Amcor Ltd v Barnes
[2016] VSC 707
•28 November 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2007 8181
| AMCOR LIMITED (ACN 000 017 372) & ORS (ACCORDING TO THE SCHEDULE ATTACHED) | Plaintiffs |
| v | |
| TREVOR MARK BARNES & ORS (ACCORDING TO THE SCHEDULE ATTACHED) | Defendants |
(BY ORIGINAL PROCEEDING)
| AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD) (ACN 104 489 581) & ANOR (ACCORDING TO THE SCHEDULE ATTCHED) | Plaintiffs by Counterclaim |
| v | |
| ACN002693843 BOX PTY LTD (ACN 002 693 843) & ANOR (ACCORDING TO THE SCHEDULE ATTACHED) | Defendants by Counterclaim |
(BY COUNTERCLAIM)
| ORORA LIMITED (FORMERLY AMCOR PACKAGING (AUSTRALIA) PTY LTD) (ACN 004 275 165) | Cross-Claimant |
| v | |
| AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD) (ACN 104 489 581) & ORS (ACCORDING TO THE SCHEDULE ATTACHED) | Defendants to Cross-Claim |
(BY CROSS-CLAIM)
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JUDGE: | SLOSS J |
WHERE HELD: | Melbourne |
DATES OF HEARING: | 25-28 May, 1, 3-5, 10-12, 15–19, 22-24, 26 (directions) June, 28-31 July, 3-6, 10, 12-13, 21 (mention) 26 (mention) August, 8-11 and 15 September 2015 |
DATE OF JUDGMENT: | 28 November 2016 |
CASE MAY BE CITED AS: | AMCOR LTD & ORS v BARNES & ORS |
MEDIUM NEUTRAL CITATION: | [2016] VSC 707 (First Revision: 15 September 2020) |
CONTRACT – Asset Sale Deed – Business sold as a going concern – Deed contained reciprocal supply / purchase obligations – Purchaser was obliged to obtain all supplies of raw materials from Vendor (cl 12.1) – Vendor was obliged to obtain ‘all its’ supplies of finished products from Purchaser (cl 12.2) – Construction of cl 12.1 (supply) and cl 12.2 (purchase) obligations – Whether Vendor breached cl 12.2 obligation to obtain ‘all its’ supplies of finished products from Purchaser – Whether subject work was encompassed within cl 12.2 – If breach is made out on what basis are damages to be assessed – Expert evidence – Which methodology is to be applied.
CONTRACT – Asset Sale Deed – Business sold as a going concern – Deed contained reciprocal supply / purchase obligations – Purchaser was obliged to obtain all raw materials from Vendor (cl 12.1) – Vendor was obliged to obtain ‘all its’ supplies of finished products from Purchaser (cl 12.2) – Parent company of Vendor not bound by Deed – Whether the Deed as executed makes commercial sense – Whether additional supply agreement is to be implied between Purchaser and the parent company of Vendor containing terms equivalent to cl 12.1 and cl 12.2 of the Deed – Construction of cl 12.2 obligation under the implied supply agreement – What purchase requirements (and of whom) were captured by cl 12.2 obligation.
ESTOPPEL BY CONVENTION – Alternatively to implied supply agreement – Whether during negotiations for Asset Sale Deed, Purchaser and parent company of Vendor adopted the assumption that the effect of the Deed would be that parent company of Vendor would be bound by cl 12.2 obligation – Whether Purchaser and parent company of Vendor conducted their relationship on the basis of such mutual assumption – Whether parent company of Vendor is estopped from denying it was bound by terms equivalent to those alleged in the implied supply agreement.
CONTRACT – Deed of Accession – Novation of Vendor’s rights and obligations under Asset Sale Deed to parent company of Vendor – Whether parent company of Vendor breached cl 12.2 obligation to obtain ‘all its’ supplies of finished products from Purchaser.
CONTRACT – Asset Sale Deed – Deed contained clause that Purchaser may not permit, allow or suffer a change in its control or the control of another party without first obtaining written consent of Vendor (cl 16.4) – Relevant concept of ‘change of control’ – Whether Purchaser breached cl 16.4 – Rights available to Vendor in the event that the Purchaser is found to have breached cl 16.4 – s 50AA Corporations Act 2001 (Cth).
ANSHUN ESTOPPEL – Asset Sale Deed – Whether Anshun estoppel operates to preclude Vendor and parent company of Vendor from claiming that the Purchaser breached cl 16.4.
CONTRACT – Asset Sale Deed – Deed contained indemnity clause (cl 11.3) whereby the indemnifier agreed to indemnify the Vendor in respect of all ‘Claims’ – Construction of ‘Claims’ – Whether ‘Claims’ means third party claims.
CONTRACT – Fixed and floating charge – Chargor granted fixed and floating charge to secure payment of the ‘Secured Money’ – What amounts and liabilities are captured by ‘Secured Money’ – Whether Chargor made a valid and effective tender under the charge – In what circumstances is the Chargor entitled to a discharge of the charge – Whether interest is payable.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs by Counterclaim and Defendants by Cross-Claim | Mr S Maiden and Ms E Murphy | Mills Oakley |
| For the Defendants by Counterclaim and Plaintiff by Cross-Claim | Dr S McNicol QC and Mr C Tran | Gilbert + Tobin |
TABLE OF CONTENTS
Introduction....................................................................................................... 1
The Achilla counterclaim............................................................................ 5
The Amcor parties’ cross-claim................................................................. 8
The counterclaim was scheduled to be heard as part of the trial of the principal proceeding but was not reached..................................... 9
Following the delivery of judgment in the principal proceeding, the Holihan parties made substantial amendments to their counterclaim and the Amcor parties commenced a cross-claim............................................................................................................. 10
Issues for determination at the trial of the Achilla counterclaim and Amcor cross-claim.................................................................................... 11
The hearing of the counterclaim and the cross-claim.......................... 13
Factual background to the asset sale transactions as found by Vickery J...................................................................................................................... 13
The Amcor parties..................................................................................... 14
APA’s Corrugating operations................................................................ 15
Speciality Packaging Group Pty Ltd (formerly Service Containers Pty Ltd)..................................................................................................... 16
Mr Ian Hottes............................................................................................. 17
ACB Co Vendor......................................................................................... 17
Mr Barnes.................................................................................................... 18
Mr Holihan................................................................................................. 19
ACB Co Purchaser..................................................................................... 19
Achilla......................................................................................................... 19
The ACB Business...................................................................................... 20
Vickery J’s summary of Amcor’s proposals to deal with the ACB business (late 1990’s until sale to Holihan) and conclusions as to the position of the ACB Business within Amcor......................... 21
Other findings made by Vickery J that are of relevance...................... 27
Amcor alleged that the businesses were sold on terms that were ‘uncommercial’..................................................................... 27
Sale of the Service Packaging Business to Mr Hottes................. 33
The sale of the ACB Business......................................................... 34
Amcor Decision to Sell the ACB Business.................................... 34
Holihan’s Proposal to Purchase the ACB Business..................... 36
Issues for determination at the trial of the Achilla counterclaim and Amcor parties’ cross-claim...................................................................... 40
Outstanding Issues for decision on the Achilla Counterclaim........... 40
Outstanding Issues for decision on the Amcor Cross-claim............... 41
Witnesses who gave evidence at the trial.............................................. 41
Witnesses called by the Holihan parties....................................... 41
Witnesses called by the Amcor parties......................................... 47
Commercial background – operation of the ACB Business prior to the sale............................................................................................................... 51
The sale of the ACB Business...................................................................... 58
The Holihan parties contend that the Second Sale Agreement (as written) does not reflect the bargain the parties reached........... 58
The Amcor parties contend that the Second Sale Agreement represents ‘the entire agreement’ between the parties.................................. 61
The dispute between the parties involves the construction of the Second Supply Agreement and its terms..................................... 63
The Second Sale Agreement......................................................................... 63
Issue 1A: Was the date of ‘Completion’ of the Second Sale Agreement 30 July 2003 (as the Amcor parties contend) or 31 July 2003 (as the Holihan parties contend)?....................................................................... 71
Issue 1B: Did Achilla commence operations of the ACB Business on 4 August 2003 (as the Amcor Parties contend) or 1 August 2003 (as the Holihan Parties contend)?....................................................................... 74
KEY ISSUE: Was there an implied supply agreement between APA and Achilla containing terms identical to clause 12 of the Second Sale Agreement, or is APA estopped from denying that it was bound by terms equivalent to those alleged in the implied supply agreement? 74
Issue 1: Was there an implied supply agreement between APA and Achilla containing terms identical to clause 12 of the Second Sale Agreement?................................................................................................ 74
The ‘implied’ supply agreement alleged by the Holihan parties....... 74
The Amcor parties deny that there was any implied supply agreement............................................................................................................. 79
Amcor’s ‘business as usual’ case as set out in their aide-mémoire documents......................................................................................... 82
Relevant legal principles.......................................................................... 87
The Holihan parties’ contentions................................................... 87
The Amcor parties’ contentions..................................................... 91
Circumstances where courts have recognised or found an ‘implied contract’ – applicable legal principles........................................... 93
The evidence falls short of demonstrating a proper basis for implying an agreement between APA and Achilla..................................... 95
Subsidiary Issues formulated under Issue 1.......................................... 96
Chronological context of relevant events – body of (pre-contractual) evidence relied upon by the Holihan parties in support of the alleged common intention.............................................................. 97
The January 2002 Business proposal............................................. 97
The August 2002 Management Buyout Proposal........................ 98
Negotiation of the Second Sale Agreement................................ 101
Initial discussions between Holihan and Barnes....................... 102
Mr MacPhail’s role in drafting the Second Sale Agreement.... 103
Preliminary discussions between Mr Holihan and Mr MacPhail............................................................................................... 104
The meeting at Baker & McKenzie’s office on 20 September 2002............................................................................................... 106
Review of early draft by Mr Tony Joyce..................................... 117
Mr Holihan reviews and comments on Mr Joyce’s note.......... 120
Final stages of negotiating the Sale Agreement......................... 125
The extent of the obligation in cl 12.2.......................................... 128
Formal entry into the Second Sale Agreement, the Sub-Lease and the giving of the Charge.................................................... 130
Completion of the Sale Agreement.............................................. 130
The evidence adduced does not provide a proper basis for the Court to imply a supply agreement........................................................ 130
Issue 1(a): If ACB Co Vendor (and not APA), was to be the counterparty to Achilla under clause 12 of the Second Sale Agreement, would the clause have any commercial purpose?................................................ 135
Issue 1(b): In negotiations, did the parties express a common intention that Achilla would obtain the benefit of the business which was at that time provided to ACB Co Vendor by APA? (Alternatively, a common intention that the effect of that agreement would be that APA would be the party bound by clause 12?)................................. 138
Issue 1(c): Following execution of the Second Sale Agreement, did APA and Achilla conduct themselves as if they were bound by clause 12 of that agreement?.................................................................................. 139
Other documentation and conduct (post-execution of the Second Sale Agreement) relied upon by the Holihan parties as evidencing a common intention on the part of Achilla and APA that Achilla would obtain the benefit of the business which at the time of sale was provided to ACB Co Vendor by APA................................. 139
The RCTI agreement...................................................................... 140
Documentation that is said to demonstrate ‘the parties’ mutual understanding’................................................................... 143
Discussions regarding fixed costs (October 2004)..................... 146
Steps taken towards de-registration of ACB Co Vendor......... 147
The Deed of Accession.................................................................. 151
Background to the Deed of Accession........................................ 153
