Cavaiuolo v Tinlins Wines Pty Ltd

[2006] SADC 106

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

CAVAIUOLO & ANOR v TINLINS WINES PTY LTD

Judgment of His Honour Judge Barrett

3 August 2006

CONTRACTS

Whether oral contract for ongoing supply by plaintiffs of grapes to defendant or an oral contract negotiated  for each vintage - court cannot create an agreement - no occasion here to imply reasonable price - consideration may be agreed by formula - termination on reasonable notice can be implied - credibility and reliability - Held - no oral contract for ongoing supply of grapes.

ANZ Banking Group v Frost Holdings [1989] VR 695 att 702; Booker Industries Pty Ltd v Wilson Parking (QLD) Pty Ltd (1981-2) 149 CLR 600 per Brennan J at 614-615; Hawthorn Football Club v Harding [1988] VR 49; Crawford Fitting v Sydney Valve (1988) 14 NSWLR 538 at 444 A-B; Hall v Busst (1960) 140 CLR 206, considered.

TRADE AND COMMERCE - TRADE PRACTICES AND RELATED MATTERS

Claims for misrepresentation in contravention of s 51A of the Act and misleading and deceptive conduct in contravention of s 52 - deeming provision that representation is made without reasonable grounds unless representor adduces contrary evidence does not arise until representation proved - Held - misrepresentations not proved - for misleading and deceptive conduct in contravention of s 52 there must be a misrepresentation - objective test - Held - misleading and deceptive conduct not proved.

Trade Practices Act 1974 s 51A, s 52 and s 82, referred to.
ACCC v Universal Sports Change Ltd [2002] FCA 1276; ACCC v Kay [2004] FCA 1363 at [131]-[135]; Taco Company of Australia Inc & Ano v Taco Bell Pty Ltd & Ors (1982) 42 ALR 177; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198, considered.

PROCEDURE

Amendment of statement of claim to include claims under the Trade Practices Act - Cause of action accrues when the resulting loss or damage is suffered not when the misrepresentation is made.

Trade Practices Act 1974, referred to.
Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd [1998] ATPR 40-853 at 49,195; Jobbins v Cappel Court Corporation Ltd (1989) 25 FCR 226; Wardley Australia Ltd & Ano v The State of Western Australia (1992) 175 CLR 514 at 525, considered.

EVIDENCE

Admissibility of evidence of conversation male plaintiff had with wineries about his contract with the defendant - admissible only to rebut recent invention.

Nominal Defendant v Clements (1960) 104 CLR 476 at 479; R v Fraser (1995) 65 SASR 260, considered.

CAVAIUOLO & ANOR v TINLINS WINES PTY LTD
[2006] SADC 106

The Parties

1. The plaintiffs are a married couple who carry on business as grape growers in the Southern Vales of South Australia. The male plaintiff conducted all relevant negotiations  He gave evidence. His wife did not. For convenience I will refer to him as either “the plaintiff” or “Mr Mario Cavaiuolo”, the latter to distinguish him from his son, Mr David Cavaiuolo who also gave evidence.

2. The defendant is a proprietary company which carries on business in the Southern Vales as a grape grower and as a wholesale wine producer. The company has three owner/directors  One is Mr Andrew Fletcher, described as a silent partner, who took no part in the relevant discussions and did not give evidence.  Another is Mr Warren Ward, who essentially does the bookwork and attends to the business side of the company. He took no part in the relevant discussions although he gave evidence.  The third is Mr Warren Randall who ran the wine making side of the company. He was the principal witness for the defendant and took part in all the relevant discussions. 

   Background to the issues at trial

3. The plaintiff, Mr Mario Cavaiuolo, was born in Italy in 1935 and migrated to Australia in 1951. In Italy he undertook grape growing. In Australia he worked in the building industry until he retired in 1982. In 1994 he established a vineyard on what has been described as the “Plains Road property” at Aldinga Beach. It comprised about 40 acres  He had purchased that property 10 years earlier. In 1997, the year when the vineyard first produced a commercial crop, the company purchased that property from the plaintiff and the company harvested the crop. The plaintiff did not sell any grapes grown on that property to the defendant.

4. The plaintiff and his family remained living on the Plains Road property for three months after the sale before moving to a house property at Addison Street, Aldinga Beach.

5. Still in 1997, the plaintiff purchased and established another broadacres property (“the Rogers Road property”) as a vineyard. Vines were planted on that property in three stages – in 1997, 1998 and 2000. The first commercial crop from that property was harvested in 2000.. The grapes harvested from that property were sold to the defendant in the four vintage years 2000-2003 inclusive. (For clarity, a vintage year is the year in which grapes are harvested, usually somewhere around February or March.)

6. In 2000 the plaintiff purchased yet another property (“the Hahns Road property”) and planted vines there; it comprised about 20 acres  The first commercial crop from that property was harvested in 2003 (T800).

7. The defendant declined to purchase the plaintiff’s grapes for the 2004 vintage. The plaintiff sent a letter of demand to the defendant on 12 October 2004 (Exhibit D5) and commenced these proceedings on 4 April 2005. The Statement of Claim seeks damages for  breach by the defendant of an alleged oral agreement made with the plaintiff. The plaintiff alleges that the defendant agreed to purchase from him, at the average district price (ADP), all grapes grown by him. By an amended Statement of Claim the plaintiff also seeks damages for misrepresentations and/or misleading or deceptive conduct under the Trade Practices Act (“the Act”).

8. When it began trading in 1993, the defendant owned 225 acres of vineyards in the Southern Vales with an already established wholesale winery in the same general area.  The company obtained grapes from local growers.  Mr Randall gave evidence that the grapes came from three sources – grapes grown on the defendant’s own land by its own employees, grapes purchased from growers pursuant to written contracts and grapes purchased from persons whom he described as “uncontracted” or “annual” growers  The plaintiff did not have a written agreement to supply grapes to the defendant. It is common ground that at about the 2000 vintage the plaintiff was offered such an agreement but  he declined (T31-34).

9. The defendant denies that there was an oral agreement that it would purchase the plaintiff’s grapes on an ongoing basis, rather, it negotiated with the plaintiff each year in the manner that it negotiated with other “uncontracted” growers. In the four vintages 2000-2003 inclusive,  the defendant said that there were oral agreements to purchase the plaintiff’s grapes and that in each year there was a separately agreed price. It is common ground that the ADP was paid for all of the plaintiff’s grapes in the 2000 and 2002 vintages. In 2001 the ADP was paid for what were described as the “younger” plantings and a price more than the ADP for the “older” plantings. In 2003 different prices were again paid for the younger and older plantings, but both were below the ADP.

10. There is no dispute about what was paid for each vintage. The dispute is as to whether there was an agreement about the prices to be paid. The plaintiff alleges that the oral agreement about price was that the ADP would be paid. The defendant asserts that for each vintage there was an oral agreement about price, which was confirmed in writing. The defendant denies any misrepresentation as alleged under the Act, or at all, and denies any misleading or deceptive conduct.

    The Statement of Claim

11. In the Statement of Claim the plaintiff alleges that an oral agreement was made between him and the defendant in 1999. Pursuant to that agreement, the defendant would purchase all of the grapes grown by him in each vintage year at the ADP. He and the defendant would agree upon an interim price before the vintage, which would be paid in instalments, and then there would be an adjustment payment made at the end of the vintage being the difference between the interim price and the ADP. The plaintiff alleges that the defendant was in breach of that oral agreement in respect of the 2003 vintage in that it failed to make the adjustment payment at the end of that vintage. He alleges that the defendant was in further breach of that agreement by declining to purchase his grapes grown in the 2004 vintage.

12. In his Statement of Claim the plaintiff alleges that the meeting at which the ongoing oral agreement was breached occurred in mid-December 2003. In his amended Statement of Claim he asserts that the meeting occurred in or about January 2004. In that amended Statement of Claim the plaintiff alleges that misrepresentations were made by Mr Randall on behalf of the defendant. The relevant parts of that pleading are as follows:

    28.     The Defendant represented to the First Plaintiff that:

    28.1   The Defendant would purchase all grapes grown by the Plaintiffs:

    Particulars

    This oral representation was made by the Defendant’s servant or agent Mr Warren Dean Randall (“Mr Randall”) to the First Plaintiff on numerous occasions between in or about 1997 and 2003 (the Plaintiffs cannot be more specific).

