Amcor Ltd v Barnes (Ruling No 2)
[2018] VSC 137
•29 March 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2007 08181
| 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 ATTACHED) | 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 |
DATE OF HEARING: | 29 January 2018 |
DATE OF RULING: | 29 March 2018 |
CASE MAY BE CITED AS: | Amcor Ltd & Ors v Barnes & Ors (Ruling No 2) |
MEDIUM NEUTRAL CITATION: | [2018] VSC 137 |
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CONTRACT — Asset Sale Deed — Business sold as a going concern — Where Court has ruled on construction of Vendor’s purchase obligation clause (cl 12.2) — Where question of compensation for disputed jobs has been referred to a Special Referee under Order 50 of the Supreme Court (General Civil Procedure) Rules 2015 — Additional legal questions raised for determination by the Court — Whether burden of proof discharged for jobs where invoices and purchase orders are missing or illegible — Scope of argument permissible before Special Referee regarding application of ‘carve out’ in cl 12.2.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs by Counterclaim/Defendants to Cross-Claim | Mr S J Maiden SC and Ms E L Murphy | Mills Oakley |
| For the Defendants by Counterclaim/Cross-Claimant | Mr C Tran | Gilbert + Tobin |
TABLE OF CONTENTS
Background......................................................................................................................................... 1
Legal questions to be determined by the Court before the reference can be completed.. 1
Question 1: Claimed Jobs for which invoices (and purchase orders) are missing or illegible — have the Holihan parties discharged their burden of proof?............................................................... 2
Jobs for which the relevant invoices (and purchase orders) are illegible............................ 2
The Holihan parties’ submission...................................................................................... 3
The Amcor parties’ submission......................................................................................... 3
Conclusion..................................................................................................................................... 3
Jobs for which the relevant invoices (and purchase orders) are missing............................. 4
The Holihan parties’ submission...................................................................................... 7
The Amcor parties’ submission......................................................................................... 8
Conclusion..................................................................................................................................... 9
Question 2: Are the Amcor parties entitled to rely on the carve-out in relation to any work other than ‘repeat order’ work?................................................................................................................... 16
Background.................................................................................................................................. 16
The Holihan parties’ submissions............................................................................................ 21
Relevant aspects of the conduct of the trial and cross-examination of Mr Holihan 23
The issues as formulated in the Joint Statement of Issues and the Amcor parties’ response 27
The Amcor parties’ submissions.............................................................................................. 33
Conclusion................................................................................................................................... 34
The Amcor parties seek the opportunity for a further reply in respect of jobs where the carve-out is enlivened............................................................................................................................ 36
Question 3: Are the Amcor parties permitted to raise any issues with respect to ‘partitions’ work? 36
Issue concerning the ‘Amcor Displays’ jobs............................................................................... 39
HER HONOUR:
Background
On 2 February 2018, the Court delivered a ruling concerning two competing applications before the Court for determination:
(a) the Holihan parties’ application seeking to have the Court proceed to refer the matter to a Special Referee, Mr Ronald Mines, so that he can undertake the reference as to whether Achilla is entitled to compensation in relation to each of the ‘Disputed Jobs’; and
(b) the Amcor parties’ application for the Court to make an order recording the Court’s answers to each of the questions posed in the statement of issues (6 key issues and 20 specific issues) that were addressed in the Reasons,[1] and an order that the further hearing or determination of the counterclaim (and cross-claim) be stayed until further order.
[1]Amcor Ltd v Barnes [2016] VSC 707 (‘Reasons’). In this ruling I adopt the defined terms and descriptions of the parties used in the Reasons.
The Court determined that the preferable course is to proceed with the reference to the Special Referee rather than by making orders formally answering the questions raised in the statement of issues (see Amcor Ltd v Barnes (Ruling No 1)[2]). Accordingly, following the delivery of Ruling No 1, the Court made orders on 6 February 2018 dismissing the Amcor parties’ amended summons and appointing Mr Ronald Mines as ‘Special Referee’ pursuant to Order 50 of the Supreme Court (General Civil Procedure) Rules 2015. Those orders provided for the reference to be undertaken by Mr Mines in a staged process, essentially because the Holihan parties have identified three additional legal questions that both parties agree must be determined by the Court before Mr Mines can complete the reference.
[2][2018] VSC 21.
Legal questions to be determined by the Court before the reference can be completed
The three legal questions raised by the Holihan parties for determination by the Court are:
(a) Whether the Holihan parties have discharged their burden of proof in respect of jobs for which invoices and purchase orders are missing or illegible.[3]
(b) Whether the Amcor parties are entitled to rely on the carve-out in relation to any work other than ‘repeat order’ work.
(c) Whether the Amcor parties are entitled to raise any issues with respect to ‘partitions’ jobs.
[3]The relevant jobs are identified by job number and year in Annexure C to the Holihan parties’ outline of submissions dealing with the referral directions, dated 17 January 2018.
The respective parties filed written submissions in relation to these questions in advance of the hearing on 29 January 2018, and addressed the Court orally about them. The Court indicated that it would rule on them at some convenient point following delivery of Ruling No 1. This ruling addresses those three legal questions. It should be read in conjunction with Ruling No 1.
Question 1: Claimed Jobs for which invoices (and purchase orders) are missing or illegible — have the Holihan parties discharged their burden of proof?
Jobs for which the relevant invoices (and purchase orders) are illegible
The Holihan parties claim to be entitled to compensation or damages in respect of three jobs for which the relevant invoices (and purchase orders) are illegible. Those three jobs were performed by Northwest Packaging in the 2005/2006 financial year, and are identified by the Holihan parties as jobs 51, 116 and 117, as follows:[4]
[4]See Annexure C to the Holihan parties’ outline of submissions dealing with the referral directions.
Job number
Invoice number
Date
Alternative Supplier
Job “type”
2005/2006 financial year
51
34966
27.09.05
Northwest Packaging
Illegible invoice
116
36965
14.02.06
Northwest Packaging
Illegible invoice
117
36936
16.02.06
Northwest Packaging
Illegible invoice
The Holihan parties’ submission
In their written submissions, the Holihan parties submitted that the three jobs for which the relevant invoices (and purchase orders) are illegible should be dealt with by the Court in the same way as those jobs for which the invoices and purchase orders are missing.
The Amcor parties’ submission
The Amcor parties contend that there is a distinction between the jobs for which the invoices are illegible and those for which the invoices are missing. In the three cases where the invoices are illegible, the Amcor parties submit that these jobs should be left to Mr Mines to consider in effectively the same way as the other jobs referred to him. They note that ‘[i]t is possible that Mr Mines, with the assistance of the parties’ tables and bringing his expertise to bear, might be able to form an opinion about [them]’ and accordingly, [t]here is no reason why the Court should cut across that possibility and determine these invoices for itself.’[5] Further, they observe:
The directions to Mr Mines could and should expressly note that he might conclude, in respect of these jobs, that there is insufficient evidence upon which to form an opinion. Should that be so, the Court could then determine these jobs for itself, with whatever additional assistance Mr Mines may have provided.[6]
[5]Submissions of the Amcor parties on Referral Directions, at [7].
[6]Ibid, at [8].
Conclusion
Having reviewed the three ‘illegible’ invoices,[7] I note that there is some text on each invoice that is capable of being deciphered, and I agree with the Amcor parties that ‘it is possible’ that Mr Mines might well be able to form some views about them. During the hearing, I indicated to the parties that my preliminary view was that there may well be some utility in referring these three jobs to Mr Mines in the first instance, to see whether he is able to form a view about them. But if he is unable to form any particular views about them, then these jobs should be dealt with by the Court in the same way as the jobs for which the invoices are missing. Senior counsel for the Holihan parties did not seek to dissuade me from that view, and later informed the Court that the Holihan parties ‘accede to that’ position.[8]
[7]See CB A1981, A2009 and A2010.
[8]Transcript 29/01/2018, at 24–25, and at 49.
In the circumstances, the Court will refer the three jobs performed by Northwest Packaging in the 2005/2006 financial year, being jobs 51, 116 and 117, to the Special Referee for consideration. If Mr Mines is unable to form any particular views about the jobs the subject of these invoices, then these invoices shall be dealt with by the Court in the same way as the jobs for which the invoices are missing, as discussed below.
Jobs for which the relevant invoices (and purchase orders) are missing
The Holihan parties have identified 25 jobs, spread across the compensable financial year periods, where the relevant invoices (and purchase orders) are missing, as follows:[9]
[9]See Annexure C to the Holihan parties’ outline of submissions dealing with the referral directions.
Job number
Invoice number
Date
Alternative Supplier
Job “type”
2005/2006 financial year
54
34648
28.09.05
Northwest Packaging
No invoice
66A
NA
08.11.05
Le Breton
No invoice
79B
8354
30.11.05
Le Breton
No invoice
101
1157
25.01.06
All Pack
No invoice
102
1157
25.01.06
All Pack
No invoice
119
37070
20.02.06
Northwest Packaging
No invoice
138
36864
13.03.06
Northwest Packaging
No invoice[10]
174
69642
26.04.06
Ubeeco Packaging
No invoice[11]
176
69642
26.04.06
Ubeeco Packaging
No invoice[12]
193
38233
11.05.06
Northwest Packaging
No invoice[13]
2006/2007 financial year
67
31454
16.10.06
JS Cutting
No invoice
89
1266
28.11.06
All Pack
No invoice[14]
91
1266
28.11.06
All Pack
No invoice[15]
92
00001266ADJ
28.11.06
All Pack
No invoice
2007/2008 financial year
11A
8579ADJ
20.07.07
Le Breton
No invoice
51A
8612ADJ
17.09.07
Le Breton
No invoice
72A
NA
01.10.07
Le Breton
No invoice
191A
8690
07.04.08
Le Breton
No invoice
209A
8700
23.04.08
Le Breton
No invoice
210A
8702
28.04.08
Le Breton
No invoice
210B
8701
28.04.08
Le Breton
No invoice
215B
8704
01.05.08
Le Breton
No invoice
219A
8706
05.05.08
Le Breton
No invoice
226A
8708
12.05.08
Le Breton
No invoice
Job number
Invoice number
Date
Alternative Supplier
Job “type”
July 2008
14
1442
18.07.08
All Pack
No invoice
[10]There is an invoice with the correct date, amount and invoice no. at A2017. However, the Amcor reference number stamped on that invoice is FB59035312, which is the reference number for job 137. The Amcor reference number for job 138 is FB05607458, which does not appear anywhere on this invoice.