The terms of the Deed of Accession............................................ 157
The legal concept of ‘novation’....................................... 158
Issue 1(d): Did ACB Co Vendor, in its own capacity, ever supply Products (raw materials) to Achilla or purchase Products (OME supplies) from Achilla in the period from Completion to 21 March 2005?.......................................................................................................... 160
Issue 1(e): Do the Second Sale Agreement and the Deed of Accession preclude a finding that there was an Implied Supply Agreement between APA and Achilla?................................................................... 162
Issue 2: Is APA estopped from denying that it was bound by terms equivalent to the alleged implied supply agreement?.................... 162
The estoppel by convention alleged by the Holihan parties............. 163
Applicable legal principles........................................................... 165
KEY ISSUE: What is the scope of clause 12 of the Second Sale Agreement, and the equivalent clause of any implied supply agreement?.......... 173
Approach to the construction of clause 12.2........................................ 173
Clause 12.2 – the rival constructions advanced by the parties......... 176
The surrounding circumstances known to the parties and the purpose and object of the transaction......................................................... 178
The proper construction of ACB Co Vendor’s obligation under clause 12.2........................................................................................ 188
The proper construction of APA’s obligations as ‘Vendor’ under clause 12 of the Second Sale Agreement......................... 189
Is Amcor Displays’ work captured within the clause 12.2 obligation?........................................................................................................... 190
Amcor Displays.............................................................................. 190
Prior to the sale, Amcor Displays was located at Revesby...... 193
Relocation of the Amcor Displays team to Wetherill Park (mid-2004)..................................................................................... 195
Achilla enters into a management agreement with APA regarding Amcor Displays............................................... 196
Decline in OME work – Amcor Displays relocates................... 197
Conclusion....................................................................................... 207
Period before the Deed of Accession was entered into............................................................................. 207
Period following execution of the Deed of Accession. 208
KEY ISSUE: Did APA breach the Second Sale Agreement or any implied supply agreement and if so how is any loss suffered by Achilla to be quantified?................................................................................................ 212
The Holihan parties’ claim for breach of the implied supply agreement and/or Second Sale Agreement................................................... 212
Approach to be taken in light of the proper construction of clause 12.2........................................................................................................... 215
Burden of proof concerning clause 12.2............................................... 215
Burden of proof concerning the carve-out in clause 12.2 – applicable legal principles................................................ 216
Conclusion – the Amcor parties bear the burden of proof concerning the carve-out in clause 12.2.......................... 219
The carve-out in clause 12.2 – what must be shown?............... 220
The Holihan parties contend they have discharged their onus re breach................................................................................... 222
Particulars of the 1,913 alleged supply breaches................................ 225
Quantum particulars............................................................................... 229
Evidence concerning the 1,913 instances of alleged breach.............. 230
Work performed by the alternative suppliers during the relevant period............................................................................................... 231
All Pack............................................................................................ 231
Northwest Packaging.................................................................... 232
Work performed for Amcor Displays............................ 237
Le Breton......................................................................................... 238
J S Cutting........................................................................................ 239
Thompson Print & Display Pty Ltd............................................. 241
SPS Packaging................................................................................. 249
Ubeeco............................................................................................. 251
Sainsbury......................................................................................... 255
Issue 3: Did APA breach an obligation to procure the supply of all of its OME supplies from Achilla, within the meaning of clause 12.2?.................................................................................................................... 256
Issue 3(a): Did APA obtain OME supplies from alternate suppliers?.................................................................................................................... 256
Issue 3(b): ‘OME supplies’.......................................................................... 257
Work performed by the ACB Business prior to (and after) the sale 260
Issue 3(b)(i): Work that had been ordered from suppliers other than Achilla, but not completed, before commencement of the Second Sale Agreement, or before Achilla had commenced operations of the ACB business............................................................................ 267
Jobs invoiced on 30 and 31 July 2003.......................................... 268
Jobs invoiced in the period from 5 August to 21 August 2003 269
J S Cutting.......................................................................... 271
Le Breton............................................................................ 271
Northwest Packaging....................................................... 272
SPS Packaging................................................................... 273
Issue 3(b)(ii): Purchases of OME for the business known as ‘Amcor Displays’.......................................................................................... 274
Issue 3(b)(iii): Work that was already the subject of an ongoing OME contract with a supplier other than Achilla or ACB Co Vendor?........................................................................................................... 274
Issue 3(b)(iv): Work that was not the same as, or of a similar nature to, work that ACB Co Vendor provided to APA before execution of the Second Sale Agreement on 2 June 2003?.............................. 278
Issue 3(b)(v): Acting as a re-seller of items that Achilla could not itself produce, and................................................................................... 280
Issue 3(b)(vi): The supply of paper or paper products including litho sheets, IP board A2, cello finished paper, 2500x2000 sheet 3C used for Kettle outers and printed sheets................................... 280
Issue 3(b)(vii): Die-cutter set up............................................................ 283
Issue 3(b)(viii): Labour charges............................................................. 284
Issue 3(b)(ix): Truck charges.................................................................. 287
Issue 3(b)(x): Work described as ‘additional charge – charges from ACB’................................................................................................. 287
Conclusion................................................................................................ 287
Issue 3(c): On the proper construction of clauses 12.2 and 12.4 of the implied supply agreement or Second Sale Agreement, was APA entitled to purchase OME supplies from suppliers other than Achilla on the basis that Achilla was not entitled to subcontract the production of goods or services to third parties (subcontractors), and if so, which supplies?.............................. 287
Issue 3(d): Was any OME excluded from the exclusivity obligation?........................................................................................................... 291
Issue 3(d)(i): Carve out where there was an inability to supply due to insufficient staff, or insufficient skilled staff, or AMWU work bans.................................................................................................. 292
‘transition period’........................................................................... 292
‘AMWU work bans’....................................................................... 295
Issue 3(d)(ii): The work involved printing, including litho printing or screen printing................................................................................ 300
Issue 3(d)(iii): The work involved the production of printing plates........................................................................................................... 304
Issue 3(d)(iv): The work involved the supply of CTP imaging........ 305
Issue 3(d)(v): The work involved partition assembly........................ 306
Issue 3(d)(vii): The work involved partition slotting......................... 306
Issue 3(d)(vi): The work involved the manufacture or supply of knives........................................................................................................... 317
Issue 3(d)(viii): The work involved the repeat of work previously conducted by third parties............................................................ 321
What are ‘repeat orders’ or ‘repeat jobs’?................................... 323
Issue 3(d)(ix): The work involved the manufacture of Kellogg’s corrugated pallets........................................................................... 332
Issue 3(d)(x): The work was RTS Imaging work................................. 340
The ‘problem child’ job – Legend Australia............................... 360
Issue 3(e): Did Achilla have knowledge of, or acquiescence in, or did the parties operate under a common assumption as to, the procurement of OME by APA from alternative suppliers....... 362
Detriment........................................................................................ 382
Does the ‘no waiver’ clause operate to prevent any estoppel? 384
Issue 4: Has there been a failure to retain appropriate records, and if so, what consequence follows?.................................................................. 385
Section 89B of the Evidence (Miscellaneous Provisions) Act 1958 (Vic)...................................................................................... 393
Section 56(2)(h) of the Civil Procedure Act 2010 (Vic).............. 394
The D & D costs methodology................................................................... 404
Evidence given by Mr Papadimatos..................................................... 405
The First Year Budget.................................................................... 406
Reconciliation of 2003/04 recovery figures................................ 410
The Second Year Budget............................................................... 411
Setting of D & D rates post 2004/05 financial year................... 412
Fixed costs attributable to work done for ACB Co Purchaser’s other customers.................................................................. 412
For charging purposes, Displays work was tracked separately from AFP work................................................................... 413
Evidence given by Mr Joyce about the D & D costs methodology and accounting treatment..................................................................... 414
Evidence given by Mr Holihan about the D & D costs methodology........................................................................................................... 415
Treatment of ‘fixed costs’ under the D & D basis............................... 419
Issue 5: If APA breached an obligation to purchase or procure OME supplies from Achilla, what is the appropriate methodology for assessing the lost profit (if any) and what is the quantum of any loss suffered?................................................................................................... 422
The applicable legal principles.............................................................. 423
Preliminary matters raised by the Holihan parties............................ 424
Lack of documentation available for use in the quantification task....................................................................................... 424
Any award of damages is likely to understate the true loss suffered by Achilla............................................................. 425
Experts’ reports........................................................................................ 428
The Experts’ Joint Report........................................................................ 431
Factors that bear on the choice of methodology to be adopted – agreed response.................................................................. 431
Experts’ view as to which loss methodology is preferable and why........................................................................................................... 431
Mr Meredith’s expert opinion...................................................... 431
Ms Wright’s expert opinion.......................................................... 435
Factual matters relevant to the methodology to be adopted............ 437
The role of Annexure 5, the First Year Budget and the Second Year Budget......................................................................... 437
Annexure 5 – fixed and variable charges................................... 438
Approach taken by Mr Meredith.................................... 438
The adjusted Achilla methodology - Meredith............ 440
The adjusted Amcor methodology - Meredith............. 441
Approach taken by Ms Wright....................................... 442
Exhibit H91A (the First Year Budget) – fixed and variable charges................................................................................. 443
Which methodology - the adjusted Achilla methodology or the adjusted Amcor methodology - is to be preferred?.................. 446
