co-operative Wholesale Society Ltd [1917] 1 KB 663.
It may be said that, by granting an injunction in such a case, the court is indirectly enforcing specifically a contract for personal services. So be it. Lord St Leonards did something like it in Lumley v Wagner (1852) 1 De GM & G 604. And I see no reason why we should not do it here.”
In the present case the applicants want the contract maintained in order to work to earn remuneration. To earn remuneration under the agreement depends upon there being mutual co-operation and mutual confidence as to the allocation of work and the discharge of it. There is in the material evidence that, at least in respect of the first applicant, mutual co-operation and confidence has broken down. Although the respondent is not bound to provide any particular amount of work to each applicant, it is obliged to operate a plant roster in accordance with clause 26 and to make a safety net payment if the applicant makes itself available for work and the remuneration earned from such work does not reach the safety net figure.
There may be an argument that, for so long as the contract remains on foot and for so long as the applicants make themselves available for work, they are entitled to the safety net payment under clause 5 and Schedule A to the contract, notwithstanding that the respondent chooses not to provide them with cartage work, and that for this reason the court should declare that the contract remains on foot if that is the position which the applicants make out on trial. However, the respondent has made clear that it intends to terminate the services of the applicants. The reasonable inference is that if, on the trial of the action, it fails in its contention that it was not after 30 June 1998 bound by the contract nor bound to grant an extension of it, it will exercise its rights under clause 28 to terminate each contract. This follows because the respondent has determined to rationalise its fleet size. In that eventuality, the applicants will receive damages for the period the respondent wrongfully refused to perform its obligations under the contract and also receive such sum as is payable under clause 28 as compensation consequent upon the termination. On the balance of probabilities the applicants, if wholly successful, will receive a money sum whether by way of damages or as contractual compensation, for a limited period. They will not receive the benefit of the contract for the balance of a period up to ten years calculated in accordance with clause 3.1(a) of the contract.
For this reason, I am satisfied on balance that damages is an adequate remedy.
There is a further reason why damages should be regarded as an adequate remedy. The form of the injunctive relief sought in paragraphs 1(a) and 1(b) of the notice of motion would restrain the respondent from exercising its power under clause 28 pending trial. This would mean that, should the respondent wish to put beyond question the effective termination of the contracts in suit by now exercising the power under clause 28, it would be unable to do so. The applicants have not made out any ground to restrain such conduct on the part of the respondent. Further, it is open to argument that the form of injunctive relief sought in paragraph (b) may impact upon the ability of the respondent to maintain and operate a roster as contemplated by clause 26 of the contract. Paragraph (b) inferentially requires that the respondent provide cartage work to the applicants and it is not in terms constrained by reference to the contractual provisions which touch on the provision of such work.
The relief sought in paragraph 1(c) of the notice of motion relates to the dispute resolution procedure under clause 24 of the contract. That clause provides :-
“24.1It is understood and accepted by the parties to this Contract that work will continue normally during all negotiations and any necessary use of the dispute resolution procedure described in this Clause.
24.2When there is a disagreement, the Carrier will attempt to resolve the matter by negotiating with the CSR representative on site at the Plant to which the Concrete Truck is currently assigned.
24.3Where the matter is not resolved, the Carriers Representative as appointed in Clause 18 will attempt to resolve the matter by negotiation with the CSR representative on site.
24.4If the matter remains unresolved, the Consultative Committee and/or the Carriers Representatives may at the option of the Carrier be party to continued discussions/negotiations with the relevant representatives of CSR.
24.5In circumstances where the matter remains unresolved, the matter will be referred to an Arbitrator for determination, which determination will be binding upon CSR, the Carrier, the Consultative Committee and the Carriers Representative.
24.6For the purpose of this Clause, CSR, the Consultative Committee and the Carriers Representative will agree upon a person to be appointed from time to time as Arbitrator. In the event that agreement cannot be reached as to the person to be appointed as Arbitrator, then the person to act as Arbitrator for the purposes of this Clause will be a person nominated by the President of the Institute of Arbitrators.
24.7The Arbitrator will nominate the procedure to be adopted in respect of any matter referred to him and may, if he desires, include in that procedure processes of conciliation, mediation and/or arbitration.
24.8.All costs associated with the Arbitrator, shall be shared equally between CSR and the respective Carrier.”
There is a real question as to the nature of the disputes which are capable of resolution under the procedure set up by the clause. Clearly operational disagreements arising in the course of performing work under the contracts are covered.
Clauses 24.2, 24.3 and 24.4 deal with resolution of a disagreement by the carrier and the respondent’s on-site representative at the plant. The clauses deal with the progression of that disagreement to arbitration under clause 24.5. Questions as to whether or not a contract exists and whether the respondent is obliged to grant a further term or entitled to terminate a contract, are not ones which ordinarily one would find capable of being resolved by the respondent’s on-site representative at the plant to which the concrete truck is assigned. In this context, clause 24.1 is more readily seen as applying where there are operational disagreements arising during the performance of work under the contract and not otherwise. So construed, clause 24 does not require the respondent to grant an extension of the contractual term or to continue to provide work either under a contract or on contractual terms pending resolution of the dispute where the contractual term has ended.
If the matters which have been referred to arbitration under clause 24 are properly the subject of arbitration in accordance with that clause, termination of the contract will not terminate the applicants’ right to arbitrate which stands as an independent agreement apart from the cartage contract: Moschi v Lep Air Services Ltd [1973] AC 331 at 350. The conduct of the arbitral proceedings is not a matter which requires injunctive relief of the type claimed in paragraph 1(c) of the notice of motion.
For the above reasons the balance of convenience is against the making of the orders sought.
The application for interlocutory relief is dismissed.
Although the applicants have failed in their application, that does not necessarily reflect the merits of their substantive claim. Accordingly, I am satisfied that the proper order is that costs of and incidental to the notice of motion, including reserved costs, be each party’s costs in the proceedings: Kerr on Injunctions (3rd Ed) (1888) at p 30.
I will hear the parties as to directions for the future conduct of the matter.
I certify that this and the preceding fifteen (15) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Cooper
Associate:
Dated: 17 July 1998
Counsel for the Applicants: N E Ulrich Solicitor for the Applicants: Reidy & Tonkin Counsel for the Respondents: J C Sheahan SC with K A Barlow Solicitor for the Respondents: Corrs Chambers Westgarth Date of Hearing: 13 July 1998 Date of Judgment: 17 July 1998
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