Amcor Ltd v Barnes (Ruling No 3)

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:	8 February 2019 Further written submissions filed on 18 March 2019 by the Plaintiffs by Counterclaim/ Defendants to Cross-Claim
DATE OF JUDGMENT:	14 June 2019
CASE MAY BE CITED AS:	Amcor Ltd & Ors v Barnes & Ors (Ruling No 3)
MEDIUM NEUTRAL CITATION:	[2019] VSC 393

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PRACTICE AND PROCEDURE — Application to reopen case and adduce further evidence — Where application to reopen is consented to by the parties — Exercise of discretion in the interests of justice — Di Stasio Pty Ltd v R & K Services Pty Ltd [2018] VSCA 340 referred to.

CONTRACT — Asset Sale Deed — Business sold as a going concern — Court has earlier determined the proper construction of that agreement — Court adopted ‘business as usual’ construction including in respect of reciprocal purchase and supply obligations under clause 12.2 — Court found that on a ‘business as usual’ construction of the clause 12.2 purchase obligation, the purchaser of the business would likely have received some small amount of Amcor Displays’ work of the kind the business had been doing prior to the sale — 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 (Vic) — Additional legal question raised for determination by the Court concerning subset of disputed jobs (‘Amcor Displays Objection’) — Determination of Amcor Displays Objection — For what (if any) Amcor Displays jobs is the purchaser of the business entitled to be compensated by an award of damages.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs by Counterclaim/Defendants to Cross-Claim	Mr S J Maiden QC and Ms E L Murphy	Mills Oakley
For the Defendants by Counterclaim/Cross-Claimant	Mr C Tran	Gilbert + Tobin

TABLE OF CONTENTS

Background......................................................................................................................................... 1

Reasons for decision delivered on 28 November 2016............................................................ 1
Ruling No 1.................................................................................................................................... 2
Ruling No 2.................................................................................................................................... 4
Dispute regarding the ‘Amcor Displays jobs’................................................................. 4
The Mines Report was delivered on 12 November 2008............................................... 4
Orders made on 7 December 2018.................................................................................... 5

Each of the Holihan parties and the Amcor parties seek leave to re-open............................. 6

Overriding principle: re-opening permissible where the interests of justice so require.... 7
The Holihan parties’ submissions..................................................................................... 7
The Amcor parties’ submissions....................................................................................... 8
Oral submissions made at the hearing............................................................................. 9

The Court is satisfied that a limited re-opening is appropriate........................................... 10

The ‘Amcor Displays Objection’................................................................................................... 10

Introduction................................................................................................................................. 10
The Amcor Displays Jobs form a significant part of the quantum of the Holihan parties’ claim.................................................................................................................................. 11
The special referee was directed not to determine the ‘Amcor Displays Objection’ 12

Relevant findings made by the Court as to the proper construction of clause 12.2 and Amcor Displays....................................................................................................................................... 12

Determination of the Amcor Displays Objection – for what (if any) Amcor Displays jobs is Achilla entitled to be compensated?..................................................................................................... 20

The Holihan parties’ submissions............................................................................................ 20
The Amcor parties’ submissions............................................................................................... 21
There is no mis-description of Amcor Displays jobs (as Service Containers or AFP jobs) in Achilla 1A......................................................................................................................................... 22
Achilla is not entitled to all of the Amcor Displays’ work that the special referee has identified as satisfying the ‘business as usual’ test............................................................................. 24
The evidence before the Court does not disclose the total value of the Amcor Displays’ work that was available to be performed prior to the sale............................................................ 25
The Holihan parties’ submission misunderstands the operation of the ‘business as usual’ construction arrived at by the Court.............................................................................. 26
The evidence before the Court supports a finding that the ACB Business performed only a ‘small part’ of the Amcor Displays’ work in the pre-sale period........................................... 27
Evidence as to the kind of OME work that the ACB Business (under Amcor ownership) did for Amcor Displays prior to the sale..................................................................................... 34
The Holihan parties’ 18 March 2019 note....................................................................... 35

Where is the evidence as to the kind of work that the ACB Business did for Amcor Displays prior to the sale?........................................................................................................................... 36
Was there any evidence about how long Le Breton had been doing work for Amcor and/or Amcor Displays, and was there any evidence as to the quantum done for Amcor Displays pre-sale?.............................................................................................................................................. 57
Evidence given by Mrs Kaye Le Breton......................................................................... 58
Evidence that Le Breton did work for Amcor Displays prior to the sale: exhibit H72.1 60
Evidence given by Mr Laurence Phillips....................................................................... 61
The summary sheets contained in exhibit H72.1 indicate that Le Breton performed a number of jobs for Amcor Displays in 2000 and 2001..................................................... 63

The Holihan parties’ principal submission is rejected.......................................................... 64
The Holihan parties’ fallback submissions.............................................................................. 66
Fallback method 1.............................................................................................................. 66
Fallback method 2.............................................................................................................. 67

Volumes of Amcor Displays’ work: Part C of the Holihan parties’ 18 March 2019 note. 70
For what (if any) Amcor Displays jobs is Achilla entitled to be compensated?................ 72

Summary of conclusions................................................................................................................ 75

HER HONOUR:

Background
Reasons for decision delivered on 28 November 2016

The Court delivered its reasons for decision in both the counterclaim proceeding and the cross-claim proceeding on 28 November 2016: Amcor Ltd & Ors v Barnes & Ors [2016] VSC 707 (‘Reasons’).

Relevantly, for present purposes, the Court found that when the reciprocal purchase and supply obligations established by clause 12 of the Second Sale Agreement are viewed in the context of the whole agreement and the surrounding circumstances, the obligations imposed on ACN002693843 Box Pty Ltd (‘ACB Co Vendor’) (one of the Amcor parties) under clause 12.2 to obtain ‘all its OME supplies’ from the first plaintiff by counterclaim (‘Achilla’) (one of the Holihan parties) were essentially as follows:[1]
[1]Reasons, at [1703].

. . .

(a)On its proper construction, the purchase obligation imposed on ACB Co Vendor under clause 12.2 is to be construed as an obligation on the part of ACB Co Vendor to continue to provide to Achilla after the sale, effectively all of the same sort of work that the ACB Business had been doing prior to the sale, save in circumstances where the exception was enlivened. That is, notwithstanding the sale, the ACB Business (under new ownership) would effectively continue on the same basis as before (i.e., when conducted by ACB Co Vendor). Thus, in the ordinary course, customers’ work that was entered in the PICK system with a master denoting the ACB Business would be routed to Achilla notwithstanding the change in ownership. Similarly, in the case of new jobs that involved work of the kind that was performed by the ACB Business prior to the sale, in the ordinary course, a quote would be generated using the PICK system, and work would be routed to Achilla unless the exception was enlivened. In this way, Achilla would continue to perform the work that historically had been undertaken by the ACB Business, and essentially on the same basis as before, including that its supplies of raw material would continue to be sourced from the AFP businesses conducted at the Smithfield and Revesby sites in New South Wales.
(b)As to whether Amcor Displays’ work was captured within the clause 12.2 purchase obligation, on the evidence, it seems clear that while the ACB Business was doing some work for Amcor Displays prior to the sale, it was not doing all or even a significant proportion of the Amcor Displays’ work. The evidence suggests that a small component of the Amcor Displays’ work was being performed by the ACB Business notwithstanding the arrangement then in place with ACE Print, and that it was being recorded separately from the other work performed for the businesses conducted by AFP at its Smithfield and Revesby sites. In the period prior to the Deed of Accession being entered into, as a general proposition, the Amcor Displays’ work was not encompassed within the scope of clause 12.2. However, given that I have found 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 of the kind that the ACB Business had been doing for it prior to the sale (save for circumstances where the relevant exception was enlivened), clause 12.2 entitled Achilla or the ACB Business to continue receive a small amount of the same sort of Amcor Displays’ work.
(c)In the period following execution of the Deed of Accession, the scope of clause 12.2 remained unchanged from the position described above. That is, the substitution of APA as ‘Vendor’ in place of ACB Co Vendor did not relevantly enlarge the scope of the clause 12.2 purchase obligation.

Against that background, the general position is that Achilla is entitled to be compensated for each job that should have been provided to the ACB Business on a ‘business as usual basis’ for the period from 27 September 2005 to 31 July 2008 (‘ClaimPeriod ’), save for work that fell within the carve out or exception to that obligation in clause 12.2.[2]
[2]The relevant exception or ‘carve out’ is contained in clause 12.2 of the Asset Sale Deed dated 2 June 2003 (described in the Reasons as the ‘Second Sale Agreement’) at CB1492. The carve out is in the following terms: ‘other than due to Achilla’s inability to supply consistently and on a basis which is commercial and reasonably acceptable in terms of price, quality and availability’.

Since delivering its Reasons, the Court has delivered two rulings addressing additional matters raised by the parties.

Ruling No 1

On 2 February 2018, the Court delivered a ruling concerning two competing applications before the Court for determination:

· the first being the Holihan parties’ application seeking to have the Court proceed to refer the matter to a special referee, Mr Ronald Mines, for him to undertake the reference as to whether Achilla is entitled to compensation in relation to each of the ‘Disputed Jobs’; and

· the second being the Amcor parties’ application for the Court to make an order recording its 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 and order that the further hearing or determination of the counterclaim (and cross-claim) be stayed until further order.

The Court determined that the preferable course was to proceed with the reference to the special referee rather than by making orders formally answering the questions raised in the statement of issues (Amcor Ltd & Ors v Barnes & Ors (Ruling No 1)).[3]
[3][2018] VSC 21 (‘Ruling No 1’).

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 (Vic). Those orders provided for the reference to be undertaken by Mr Mines in a staged process, essentially because the Holihan parties had identified three additional legal questions that both parties agreed must be determined by the Court before Mr Mines could complete the reference. Mr Mines was also specifically directed not to determine (what was described as) the ‘Amcor Displays Objection’.[4] To that end, in Annexure A to the 6 February 2018 orders, Mr Mines was instructed that:[5]

Where the Claim Documents show that the Amcor Parties rely upon the Amcor Displays Objection for a particular job, your task in considering that job is to determine whether Achilla would have received the Disputed Job on a “business as usual” basis, having regard to any objections made by the Amcor Parties other than the Amcor Displays Objection.
[4]See paragraph 7(a) of Annexure B to the 6 February 2018 orders.
[5]See Annexure A (Letter of Instruction to Special Referee) to the 6 February 2018 orders.