Applying the adjusted Achilla methodology...................................... 447
Freight/distribution costs should be excluded......................... 447
Is ‘mobile equipment’ a fixed cost?............................................. 448
Are repairs and maintenance a fixed cost or a variable cost, or both, and if so, in what proportions?.............................. 449
Applying the adjusted Amcor methodology...................................... 451
Are fixed costs to be apportioned across the Amcor work only or must they be apportioned across all Amcor and non-Amcor work?...................................................................... 453
Are repairs and maintenance a fixed cost or a variable cost, or both, and if so, in what proportions?.............................. 454
Is mobile equipment a fixed cost?............................................... 454
The impact of the freight charge arrangements in place with the alternative suppliers on the calculation of Achilla’s loss......... 454
Conclusion as to the methodology to be adopted for calculating Achilla’s loss................................................................................... 459
KEY ISSUE: What is the scope and effect of APA’s alleged overcharging and undercharging of Achilla?............................................................... 460
Issue 6: Alleged overcharging and undercharging................................ 460
Issue 6(a): By what total amount, if any, did APA charge Achilla prices that were higher than the prices prescribed by cl. 12 of the Second Sale Agreement or of the implied supply agreement? 460
Issue 6(b): Was any or all of any overcharge caused by a mistake on the part of APA?............................................................................. 461
Issue 6(c): Did Achilla (or any of the Holihan parties) suffer any loss by reason of the asserted overcharge?........................................ 462
Issue 6(d)-6(f): Aspects of alleged undercharging............................. 470
Issue 6(g): Is APA entitled to set-off any overcharging against any undercharging?.............................................................................. 470
Issue 7: Did APA pay Achilla $414,000 in about September 2003, and if so must that amount be set-off against any damages awarded to Achilla?........................................................................................ 471
ISSUES ARISING ON THE COUNTERCLAIM REGARDING THE CHARGE.................................................................................................. 475
KEY ISSUE: What is the scope and effect of the Charge, what if any amount remains secured by it, is ACB Co Purchaser entitled to a discharge of it, and if so on what conditions?.................................... 475
Issue 8: What did the Charge secure?.................................................. 479
Relevant provisions of the Charge.............................................. 480
Approach to proper construction of the Charge....................... 484
Issue 9: Did ACB Co Purchaser effectively tender the balance of the purchase price under the Second Sale Agreement on or before 30 July 2008?......................................................................................... 487
Issue 10: Is ACB Co Purchaser liable to pay APA interest on the balance of the purchase price, and if so, in what amount?...... 495
Issue 11: What amount remains payable by ACB Co Purchaser under the Charge?..................................................................................... 503
Issue 12: Is clause 3.1 of the charge void as a clog on the equity of redemption?.................................................................................... 504
Issue 13: Is ACB Co Purchaser entitled to a release or discharge of the Charge upon payment of the amount which remains payable by ACB Co Purchaser under the Second Sale Agreement?........... 507
ISSUES ARISING ON THE CROSS-CLAIM......................................... 507
KEY ISSUE: Did ACB Co Purchaser breach the Second Sale Agreement or any implied supply agreement by reason of a change of control, and if so, what is the effect of that breach and what if any liability for it is borne by ACB Co Purchaser, Achilla and/or Mr Holihan?............... 507
Background to the alleged change of control in 2004 and/or 2005. 507
Issue 14:Was there a change of control of ACB Co Purchaser and/or Achilla within clause 16.4(iii) of the Second Sale Agreemetn (or the implied supply agreement), and if so, did ACB Co Purchaser permit, allow or suffer that change in control?......................... 510
The alleged changes of control.............................................................. 510
The relevant concept of ‘control’ – s 50AA of the Corporations Act 2001 (Cth)................................................................................................. 514
Capacity to determine the outcome of decisions about ‘financial and operating policies’...................................................... 517
Conclusion on the relevant concept of control.......................... 519
The first alleged change of control: May/June 2004............................... 519
The 26 May Holihan/Barnes 80/20 Agreement................................. 521
The 26 May 80/20 Shareholding Deed................................................. 526
Vickery J found that by 30 June 2004, Barnes had informed Holihan of the identity of the other shareholders......................................... 528
The parties’ rival contentions concerning the first alleged change of control.............................................................................................. 529
Was the communication by Barnes effective to constitute notification for the purposes of clause 20(b)?.................................................. 533
What is the operation and effect of clause 20(e)?................................ 534
The Amcor parties’ submissions.................................................. 537
The Holihan parties object to the dividend argument being raised.................................................................................... 539
The ‘dividend evidence’................................................................ 540
No ratification by the representatives of the beneficial owners............................................................................................... 545
Conclusion re the first alleged change of control............................... 546
The second alleged change of control: October 2005............................. 547
The 28 May Holihan/Barnes 50/50 Agreement................................. 548
Evidence given by Holihan about the 28 May Holihan/Barnes 50/50 Agreement....................................................................................... 550
Was there a change in October 2005 in the capacity to determine the outcome of decisions?.................................................................... 552
Issue 15: Was ACB Co Purchaser obliged to inform APA of any change of control?........................................................................................ 559
Issue 16: If APA had been aware of the breach, would APA have terminated the implied supply agreement, the Second Sale Agreement, or clause 12 of each of those Agreements?........... 565
Would ACB Co Purchaser and/or Achilla have cured the breach?................................................................................. 566
Cure by paying purchase price....................................... 566
Cure by removing control............................................... 568
The rights available to the Vendor in the event of an un-remedied breach of clause 16.4.......................................................... 570
Even if a right under clause 16.1 were available to the Vendor, if there was an un-remedied change of control, would APA have exercised that right?................................................. 570
Evidence concerning the first alleged change of control in June 2004............................................................ 571
Evidence concerning the second alleged change of control in October 2005................................... 576
APA moves to bring the specialty work ‘in-house’.................. 596
Acquisition of the Sainsbury business........................................ 601
Conclusion....................................................................................... 602
Issue 17: Has APA suffered any loss by reason of any breach?........ 605
Amcor parties’ allege that by reason of change(s) of control in May-June 2004 and in October 2005, Achilla breached the implied supply agreement........................................................................... 606
Amcor parties’ allege that by reason of change(s) of control in May/June 2004 and in October 2005, Achilla breached the Second Sale Agreement................................................................. 607
Alleged losses claimed by the Amcor parties...................................... 609
APA’s claim to set-off amounts paid to Mr Hodgson.............. 609
APA’s claim to set-off amounts paid to Messrs Barnes, Sangster, Bayley and Mihelic......................... 612
Issue: 18: What is the quantum of any damages?............................... 616
Issue 19: Liability of Holihan, Achilla and ACB Co Purchaser........ 618
The indemnity given by Mr Holihan.................................................... 620
Issue 19(a): Do the matters pleaded by APA by way of cross-claim give rise to a ‘Claim’ as defined in the Second Sale Agreement for the purposes of Mr Holihan’s contractual indemnity?...... 620
What is a ‘Claim’ for the purposes of clause 11.3?.................... 621
Proper construction of clause 11.3............................................... 625
Issue 19(b): Was any liability of Mr Holihan discharged by the tender of the final instalment of the purchase price?............................ 635
Issue 19(c): Does the Anshun doctrine preclude the Amcor parties from bringing the claims in section H of the cross-claim?....... 642
Issue 19(d): Is Mr Holihan liable to APA for any loss?..................... 643
Issue 19(e): Is Achilla liable to APA for any loss?.............................. 645
Issue 20: Does the Anshun doctrine or abuse of process preclude the Amcor parties from bringing the cross claims in section H?... 645
Anshun estoppel - applicable legal principles........................... 646
The Court of Appeal granted leave to bring the cross-claim... 649
Was it ‘unreasonable’ for the Amcor parties not to have raised the change of control allegations in the principal proceeding?......................................................................... 653
Conclusion....................................................................................... 662
Abuse of process............................................................................ 666
Failure to call particular witnesses............................................................ 668
The Holihan parties’ failure to call Barnes to give evidence... 668
The Holihan parties’ failure to call Mr Daaboul and Mr Dailey to give evidence...................................................................... 670
Relevant principles concerning when the appropriate Jones v Dunkel inference should be drawn................................. 672
Amcor parties allege that the Holihan parties could have called Mr Bayley............................................................................ 678
Amcor parties allege that the Holihan parties could have called Mr Hodgson, Mr Sangster and Mr Mihelic and also Mr Barnes and Mr Bayley................................................. 680
Amcor parties allege that the Holihan parties could have called Mr Roe................................................................................. 686
The Holihan parties contend that the Amcor parties should have called executives other than Mr Roberts and Mr Powell – for e.g., Mr Lachal and Mr Clayton – to give evidence on the cross-claim.................................................................... 689
Conclusion..................................................................................................... 693
1....... Was there an implied supply agreement between APA and Achilla containing terms identical to clause 12 of the Second Sale Agreement or is APA estopped from denying that it was bound by terms equivalent to those alleged in the implied supply agreement?...................................................................................... 694
2....... What is the scope of clause 12 of the Second Sale Agreement, and the equivalent clause of any implied supply agreement?........ 697
3....... Did APA breach the Second Sale Agreement or any Implied Supply Agreement, and if so how is any loss suffered by Achilla to be quantified?............................................................................. 699
Methodology for quantification of any loss............................... 702
4....... What is the scope and effect of APA’s alleged overcharging and undercharging of Achilla?............................................................ 703
5....... What is the scope and effect of the Charge, what if any amount remains secured by it, is ACB Co Purchaser entitled to a discharge of it, and if so on what conditions?........................... 703
6....... Did ACB Co Purchaser breach the Second Sale Agreement or any implied supply agreement by reason of a change of control, and if so, what is the effect of that breach and what if any liability for it is borne by ACB Co Purchaser, Achilla and/or Mr Holihan?........................................................................................................... 704
Conclusion as to the first alleged change of control................. 706
Conclusion as to the second alleged change of control............ 707
Ancillary matters..................................................................................... 707
Form of final orders...................................................................................... 710
HER HONOUR:
Introduction
This proceeding, involving the trial of a counterclaim and cross-claim, forms part of a suite of litigation that was commenced several years ago between Amcor Limited (‘Amcor’) and several related companies on the one hand and a number of former Amcor executives and their associated corporate entities on the other. Two proceedings, known as ‘the Hodgson proceeding’[1] and ‘the Barnes proceeding’[2] respectively, were heard concurrently in a joint trial on questions of liability that took place before Vickery J in 2011 (the ‘principal proceeding’).