    28.2   The Defendant would purchase all grapes grown by the Plaintiffs at each vintage from and including the 2000 vintage.

    Particulars

    This oral representation was made by the Defendant’s servant or agent Mr Randall to the First Plaintiff at the 1999 meeting as pleaded in paragraphs 3, 4 and 5 hereof.

    28.3   The Defendant would buy the Plaintiff’s grapes from the 2004 vintage

    Particulars

    This written representation is to be implied from a letter sent by the Defendant to the Plaintiffs dated 22 April 2003 in which the Defendant stated “We take this opportunity to indicate our thanks for your business and look forward to a continued association.”

    28.4   The Defendant would purchase the Plaintiff’s grape harvests even if the grape industry went bad.

    Particulars

    This oral representation was made by the Defendant’s servant or agent Mr Randall some time prior to the 2000 vintage (the Plaintiffs cannot be more specific) when the First Plaintiff said words to the effect “I will do the right thing by you (meaning that the Plaintiffs would sell all of their harvests of grapes to the Defendant for the Average District Price) if you do the right thing by me (meaning continuing to buy the Plaintiff’s grapes) if the grape industry goes bad.” After which Mr Randall shook the First Plaintiff’s hand and said words to the effect “That’s good enough for me, Mario.”

13. The defendant opposed the application to amend the Statement of Claim so as to include the claim under the Act. it submitted that the application was out of time. Argument upon this issue was heard on the first day of the trial. There was no opposition to amendment of the contractual aspects of the claim, up to and including paragraph 26. I allowed those amendments and reserved the ruling on the proposed amendment relating to the Act . The evidence on that aspect was admitted de bene esse.

    Ruling upon Objection to the Amendment of the Statement of Claim

14. The defendant objected to the plaintiff’s amendment of the Statement of Claim to include the claim under the Act. it submitted that the proposed amendment was statute barred. In written submissions counsel for the defendant referred to the legislative amendment to the Act which was given Royal Assent on 21 July 2001. That amendment substituted for the three years limitation period, a period of six years. s 82(2) now provides:

    An action under sub-section (1) may be commenced at any time within six years after the day on which the cause of action that relates to the conduct accrued. 

15. The defendant submitted that, where a plaintiff seeks relief  under a contract which results in a series of losses , there is no separate cause of action relating to each loss but only one cause of action that accrues when the plaintiff enters into the contract (Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd)[1].  This is the legal position, even if the plaintiff was unaware that the cause of action existed, unless there is fraud involved (Jobbins v Cappel Court Corporation Ltd)[2].  Accordingly, counsel for the defendant submitted that prior to the legislative amendment of 21 July 2001 the plaintiff’s cause of action accrued within three years of him entering into the contract, that the claim was not in time and that any misleading or deceptive conduct which may have occurred after entry into the contract alleged by the plaintiff  is not now actionable.

    [1] (1998) ATPR 40-853 at 49,195 per Pincus J

    [2] (1989) 25 FCR 226

16. I do not accept that submission.  The cause of action relating to the conduct referred to in the amendment does not accrue at the time of the alleged misrepresentation, rather it accrues when the resulting loss or damage is suffered (Wardley Australia Ltd and Ano v The State of Western Australia)[3].  At the earliest, the loss that is alleged by the plaintiff occurred in November 2003 when the defendant did not make the adjustment payment for the 2003 vintage.  These proceedings were commenced on 4 April 2005.  In my judgment, the proceedings were commenced within the statutory period.  The amendments to the plaintiff’s Statement of Claim are allowed.

    [3] (1992) 175 CLR 514 at 525

    The Plaintiff’s Opening

17. In response to an informal request by Mr McCarthy for the defendant, Mr Simpson for the plaintiff sought to include the requisite particulars in his opening. The opening incorporated particulars of the representations said to found the claim under the Act. Words of Mr Randall were alleged to constitute the terms of the oral agreement and the misrepresentations alleged under the Act. In that regard, Mr Simpson said that the first representation was made in 1997, about the time when the plaintiff told Mr Randall that he was purchasing the Rogers Road property. Mr Simpson said that the plaintiff would give evidence that he asked Mr Randall if the defendant would buy his grapes in the event of him establishing another vineyard. Mr Randall replied, “Yes I would be very unhappy if you sold it [meaning the grapes] anywhere else. Yes I will buy your grapes”(T19). Mr Simpson also said that at some time after the first plantings on the Rogers Road property, there was a discussion between the plaintiff and Mr Randall about the price for his grapes. The plaintiff told Mr Randall that all he wanted was the ADP. Mr Randall agreed that the defendant would buy the grapes for that price (T21 and 22). During one of the discussions about price, the plaintiff said to Mr Randall that he would leave it to him to decide whether the defendant would pay a bonus if the grapes were of particularly good quality.

18. Mr Simpson also said that the plaintiff would give evidence that in January 2004, he enquired about the failure of the defendant to make the adjustment payment for the 2003 vintage and that Mr Randall replied that there would not be an adjustment cheque because the defendant could not afford it and the industry was not very buoyant. When the plaintiff protested,  Mr Randall said that he had some more bad news for the plaintiff, namely, that the defendant would not be taking his grapes that year. The plaintiff replied that this was very late notice by the defendant of its intention not to buy the plaintiff’s grapes and that the plaintiff had been left with the problem of selling his grapes for that vintage.

19. The plaintiff’s claim is for the adjustment payment for the 2003 vintage and the loss of revenue for the 2004 vintage, amounting in all to $262,033.35.

    The Defence

20. The defendant denies that there was an ongoing agreement for the sale and purchase of the plaintiff’s grapes and asserts that for each of the 2000-2003 vintages there was an oral agreement for each separate year.

21. In paragraph 5 of the defence, the defendant alleged that it had offered the plaintiff (I have changed the plural in the pleadings to the singular for consistency in this judgment) an opportunity to be a contracted grower pursuant to a written agreement. However, the plaintiff refused to be bound by an ongoing agreement and said that he wanted to deal with the defendant only on a year to year basis. The defendant denies that there was an ongoing agreement to pay for the plaintiff’s grapes at the ADP. Rather there was an agreement about supply and price for each of the vintages when grapes were sold. The defendant denies any liability to make an adjustment payment for the 2003 vintage and denies any liability to purchase the plaintiff’s grapes in 2004 and subsequent years. The defendant filed an amended defence which denies the misrepresentations alleged to give rise to relief under the Act and also raises the time limitation defence.

    The Defendant’s Opening

22. Counsel for the defendant, Mr McCarthy, opened by explaining the defendant’s modus operandi in conducting business as a wholesale wine producer. He foreshadowed evidence of a pattern of greatly increased planting of vines in the Southern Vales in the late 1990s, resulting in what was expected to be an over supply of grapes in 2002 and 2003. That over supply did not occur because of extremely poor yields in those two years.  As a result the defendant continued to buy grapes from persons who were described as uncontracted or annual growers.

23. Mr McCarthy said that the defendant would deny that there was any agreement in 1997, or at any time, to buy the plaintiff’s grapes indefinitely. The defendant would also deny the existence of an agreement to purchase at the ADP on an ongoing basis. The agreements with the plaintiff between 2000 and 2003 were made annually.  The defendant would give evidence about those annual negotiations and about his supplying the plaintiff with a photocopy of the notes that he had made at the meeting about the key terms of their annual agreement. Before calling Mr Randall to give evidence, Mr McCarthy said that he would call the business manager, Mr Ward, and that, when he knew the identity of other witnesses who might be called, he would further open. He later opened upon witnesses who would be called to say that they had been approached by the plaintiff to buy his grapes during the years when he (the plaintiff) claimed to be contracted to supply grapes to the defendant.