Ruling No 2

On 29 March 2018, the Court delivered a further ruling addressing three legal questions that had been raised by the Holihan parties for determination by the Court, namely:

(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.
(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.

(Amcor Ltd & Ors v Barnes & Ors (Ruling No 2)).[6]
[6][2018] VSC 137 (‘Ruling No 2’).

Dispute regarding the ‘Amcor Displays jobs’

At the end of Ruling No 2, the Court noted that both the Holihan parties and the Amcor parties had informed the Court that, in light of the Court’s finding that on a ‘business as usual’ construction Achilla would likely have continued to receive some small amount of Amcor Displays’ work of the kind that the ACB Business had been doing for it prior to the sale, it was likely the ‘Amcor Displays jobs’ would raise considerations additional to those that apply to the remainder of the jobs. However, as both parties were in general agreement as to the way forward, the Court indicated that if, following consideration of the special referee’s report, either party wished to seek to seek leave to re-open, a formal application should be made, supported by appropriate material.

The Mines Report was delivered on 12 November 2008

On 12 November 2018, Mr Mines delivered his report to the Court, comprised of a ‘reference overview’ and a schedule setting out his determination, on a job by job basis, as to whether Achilla is entitled to damages for each job (‘Mines Report’). In his reference overview, Mr Mines outlined the approach he had followed to reach his findings in respect of each disputed invoice, stating:[7]
[7]Mines Report, reference overview dated 2 November 2018, at pg 1.

. . .
As directed, I have reviewed these invoices based upon arguments put by the parties in columns I, J and K of the (Revised) Claim Documents.
In all of the above cases, I have applied logic based on my extensive knowledge of the corrugated box industry, as well as knowledge gained within the several industry businesses that I have either been employed by, or have supplied contract work to.
The above logic and knowledge encompasses the type of manufacturing industry/processes available to Achilla, as described in Sections 17e and 18 of [the 6 February 2018 orders] and the evidence of the various suppliers regarding their processes and capabilities.
I was able with a fair degree of accuracy, to determine whether Achilla had the capability to perform specific work but I was unable to determine whether they had the capacity, at any particular time, to perform the work.
I based my assessment on their capability only.
. . .

Both the Holihan parties and the Amcor parties have indicated that they are generally content with the way that the special referee has gone about performing the tasks that were allocated to him.

Orders made on 7 December 2018

On 7 December 2018, orders were made by consent for the parties to file written submissions addressed to four topics:

(a) the adoption or otherwise of the Mines Report (or part(s) thereof);

(b) the Amcor Displays Objection;

(c) any application made to reopen and adduce further evidence in relation to Amcor Displays; and

(d) the procedural steps to follow the adoption or otherwise of the Mines Report.

Pursuant to those orders, the Holihan parties and the Amcor parties each filed an outline of submissions, a summons and an affidavit in support. They sought leave to re-open their respective cases, to adduce further evidence relevant to the Amcor Displays Objection and to make submissions.

The matter was listed for hearing on 8 February 2019. On that day, the time available permitted the Court to hear argument directed to the Amcor Displays issues only. Accordingly, this ruling deals only with how the Amcor Displays Objection is to be resolved, and whether either party should have leave to re-open in furtherance of its resolution. It will be necessary to re-schedule a further hearing to deal with the other two outstanding issues, namely:

(a) Should the Mines Report be adopted in whole or in part, and what is otherwise to be done with it?

(b) What further procedural steps are required to progress the proceeding?

This ruling should be read in conjunction with the Reasons, Ruling No 1 and Ruling No 2.

Each of the Holihan parties and the Amcor parties seek leave to re-open

As noted above, each of the Holihan parties and the Amcor parties sought to re-open. The only difference between them was how much of discovered document ‘Achilla 1A’[8] should be accepted into evidence upon the re-opening of the case, in circumstances where an extract only had been tendered at trial due to its voluminous size.[9]
[8]Part of Achilla 1A is exhibit H197 at CB 2447ff.
[9]Comprising some 1600 pages or thereabouts.

In the case of the Holihan parties, the further evidence sought to be adduced was an extract from Achilla 1A (which was set out as exhibit ‘CAH-1’ to an affidavit of Mr Holihan sworn on 7 February 2019) listing all invoices issued by Achilla to Amcor Displays in the period from October 2005 to the end of the Second Sale Agreement on 31 July 2008, which is commensurate with the Claim Period (as defined in the orders made on 6 February 2018).

In the case of the Amcor parties, they sought to have the whole of Achilla 1A tendered, observing that the tender of the ‘extract only’ appeared to be a case of inadvertent error, seemingly by both parties, which occurred in order to reduce the amount of documents tendered, and not for any tactical or strategic reason.

Overriding principle: re-opening permissible where the interests of justice so require

It is clear that where the interests of justice so require, the court may allow a party to re-open its case, even where reasons have been published.[10] As the Court of Appeal observed in Di Stasio Pty Ltd v R & K Services Pty Ltd,[11] the ‘overriding principle is whether, taken as a whole, the justice of the case favoured leave being granted to re-open’ and the court should endeavour to identify ‘a means of rectifying matters in a simple and inexpensive manner in accordance with modern views about the proper conduct of litigation’.[12]
[10]See De L v Director-General, NSW Department of Community Services [No 2] (1997) 190 CLR 207, 215; Di Stasio Pty Ltd v R & K Services Pty Ltd [2018] VSCA 340, [80]-[81] (per Tate JA, McLeish and Niall JJA agreeing).
[11][2018] VSCA 340.
[12]Ibid, at [71]-[72] (per Tate JA, McLeish and Niall JJA agreeing).

The Holihan parties’ submissions

The Holihan parties submitted that, in the present case, the interests of justice require that leave to re-open be granted, because:[13]
[13]See the Holihan parties’ outline of submissions dated 5 February 2019, at [58] (footnotes omitted).

(a)there was no reason for the evidence to be adduced on the first hearing, as the issue to which it relates did not emerge until the Amcor parties’ closing submissions;
(b)the need to reopen was first identified shortly after the publication of reasons, in March 2017;
(c)the parties agree that the case should be reopened, and reopening will cause no prejudice to either party and no undue inconvenience to the Court;
(d)the reopening is of limited scope and involves only adducing further parts of a document that is already in evidence in part (together with a limited explanation of that document);
(e)without the further information the Court will be hindered in its determination of the Amcor Displays Objection, and the Holihan Parties might be prejudiced in proving their loss; and
(f)usual concerns regarding finality do not apply, as the further evidence is to be used in submissions on questions that are to be determined as part of a staged approach to the case.

Further, the Holihan parties submitted that leave should also be granted to allow Mr Holihan’s further affidavit (and exhibit CAH-1) to be filed, as it is relevant.[14] They contended that, because Mr Holihan has first-hand knowledge of the Achilla 1A document, he is able to describe how the various potentially confusing columns of the document relate to one another. They say that the calculations he provides will likely be of assistance to the Court, and can readily be checked by the Amcor parties.
[14]The Holihan parties’ outline of submissions, at [59].

The Amcor parties’ submissions

The Amcor parties agreed that leave to re-open should be granted. They noted that the prospect of adducing further evidence had been raised by the parties during the next mention after the Reasons were delivered, and observed that in dealing with the Amcor Displays Objection, it will likely be relevant for the Court to know how much work Achilla did for Amcor Displays. The Amcor parties contended that the most expedient, and therefore the appropriate, course is to tender the full version of the Achilla 1A document – but on the express understanding that the Court will only consider, and will only have to consider, those parts to which the parties take the Court. They submitted that course is the most appropriate one for the following reasons:[15]
[15]The Amcor parties’ outline of submissions dated 5 February 2019, at [51]-[55].

(a) first, in the ordinary course, the traditional approach is for entire documents to be admitted rather than redacted versions or extracts. Here, an extract was tendered simply because the Achilla 1A document was very bulky;

(b) secondly, in circumstances where the parties agree that additional parts of the Achilla 1A document are relevant, it is more prudent to admit the whole document, in case more of it should become relevant to the Court’s consideration of the issues during the course of oral argument; and

(c) thirdly, it will not cause any disproportionate cost to admit the whole document. That can be done electronically, and the parties will address the Court on what is relevant, and the Court need not consider those parts it is not directed to.

The Amcor parties also submitted that the Court should reject the Holihan parties’ alternative course of adducing further evidence from Mr Holihan.[16] They said the Achilla 1A document speaks for itself, and given the somewhat extraordinary nature of any application to re-open, the nature of the new evidence should be limited to documentary evidence where possible.
[16]The Amcor parties’ outline of submissions, at [55].

Oral submissions made at the hearing

During the course of the oral submissions made at the hearing, counsel for the respective parties agreed that the most sensible and expedient course would be for the Court to deal with the Amcor Displays Objection before dealing with any of the other matters and/or referring anything further to the special referee. To that end, counsel for the Amcor parties informed the Court that, notwithstanding what is contained in Amcor parties’ written submissions, he would be submitting that a reasonable ‘compromise position’ would be for the Court to receive the Achilla 1A document and Mr Holihan’s further affidavit, treating it as an explanation of Achilla 1A.[17]
[17]Transcript 08/02/2019, at TT12-13 (Mr Tran).

Counsel for the Holihan parties agreed that in respect of the applications to re-open, the Holihan parties are content to proceed on the basis that leave to re-open should be granted to both sides.[18]
[18]Ibid, at TT27-28 (Mr Maiden QC).

The Court is satisfied that a limited re-opening is appropriate

Against that background, the Court indicated that in circumstances where it seems at the trial neither side had focused on what a ‘business as usual’ construction of the Second Sale Agreement might entail for the Amcor Displays’ work, and given the (effectively agreed) position now reached between the parties, that it was satisfied it was in the interests of justice to allow the parties to re-open in the limited way discussed. Accordingly, the Court ruled that both the further affidavit of Mr Holihan (together with his exhibit ‘CAH-1’) and the whole of the Achilla 1A document be admitted into evidence, effectively by consent. Both parties would then have the opportunity to make submissions about the conclusions the Court should draw from that additional material.[19]
[19]Transcript 08/02/2019, at TT30-32.

In my view, when the additional material sought to be adduced by the parties is taken as a whole, the justice of the case favours leave being granted to re-open. Further, that course commends itself as the preferable and expedient way forward, and given the time this proceeding has occupied to date, the Civil Procedure Act 2010 (Vic) would endorse it as a pragmatic, efficient and expedient course that accords justice to both parties.