[11]There is an invoice with the correct date, amount and invoice no. at A2956 (invoice 69642). However, the Amcor reference number stamped on that invoice is FB59027900, which is the reference number for job 175. The Amcor reference number for job 174 is FB59029333, which does not appear anywhere on that invoice.
[12]There is an invoice with the correct date, amount and invoice no. at A2956 (invoice 69642). However, the Amcor reference number stamped on that invoice is FB59027900, which is the reference number for job 175. The Amcor reference number for job 176 is FB05606238, which does not appear anywhere on that invoice.
[13]There is an invoice with the correct date, amount and invoice no. at A2033 (invoice 38233). However, the Amcor reference number stamped on that invoice is FB59030320, which is the reference number for job 192. The Amcor reference number for job 193 is FB05606338, which does not appear anywhere on that invoice.
[14]The Amcor Parties’ Summary Spreadsheet (21 March 2005 to 30 July 2008) lists jobs 89, 90 and 91 as having a single invoice. However, that invoice bears the order number only for job 90. Therefore, there is an invoice for job 90 but not for jobs 89 and 91.
[15]See the footnote above — the same observation applies.
The Holihan parties accept that they bear the onus of proof of satisfying the Court that the OME work the subject of the Claimed Jobs (including those for which the invoice is missing) was sent to alternative suppliers in breach of the obligation in clause 12.2 of the Second Sale Agreement. That is, as a practical matter, in order for Achilla to be entitled to be compensated for each of those jobs, the Holihan parties must demonstrate that each of those jobs should have been provided to Achilla on a ‘business as usual’ basis.
In its Reasons, the Court found that the ‘business as usual’ concept meant that the OME work that had been routed through the ACB Business before the sale[16] was required to be routed through the ACB Business (under Achilla’s ownership) after the sale.[17] Accordingly, on a ‘business as usual’ construction of clause 12.2, the ACB Business would, following the sale, be entitled to receive the sort of work that the ACB Business had been doing prior to the sale, save that clause 12.2 does not encompass within the Vendor’s (i.e. the Amcor parties’) obligation any requirement that Achilla be given work that was a ‘repeat order’ of OME work that prior to the sale was being sent to one or other of the alternative suppliers.[18] In that regard, as the Court observed, the issue of ‘repeat orders’ is consonant with the notion of ‘business as usual’ in the sense that where, prior to the sale, particular OME work was being performed by an alternative supplier, repeat orders of that work ordered after the sale would, in the ordinary course, continue to be made by that supplier.[19]
[16]That is, the sale of the ACB Business effected by the Second Sale Agreement.
[17]See, e.g., Reasons at [299], [303]–[305], [386].
[18]Reasons at [810].
[19]Reasons at [810].
Against that background, it will be seen that there are two components to the notion of ‘business as usual’ for the purposes of clause 12.2 — first, that the OME work was work that had been routed through the ACB Business before the sale, and secondly, that the particular OME work was not a ‘repeat order’ of OME work that prior to the sale was being sent to one or other of the alternative suppliers.
The Holihan parties’ submission
The Holihan parties submit that despite the fact that there is a body of ‘missing evidence’ being invoices, purchase orders, quotes and production orders for some of the OME work the subject of the 1,913 instances of alleged breach, and notwithstanding that the Holihan parties did not succeed in obtaining rulings under s 89B of the Evidence (Miscellaneous Provisions) Act 1958 (Vic) or s 56(2) of the Civil Procedure Act 2010 (Vic) save in respect of the Sainsbury jobs,[20] Achilla has nevertheless discharged its burden of proof in respect of the jobs the subject of the missing documentation. In this regard, they rely upon the decision in NOM v Director of Public Prosecutions,[21] where the Court of Appeal summarised the relevant law as follows:
Mere mechanical comparison of probabilities independent of a reasonable satisfaction will not justify a finding of fact. The fact finder must feel an actual persuasion of the occurrence or existence of the fact in issue before it can be found. Where, as in the present case, the standard of proof is to be applied to circumstantial evidence, satisfaction as to a reasonable and definite inference is required.[22]
[20]In respect of the Sainsbury jobs, the Court stated (Reasons at [993]):
Save in respect of litho lamination and cutting, about which Mr Powell gave some evidence, and screen printing, about which I am not satisfied Achilla had the ability to perform other than by contracting it out, I am satisfied that it is appropriate for the Court to rule or order under section 89B that, in the absence of evidence to the contrary, it be presumed to be true that Achilla could have done the OME work that was sent to Sainsbury by the Amcor parties during that period.
[21](2012) 38 VR 618.
[22](2012) 38 VR 618, 655–656 [124]; see also Evidence Act 2008 (Vic) s 140(1).
The Holihan parties contend that the Court should be satisfied to the requisite standard because:[23]
(a)The 1,913 jobs the subject of Achilla’s claim were based on ‘summary spreadsheets’ produced by the Amcor parties pursuant to court orders for discovery of summary spreadsheets for ‘OME work’ performed by alternative suppliers.[24]
(b)Mr Holihan gave uncontradicted evidence about the kind of work that the ACB Business did before the sale, the kind of work that Achilla could do and did after the sale[25] and the nature of work that the alternative suppliers did at the relevant time.[26] That evidence was corroborated by the evidence of the alternative suppliers — in particular, by Mr Pellizzari of Northwest Packaging,[27] Mr Prasad of All Pack,[28] Mrs Le Breton of Le Breton Graphics[29] and Mr Borg of Ubeeco.[30] The Court made detailed findings about the work that could be done by the alternative suppliers.[31] Mr Holihan’s evidence about Achilla’s ability to perform much of the work the subject of the 1,913 invoices was ‘not rigorously tested.’[32]
(c)On the basis that the ACB Business pre-sale and Achilla post-sale could and did do work of the type provided by the relevant alternative suppliers, it is more likely than not that each of the jobs for which there is no documentation was a job of the type which, on a business as usual basis, would have been done by Achilla. The Holihan parties are not aware of any evidence that suggests the existence of an equally plausible contrary inference.
[23]See Holihan parties’ outline of submissions dealing with the referral directions, at [28].
[24]See, e.g., Reasons at [956]. See also Mr Holihan’s evidence about the Quantum Particulars at [319] ff of his witness statement (Ex. H93.1) (the Holihan Statement).
[25]See, e.g., Holihan Statement, [131]–[132], [312].
[26]See, e.g., Holihan Statement, [313]–[318].
[27]The evidence is summarised in the Holihan parties’ Closing Submissions on Liability dated 20 August 2015 (Liability Submissions) at [159]–[161].
[28]The evidence is summarised in the Liability Submissions at [164]–[165].
[29]The evidence is summarised in the Liability Submissions at [169]–[171].
[30]The evidence is summarised in the Liability Submissions at [166]–[168].
[31]As to Northwest Packaging, see Reasons at [551]–[565]; as to All Pack, see Reasons at [544]–[550]; as to Le Breton, see Reasons at [566]–[570]; and as to Ubeeco, see Reasons at [604]–[613].
[32]Quoting Reasons at [635].
The Amcor parties’ submission
The Amcor parties submit that while ‘it may be accepted’ that the Holihan parties have demonstrated that Achilla could do much of the OME work which alternative suppliers carried out for the Amcor parties, including the OME suppliers for the 25 jobs which have no invoices, that does not establish that Achilla was entitled to have received (and performed) those jobs on a ‘business as usual’ basis. That is because there is no evidence as to whether the particular OME work the subject of each respective invoice was a ‘repeat order’ of OME work that prior to the sale was being sent to one or other of the alternative suppliers. In addition, in circumstances where the evidence before the Court at trial demonstrated that each of Le Breton, Northwest Packaging and All Pack in particular frequently carried out OME jobs that were ‘repeat orders’, the Amcor parties submit that ‘there is simply insufficient evidence either way for the Court to make findings on the balance of probabilities.’[33] Accordingly, they submit that the Holihan parties are not entitled to damages in respect of those jobs.
[33]Submissions of the Amcor parties on Referral Directions, at [13].
Conclusion
Relevantly, in the orders made by Vickery J on 10 May 2011, the second defendant to counterclaim (referred to as ‘APA’), was required to make discovery:
(a). . . of summary spreadsheets (in the form exhibited to the affidavit of Rebecca Smithwick sworn on 5 May 2011) related to the purchase by it of OME supplies of corrugated board and corrugated cartons from the entities identified in the attached schedule during the period 21 March 2005 to 31 July 2008; and
(b) . . . of all invoices, purchase orders and delivery dockets related to the supplies referred to in paragraph 1(a) [sic.] above.[34]
[34]Orders of Vickery J made on 11 May 2011, at [3].
In the later orders for discovery made by Vickery J on 10 May 2012, the first defendant to counterclaim (referred to as ‘ACB Co Vendor’) was similarly required to make discovery of ‘summary spreadsheets’ (in the form discovered by the defendants to counterclaim to date) relating to the purchase or other procuring of OME supplies of corrugated board and corrugated cartons from the alternative suppliers identified during the period 30 July 2003 to 21 March 2005, and of all invoices, purchase orders and delivery dockets related thereto.[35] Further discovery was also ordered to be given by the second defendant to counterclaim (APA) of ‘all invoices, purchase orders and delivery dockets related to the purchase or other procuring of OME supplies of corrugated board and corrugated cartons by it during the period 21 March 2005 to 31 July 2008’ from any of the alternative suppliers there listed.[36]
[35]Orders of Vickery J made on 10 May 2012, at [11].
[36]Ibid, at [9].
As Mr Holihan explained in his witness statement (at paragraph 319ff under the heading ‘Achilla’s claim for lost profits’), he prepared Achilla’s quantum particulars by using the summary spreadsheets that had been discovered by the Amcor parties in the proceeding. As a first step, he prepared a chronological listing of all of the purchases listed in the summary spreadsheets. He then performed the other steps outlined in paragraph 321 of his statement, which included reviewing the purchase orders and invoices produced on discovery or obtained on subpoena, in order to arrive at the amount of profit he contended Achilla would have received if it had performed the OME work in each case.
