Allied Express Transport Pty Ltd v BAX Global (Aust) Pty Ltd (No 2)

[2006] NSWSC 1180

CITATION:	Allied Express Transport Pty Ltd v BAX Global (Aust) Pty Ltd (No 2) [2006] NSWSC 1180
HEARING DATE(S):	16/10/06, 18/10/06, 19/10/06, 20/10/06, 23/10/06, 24/10/06, 25/10/06, 30/10/06, 31/10/06
JUDGMENT DATE :	13 November 2006
JURISDICTION:	EQUITY DIVISION/ Commercial List
JUDGMENT OF:	Gzell J
DECISION:	Plaintiff entitled to judgment on claim subject to set-off. Principles upon which items in cross claim made out determined. Matter adjourned to enable parties to agree on quantum.
CATCHWORDS:	CONTRACTS - General Contractual Principles - Offer and Acceptance - Whether mutual assent to contractual terms - Negotiations for contracts of delivery by plaintiff from defendant's warehouses of its customers' goods to consignees - Negotiations partly oral and partly in writing - Negotiations incomplete when deliveries commenced - What were the terms of the contract? - Whether plaintiff entitled to payment of outstanding invoices subject to equitable set-off - Whether defendant entitled under the contract for loss or deemed loss of goods by plaintiff - No principles involved
CASES CITED:	Trentham (G Percy) Ltd v Archital Luxfer Ltd [1993] 1 Lloyd's Rep 25 Foxtel Management Pty Ltd v Seven Cable Television Pty Ltd (2000) 102 FCR 464 Branir v Owston Nominees (No 2) (2001) 117 FCR 424 Chitty on Contracts, 29th ed, Sweet & Maxwell, London, 2004
PARTIES:	Allied Express Transport Pty Ltd - Plaintiff/Cross-Defendant BAX Global (Aust) Pty Ltd - Defendant/Cross-Claimant
FILE NUMBER(S):	SC 50001/06
COUNSEL:	Mr T Davie - Plaintiff/Cross-Defendant Mr J Lockhart - Defendant/Cross-Claimant
SOLICITORS:	Hassett Dixon Solicitors and Attorneys - Plaintiff/Cross-Defendant Allens Arthur Robinson, Solicitors - Defendant/Cross-Claimant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

GZELL J

MONDAY 13 NOVEMBER 2006

50001/06 ALLIED EXPRESS TRANSPORT PTY LTD v BAX GLOBAL (AUST) PTY LTD (NO 2)

JUDGMENT

Introduction

1 BAX Global (Aust) Pty Ltd provided warehousing and delivery services for, amongst other customers, Dell Asia Pacific Sdn and Samsung Electronics Australia Pty Ltd. Allied Express Transport Pty Ltd entered into an agreement with BAX to deliver goods for Dell and, subsequently, for Samsung. The terms of those agreements are in dispute. Allied claims that it agreed to carry Samsung goods on the same terms as CTI Logistics Ltd had carried them prior to its takeover by Allied. Allied claims it is entitled to payment of outstanding invoices. BAX claimed that it was a term of the Dell contract that it was a pre-condition to payment that Allied produce a POD, a proof of delivery, and it failed to do so. BAX has abandoned that claim. Allied provided labourers at BAX warehouses to sort goods into piles for different delivery runs. BAX says it did not agree to pay this cost.

2 By its cross-claim, BAX asserts that it was a term of the Dell contract that Allied was liable to BAX for lost or missing goods and goods for which no POD was provided containing specified information to a maximum of $1,000 per consignment and $50,000 per incident. BAX claims that Allied agreed to carry Samsung goods under the terms of the Dell contract and Allied is estopped from asserting to the contrary. If the carriage was in terms of the CTI contract, the claims for failure to produce PODs were landed costs plus 5% up to a maximum of $2,500. BAX asserts a right of set-off against any amount for which it is liable to Allied.

3 Because of the significance of oral communications to the determination of the terms of the contracts between the parties, I rejected the affidavit evidence of conversations and required them to be proved orally.

The abandonment of the “no POD, no pay” issue

4 Both in its outline of submissions and in its summary of issues delivered before trial, BAX contended that it was a term of the agreement between the parties that if Allied did not produce a POD for a delivery, Allied was not entitled to payment.

5 During the trial, evidence was adduced from BAX witnesses as to conversations in which it was said that this requirement was put to Allied witnesses and agreement was reached. A deal of the time at trial was taken up with examination and cross-examination on this issue.

6 In par 13 of its final written submissions, BAX for the first time stated:

“BAX no longer contends that Allied’s entitlement to be paid in respect of a delivery depended upon Allied producing a POD for the delivery. Accordingly, any discussions between BAX and Allied as to whether payment of invoices and provision of PODs were linked are of no relevance.”

7 BAX gave no explanation for this key change of course. One might take the view that the veracity of those BAX witnesses who testified that agreement had been reached on this issue was affected by this change in course and little confidence should be placed on their other evidence where in conflict with Allied witnesses.

8 On the other hand, one might take the view that the change in course was simply a concession that did not reflect upon the testimony of any of the BAX witnesses. I have adopted this course. I have not rejected evidence of BAX witnesses on the basis of the change in course.

9 On the issue of costs, however, other considerations may be apposite.

10 Since the issue was said to be central to the conversations between the parties, evidence on this topic cannot be entirely ignored in analysing the negotiations that led to agreement between the parties.

The tender documents

11 Anwar Feghali was the projects and implementation manager for New South Wales of BAX. He prepared a tender document in April or May 2003. He said it was sent to a number of transport providers including Allied. Amongst other things it stated: “100% PODs (24-48Hrs).”

12 Peter Paul Botica was Allied’s New South Wales state sales manager. He denied that Allied was invited to tender and he denied Allied was sent a copy of the tender document. On this issue he was not cross-examined. Nor was the matter raised with Mr Feghali in evidence in chief.

13 I have no reason to doubt Mr Botica’s evidence that the tender document was not received by Allied.

The early meetings

14 The early meetings in May 2003 were between Mr Botica and Mr Feghali. They were of little consequence. Mr Feghali said that Allied made an oral presentation. Mr Botica said Mr Feghali asked why Allied had not tendered and the conversations were limited to ascertaining the basis upon which Allied should quote for the work.

15 The work was the delivery of computers and related products consigned by Dell to commercial premises in metropolitan Sydney as directed by BAX.

16 Colin Albert McDowell was the managing director and founder of Allied. Jim Georges was the general manager, sales. Following discussions with them, Mr Botica sent a memorandum to Mr Feghali stating a price of 19.5 cents per kilogram using a 167 cubic metre rate for the work. The memorandum stated that the rate did not include insurance. It could be implemented, if required, at an agreeable rate.

Meeting on 10 June 2003

17 In his evidence in chief, Mr Georges said that while CODs, confirmations of delivery, were mentioned at a meeting on 10 June 2003, there was no mention of PODs.