Accordingly, at the hearing on 8 February 2019, the further affidavit of Mr Craig Anthony Holihan dated 7 February 2019 (together with exhibit CAH-1) was tendered as exhibit H448, and a USB containing an electronic version of the whole of the discovered document ‘Achilla 1A’ was tendered as exhibit A99.

The ‘Amcor Displays Objection’
Introduction

Following the delivery of the Reasons and the appointment of Mr Mines as the special referee, the parties, through an iterative process of exchange of ‘Claim Documents’, have identified as ‘Disputed Jobs’[20] approximately 957 jobs that were performed by one or other of the alternative suppliers in the period from 27 September 2005 to 31 July 2008 (‘Claim Period’).
[20]In the orders of 6 February 2018, the ‘Claim Documents’ and ‘Disputed Jobs’ are defined as follows:

The ‘Amcor Displays Objection’ concerns a subset of these Disputed Jobs, being the Amcor Displays Jobs that were performed by one or other of the alternative suppliers in the Claim Period, that Achilla contends were OME supplies that APA should have procured from Achilla on a ‘business as usual’ basis, and for which Achilla is now entitled to be compensated.

The Amcor Displays Jobs form a significant part of the quantum of the Holihan parties’ claim

It is common ground that the Amcor Displays Jobs form a significant part of the quantum of the Holihan parties’ claim. Relevantly, the Holihan parties submitted that, of the outstanding issues, the Amcor Displays question is likely to be ‘the single most important’[21] one to be resolved: first, because the parties accept that it will determine, in part, the answer to what the special referee might need to look at; and secondly, because of the quantum at stake. In that regard, counsel for the Holihan parties informed the Court that some idea of the relativity of the Amcor Displays’ work in question can be gleaned by reference to the figures that were produced as a result of the work performed by their accounting expert, Mr Meredith, before the findings were made at trial. Counsel for the Holihan parties submitted:[22]

On our calculations, the Displays work done by the alternative suppliers is valued at a total – and this, of course, is taking the figures that were produced as a result of Mr Meredith's work before the findings at trial, but because it's all relevant, not absolute, it's useful to look at it this way – $3.867 million, and of that 3.867, Mr Mines has found that the work in question would have been "usual course of business" work and, therefore, gone to Achilla, subject to the outcome of the Displays objection, in the amount of $3.347 million.

[21]Transcript 08/02/2019, at T34 (Mr Maiden QC).

[22]Ibid.

In response, the position adopted by the Amcor parties is that Achilla is not entitled to any compensation for the Amcor Displays Jobs that were sent to one or other of the alternative suppliers in the Claim Period, in essence because Amcor has provided Achilla with the ‘small amount’ or ‘small proportion’ of Amcor Displays’ work that the Court found it was obliged to obtain from Achilla following the sale of the ACB Business.[23]
[23]See the Amcor parties’ outline of submissions, at [2.2(i)] and [58]-[63].

The special referee was directed not to determine the ‘Amcor Displays Objection’

As noted earlier, the orders made by the Court on 6 February 2018, appointing Mr Mines as the special referee, identified the ‘Amcor Displays Objection’ as a separate issue that was not to be determined by him. In those orders, the ‘Amcor Displays Objection’ was defined as, in effect, any objection of the Amcor Parties to Achilla’s claim for a job on a ‘business as usual basis’ on the ground that the job was an Amcor Displays Job.[24]
[24]In the orders of 6 February 2018, ‘Amcor Displays Objection’ and ‘Amcor Displays Job’ are defined as follows:

As the special referee has now delivered his report, it is a matter for the Court to determine how the Amcor Displays Objection is to be resolved. As a first step in that process, it is convenient to set out the relevant findings made by the Court as to the proper construction of clause 12.2 of the Second Sale Agreement insofar as it concerns Amcor Displays.

Relevant findings made by the Court as to the proper construction of clause 12.2 and Amcor Displays

In its Reasons, the Court found that when the provisions of clause 12 are viewed in the context of the whole of the Second Sale Agreement and the surrounding circumstances, the purchase obligation imposed on ACB Co Vendor under clause 12.2 to obtain ‘all its OME supplies’ from Achilla is to be construed as an obligation on the part of ACB Co Vendor to continue to provide to Achilla after the sale, effectively all of the same sort of work that the ACB Business had been doing prior to the sale, save in circumstances where the exception was enlivened.

The relevant ‘surrounding circumstances’ informing that ‘business as usual’ construction were summarised as follows:[25]
[25]Reasons, at [422].

The surrounding circumstances known to the parties and the purpose and object of the transaction
. . .
[422]At the time of sale, the ACB Business was regarded by Amcor as an underperforming business in the sense that it was not meeting Amcor’s ‘return on funds employed’ (ROFE) benchmark. When ACB Co Vendor sold the assets and undertaking of the ACB Business to the Holihan parties, it was the sale of a going concern, and it was envisaged on both sides that after the sale, the ACB Business would continue to do the OME work that historically had been routed through the ACB Business prior to the sale, using the same equipment and at the same premises. Further, raw materials required by the ACB Business (under new ownership) would (continue to) be supplied by ACB Co Vendor sourced from the corrugated box plants at AFP Smithfield and AFP Revesby at D & D prices agreed between them, and the ACB Business would (continue to) perform OME work for customers of the corrugated box plants at AFP Smithfield and AFP Revesby at D & D prices agreed between them, and the PICK and PCS systems would (continue to) be used for ordering, quoting and scheduling the work to be undertaken by the ACB Business (under new ownership). In that sense, the ACB Business (under new ownership) would operate in much the same way as it had in the past, and work for customers would be ordered and received in much the same way as before, and at the same or similar pricing. To facilitate that course, the Wetherill Park premises from which the ACB Business operated were to be sub-leased to the Holihan parties by APA and the ACB Business (under new ownership) would continue to have access to the corrugator located there. And the Holihan parties were permitted to offer employment to any of the ‘Employees’ (defined to mean the employees of the Vendor engaged in the Business as listed in Annexure 7) with effect from the Completion Date.

The Court noted that under the ‘business as usual’ construction, notwithstanding the sale to the Holihan parties, the ACB Business (under new ownership) would effectively continue on the same basis as before (i.e., when conducted by ACB Co Vendor).[26] Thus, in the ordinary course, customers’ work that was entered in the PICK system with a master denoting the ACB Business would be routed to Achilla notwithstanding the change in ownership. Similarly, in the case of new jobs that involved work of the kind that was performed by the ACB Business prior to the sale, in the ordinary course, a quote would be generated using the PICK system, and work would be routed to Achilla unless the exception was enlivened. In this way, Achilla would continue to perform the work that historically had been undertaken by the ACB Business, and essentially on the same basis as before, including that its supplies of raw material would continue to be sourced from the AFP businesses conducted at the Smithfield and Revesby sites in New South Wales.
[26]Ibid, at [436].

In the case of Amcor Displays, the Court concluded that at the time the Second Sale Agreement was entered into, the entirety of the OME requirements of Amcor Displays were not encompassed by the clause 12.2 obligations. Relevantly, the Court found:[27]

Period before the Deed of Accession was entered into
. . .
[489]As a matter of construction, the Amcor Displays’ work is not captured by the express language of clause 12.2. Amcor Displays was not part of ACB Co Vendor, and so the Amcor Displays’ work did not form part of ‘its’ OME supplies. In my view, when one looks to the surrounding circumstances in order to arrive at the proper construction of clause 12.2, the objective evidence confirms that the entirety of the OME requirements of Amcor Displays was not encompassed by the clause 12.2 obligations. Relevantly, at the time the Second Sale Agreement was entered into, there was a separate arrangement in place with ACE Print to perform work for Amcor Displays, of which Mr Holihan was aware. Amcor Displays was operated and conducted separately from the ACB Business (operated and conducted by ACB Co Vendor) and also separately from the AFP corrugated box plants at Revesby and Smithfield. In the period immediately prior to the sale of the ACB Business, Amcor Displays was not being managed by a staff member of AFP, but by Mr Hottes who was doing so on contract. Amcor Displays had its own estimating staff who would quote and arrange the routing of work. Amcor Displays also had access to the PICK system but, as Mr Nellies observed, ‘technically, Amcor Displays was a customer’ so that they should have been placing orders with Amcor in the same way that a customer would place orders.
[490]While the evidence shows that the small amount of work that was performed by the ACB Business for Amcor Displays prior to the sale was, however, taken into account in estimating the volume of work that would likely be performed by the ACB Business in the first contract year, and thereby in arriving at the D & D rates that would apply, that scintilla of evidence does not entail the consequence that all of the Amcor Displays’ work was captured and brought within the scope of the clause 12.2 obligation. Mr Joyce’s evidence gave some indication of the type of Amcor Displays’ work that would be sourced from the ACB Business while under Amcor ownership, and on a ‘business as usual’ scenario, it is likely that work would continue.

[27]Reasons, at [489]-[490] (footnotes omitted).

Following the entry into the Deed of Accession, from 21 March 2005, APA (the parent of ACB Co Vendor) became the party that was bound by the Second Sale Agreement. The Holihan parties submitted that in circumstances where APA had become the named vendor, on a plain reading of clause 12.2 APA was required to obtain all its OME supplies of Products from Achilla save where the exception ‘…other than due to Achilla’s inability…’ was enlivened. The Amcor parties did not accept that the novation effected by the Deed of Accession gave rise to any enlarged operation of the Second Sale Agreement and they disputed that the effect of the Deed of Accession (and in particular, clause 2.1) was to bring the Amcor Displays’ work within the clause 12.2 obligations, save to the extent that the notion of ‘business as usual’ might continue to capture the small amount of work that the ACB Business performed historically for Amcor Displays.