[1]In the Hodgson Proceeding, Mr James Hodgson (‘Hodgson’) as plaintiff claimed amounts he alleged were due to him under his contract of employment with Amcor consequent on the termination of his employment with that company which he claims to have occurred on 1 October 2004. Mr Hodgson, at the time of his departure from Amcor, occupied a senior position as Group General Manager of Amcor’s corrugating division known as Amcor Fibre Packaging Australia.
[2]In the Barnes proceeding, the Amcor parties alleged that the former executives, namely Messrs Trevor Barnes (‘Barnes’), Craig Holihan (‘Holihan’), Ian Sangster (‘Sangster’), Roger Bayley (‘Bayley’) and Albert Mihelic (‘Mihelic’), and the first defendant by counterclaim in the Hodgson Proceeding, Hodgson, as former senior managers of Amcor’s corrugating division, Amcor Fibre Packaging Australia, breached various contractual, equitable and statutory duties they owed to the company.
Relevantly, both the present counterclaim and the cross-claim are brought in the Barnes’ proceeding. The counterclaim is brought by the fourth defendant, Australian Corrugated Box Co Pty Ltd (formerly Achilla Pty Ltd) (referred to throughout as ‘Achilla’), a corporate entity associated with Mr Craig Holihan (a former Amcor executive and the second defendant in the Barnes’ proceeding), and another entity associated with him, ACB Australia Pty Ltd (‘ACB Co Purchaser’), against two Amcor entities, Orora Limited (formerly Amcor Packaging (Australia) Pty Ltd) (referred to throughout as ‘APA’) and ACN002693843 Box Pty Ltd (‘ACB Co Vendor’). The cross-claim is brought by APA against Achilla, ACB Co Purchaser and Mr Holihan. For convenience, throughout these reasons I will adopt the descriptions the parties used when referring to themselves, and generally refer to them as ‘the Amcor parties’ and ‘the Holihan parties’ respectively.
The matters raised in the counterclaim and cross-claim have their genesis in the sale by the Amcor parties of two businesses. The first, the ‘Service Packaging Business’, was sold in February 2002 (and was the subject of the ‘First Sale Agreement’). The second, the ‘ACB Business’, was sold in 2003 (and was the subject of the ‘Second Sale Agreement’). Events concerning or arising from the sale of the ACB Business are the focus of both the counterclaim and the cross-claim.
At all relevant times, APA, a wholly-owned subsidiary of Amcor, was the corporate vehicle for conducting the Australasian corrugated packaging operations of Amcor. One of the divisions of APA was called ‘Amcor Fibre Packaging Australasia’ (‘AFP’), which produced and supplied corrugated cardboard packaging products. APA was also the sole shareholder of ACB Co Vendor.
Prior to the sale, ACB Co Vendor owned and operated an ‘in-house’, ‘short-run’ manufacturing operation or ‘specialty’ packaging business. The business, which was known as the ‘ACB Business’, operated from large factory premises at Wetherill Park in Western Sydney. The ACB Business produced and supplied packaging products made from corrugated cardboard sheets, usually in the form of customised packaging or non-standard boxes, and the business obtained its supplies of corrugated cardboard sheets from the AFP plants at Revesby and Smithfield in New South Wales. The ACB business catered mainly for smaller customers, or large customers who had specialised box requirements where the quantity of the product required was too small for them to be produced economically in large-scale production facilities, or was ‘fiddly work’ that would cause bottlenecks in a higher-speed, lower-cost production plant.
Before the sale, the largest part of the work undertaken by the ACB Business was in performing what was referred to as ‘outside manufacturing enterprise’ (‘OME’) work for customers of the AFP division. The ACB Business also did a limited amount of work for other non-AFP customers. Within Amcor, the outside manufacturing work that was sourced from a third party was referred to as ‘OME work’ and the third parties that supplied it, were referred to as ‘OMEs’. However, the work that the ACB Business did for AFP or for customers of AFP was also referred to as ‘OME work’, even though it was done ‘in-house’ by an Amcor business. Relevantly, before the sale took place, there were at least eight alternative suppliers (or OMEs) who performed OME work for AFP or for customers of AFP.
During the 2001/2002 financial year Amcor was considering the fate of the ACB Business after internal reviews had shown it to be an underperforming business in terms of its ‘return on funds employed’ benchmark. At that time, Mr Craig Holihan, who was then employed as the general manager of the ACB Business, and reporting to Mr Trevor Barnes,[3] expressed interest in purchasing the ACB Business if it were to be closed down. Mr Barnes communicated Mr Holihan’s interest to Mr Hodgson, whom he reported to, and in about mid-2002, Mr Hodgson spoke to his superior, Mr Peter Brown, the managing director of Amcor Australasia,[4] about Mr Holihan's interest. Mr Brown said that if Mr Holihan put in a proposal, they would look at it. Encouraged by that indication, Mr Holihan put forward a proposal, and in late 2002 and early 2003, negotiations took place which culminated in the sale of the ACB Business to Mr Holihan.
[3]Mr Barnes is the first defendant in the Barnes’ proceeding.
[4]In the principal judgment, Hodgson v Amcor Ltd (2012) 264 FLR 1, Vickery J said (at 25-26 [77]-[78]) that in 2000, Amcor reorganised its global operations and all of Amcor’s Australasian businesses became one division called ‘Amcor Australasia’. Mr Brown became the Managing Director of Amcor Australasia and he continued to report to Mr Russell Jones, then Managing Director of Amcor.
The sale of the ACB Business to Mr Holihan (and corporate entities associated with him) was effected by an Asset Sale Deed executed on 2 June 2003 between ACB Co Vendor and the Holihan entities (ACB Co Purchaser, Achilla and Mr Holihan), for a base purchase price of $1 million (plus stock) payable by instalments within five years of completion (the ‘Second Sale Agreement’). As part of those arrangements, ACB Co Purchaser also granted a charge to APA and ACB Co Vendor, by way of security, and Achilla undertook to enter into a sub-lease with APA of the factory premises at Wetherill Park where the business was conducted.
An important feature of the Second Sale Agreement was clause 12, which entrenched counterpart obligations between the parties concerning the supply/purchase of raw materials on the one hand and the purchase/supply of finished products on the other, in each case for a period of five years. Under clause 12:
(a) the Vendor undertook to continue to supply the ACB Business (under the new ownership) with supplies of raw materials at prices based on ‘D & D’ (direct and distribution) costs to the Vendor, and the ACB Business would obtain all such supplies from the Vendor, save in the case of products the ACB Business manufactures for itself, and it would not, during that period, purchase or procure the supply of raw materials from any other party, other than due to the Vendor’s inability ‘to supply consistently and on a basis which is commercial and reasonably acceptable in terms of price, quality and availability’; and
(b) Achilla (as the trading entity of the ACB Business under new ownership) undertook to supply products to the Vendor at prices based on ‘D & D’ costs to Achilla, and the Vendor would obtain all its OME supplies of products from Achilla, and would not during that period purchase or procure the supply of products from any other party other than due to Achilla’s inability ‘to supply consistently and on a basis which is commercial and reasonably acceptable in terms of price, quality and availability.’
On 30 July 2003 or thereabouts, most of the assets of the ACB Business were transferred by ACB Co Vendor to ACB Co Purchaser, and Achilla (as the trading entity) began to operate the ACB Business using those assets. For the first year or so after the sale, the arrangement seemed to be working well. But in late 2004, Amcor became aware for the first time of secret arrangements apparently in place between Mr Holihan and other former executives of Amcor or former senior managers of Amcor’s AFP corrugating division, namely Messrs James Hodgson, Trevor Barnes, Ian Sangster, Roger Bayley and Albert Mihelic, whereby they had agreed to take a stake in the ACB Business. Thereafter, the business relationship became disharmonious, and in the years that followed, the amount of work performed by the ACB Business for the Amcor parties decreased, and OME work continued to be given to at least eight alternative suppliers.
In March 2005, the Amcor parties made arrangements with the Holihan parties for APA to effectively ‘step into the shoes of’ ACB Co Vendor for the purposes of the Second Sale Agreement. To facilitate that course, the parties to the Second Sale Agreement, namely ACB Co Vendor, ACB Co Purchaser, Achilla and Mr Holihan, entered into a ‘Deed of Accession’ with APA (as transferee). The Deed of Accession provided for the novation of the rights, covenants, undertakings and obligations of ACB Co Vendor as Vendor under the Second Sale Agreement on terms that APA be substituted for ACB Co Vendor in all capacities and for all purposes under the Second Sale Agreement, with effect on and from 21 March 2005, and that ACB Co Vendor be released. Accordingly, by virtue of the Deed of Accession, with effect from 21 March 2005, APA became bound to ‘observe, perform, be bound by and comply with’ the provisions of the Second Sale Agreement binding on the Vendor, and ‘shall enjoy the rights and benefits of the Vendor’ thereunder.