18 A COD is sent electronically by a driver once a delivery has been made. It contains no signature of the consignee. A POD contains a signature on behalf of the consignee.

19 In cross-examination, however, Mr Georges agreed that he had said that Allied would set up an EDI, electronic data interchange, computer system whereby BAX could effectively book jobs on line the day before, and Allied would send enough drivers to do the booked job the next morning. The drivers would scan their freight using an on-site scanner before loading their vehicles. They would then deliver and get a signed POD, if possible, and take that back to the vehicle. Each vehicle would have an MDT, a mobile data terminal, and the driver would enter details of the POD into the MDT. At the end of the day the driver would drop off the paper work at Allied, including the hard copy POD which would be scanned onto the internet where it could be accessed by BAX.

20 The work Allied agreed to perform also included the provision of labourers at BAX warehouses to sort goods into piles for different delivery runs, the metropolitan area having been divided by postcode into a number of runs.

21 Prem Chandar Ramachandran was the logistics manager of BAX. Mr Georges agreed that during the meeting Mr Ramachandran said that the system would need to have a track and trace feature so that BAX could track the progress of a delivery on the internet. Mr Georges agreed that he responded that they would have that facility from the scanning by the driver as BAX would get an electronic COD and the hard copy POD would be scanned and posted on the internet.

22 Mr Georges maintained that the conversation at the meeting was primarily concerned with CODs. He said BAX regarded CODs as essential for every delivery and that PODs were not a major issue for BAX. But when a delivery was questioned, BAX would require a POD.

23 It was put to Mr Georges that Mr Ramachandran asked what the COD would have on it and Mr Georges said it would have the BAX job number, the time of delivery, the name of the receiver but not the signature. BAX would have to access the internet to see the signature and Mr Ramachandran said that BAX would need to be able to access the physical POD with the signature if delivery was in issue. BAX needed the PODs on request. Mr Georges replied that the hard copy PODs would be back at Allied and could be retrieved if necessary.

24 It was put to Mr Botica that Mr Feghali had said that BAX would not pay Allied for deliveries for which it could not provide a POD. Mr Botica denied that this was said. It was suggested that his recollection might be faulty. It was put that it was possible that the words were used. Mr Botica replied: “No. I would have remembered that. That is a very important part when it comes to transport.”

25 It was submitted that Mr George’s faulty recollection that PODs were not discussed at the meeting put his evidence in doubt. But he freely conceded that he was in error and agreed with the conversations put to him. I found Mr Botica’s evidence on the issue of PODs convincing. Furthermore, the “no POD, no pay” proposition was not put to Mr Georges.

26 No evidence was adduced from Mr Feghali as to what he said at the meeting. Mr Ramachandran said that at the meeting he said there was a clear requirement for 100% PODs and CODs to be delivered back to BAX. He said Mr Georges acknowledged that there was no problem in providing this service. But neither the statement of Mr Ramachandran nor the response of Mr Georges was put to Mr Georges in cross-examination. Nor did Mr Ramachandran say anything about “no POD, no pay”.

27 Alain Brard was an account manager with BAX with responsibility for the Dell accounts. He testified that he said at the meeting that prerequisites were track and trace capability, the provision of delivery of every consignment, and the obtaining of PODs for shipments delivered. He said that Mr Botica responded that Allied would provide PODs on every consignment. He said that he told Mr Botica that, as stipulated in the tender document from Mr Feghali, BAX would not pay for deliveries for which Allied could not provide a POD.

28 This conversation was not put to Mr Georges or to Mr Botica in cross-examination. It was an important part of BAX’s case and the failure is significant.

29 Mr McDowell came into the meeting late and made general comments only.

30 I find that at the meeting of 10 June 2003, Mr Georges, on behalf of Allied, agreed that Allied would obtain a signed POD for each delivery, if possible. BAX failed to establish, however, that at the meeting Allied agreed that it would not be paid for a delivery unless it produced a POD.

The documentation

31 Shortly after the meeting of 10 June 2003, BAX sent Allied a Transportation Agreement. Exhibit A to the Transportation Agreement was a SOW, a Statement of Work. Exhibit B was a Pricing Schedule. The Pricing Schedule increased Mr Botica’s rate of 19.5 cents per kilogram by 6% to 20.67 cents per kilogram to cover insurance for a maximum of $1,000 per consignment and $50,000 per conveyance or load.

32 Clause 7 of the SOW required the carrier to establish a reporting process that insured POD information daily, within 24 hours of dispatch. Clause 14.4 of the Transportation Agreement provided that the POD referred to in the SOW was to include as a minimum, the BAX Global reference number, the number of pieces and weight, the correct delivery address, the printed name of the receiver, the receiver’s signature and the date and time of delivery. Clause 14.5 provided that a failure to provide a POD that met these requirements constituted not only a procedure failure, but also evidence of lost or missing goods. Liability for lost or damaged goods lay with the carrier under cl 9. Clause 10 contained a claims procedure.

33 On 24 June 2003, Mr Botica sent to Mr Feghali insurance and security information for inclusion in the Pricing Schedule. A revised Pricing Schedule incorporating this information was sent to Mr Botica on 26 June 2003 to which he responded on the same day that the information was correct and Allied would abide by the Pricing Schedule.

34 The Pricing Schedule included the provision of two men per truck for hotspots with an hourly charge for the second man. It also provided that Allied would provide palm pilots and cages for vehicles delivering to hotspots at its expense if the contract between the parties was for two years with a one year option to enable Allied to recoup these costs.

35 Anthea Gilmore was the legal counsel for Allied. It was her job to review the Transportation Agreement and suggest changes. This she did on 27 June 2003. Her response, amongst other changes, sought the removal of cl 9 and the exclusion from cl 14.4 of the requirements that a POD specify the correct delivery address and the printed name of the receiver.

36 Matthew Kari was the national risk officer of BAX. He was directed to negotiate with Ms Gilmore on behalf of BAX. He responded to Ms Gilmore’s requests on 1 July 2003. He maintained that cl 9 should specify a level of liability in the carrier and suggested a new provision limiting the liability to a maximum value of $1,000 per consignment with a limit of $50,000 per incident. BAX refused to alter cl 14.

37 There was a response from Allied on 2 July 2003. The response had been drafted by Ms Gilmore who was leaving for a vacation. It was sent on her behalf by Mr Botica. It accepted the amendment to cl 9 and agreed to cl 14.4.

38 Mr Botica said that in using the word “agreed” in the 2 July 2003 email, he did not consider he was binding Allied to anything. Rather he was working up a draft agreement to be submitted to the directors. But Mr Botica was merely forwarding the email that Ms Gilmore had compiled.

39 Mr McDowell’s daughter, Michelle McDowell, was the general manager of Allied. Mr McDowell said that it was Allied’s policy for him to sign agreements with his daughter as co-signatory. Mr Botica said that Ms Gilmore reported to Ms McDowell. Mr McDowell said he believed that Ms Gilmore negotiated with Grant Goodman at that time. Mr Goodman was general manager, business. Mr McDowell was mistaken in that belief. Mr Goodman said the only persons who reported to him were two warehouse managers.