The Court found as follows:[28]

Period following execution of the Deed of Accession
. . .
[495]Between the time of entry into the Second Sale Agreement and the Deed of Accession being executed, the position concerning Amcor Displays had changed. Importantly, the contractual arrangement with ACE Print had been terminated, and the Amcor Displays’ OME work was being routed by the estimators at Amcor Displays (and not the AFP estimators) and performed variously by one or other of the alternative suppliers and in some cases by Achilla. Further, the Holihan parties (via Achilla) had entered into a management agreement with APA whereby Achilla’s employee, Mr Daaboul, was undertaking the management of ‘the NSW Displays Division’ of APA. However, Mr Manser had informed Mr Holihan that the arrangement would not be extended beyond 30 June 2005 because he was going to relocate the purchasing functions of Amcor Displays NSW to Victoria and have them run from a Service Containers business. Accordingly, at the point at which the Deed of Accession was entered into, the arrangements pertaining to the Amcor Displays’ work were markedly different to those in place concerning the OME work then being performed by Achilla under the Second Sale Agreement.
[496]The evidence given by the respective parties concerning the entry into the Deed of Accession, which is summarised earlier in these reasons (under Issue 1(c), ‘Background to the Deed of Accession’), is of limited assistance. The evidence is that it was initiated by the Amcor parties, having been discussed internally at a management level before being communicated to Mr Holihan on 16 February 2005, when he received an email from Mr Lewis regarding ACB Co Vendor which attached a draft ‘Deed of Accession’. In the covering email, Mr Lewis referred to Amcor’s continuing practice of ‘remov[ing] company structures no longer required’ and said that they wish to place ACB Co Vendor in voluntary liquidation and deregister it, and to facilitate that course it was necessary to ‘assign any existing contractual obligations to the main Amcor company, namely Amor [sic] Packaging (Australia) Pty Ltd liquidation.’ Mr Holihan referred the proposed deed to his solicitor, Mr Roe, for review and once his comments were to hand, Mr Holihan forwarded them to Mr Lewis for his consideration the same day. The Deed of Accession was executed by the parties a few days later.
[497]The Holihan parties submit that the Deed of Accession was correcting a mistake and really putting into place or formally recording what was the existing practice between the parties. In my view, the objective evidence does not support that position. It is not one that is recorded or otherwise evident in either the contemporaneous correspondence exchanged between the parties or the recitals to the Deed, and does not reflect what was the (then) existing practice between the parties. Furthermore, there was no discussion between the parties about enlarging the scope of the contractual undertaking so as to encompass all of Amcor Displays’ OME requirements within the clause 12.2 obligation. Were that proposed to occur, it was necessary for the Amcor parties to discuss the matter with Achilla. That is because any change to the scope of the clause 12.2 obligations would have implications for Achilla, particularly in circumstances where it was required to supply finished products to the Vendor ‘at prices based on D & D costs to Achilla’.

[28]Reasons, at [495]-[497] (footnotes omitted).

The foregoing findings make clear that the only basis available to the Holihan parties to claim that after the sale of the ACB Business any Amcor Displays’ work should have been performed by Achilla lay in the ‘business as usual’ construction, and then only to the extent that the notion of ‘business as usual’ entailed that Achilla might continue to capture the OME work that the ACB Business had performed historically for Amcor Displays.

In the circumstances, it follows that Achilla was required to adduce evidence about the OME work that the ACB Business had performed historically for Amcor Displays so as to demonstrate the particular OME jobs or kind of OME work performed for Amcor Displays before the sale that it contends on a ‘business as usual’ basis were to continue to be performed by Achilla following the sale.

In seeking to demonstrate the work that the ACB Business had performed historically for Amcor Displays, Mr Holihan gave evidence at the trial of the counterclaim about the general types of OME work that the ACB Business performed prior to the sale, when he was its General Manager, and also the customers (or customers of AFP) for whom the ACB Business performed work. The Court summarised that evidence, as follows:[29]

Relevantly, at that time of the sale, the largest customer of the ACB Business by turnover was AFP, in the sense that work done for AFP’s customers provided something in the vicinity of 80% of the work being performed by the ACB Business. Mr Holihan said that the AFP customers for whom the ACB Business did work included sales groups within AFP such as ‘Heavy Duty’, ‘Fruit and Veg’, and Amcor Displays, although the ACB Business did not do very much work for Amcor Displays because, shortly after the ACB Business obtained a litho laminating machine in June 2001, AFP entered into a supply agreement with ACE Print & Display Pty Ltd (‘ACE Print’) in relation to Amcor Displays’ work.

[29]Reasons, at [100] (footnotes omitted).

The Court also noted that Mr Holihan had acknowledged, under cross-examination, that he was aware that AFP’s contract with ACE Print did not relate only to Amcor Displays’ work, and he said he believed ‘that AFP would have had all of its screen print work made by Ace and then Ace did other things as well’.[30]
[30]Ibid, at [268].

Further evidence about the quantum of the Amcor Displays’ work performed by the ACB Business prior to the sale was given by Mr Holihan and others in the context of their evidence about the D & D pricing mechanism embodied in the Second Sale Agreement.

As was explained in the Reasons, the D & D pricing mechanism was developed by the parties in consultation with each other prior to entry into the Second Sale Agreement. The acronym ‘D & D’ (a reference to the ‘direct and distribution costs’) was defined in clause 1.1 to mean ‘the applicable costing base of products for the purposes of calculating costs in relation to clause 12 as shown in Annexure 5’. The objective of the D & D costs mechanism was to allow the Vendor, or Purchaser or Achilla (as the case may be) to recover their respective ‘direct and distribution costs’ involved in the supply of raw materials on the one hand, and the supply of finished products on the other, on the basis of an effectively agreed pricing.

Generally speaking, it was through the D & D pricing mechanism that ACB Co Purchaser/Achilla would recover its fixed costs of operating the ACB Business. The pricing that was to apply in the first year of operation of the ACB Business (under new ownership) was to be arrived at by reference to the pricing that applied to the historical actual throughput from the Wetherill Park plant as operated by ACB Co Vendor preceding the sale, and ratcheted up in each contract year by the agreed margin(s) specified in clause 12. In that way, with the D & D pricing mechanism in place under the Second Sale Agreement, an estimator who was quoting on a job or order to be placed with the ACB Business, could enter the job details into the PICK system and the PICK system would generate a costing or quote for the item of proposed work.[31]
[31]Reasons, at [432].

The Holihan parties led evidence about the process engaged in between the parties at or around Completion, and in subsequent years, to agree upon the D & D costs mechanism that was to apply to supplies made under the agreement. Primarily, that evidence was given by Mr Papadimatos, who worked as an accountant in the ACB Business (under new ownership) from shortly before Completion until 2010. Mr Holihan and Mr Joyce also gave evidence about aspects of this process.

The First Year Budget, headed ‘AFP-Wetherill Park-Factory Recovery & Machine Rates-Period 1/07/03 to 30/06/2004 (12 months)’ (and referred to at trial as ‘exhibit H91A’), was based on Annexure 5 to the Second Sale Agreement. The First Year Budget assumed that the same volume would be manufactured in the 2003/04 year by the ACB Business under the new ownership as was (in fact) manufactured by the ACB Business under Amcor ownership in 2002/03.[32]
[32]Reasons, at [1002].

In the Reasons, the Court noted that there was some unchallenged evidence that the machine rates agreed between the parties for the purpose of the D & D calculation ‘included some Amcor Displays’ volume’, which was recorded separately from the AFP work, as follows:[33]

. . . The data tables accompanying the June 2003 profit & loss statement, headed ‘Amcor Fibre Packaging – Recovery of Wetherill Park Labour, Variable and Fixed Costs Based on Machine Hours, MTD June 03’, give the detail for the components of the $2.622m that is referable to the recovery of the cost of work done for AFP and Amcor Displays by machine hour, and confirm that the sum of $172,097.83 represents ‘Management Unit C’ being ‘Amcor Displays’ and the remaining sum of $2,450,225 represents ‘Management Unit A’ being ‘NSW Box’.

[33]Ibid, at [476] (footnotes omitted).

In a context where Mr Holihan’s evidence was that prior to the sale ‘the ACB Business did not do very much work for Amcor Displays’ and the machine rates data tables recorded the Amcor Displays’ work performed by the ACB Business as comprising only $172,097.83 out of the $2.622 million total, the Court, in its Reasons, concluded in respect of ‘Issue 3(b)(ii): Purchases of OME for the business known as “Amcor Displays”’ as follows:

[666]The rival contentions concerning OME work that was performed for Amcor Displays have been considered earlier in these reasons. As will be apparent, I have concluded that the work done by the alternative suppliers for Amcor Displays was not encompassed within the clause 12.2 purchase obligation, save to the extent that the notion of ‘business as usual’ might continue to capture the small amount of work that the ACB Business had performed historically for Amcor Displays.[34]
[667]Accordingly, save in respect of that small portion of work that the ACB Business performed historically for Amcor Displays, the Holihan parties are not entitled to recover any loss and damage in respect of the Amcor Displays’ work.

[34]That is a reference to the small portion of converting work Mr Joyce described as pertaining to the $172,097.83 of work performed by the ACB Business in the 2002/03 financial year.

It is against that background that the Holihan parties now effectively seek to have the Court re-visit the issue of Amcor Displays’ work and determine which (if any) of the jobs the subject of the Amcor Displays Objection are jobs for which Achilla is entitled to be compensated.

Determination of the Amcor Displays Objection – for what (if any) Amcor Displays jobs is Achilla entitled to be compensated?
The Holihan parties’ submissions

Achilla’s principal submission is that it is entitled to be compensated for all of the Amcor Displays’ work that the special referee has identified as satisfying the ‘business as usual’ test. In effect, Achilla contends that the ‘business as usual’ concept should be the sole criterion by which the Amcor Displays Objection is determined.

Alternatively, as a fallback position, Achilla says that if the Court finds that it was entitled to something less than the entirety of the Amcor Displays’ work that the special referee has identified as satisfying the ‘business as usual’ test, then:[35]

(a) Achilla should be awarded 64.33 per cent of the total value of the Amcor Displays Jobs (less the value of such Amcor Displays’ work that it actually did) that being the proportion of the Amcor Displays’ work that Achilla did in the year preceding the Second Sale Agreement; or, alternatively

(b) for each year of the Claim Period, Achilla should be awarded damages equal to the value of Amcor Displays’ work that it did in the year preceding the Second Sale Agreement (again, less the value of such Amcor Displays’ work that it actually did).

[35]Holihan parties’ outline of submissions, at [6(c)].

The alternative approaches advanced by Achilla are put forward as the Court adopting a ‘doing the best it can’ approach to the assessment of loss on the available evidence. The second alternative effectively amounts to the Court finding that the ‘best it can do’ on the available evidence is to say, having regard to the ‘business as usual’ findings, that the minimum amount of the Amcor Displays’ work that Achilla should have been given is likely to be the same amount as that obtained in the year immediately prior to entry into the Second Sale Agreement, pro-rated across the Claim Period. That is, taking the $172,097.83 that was received in the 2002/2003 financial year, and pro-rating it for the periods of less than a year at the beginning and end of the Claim Period (which in total is 33 months).