In July 2008, the Second Sale Agreement came to an end by effluxion of time and the arrangements were not renewed. Towards the end of the five year term, a dispute arose between the parties concerning the payment of the final instalment of purchase price that was due on 31 July 2008, with the result that payment was not effected and so the charge remains on foot.
The Achilla counterclaim
In their counterclaim, the Holihan parties seek damages for alleged breaches of the supply arrangements in place between the parties as part of the sale of the ACB Business.[5] They also seek a discharge of the charge that was entered into contemporaneously with the sale, and to recover amounts that they contend Achilla was overcharged for raw materials.
[5]See the Fourth Amended Counterclaim of the Fourth Defendant, dated 16 February 2015 (the ‘counterclaim’).
The gist of the Holihan parties’ substantive case on the counterclaim is that it was a breach of contract for the Amcor parties to send OME work to the eight alternative suppliers during the five year term of the agreement. They claim that there were 1,913 jobs that were sent by the Amcor parties (including the division of APA known as ‘Amcor Displays’) to suppliers other than Achilla, and they now seek to recover the profit that they say Achilla was entitled to make on that work. The breach of contract contended for, however, is not pleaded as a breach of the Second Sale Agreement. Rather the Holihan parties plead there was a breach of an ‘implied supply agreement’, the terms of which they say were identical to clause 12 of the Second Sale Agreement, save that under the implied supply agreement, APA had the rights and obligations that ACB Co Vendor had under clause 12 of the Second Sale Agreement.[6]
[6]Ibid, at [3AA].
In essence, the Holihan parties maintain that the written terms of the Second Sale Agreement failed to embody the supply agreement that all of the parties understood they had entered into, or the arrangements that they acted upon. The Holihan parties contend that the facts demonstrate that the parties always intended APA to be the counterparty to the supply obligations embodied in clause 12, and that throughout the negotiations that culminated in the Second Sale Agreement, the role of APA (and the AFP division) as the party bound by the supply obligations was taken for granted by those doing the negotiating. Further, they say, unless construed and interpreted in that way, the arrangements would have made no commercial sense. That is because, under the Second Sale Agreement, ACB Co Vendor had sold all of its assets and terminated all of its employees, such that following the sale, it was unlikely to have any OME requirements, nor any capacity to supply raw materials to Achilla. In those circumstances, the Holihan parties contend that the law (via an implied contract, or an estoppel to like effect) recognises a contract between Achilla and APA effectively in the same terms as the purchase obligation[7] and the sale obligation[8] set out in clause 12 of the Second Sale Agreement.
[7]A reference to the obligation in clause 12.2 (concerning finished products).
[8]A reference to the obligation in clause 12.1 (concerning raw materials).
The Amcor parties respond by contending that the Second Sale Agreement represents the entirety of the agreement reached between the parties, and that APA did not become a party to, or bound by, the Second Sale Agreement until the Deed of Accession was executed. They submit that, absent a claim for rectification, the alleged un-commerciality of the Second Sale Agreement and the alleged post-contractual conduct have no traction in the face of the clear terms of the Second Sale Agreement. Further, they say pre-contractual negotiations cannot support an estoppel by convention that is inconsistent with the terms of a written contract.
The Amcor parties also refute the Holihan parties’ claim that under the Second Sale Agreement the ACB Business was entitled to perform all of the OME work requirements of the business known as ‘Amcor Displays’. They contend that Amcor Displays was distinct from the business operated by ACB Co Vendor prior to entry into the Second Sale Agreement, and that Amcor Displays’ OME work requirements were not encompassed within the supply obligations under clause 12 of the Second Sale Agreement.
In respect of the Holihan parties’ claim that APA charged Achilla prices that were higher than it was entitled to charge under the contractual ‘D & D’ formula, the Amcor parties admit there was some overcharging but say that it is not established in every instance alleged. In those cases where there was overcharging, the Amcor parties say that Achilla avoided any loss by passing on those overcharges to its customers by pricing its own products based on the prices Achilla was charged by APA. Further, the Amcor parties submit that in the process of investigating Achilla’s claims of overcharging, several instances of undercharging by APA have been revealed which they effectively seek to set-off against any amount found due to Achilla.
As to the charge given by Achilla in favour of ACB Co Vendor and APA, the Holihan parties contend that they offered to pay the final instalment of $300,000 well in advance of the due date, and sought a release of the charge. The Amcor parties refused to accept the Holihan parties’ tender in circumstances where there was litigation on foot between them and, in their view, no basis upon which the charge should be released. In effect they submit that there was no obligation upon them to discharge the charge because, at all material times, it operated to secure moneys potentially owed to the Amcor parties by ACB Co Purchaser as a result of the litigation Amcor had commenced against its former executives.
The Amcor parties’ cross-claim
The Amcor parties, by their cross-claim, seek damages for alleged breaches of a change of control provision set out in clause 16.4 of the Second Sale Agreement. Clause 16.4(i) provided that ‘[t]he provisions of this clause 16.4 apply only for so long as the Charge remains in force or is not discharged.’ The relevant concept of ‘control’ for the purposes of the Second Sale Agreement is one defined by reference to section 50AA of the Corporations Act 2001 (Cth).
The Amcor parties submit, by reference to facts as found by Vickery J in the principal proceeding, that there was a change of control of ACB Co Purchaser and/or Achilla in both May/June 2004 and in October 2005, which ACB Co Purchaser ‘permit[ted], allow[ed] or suffer[ed]’ without first informing ACB Co Vendor or APA and obtaining their consent, in breach of clause 16.4. They submit that the evidence shows that at each alleged change of control, ACB Co Vendor and/or APA would have terminated the clause 12 supply agreement in accordance with clause 16.1, or in reliance upon its rights at general law. Accordingly, the Amcor parties contend that had ACB Co Vendor or APA not been deprived of the opportunity to terminate the supply agreement at or about the date of the relevant change of control, any alleged breaches of contract by them after that date would not have occurred.
The Amcor parties also dispute the Holihan parties’ contention that clause 16.4(ii) of the Second Sale Agreement operated in any way to fetter the right to terminate the supply obligation found in clause 16.1 or under the general law. Rather, they submit that clause 16.4(ii) provides ACB Co Vendor (and APA, following entry into the Deed of Accession) with an alternative and more expansive option in the event of breach.
The Holihan parties deny that there was any change of control of ACB Co Purchaser or Achilla in May/June 2004 or in October 2005. They submit that when the whole of the evidence, including the findings made by Vickery J, is examined, it is clear that none of Messrs Barnes, Hodgson, Bayley, Mihelic or Sangster was ever in a position to exercise the degree of practical influence necessary to establish that a change of control had occurred. But if, contrary to their submission, the Court finds that there was a change of control, they submit it was not ‘permit[ted], allow[ed] or suffer[ed]’ by ACB Co Purchaser because in the circumstances alleged, ACB Co Purchaser had no ability to prevent it. Further, if the Court finds, contrary to their submission, that ACB Co Purchaser had ‘permit[ted], allow[ed] or suffer[ed]’ a change of control, the Holihan parties contend that APA would not have issued a cure notice, but even if it had, Achilla would have paid out the purchase price, thereby denuding the charge of any operative force and effectively denying APA any ability to terminate for breach under clause 16.4.
The Holihan parties also take issue with the loss claimed by APA in that it includes the loss of the chance to terminate the employment of Messrs Barnes, Hodgson, Mihelic, Bayley and Sangster and thereby avoid payments made to them in 2004.
The counterclaim was scheduled to be heard as part of the trial of the principal proceeding but was not reached
When the trial of the principal proceeding commenced before Vickery J on 30 March 2011, it was scheduled to include the hearing (on 25 and 26 July 2011) of the counterclaim brought by Mr Holihan and the corporate entities associated with him (‘the Achilla counterclaim’). On 29 June 2011, however, the dates for the hearing of the Achilla counterclaim were vacated – apparently due to a shortage of time - and it was adjourned sine die.[9]
[9]See ACN002693843 Box Pty Ltd & Anor v Australian Corrugated Box Co Pty Ltd & Ors [2013] VSCA 223, at [6].
The gist of the Amcor case that was run against Mr Barnes and the Holihan parties at the trial before Vickery J was that they participated in the sale of the two businesses, the Service Packaging Business and the ACB Business, ‘in circumstances which amounted to a breach of their statutory and fiduciary duties to Amcor which, by reason of the sale being on uncommercial terms, Amcor suffered loss and damage and Barnes and the Holihan parties made profits, and Barnes and the Holihan parties “obtained benefits and other benefits”.’[10]
Following the delivery of judgment in the principal proceeding, the Holihan parties made substantial amendments to their counterclaim and the Amcor parties commenced a cross-claim
[10]Amcor Ltdv Barnes [2012] VSC 434, at [86] (citations omitted).
Justice Vickery delivered judgment in the principal proceeding on 20 March 2012 (‘the principal judgment’).[11] Following delivery of the principal judgment, further interlocutory steps were undertaken by the parties, including by way of substantial amendment of both the Achilla counterclaim and the Amcor defence to counterclaim. Also, Amcor subsequently sought and obtained (in September 2013) leave to bring their ‘change of control’ cross-claim against the Holihan parties, the substance of which is set out above.
[11]Hodgson v Amcor Ltd (2012) 264 FLR 1; [2012] VSC 94.
As a result, new pleas have been added that were not present when the principal proceeding was heard and determined. Furthermore, with the separation of the hearing of the Achilla counterclaim and the associated Amcor cross-claim from the trial of the principal proceeding, and the introduction of fresh claims, the Court has now heard a substantial body of evidence that is additional to the evidence that was adduced before Vickery J, but in circumstances where much of the relevant background to the entry into the sale agreements and the arrangements in place between the former executives has already been the subject of findings made by his Honour on the basis of the evidence adduced before him. Not surprisingly, this situation has given rise to questions of issue estoppel and Anshun estoppel in the context of the current hearing.