    The Issues

24. The issues for consideration in this matter include the following:

    Whether there was an ongoing oral contract between the plaintiff and the defendant for the sale and purchase of grapes?

    If so, what were the agreed terms?

    If there were such a contract was there a breach?

    If there were a breach, what damages were suffered?

    Did the defendant make any misrepresentations or engage in misleading or deceptive conduct giving rise to liability for damages under s 82 and s 87 of the Act?

    If so, what damages were suffered?

    The Witnesses for the Plaintiff 

25. The plaintiff gave evidence. During his evidence, Mr James Osborne from the Australian Wine and Brandy Association was interposed to give evidence about how the ADP is fixed. Over objection of the defendant, the plaintiff called Mr Bill Sotiropoulos, who had a neighbouring vineyard. Mr Sotiropoulos gave evidence about conversations the plaintiff had with him about his (the plaintiff’s) agreement with the defendant for the supply of grapes. (I received that evidence de bene esse.) Over objection of the defendant, the plaintiff called Mr John Kalantzis from Rivers Estate Wines, who gave evidence that during the 2000 vintage he tried to obtain grapes from the plaintiff but was told that he (the plaintiff) had an agreement with the defendant.  (That evidence was also received de bene esse. )

1. The plaintiff called his son-in-law, Mr Roger Clarke to give evidence of conversations between them about the plaintiff’s agreement with the defendant.  (That evidence was the subject of an ongoing objection.)

2. Finally, the plaintiff called his son, Mr David Cavaiuolo, who gave direct evidence of communications between his father and the defendant and also (over objection) of discussions between the witness and his father about the agreement.  It was submitted that the effect of the evidence of the last four witnesses was that the plaintiff always regarded himself as being bound by an agreement to sell his grapes to the defendant.

   Ruling on the Admissibility of Evidence of the Plaintiff’s Witnesses

3. The defendant objects to the admissibility of evidence of conversations between the plaintiff and four of his witnesses about his alleged contract with the defendant.  The conversations are said to be irrelevant, hearsay and inadmissible self-serving statements.  Regarding the first objection, I do not accept that the evidence is irrelevant.  While the plaintiff’s belief about the contractual relationship is not determinative of there being a contract, his belief may, absent other considerations, be evidence of the existence of a contract.  His actions clearly are admissible in that connection.  For example, his declining to sell his grapes to Mr Kalantzis at a higher price, because he regarded himself as bound by a contract with the defendant, is admissible.  Ordinarily the objection on the ground of hearsay would be compelling, but one of the exceptions to the hearsay rule is admissibility for the limited purpose of rebutting fabrication or recent invention (Nominal Defendant v Clements[4] and R v Fraser[5]).  So much is conceded by the defendant (T1529).  The objection based upon self-serving statements would also be compelling but for this same exception.  Thus I admit the conversations the plaintiff had with Mr Sotiropoulos, Mr Kalantzis, Mr Clarke and Mr David Cavaiuolo about his contract with the defendant but only for the purpose of rebutting fabrication or recent invention.

   [4] (1960) 104 CLR 476 per Dixon CJ at p479

   [5] (1995) 65 SASR 260 per Doyle CJ at p263 and Olsson J at p274

   The Witnesses for the Defendant

4. Mr Warren Randall gave evidence for the defendant concerning the operations of the defendant company and his modus operandi with regard to sourcing grapes. He was the only witness for the defendant and gave evidence of the critical conversations with the plaintiff. Mr Warren Ward gave evidence of the business side of the company and of his having written to the plaintiff setting out the terms of what the defendant claims were the annual agreements, including the quantity of grapes delivered and the agreements as to price.

5. Mr Adam Jacobs gave evidence of discussions he had with Mr Randall and also the plaintiff after the defendant declined to purchase the plaintiff’s grapes for the 2004 vintage. The defendant called Mr Paul Rogers who, from early 2000, was employed by Fox Creek Wines, first as the business manager and then, in 2005, as general manager. He gave evidence of having once met the plaintiff in March 2003, when there was some discussion about the possible purchase of the plaintiff’s grapes by Fox Creek Wines. Similar evidence was given by Mr Kevin Fiddaman from Ryecroft Winery, of discussions during the 2000 and 2001 vintages.  Mr Vito Zerella gave evidence of similar discussions with the plaintiff in 1997 and 2001. It was submitted that the effect of the evidence of these four witnesses was that the plaintiff regarded himself as free to negotiate with purchasers of grapes other than the defendant.

6. The defendant also called Mr Ian McMillan who commenced working for the defendant in January 2001 as a viticulturist. He gave evidence about the discrete topic of a conversation said to have occurred between him and the plaintiff in 2003. He also gave evidence about viticultural aspects of the defendant’s operations.

   The Plaintiff’s Evidence

7. The plaintiff gave evidence that he was aged 70, had migrated to Australia when 16 and had been involved in the building industry until he retired in 1982. He said that he bought the Plains Road property in 1984 and that it comprised of 81 acres (T27). He later corrected that evidence in cross-examination and said that it was 40 to 41 acres (T116-119). He said that he did not develop the land into vineyards until 1994 or 1995. The first commercial crop was produced in 1997. He said that he signed the contract for the sale of that land to the defendant in 1998 (T33), but then corrected that to 1997 (T34). He readily conceded that he found it difficult to recollect dates. (This difficulty occurred numerous times.) 

8. The plaintiff said that, at the time he sold the Plains Road property, the Rogers Road property came up for sale and he was thinking of buying it. He said that he then had a discussion with Mr Randall during which he asked Mr Randall if he went ahead with the purchase of the Rogers Road property, would the defendant buy his grapes. In reply, Mr Randall said that he would buy his grapes from him and that the industry was good for the next 10 to 15 years (T35). Mr Randall said that he would be disappointed if the plaintiff did not sell his grapes to him (T172). Following that discussion, the plaintiff purchased the property and set about planting vines straightaway. The plaintiff did not claim that he went ahead with the purchase because of what Mr Randall had said (T38).  Mr Randall gave him advice on what varieties of grapes to plant (T412). The Rogers Road property consisted of 80 acres. Settlement took place in September 1997 (Mr Randall puts settlement at March 1997.) The plaintiff and his family moved into a house property at Addison Street Aldinga Beach in June 1997.

9. While the plaintiff  was establishing the vineyard at Rogers Road, Mr Randall visited him quite often (T38). He planted 20 acres of shiraz grapes in 1997 and a further 20 acres of shiraz grapes in 1998. He did not plant any in 1999.

10. There was some lack of clarity in his evidence about the location of plantings in 2000 (T39).  The plaintiff purchased the 20 acre property at Hahns Road in 2000. His evidence left it unclear whether he planted a final 20 acres of grapes on the Rogers Road property, or 20 acres on the Hahns Road property, or both.  The uncertainty about the plantings in 2000 remained, despite questioning on the topic on several occasions (T39-40, 63-64 and 411). (Notes made by Mr Randall of later discussions with the plaintiff represent, in my view, the more reliable account of plantings.)  The matter is of some significance because the defendant argues that, even if, despite its denials, there is found to be an agreement in relation to the sale of grapes produced on the Rogers Road property, the agreement could not be taken to include grapes grown on the Hahns Road property which was not in the contemplation of the parties at any of the times suggested for the agreement.

11. The plaintiff said that because he had reached an agreement to sell his grapes to the defendant, he declined to enter into agreements to sell grapes to South Corp, Fox Creek and Rosemont (T40-41). The plaintiff gave evidence about discussing with Mr Randall the price at which he would sell his grapes. His evidence is not entirely clear as to when that conversation, or those conversations, took place. He gave evidence of there being discussions about price on three possible occasions in 2000.  One suggestion was when the first crop from Rogers Road was being transferred from a trailer on a ramp on his property to a truck to be taken to the defendant’s winery. This was referred to as “the ramp meeting”.  The usual time of vintage would be in about March.  Another possible occasion was in the defendant’s four-wheel-drive (T161). The third suggested occasion was at the offices of the defendant. 