Achilla acknowledges that if either of the fallback positions is adopted, the Court will also be required to identify what amount of Amcor Displays’ work Achilla actually received, because that is an integer that goes to the calculation of the 64.33 per cent. As Achilla did receive some work during the Claim Period, the value of that work has to be brought to account and subtracted so as to ensure there is no double-counting. To assist in that regard, Mr Holihan, in his further affidavit,[36] has identified the value of the Amcor Displays’ work that Achilla actually received during the Claim Period as being $49,423.04 (including GST).
[36]Exhibit H448.

The Amcor parties’ submissions

The Amcor parties, on the other hand, submit that Achilla has already received the small amount of the same sort of Amcor Displays’ work that the Court found on a ‘business as usual’ construction of the clause 12.2 obligation it was entitled to continue to receive following the sale of the ACB Business, and it is not entitled to receive compensation for anything more. In this regard, Amcor referred to and relied on the findings made by the Court in its Reasons, as mentioned above.

As to the value of the Amcor Displays’ work that Mr Holihan has identified Achilla did receive, the Amcor parties submit that there is a prospect that there were some additional jobs that were AFP or Service Containers jobs that were mis-described – where sometimes work was invoiced to AFP even though it was for Amcor Displays – which should be brought to account. But in advancing this argument, counsel for the Amcor parties effectively acknowledged that their Service Containers’ argument was not a strong one.[37]

There is no mis-description of Amcor Displays jobs (as Service Containers or AFP jobs) in Achilla 1A

[37]Transcript 08/02/2019, at TT121-126.

Counsel for the respective parties referred the Court to several examples of jobs recorded in Achilla 1A. To further assist the Court, during the course of the hearing the Holihan parties prepared an extract of Achilla 1A by printing every row that begins with the Service Containers description, so as to capture all of the jobs relevantly described as being Service Containers jobs. That document, headed ‘Extract of Achilla 1A (Service Containers)’,[38] was produced to the Court as an aide-memoire during the hearing.
[38]Comprised of 13 A3 pages (landscape format).

In most rows shown in the extract, the column headed ‘PD Description’ is blank, but there are some rows where a description is given, such as ‘1220Mm X 41M S/Face Rolls’, ‘915Mm X 55M S/Face Rolls’, ‘1525mm X 33m’, ‘760Mm X 66M S/Face Rolls’, indicating that the job was for single face rolls of corrugated cardboard. In some of the other cases where the column headed ‘PD Description’ is blank, the columns headed ‘Invoice type’ and ‘Description’ record ‘pallets’ and ’60 Chep’ respectively, indicating that the job involved the return of Chep pallets, for which no charge was involved. There are a couple of other instances where the columns headed ‘Invoice type’ and ‘Description’ record ‘pallets’ and ’60 Chep ACB Non Return’ (or ‘Non Return Pallet’) respectively, indicating that the job involved the non-return of Chep pallets, for which a charge was involved. There is also an entry where the description records ‘Freight incorrectly charged to customer’.

Counsel for the Holihan parties submitted that so far as they can ascertain from their inspection of the entries recorded in the ‘Extract of Achilla 1A (Service Containers)’ document, all of the Service Containers entries there recorded answer the description of one or other of three items, being ‘blank’ entry, ‘single faced pads’ or ‘pallet’ (or non-return pallet) respectively.[39] The evidence given at the trial of the counterclaim about products such as single face pads or single face rolls was to the effect that they are a fairly basic or rudimentary corrugated cardboard product.[40] Single face pads or rolls are unlike the typical range of products produced for Amcor Displays, being point of sale cardboard displays of the kind used in supermarket aisles and chemist shops. Accordingly, the Holihan parties submitted that there is nothing in any of those Service Containers jobs that suggests that they are in any way to do with Amcor Displays.[41]
[39]Transcript 08/02/2019, at T79ff (Mr Maiden QC).
[40]See Reasons at [553]. Mr Pellizari of Northwest Packaging explained that ‘single face pads’ are made using a machine called a ‘single facer’. Two reels of paper are loaded on to mill stands and fed through a heated roll so that a corrugation effect is created on one piece of paper and the other piece is laminated to it using a starch based adhesive whereby the corrugated peaks cause the adhesion. The end product is a single faced roll of about 75 metres in length (or as required) with a layer of paper on one side and a corrugated piece on the other.
[41]Transcript 08/02/2019, at T81 (Mr Maiden QC).

I share that view. It follows that I am not satisfied that there is any real prospect that there were some additional jobs performed for Amcor Displays by the ACB Business during the Claim Period that were that were mis-described as Service Containers jobs.

A similar position applies in the case of the AFP jobs performed by Achilla during the Claim Period that the Amcor parties submitted might have been mis-described. The Amcor parties prepared a one-page document headed ‘Extract of example AFP invoices from Achilla 1A re Displays Work’ to illustrate the kind of jobs in question. In that extract, the ‘PD Description’ column records the relevant jobs performed for AFP variously as ‘503121-699Pk 501498 Cool C D/C Display’, ‘71235-008Pk Display Outer Outer Aust Print’ and ‘51806-024PK ZSHDS Display shipper’.

It is unclear what product a ‘D/C Display’ or a ‘Display Outer’ is. In that regard, the Court was not referred to any evidence adduced at the trial of the counterclaim that would assist to clarify the matter. But the mere presence of the word ‘Display’ or ‘D/C Display’ does not, as counsel for the Holihan parties submitted, mean that the job was one that was ordered by Amcor Displays.[42] It follows that I am not satisfied that there is any real prospect that there were some additional jobs performed for Amcor Displays during the Claim Period that were that were mis-described as AFP jobs.

Achilla is not entitled to all of the Amcor Displays’ work that the special referee has identified as satisfying the ‘business as usual’ test

[42]Ibid, at TT37-39 (Mr Maiden QC).

Essentially for the reasons advanced by the Amcor parties, I am not satisfied that Achilla is entitled to an award in damages for all of the Amcor Displays’ work that the special referee has identified as satisfying the ‘business as usual’ test.

It will be recalled that, in the principal judgment, the factual findings made by Vickery J were to the effect that Amcor Displays was conducted under the umbrella of the Service Containers business located at Revesby, which was separate from the ACB Business conducted at Smithfield and Wetherill Park.

In its Reasons concerning the counterclaim, the Court found that the Amcor Displays’ work is in a different position to the general body of AFP work performed by the ACB Business. Accordingly, for present purposes, the starting point is the Court’s conclusion that, as a matter of construction, the Amcor Displays’ work was not encompassed within the clause 12.2 purchase obligation, save to the extent that the notion of ‘business as usual’ might continue to capture the small amount of work that the ACB Business had performed historically for Amcor Displays.

In oral submissions made on behalf of the Amcor parties, counsel summarised the practical operation and effect of the Court’s construction, as follows:[43]

[T]he logical structure of clause 12.2, outside of a Amcor Displays' context, is as follows: if it is OME work of the kind that Achilla would ordinarily do, then unless the Amcor parties could show that it was repeat work, then, prime facie Achilla was entitled to it, subject to the carve out, because clause 12.2, on its proper construction, had the result that OME work fit within clause 12.2, unless it was, say, screen–printing.
Amcor Displays is actually the same logical structure but in reverse. If it's Amcor Displays' work, then, the starting point is: Achilla is not entitled to it unless, effectively, exactly like repeat work, unless they can show that they were doing that work prior to the sale.
Then they are entitled to do so. [It is the] [e]xact same logical structure but flipped because the default position is flipped. Default position, as [y]our Honour said, is that Amcor Displays is not in clause 4.2 [sic.] unless "business as usual". For every other sort of OME work, except screen-printing and maybe one or two others, the default position is: you're in clause 12.2 unless repeat work.

The evidence before the Court does not disclose the total value of the Amcor Displays’ work that was available to be performed prior to the sale

[43]Transcript 08/02/2019, at T117 (Mr Tran).

It is common ground that the evidence before the Court does not disclose the total value of the Amcor Displays’ OME work that was available to be performed prior to the sale.

The Holihan parties contend that in the financial year preceding the Second Sale Agreement the position concerning the OME work performed for Amcor Displays was as follows:[44]

(a) the ACB Business did $172,097.83 worth of Amcor Displays work;
(b)ACE Print performed $63,629.28 worth of work for AFP (including Amcor Displays) between July 2002 and February 2003. If that figure were annualised for the financial year it would be $95,443.92;
(c)JS Cutting [including Stan’s] did [$5,413][45] worth of Amcor Displays work;
(d)none of Le Breton, Thompsons, All Pack or Northwest Packaging did Amcor Displays work; and
(e)there is no evidence of Amcor Displays work being performed by any other OME supplier.

[44]Holihan parties’ outline of submissions, at [40(c)] (footnotes omitted).

[45]In the Holihan parties’ outline of submissions at [40(c)], the figure was stated as being $2,937 but this was corrected by their counsel at the hearing to be $5,413 (including Stan’s): see Transcript 08/02/2019, at T98 (Mr Maiden QC).

The Holihan parties acknowledge that ‘[t]here was no evidence of the total volume or value of OME work sent out by Amcor Displays at any point prior to the Second Sale Agreement’.[46] In their outline of submissions, they sought to explain the reason for this, as follows:[47]

The value and amount of available Amcor Displays work pre-sale and the proportion of available Amcor Displays work pre-sale that the ACB Business in fact did were not the subject of the Amcor Parties’ pleaded case and there was no discovery about such issues.
Once opened, the gist of the Amcor Parties’ case was that Amcor Displays work did not form part of the “business as usual” undertaking that the Second Sale Agreement embodied; it was a discreet [sic] business unit not captured by the supply obligation. . .
The Amcor Parties did not open a case on the basis that the business as usual concept, propounded by them, encompassed a small (or any other) amount of Amcor Displays work.
While the Court itself raised whether or not there was a course of dealing in relation to the Amcor Displays work pre-sale that might have seen the sort of work that the ACB Business did for Amcor Displays pre-sale go across to the purchaser . . . and the Amcor Parties’ Senior Counsel said in opening that “whether and if so how much and why” Amcor Displays actually sent work to the ACB Business prior to the sale would be the subject of cross-examination . . . and was “the $3,000,000 question” in relation to breach . . . the Amcor Parties did not seek to amend their pleading to assert that their “business as usual” construction of the supply obligation included an amount or proportion of Amcor Displays work, they did not in opening articulate any amount of Amcor Displays work which their business as usual construction embraced or otherwise accommodated and Mr Holihan was not cross-examined about the issue.
Specifically, Mr Holihan was not cross-examined about, and there was no specific discovery order about, matters such as: (a) the total amount (by value) of available Amcor Displays OME work pre-sale; (b) how the $172,097.83 that the ACB Business compared with the amount (by value) of work done by other OME suppliers pre-sale, including Ace Print; (c) what sorts of jobs the $172,097.83 related to; whether any of the Alternative Suppliers were doing OME work for Amcor Displays pre-sale and, if so, the amount (by value) of that work and what sorts of jobs that work was referable to; and (d) the amount of OME work that Achilla in fact did for Amcor Displays post-sale and what sorts of jobs that work related to.