The Holihan parties also pointed to a further complication in this regard, arising from the fact that after the delivery of the principal judgment, when dealing with a claim for an account of profits sought by Amcor, his Honour appeared to ‘re-visit’ or comment upon some of the findings he had made in the principal judgment. This took place in a context where, following the trial on liability and delivery of the principal judgment, Amcor sought leave to amend its pleadings by making fresh claims against each of Mr Barnes and Mr Holihan personally for an account of profits, based on findings made in the principal judgment. Vickery J refused Amcor’s application for leave to make the proposed amendments. In his ruling, delivered on 20 September 2012,[12] his Honour noted that the pecuniary relief sought by Amcor against each of Mr Barnes and Mr Holihan in the Third Amended Statement of Claim upon which the trial was conducted ‘comprised damages, further or alternatively equitable compensation and interest’ and did not seek an account of profits. Relevantly, in the context of the claims made against Mr Holihan, Vickery J observed:
[128]Again, in the Principal Judgment the Court made a number of findings against Holihan which, on a careful analysis invited by his counsel of the pleadings, the documents submitted before and during the trial and the trial submissions, went beyond the case in fact put by Amcor. The Amcor case at trial against Holihan in essence was: Holihan participated in the sale of the ACB Business under the Second Sale Agreement in circumstances which amounted to a breach of his statutory and fiduciary duties to Amcor, and by reason of the sale being on uncommercial terms, Amcor suffered loss and damage, Holihan made profits, and Holihan ‘obtained benefits and other benefits’.
[129]Again, this was the fundamental case that was pleaded against Holihan. It was also the way in which Amcor conducted its case against him at trial.[13]
[12][2012] VSC 434.
[13]Ibid, at [128]-[129] (emphasis added).
In conclusion, his Honour said:
[142]I am satisfied that the findings in the Principal Judgment made against Barnes and Holihan which went beyond the case advanced by Amcor at trial and which now provide content for the new allegations in the proposed Fourth Amended Statement of Claim, should not provide the foundation for any relief granted to Amcor.
[143]There should be no order directed to Barnes or Holihan or Holihan’s companies for relief by way of an account of profits or otherwise based upon these findings.[14]
[14]Ibid, at [142]-[143].
Issues for determination at the trial of the Achilla counterclaim and Amcor cross-claim
On 13 March 2015, Vickery J made orders in preparation for the trial of the Achilla counterclaim and Amcor parties’ cross-claim, including an order that ’pursuant to section 50 of the Civil Procedure Act 2010, the trial of the proceeding be conducted by reference to the statement of issues annexed to this order.’ The annexed ‘Joint Statement of Issues’ set out a summary of the issues that the parties consider to arise from the pleadings. This document was amended by the parties from time to time, in consultation with one another, during the course of the trial.
In its final iteration, the Joint Statement of Issues occupied 8 pages, and the twenty or so issues were identified and arranged under the following headings:
A.Issues arising on the Counterclaim regarding the Supply Agreement (Issues 1A, 1B, 1-7).
B.Issues arising on the Counterclaim regarding the Charge (Issues 8-13).
C.Issues arising on the Cross-Claim (Issues 14-18).
D.Liability of Holihan, Achilla and ACB Co Purchaser (Issues 19-20).
The parties identified and listed the ‘key issues’ in dispute, as follows:
1Was there an Implied Supply Agreement between APA and Achilla containing terms identical to clause 12 of the Second Sale Agreement, or is APA estopped from denying that it was bound by terms equivalent to those alleged in the implied supply agreement?
2What is the scope of clause 12 of the Second Sale Agreement, and the equivalent clause of any implied supply agreement?
3Did APA breach the Second Sale Agreement or any implied supply agreement, and if so how is any loss suffered by Achilla to be quantified?
4What is the scope and effect of APA’s alleged overcharging and undercharging of Achilla?
5What is the scope and effect of the Charge, what if any amount remains secured by it, is ACB Co Purchaser entitled to a discharge of it, and if so on what conditions?
6Did ACB Co Purchaser breach the Second Sale Agreement or any implied supply agreement by reason of a change of control, and if so, what is the effect of that breach and what, if any, liability for it is borne by ACB Co Purchaser, Achilla and/or Mr Holihan?
The hearing of the counterclaim and the cross-claim
The hearing of the Achilla counterclaim and the Amcor parties’ cross-claim proceeded against that background. The Holihan parties were represented by Mr Maiden and Ms Murphy, instructed by Mills Oakley, and the Amcor parties were represented by Dr McNicol QC and Mr Tran, instructed by Gilbert + Tobin. During the hearing, Counsel for the respective parties pointed to passages in the principal judgment and other interlocutory rulings and decisions of both Vickery J and the Court of Appeal that they sought to rely upon, often contending that they were findings that gave rise to an issue estoppel or Anshun estoppel. Written submissions were filed by the parties addressing the paragraphs of the various judgments which they contended gave rise to an issue estoppel, and oral submissions were made, as and when required, by Counsel for the respective parties. The Holihan parties also stated formally that, for the purposes of narrowing the issues in dispute on the cross-claim, and without prejudice to their rights to challenge the findings on appeal, there were (identified) paragraphs of the principal judgment to which no objection is made and they would not object to the Amcor parties relying on the findings made by Vickery J at paragraphs [1087], [1088], [1147] and [1149] of the principal judgment.[15]
[15]See Holihan parties’ amended submissions on effect of earlier judgments and list of findings to which no objection is made, dated 18 June 2015.
Save in respect of some discrete paragraphs said to be relevant to the Amcor parties’ cross-claim, which the Court ruled did give rise to an issue estoppel (see below under ‘change of control’), the general approach adopted by the Court for the purposes of the trial of the counterclaim and cross-claim was that the Court would have regard to the findings made by Vickery J as relevant background but not treat them as determinative of the issues before the Court on the hearing of the counterclaim and cross-claim.
Factual background to the asset sale transactions as found by Vickery J
Before turning to consider the host of issues formulated in respect of the counterclaim and cross-claim, it is convenient to set out in a summary way the factual background to the two asset sale transactions, namely the sale of assets of the Service Packaging Business (the First Sale Agreement) and of the ACB Business (the Second Sale Agreement), as described by Vickery J in the principal judgment.
The Amcor parties
Amcor is a publicly-listed multinational packaging company. Its Australian operations comprise six discrete operating businesses – Corrugating/AFPA, Metals, Plastics, Cartons & Sacks, Paper and Glass – which are conducted through a number of divisions, and a group of corporate entities. Amcor’s corrugated packaging business, which focussed on the manufacture of cardboard corrugated products, principally cardboard boxes, was the largest division in Australasia. It had its head office in Melbourne and operated 14 corrugated box plants throughout Australia and New Zealand.
At all relevant times, APA was the corporate vehicle for conducting the Australasian corrugated packaging operations of Amcor, with a division – AFP – that produced and supplied corrugated cardboard packaging products. Relevantly, APA trades as Amcor Fibre Packaging Australasia (‘Corrugating/AFPA’).
Relevantly, APA was the parent company of, and owned all of the issued shares in:
(a) Specialty Packaging Group Pty Ltd. (formerly Service Containers Pty Ltd (ACN 005 319 666) (‘Service Containers’) - the vendor of the assets of the Service Packaging Business on the terms of the First Sale Agreement.
(b) ACN 002693843 Box Pty Ltd (formerly Australian Corrugated Box Co Pty Ltd) (i.e., ACB Co Vendor) - the vendor of the assets of the ACB Business on the terms of the Second Sale Agreement.
Amcor holds all of the issued shares in APA and was relevantly the ultimate holding company of each of ACB Co Vendor and Service Containers.
The officers of APA at relevant times were:
·Mr Colin Clayton – Director from February 1998 to July 2008 and Secretary from October 1995 to July 2008;
·Mr Peter Brown – Director from November 1998 to September 2003;
·Mr Peter Reichler (from November 1998 to January 2003)
·Mr Louis Lachal – Director from July 2000 to January 2008;
·Mr John Crawford (from January 2003 to July 2004); and
·Mr Ian Lewis – Director from August 2004 to December 2013 and Secretary from July 1999 to December 2013.
Neither Mr Holihan nor any of the other former executives that were named as defendants (namely Messrs Barnes, Hodgson, Sangster, Bayley and Mihelic) was a director of APA.
APA’s Corrugating operations
APA’s Corrugating operations (i.e., ‘Corrugating/AFPA’) comprised several departments: Sales and Marketing, Operations, Commercial, New Zealand Box, Packaging Solutions, and Human Resources. The principal business activity conducted was the production of corrugated cardboard products, including cardboard boxes and the like. Mr Hodgson was the Group General Manager of Corrugating/AFPA. He reported to the managing director of Amcor Australia, Mr Peter Brown, who in turn reported to the CEO and Managing Director of Amcor, Mr Russell Jones. Several of the other defendants in the principal proceeding were departmental general managers of Corrugating/AFPA, as follows:
(a) Mr Sangster (based in Queensland) - Sales and Marketing;
(b) Mr Barnes (based in New South Wales) – Operations;
(e)Mr Mihelic, General Manager, Packaging Solutions (based in Burwood).
In addition, Mr Clayton held the position of Group General Manager, Finance & Operations. Mr Clayton reported to Mr Brown. Mr Parker, the General Manager of the Commercial department of Corrugating/AFPA, reported directly to Mr Hodgson with an indirect line of responsibility to Mr Clayton.
The structure of Corrugating/AFPA at relevant times is set out in Schedule 1 to the principal judgment. For convenience, it is reproduced as Schedule 1 to these reasons.
Speciality Packaging Group Pty Ltd (formerly Service Containers Pty Ltd)
Prior to the sale of the Service Packaging Business to Mr Ian Hottes on 2 February 2002, that business formed part of the Corrugating/AFPA division and was conducted by Service Containers.