12. The tenor of the plaintiff’s evidence was that wherever the conversation took place, it was at about the same time, but even that is not entirely clear.  It was also suggested by the plaintiff that there had been some discussion between him and the defendant about price in 1997, when the oral agreement was made for the sale and purchase of grapes from the proposed Rogers Road plantings.  At one stage it appeared that he meant that whatever conversation took place in 2000 regarding price was merely confirmatory of the 1997 conversation (T44). 

13. Reverting to the conversation or conversations at the time of the 2000 vintage, the plaintiff first identified it as occurring in February or March 1997 but he immediately corrected that to 2000. He said that at that point, they shook hands (T45). In his evidence, there was no discussion thereafter about price because it was understood that he would be paid the ADP. Thus, while the ADP was the agreed consideration, the figure would vary from year to year and there might be discussion about what it would be for the coming year. In the conversation at the ramp the plaintiff said that there was some discussion on the topic of bonuses. He said that he left the question of bonuses to the defendant, but all he sought was the ADP. 

14. The plaintiff’s evidence about the discussion or discussions that he had with the defendant about price is quite confusing.  At one point he said that the conversation about price in the defendant’s office was in October or November 1997, but he then immediately corrected that to 2000 (T47). On the following page he said that the conversation was in the defendant’s office at Christmas 1999 (T48, see generally 44‑8)  (As I mentioned earlier, the plaintiff frankly conceded that he had difficulty in being exact about dates.) 

    The plaintiff said that in the 2002 vintage he declined an offer put to him by Mr Kalantzis, on behalf of River Estates, to buy his grapes for $2,400 per tonne (Mr Kalantzis said this was in the 2000 vintage (T544)  I am satisfied it was in the 2000 vintage). He did that because he was committed to deliver his grapes to the defendant. In that year he received only $1,907 per tonne from the defendant. The plaintiff said that he later told Mr Randall of the offer that he had rejected (T78-79). In reply, Mr Randall said “Don’t worry we always look after our growers”.

15. In relation to the 2003 vintage, the plaintiff gave evidence that there was only one meeting and one discussion about the sale of those grapes.  Mr Randall said that he would pay $1,000 per tonne and that there would be an adjustment up to the ADP at the end of the year. The plaintiff left the meeting with that understanding (T334-339 and 353-359). (By that I took him to mean that there would be three equal instalments, each one third of $1,000 per tonne of the grapes supplied, and that there would be a fourth instalment bringing that accumulated sum up to the ADP for 2003.  Mr Randall’s account differs in significant respects (see discussion below).)

16. Part of the plaintiff’s case in contract is that he did not receive the adjustment payment at the end 2003. In a letter dated 22 April 2003 (Exhibit P1 p23), the defendant wrote to the plaintiff setting out the three payments that he would receive that year. There is no provision in the letter for a fourth adjustment payment. The plaintiff said that he raised this with the defendant’s viticulturalist, Mr Ian McMillan, sometime after receiving the letter. He told Mr McMillan that he was a little disappointed that the proposed payments were low and he hoped that the defendant would come through at the end of the year, meaning that there would be an adjustment payment. In reply, Mr McMillan told him not to worry about it. (Mr McMillan said that a conversation similar to that occurred in 2002 not 2003 – see later.)  In view of that discussion, the plaintiff did not further query the letter which, unlike in previous years, had not provided for an adjustment payment.

17. The plaintiff gave evidence that he first raised the question of the adjustment payment with Mr Randall in January 2004. In reply, Mr Randall told him that he would not be getting an adjustment payment because the industry was not as buoyant as it had been previously. The plaintiff said it was at this point that Mr Randall first told him that the defendant would not be buying his grapes in that vintage. Mr Randall went on to refer the plaintiff to Mr Adam Jacobs, to see if he could sell his grapes through him (T87). The plaintiff said that he had been trying to contact Mr Randall between November 2003 and January 2004, but had been unable to get through to him. He recollected that he had been told that Mr Randall was away on holidays, perhaps in South Africa. He had seen Mr Randall’s car outside the winery and thought that Mr Randall was avoiding him.

18. In cross-examination, it was put to the plaintiff that in the vintage of 2000, which was the first vintage when the defendant purchased the plaintiff’s grapes, the plaintiff met with Mr Randall in his office to discuss the purchase of the grapes; and that this was the first of the annual negotiations for the sale and purchase of grapes. The plaintiff denied that and said that the purpose of the meeting was not to reach an agreement but was to discuss things such as arrangements for the harvesting of the grapes (T169).

19. It was put to the plaintiff that this meeting occurred in October 1999 when the plaintiff and his son went to the offices of the defendant (the “lab meeting”). The plaintiff agreed that there was such a meeting at the defendant’s offices before Christmas 1999, but said that what was discussed was not the purchase of the grapes but merely aspects of harvesting that vintage.  There was an ongoing agreement that did not require any discussion.

20. Having reached the agreement with the defendant, the plaintiff never sold his grapes to anyone else and never sought to do so. He had spoken to wineries such as Fox Creek, but for the purpose of comparing prices (T212-219 and 328-331) not for the purpose of selling his grapes to them.

21. The plaintiff agreed that he was paid more than the ADP for the old plantings of shiraz in 2001. He denied that it was as a negotiated price. The defendant had paid that unilaterally, without reference to him. Specifically, he said, “They overpay people sometime” (T248 and more generally 242-249).

22. He agreed that he had always understood that the sale of his grapes to the defendant was subject to those grapes being disease free and of a sufficient quality. He said that it was industry practice for a buyer to inspect grapes for disease and quality sometime before the harvest; that was understood between him and Mr Randall and was not the subject of discussion (T301-302).  (That position is common ground between the parties.)

23. The plaintiff was quite emphatic that an important discussion occurred at the ramp on his property, on the occasion of the delivery of his first vintage to the defendant in 2000.  He identified that as the occasion when Mr Randall offered him a written contract but he declined. After he declined, he explained his reasons, which do not bear on the issues at trial.  They then reached an agreement and Mr Randall said, “Carry on mate. Good enough for me”. It was put to the plaintiff that Mr Randall said that he thought the industry would be going OK but that he did not guarantee that he would always buy the plaintiff’s grapes. The plaintiff replied as follows (T363-364):

    If he didn’t guarantee, well at least do the right thing. You don’t start to play games. You know, not ringing up, not getting in touch with us, not letting me know what’s happening, what’s going on”.

    I perceive that answer as significant ,suggesting a softening of the assertion of a clear agreement. 

24. There are two other passages of the plaintiff’s evidence which are similar in effect.  The first passage is at T238, line 7, in cross-examination :

    I say this: the best way to deal with people is communications.  Now if Mr Randall came to me in 2004 and say, “Look, Mario, things are cheap, prices are down and we can only pay for this year $700, $800”, and then I would have said “OK, Warren, if that’s what you think, if that’s what you think it’s worth, I will trust”.

25. The second passage is at T360-61:

    AWell, if someone comes and say, and you make an agreement, you will try and keep it, won’t you?  If Mr Randall agreed to me, promised me, say ‘We buy your grapes, don’t worry about it, ho ahead’ and then you take that as an obligation, or a promise and you expect that people will keep that promise, and that’s what I did, I expect Mr Randall to keep the promise until he would have said to me ‘Mario, next year we don’t take your grapes’.  Give a man plenty time, give him six months, three months, you know that the industry is going bad so shy not warn the people, why not warn the grower in plenty of time, say ‘Look, this is what I’m going to pay you, and next year we don’t want your grapes’.  Then I would have said ‘Okay, if that’s how you feel, I’ll have a look somewhere else’.  It’s a fair comment.  That would be fair, wouldn’t it, but that didn’t happen and that’s what I wanted Mr Randall to do.  That’s what I expected Mr Randall to do with the association that we had going, I would expect he would come to me like he before, on many occasions ‘Hello Mario, how you going, everything okay?’, he would have said ‘Look Mario, from now on, next year we are not buying your grapes’ then I would have said ‘Okay, thank you very much, I’ll look somewhere else’.