The mere listing of an OME job in the summary spreadsheets that were ordered to be discovered by the Amcor parties does not entail the consequence that the job was one that, on a ‘business as usual’ basis, should have been provided to Achilla. On the contrary, the summary spreadsheets simply record the ‘OME supplies of corrugated board and corrugated cartons’ purchased by the relevant Amcor entities from the alternative suppliers during the relevant period. Thus, the summary spreadsheets could include amongst the OME supplies provided by the alternative suppliers:
·OME work that was ‘repeat order’ work;
·OME work performed for Amcor Displays;
·OME work that was of a type that was not performed by the ACB Business prior to the sale (e.g. the Kellogg’s pallet work, which the Court found was not part of the ‘business as usual’ work undertaken by the ACB Business prior to the sale, but was work that was offered to the ACB Business following the sale, which work Mr Holihan welcomed the opportunity to perform: see Reasons at [825]); and
·OME work that was of a kind that was routed to and performed by the ACB Business prior to the sale but was not given to the ACB Business after the sale (some of which may be work that on a ‘business as usual’ basis should have been provided to Achilla, and some of which may be work that was not provided to Achilla because, for example, the Amcor parties invoked and relied upon the ‘carve-out’ words of exception).
Accordingly, it follows that there is no prima facie presumption that OME jobs that were performed by the alternative suppliers in the period from 21 March 2005[37] to 31 July 2008 should have been given to Achilla. The Holihan parties bear the onus of satisfying the Court that the OME work the subject of those missing invoices was sent to alternative suppliers in breach of the obligation in clause 12.2 of the Second Sale Agreement. It is a matter for the Holihan parties to establish in each case that the subject work was OME work of the sort that was routed through the ACB Business prior to the sale before the Court could reach the requisite satisfaction that, on a ‘business as usual’ basis, the work the subject of those OME jobs was work that should have been given to Achilla.
[37]I note that in the Details of Claim/Response to Claim/Reply to Claim document the first contested job the subject of Achilla’s claim for compensation is dated 27 September 2005.
In the 25 cases listed in the Holihan parties’ Annexure C as jobs where the relevant invoice is missing, the actual work performed by the alternative supplier cannot be identified. In those circumstances, in my view, there is no proper basis for the Court to make findings on the balance of probabilities or ‘make a reasonable and definite inference’ that whatever OME work was performed by the alternative supplier in each of those cases was work that on a ‘business as usual’ basis should have been provided to Achilla.
In the case of 22 of the 25 jobs in question, the relevant OME work was performed by one or other of Northwest Packaging, All Pack or Le Breton, each of which is an alternative supplier that regularly performed OME work for the Amcor parties (generally for supply to customers of the AFP Smithfield and Revesby plants and also in some cases for Amcor Displays) both before and after the sale of the ACB Business. The Court has found that both before and after the sale, the usual practice was for repeat orders of OME work that had been performed by a particular supplier in the past to be routed to that same supplier.[38] In those circumstances, unless the actual work performed by the alternative supplier can be identified, there is in my view no basis for the Court to prefer the inference that the Holihan parties seek to have the Court draw over that which the Amcor parties contend is equally open and available, namely that the OME work performed by the alternative suppliers for the Amcor parties was ‘repeat order’ work.
[38]Reasons at [808].
Two of the remaining jobs for which there are no invoices concern work performed by Ubeeco. Ubeeco performed a range of fibreboard assembly work and softwood pallet work in addition to the Kellogg’s pallet work. The two jobs in question, jobs 174 and 176 listed in the 2005/2006 financial year, relate to the same invoice number, invoice no. 69642. There is a Ubeeco invoice no. 69642 in evidence, but it is stamped with the Amcor reference number that pertains to job 175, being FB59027900.[39] It identifies the subject work as ‘APMH-FA-10 Fibreboard Assembly Simplot 30073380’. The invoice is dated 26/04/2006 and records a request to ship a quantity of 130 units (from an order quantity of 3,000 — referencing Customer Order No. 45017384 ) with a unit price of ‘17.750’ and an extended price of $2,307.50 plus GST of $230.75, and an invoice total of $2,538.25.
[39]The invoice is at Alternative Supplier Tender Bundle, A2956 (part of Exhibit H303).
The details of jobs 174 and 176, as recorded on the relevant Amcor summary sheet,[40] appear to replicate the details of job 175, in that each is said to relate to an invoice no. 69642 that is dated 26/04/2006 for an amount of $2,538.25 but has been denoted as having a different Amcor reference number, being FB59029333 in the case of job 174 and FB05606238 in the case of job 176. There are other Ubeeco invoices rendered at or about that time that pertain to shipments of discrete quantities of the ‘APMH-FA-10 Fibreboard Assembly Simplot 30073380’ which also reference Customer Order No. 45017384; perusal of those invoices suggests that the original order of 3,000 units was to be shipped in instalments, as and when requested by the customer, and that each shipment was denoted by a separate packing slip number. For example, invoice no. 69709 dated 28/04/2006 records two shipments, one of 200 units (packing slip no. 69146) and the other of 100 units (packing slip no. 68543)[41] and invoice no. 69836 dated 4/05/2006 records one shipment of 160 units (packing slip no. 69261).[42] Against that background, it is not clear why one invoice number, relevantly invoice no. 69642 dated 26/04/2006, would pertain to three separate jobs performed by Ubeeco, being jobs 175, 174 and 176, and be rendered three times and in each case for an amount of $2,538.25. In my view, a more likely explanation is that when preparing the summary sheets and the quantum particulars that followed, the work identified in invoice no. 69642 has been erroneously duplicated and made the subject of three discrete jobs, whereas the subject work was performed only once, as job 175.[43]
[40]See A2755.
[41]See A2957.
[42]See A2958.
[43]I note that a further version of invoice no. 69642 appears at Alternative Supplier Tender Bundle, A3249 (part of Exhibit H313). This version, which is not endorsed with any Amcor reference number, shows the billing address as ‘Amcor Fibre Packaging’ at ‘Percival Street Smithfield, NSW 2164’ rather than ‘Locked Bag 854 Camberwell, VIC 3124’ (as appears on the version found at Alternative Supplier Tender Bundle A2956).
I note that in the Holihan parties’ Annexure C, there are also some All Pack jobs and Northwest Packaging jobs listed that exhibit a similar phenomenon — that is, the same numbered invoice is referenced for more than one job, and the relevant Amcor summary sheet contains essentially the same information for each of those jobs.
For example, in the case of All Pack, the relevant Amcor summary sheet shows that each of jobs 100, 101 and 102 listed in the 2005/2006 financial year refers to invoice no. 1157, dated 25/01/2006.[44] There is only one version of invoice no. 1157 dated 25/01/2006 in evidence.[45] That invoice is stamped with two Amcor reference numbers, the first being FB59038604 which is the reference number for job 100, and the second being FB59036351, which is the reference number for job 101. Thus it would appear that All Pack job 101 has erroneously been listed in Schedule C as a ‘missing invoice’ job. The details of jobs 101 (Amcor reference number FB59036351) and 102 (Amcor reference number FB05607180), as recorded on the relevant Amcor summary sheet, appear to replicate the details of job 100 (Amcor reference number FB59038604), which is described in invoice no. 1157 as a ‘6 Pt Glue 30081102’ job and a quantity of 450 units was supplied at a total cost of $178.20.[46]
[44]See Alternative Supplier Tender Bundle, A5 (part of Exhibit H282).
[45]The invoice is at Alternative Supplier Tender Bundle, A92 (part of Exhibit H296).
[46]Ibid.
Similarly, in the 2006/2007 financial year, each of All Pack jobs 89 and 91 refers to invoice no. 1266. There is only one version of invoice no. 1266 dated 28/11/2006 in evidence but it is not stamped with any relevant Amcor reference number.[47] The work described in invoice no. 1266 is a ‘3 Point Glue’ job and a quantity of 2,450 units was supplied at a total cost of $1,859.55.[48] The details of jobs 89 (Amcor reference number FB59077547) and 91 (Amcor reference number FB05610565), as recorded on the relevant Amcor summary sheet, appear to replicate the details of job 90 (Amcor reference number FB59076789).
[47]The invoice is at Alternative Supplier Tender Bundle, A169 (part of Exhibit H296).
[48]Ibid.
In the case of Northwest Packaging, job 138 listed in Schedule C for the 2005/2006 financial year refers to invoice no. 36864, dated 13/03/2006; however, no invoice can be located which contains the correct Amcor reference number for that job (FB05607458). The version of invoice no. 36864 that is contained in the Alternative Suppliers Tender Bundle has the correct date and amount ($1,991.42) but it is stamped with Amcor reference number FB59035312, which is the reference number for job 137.[49] That invoice records the work as ‘FFSC[50] 1600x305x1500 – 1C Plain (NWP to convert only)’ and a quantity of 429 units was supplied at a total cost of $1,991.42.
[49]The invoice is at Alternative Supplier Tender Bundle, A2017 (part of Exhibit H299).
[50]Presumably a reference to ‘full flap slotted containers’.
Similarly, Northwest Packaging job 193 listed in Schedule C for the 2005/2006 financial year refers to invoice no. 38233, dated 11/05/2006; however, no invoice can be located which contains the correct Amcor reference number for that job (FB05606338). There is a version of invoice no. 38233 contained in the Alternative Suppliers Tender Bundle that has the correct date and amount ($64,911.00) but it is stamped with Amcor reference number FB59030320, which is the reference number for job 192.[51] The work recorded on the invoice is described as ‘Garlock Pty Ltd Sheets 225x50’ and a quantity of 1,050 units was supplied at a total cost of $64,911.00.
[51]The invoice is at Alternative Supplier Tender Bundle, A2033 (part of Exhibit H299).
In the case of the All Pack and Northwest Packaging jobs discussed above for which the Holihan parties claim there are missing invoices, the more likely inference to be drawn is that the work identified in the relevant invoice has been erroneously duplicated and recorded by the Amcor parties as being the subject of two or more discrete jobs, whereas the subject work was performed only once on the specified date by the alternative supplier.
The remaining job for which there is no invoice is job 67, which is listed in Schedule C as one performed by J S Cutting in the 2006/2007 financial year. The evidence at trial was that J S Cutting made and repaired knives and performed die-cutting work, often where the die-cutting involved small quantities of cardboard boxes. The details of job 67, as recorded on the relevant Amcor summary sheet, refer to an invoice no. 31454 (which is missing), which is said to be dated 16/10/2006, to be in the sum of $1,045 and to bear an Amcor Displays reference number, A000273419. The summary sheet records five other Amcor Displays jobs performed by J S Cutting at or about that time at a cost of $1,045 in each case, but each of those jobs has a separate invoice number and references a different order number. In each case, the job is described as a ‘diecutting’ job — for example, ‘Diecutting 1000 large folders’,[52] ‘Diecutting 1000 large folders – OME6508’,[53] ‘Diecutting large folder – knife OME 6508’[54] or ‘Diecutting 1000 Tri Marketing folder’.[55] In the absence of invoice no. 31454 or a purchase order describing the OME work the subject of job 67, one does not know what work job 67 entailed. There are indications, based on the total pricing alone, that job 67 might be a ‘diecutting’ job of some description. But without the details of the work performed, in my view there is no proper basis for the Court to find or infer that the OME work performed by J S Cutting on job 67 was work that on a ‘business as usual’ basis should have been provided to Achilla.