40 There was nothing tentative in the email of 2 July 2003. It placed no qualification upon the statements that Allied agreed with certain terms. Neither Ms McDowell nor Ms Gilmore gave evidence. In the absence of direct evidence as to the authority of Ms Gilmore, I infer that she had instructions from Ms McDowell to agree to the terms of the Transportation Agreement and that Ms McDowell had authority to bind Allied. Mr McDowell was not aware that Allied and BAX were negotiating a written contract but he did say that part of Ms Gilmore’s responsibilities was to assist with negotiations.

41 The email of 2 July 2003, contained requests for alteration in a number of respects. On 18 July 2003, Mr Feghali’s statement of three remaining issues was sent to Mr Botica. The three issues were cl 4.3 with respect to additional charges, cl 10.2 and cl 10.3 relating to claim processing and the inclusion of a not to solicit clause.

42 In early July 2003, Mr Feghali had a discussion with Mr Georges about the SOW. Mr Feghali agreed in cross-examination that Mr Georges said Allied would approach what BAX wanted in the SOW on a best endeavours basis and see what it could do. Allied was not going to do everything in the SOW. Mr McDowell would never sign off on some of it. He said a lot depended upon volume. The greater that was, the more were the things that Allied could do.

The 30 July 2003 version

43 Towards the end of July 2003, Mr Botica and Mr Feghali met to finalise the SOW and to agree on implementation. Mr Feghali said during the meeting he said "no POD, no pay" to which Mr Botica agreed, saying he understood that to mean that if Allied did not provide a POD it would not be paid.

44 In his affidavit in reply, Mr Botica had denied this conversation. It was not put to him in cross-examination. The SOW was not finalised.

45 On 29 July 2003, Mr Kari sent Ms Gilmore a version of the Transportation Agreement highlighting cl 4.3, cl 10.2 and cl 10.3 and provision for a not to solicit clause in cl 22. In addition, cl 6.2 with respect to the contents of electronic invoices was highlighted. Mr Kari sought Ms Gilmore’s suggested wording of these provisions. The document contained a blank SOW and a blank Pricing Schedule.

46 Ms Gilmore responded on 30 July 2003 attaching the Transportation Agreement with her suggested wording of cl 4.3 and cl 22 and with no comment on cl 6.2 or cl 10.2 and cl 10.3. She said: “I am just awaiting now your insurance stuff and I will forward this onto the insurer. If you’ve got any problems just give me a call on 9796 0374 and we will fix them up.”

47 The inference to be drawn from this exchange between Ms Gilmore and Mr Kari is that there were few outstanding items of the Transportation Agreement other than the SOW and the Pricing Schedule that remained to be negotiated.

48 Neither Mr Kari’s version nor Ms Gilmore’s version in response made any change to cl 14 and, in particular, the requirement in cl 14.5 that a failure to provide a POD constituted not only a procedure failure, but also evidence of lost or missing goods, liability for which was governed by cl 9. Nor was there any change to cl 9 and, in particular, to cl 9.1 which provided that Allied accepted all risk liability for any goods lost or damaged whilst being transported by it, their subcontractor or their agent or any other party to a maximum value of $1,000 per consignment with a limit of $50,000 per incident.

49 Mr Kari responded on 30 July 2003, saying he would review Ms Gilmore’s suggested amendments with senior management and advise. On the same day Ms Gilmore indicated that she was unaware of what had been discussed regarding invoicing and she had made no change for that reason.

50 The outstanding issues did not affect Allied’s liability for failure to produce a POD on request nor did it affect the “no POD, no pay” issue.

51 In late July 2003, Mr Feghali telephoned Mr Georges and asked Allied to start work. Mr Georges said nothing about the terms upon which Allied would commence work. In particular, he said nothing about work being subject to the standard terms that appeared on the back of Allied invoices.

52 Mr Georges was aware that documentation was being negotiated and that it had not been finalised. He said he did not believe the terms that had been agreed would govern the relationship between the parties. He said it was common practice for Allied not to have a written contract with a client and reliance was placed on “a handshake agreement.”

53 Allied commenced to deliver Dell products on 5 August 2003.

Legal Principles

54 It may not be possible to analyse the contractual position of parties to protracted negotiations by the notions of offer and acceptance. Reference is made to this problem in Chitty on Contracts, 29th ed, Sweet & Maxwell, London, 2004 at [2-026]:

“When parties carry on lengthy negotiations, it may be hard to say exactly when an offer has been made and accepted. As negotiations progress, each party may make concessions or new demands and the parties may in the end disagree as to whether they had ever agreed at all. The court must then look at the whole correspondence and decide whether, on its true construction, the parties had agreed to the same terms. If so, there is a contract even though both parties, or one of them, had reservations not expressed in the correspondence. The court will be particularly anxious to hold that continuing negotiations have resulted in a contract where the performance which was the subject-matter of the negotiations has actually been rendered. In one such case a building sub-contract was held to have come into existence, even though agreement had not been reached when the work was begun, because during its progress outstanding matters were resolved by further negotiations; and this contract may then be given retrospective effect to cover work done before the final agreement was reached.”

55 The case to which reference was made was Trentham (G Percy) Ltd v Archital Luxfer Ltd [1993] 1 Lloyd’s Rep 25. At 27, Steyn LJ pointed to the impact of the fact that the transaction is executed rather than executory. His Lordship said: “The fact that the transaction was performed on both sides will often make it unrealistic to argue that there was no intention to enter into legal relations”. The passage was quoted with approval by Beaumont J in Foxtel Management Pty Ltd v Seven Cable Television Pty Ltd (2000) 102 FCR 464 at [131].

56 In Branir v Owston Nominees (No 2) (2001) 117 FCR 424 at 525, Allsop J discussed the need not to constrict one’s thinking in the formation of contract to mechanical notions of offer and acceptance. There are circumstances in which parties go about their commercial business on the clear basis of some manifested mutual assent without ensuring the exhaustive completeness of documentation. In such circumstances, his Honour said that even in the absence of clear offer and acceptance, and even without being able to identify precisely when a contract arose, if it can be stated with confidence that by a certain point the parties mutually assented to a sufficiently clear regime which must in the circumstances have been intended to be binding, the court will recognise the existence of a contract.

57 In the instant circumstances, Allied commenced to carry out the work as described in the discussions between the parties and was paid at the rates specified in the Pricing Schedule to which Mr Botica had agreed. The agreement between the parties was thus executed rather than executory.

Nonconformities

58 Allied points to conduct of the parties inconsistent with the Transportation Agreement and submits that it did not contain the terms of the agreement between the parties.

59 Allied did not provide BAX with transportation services in accordance with the SOW. There was no three-month trial period. BAX requested Allied to carry out deliveries that were not confined to the postcode areas in Appendix A to the SOW in the first three months. There were no formal monthly business reviews.

60 The SOW contemplated two phases in Allied’s deliveries. First, to postcodes in Appendix A and, secondly, to the more extensive postcodes in Appendix B.