    Summary of the Plaintiff’s Evidence

    The Claim in Contract

26. At about the time the plaintiff sold the Plains Road property to the defendant in 1997, he discussed with Mr Randall the establishment of a further vineyard at Rogers Road. The plaintiff was encouraged to do so by the Mr Randall who advised him upon what varieties of grapes to plant. The two men agreed that the defendant would purchase the grapes which the plaintiff produced. It was understood, without anything being said, that the grapes would be disease free and of sufficient quality for the defendant’s requirements. The plaintiff’s evidence is unclear as to whether there was discussion at this meeting about the price being the ADP.  There was ongoing contact between the plaintiff and Mr Randall between 1997 and 2000. When the first of the vines planted in 1997 bore fruit for the 2000 vintage, there was a further critical discussion between the plaintiff and the defendant.  There is uncertainty in the plaintiff’s evidence about exactly when this occurred, but it was in anticipation of the 2000 vintage.  The location of the further discussion or discussions is also unclear. The plaintiff is not clear whether the discussion took place at the defendant’s office, at a ramp or in a four-wheel-drive vehicle on the plaintiff’s property, or possibly all three places.  What was agreed was that the price would be the ADP, although something had been said by the plaintiff about him leaving it to Mr Randall if the defendant wished to pay bonuses for grapes of superior quality.

27. For the vintages 2000 to 2003 inclusive, the defendant purchased the plaintiff’s grapes pursuant to that agreement. The parties met each year as the vintage approached to discuss details of the harvest. Topics such as the time of picking, the estimated yield and what might be the ADP for the year were discussed. The defendant complied with the agreement by paying the ADP for the 2000 and 2002 vintages. When it paid more than the ADP for the older planting of grapes in 2001, the defendant did so unilaterally, without discussion with the plaintiff.  It was suggested by Mr Simpson (in his address) that this was possibly done by the defendant as a sweetener to encourage the plaintiff to continue supplying his grapes. In paying less than the ADP in 2003, the defendant was in breach of the agreement. He was also in breach of the agreement by not purchasing any grapes at all in 2004. As evidence of the plaintiff’s belief that he had an oral agreement with the defendant, he referred to the fact of his declining to sell his grapes to Mr Kalantzis in 2002 at a price higher than that which he would have expected under his agreement with the defendant. Such discussions that he had with other wineries about his grapes were only for the purpose of comparing prices and were not directed towards selling his grapes to those wineries.

    The Claim under the Trade Practices Act

1. The factual basis of this claim is essentially the same as that previously outlined. Specifically what is alleged is that the defendant made misrepresentations to the plaintiff, which the plaintiff relied upon to his financial loss. (I have already recited the plaintiff’s evidence of his discussions with Mr Randall).  Mr Simpson submitted that that evidence is essentially that which is pleaded in paragraphs 28.1 and 28.2 of the amended Statement of Claim.  He took me to the plaintiff’s evidence of the representations.  Those representations concern the purchase indefinitely by the defendant of the grapes grown by the plaintiff.  It is necessary to set out what counsel for the plaintiff claimed were the defendant’s representations.  It is conceded they are slightly different from those pleaded.

2. The first representation is said to have been made by Mr Randall when the plaintiff was considering buying the Rogers Road property.  The plaintiff asked Mr Randall if he would buy his grapes.  Mr Randall replied (T35):

   Yes, of course I will buy the grapes from you…..  The industry is good for the next 10, 15 year.

3. The second representation is said to have been made in a series of conversations between the plaintiff and Mr Randall between the time the vines were planted on the Rogers Road property and the first commercial vintage in 2000.  The plaintiff did not use direct speech in recounting those conversations, but he said that the defendant indicated he was pleased with the plantings and was looking forward to the first crop.  The plaintiff said that defendant was buying the grapes from him.  He said that Mr Randall said (T38):

   The industry was good and strong and that we had no worries about selling the grapes, and they always look for more and more grapes each year and that sort of thing. 

4. The plaintiff said (T41)that he could not remember everything that the defendant had said or when it was said:

5. The third representation or series of representations was again not recited in direct speech.  The plaintiff said that between 1997 and the sale of the 2000 vintage there was a good deal of discussion between him and the defendant, in which the defendant represented:

   How good the market was and all that sort of thing.  We had nothing to worry about for a long time, that kind of talk”.

   Further, the defendant said (T43):

   He would assure me that he would buy the grapes.  That was the general understanding that we – conversation at the time, that the grapes was his and I grew the grapes for him and that was it……. 

   On the topic of price, the plaintiff said (T44):

   I understood that he would buy the grapes at ADP so there was really no need for me to discuss the price unless he brought it up. 

6. Counsel submitted that, as a result of these representations by the defendant, the plaintiff relied on them in the sense that he did not try to find other buyers for his grapes.  Insofar as the plaintiff’s evidence of the representations differed from the pleadings, the difference was not fatal to the plaintiff’s claim but was a matter of weight (T1671-1674).  (He cited Gould v Mt Oxide Mines Ltd[6].)

   [6] (1916) 22 CLR 490, at 517

7. The representation pleaded in paragraph 28.3 was contained in the letter of 22 April 2003 (Exhibit P1 p23). That letter was from the defendant to the plaintiff, and confirmed the deliveries for the 2003 vintage.  The letter concludes as follows:

   We take this opportunity to indicate our thanks for your business and look forward to a continued association.

8. In my view, this is no more than a conventional courtesy in a letter.  No evidence was given by the plaintiff of the representation pleaded in paragraph 28.4 of the amended Statement of Claim. 

9. Thus the case for the plaintiff rests on the representations pleaded in paragraphs 28.1 and 28.2 and the three representations identified above. For convenience, I recite the two pleaded sub-paragraphs:

   28.     The Defendant represented to the First Plaintiff that:

   28.1   The Defendant would purchase all grapes grown by the Plaintiffs:

   Particulars

   This oral representation was made by the Defendant’s servant or agent Mr Warren Dean Randall (“Mr Randall”) to the First Plaintiff on numerous occasions between in or about 1997 and 2003 (the Plaintiffs cannot be more specific).

   28.2   The Defendant would purchase all grapes grown by the Plaintiffs at each vintage from and including the 2000 vintage.

   Particulars

   This oral representation was made by the Defendant’s servant or agent Mr Randall to the First Plaintiff at the 1999 meeting as pleaded in paragraphs 3, 4 and 5 hereof.

   Other Witnesses for the Plaintiff

10. Mr Sotiropoulos owned or co-owned a vineyard close to that of the plaintiff at Rogers Road. He had contact with the plaintiff from about November 2000. His evidence was that he understood from what the plaintiff had told him that the plaintiff had a gentleman’s agreement in perpetuity with the defendant whereby the defendant would buy the plaintiff’s grapes at the ADP. (I have already admitted that evidence, and the evidence to similar effect of Mr Roger Clarke and Mr David Cavaiuolo, for the limited purpose of rebutting any suggestion that the plaintiff’s claim to have made such an agreement with the defendant is a recent invention.)

11. Mr John Kalantzis was employed by Rivers Estate, a bulk wine producer working mostly in the Riverland. He was trying to source grapes for the 2000 vintage (T544). He only worked for Rivers Estate for that vintage. The plaintiff was one of the growers from whom he was trying to obtain grapes. The plaintiff told him that his grapes were committed to the defendant company, but that if there was any excess over that which the defendant required, then the excess might be available to Mr Kalantzis. He offered the plaintiff between $2,000 and $2,400 per tonne. There was no sale. He gave evidence that Mr Randall rang him to warn him against approaching growers in the Southern Vales area. (Mr Randall confirms this evidence (T946-7 and 1036-8).) Mr Kalantzis said that the plaintiff told him that he had a gentleman’s agreement with the defendant and wanted to be loyal to it. Mr Kalantzis said that there were several discussions, the first being before Christmas 1999. His evidence was received over objection. With one exception, I consider that it is admissible, but only on the same basis as the evidence of Mr Sotiropoulos, namely, to rebut any suggestion of recent invention by the plaintiff. The exception is the comment of the plaintiff, which might be regarded as against his interest, namely, that he contemplated the possibility that the defendant would not buy all his grapes, and that there might be some excess or surplus to the defendant’s requirements which the plaintiff would be at liberty to sell to others.  That may indicate that there was not a clear agreement for the sale and purchase of all the plaintiff’s grapes.