When the First Sale Agreement with Mr Hottes was entered into, the directors of Service Containers were Mr Clayton (from April 2001 to July 2008), Mr Hodgson (from August 2001 to November 2004), Mr Brown (from February 1996 to September 2003), and Mr Lachal (from April 2001 to July 2008). Mr Lewis was the secretary from December 2001 [to the present].
Apart from Mr Hodgson, neither Mr Holihan nor any of the other former executives named as defendants to the principal proceeding was a director of Service Containers.
Prior to the sale, Service Containers conducted two businesses: Amcor Displays, a graphics and displays business, and the Service Packaging Business. Each of the businesses was situated in NSW.
Mr Hottes managed both the Service Packaging Business and Amcor Displays at premises situated in Revesby, New South Wales, and from 10 January 2000, he reported to Mr Barnes.
Justice Vickery described the two businesses as follows:
[46]Amcor Displays was a graphics and displays business.
[47]The Service Packaging Business had two discrete aspects to its business operations. First, it received orders from its customers for the supply of finished corrugated products and corrugated boxes. It sourced its supply of corrugated cardboard from Amcor’s corrugated packaging division. It charged a premium on the cost of supply to it by Amcor. Second, it brokered the sale to its customers of a range of plastic wraps, tapes, stock boxes and general packaging which Amcor did not manufacture and which the Service Packaging Business sourced externally.
[48]The Displays Business was profitable, however the Service Packaging Business was not. The turnover of the Service Packaging Business in or about February 2002 was approximately $3.0 million. This was less than 0.5% of Corrugating’s Australasian turnover of about $900 million. It had trading stock of approximately $400,000 and book assets of about $80,000 representing less than 0.1% of Corrugating’s assets. It had three employees, not including Hottes. It was a non-core and underperforming business for Amcor. [16]
[16]Hodgson v Amcor Ltd (2012) 264 FLR 1, at [46]-[48].
Mr Ian Hottes
Mr Hottes controlled Service Packaging Pty Ltd, the corporate vehicle named as purchaser of the assets of the Service Packaging Business. In April 2001 Mr Hottes was diagnosed with cancer and he had major surgery in May 2001. He recovered sufficiently to return to work in late 2001, however, the cancer returned in mid-2003 and he became very sick and was hospitalized for 55 days and on life support. From mid-2003 until his death, Mr Hottes rarely attended work. Throughout this period Ms Dettmar, who had been the business manager of the Service Packaging Business since 1996, continued to manage the business.
In 2003, given the infirmity of Mr Hottes, his wife, Mrs Marlene Hottes, was made a director of Service Packaging Pty Ltd. Mr Hottes died on 5 August 2004.
ACB Co Vendor
Prior to the sale of the ACB Business to the Holihan parties in June 2003, ACB Co Vendor conducted the ACB Business as part of the Corrugating/AFPA division. Prior to the sale, Mr Holihan was the General Manager of the ACB Business. He reported to Mr Barnes, who was the General Manager Central Region, at least until November 2002. Mr Barnes in turn reported to Mr Hodgson, the Group General Manager, AFPA/Corrugating.
Accordingly, I find that APA overcharged Achilla $232,642.06 for the supply of raw materials, and APA’s set-off claim should be dismissed.
5.What is the scope and effect of the Charge, what if any amount remains secured by it, is ACB Co Purchaser entitled to a discharge of it, and if so on what conditions?
As to the Charge, the real issue in contention between the parties was whether the Charge secured more than merely the payment of the purchase price for the ACB Business, and if so, did it extend to providing security for any damages and equitable compensation awarded and costs that the Amcor Parties might incur in connection with the principal proceeding.
Relevantly, I have found that the Charge did not secure payment of:
(a) any liability for costs or damages payable to the Chargees other than in litigation brought to enforce the Charge or the Second Sale Agreement or for breach of those agreements;
(b) interest under the Second Sale Agreement; or
(c) compensation of the type sought against ACB Co Purchaser in proceeding 8181 of 2007 (the principal proceeding).
I have also found that ACB Co Purchaser’s tender of the balance of the purchase price under the Second Sale Agreement on or before 30 July 2008 was valid and effective. In the circumstances, ACB Co Purchaser is excused from the requirement to make an actual tender, it having been made clear by the Amcor parties that such tender would be refused.
Further, in my view, the conduct of the Chargees in wrongfully refusing the tender, deprives APA (as the then Vendor under the Second Sale Agreement) of any right it might otherwise have had to receive interest arising as a result of ACB Co Purchaser’s failure to actually pay the final instalment of purchase price on or about 30 July 2008. There are no fixed rules about when interest is payable following rejection of a valid tender and, in my view, this case falls within the category of cases that warrant an ‘exceptional circumstances’ approach of the kind taken by Hamilton J in Coughlan v George.[2040] Accordingly, ACB Co Purchaser is not liable to pay APA interest on the balance of the purchase price and it remains indebted to APA for the final instalment only, namely the sum of $300,000. ACB Co Purchaser is entitled to a discharge of the Charge upon payment of this amount.
6.Did ACB Co Purchaser breach the Second Sale Agreement or any implied supply agreement by reason of a change of control, and if so, what is the effect of that breach and what if any liability for it is borne by ACB Co Purchaser, Achilla and/or Mr Holihan?
[2040](2003) 11 BPR 98015.
The Amcor parties allege that ACB Co Purchaser breached the Second Sale Agreement by not informing ACB Co Vendor of a change in control of ACB Co Purchaser or Achilla in May/June 2004 and/or by not informing APA of a change of control of ACB Co Purchaser or Achilla in October 2005. The respective changes of control are alleged to arise from:
· In the case of the ‘first change of control’ - a written agreement made between Messrs Holihan and Barnes dated 26 May 2003 (the ’26 May Holihan/Barnes 80/20 Agreement’) whereby each of Messrs Holihan and Barnes made promises regarding matters including the affairs and management of ACB Co Purchaser, Achilla and a third company LeoRose, which held shares in ACB Co Purchaser; and
· In the case of the ‘second change of control’ - the written agreement between Messrs Holihan and Barnes that was expressed to be ‘made 28th May 2003’ (the ’28 May Holihan/Barnes 50/50 Agreement’) but was executed in October 2005 and only came into operation on that date, whereby each party made promises regarding the affairs of ACB Co Purchaser including the re-arrangement of the beneficial ownership of shares in that company.
The control or change of control that is relevant is that mentioned in clause 16.4(ii) of the Second Sale Agreement, and what ACB Co Purchaser must not do is ‘permit, allow or suffer’ a change in its control or the control of Achilla without the Vendor’s written consent. In clause 1.1 of the Second Sale Agreement, the expression ‘control’ is defined to mean, unless the context otherwise requires, ‘the meaning set out in section 50AA of the Corporations Act’.
The parties’ adoption of the section 50AA definition of control for the purposes of that contractual requirement conveys the notion that the sort of ‘control’ that is relevant in the clause 16.4(ii) context is control at the level of capacity to determine the outcome of decisions about ‘financial and operating policies’ of the company, and whether or not there is a change in control is to be ascertained by looking at the practical influence that can be exerted when making, and influencing the outcome of, decisions about ‘financial and operating policies’, rather than by focussing on the legal rights capable of being exercised or enforced. Further, when looking at the capacity of an entity to determine the outcome of such decisions, any practice or pattern of behaviour is to be taken into account. It follows, in my view, that one does not discern or ascertain whether there is a change of control by simply looking at the number of shares held at any particular time, or to strict legal rights, or to the rights of directors etc. Rather, one must look to see whether the relevant person or entity has the capacity in a real and practical sense to determine the important decisions of the company that set the framework for the operation of the business, in meeting its legal and regulatory obligations and in achieving its financial and other corporate objectives, as distinct from the day to day decisions made within that framework.
Conclusion as to the first alleged change of control
In my view, there was no ‘change in control’ in the relevant companies as a result of or by reason of Mr Holihan being informed as to the identity of the representatives of the other beneficial owners on or about 30 June 2004. Rather, in the absence of evidence of any ratification by them, clause 4(c) continued to operate such that it remained the case as at 30 June 2004 that Messrs Barnes and Holihan each had ‘one half of the voting rights in general meeting of each of the companies.’ Furthermore, in the absence of ratification, the veto rights under clause 10 that the Amcor parties rely upon were not enlivened. It follows that I am not satisfied that after disclosure was made to Mr Holihan, the beneficial owners relevantly had any capacity in a real and practical sense to determine the important decisions of ACB Co Purchaser and/or Achilla that set the framework for the operation of the business, in meeting its legal and regulatory obligations and in achieving its financial and other corporate objectives.
In the circumstances, there was no relevant ‘change’ in capacity to determine the companies’ financial and operating policies and Mr Holihan continued to be bound to manage the companies pursuant to the terms of the 26 May Holihan/Barnes 80/20 Agreement. It follows that ACB Co Purchaser did not, within the meaning of clause 16.4 ‘permit, allow or suffer a change in its control or the control of Achilla without first obtaining the written consent of the Vendor.’
Conclusion as to the second alleged change of control
In my view, notwithstanding the entry by Mr Barnes and Mr Holihan into the 28 May Holihan/Barnes 50/50 Agreement, which Vickery J found took place in October 2005, it is not clear that it effected any relevant ‘change’ in capacity to determine ACB Co Purchaser or Achilla’s financial and operating policies. Having considered the evidence and the agreements, I am not satisfied that by reason of entry into the 28 May Holihan/Barnes 50/50 Agreement there was any effective change in the identity of the person(s) or entities having the capacity in a real and practical sense to determine the important decisions of ACB Co Purchaser and/or Achilla that set the framework for the operation of the business, in meeting its legal and regulatory obligations and in achieving its financial and other corporate objectives. It follows, that I am not satisfied that there was relevantly any change of control in either ACB Co Purchaser or Achilla by reason of entry into the 28 May Holihan/Barnes 50/50 Agreement.