[52]Invoice no. 30931 at A384.
[53]Invoice no. 31126 at A385 and invoice no. 31283 at A387.
[54]Invoice no. 31757 at A389.
[55]Invoice no. 31852 at A390.
For the reasons set out above, in the case of each of the jobs listed in Schedule C as ‘missing invoice’ jobs, I am not satisfied that there is any proper basis for the Court to make findings on the balance of probabilities or make a reasonable and definite inference that whatever OME work was performed by the alternative supplier in each of those cases was work that, on a ‘business as usual’ basis, should have been provided to Achilla. It follows that the Holihan parties have not discharged their burden of proof in respect of those jobs.
Question 2: Are the Amcor parties entitled to rely on the carve-out in relation to any work other than ‘repeat order’ work?
Background
On the pleadings as they stood when the trial of the counterclaim and cross-claim commenced on 25 May 2015, the Holihan parties claimed, and the Amcor parties denied, that in breach of the (implied) Supply Agreement and clause 12.2 of the Second Sale Agreement as amended by the Deed of Accession, APA (the relevant Amcor party):
did not purchase or procure the supply of all its OME supplies from Achilla, and purchased or procured supplies of products from parties other than Achilla, for reasons other than Achilla’s inability to supply consistently and on a basis which was commercial and reasonably acceptable in terms of price, quality and availability.[56]
Throughout the trial the parties referred to the latter phrase, or words of exception, as the ‘carve-out’.
[56]Paragraph 6 of the Holihan Parties’ Fourth Amended Counterclaim of the Fourth Defendant dated 16 February 2015 (filed pursuant to orders made by Vickery J on 13 February 2015) (emphasis added). Particulars of this allegation were contained in the Holihan parties’ Liability Particulars of Paragraph 6 dated 3 May 2013 at document 7 in the Court Book and provided to the Court on CD.
In their Defence, the Amcor parties positively pleaded that the purchase and/or procurement of supplies of products by APA was ‘made in accordance with clause 12.2 of the Second Sale Agreement as amended by the Deed of Accession on and from 21 March 2005 to the end of the Period’.[57] The Holihan parties contend that two sets of particulars were given of this plea, which they describe as follows:[58]
[57]Paragraph 29(c) of the Further Amended Defence to Fourth Amended Counterclaim of the Fourth Defendant and Cross-claim (filed pursuant to orders made by Sloss J on 18 and 20 May 2015).
[58]See Holihan parties’ outline of submissions dealing with the referral directions, at [35].
(a)First, particulars in response to the Holihan parties’ ‘Liability Particulars.’[59] The Amcor parties’ particulars only raised reliance on the carve-out in clause 12.2 of the Second Sale Agreement in relation to:
[59]The Amcor parties’ Response to Liability Particulars dated 7 June 2013 is at document 8 in the Court Book and provided to the Court on CD.
(i)the so-called ‘transition period’ very early on in the supply agreement[60] (and therefore irrelevant to Achilla’s current claims, which now relate only to the period on and following 27 September 2005);
[60]See, e.g., job 0 in the 2003/2004 financial year.
(ii)the period of the ‘AMWU work bans’ (also early on in the supply period and therefore irrelevant to the current claims);
(iii)RTS [Imaging] work done by alternative suppliers before around late October 2004[61] (RTS [Imaging] work in the Compensable Period is now conceded by Achilla);
(iv)partition slotting work done by alternative suppliers before about October 2004[62] (irrelevant to the current claims as the partitions slotter was purchased before the Compensable Period); and
(v)Kellogg’s pallets work done by alternative suppliers before about 28 June 2004[63] (which is irrelevant as this was before the Compensable Period).
(b)The matters specifically relied upon by the Amcor parties were addressed or answered in the Holihan parties’ Reply Particulars dated 8 October 2014.[64]
(c)Second, particulars (inserted under paragraph 29(c) by amendments made [by the Amcor parties] on 19 May 2015, [shortly prior to the trial commencing]) to the effect that it was in accordance with the terms of cl 12.2 for ‘repeat orders’ to be given to the OME supplier that had previously performed that OME work, because repeat orders were jobs that Achilla was unable to supply consistently and on a reasonably acceptable basis in terms of price, quality and availability.[65]
[61]See, e.g., job 0 in the 2003/2004 financial year.
[62]See, e.g., job 16 in the 2003/2004 financial year.
[63]See, e.g., job 30 in the 2003/2004 financial year, which refers to Reasons at [828].
[64]Addendum Court Book, document 435. These particulars were filed pursuant to order 1 of the orders made by Vickery J on 17 September 2014. See, in particular, items 2, 3, 4, 9, 16, 18 and 19 of the Reply Particulars. Note the matters were also replicated in the Issues List, including the final Issues List dated 2 September 2015, in addition to miscellaneous issues such as that the work involved printing which Achilla could not itself do, the work involved the manufacture of knives and the work involved the production of printing plates. The Issues List was an organic document, which evolved up to the final day of trial.
[65]See the amendments to the particulars to paragraph 29(c) of the Further Amended Defence to Fourth Amended Counterclaim of the Fourth Defendant and Cross-claim.
In the amended particulars inserted under paragraph 29(c), the Amcor parties stated:
“Repeat orders” means orders placed by customers for products (the production of which required OME work to be done) which those customers had placed before. Repeat orders are a kind of job that Achilla was unable to supply consistently and on a basis which is commercial and reasonably acceptable in terms of price, quality and availability. In particular, repeat orders that were being placed with other OME suppliers could not be done by Achilla consistently, on a basis which was commercial and reasonably acceptable in terms of price, quality and availability.
The identification of repeat orders was known from the unique numbers allocated to every OME job ordered and placed in the PICK system. An example of such unique job numbers is “33326 – 101 – 40”. The first number in the chain identified the customer (in this example, the customer is RTS). The second number referenced the type of product being requested. The third number referenced the number of times that product had been produced or repeated for that customer. In the example above that product had been produced or repeated for RTS 40 times. This job numbering system and the existence of repeat orders was known to and understood by Achilla and its staff.[66]
[66]Underlining indicates that these paragraphs were added to the particulars inserted under paragraph 29(c) by the amendments made on 19 May 2015.
In an affidavit sworn in support of the Amcor parties’ application for leave to amend,[67] when addressing the amendments made to the particulars sub-joined to paragraph 29(c), Ms McCudden (one of the Amcor parties’ solicitors) stated that the issue of ‘repeat orders’ was not a new issue and was one that was raised in, for example, witness statements of Ms Gerke dated 11 February 2015[68] and Mr Phillips dated 25 February 2015. (The evidence to be given by Ms Gerke was to the effect that it was important to ensure that a quality product was delivered on time, to the specifications in the right manner and at the right price, and that repeat orders in particular needed to be delivered to the same quality.[69] Mr Phillips’ witness statement, at that stage (i.e., in the form in which it was filed), made observations about the ease of providing repeat order work to the same supplier, and included statements to the effect that sending repeat order work to the same supplier maintained quality and timing.[70])
[67]Affidavit of Christina Maree McCudden, Special Counsel, sworn 15 May 2015, at [8].
[68]During the trial, once the Holihan parties indicated that they did not require Ms Gerke to attend for cross-examination, her witness statement was substituted or replaced by an affidavit from her dated 7 August 2015 to similar effect (tendered as Exhibit A98).
[69]See Exhibit A98, at [11].
[70]See Mr Phillips’ witness statement (Exhibit A89) at [70]–[71]. Paragraph [71] was struck out in the version of his statement that was accepted into evidence.
Save as noted above, the Amcor parties did not provide particulars of any types of OME work, or particular jobs performed by any of the alternative OME suppliers, that they contended Achilla could not perform consistently and on a basis which was commercial and reasonably acceptable in terms of price, quality and availability.
In their opening outline of submissions dated 19 May 2015, the Amcor parties summarised their ‘principal claims in defence of the breach allegations’ as being broadly as follows:
[20]First, and most generally, the evidence will not establish that Achilla could do the OME work which APA required of other OME suppliers “consistently and on a basis which is commercial and reasonably acceptable in terms of price, quality and availability”.
[21]Secondly, the evidence will show that APA was entitled to place orders for OME supplies with suppliers other than Achilla because those orders were repeat orders which those other suppliers had already supplied to APA and its customers in the past.
. . .[71]
[71]The third and fourth broad grounds (summarised in paragraphs [22] and [23] of their opening outline) are not relevant to this issue.
These broad assertions about the carve-out were supported by footnoted references to (anticipated) evidence to be led from Mr Robert Guy (who gave evidence about the RTS Imaging work) and from Mr Darren Nellies, and the ‘repeat orders’ evidence to be given by Ms Gerke and Mr Phillips as mentioned above.
At the trial, the issue of ‘repeat orders’ was opened on behalf of the Amcor parties as follows:
The evidence will establish our case or establish that some things positively have to be established to the requisite standard and for example repeat orders is an area which we’ll be coming to in this case. Now the evidence we say will establish that repeat orders is a term which is familiar in the industry, and it refers to an order of OME work for a product ordered by an end customer which has been done by a particular OME supplier before, in the past, because the end customer has placed an order for that product with the relevant Amcor entity in the past.
The evidence will show as a general proposition that we say Achilla could not necessarily provide OME supplies consistently and on a basis which is commercial and reasonably acceptable in terms of price, quality and availability where a different supplier was doing it previously. The previous supplier will have already been geared up, that is there are set up costs which have already been set up to do that work, and the relevant part of Amcor will already be set up to direct the work to them. The pre-existing procuring with that supplier. So shifting a repeat order to a new supplier we will say is not often done in the industry without good reason, because it will introduce unknowns and variables and uncertainties into what is a specific, precisely defined and established process, a pre-existing process.[72]
[72]Transcript 03/06/15, at 630–631.