12. Mr Roger Clarke is the plaintiff’s son-in-law. He and his wife (the plaintiff’s daughter) purchased a 10 acre block opposite the Rogers Road property and worked on it for about three years before selling it. He said that during that time he had many family discussions with the plaintiff, during which the plaintiff told him that he had a gentleman’s agreement, as opposed to a contract, with the defendant, pursuant to which the defendant would buy his grapes indefinitely at the ADP (T563-564).

13. Mr David Cavaiuolo is the plaintiff’s son. He is a music teacher by occupation. He lived with his parents at the Plains Road property and moved with them to the house property at Aldinga. When he married, he and his wife lived in another house property at Aldinga in 1999 and 2000. After he and his wife separated, he returned to live with his parents at Aldinga and has continued to live with them ever since. He remembers a conversation with his father at about the time the Rogers Road property was being purchased in 1997, during which his father said that Mr Randall was buying his grapes at the ADP for as long as he could supply them. When he, Mr David Cavaiuolo, asked his father whether it might not be better if he sought bonuses, his father said that it was better not to be too greedy. (This evidence is admitted for the limited purpose of rebutting a suggestion of recent invention.) He also remembers being present at what has been called the “lab meeting”, but could not recall anything significance in the discussions on that occasion.

    The Defendant’s Evidence

14. Mr Warren Randall graduated from the University of Adelaide in 1977 with a Bachelor of Agricultural Science degree.  He gained a Bachelor of Oenology degree from the Charles Sturt University, New South Wales in 1982.  He described the establishment and growth of the defendant company, which began with a land holding of some 225 acres and now has some 900 acres under vines.  When the defendant company began production in 1993, it was processing 2,000 tonnes of fruit each year.  It is now processing approximately 6,000 tonnes.  The business plan of the company was to increase the percentage of grapes being processed from its own vineyards.  Mr Randall said that the defendant has entered into written agreements with some growers for the supply of grapes and has obtained a decreasing percentage of grapes from uncontracted or annual growers.  He denied having had any conversation with the plaintiff about the sale of grapes at about the time of the settlement on the Plains Road property in March 1997 (T704-705), but said that there were discussions in mid May that year (T674).  The plaintiff indicated that he and his son were thinking of buying a further property. 

15. Mr Randall gave evidence of there having been a discussion about of the sale by the plaintiff to the defendant of grapes that he might grow on the property under consideration.  Mr Randall denied having agreed to purchase the plaintiff’s grapes but said (to the plaintiff) that, if the plaintiff did buy a property and grow grapes, he would be happy to talk to him about buying his grapes.  Mr Randall agreed that there had been a discussion about what grapes might be planted on the property and that he gave advice that, in the circumstances of the market, it might be preferable to plant red grapes with a predominance of shiraz (T674-676).  He denied that there was continual contact between him and the plaintiff except that their paths might cross from time to time. 

16. Mr Randall said that his next discussion with the plaintiff was in late 1999, when the first commercial crop from the Rogers Road property was anticipated;  that was at the meeting which has been described as the “lab meeting” (T676-677).  As a result of that meeting in late November 1999 he put the plaintiff on the list of uncontracted growers with whom he would negotiate for the forthcoming vintage.  He generally left such discussions for as late as possible in the vintage, usually in late January or early February for shiraz grapes.

17. Mr Randall produced a list entitled “2000 Vintage Growers” with a subtitle “Annual Negotiation”. (The list is dated 29 December 1999 and became Exhibit D15A.) He said that it was the list he had prepared of uncontracted growers for the 2000 vintage; it included the plaintiff’s name about half way down.  He could not locate his diaries for 1999 and 2000 and so could not be specific about when he met with the plaintiff in the New Year.  At that later meeting, he elicited from the plaintiff an estimate of the likely yield for that vintage.  He made notes of the estimate by the plaintiff that, from the plantings of 20 acres in 1997, there might be expected 2 to 3 tonnes per acre and that, from the 20 acre plantings in 1998, half a tonne per acre.  He noted the ADP for the previous vintage and said that he estimated the ADP would be $200-250 per tonne more than in the previous year. He said that he photocopied the notes he made during that meeting and gave the photocopy to the plaintiff.  (The plaintiff denied ever being supplied with photocopies (T1050).) (The original notes became Exhibit D15B.) 

18. Mr Randall said that he and the plaintiff agreed to the sale and purchase of that year’s production and that the price would be the ADP.  The payment was to be by four instalments, the first three being at the end of April, June and September 2000 respectively, each being one third of the previous year’s ADP.  There would be a final instalment in late November, making up the difference between the sum already paid and the ADP for the 2000 vintage. The ADP for the 2000 vintage was $1,968, the highest paid (T739). Mr Randall tendered a hand written letter from Mr Ward to the plaintiff dated 30 April 2000, confirming that program of payments and enclosing the first payment.  (That letter was in the plaintiff’s book of documents (Exhibit P1 p5) and the defendant’s book of documents (Exhibit D18 tab 3).) Mr Randall did not recall any conversation with the plaintiff during the 2000 vintage in a four-wheel-drive vehicle following a tractor and trailer or a conversation on the ramp.  In relation to the 2000 vintage, he recalled the “lab conversation” late in 1999, at which Mr David Cavaiuolo was present, and he recalled the negotiations in his office in January or February.  He could not identify the date.  He said that around 6 March 2000, at the weighbridge or receival bin, he had a discussion with the plaintiff in which he offered the plaintiff a written contract for five years, but the plaintiff rejected it (T735-739). 

19. Mr Randall gave evidence about the pattern of grape plantings in the Southern Vales in the late 90s and the economic consequences in later years.  There was a very considerable upsurge in planting in the late 1990s, most particularly in 1998, which was expected to lead to a glut of grapes in about 2002 and the following years.  Until that glut occurred, there was a considerable demand for wine and, consequently, for grapes.  Mr Randall was assiduous in establishing relationships with growers.  The defendant company sponsored the local Bocce club to help develop those relationships.

20. Mr Randall said that the pattern of discussions with the plaintiff in the 2001 vintage was very similar to that in 2000.  He said that a meeting with the plaintiff took place on 5 February 2001. He produced a dated note setting out what, he said, were the key points of that discussion (Exhibit D19C and Exhibit D18 tab 7.3). He produced two lists said to be for that year, the first headed “Growers list” which, he said, was a list of contracted growers (Exhibit D19A tab 7.1) and a document headed “Annual growers – 2001 vintage” listing the so called annual growers, including the plaintiff (Exhibit D19B and Exhibit D18 tab 7.2)..  In his notes of that meeting (Exhibit D19C) there is, for the first time, a record of grapes from the Hahns Road property.  The note indicates that there were estimates of yield from 60 acres of planting on the Rogers Road property in 1997, 1998 and 2000, and plantings of 20 acres in 2000 on Hahns Road.  (This is the vintage in which there is a note of different prices applying to grapes from different plantings.)  It is common ground that the price paid for the so called older plantings was $2,100 per tonne and the ADP was paid for the younger plantings. 

21. Mr Randall said that those prices were reached by agreement at the meeting on 5 February 2001 and that he gave the plaintiff a photocopy of the notes which he made.  As with the previous vintage, a letter was sent by Mr Ward to the plaintiff enclosing the first instalment payment and confirming the payment schedule.  (This letter was common to the books of documents of the plaintiff and the defendant (Exhibit P1 p9 and Exhibit D19 tab 9).)  The ADP for 2001 was $1,901 (T771).  Mr Randall said that the reason for the ADP being lower than the peak of the previous vintage was that the acreage of vines producing commercial crops had increased from the previous year.  The grapes were of greater maturity and fruitfulness.