[46]Holihan parties’ outline of submissions, at [40(d)].

[47]Ibid, at [40(d)], footnote 68.

In these circumstances, the Holihan parties submit that the Court ‘should infer that the Displays work sent to J S Cutting involved solely the production of knives’, which the ACB Business did not do. Accordingly, on the evidence before the Court, the Holihan parties maintain that ‘business as usual’ for Amcor Displays involved all OME work other than the production of knives being sent to either the ACB Business or ACE Print, the value of which in the 2003 financial year totalled $267,541.75.

The Holihan parties’ submission misunderstands the operation of the ‘business as usual’ construction arrived at by the Court

As will be apparent, the Holihan parties effectively seek to sidestep the Court’s construction of clause 12.2, and treat the Amcor Displays’ work as falling within the clause 12.2 obligation in much the same way as do the AFP jobs. Indeed, in their outline of submissions the Holihan parties acknowledge that ‘there may have been no specific obligation for the Amcor parties to send the ACE Print jobs to Achilla’ but they submit nevertheless that ‘once it became untenable to send them to ACE Print, “business as usual” would have involved sending the remainder of the non-knife work to Achilla’.[48] In my view, that approach misunderstands the operation of the ‘business as usual’ construction arrived at by the Court.
[48]Holihan parties’ outline of submissions, at [42].

In the context of the ACE Print contract, the position is, as counsel for the Amcor parties observed, that prior to the Second Sale Agreement, Achilla was not doing the work that ACE Print was doing. In other words, it was not ‘business as usual’ for Achilla to undertake the Amcor Displays’ work performed by ACE Print.

Further, as counsel for the Amcor parties observed, the ‘fundamental difficulty’ with the case being advanced by the Holihan parties is that it ‘attempts to describe a world where Amcor is always bound to place Amcor Displays’ work in one place or another [and] really seeks to inject content into the contractual obligation, which is just not there, [and] misunderstands what “business as usual” means’.[49]
[49]Transcript 08/02/2019, at T119.

Accordingly, the position is (as the Amcor parties submitted) that once ACE Print ceased doing that Amcor Displays’ work, it did not follow that Achilla became entitled to perform that work. That is because Amcor Displays’ work is not encompassed within the clause 12.2 purchase obligation, save to the extent that the notion of ‘business as usual’ might continue to capture the small amount of work that the ACB Business had performed historically for Amcor Displays.[50]

The evidence before the Court supports a finding that the ACB Business performed only a ‘small part’ of the Amcor Displays’ work in the pre-sale period

[50]That is a reference to the small portion of converting work Mr Joyce described as pertaining to the $172,097.83 of work performed by the ACB Business in the 2002/03 financial year.

As part of their primary case, the Holihan parties also sought to take issue with the Court’s finding concerning the amount of Amcor Displays’ work performed by the ACB Business prior to the sale. They submitted that the evidence before the Court does not support a finding that the ACB Business performed only a ‘small part’ of the Amcor Displays’ work in the pre-sale period. In those circumstances, counsel for the Holihan parties submitted that by virtue of the decisions in Fletcher Construction Australia Ltd v Lines McFarlane & Marshall Pty Ltd[51] and Elliott v R[52] ‘it's open to the court now, judgment not having been entered, to revisit that finding’.[53]
[51](2001) 4 VR 28, especially at 47 [49] (per Chernov JA, with whom Charles and Vincent JJA agreed).
[52](2007) 234 CLR 38, at 48 [31]-[32].
[53]Transcript 08/02/2019, at T108 (Mr Maiden QC).

In this regard, they refer to the evidence that the value of the Amcor Displays’ work performed by the ACB Business during the financial year preceding the entry into the Second Sale Agreement was $172,097.83, noting that it was ‘one component (only 6.6%) of a total of some $2.622 million of OME work performed by the ACB Business for the whole of Amcor’ and ‘was not evidence as to the proportion of all the available pre-sale Amcor Displays OME work that the ACB Business actually did’. They submit that ‘[i]t is in that context that Mr Holihan’s evidence that the ACB Business “did not do very much work for Amcor Displays” prior to the sale is to be understood’.[54] They also point to the (inferred) total of the value of the Amcor Displays’ work available in the financial year preceding the Second Sale Agreement, of $267,541.75, and observe that the $172,097.83 provided by the ACB Business represents ‘some 64.33%’ of the available work.[55]
[54]Holihan parties’ outline of submissions, at [45].
[55]Ibid, at [46].

Counsel for the Amcor parties submitted that the Holihan parties’ attempt to re-open the ‘small’ finding ‘proceeds on the wrong footing’ and a misunderstanding of what the Court has found and the reasons given in the principal judgment.[56]
[56]Transcript 08/02/2019, at T126 (Mr Tran).

I share that view. When the extract from Mr Holihan’s witness statement (set out in italics at paragraph 78 above) is viewed in the context of the surrounding paragraphs of his witness statement (paragraphs 160 and 163 in particular), and the oral evidence he gave at trial, the impression conveyed is not to the effect that prior to entry into the Second Sale Agreement the ACB Business was performing all or even a significant proportion of the Amcor Displays’ work.[57]
[57]Reasons, at [1703].

Some indication of this can be gleaned from the following passages of Mr Holihan’s witness statement:[58]
[58]Exhibit H93.1 (Holihan WS1), at [19]-[23], [158]-[165] (emphasis added).

Income streams of the ACB Business
[19]When I was General Manager, the ACB Business obtained its income from two streams.
[20]First, the ACB Business had its own customers (ACB Customers) who purchased packaging products from ACB Vendor. Sometimes those products were corrugated cardboard or paper-based (e.g. printed or plain boxes); sometimes they were not (such as packaging tape, wrapping and labels). The ACB Business did not manufacture the products that were not made from board or paper. It bought them from third parties and on-sold them to its customers. These customers were managed by the ACB Business’ sale team.
[21]Most of the corrugated products that the ACB Business sold to its customers were manufactured, either in part or in whole, by AFP. In this sense, AFP was a supplier of corrugated products to the ACB Business and ACB Vendor acted as a re-seller. Sometimes, the corrugated products were treated (or ‘finished’) by the ACB Business before on-sale.
[22]The second income stream of the ACB Business was income earned from work that it did for AFP businesses, for their customers (AFP Customers). The AFP businesses that the ACB Business did work for included sales groups within AFP such as Amcor Displays, ‘Heavy Duty’ and ‘Fruit and Veg’, although the ACB Business did not do very much work for Amcor Displays because shortly after the ACB Business obtained a litho laminating machine in June 2001 (see paragraph 24(a) below), AFP entered into a supply agreement with ACE Print & Display Pty Ltd (ACE Print) in relation to Displays’ work (see paragraph 72 below). In this sense, the ACB Business competed with third party suppliers for work from AFP. Work sourced from a third party was referred to within Amcor as ‘OME’ work. It was also called ‘tolling’, ‘toll manufacturing’, ‘toll converting’ or ‘closure work’. The third parties that supplied it were referred to as ‘OMEs’. This work that the ACB Business did for AFP (for simplicity, I refer to this work as ‘OME work’ even though it was done by an Amcor business) was ultimately for AFP Customers.
OME work done by the ACB Business for AFP
[23]While I was General Manager, the OME work that the ACB Business did on behalf of AFP (for AFP Customers) formed a very large amount of the total sales invoiced out of ACB Vendor. Immediately prior to completion of the Sale Agreement (see paragraph 110 below), AFP was the largest customer of the ACB Business by turnover. . .

. . .
Operation of ACB Business - August 2003 to December 2004
. . .
Discussion with Amcor regarding Amcor Displays
[158]On 23 October 2003, I received an email from David Manser (Manser) who was the Commercial Manager, Specialty Group, AFP [CB5/1857]. The email concerned a specialty group information technology meeting that was scheduled for the next day to discuss the specialty group (including Amcor Displays New South Wales which was a customer of Achilla’s) moving off the PICK system.
[159]In November 2003, Caldow telephoned me. I cannot recall exactly what Caldow said but in substance he asked if I would be happy to enter into some sort of arrangement for Amcor Displays to relocate to Wetherill Park and for George Daaboul (Daaboul), an employee of mine, to be seconded to AFP to manage the Amcor Displays business. I knew that Caldow knew Daaboul because we had all worked together previously at Visy Board (Visy). Caldow also said that the work that AFP was doing for Amcor Displays in-house at its Revesby and Smithfield factories would now be routed to Achilla. He said he could send me a fax of some notes that he had made about his current thinking.
[160]I saw this as a tremendous opportunity for Achilla for reasons including that it would give Achilla insight into the OME work that Amcor Displays had. I understood that work to be under contract with ACE Print at the time. I also thought Caldow’s proposal aligned with the discussion that I had had with Kent in March (which I had followed up with a series of discussions in September and early October) regarding an alliance in relation to screen-printing work because Amcor Displays had work that required screen-printing. I saw there was an opportunity at picking away at the ACE work. I understood that the ACE contract was to expire sometime into the period of the Achilla Supply Agreement.
[161]On 17 November 2003, I received a fax from Caldow regarding Amcor Displays [CB3/0933]. The facsimile set out the details of the proposal that Caldow and I had discussed at that time.