It follows that ACB Co Purchaser did not breach clause 16.4 of the Second Sale Agreement by ‘permit[ting], allow[ing] or suffer[ing] a change in its control or the control of Achilla without first obtaining the written consent of the Vendor’.
Ancillary matters
Under Issue 19, which raises the question of what (if any) is the liability of Mr Holihan, Achilla and ACB Co Purchaser pursuant to clauses 11.2, 11.3 and /or 17.2 of the Second Sale Agreement in respect of any breach, a number of underlying questions were posed, which have been answered as follows:
(a)Do the matters pleaded by APA by way of cross-claim give rise to a ‘Claim’ as defined in the Second Sale Agreement for the purposes of Mr Holihan’s contractual indemnity?
I agree with the Holihan parties’ submission that the expression ‘Claim’ in clause 1.1, and thus the indemnity in clause 11.3, in each case is limited to ‘third party claims’. It follows that the matters pleaded in Parts G, H3 and H4 of the Amcor parties’ defence to counterclaim do not give rise to a ‘Claim’ (within the meaning of that term in clause 11.3 of the Second Sale Agreement as amended by the Deed of Accession) against which Mr Holihan would be required to indemnify APA.
(b)Was any liability of Mr Holihan discharged by the tender of the final instalment of the purchase price?
Mr Holihan contracted with ACB Co Vendor to provide a guarantee of the ‘due and punctual performance and observance’ by ACB Co Purchaser and Achilla of their respective obligations. He did so in a context where the term of the Second Sale Agreement, and in particular, the date for payment of the instalments of purchase price, was to expire on or about 30 July 2008. In my view, in circumstances where ACB Co Purchaser (or Achilla) has (or is to be regarded as having) complied with those obligations ‘on time and in accordance with’ the Second Sale Agreement, Mr Holihan’s obligation to guarantee the ‘due and punctual performance and observance’ by ACB Co Purchaser and Achilla of their respective obligations is simply not enlivened. That is, the pre-condition to ACB Co Vendor (or APA) being able to call upon the guarantee has not been satisfied, nor has ACB Co Vendor (or APA) invoked clause 11.2 and ‘required’ Mr Holihan ‘to comply with those obligations’.
If, however, a different view of the evidence were taken, and it was found that there is scope in the present case to find that ACB Co Purchaser or Achilla had not complied with those obligations ‘on time and in accordance with’ the Second Sale Agreement, and also that ACB Co Vendor or APA had given notice to Mr Holihan requiring him to comply with those obligations, such that the guarantee is enlivened, then the question arises as to whether the ‘tender’ in July 2008 operated or was effective to discharge Mr Holihan from his surety obligations. In my view, it was effective to do so, essentially for the reasons of principle given by the High Court in Ankar Pty Ltd v National Westminster Finance (Australia) Ltd.[2041] The rejection by ACB Co Vendor (or APA) of the ‘tender’ made in a timely way by ACB Co Purchaser, operated to preclude the existence or continued existence of the circumstances in which Mr Holihan, as surety, had agreed to be bound.
(c)Does the Anshun doctrine preclude the Amcor parties from bringing the claims in section H of the cross-claim?[2042]
[2041](1987) 162 CLR 549.
[2042]This issue was re-numbered as Issue 20, for convenience.
In their reply, the Holihan parties pleaded that the ‘change of control’ allegations made by the Amcor parties under Part H of their defence were relevant to the subject matter of the principal proceeding heard by Vickery J, could have been raised at or before the trial of that proceeding, and it was unreasonable of the Amcor parties not to have raised them at that time. Accordingly, the Holihan parties contend that the Amcor parties are now estopped from making those allegations pursuant to the principle in Port of Melbourne Authority v Anshun Pty Ltd.[2043] In my view, while it would now appear (with the benefit of hindsight) that it was theoretically possible for the Amcor parties to have raised ‘change of control’ allegations in the principal proceeding, it was not ‘unreasonable’ for them not to have done so. Accordingly, the Anshun doctrine does not preclude the Amcor parties from bringing the cross-claims in section H.
[2043](1981) 147 CLR 589.
The Holihan parties also sought to have the Court dismiss the change of control allegations under its general discretion to prevent an abuse of process. The power to strike out or dismiss for abuse of process is one that is to be exercised sparingly and upon an examination of the circumstances of the particular case. The basis on which the cross-claim has been brought, and the reason for its lateness, have been discussed at length above in dealing with the Anshun estoppel defence advanced by the Holihan parties. I have set out the reasons why I have found it was not unreasonable for the Amcor parties to bring the cross-claim. For essentially the same reasons, I would also dismiss the Holihan parties’ abuse of process defence.
(d)Is Mr Holihan liable to APA for any loss?
This issue is said to be a ‘catch all’ for the remaining questions as to whether Mr Holihan is liable to APA for any loss under clause 11.2, and it only arises for determination if the Court finds that the guarantee has not been discharged.
In their closing written submissions, the Amcor parties sought to characterise the exchange of correspondence that took place between their solicitors and the solicitors for the Holihan parties regarding payment of the final instalment of purchase price as being ‘in substance a call upon Mr Holihan’, contending that ‘[t]hat is the only way in which he could be made liable to pay the instalment, which remains unpaid.’[2044]
[2044]Amcor parties’ liability submissions, at [590].
In my view, when the relevant correspondence between the solicitors is read in the context in which the exchange took place, it is clear that it does not constitute a ‘call’ upon Mr Holihan under the guarantee. To be sure, Mills Oakley were at the relevant time apparently acting as the solicitors for each of ACB Co Purchaser, Achilla and Mr Holihan. But as the (alleged) ‘call’ made reference to payment of ‘both the $300,000 and the applicable amount of interest owed’, it far exceeded the maximum liability of Mr Holihan under the guarantee, and was incapable of constituting a valid call upon Mr Holihan.
(e)Is Achilla liable to APA for any loss?
The Holihan parties do not dispute that in the event ACB Co Purchaser is found liable for any loss, then clause 17.2 applies to make Achilla jointly and severally liable for such loss. However, they deny that there is any loss for which ACB Co Purchaser is liable.
Form of final orders
In due course, I will hear from the parties as to the appropriate form of final orders.
SCHEDULE 1 (to principal judgment):
AMCOR FIBRE PACKAGING AUSTRALASIA (Corrugating/AFPA)
Appendix A (to principal judgment) – revised
Appendix B (to principal judgment)
Structure of the 28 May Holihan/Barnes 50/50 Agreement
(the 50/50% split)
| |
|
SCHEDULE OF PARTIES
| No. 8181 of 2007 | |
| BY ORIGINAL PROCEEDING | |
| BETWEEN: | |
| AMCOR LIMITED (ACN 000 017 372) | First Plaintiff |
| ACN002693843 BOX PTY LTD (ACN 002 693 843) | Second Plaintiff |
| ORORA LIMITED (FORMERLY AMCOR PACKAGING (AUSTRALIA) PTY LTD) (ACN 004 275 165) | Third Plaintiff |
| SPECIALTY PACKAGING GROUP PTY LTD (FORMERLY SERVICE CONTAINERS PTY LTD) (ACN 005 319 666) | Fourth Plaintiff |
| - and - | |
| TREVOR MARK BARNES | First Defendant |
| CRAIG ANTHONY HOLIHAN | Second Defendant |
| ACB AUSTRALIA PTY LTD (ACN 104 489 670) | Third Defendant |
| AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD) (ACN 104 489 581) | Fourth Defendant |
| IAN RUSSELL SANGSTER | Fifth Defendant |
| CHRISTOPHER IAN ROGER BAYLEY | Sixth Defendant |
| ALBERT WILLIAM MIHELIC | Seventh Defendant |
| BY COUNTERCLAIM | |
| BETWEEN: | |
| AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD) (ACN 104 489 581) | First Plaintiff by Counterclaim |
| ACB AUSTRALIA PTY LTD (ACN 104 489 670) | Second Plaintiff by Counterclaim |
| -and- | |
| ACN002693843 BOX PTY LTD (ACN 002 693 843) | First Defendant by Counterclaim |
| ORORA LIMITED (FORMERLY AMCOR PACKAGING (AUSTRALIA) PTY LTD) (ACN 004 275 165) | Second Defendant by Counterclaim |
| BY CROSS-CLAIM | |
| BETWEEN: | |
| ORORA LIMITED (FORMERLY AMCOR PACKAGING (AUSTRALIA) PTY LTD) (ACN 004 275 165) | Cross-Claimant |
| - and - | |
| AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD) (ACN 104 489 581) | First Defendant to Cross-Claim |
| ACB AUSTRALIA PTY LTD (ACN 104 489 670) | Second Defendant to Cross-Claim |
| CRAIG ANTHONY HOLIHAN | Third Defendant to Cross-Claim |
These cases may be said to decide no more than that whether a contract is to be implied is a question of fact and that a contract will only be implied where it is necessary to do so. … There does not, however, appear to have been a case in which a contract has been implied from the mere facts (a) that an endorsee, entitled as holder of the bill of lading to demand delivery, does so, and (b) that the ship-owner, bound by contract with his shipper (and perhaps his charterer) to deliver goods to any party presenting the bill of lading, duly makes such a delivery. Whether on such facts (without more) a contract may be implied must be considered in the light of ordinary contractual principles.
Most contracts are, of course, made expressly, whether orally or in writing. But here, on the evidence, nothing was said, nothing was written. So regard must be paid to the conduct of the parties alone.
Bingham LJ went on to observe (at 224) that it would ‘be fatal to the implication of a contract if the parties would or might have acted exactly as they did in the absence of a contract.’
…I believe that I would have bought screen print work cheaper than what Amcor was going to be buying it for. So I would have put a margin on top, but it included the additional other steps beyond screen printing that we would have done as well. It was a total package.
So would Achilla be entitled to charge a margin on the margin charged by Thompsons?---Yes.
Right. So do you think that would have been a good commercial result for Amcor?---If the overall package for Amcor was that they had a one stop shop for buying their product, yes, that would make more commercial sense. And number two, if that was tested and overall the prices were commercial, I would say yes.
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