61 Allied submits that there was a failure to comply with a number of pre-conditions to proceeding to the second phase. Those pre-conditions were not contained in the SOW in its original form. They were included in a SOW attached to a Transportation Agreement forwarded to Ms Gilmore on 8 August 2003.

62 The pre-conditions that were not met before Allied was asked to proceed to the second phase were complete integration between BAX and Allied technologies, real time POD availability to BAX, consistent meeting of agreed operational and service level KPIs, key performance indicators, high quality customer services in terms of drivers’ presentation, drivers’ courtesy, reliable and secure vehicles, quick response time and effective escalation path, and evidence of complete track and trace functionality.

63 The SOW required a continuous improvement programme. That was not developed. Allied was required to compile and maintain standard operating procedures. That was not done. Vehicles were to have alarms and locking mechanisms for the cargo area. That was not done. Nor was there a security procedure in line with any Technological Asset Protection Association requirement.

64 The SOW required BAX to scan goods and produce a daily manifest. This was not always done. Instead, BAX required Allied to carry out numerous ad hoc deliveries. There was no check by BAX warehouse operators of physical goods loaded onto vehicles against run/load manifests.

65 With respect to the argument that these nonconformities meant that the Transportation Agreement did not contain the terms of the agreement between the parties, it should be noted that many of the submitted nonconformities were with a SOW that came into existence after the commencement of work. Secondly, Mr Georges made it clear that Allied would not comply with all the requirements of the original SOW. They would use their best endeavours to do so. Thirdly, non-compliance with some of the terms of the Transportation Agreement and its exhibits does not mean that the parties had not agreed on other terms within that documentation.

The terms of the agreement

66 Allied submits that the terms of the agreement were that it would provide delivery services in the metropolitan delivery area as instructed by BAX through the EDI process. Allied would be paid in accordance with the per kilo rate included in the Pricing Schedule. Allied would provide insurance which it was understood would limit its liability to $1,000 per consignment. Allied would provide security as contained in the Pricing Schedule. Allied would provide a track and trace facility with electronic provision of CODs through MDTs. Allied would provide PODs on request where delivery was in dispute. Invoicing would be in accordance with the Pricing Schedule. Palm Pilots would be introduced if the parties entered into a two-year contract with an extension of one year (but not otherwise). Allied would be entitled to place a lien on goods if BAX failed to pay charges due to Allied on reasonable demand in accordance with the terms on the back of its invoices. And Allied would pick up deliveries from the BAX warehouse, scan the goods, and provide sorting labour at that warehouse.

67 In my view none of the terms on the back of Allied invoices formed part of the agreement between the parties. They were never discussed and the entire concentration of effort was with respect to the Transportation Agreement, including its exhibits.

68 I find that by the time Allied commenced to carry Dell products, BAX and Allied had reached mutual assent on, and intended that they be bound by, the terms in the Transportation Agreement sent by Ms Gilmore to Mr Kari on 30 July 2003 and the terms of the Pricing Schedule, with the exception of the few items that had not been agreed at 30 July 2003, in performance by Allied of deliveries of Dell products to commercial destinations in the areas specified in the original SOW in the manner outlined by Mr Georges at the meeting of 10 June 2003.

69 In particular, I find that the parties’ agreement in relation to PODs when the deliveries commenced was as set out in the version of the Transportation Agreement sent by Ms Gilmore to Mr Kari on 30 July 2003.

The 8 August 2003 version

70 On 8 August 2003, Mr Kari sent a further version of the Transportation Agreement together with the Pricing Schedule and a new version of the SOW to Ms Gilmore. The Transportation Agreement contained the cl 4.3 that Ms Gilmore had proposed and the electronic invoice requirements in cl 6.2 were reduced. Ms Gilmore was asked to confirm the reduced provision. The not to solicit provision in Ms Gilmore’s cl 22 was deleted. Mr Kari stated that BAX financial controller had advised against it. Clause 10.2 and cl 10.3 remained the same as did cl 14 and cl 9.

71 In his email to Ms Gilmore, Mr Kari stated:

“I have been advised by Anwar that he and Peter agreed to the inclusions (sic) of a clause that meant BAX is not responsible for service charges on consignments that do not have POD’s (sic) . In response to this I have inserted a new clause 6.4. I have highlighted it for your reference and would appreciate your confirmation of acceptance.”

Clause 6.4 was in the following terms:

“BAX Global’s liability to pay for any consignments will be extinguished if Allied are not able to provide a signed and complete Proof of Delivery.”

72 There was no justification for the inclusion of this provision in the transportation agreement. It was not agreed at the meeting of 10 June 2003 and I do not accept Mr Feghali’s testimony that Mr Botica agreed to “no POD, no pay” at their meeting towards the end of July 2003 in light of Mr Botica’s denial and the failure of counsel to put the conversation to Mr Botica in cross-examination. I find that Allied had not agreed to the “no POD, no pay” concept stated in cl 6.4.

The 12 September 2003 version

73 On 12 September 2003, Matthew Kari sent a marked up version of the Transportation Agreement together with an amended SOW and an amended but incomplete Pricing Schedule to Ms Gilmore. The electronic invoice requirement in cl 6.2 was amended to include volume. Clause 9.1 was amended to state that all claims were to be at BAX customer invoice value. A shorter notice period was included in cl 10.2 and cl 10.3 was removed. There remained an argument with respect to the not to solicit provision.

74 In his email to Ms Gilmore, Mr Kari said: “Clause 6.1 - has been amended to incorporate 6.4 to provide clarity for both BAX and Allied”. Clause 6.1 was in the following terms:

“Payment will only be made for consignments where a confirmation of delivery has been made available for BAX Global validation”.

75 That was the final version of the Transportation Agreement. It contained the previously agreed cl 14 and it contained the limitation of liability of Allied in cl 9.1. It did not contain the 8 August 2003 “no POD, no pay” provision. That was replaced in the amendment to cl 6.1 by a “no COD, no pay” provision. A Transportation Agreement was never executed by the parties.

76 In my view there is insufficient evidence to suggest that the parties agreed upon a variation of the terms to which they had mutually assented by 30 July 2003 and the version of the Transportation Agreement sent by Ms Gilmore on 30 July 2003 remained the record of their contractual rights and obligations.

Samsung and Dell home delivery terms

77 Vincent Charles Caruana was the financial manager, reporting and logistics of BAX. On 31 October 2003, he was advised that Allied had acquired the business of CTI logistics Ltd. CTI performed deliveries for BAX of Dell home delivery products and of Samsung products.

78 Mr Caruana sent an email to Mr McDowell on that day containing the following:

“We need to understand which legal entity will be providing services to us as of Monday 3 Nov 2003.

We also need to clarify where Bax stands in terms of claims outstanding with CTI. Will Allied Express take an interest in clearing up these claims?

Would CTI continue to trade in any capacity as a separate legal entity?

On what conditions will the services be provided? Will they be on our current terms and conditions with CTI?”