Heads of agreement with Thompsons (December 2003)
[162]In around November 2003 I made enquiries about a site at 21 Tarlington Place, Smithfield (Tarlington Place). I made those enquiries because I was starting to seriously think about some sort of alliance with Kent in relation to screen printing and litho lamination work following on from our earlier discussions.
[163]In December 2003, I caused Achilla to enter into a heads of agreement with Thompsons [CB7/2481]. By then Achilla was doing some work for Amcor Displays, and in deciding to enter into the heads of agreement, I was mainly interested in Thompsons’ ability to support Achilla in that work. At that point, I understood that most of the Amcor Displays OME work was done by ACE Print but I hoped that would change, especially after my discussion with Caldow in November. Having sat in on the monthly AFP management meetings, and being familiar with the work required in producing corrugated cardboard displays, and having visited the Displays site, I knew that Achilla was able to perform all of the operations involved in the manufacture of displays except for screen printing.
[164]Kent and I discussed that Achilla would receive orders from AFP, Thompsons would do screen-printing and Achilla would otherwise complete the OME work as required – i.e. by die cutting, litho laminating, gluing and packing.
[165]On 1 December 2003, Thompsons and Achilla entered into a lease as tenants in common in equal shares of 21 Tarlington Place. Shortly afterwards, Achilla moved machinery from the factory at Wetherill Park to Tarlington Place. This included the Grassi No 1 litho laminator, slitter, bandsaw, partition slotter, the Mecanelec, gluers and three die cutters. Thompsons continued to do its screen printing in Tamworth but did all of its other work from Tarlington Place, so I became very familiar with the machines it had and the work that it did.

Mr Holihan’s evidence also falls to be considered against the background of the factual findings made by Vickery J in the principal judgment concerning the historical position of Amcor Displays from early 2002. Relevantly, it will be recalled, his Honour found that the Amcor board determined it would retain the Amcor Displays business (which was profitable) and engaged Mr Hottes as an independent contractor to operate it. Mr Holihan’s evidence must also be considered in light of the evidence given by other witnesses at the trial of the counterclaim about the re-location of the Amcor Displays team to Wetherill Park in mid-2004, through to June 2005, when Mr Manser informed Mr Holihan that he was going to relocate the purchasing functions of Amcor Displays NSW to Victoria and have them run from a Service Containers business.

In its Reasons, the Court summarised the position concerning Amcor Displays, as follows:[59]
[59]Reasons, at [450]-[459] (emphasis added in bold) (footnotes omitted).

Fallback method 1

Fallback method 1 takes the figure of 64.33% (arrived at in the manner outlined at paragraph 78 above) as representing the percentage by value of the Amcor Displays’ OME work that was performed by the ACB Business in the financial year prior to entry into the Second Sale Agreement. That percentage is then applied to the total value of the Amcor Displays’ OME work performed in the Claim Period by (a) all of the alternative suppliers, and (b) that in fact done by Achilla (being $49,423.04 (incl. GST)), to arrive at the compensation amount. An allowance is then made for the Amcor Displays’ OME work that Achilla actually did receive during the Claim Period (being the $49,423.04 (incl. GST)) to arrive at the compensation amount.

I am not satisfied that Fallback method 1 is an appropriate method. It proceeds on the erroneous footing that, in the Claim Period, Achilla was entitled to receive all kinds of Amcor Displays’ OME work, irrespective of whether or not the ACB Business had performed that particular OME work for Amcor Displays prior to the sale. Given the findings made by the Court, the position is that Achilla has no entitlement to recover any loss and damage in respect of the Amcor Displays’ work undertaken by the alternative suppliers in the Claim Period save where it has demonstrated that the work the subject of those jobs was work that the ACB Business had performed historically for Amcor Displays prior to the sale.

As noted above when dealing with the Holihan parties’ principal submission, they acknowledge that ‘[t]here was no evidence of the total volume or value of OME work sent out by Amcor Displays at any point prior to the Second Sale Agreement’.[161] In the absence of such evidence, and against the background of the evidence given by Mr Holihan and the other witnesses mentioned and discussed above, I am not satisfied that it is appropriate for the Court to proceed on the footing that the figure of 64.33% (asserted by the Holihan parties) accurately represents the percentage by value of the Amcor Displays’ OME work that was performed historically by the ACB Business prior to entry into the Second Sale Agreement.
[161]Holihan parties’ outline of submissions, at [40(d)].

Fallback method 2

Fallback method 2 seeks to place Achilla in the position that it would have been in if in each year of the Claim Period it had received Amcor Displays’ OME work of the same value as that which the ACB Business received in the final year prior to the Second Sale Agreement, being $172,097.83.[162] As the Claim Period commenced on 27 September 2005 and ended on 31 July 2008, the stated annual value would then need to be pro-rated for the relevant periods of less than 12 months being the 2005/06 financial year and for the month of July 2008. Once again, an allowance would then have to be made for the Amcor Displays’ OME work that Achilla actually did receive during the Claim Period ($49,423.04 (incl. GST)) in order to arrive at the compensation amount.
[162]Reasons, at [475]-[476].

The Holihan parties submit that Fallback method 2 is a conservative measure because it makes no allowance for the ‘organic increase in the volume of Amcor Displays’ work’ that they assert would have been provided to Achilla in the usual course of the business.

The Amcor parties, while maintaining their primary position that the Holihan parties have not proven any liability in respect of the Amcor Displays jobs, nevertheless accept that Fallback method 2 is an alternative that the Court could consider if it were against them. Counsel for the Amcor parties acknowledged that even though there is no contractual obligation under the Second Sale Agreement for the purchase of any guaranteed minimum amount of OME work, the figure of $172,097.83 referable to Amcor Displays’ work that was factored into the D & D methodology is important because it was a fact known to both parties at the time they entered into the contract. In that regard, counsel for the Amcor parties observed:[163]

[MR TRAN:] . . . What's known to both parties prior to the contract is ordinarily very important to understanding how the contract should be interpreted. In circumstances where there's very little upon which the court could otherwise safely fix, in my respectful submission, that stands out as a beacon and so it's unsurprising that that should be the alternative position.
It's our only alternative and the alternative of last resort for the Holihan parties, but it's unsurprising, in my respectful submission, that the parties should end there.

[163]Transcript 08/02/2019, at T134.

In my view, while the evidence before the Court does not provide any clear articulation of the particular jobs or type of OME work that the ACB Business performed for Amcor Displays prior to the sale, nevertheless the evidence adduced concerning the D & D pricing methodology does record that the ACB Business did some OME work for Amcor Displays in the financial year prior to the sale, and it is clear that the parties envisaged the ACB Business would continue to perform some OME work for Amcor Displays after the sale. That is because the D & D pricing methodology, and the First Year Budget that was established for the purposes of pricing components of OME work performed under the Second Sale Agreement by the ACB Business (under new management), adopted and incorporated the sum of $172,097.83 shown in exhibit H15 as representing ‘Management Unit C’ being work performed by the ACB Business for ‘Amcor Displays’ in the 2002/03 financial year. That is to say, the First Year Budget assumed that the same volume would be manufactured in the 2003/04 year as was (in fact) manufactured in 2002/03. In that way, the pricing mechanism the ACB Business was required to use for charging for OME work performed for Amcor related customers, after the sale, was based on the method of charging used by the ACB Business before the sale.

The contractual arrangements in place between the parties envisaged that a budget would be prepared for the second (and each successive) year of operation under the Second Sale Agreement by the ACB Business (under new management), with reconciling adjustments to be made to reflect the actual experience of the previous year. The reciprocal purchase and supply obligations established by clause 12 of the Second Sale Agreement were intended to be mutually beneficial, with the result that the more OME work the ACB Business performed for Amcor related customers, the more attractive the pricing would become.

The evidence given at the trial of the counterclaim about the reconciliation exercise and adjustment of the pricing for components of OME work in successive years of the Second Sale Agreement is summarised in the Reasons.[164] Relevantly, the evidence given by Mr Papadimatos was to the effect that, because the volume used in the Second Year Budget had decreased but the costs had remained about the same, the machine rates would have increased in the second year due to the lower volume. Mr Papadimatos said that the machine rates derived from the Second Year Budget were entered into the PICK system (in place of those taken from the First Year Budget) and in terms of charging AFP for work performed by the ACB business, the same process as had applied in the first year took place. However, Mr Papadimatos did not recall (and he said he does not have any records of) the D & D rates being set after the 2004/05 financial year.[165] In those circumstances, it seems likely that the D & D pricing for work performed for Amcor entities by the ACB Business in the later years of the Second Sale Agreement continued to adopt and incorporate the assumption that work was being performed by the ACB Business for Amcor Displays approximating the sum of $172,097.83, together with any adjustments made in the 2003/04 financial year.
[164]At [995]ff.
[165]Exhibit H402 (Papadimatos WS), at [53].

Volumes of Amcor Displays’ work: Part C of the Holihan parties’ 18 March 2019 note

At the recent hearing, the Court raised the question of the effect of the (approximately) $172,097.83 being included in the budget, noting that under the D & D pricing mechanism, if the ACB business was doing more work than was budgeted and that would change the D&D pricing mechanism it might well affect the calculation of damage.[166] Having raised the issue, the Court then invited the parties to comment upon whether the Amcor Displays’ work had any effect on the prices which Amcor was to be charged using the D & D methodology and if so, whether it might therefore be said to affect the calculation of any damages or compensation. To that end, under Part C of their 18 March 2019 note (headed ‘Volumes of Amcor Displays work’), the Holihan parties framed two questions as follows:[167]

(a)The first was whether Achilla was doing more work during the Claim Period than it had before the sale of the ACB Business (and, inferentially, whether it would have done more than that amount had it been given all the work that it now claims for). If Achilla had been given a volume of work greater than in the pre-sale period, that might have had an effect on the prices which Amcor was to be charged using the D&D methodology, and therefore might be said to affect the calculation of damages.[168]
(b)The second was what amount of Displays work was done by Achilla during the Claim Period as a proportion of the total of all of its work for AFP.[169] That raises the question of what proportion of all of the Displays work Achilla did during the Claim Period.

[166]Transcript 08/02/2019, at 143.

[167]Holihan parties’ 18 March 2019 note, at [13]-[14].

[168]Referring to Transcript 08/02/2019, at T143.22-28.

[169]Ibid, at TT146.5-148.9.

The Holihan parties responded to the Court’s invitation in Part C of their 18 March 2019 note. The Amcor parties made no submission in response.

In dealing with the issue of total volumes, the Holihan parties note that in the year immediately preceding the Second Sale Agreement, the ACB Business supplied 11,325,000 square metres to the Amcor parties, which volume formed the basis for the pricing for the first year of the Supply Agreement.[170] While there is no dissection of that gross amount as between Amcor Displays and AFP generally, the Holihan parties submit that the tables they have prepared using the findings from the Mines Report and the data from Mr Meredith’s report ‘demonstrate that even if Achilla had been given all of the work that it now claims, it would have received a volume of work during the Claim Period that was lower than the pre-contract volume’.[171] In those circumstances, it seems clear that the integrity of the D & D pricing methodology would not be impaired if the Court were to adopt Fallback method 2 in order to arrive at the compensation amount.
[170]The Holihan parties’ 18 March 2019 note, at [15].
[171]Ibid, at [16].