Accordingly, as noted in the Reasons (at [795]), the Amcor parties’ case at trial was effectively that:
(a) on a proper construction of clause 12.2 of the Second Sale Agreement, Achilla was not entitled to any ‘repeat work’; and
(b) Achilla could not supply ‘repeat work’ consistently and on a basis that was commercial and reasonably acceptable in terms of price, quality and availability.
However, in their closing written submissions, the Amcor parties characterized repeat orders as OME work that that fell outside clause 12.2 on a proper construction of the clause. The Holihan parties did not agree with this characterisation but, in the final outcome, the Court held that it was the correct one. Accordingly, in its Reasons the Court stated:
Initially, in their particulars (at paragraph 29(c)), the Amcor parties particularised ‘repeat orders’ as an example of a class of case where they contend Achilla was unable to supply consistently and on a reasonably acceptable basis. But in their closing submissions, the Amcor parties characterise repeat orders as falling outside clause 12.2 on a proper construction of the clause. The Holihan parties do not agree with this characterisation but in my view, it is the correct one. The issue of repeat orders is consonant with the notion of ‘business as usual’ in the sense that on a business as usual construction, the ACB Business would, following the sale, be entitled to receive the sort of work that the ACB Business had been doing prior to the sale. Similarly, where prior to the sale, particular OME work was being performed by an alternative supplier, repeat orders of that work ordered after the sale would, in the ordinary course, continue to be made by that supplier. On its proper construction, clause 12.2 does not encompass within the Vendor’s obligation any requirement that Achilla be given work that was a ‘repeat order’ of OME work that prior to the sale was being sent to one or other of the alternative suppliers.[73]
[73]Reasons at [810].
The Holihan parties’ submissions
The Holihan parties submit that, save in respect of the case advanced in respect of ‘repeat orders’ as a class of work, little was said by the Amcor parties about the ‘carve-out’. They contend that the Amcor parties’ oral opening did not presage or disclose a case of the kind now sought to be run by the Amcor parties, being one where they rely heavily on the ‘carve-out’, contending (in many instances for the first time) that Achilla could not perform a host of jobs consistently and on a basis which is commercial and reasonably acceptable in terms of price, quality and availability.
The Holihan parties’ outline of submissions sets out a number of examples of OME work which the Amcor parties, in their Response to Claim, now seek to raise before the Special Referee and contend in each case that it falls within the carve-out, as follows:[74]
[74]See Holihan parties’ outline of submissions dealing with the referral directions, at [30(a)] to [30(i)]. The footnotes are taken from that document.
(a)jobs performed by Le Breton involving litho printed sheets, on the basis that Le Breton “could obtain better prices for litho printing than its competitors” and “Achilla could not have been able to achieve the same cost effectiveness as Le Breton” (emphasis added by the Holihan parties);[75]
(b)jobs involving the use of a standing knife, on the basis that standing knives were expensive and there may have been difficulties moving a job across to Achilla that would render the exercise unviable;[76]
(c)jobs involving the manufacture of corrugated partitions and single face pads performed by Northwest Packaging, on the bases that Northwest Packaging “had particular expertise in partition making and were very cost effective at doing that work”, that Northwest Packaging had low overheads that allowed it to keep costs down, that Amcor was a “house account” for Northwest Packaging and that Northwest Packaging had machinery “designed around performing such work in a unique way” (emphasis added by the Holihan parties);[77]
(d)jobs involving the manufacture of small corrugated partitions, on the basis that Achilla’s machinery was not suitable and, in particular, Northwest Packaging’s machinery was more “practical for doing … partitions [of certain sizes]”;[78]
(e)jobs involving the manufacture of full flap slotted containers by Northwest Packaging, on the basis that Amcor was a “house account” of Northwest Packaging and, as a result, “Amcor was able to secure better prices for jobs performed by Northwest than accounts that were managed by external representatives” and, “[c]onsequently, compared to Northwest, Achilla would have been unable to supply [FFSCs]” consistently and on a basis which was commercial and reasonably acceptable in terms of price, quality and availability (emphasis added by the Holihan parties);[79]
(f)jobs involving packing, palletising and handwork performed by All Pack, on the bases that All Pack had “low costs” and “experienced staff who were efficient when performing … handwork” and that All Pack had fast turnaround times and were “well known for their on-time delivery”,[80] or on the basis that All Pack was “specialised in hand assembly work such as hand gluing”, that All Pack performed gluing jobs at a “low cost” of perhaps 8 or 9 cents and that, according to Mr Prasad of All Pack, Achilla was “unable, at times, to perform gluing work for its own customers during the relevant period” (emphasis added by the Holihan parties);[81]
(g)jobs involving hand assembly performed by Ubeeco Packaging, on the basis that Ubeeco had a “significantly larger workforce than Achilla” which allowed it to provide good customer service in terms of product availability and timely delivery than Achilla which had a “much smaller size” of workforce;[82]
(h)jobs involving die cutting performed by Northwest Packaging, on the bases that Northwest Packaging’s die cutter “could be set up particularly quickly allowing it to die cut certain jobs in a very short time” and that Northwest Packaging could acquire knives for die cutting jobs quickly (within 24 hours) rather than the usual four days;[83] and
(i)jobs such as “pre-printing collars” done by All Pack on the basis of Mr Garcia’s evidence that All Pack used disabled workers and could therefore perform small jobs very cheaply, and had good turnaround times.[84]
[75]See, e.g., paragraph 18 of the Response to Claim for the 2005/2006 financial year in response to Achilla’s claim for job 51A. Note that the only substantive issue taken by the Amcor parties in their Response to Liability Particulars in relation to Achilla’s ability to do this job was that it involved printing which Achilla could not itself do.
[76]See, e.g., paragraph 20 of the Response to Claim for the 2005/2006 financial year in response to Achilla’s claim for job 51A.
[77]See, e.g., paragraph 34 of the Response to Claim for the 2005/2006 financial year in response to Achilla’s claim for job 52. Note that the only substantive issue taken by the Amcor Parties in their Response to Liability Particulars in relation to Achilla’s ability to do this job was that it could not do the job until it acquired a partition slotter in or around October 2004 (well before this job was sent to the Alternative Supplier).
[78]See, e.g., paragraph 35 of the Response to Claim for the 2005/2006 financial year in response to Achilla’s claim for job 52.
[79]See, e.g., paragraphs 46(f) to (h) of the Response to Claim for the 2005/2006 financial year in response to Achilla’s claim for job 55. Note that no issue was taken by the Amcor Parties in their Response to Liability Particulars in relation to Achilla’s ability to do this work. The only issue raised was that Achilla was not entitled to the job because APA was not bound by the implied exclusive supply agreement (and there was therefore no breach of that agreement by APA).
[80]See, e.g., paragraph 55 of the Response to Claim for the 2005/2006 financial year in response to Achilla’s claim for job 56. Note that no issue was taken by the Amcor Parties in their Response to Liability Particulars in relation to Achilla’s ability to do this work. The only issue raised was that Achilla was not entitled to the job because APA was not bound by the implied exclusive supply agreement (and there was therefore no breach of that agreement by APA).
[81]See, e.g., paragraphs 100(d) to (f) of the Response to Claim for the 2005/2006 financial year in response to Achilla’s claim for job 59. Note that no issue was taken by the Amcor Parties in their Response to Liability Particulars in relation to Achilla’s ability to do this work. The only issue raised was that Achilla was not entitled to the job because APA was not bound by the implied exclusive supply agreement (and there was therefore no breach of that agreement by APA).
[82]See, e.g., paragraphs 482(f) to (j) of the Response to Claim for the 2005/2006 financial year in response to Achilla’s claim for job 125. Note that no issue was taken by the Amcor Parties in their Response to Liability Particulars in relation to Achilla’s ability to do this work. The only issue raised was that Achilla was not entitled to the job because APA was not bound by the implied exclusive supply agreement (and there was therefore no breach of that agreement by APA).
[83]See, e.g., paragraphs 673(e) to (h) of the Response to Claim for the 2005/2006 financial year in response to Achilla’s claim for job 167. Note that no issue was taken by the Amcor Parties in their Response to Liability Particulars in relation to Achilla’s ability to do this work. The only issue raised was that Achilla was not entitled to the job because APA was not bound by the implied exclusive supply agreement (and there was therefore no breach of that agreement by APA).
[84]See, e.g., paragraph 719 of the Response to Claim for the 2005/2006 financial year in response to Achilla’s claim for job 177.
The Holihan parties contend that while matters of the kind set out above were raised with one or other of the alternative supplier witnesses during cross-examination, they were not raised with Mr Holihan, who was the Holihan parties’ main witness. They submit that Mr Holihan ‘gave evidence in chief touching upon Amcor’s pleaded and particularised allegations relating to the carve-out[85] and also at a general level about Achilla’s ability to supply consistently and on a basis which was commercial[] and reasonabl[y] acceptable.[86]’ They also point, in particular, to the fact that Mr Holihan was not cross-examined about the evidence he gave (at paragraph 352 of his statement) to the effect that ‘based on the Amcor parties’ own calculations, Achilla would have been the cheaper OME provider in all but 27 of the 1,913 jobs claimed.’
[85]See, e.g., evidence in the Holihan Statement concerning complaints about Achilla’s inability to supply partitions at [193], the RTS work at [354], Kellogg’s pallets at [355] and the AMWU work bans and the “transition period” at [98]–[118].
[86]Holihan Statement, [347]–[352].
It is necessary to set out some further matters by way of background before returning to the Holihan parties’ submissions.
Relevant aspects of the conduct of the trial and cross-examination of Mr Holihan
The cross-examination of Mr Holihan took place over six (non-consecutive) days, commencing on 4 June 2015 and concluding on 19 June 2015, and was interrupted as required from time to time to accommodate the availability of some of the alternative supplier witnesses and an equipment supplier witness, Mr Whitechurch.
On 10 June 2015, after Mr Holihan had been under cross-examination for two days, Senior Counsel for the Amcor parties flagged an amendment to be made to their pleading in relation to the estoppel by convention plea and the alleged election of Mr Holihan not to take particular OME jobs, so as to bring the pleading into line with the Amcor parties’ case as opened. A draft form of the proposed pleading was provided and the Court adjourned the hearing of the Amcor parties’ application for leave to amend until such time as Mr Holihan’s evidence was completed.