79 Mr McDowell responded with the following:

“I have asked Jim Georges to contact you. He will be your Allied Express contact. Jim is our General Manager – Sales for Allied Express.
Peter Martino had no right to tell you what he did.

CTI WA is responsible for everything that happened and all historical information up to the 31/10/03. You may contact David Watson the General Manager of CTI Perth on 0418 942 666.

The legal entity for all trading as at the 3/11/03 is Allied Express Pty Ltd.

All claims outstanding for CTI up until 31/10/03 must be handled through the historical information at CTI Perth.

Yes CTI continues to trade as CTI Perth.

The terms and conditions under which Allied Express trades with you are the same as the ones we trade with Bax global for the Dell deliveries.”

80 Mr Caruana responded to Mr McDowell:

“I have already spoken to Jim.
He advised that as of Monday the entity is New Allied CTI and services will be based on our current terms and conditions and that the CTI entity will exist.
He advised that you guys will help us clear these claims up until 31/12/03 and will help clear any outstanding claims after this date with CTI Perth to maintain our good relationship.”

81 In his oral evidence, Mr Caruana said that he used the phrase “our current terms and conditions” in his response to Mr McDowell in the same sense as he used it in his initial email, that is the current terms and conditions between CTI and BAX.

82 In my view, that was a misconception. Mr McDowell responded to the question which legal entity would provide services from 3 November 2003 by identifying Allied. And he responded to the question on what conditions would the services be provided by saying the same terms and conditions as Allied provided Dell deliveries for BAX.

83 Those were the terms of the offer extended by Allied to BAX and, in my view, the subsequent conduct of BAX constituted an acceptance of that offer.

84 On this aspect of the matter, there is a paucity of evidence. Notwithstanding the difference that no insurance was obtained by Allied for Samsung deliveries and Mr Ramachandran’s suggestion that there was a difference with respect to the provision of PODs between Samsung deliveries and Dell commercial deliveries, it seems to me that performance by Allied and BAX of Samsung deliveries and Dell home deliveries was in response to Mr McDowell’s offer rather than Mr Caruana’s misconception of it. Mr Caruana thought the deliveries would be made by a new Allied CTI entity. Mr McDowell had indicated that it was Allied which would perform the services. And the services were performed by Allied with the assent of BAX.

85 In my view, therefore, the terms of the Samsung and Dell home delivery services were the same as the terms of the Dell commercial deliveries.

The Allied claim

86 Allied claims $439,187.44 for unpaid invoices. BAX accepts that it owes Allied $277,364.33 for Samsung deliveries and $3,204.01 for Dell deliveries but for its cross-claim. What is in issue is $158,619.10, although there is a slight difference between the parties as to this figure.

Lack of a reference number

87 BAX has withheld payment of invoices that lack a BAX reference number. It says it has been unable to reconcile these invoices with its records. The parties are agreed that the value of these invoices is $24,702.57 (although there may be a slight difference between them as to the figure).

88 Clause 6.2.2 of the Transportation Agreement required an Allied invoice to contain a consignment reference. Clause 6.2.3 required a BAX reference. Clause 6.3 enabled BAX to dispute any invoice. The undisputed portion was to be paid in accordance with the agreement and the disputed portion to be paid within 30 days of resolution of the dispute.

89 Allied’s failure to provide a reference constituted a breach of contract. But BAX was not entitled to withhold payment. There was no contractual term that the provision of a BAX reference on an invoice was a condition precedent to payment. The appropriate course was for BAX to claim damages for breach of contract in its cross-claim.

90 BAX booked ad hoc courier jobs with Allied. These deliveries were not entered through the EDI system and no BAX reference was provided to the drivers. The reference number was an Allied one. Allied produced evidence of delivery in the form of driver run sheets signed by the drivers, some of which, as a sample, were in evidence.

91 BAX maintains that it could not reconcile invoices with the Allied reference number to its records and it should not have to pay.

92 But Mr Ramachandran gave evidence that BAX maintained an internal continuous process of entering special jobs on a register with the Allied reference number and the BAX order number so that BAX was in a position to reconcile an invoice containing an Allied reference number alone.

93 It was submitted on behalf of BAX that Mr Ramachandran said this system applied only to Dell deliveries. BAX has been able to reconcile all Dell invoices that contained an Allied number but no BAX number.

94 I do not read Mr Ramachandran’s evidence in that way. He said that it was the same for Samsung and Dell.

95 In my view BAX has established no basis for withholding payment of Allied invoices that lacked a BAX reference. Furthermore, it has failed to establish that it suffered any damage, let alone damage equivalent to Allied’s invoiced amount, and was thus entitled to refrain from paying Allied’s invoices.

96 Some of the ad hoc deliveries were performed by Allied on a direct request from Samsung. BAX paid invoices rendered by Allied for this work only if Allied provided evidence that authorised Samsung personnel had requested the delivery, thereby enabling BAX to be reimbursed by Samsung.

97 BAX submits that there was no contractual term that required it to pay for work requested directly by Samsung. Further, it submits that Allied has failed to discharge its burden of proof because it is not possible to differentiate between those invoices for BAX booked ad hoc deliveries and those booked directly by Samsung.

98 BAX was aware that Samsung booked work directly from Allied. It took no steps to prevent this happening. It led Allied to accept instructions from Samsung and to deliver in accordance with those instructions as performance of the contract between Allied and BAX.

99 Whether it be put on the basis that BAX constituted Samsung its agent to book work, or as a variation of the contract, or as an estoppel based upon a representation upon which Allied acted to its detriment, I am of the view that Allied was entitled to payment of these invoices.

100 BAX says it would be unfair for it to be required to pay Allied when the lack of identity of the person at Samsung who placed the order, denies BAX the opportunity of recovering from Samsung. But Allied has produced proof of delivery and ought to be paid for its work. Having been apprised of the problem associated with Samsung placing orders direct with Allied, BAX ought to have stopped the practice or established its own procedures to ensure it was in a position to recover the cost from Samsung.

101 In my view, Allied has established an entitlement to payment of invoices totalling $24,702.57 or some slightly different figure.

“No POD, no pay”

102 The amount of the invoices in this category is $41,872.94, or some slightly different figure.

103 BAX does not appear to argue that the work, the subject of these invoices, was not done. The fact that Allied raised invoices leads to the prima facie inference that the work described in them had been done.

104 I have found that it was not a term of the contract that Allied was not to be paid unless it produced a POD. BAX has resiled from its assertion that it was a contractual term. BAX now says that these invoices fall into the same category as those that lacked a BAX reference. If that is so, BAX has failed to establish its entitlement to withhold payment for the reasons expressed above.

105 I find that Allied is entitled to payment of the invoices in this category totalling $41,872.94 or some slightly different figure.

Missing DFN reports

106 The amount of the invoices in this category is $21,396.67 or some slightly different figure.

107 A DFN, delivery failure notification, was created by BAX staff when Allied notified it that a delivery had failed. The SOW provided that Allied should contact BAX immediately should there be a delivery unable to be effected 100% accurately.