In response to the second question posed, the Holihan parties produced three further tables, by extracting and summing data from exhibit A99, in order to arrive at the quantum of the Amcor Displays sales made by Achilla as a percentage of its total sales. ‘Table 5’ produced by the Holihan parties confirms the method by which the figure for the Amcor Displays sales, of $49,423.04 (incl. GST), was arrived at by reference to each of the 2005/06, 2006/07 and 2007/08 financial years and in July 2008. That table is extracted below:[172]
[172]Ibid, at [22].

Table 5: Amcor Displays sales only – i.e. Amcor Displays sales made by Achilla

A B C D

Year Goods Value[173] Total Sales Tax[174] Total Value[175]

27/9/05 – 30/6/06 $37,357.43 $3,735.75 $41,093.18

1/7/06 – 30/6/07 $0.00 $0.00 $0.00

1/7/07 – 30/6/08 $7,572.60 $757.26 $8,329.86

July 2008 $0.00 $0.00 $0.00

Totals $44,930.03 $4,493.01 $49,423.04
[173]Exhibit A99, column J.
[174]Ibid, column K.
[175]Ibid, column L.

Table 5 demonstrates that the value of Amcor Displays’ work performed by the ACB Business in the financial years 2005/06, 2006/07, and 2007/08 and in July 2008 fell well short of that performed historically by the ACB Business. In that sense, the figures recorded for the Amcor Displays’ work performed by the ACB Business do not, in my view, reflect ‘business as usual’.

For what (if any) Amcor Displays jobs is Achilla entitled to be compensated?

On the evidence before the Court, it is unclear as to why the Amcor Displays’ work performed by the ACB Business fell away from mid to late 2005. As noted above, the evidence given by Mr Manser was to the effect that he proposed to re-locate the purchasing functions of Amcor Displays NSW to Victoria in 2005 and have them run from a Service Containers business. He agreed that the ‘plan was ‘to have the manufacturing work for New South Wales Displays done from a site in Melbourne’ but added that: [176]

---You've got to remember a lot of the clients within Displays are national, so the deliveries aren't necessarily New South Wales. They might be delivered to Melbourne, could be delivered to Western Australia. So the work is portable.

[176]Manser XXN, Transcript 23/06/15, at TT2347-2348.

When Mr Manser was asked whether the plan did ‘actually happen’ he responded by saying:[177]

---We got to the situation where the work was transferred, I can't remember exactly the date, but I think it's in one of these emails here and we did mention that the transition of the work was going to take place - - -
[MR TRAN:] Okay?--- - - - and only the work that was still in the system in New South Wales would be completed in New South Wales. You can't stop a job half way through, so all new orders were being placed in Melbourne.
Okay. To be done at the Amcor owned site that was being run by Service Containers?---Mulgrave, yes.

[177]Ibid, at T2348.

As counsel for the Holihan parties observed,[178] however, Mr Manser did not say when the operational transfer to the Mulgrave site happened – ‘[w]hether that happened during the term of this agreement or afterwards’ - and the evidence before the Court shows that Amcor Displays continued to place orders on Achilla up to 2008, which suggests that the separate Amcor Displays business continued despite any re-location to Service Containers’ premises at Mulgrave. In that regard, counsel for the Holihan parties also referred to evidence that was given by Mr Kent (of Thompsons) under cross-examination, about OME work that Thomsons (who were located in New South Wales) performed for Amcor Displays in November 2005 or thereabouts that was invoiced to ’Amcor Displays Australasia’ at the Mulgrave address.[179] When Mr Kent’s attention was drawn to the Mulgrave location stated on the invoice (as opposed to Amcor Displays in Wetherill Park) and asked if he knew why it was sent to Displays in Victoria, he said ‘[t]he only thing I could think of that Amcor Displays Sydney was doing that for Amcor Displays Victoria’.[180]
[178]Transcript 08/02/2019, at T89 (Mr Maiden QC).
[179]See Tax Invoice No. S4608, ASB Vol 6: A2551 (part of exhibit H308) and Kent XXN, Transcript 10/06/15, at TT1116-1117.
[180]Kent XXN, Transcript 10/06/15, at T1117.

Accordingly, counsel for the Holihan parties submitted:[181]

So there is, at least as far as Mr Kent can recall, still a separate – separately existing Amcor Displays Victoria in New South Wales. The point is: it's not safe for the court to infer, merely from the fact that the New South Wales business moved to Victoria, at some stage, that the separate Amcor Displays business, which Amcor's case on Displays hangs on the existence of, had changed, as a result of that move, and become part of this Service Containers' business. It appears to have retained its independent identity.

[181]Transcript 08/02/2019, at T87 (Mr Maiden QC).

Aside from the issue of when the plan to move the Amcor Displays business to Victoria did ‘actually happen’, the notion that the Amcor Displays’ work was ‘portable’ and that the finished product was capable of being delivered nationally also renders it unclear whether (and if so, what) Amcor Displays’ work would continue to be encompassed within the operation of the ‘business as usual’ framework.

The schedule of Claim Documents prepared by way of an iterative exchange between the parties during the special referee process indicates that a substantial number of the jobs in the Claim Period that were identified as ‘Disputed Jobs’ were Amcor Displays jobs that were performed by one or other of the alternative suppliers in the period from 27 September 2005 to 31 July 2008. That is to say, on the evidence before the Court it is demonstrably not the case that from late 2005 all of the Amcor Displays’ work in New South Wales was performed by the Service Containers business in Victoria. Indeed, the schedule of Claim Documents records that many of the Amcor Displays jobs undertaken in that period were performed by Le Breton, which was based in New South Wales.

In my view, the notion of ‘business as usual’ under the Second Sale Agreement entailed that the ACB Business (under new management) would continue to capture the small amount of work that the ACB Business had performed historically for Amcor Displays. In that regard, as was noted in the Reasons, ‘Mr Joyce’s evidence gave some indication of the type of Amcor Displays’ work that would be sourced from the ACB Business while under Amcor ownership, and on a ‘business as usual’ scenario, it is likely that work would continue’.[182]
[182]Reasons, at [490].

On the basis of the evidence before the Court, I am unable to identify the particular Amcor Displays jobs that the ACB Business had performed for Amcor Displays in the financial year preceding the sale. Nevertheless I am satisfied that the Holihan parties have demonstrated that in the final year prior to the Second Sale Agreement, the ACB Business did perform OME work for Amcor Displays to the value of $172,097.83. On a ‘business as usual’ scenario, notwithstanding that the Second Sale Agreement did not provide for any minimum guarantee of OME work, the arrangement was intended to be a demonstrably commercial one and, as such, it is likely that the ACB Business would continue to perform some OME work for Amcor Displays. In those circumstances, given the Court’s findings as to the proper construction of the Second Sale Agreement, and in particular clause 12.2 insofar as it concerns Amcor Displays, Achilla is entitled to be compensated for the ‘business as usual’ Amcor Displays’ work that it did not receive during the Claim Period. Such compensation is to be measured on the basis of Fallback method 2.

If Fallback method 2 is followed, it will effectively place Achilla in the position that it would have been in if ‘business as usual’ had prevailed, such that in each year of the Claim Period, Achilla would have received some Amcor Displays’ OME work, and in the ordinary course, of about the same value as that which the ACB Business received in the final year prior to the Second Sale Agreement. As the Claim Period commenced on 27 September 2005 and ended on 31 July 2008, the stated annual value, being $172,097.83, would then need to be pro-rated for the 2005/06 financial year and for the month of July 2008, and an allowance made for the Amcor Displays’ OME work that Achilla did receive during the Claim Period (being $49,423.04 (incl. GST)) in order to arrive at the compensation amount that is to be made the subject of an award of damages.

For completeness, I should add that I do not accept the Holihan parties’ submission that any further adjustment is required to reflect ‘organic growth’ of the kind asserted. Nor do I accept the Amcor parties’ submission that there were some additional Amcor Displays jobs that were mis-described as AFP or Service Containers jobs that were performed by the ACB Business during the Claim Period which should be brought to account.

Summary of conclusions

For the foregoing reasons, I am not satisfied that Achilla is entitled to be compensated for all of the Amcor Displays’ work that the special referee has identified (on the basis of Achilla’s ‘capability only’) as satisfying the ‘business as usual’ test. In my view, the Amcor Displays Objection should be resolved by ordering that Achilla be compensated by APA for the ‘business as usual’ Amcor Displays’ OME work that it did not receive during the Claim Period. The quantum of such compensation is to be measured on the basis of Fallback method 2, including by making an allowance for the Amcor Displays’ OME work that Achilla did receive during the Claim Period ($49,423.04 (incl. GST)), in order to arrive at the compensation amount that is to be made the subject of an award of damages.

It will be necessary to re-schedule a further hearing to deal with the other two outstanding issues, namely:

(a) Should the Mines Report be adopted in whole or in part, and what is otherwise to be done with it?

(b) What further procedural steps are required to progress the proceeding?

I will hear from the parties as to the appropriate form of orders.

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

---

Claim Documents means (i) the Holihan Parties’ details of claim (as rectified) dated 8 July 2017; (ii) the Amcor Parties’ details of response dated 1 September 2017; and (iii) the Holihan Parties’ details of reply dated 17 November 2017.
Disputed Jobs means the jobs listed in the Claim Documents which are not conceded by either party and which are not Kellogg’s Pallet Jobs.

Amcor Displays Job means a job for the “Amcor Displays” division of Amcor Fibre Packaging which can be identified by the use of the prefix “SX” on invoices and the like (see Reasons at [474]).
Amcor Displays Objection means any objection by the Amcor Parties in their details of response dated 1 September 2017 arising from an allegation by the Amcor Parties that the job was an Amcor Displays Job.

Table 5: Amcor Displays sales only – i.e. Amcor Displays sales made by Achilla
A	B	C	D
Year	Goods Value[173]	Total Sales Tax[174]	Total Value[175]
27/9/05 – 30/6/06	$37,357.43	$3,735.75	$41,093.18
1/7/06 – 30/6/07	$0.00	$0.00	$0.00
1/7/07 – 30/6/08	$7,572.60	$757.26	$8,329.86
July 2008	$0.00	$0.00	$0.00
Totals	$44,930.03	$4,493.01	$49,423.04

[2019] VSC 393

14 June 2019