On the next day, 11 June 2015, during the cross-examination of the second of the alternative supplier witnesses, Mr Pellizzari from Northwest Packaging, the issue of Northwest Packaging’s prices was raised and objection was taken by the Holihan parties as to the relevance of cross-examination of him directed to whether or not Achilla was a competitor for work.[87] Junior counsel for the Amcor parties sought to explain the relevance of his line of questioning, in the absence of Mr Pellizzari, as follows:
MR TRAN: … The reason why I was asking Mr Pellizzari about whether he considered themselves to be in competition I think was twofold. The first [is that] clause 12.2 refers to work that could be done or couldn’t be done on a commercial basis, and so it’s not something that’s been addressed in detail.
…
MR TRAN: Not the proper construction, but at least one open construction of that clause [12.2] is that [it] directs attention to what is commercial in the industry, and this [is] someone who’s been in the industry for many, many years. …
…
MR TRAN: And so at least [on] one available construction the word, “Commercial” would direct some attention to what was happening in the industry. Now that’s not something that’s been canvassed between either side yet, but - - -
HER HONOUR: Well I don’t think that it’s even part of the case that Dr McNicol opened, that the work wasn’t able [to] be done at commercial prices.[88]
[87]Transcript 11/06/15, at 1261–1264.
[88]Transcript 11/06/15, at 1262–1263.
The line of cross-examination was allowed on the basis that it was conceivably relevant to the commerciality of moving ‘repeat order’ work across to Achilla. Other alternative supplier witnesses who gave evidence after Mr Pellizzari were also cross-examined about their pricing. But for the most part, Mr Holihan was not cross-examined directly on the issues relating to the carve-out. General propositions were put to him, to the effect that Amcor would want to get the job done at the best available price, and he was cross-examined, despite objection, on the issue of Achilla’s pricing for the Kellogg’s pallet work.
The issue of Achilla’s pricing for the Kellogg’s pallet work was raised with Mr Holihan on 17 June 2015, which was the second last day of his cross-examination. Once objection was taken, a lengthy exchange took place between the Court and Senior Counsel for the Amcor parties, in the absence of Mr Holihan, during which the Court observed that the issue of pricing generally did not appear to be raised on the pleadings as they stood, and the Court had not understood that pricing per se was part of the Amcor parties’ case.[89] Senior Counsel for the Amcor parties responded by stating: ‘Well, Your Honour, we’ll have to seek leave to amend to actually give it more prominence than it has.’[90] Counsel for the Holihan parties also observed in this context that the issue of pricing was not raised in the proposed amended pleading that the Amcor parties had provided on 10 June 2015.
[89]See Transcript 17/06/15, at 1666–1679.
[90]Transcript 17/06/15, at 1673.24–1673.25.
The Court ruled on the Holihan parties’ objection, stating:
HER HONOUR: . . . I think the position [is], the discussions [have] indicated that all the parties need to have a proper understanding of how clause 12.2 operates. I am going to allow Dr McNicol to ask some questions about the D & D pricing. I am going to allow her to ask questions about the pricing that applied to the Kellogg’s pallets. But at the moment, Dr McNicol, I am not satisfied that on your pleading, pricing is raised as an issue between the parties. Now if pricing is part of your case, you are going to need to correctly plead that in the way in which you rely on it, because at the moment I don’t understand that to be a part of your case. So Mr Maiden, I am going to overrule the objection and I am going to allow Dr McNicol to ask questions that are directed to the D & D pricing under clause 12.2, the mechanism in which it was operating, and how that mechanism applied in the context of the pricing for Kellogg’s pallets, if at all.[91]
[91]Transcript 17/06/15, at 1678.31–1679.17.
The expression ‘D & D’ pricing is a reference to the pricing mechanism established in the Second Sale Agreement that applied to both the supply of raw materials (corrugated board and corrugated cartons) by ACB Co Vendor to Achilla under clause 12.1 for the non-Amcor work to be performed by the ACB Business, and for the supply of (finished) Product by Achilla to ACB Co Vendor/APA. ‘D & D’ pricing is discussed extensively in the Reasons, but for present purposes it is sufficient to refer to the summary set out at paragraph 137:
Similarly, under clause 12.2, Achilla was required to supply ‘Products’ to ACB Co Vendor at prices based on D & D costs to it. ACB Co Vendor, in turn, was obliged to ‘obtain all its OME supplies’ of ‘Products’ from Achilla, save in the exceptional circumstances mentioned. The prices at which Achilla was to make the OME supplies of ‘Products’ available to ACB Co Vendor were based on ‘D & D costs’ plus a margin (initially 12% and ratcheted up by an additional 2% in each annual period of the 5 year term to a maximum of 20%). Once again, the contractual pricing mechanism of ‘D & D’ plus a margin operated so that, by using the PICK system, the parties could ascertain or predict the price at which the relevant supply of Products would take place in each 12 month period during the term.
As will be apparent, the ‘D & D’ price for the supply of any particular Product by Achilla was ascertainable by using the PICK system. That is, by entering the job details into the ordering system, the Amcor parties could ascertain the relevant price at which the particular Product would be supplied by Achilla under clause 12.2. Achilla could also view that pricing information as it had access to the PICK system until it was de-commissioned in October 2005 and replaced by the new ‘SAP’ system.[92]
[92]The acronym ‘SAP’ apparently stands for ‘Systems Applications and Products’.
Returning to the issue of the Amcor parties’ pleading amendment, on 5 August 2015, there being no opposition, the Amcor parties were given leave to file their Second Further Amended Defence to Fourth Amended Counterclaim of the Fourth Defendant and Cross-claim.[93] That version of the pleading did not raise any fresh contention about the issue of pricing generally, and the Amcor parties did not provide any further and better particulars of paragraph 29(c) of their defence. Accordingly, and relevantly for present purposes,[94] ‘repeat orders’ remained the only pleaded basis upon which the Amcor parties sought to invoke the ‘carve-out’.
[93]Transcript 05/08/15, at 3363.28–3364.03.
[94]In the present context, the Details of Claim document relates only to claims made by Achilla for jobs arising in the period on and following 27 September 2005.
The issues as formulated in the Joint Statement of Issues and the Amcor parties’ response
It will also be recalled that, in preparation for the trial, Vickery J made orders on 13 March 2015 which included an order that ‘pursuant to section 50A 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 considered arose 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 identified 20 or so issues that were arranged under four main headings. The issues arising on the Holihan parties’ Counterclaim regarding the Supply Agreement were set out in Part A. Issue 3 dealt with ‘Breach of the Implied Supply Agreement or the Second Sale Agreement’. Relevantly, issues 3(b)(iv) and 3(d) were framed as follows:
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?
. . .
(b)Were any of the following alleged supplies not OME supplies within the meaning of clause 12.2, and if so, which:
. . .
(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?
. . .
(d)Was APA entitled to purchase OME supplies from suppliers other than Achilla on the basis that Achilla was not able to provide the supplies consistently and on a basis that was commercial and reasonably acceptable in terms of price, quality and availability, including for any of the following reasons:
(i)insufficient staff or insufficient skilled staff or AMWU bans;
(ii)the work involved printing, including litho printing or screen printing;
(iii)the work involved the production of printing plates;
(iv)the work involved the supply of CTP imaging;
(v)the work involved partition assembly;
(vi)the work involved the manufacture or supply of knives;
(vii)the work involved slotting;
(viii)the work involved the repeat of work previously conducted by third parties;
(ix)the work involved the manufacture of Kellogg’s corrugated pallets; or
(x)the work was RTS Imaging work —
and if so, during what period(s)?
As will be noted, each of issues 3(b)(iv) and 3(d) were directed to different aspects — the former being an enquiry as to what work was encompassed within the notion of an OME supply within the meaning of clause 12.2, whereas the latter was directed to work that had been found to be an OME supply and addressed whether the carve-out was enlivened. Logically, the matter raised in issue 3(b)(iv) is anterior to the consideration of any carve-out issues.
When written closing submissions were filed, the Amcor parties raised some of the issues that they now seek to raise before the Special Referee. In their written submissions, they effectively lumped issues 3(b)(iv) and 3(d) together and sought to deal with them in the one section, Section C, headed ‘Repeat Work and Different Work (Question 3(b)(iv); Question 3(d)(ii)-(x))’. It is convenient to reproduce the summary set out at the beginning of Section C of the Amcor parties’ closing submissions, and some relevant extracts from the submission that follows. As will be noted from the sub-headings, the submission commences by focussing on ‘repeat jobs’ and ‘Why Achilla cannot show that Amcor breached clause 12.2 by continuing to obtain repeat work from other suppliers’, but then branches off into a consideration of ‘examples of significant repeat work and different work’[95] that are said to ‘form the subject of this dispute’, as follows:[96]
[95]Amcor parties’ closing submissions, at [203] (emphasis added).
[96]See Amcor parties’ closing submissions, at [189]–[203].
(i) Summary
189.The Amcor Parties have already explained in these written submissions the reasons why clause 12.2 should be construed to mean that Achilla was only entitled to that OME work which it was doing for Amcor prior to the Second Sale Agreement. It follows that Achilla was not entitled to any kind of work that was:
(a)not the same as, or of a similar nature to, work that ACB Co Vendor provided to Amcor before the execution of the Second Sale Agreement on 2 June 2003; and/or
(b)work that involved the repeat of work previously conducted by third parties.
190.These categories overlap, in varying degrees, with others in the joint list of issues.[97]
[97]Work involved printing, including litho printing or screen printing; work involved the production of printing plates; work involved the supply of CTP imaging; work involved partition assembly; work involved the manufacture or supply of knives; work involved slotting; work involved the repeat of work previously conducted by third parties; work involved the manufacture of Kellogg’s corrugated pallets; work was RTS Imaging work; work was not the same as, or of a similar nature to, work that ACB Co Vendor provided to Amcor before the execution of the Second Sale Agreement on 2 June 2003.
191.In addition to the arguments on construction to the same effect, the Amcor Parties submit that the Court should find that it was not inconsistent with clause 12.2 for Amcor to continue routing repeat jobs to the supplier which had made previous batches of that work. Achilla was not able to supply that category of work consistently and on a basis that was commercial and reasonably acceptable in terms of price, quality and availability.
(ii) What are repeat jobs?
192.At a definitional level, the evidence about what repeat jobs are has been consistent. In the PICK system, orders were given a code in the form #### -###-##. The first five digits were the customer code, the next three digits were the specific job or box to be made and the final two digits were the cycle, batch or repeat number.[98] Each customer had its own code (first five digits), and each product which that customer ordered from Amcor had its own job code (next three digits). The customer code and the job code were, together, a “master”.[99] Each time the customer ordered that product from Amcor, the cycle, batch or repeat number would increase by one (final two digits).