108 Mirna D’Antonio was the accounting manager, logistics for BAX. She took the view that if there was no DFN with respect to a re-delivery, Allied was not entitled to be paid. In her master file she recorded all Samsung delivery orders that had been dispatched and she recorded against each delivery the actual cost received from Allied with reference to the invoice number and invoice period. If a further invoice was raised by Allied, Ms D’Antonio was alerted to a duplication because an amount had already been recorded against the order number. She checked the DFN file, and if there was no DFN, she requested from Allied a credit note for the invoiced amount.

109 Allied has produced PODs with respect to these invoices. They contain a signature on behalf of the consignee. The inference is that a re-delivery took place. And that displaces the inference that the failure of BAX staff to record a DFN means that there was no re-delivery.

110 Prima facie, Allied has established re-deliveries for which it is entitled to be paid. If BAX asserts that there was no re-delivery, and the invoices constitute a duplication of charge, it has failed to adduce evidence sufficient to establish that proposition.

111 BAX submits the fact that the final delivery took place only one or two days after the original delivery supports the view that there was no re-delivery. I do not draw that inference in the absence of evidence that re-deliveries were attempted after a long interval of time.

112 In my view, Allied is entitled to payment under this heading in the amount of $21,396.67 or some slightly different figure.

Non-delivery charges

113 The parties agree that the value of the invoices in this category is $12,396.67.

114 In its closing submissions, Allied said that this related principally to second man charges and storage charges. Second man charges arose where a load was too heavy to be unloaded by one man. Storage charges arose when Allied stored Samsung goods because of a lack of space at BAX warehouses or because Samsung refused to take back goods.

115 BAX argues that there is no evidence to support this basis for the claim. It says Allied had raised the charges for warehousing and labour and forklift usage and that second and third man charges had been paid.

116 Marita Coe-Jennen was the Victorian operations manager of Allied. She said that on numerous occasions because BAX warehouses did not have room for their own freight, Allied had to store goods. She provided a list of such occasions but without a cost associated with them.

117 Adam Grubb was a warehouse manager for Allied. He gave evidence of the limited ability to return stock to Samsung, again without a costing.

118 John Richardson was national administration manager for Allied. He prepared a spreadsheet in which he identified a number of items not paid by BAX as second man charges at the rate of $30 per hour. Ms D’Antonio summarises the amount as “not transport.”

119 In my view, the evidence establishes that invoices totalling the agreed amount were rendered and rejected. There is some confusion as to whether the amounts relate to second man charges or to warehousing. In either event, however, I am of the view that they were appropriate charges. If Allied incurred expenditure in storing goods because BAX or Samsung would not take them back, that is a charge incidental to the performance of the contract, as is a charge for a second or third man if BAX required loads incapable of handling by one man to be delivered to Samsung consignees.

120 I am of the view that Allied has made out entitlement to payment of invoices under this category in the agreed sum of $12,396.67.

Kilo overcharges

121 The parties are agreed that the value of invoices in this category stands at $3,172.10.

122 Ms D’Antonio was originally of the view that $21,607.28 was not payable due to duplicate invoicing or incorrect weights having been charged.

123 It was common ground that Allied was entitled to charge 16 cents per kilogram for Samsung deliveries. Ms D’Antonio originally had a larger figure for alleged overcharges. Mr Richardson suggested there were arithmetic errors in her calculations. Ms D’Antonio accepted that, to the extent that Mr Richardson exhibited a delivery note that gave a delivery weight that was consistent with the weight charged by Allied, payment of the invoice should be approved.

124 In her last affidavit, Ms D’Antonio says: “Only a small amount relates in respect of which I remain of the view that Allied has charged for the wrong weight”. She gives no explanation for this belief. If BAX alleges a claim by Allied is in excess of its contractual entitlement, it should put on some evidence to establish that fact. It has not done so.

125 In my view, Allied is entitled to be paid its invoices in the agreed sum of $3,172.10.

Sorting charges

126 Allied claims $50,831.41 as the cost of its labour to sort Dell deliveries into their appropriate piles. The figure is agreed.

127 It was Allied’s obligation to provide labour to sort Dell products into appropriate piles. Allied says that obligation was varied.

128 On 8 December 2003, Mr Botica sent an email to Dennis Nelson, the New South Wales executive director of BAX, saying, amongst other things, that inconsistency of wave releases had moved Allied’s sorting costs up to ridiculous levels, and if BAX would not increase Allied’s rate per kilogram, Allied would like to ask for an exit agreement as soon as possible.

129 A meeting took place on 15 December 2003. Mr Georges said he put to the meeting that Allied walk away from the work or, alternatively, a new rate be struck. He did not recall putting to BAX the alternatives of BAX paying for Allied sorting labour, or BAX doing that work. When taken to his affidavit, in which he said he put those alternatives, he readily accepted his recollection was faulty and that what was said in the affidavit would possibly refresh his memory.

130 Mr Nelson said that at the meeting Mr Botica advised that BAX would need to pay for sorting labour or Allied would withdraw from the contract. Mr Nelson said that he was angry and indicated that he would not consider paying Allied for sorting labour and he would get back to them on BAX’s decision.

131 Mr Nelson said he subsequently resolved that BAX would do the sorting work but he could not recall whether he informed Allied of this decision. In cross-examination, Mr Nelson agreed that at the meeting it was agreed in principle that if necessary sorting work was to be carried out, it would not be at Allied’s cost.

132 BAX did not take over the sorting work. That continued to be performed by Allied. Mr Ramachandran said that he employed additional personnel to help Allied, but Allied provided personnel to carry out sorting throughout.

133 The evidence was clear that, whatever solution was found, Allied should not bear the cost of sorting after 15 December 2003. Mr Ramachandran agreed that Allied continued to provide sorting labour and it is with respect to that cost that Allied’s claim to $50,831.41 is made. In my view, Allied has established its entitlement to payment of this amount.

Allied’s entitlement

134 It follows that Allied’s claim to $439,187.44 has been made out and it is entitled to judgment in that amount subject to any right of set-off by BAX. It was not submitted that BAX lacked an equitable right of set-off.

BAX cross-claim

135 By its cross-claim, BAX claims amounts under various headings and a right to set-off those amount against Allied’s claim.

Missing PODs

136 Allied’s failure to produce a POD for a delivery made by it constituted evidence of lost or missing goods for which liability was governed by cl 9.1, in terms of cl 14.5 of the Transportation Agreement. Under cl 9.1, Allied accepted all risk liability for any goods lost or damaged whilst being transported by it, or its subcontractor, or its agent, or any other party to a maximum value of $1,000 per consignment.

137 BAX submits that cl 9.1 operates like a liquidated damages clause entitling BAX to recover the value of the goods the subject of a missing POD up to the capped amount. I do not accept that submission. The failure to provide a POD for a delivery performed by Allied, constitutes evidence of loss. If that evidence is rebutted, there is no loss or damage for which Allied is liable in terms of cl 9.1.