22. Regarding the 2002 vintage, Mr Randall gave evidence that on 21 January 2002 the plaintiff and his son came to his offices with their neighbour, Mr Jim Alexopoulos. Mr Randall said that he did not discuss business with all three men together, but met separately with the Cavaiuolos and Mr Alexopoulos.  In late 2001, he anticipated not requiring grapes for the 2002 vintage from the uncontracted growers from whom he had previously sourced grapes.  He expected the effects of the increased plantings in the late 1990s became evident in the 2002 vintage.  In addition, and for the same reason, he expected that the ADP for 2002 would be lower than it had been in 2001.  Accordingly, he proposed to negotiate with those growers from whom he decided to buy, on the basis that the defendant would make a lower instalment payment than one third of the previous year’s ADP (T804-807)  He prepared a list of uncontracted growers from whom he did not expect to purchase that year. The name of the plaintiff was on that list (T786).  He gave evidence of a particular grower whom he “dropped” in November 2001 (T779).

23. As with the previous vintage, the defendant produced a list containing, this time, a mixture of contracted and uncontracted growers, with notes of growers whose grapes he no longer required (Exhibit D20A and Exhibit D18 tab 112.1).  The plaintiff’s name appears on that list, but is crossed out.  The plaintiff’s name appears again in the second document for that year, headed “uncontracted growers 2002” (Exhibit D20B).  Mr Randall said that, as things turned out, he required the plaintiff’s grapes for that year.  He said that the meeting for the 2002 vintage took place on 21 January 2002 and he produced a handwritten note setting out what, he said, were the key points of their discussions (Exhibit D20C).

24. As in previous years, there was a letter from Mr Ward dated 30 April 2002 enclosing the first instalment and setting out the program of subsequent instalments.  (Again, this letter is common to the books of documents of both parties (Exhibit P1 p15 and D18 tab 13).)  The ADP for that year was $1,907, a few dollars higher than the previous year.  Mr Randall said that he had sourced grapes from more uncontracted growers that he had expected, because the 2002 vintage was the poorest yield on record.  He expected that there would be a surplus for the 2003 vintage, which meant that he would be buying grapes from fewer uncontracted growers and the price would be less (T82405).

25. The negotiations between the parties regarding the 2003 vintage are the subject of dispute.  It seems not to be in dispute that they first met on 24 January 2003.  (That is the date which appears on Mr Randall’s notes of the meeting (Exhibit D21 and D18 tab 17).)  Consistent with his evidence of discussions in earlier years, the plaintiff said that price was not discussed on that occasion.  He said that the ADP had been agreed between them much earlier and that he never agreed to accept a lesser sum.  The defendant’s evidence is different.  He said that he transposed into his own handwriting, notes of estimates of that year’s vintage prepared by Mr David Cavaiuolo and marked exhibit D3.  Notes of those parts of the conversation on 24 January (Exhibit D21) were written then, but when the discussion turned to price towards the end of the meeting, Mr Randall said that he offered $1,000 per tonne for all grapes.  He said that the plaintiff was shocked at that low offer and did not want to make a commitment to that low figure there and then.  Accordingly, on that occasion he made no note regarding price.  He said that the meeting broke up on the understanding that the plaintiff would ring him to finalise matters (T835-7). 

26. Mr Randall said that there was no communication with the plaintiff for about a week. On 31 January 2003, he rang the plaintiff from his mobile telephone while he was driving from his home to a meeting in the city.  During that telephone call, the plaintiff reluctantly agreed to accept $1,000 per tonne for most of the grapes but he persuaded Mr Randall to pay $1,200 per tonne for the older plantings.  That replicated the differentiation between the two types of plantings negotiated in 2001, although at a lower price.  Mr Randall said that when he arrived home from the meeting later that day, he wrote on Exhibit D21 the prices that he had agreed on the phone.  Mr Randall said that he emphasised to the plaintiff that the agreed figures were flat-rate prices, that is, there would be no reference to the ADP for that year and, consequently, there would be no final adjustment payment.  The plaintiff denies any such agreement and denies that there was any discussion about price over the telephone, as indicated by the defendant.  He concedes that there might have been a telephone call on that occasion but it must have been to discuss relatively unimportant matters.  His counsel put to the defendant that the notes were manufactured for this litigation.  The defendant denied that suggestion.

1. As events turned out, the yield in 2003 was again very low, so the ADP for that year was higher than expected.  It was $1,805 per tonne.  Mr Randall agreed that, in those circumstances, he had obtained cheap grapes (T849)  As in previous years, a letter was sent by the defendant company, confirming the payment schedule and enclosing the first instalment.  This letter was typed rather than hand written and came from the new administration manager, Mr B Nicholls, rather than Mr Ward.  It was dated 22 April 2003.  (It is common to both parties’ books of documents (P1 p23 and D18 tab 19).)  The letter replicates what the defendant said was the agreed prices per tonne, including the higher rate for the older plantings. It does not refer to an adjustment payment.  It is common ground that the plaintiff did not complain to Mr Randall about there being no reference to an adjustment payment until the parties met to discuss the 2004 vintage.  The plaintiff’s amended pleadings asserted that that meeting was in January 2004.  The defendant said that it was on 10 December 2003.  The plaintiff appears to have conceded that that date may be correct (T415-16).

2. The only communications between the plaintiff and the defendant between the delivery of the last load of grapes in March 2003 and the end of the year would appear to be the three letters from the defendant enclosing the three instalment payments for the 2003 vintage. Those letters were dated 22 April 2003, 30 June 2003 and 30 September 2003 (Exhibit P1 p23-25 and D18 tab 19-21). Mr Randall does not suggest that he told the plaintiff that he had only been moved from the defendant’s “outs” list to the “ins” list due to the poor yield for the 2003 vintage.  Nor did the plaintiff  know that, following the 2003 vintage, the defendant began negotiations with Lion Nathan for the purchase of the Tatachilla Winery, which involved meeting Lion Nathan’s obligations to contracted grape growers (T853-856). Mr Randall said that he told Mr Adam Jacobs in about September 2003 that he would be dropping quite a few annual growers for the 2004 vintage.  Mr Randall’s evidence is that the deal with Tatachilla was finalised at the defendant’s Board meeting on 2 December 2003.  Mr Randall had been overseas from 5 to 26 November, although he was able to receive calls on his mobile telephone while away.  He heard nothing from the plaintiff by way of complaint about there being no adjustment payment, or on any other topic, until he returned from overseas.  He said that he received a call from the plaintiff on 3 December, the day after the Board’s meeting which finalised the deal with Tatachilla.  Upon that deal being completed, the plaintiff was to be one of a number of annual growers from whom the defendant would not purchase grapes that year. 

3. Mr Randall said that a meeting was arranged between the plaintiff and the defendant for 8 December, but he had to cancel it due to other commitments.  The meeting was rearranged for 10 December.  As previously indicated, the plaintiff amended his Statement of Claim to assert that this meeting occurred in January 2004, rather than in December 2003, as he had originally pleaded.  In his evidence in chief, the plaintiff in chief he maintained that the meeting was in January 2004 but, under cross-examination, conceded that it may have been on 10 December (T415-416).  The defendant’s account of the meeting differs from that of the plaintiff.  The plaintiff said that he first raised the non-payment of the adjustment amount for the 2003 vintage.  He was told there would be no such payment because the market was not buoyant.  He was then told that, in fact, the defendant would not buy his grapes for that vintage. 

4. For his part, Mr Randall said that he began by taking notes of the plaintiff’s estimates for the 2004 vintage for the purpose of giving them to Mr Adam Jacobs, to whom he was going to refer the plaintiff after he told him that he would not buy his grapes that year.  He then told the plaintiff of that decision and, as he intended to do, referred him to Mr Jacobs to see if he could sell his grapes through him.  Only after these discussions did the plaintiff complain about there not being an adjustment payment for the 2003 vintage.  Mr Randall said he saw that as the plaintiff merely “trying it on” and told him so.  The plaintiff said nothing more on the topic (T876-7)  Mr Randall said that he made notes of that meeting. He produced them in court (Exhibit D24, see also Exhibit D9).) He did not give the plaintiff a copy. Mr Randall gave evidence that he had similar meetings with ten other growers such as the plaintiff.  Mr Randall at first said ten growers and then, after he had a more detailed look at a spreadsheet, he said sixteen growers (T890 and 922).  The plaintiff was among the first growers whom he put off.  He continued such discussions with other growers until January 2004 (T890-3).  He provided a spreadsheet showing the growers who were dropped (Exhibit D26; T896-905).  He gave evidence that the few annual growers whose grapes he purchased that vintage were growers who were able to exert some pressure on him, because they had white wine grapes to sell as well as red. While the defendant did not have any need for red grapes, he did have a need for white grapes.  After that meeting, the plaintiff did not contact Mr Jacobs.  Mr Jacobs contacted him.