[98]See Affidavit of Charlotte Gerke dated 7 August 2015 (Exhibit A98) at [8]-[10]; Evidence of Craig Holihan (Transcript at T906/L2 to T907/L21); Evidence of Paul Silva (Transcript at T2432); Witness Statement of Laurence Phillips (Ex A89) at [55(d)].
[99]See Evidence of Darren Nellies (Transcript at T3138/L3-4).
193.Accordingly, repeat jobs are identifiable from the job numbers included on invoices.[100]
[100]Affidavit of Charlotte Gerke dated 7 August 2015 (Exhibit A98) at [5].
194. The Holihan parties submit that:
The mere existence of a repeat order number within the Amcor systems does not indicate that the order was always sent to (or repeated with) the same OME supplier. The existence of the number referenced in the particulars above therefore does not necessarily establish that the supplier of the job had supplied it on previous occasions.[101]
. . .
(iii)Why Achilla cannot show that Amcor breached clause 12.2 by continuing to obtain repeat work from other suppliers
. . .
203.Examples of significant repeat work and different work that form the subject of this dispute include litho lamination work (such as RTS Imaging and Legend Australia work), Kellogg’s pallets work, the types of work done by Northwest Packaging including partitions and single face pads and the types of work done by All Pack including hand assembly work.
[101]Written submissions at [420].
Apart from the footnoted reference in paragraph 190 of the Amcor parties’ closing submissions extracted above, no separate or discrete submission was made by them in respect of the ‘carve-out’ issues raised in paragraphs 3(d)(iii), (iv), (v), (vi), (vii), (ix) and (x) of the List of Issues.
In their reply submissions, the Holihan parties objected to the Amcor parties raising or relying upon matters that had not been pleaded.[102] During oral closing submissions, counsel for the Holihan parties reiterated their objection and pointed out the differences between the Amcor parties’ pleaded case and the Issues List on the one hand, and the matters raised in the Amcor parties’ closing submissions on the other, and provided a document to the Court summarising those differences.[103]
[102]Holihan parties’ reply submissions, at Sections E.4.1.3, E.4.1.4 and E.4.1.5.
[103]Reproduced as Annexure F to the Holihan parties’ outline of submissions dealing with the referral directions.
Against that background, the Holihan parties now submit that if the Amcor parties had wished to mount a defence to the claims for breach on bases such as those set out above (at [45]), they should have raised it squarely by amending paragraph 29(c) of their defence or supplementing the particulars subjoined to it. Further, and perhaps more importantly, they contended, first, that as a matter of fairness, those matters should have been put to Mr Holihan in cross-examination, so that he might have an opportunity to respond, and secondly, that the Amcor parties’ failure to give notice of their un-pleaded case meant that the Holihan parties did not have an opportunity to adduce further evidence addressing it. They submitted that allowing the arguments to be made at this late stage would be productive of procedural unfairness and would cause real prejudice to Achilla.
To demonstrate the sort of matters that were not put to Mr Holihan in cross-examination, the Holihan parties prepared a list, as follows:[104]
[104]See Holihan parties’ outline of submissions dealing with the referral directions, at [44].
For example, it was not put to Mr Holihan that:
(a)Le Breton could obtain better prices than Achilla for litho printing and Achilla would not have been able to achieve the same cost-effectiveness as Le Breton.[105] (The issue of Le Breton’s pricing for litho print sheets arose during the cross-examination of Mr Kent [of Thompson] on 10 June 2015, before the conclusion of Mr Holihan’s cross-examination.[106]);
(b)standing knives were expensive and this may have made it unviable to move a job across to Achilla.[107] (The issue of the viability of moving cutting formes from one Alternative Supplier to another was also raised during the cross-examination of Mr Kent, on 10 June 2015.[108]);
(c)Northwest Packaging was very cost-effective at doing particular job types, including because Amcor was a “house account” of its.[109] (This matter arose during the cross-examination of Mr Pellizzari [of Northwest Packaging] on 11 June 2015.[110])
(d)Achilla’s machinery was not as practical as Northwest Packaging’s for corrugated partitions of particular sizes.[111] (Again, this issue arose during the cross-examination of Mr Pellizzari on 11 June 2015.[112]);
(e)All Pack had low costs and more experienced and efficient staff than Achilla for work such as handwork.[113] (The issue of All Pack’s efficiency arose during Mr Prasad’s [of All Pack] cross-examination on 12 June 2015.[114]);
(f)Ubeeco’s large workforce enabled it to provide superior customer service than Achilla, which had a much smaller workforce.[115] (The issues of Ubeeco’s workforce and customer service levels arose during the cross-examination of Mr Borg [of Ubeeco Packaging] on 15 June 2015.[116]);
(g)Northwest Packaging could perform die cutting jobs extremely quickly.[117] (The issue of the speed of cutting work done by Northwest Packaging arose during the cross-examination of Mr Pellizzari on 11 June 2015.[118]); or
(h)All Pack could do small jobs (such as pre-printing collars) very cheaply and quickly.[119] (The issues of All Pack’s turnaround times and service levels arise during the cross-examination of Mr Prasad on 12 June 2015.[120]).
[105]Cf paragraph [45(a)] above.
[106]Kent XXN, T 1093.24–30.
[107]Cf paragraph [45(b)] above.
[108]Kent XXN, T 1110.25–1111.5.
[109]Cf paragraph [45(c)] above.
[110]See, e.g., Pellizzari XXN, T1187.13–25.
[111]Cf paragraph [45(d)] above.
[112]See, e.g., Pellizzari XXN, T1228.14–28.
[113]Cf paragraph [45(f)] above. Although Mr Holihan was asked whether he had a dedicated team of hand assembly staff, and answered that a person could be trained for that job “within about five minutes” — see T 1027.29–1028.17 — that does not answer the point.
[114]See, e.g., Prasad XXN, T1377–1382.
[115]Cf paragraph [45(g)] above.
[116]See, e.g., Borg XXN, T1401 and 1419.
[117]Cf paragraph [45(h)] above.
[118]See, e.g., Pellizzari XXN, T1235.13–31.
[119]Cf paragraph [45(i)] above.
[120]See, e.g., Prasad XXN, T1376. Note the issues also arose during the examination in chief of Mr Garcia. See, e.g., Garcia XIC, T3510–3511.
The Holihan parties also submit that in the case of the carve-out, had they been put on notice of the claims in question, they ‘would have sought to marshal evidence demonstrating that the individual elements now relied on (principally as to price) had to be considered in light of quality and availability, and other facts that might have made Achilla commercial and reasonably acceptable notwithstanding any advantages that the Amcor parties now seek to have the referee rely on in isolation.’[121]
[121]See Holihan parties’ outline of submissions dealing with the referral directions, at [64].
The Amcor parties’ submissions
The Amcor parties’ response was comparatively brief. They accept that the matters identified by the Holihan parties were not pleaded or particularised.[122] Nevertheless, they submit that they are entitled to raise them now. In effect, they contend that while the real issues in dispute ‘were guided by the pleadings and the Joint Statement of Issues’, the parties’ positions ‘were more fluid than the pleadings and the Liability Particulars’ and the real issues in dispute ‘emerged and were also guided by the course of evidence’.[123] They submit that the case was conducted on the basis that ‘the parties would have the opportunity to apply the evidence at trial — whatever it was — to each individual job at a later time after the Court delivered its reasons’ and that the matters which they now seek to press ‘depend only upon the evidence which has already been led at trial, which Mr Mines is in a position to assess as an industry expert.’[124]
[122]See Amcor parties’ outline of submissions dealing with the referral directions, at [15].
[123]Ibid, at [16].
[124]Ibid, at [17].
As to the matter of ‘price’, the Amcor parties submit that in circumstances where Achilla’s pricing was ‘set per machine’ and clause 12.2 did not oblige Amcor to provide an opportunity to price-match, ‘the necessary evidence to determine which company could carry out jobs at a cheaper rate is already before the Court, and can readily be determined by Mr Mines as an industry expert.’[125] But if, effectively, the only prejudice the Holihan parties claim they will suffer is that ‘the case will be determined without Achilla having been given the opportunity to lead evidence relevant to the referee’s determination of those responses, and [the Holihan Parties] will have been denied procedural fairness’,[126] the Amcor parties submit that:
this prejudice can be ameliorated, without shutting the Amcor Parties out from pressing the matters they seek to raise, by providing the Holihan Parties with an opportunity to put on evidence before the referee. Moreover, any costs consequences of doing so (and for the avoidance of doubt, the Amcor Parties reserve their position on this) can be the subject of submissions at an appropriate time. Given that the Holihan Parties say that they lost this valuable opportunity, they can be provided the opportunity as a condition of the Amcor Parties pressing ahead with the matters in their Response to Claim document.[127]
[125]Ibid, at [18].
[126]See Holihan parties’ outline of submissions dealing with the referral directions, at [68].
[127]See Amcor parties’ outline of submissions dealing with the referral directions, at [19].
Conclusion
In circumstances where most of the carve-out claims now sought to be pressed by the Amcor parties before the Special Referee were not pleaded, particularised, opened or (for the most part) put to Mr Holihan during cross-examination, I do not propose to allow them to be adjudicated upon by the Special Referee. In my view, to find otherwise would be productive of real unfairness to the Holihan parties and be contrary to the way the case was conducted. So far as the counterclaim and cross-claim were concerned, the trial was a trial on all issues, save that the Court informed the parties early in the piece that, in the absence of the parties reaching agreement, it was likely the Court would appoint an expert, under s 65M of the Civil Procedure Act 2010 (Vic), to assist with any calculation or categorisation exercise required to be performed. In the event, the parties sought jointly the appointment of a Special Referee under r 50.01 of the Rules.
The Amcor parties did not run a case at trial that relied on the carve-out other than for the pleaded and particularised matters. The Court informed the Amcor parties, through their counsel, that if they wished to run a wider case than that which was pleaded and particularised, and opened, then it would be necessary for them to apply for leave to amend their pleading. No such application was made in respect of the carve-out. For the most part, the matters relating to the carve-out that are now sought to be relied upon by the Amcor parties before the Special Referee were not matters that Mr Holihan was on notice would be raised or pursued when he was preparing his evidence in chief, nor (perhaps more importantly) were they put to him whilst under cross-examination. As a result, he and the Holihan parties have been denied the opportunity to adduce evidence that might assist Achilla to respond to those allegations.