138 In my view, BAX’s claim for the value of goods the subject of deliveries for which no POD was produced by Allied up to the capped amount per consignment is misconceived. It is only entitled to the value of goods subject of an Allied delivery for which no POD was produced up to the capped amount if the presumption established under cl 14.5 is not rebutted.

139 BAX’s original claim was that there were 1,100 missing PODs. This number was reduced when Mr Grubb produced PODs signed by BAX personnel for returns of goods into the BAX warehouses. After the trial the number was further reduced to 822.

140 The request for Allied to produce PODs was not made as a result of a query of a delivery by a Samsung consignee. BAX created spreadsheets setting out all PODs that it said Allied had failed to produce. Revisions of these spreadsheets formed the basis of BAX’s claim against Allied.

Deliveries not made by Allied

141 Allied claims that it did not receive and deliver goods to a value of $332,169.81, applying the $1,000 cap.

142 BAX’s evidence is that its WMS, warehouse management system, shows goods allocated to Allied. Allied says there are a number of alleged missing PODs for which BAX has not produced a WMS allocation form. To the extent of that deficiency BAX’s claim should be reduced.

143 Allied says that a WMS allocation form alone is insufficient evidence of receipt of the goods by Allied. A manifest signed by an Allied driver is required.

144 Kristyn Worner was a senior analyst for BAX. She said allocation of consignments was automated and carried out by a carrier matrix. She did not know the basis upon which the identification of consignments was made. Anil Pillai was a commercial analyst of BAX. He conceded that allocation of consignments depended on the accuracy of the people entering data. He conceded that if there was an allocation but no manifest one could not say whether the goods were collected or not.

145 In the nature of things, systems are as good as the information entered. Mistakes may be made. But in the absence of evidence of inaccuracy, the output of the business system will be given considerable weight.

146 In any event, it is for Allied to rebut the presumption that goods were lost in its care. That presumption is not rebutted by evidence that mistakes may creep into an automated system.

147 Allied says that it did not raise an invoice with respect to the goods in this category and the inference should be drawn that the goods were never received by Allied.

148 I place greater weight on the evidence of allocation by the WMS than I do on the failure to raise an invoice. I find that the presumption under cl 14.5 of the Transportation Agreement has not been rebutted by that fact.

149 Allied says there are over 30 instances of Dell products for which BAX claims Allied has not provided a POD that were the subject of a claim by Dell against BAX that BAX rejected. If that be so, I am of the view the presumption is rebutted in those cases and BAX’s claim should be reduced accordingly. If BAX argued against Dell that the goods were delivered, it can hardly argue to the contrary against Allied.

150 Allied claims that a number of WMS allocation forms relied upon by BAX contain the words “POD Date” with a date inserted and “signature RCVBY”, presumably received by, with the words “Unreadable” or “Unknown”.

151 In my view, the presumption in cl 14.5 does not arise in those cases. The inference to be drawn from such entries is that somebody at BAX viewed a POD before making the comment. Again, BAX’s claim should be reduced for these entries.

152 Mr Richardson compared the signature of drivers on the manifests relied upon by BAX, with the signatures of drivers in Allied files and concluded that some of the signatures were not those of Allied drivers. I place little weight on this evidence. There may have been other signatures that were not on the file to which Mr Richardson had access. Ad hoc courier jobs were done by any driver, not necessarily one whose signature was held on file. Mr Richardson did not profess to be a handwriting expert and it is not clear to me why someone would represent himself to be an Allied driver if he was not. In my view the evidence of Mr Richardson does not rebut the presumption under cl 14.5 of the Transportation Agreement.

153 Allied submits that even if an Allied driver signed a manifest, it did not follow that the goods on the manifest were delivered by the driver because the loading procedures were such that Allied drivers could not check what was put into their trucks.

154 If an Allied driver signed a manifest for specified goods then, prima facie, specified goods were loaded on his truck. If he did not check what was on his truck that is not a matter which, in my view, rebuts the presumption arising from the failure to produce a POD for the receipt of goods by the consignees. In any event, if there was a discrepancy between the load and the manifest one would expect BAX to have been informed. Furthermore, the failure to check plays no part in the ability to obtain a POD with respect to correct deliveries.

155 General assertions by Allied that BAX was reluctant to sign for returned goods that, in Melbourne, additional stock was placed on trucks without paperwork, and that, in Melbourne, BAX rather than Allied stored the PODs, do not serve to rebut the presumption of loss with which Allied is faced. They are far too general and do not address the individual items upon which BAX relies.

COD but no POD

156 Based on the cap of $1,000, the amount claimed by BAX under this heading is $269,298.41.

157 The evidence was that drivers created a COD at the time of delivery of goods and it was electronically transmitted to BAX. Where a COD exists for a delivery, Allied submits that the presumption that the goods were lost under cl 14.5 of the Transportation Agreement is rebutted. It was submitted that BAX would enjoy a windfall gain if it was entitled to treat goods, the subject of a delivery evidenced by a COD, as lost.

158 BAX submits that the Transportation Agreement is clear in its requirement that Allied provide PODs. It submits that it would defeat the whole purpose of that requirement if Allied be absolved of any possible liability.

159 BAX submits that a COD might exist even though the goods were wrongly delivered, damaged or lost. It points to two instances in which a COD was provided even though the goods were stolen.

160 BAX is entitled, in my view, to the value of these stolen goods up to $1,000 in each case. But in other respects I am of the view that its claim fails. The purpose of a POD was to provide what should be irrefutable evidence of delivery in the event that a consignee claimed goods had not been delivered. The delivery system to which BAX assented provided evidence of delivery by the driver’s entry of details in his MDT upon delivery of goods. The Transportation Agreement did not make failure to provide a POD a matter of strict liability. It created a rebuttable presumption only. The failure was but evidence of lost or missing goods.

161 In the circumstances, under the system adopted by Allied with the assent of BAX, the electronic receipt by BAX of a COD was clear evidence of delivery and it rebutted any suggestion that the goods were lost.

162 In my view BAX is not entitled to the $269,298.41 claimed by it under this heading. It is entitled only in the case of the two instances of stolen goods mentioned above.

Other arguments

163 Allied contends that it is not liable to BAX for goods that BAX totals at $53,509.49 with the $1,000 cap. In this category are deliveries for which BAX’s own evidence recorded receipt of a COD according to Allied and instances where Allied held documents showing the destination of freight.

164 As to the former category, if it is made out, BAX’s claim should be reduced. As to the latter, it does not seem to me that the presumption of loss is rebutted by evidence that goods were to be delivered to particular addresses.

The alternative Samsung claim

165 If the Court did not accept that a failure to provide PODs was evidence of lost goods entitling BAX to recover the capped amount, BAX raised an alternative claim that it suffered loss by reason of the non-provision of timely PODs being an amount it paid to Samsung as a result of not being able to provide PODs to Samsung.

166 Since I have found that BAX is entitled to moneys under cl 9.1 of the Transportation Agreement, it is unnecessary for me to deal with the alternative cross-claim.

Dell deliveries

167 According to BAX, it paid $194,390.98 to Dell as a result of claims made by Dell against BAX that deliveries were lost, missing, stolen or wrongly delivered. BAX contends that these deliveries were allocated to Allied and it is entitled to this amount under cl 9.1 of the Transportation Agreement.

168 BAX is no longer pressing a number of these claims and its claim against Allied is reduced to $73,185.51 if liability is capped.

169 Allied says that cl 10.2 of the Transportation Agreement was in the following terms:

“BAX Global will advise their intention to lodge a claim for loss or damage within 7 days of becoming aware of an incident, (other than those reported by the Provider). BAX Global has 90 days from the advice date to lodge a claim.”

Allied claims that none of the Dell claims were made within those periods.

170 But the terms of the Transportation Agreement sent by Ms Gilmore to Mr Kari on 30 July 2003 contained the earlier version of cl 10.2:

“BAX Global has a ninety (90) days from the date notice is received from the Provider of actual damage to place a claim and one hundred and eighty (180) days in the case of missing/loss (sic) goods.”

171 The version of cl 10.2 relied upon by BAX was contained in the 12 September 2003 version of the Transportation Agreement. As I have said, there is insufficient evidence to suggest that the parties agreed upon a variation of the terms to which they had mutually assented by 30 July 2003 and the version of the Transportation Agreement sent by Ms Gilmore on 30 July 2003 remained the record of their contractual rights and obligations.

172 BAX points to the evidence of Ms Worner that BAX notified Allied of claims promptly. That may well be the case in the day to day operations of the parties, but the same may not have applied to the items in the spreadsheets.

173 There was a reason for time limits on claims. Allied had to be in a position to notify and claim from its insurer. BAX was aware of this need. It had been highlighted in the negotiations between Ms Gilmore and Mr Kari. The provision therefore had significance.

174 In my view, claims made by BAX for lost goods more than 180 days after notification by Allied in accordance with cl 9.1 of the Transportation Agreement should be excluded from the BAX claim.

BAX ICAR/Allied POD for delivery

175 With respect to some items, Allied claims that because there is an Allied POD, the goods could not have been lost. But BAX claims there is other evidence that establishes the loss and the POD cannot stand against the more specific evidence of loss. In my view that argument is correct. I place greater weight on specific records of loss than upon the inference to be drawn from the existence of a POD. In my view, items in this category are recoverable from Allied.

176 BAX staff generated ICARs, internal corrective action reports. Allied submits that some of them show that BAX rejected the Dell claim. BAX says the amounts were paid to Dell and points to credit notes given by BAX to Dell with respect to the individual deliveries specified in the spreadsheets. Ms Worner was not cross-examined on the accuracy of these documents. In my view, BAX is entitled to recover the amount of any credit notes up to the $1,000 cap from Allied. To the extent to which BAX rejected a Dell claim and there is no evidence of payment, BAX’s claim should be reduced.

177 Allied points to a number of items for which there is no ICAR. Ms Worner said that the absence of an ICAR would generally mean there was nothing wrong with the order and the order was delivered successfully. In my view items in this category have not been established as lost and the amounts should be deducted from the BAX claim.

178 In one instance there is no relevant exhibit to establish the loss and BAX’s claim should be reduced accordingly. Likewise, where the exhibit contains no reference to the alleged loss.

Allied COD for delivery

179 In a second class of case, the complaint is of an incomplete delivery. Allied argues that it delivered what it was given in the case of a single scan of one carton because Allied cannot check its contents. In the absence of an ICAR establishing that the single carton contained the missing items, these incidents should not be the responsibility of Allied. The inference is that the contents of the single carton delivery were deficient.

BAX ICAR/Allied POD for return

180 In a different category are goods returned to BAX as indicated in an ICAR or Allied POD. Some of these items have been withdrawn. Others in this category should be excluded from BAX’s claim if an ICAR indicates a return to BAX. For the reasons expressed in relation to deliveries based on Allied PODs, the inference of return is overridden by any specific evidence of loss.

Error acknowledged in ICAR

181 In a further category, ICARs indicate that two remaining items were lost due to “carrier changeover” and “supplier issue”. Neither of those claims is sustainable against Allied. They relate to other causes.

No ICAR

182 In another category are claims with respect to which no ICAR was created and in which Allied has a record of scanning in the consignment. The inference is that Allied delivered the freight since the absence of an ICAR suggests the delivery occurred. These items should be excluded from BAX’s claim.

No ICAR/Hearsay

183 In yet another category, Allied claims that the BAX claims are based on hearsay evidence only. No objection was taken to the tender. In my view the items in this category are unsustainable for the different reason that no ICAR was raised.

Part deliveries

184 With respect to part deliveries only, Allied claims that a POD establishes that it delivered the entire consignment. BAX says that an ICAR records that the goods were returned to BAX with some parts missing. In my view, the POD does not exclude the more specific evidence to the contrary and BAX is entitled to maintain its claim against Allied with respect to goods recorded as missing on return to BAX.

Hearsay evidence of theft

185 Allied has a further category in which it objects on the basis that there is but heresay evidence of theft and, with respect to several claims, Allied has a POD. In my view these items fall into the former category. Where there is an ICAR recording the theft of goods, that evidence is to be preferred to the inference to be drawn from a POD that delivery took place.

Evidence of value

186 Finally, there is a category in which Allied accepts the evidence of theft, but suggests there is no evidence of value. BAX says the evidence of value is contained in individual invoices received by BAX from Dell, the amounts paid by BAX to Dell in respect of each of the individual claims, and the electronic invoice received by BAX from Dell. With respect to its claims for which such documents exist, BAX is entitled to claim these amounts from Allied.

Pleading deficiencies

187 In final submissions, both parties alleged that claims or defences to claims raised in evidence were not the subject of specific pleading. I have ignored those submissions and dealt with the issues that arose at trial. In so doing, I have treated the pleadings on both sides as if they had been amended to enable the issues agitated by the parties to be heard.

Documentary evidence

188 Fifteen lever arch files of documents were tendered. I indicated to counsel that I would have regard only to those parts of the files to which my attention was drawn and their significance explained. The parties took me to a relatively small portion of these files and this judgment is based upon those parts only.

Conclusion

189 Allied has established its claim and, subject to the uncontested right of BAX to equitable set-off of its entitlement under its cross-claim, Allied is entitled to judgment for $439,187.44 plus interest at the scheduled rate on the net amount thereafter.

190 So far as the cross-claim is concerned, I have decided the basis upon which each of the claimed elements is or is not made out. I will leave it to the parties to apply those principles to the amounts claimed in each category to arrive at an amount to be set-off against Allied’s claim. If agreement cannot be reached, I will consider what steps should be taken to resolve the issue of quantum of the cross-claim.

191 I will hear the parties on costs and I will hear the parties on the appropriate terms of orders that may be necessary to perfect these reasons for judgment.

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