The Amcor parties frankly acknowledge that no affidavit material has been filed by them directed to informing the Court as to why the matters raised during trial were not attended to in the course of trial.[128] They accept that by seeking to raise for the first time the new carve-out contentions as set out in the Details of Claim/Response to Claim/Reply to Claim document ‘there is a real degree of prejudice[] to Mr Holihan insofar as he may have to put on additional evidence and revisit matters, which he visited for the first time during the context of the counter claim.’[129] But counsel for the Amcor parties submitted:
. . . the great crux, the bulk of the prejudice which Mr Holihan identifies, begs inability to be cross-examined or put on evidence to meet these matters is ameliorated by giving Mr Holihan the opportunity to put on evidence.
That just leaves the residual category which I can’t avoid[,] the prejudice that results from him having to do it now, when he could have done it all in one package before. I can’t avoid that prejudice, Your Honour, but I say the bulk of the prejudice put by the Holihan parties in their written submissions, is his inability to meet this case. In our submission that is ameliorated by giving him that opportunity.[130]
[128]Transcript 29/01/18, at 52 (Mr Tran).
[129]Transcript 29/01/18, at 53–54 (Mr Tran).
[130]Transcript 29/01/18, at 54 (Mr Tran).
In my view, the notion that such evidence could be adduced now before the Special Referee is somewhat fanciful. Nowadays, in making any order or giving any direction in a civil proceeding, the Court is expressly required to further the overarching purpose of the Civil Procedure Act (and the Rules) of facilitating the just, efficient, timely and cost-effective resolution of the real issues in dispute. In circumstances where a full trial of the counterclaim and cross-claim was conducted over some 35 days, the evidence has been led and the witnesses have been cross-examined, the course proposed by the Amcor parties is not one that will further that overarching purpose. The exercise to be performed by the Special Referee is one that is to take place against the background of the evidence already given and tested, and the Court’s findings and reasons for decision. The Special Referee is not permitted now to entertain fresh arguments about the carve-out that were not pleaded and particularised, and opened before the Court. Accordingly, given that the relevant Compensable Period is from 27 September 2005 to 31 July 2008, before the Special Referee the Amcor parties are limited to reliance on the carve-out in relation to ‘repeat order’ work only.
The Amcor parties seek the opportunity for a further reply in respect of jobs where the carve-out is enlivened
At the hearing on 29 January 2018, the Amcor parties submitted that on matters such as the carve-out, where they bear the burden of proof, they should be permitted to respond to the matters raised in the Holihan parties’ reply. Counsel for the Amcor parties noted that even if the Court ruled in the Holihan parties’ favour on the carve-out, thereby narrowing dramatically the class of matters that could be relied upon, they would in any event seek to have the opportunity to put on further written submissions by way of reply, within a short time frame.[131]
[131]Transcript 29/01/18, at 63 (Mr Tran).
The Holihan parties opposed this course, submitting that the respective contentions as set out in the Details of Claim/Response to Claim/Reply to Claim document were sufficient.
At the hearing, the Court indicated to the parties that it was amenable to considering whether there was any demonstrated need for additional reply submissions, and suggested that the Amcor parties should commence preparing a document that would set out the matters sought to be raised by way of reply. Once prepared, that document could be shown to the Holihan parties in advance of the Court delivering its ruling, so that they would be ready to meet it. Accordingly, if necessary, I will hear from the parties on this aspect at a convenient time.
Question 3: Are the Amcor parties permitted to raise any issues with respect to ‘partitions’ work?
This question arises in essentially the same context as that concerning Question 2. As noted earlier, before the Special Referee the Amcor parties seek to rely upon the carve-out in relation to ‘partitions work’. ‘Partitions’ are made from slotted pads of corrugated cardboard (usually made on a machine such as the ‘Mecanelec’). Once made, the corrugated partitions usually undergo some hand assembly, whereby one or more of them are ‘slid’ together, to make an assembled partition structure of the kind often found on the inside of wine cartons.
As will be apparent from the summary of the pleadings and particulars set out above, the ‘partitions’ work was not raised or referred to by the Amcor parties in paragraph 29(c) of their defence where they plead their reliance on the carve-out in clause 12.2 of the Second Sale Agreement. The ‘partitions’ work was mentioned, however, in the Amcor parties’ particulars given in response to the Holihan parties’ ‘Liability Particulars’, and the matters specifically relied upon by the Amcor parties were addressed or answered in the Holihan parties’ Reply Particulars dated 8 October 2014, relevantly as follows:[132]
[132]See the Holihan parties’ Reply to Liability Particulars of the Amcor parties, filed on 8 October 2014, CB8, Tab P, 2713 at 2722–2723.
Item
Amcor Plea
Achilla Response
Jobs
Value of Jobs
18
[Work required slotting. Achilla did not purchase a partition slotter until October 2004]
248
$227,348.90
The Work required partition slotting and assembly and a partition slotter and partition assembler and personnel skilled in using that machinery. Achilla has admitted in its Reply to Defence to Second Amended Counterclaim that it did not purchase a partition assembler under the Second Sale Agreement. Achilla did not at any stage inform ACB or APA that it subsequently acquired that machinery. At least until obtaining a new partition slotter in around end October 2004 Achilla had an inability to supply consistently and on a basis which was reasonably acceptable in terms [of] price, quality and availability in that:
(a) it was slow to supply, had poor service levels and could not provide on time delivery consistently;
(b) it relied on hand assembly using resources outside Achilla;
(c) it had limited capacity for partition work and acknowledged it was not geared up to take on any more partition work.
49. Achilla admits that some Work required partition slotting and assembly.
50. Achilla possessed a partition slotter from Commencement.
51. Further, partition assembly does not require a partition assembler or personnel skilled in operating such machinery, but can be performed by hand, often faster than by using such machinery.
52. Achilla engaged personnel skilled in the performance of partition assembly by hand such that it could complete that part of the Work that required partition assembly.
53. Achilla denies the allegations in sub-paragraphs (a) to (c).
54. To the extent that any assembly work was contracted out (which is not admitted) Achilla says that on their correct construction, the Supply Agreement and/or the Second Sale Agreement do not prohibit the subcontracting of any part of the work the subject of clause 12.2.
At the trial, Mr Holihan was cross-examined at some length in respect of the ‘partitions review’ jobs that were sent to Northwest Packaging. But he was not cross-examined more generally about issues that might enliven the carve-out criteria and their applicability in a context where Achilla had purchased a new partition slotter (in around end October 2004) and from that point forward had the capacity to perform partitions assembly and slotting work.
In the Reasons, when dealing with Issue 3(d)(v) (the work involved partition assembly) and Issue 3(d)(vii) (the work involved partition slotting),[133] the Court noted that the focus of the claims advanced and pursued by the Amcor parties at trial concerning partitions work was on work performed in connection with the ‘partitions review’ instigated by Mr Holihan. The Court observed that:
758Having regard to the Amcor parties’ closing written submissions, however, it appears that the only real issue in dispute between the parties is Achilla’s entitlement to claim for partitions work for a period connected with the ‘partitions review’ – that is, whether or not Achilla was entitled to the partitions work that was invoiced to Amcor during the period of that review. Reference was made to at least 16 jobs that were sent to Northwest Packaging between 21 June 2004 and 5 August 2004 (i.e., prior to the Deed of Accession), pertinent details of which are extracted below:
. . .
[133]See Reasons at [755]–[780].
As the ‘partitions review’ concerned jobs that were sent to Northwest Packaging between 21 June 2004 and 5 August 2004 (i.e., prior to the Deed of Accession), they do not fall within the Compensable Period, and thus are not relevant to the task being performed by the Special Referee. (In any event, the claim Achilla made for partitions work performed during that review period failed.)
Accordingly, in the case of the partitions work, essentially for similar reasons to those outlined above in response to Question 2, my ruling is that the Special Referee is not permitted now to entertain arguments about the carve-out that were not pleaded and particularised, and opened before the Court.
Issue concerning the ‘Amcor Displays’ jobs
In the case of ‘Amcor Displays’ jobs, the Court was satisfied that on a ‘business as usual’ construction of the clause 12.2 obligation, Achilla would likely have received some small amount of Amcor Displays’ work, unless the exception was enlivened.[134] Both the Holihan parties and the Amcor parties have now informed the Court that, in light of that finding, it is likely that the Amcor Displays jobs will raise considerations additional to those that apply to the remainder of the jobs.
[134]See Reasons at [479]. See also at [666], [667] and [1703(b)].
The Holihan parties submit that once the Special Referee has determined which of the Amcor Displays jobs satisfy the ‘business as usual’ criterion and are not the subject of the carve-out, it is likely that the Court will require the following further information before the quantification exercise can be completed, namely:
(a)the value of the Refereed Displays Jobs (by application of the experts’ methodology);
(b)the value of all of the Displays jobs (i.e. the Refereed Displays Jobs and those rejected by the referee or otherwise excluded by the Reasons);
(c)the value of the Displays work done by the ACB Business prior to the sale; and
(d) the value of all the Displays work prior to the sale.[135]
[135]See Holihan parties’ outline of submissions dealing with the referral directions, at [14].
Further, they submit, ‘[u]nless the assessment and quantification exercises clearly demonstrate that the quantum of the Assessed Displays Jobs answers[136] the description of “small component” of all of the Displays jobs in the Claim Period, the Holihan parties might need leave to reopen their case at the quantification stage’[137] so as to allow the parties to address those matters.
[136]Note the correction made by Mr Maiden SC at the hearing: see Transcript 29/01/18, at 5.
[137]See Holihan parties’ outline of submissions dealing with the referral directions, at [15].
The Amcor parties ‘agree in principle’ with those tentative views expressed by the Holihan parties, and ‘[w]hile reserving their rights’, because the appropriate course may be affected by the Special Referee’s work, from this vantage point they ‘agree that the parties may later wish to apply to the Court to reopen their cases to address the proportion of Amcor Displays work to which the Holihan parties are entitled.’
In circumstances where both the Holihan parties and the Amcor parties are in general agreement as to the way forward, the Court proposes to simply note that either or both of them might wish to seek leave to re-open their case to address the issue of proportion. In the event that either party wishes to seek to do so following consideration of the Special Referee’s report, a formal application should be made, supported by appropriate material.
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 |
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