5. Mr Jacobs was in a curious position and considerable cross-examination was directed towards him (and Mr Randall) about the role that he played.  He was engaged by the defendant and, as it transpired, other wineries, to source grapes from uncontracted growers.  He regarded himself as being employed by the wineries, to which he made recommendations about which grapes to choose from among the uncontracted growers.  If the wineries agreed to purchase a grower’s grapes, he would then charge the growers a commission.  The wineries paid nothing.  The defendant provided Mr Jacobs with the estimates and other information that the plaintiff  had given him and Mr Jacobs kept in touch with Mr Randall about growers who were signed up with other wineries for that year.  Mr Randall said that he referred the plaintiff to Mr Jacobs out of his concern for the plaintiff. He did the same for other growers for the same reason (T933).  At the time, he did not necessarily intend to have no further dealings with the uncontracted growers; that would depend upon his future needs (T934).

   Summary of the Defendant’s Evidence

   The Claim in Contract

6. Mr Randall agrees that he had a discussion in 1997 with the plaintiff, at which the plaintiff indicated that he was considering buying the Rogers Road property.  Mr Randall agrees that when the plaintiff enquired about what plantings might be most marketable, he gave him advice, but he denies having given anything in the nature of directions about what to plant.  He agreed to discuss buying the plaintiff’s grapes when they became available, but denies having agreed to purchase the plaintiff’s grapes.  He denies having been in constant contact with the plaintiff between that discussion and when the first commercial crop became available.  The next discussion of any significance was the “lab meeting” in late 1999.  On that occasion the plaintiff asked him if he would buy his grapes.  Mr Randall agreed to have a meeting with him, which occurred in the New Year.  He put the plaintiff on his list of annual growers. At the later meeting, there was an agreement made to purchase the grapes for that vintage at the ADP.  That agreement was confirmed in writing by Mr Ward.  The defendant denies any ongoing agreement to purchase the plaintiff’s grapes.  He asserts that there was an annual negotiation, in support of which Mr Randall produced notes indicating a division between contracted growers and annual or uncontracted growers.  That pattern of annual negotiation with the plaintiff occurred for each of the 2001, 2002 and 2003 vintages.  A price in excess of the ADP was agreed upon for the older plantings in 2001 and prices below the ADP were agreed in 2003. As a result of the steep increase in vine planting in the late 1990s, particularly in 1998, the defendant expected an oversupply of grapes by 2002.  That did not eventuate because of a record low yield in that year.  A low yield for the 2003 vintage deferred for a further year the expected oversupply. The defendant only agreed to take the plaintiff’s grapes in 2002 and 2003 because of the low yield in each of those years.  The defendant had been increasing the percentage of grapes sourced from the company’s own vineyards and from the vineyards of contracted growers.  The defendant had offered the plaintiff a written contract at the time of the 2000 vintage, but the plaintiff had declined.  Accordingly, the defendant did not regard itself as bound to continue purchasing the plaintiff’s grapes and, when it had no need to do so in the vintage of 2004, it declined to do so.  The defendant  was not in breach of any agreement in not providing a fourth instalment payment for the 2003 vintage, because a flat rate had been agreed at the beginning of that vintage.  it was not in breach in any agreement in declining to take the plaintiff’s grapes in 2004. 

   The Claim under the Trade Practices Act

7. The defendant denies the misrepresentations alleged to have been made in 1997 or at all.

   Other Witnesses for the Defence

8. Mr Warren Ward gave evidence.  (I refer to only part of his evidence.) He explained that, from a business point of view, there was no point in buying cheap grapes to flood an oversupplied market, particularly with regard to the 2004 vintage.  In that vintage,  wine was “dumped” cheaply (T1159).  He confirmed the evidence of Mr Randall about the timetable of the negotiations with Tatachilla (T1182). He also confirmed the evidence of Mr Randall about the sources of the company’s grapes.

9. Mr Adam Jacobs said that he had never met the plaintiff (T1265), but had spoken to him on the telephone several times.  He described himself as a broker engaged by the wineries, for which he tried to source grapes.  He met Mr Randall on 10 December (the day on which Mr Randall told the plaintiff that he did not require his grapes that year).  As a result of his meeting with Mr Randall, he prepared a spreadsheet of uncontracted growers to send to various winery clients (T1268).  His main priority was the needs of the purchasing winery (T1274).  If the winemaker chose to purchase grapes from a particular grower, he would go to the grower, obtain a contract and charge him commission (T1407-8).

10. Mr Paul Rogers, the general manager of Fox Creek, said that he met the plaintiff only once, in 2003.  He met the plaintiff on his own vineyard on 3 March 2003.  He went with the Fox Creek winemaker to look at the plaintiff’s grapes.  The plaintiff told him that he was not happy with the price that the defendant was paying and he was looking to get a better price (T1296).  Mr Rogers said that there was no agreement concluded on the day of the visit to the vineyard and that he rang the plaintiff the following day to say that they were not interested in buying his grapes.  The plaintiff told him that the grapes were being picked that night anyhow. 

11. In cross-examination, it was put to Mr Rogers that, when the plaintiff first spoke to him on the telephone, the plaintiff said that he had a friend who was interested in selling his grapes and he gave the name of the friend as Jim Alexopoulos.  Mr Rogers did not recall that conversation, but agreed that he had written down a telephone number which other evidence suggests was Mr Alexopoulos’ telephone number.  Alongside the telephone number the witness agreed that he had written the name “Jim” (T1304-5).  Mr Rogers did not remember the plaintiff ever saying to him that he was committed to selling his grapes to the defendant, but the plaintiff did say that the defendant had been buying his grapes.  Mr Rogers denied that the plaintiff had told him that he should speak to Mr Randall to see if the defendant did not want all of his grapes (T1307). 

12. It was put to Mr Rogers that he had made a second visit to the plaintiff and the plaintiff had said that he was expecting to hear from Mr Randall at any minute to confirm that the grapes were going to be picked.  Mr Rogers said that did not ring a bell, but he was not willing to deny it (T1309).

13. Mr Ian McMillan, the defendant’s viticulturalist, was called.  Apart from confirming aspects of Mr Randall’s evidence about the growth of grapes, he gave evidence about a conversation that he had with the plaintiff in 2002.  The plaintiff was asking about the whereabouts of Mr Randall and said that there was some problem with his payment.  Mr McMillan fixed the time of that conversation by reference to the plaintiff having asked him whether the recent development of the defendant’s tanks might have caused a liquidity problem, giving rise to the problem he had with his payment.  Mr McMillan assured the plaintiff that that was not so and that the development of the tanks was a positive sign of the defendant’s financial position.  He thought that the conversation must have taken place sometime after September 2002, when there were some adverse weather conditions; the effects of that weather had been part of the conversation.  Mr McMillan assured the plaintiff that he had only to contact Mr Randall and any problem with his payment would be sorted out.  (It is hard to see why the plaintiff would be complaining about this payment in 2002.  It would seems more likely that this conversation was in 2003, as the plaintiff suggested.)

14. Mr Kevin Fiddaman from Ryecroft Winery met the plaintiff in January or February 2000.  He had been asked by his manager to go and see the plaintiff.  He visited the plaintiff again in the following year, in January or February 2001.  On each occasion the plaintiff confirmed that his grapes were for sale and did not say that they were promised to anyone else (T1339-1342).  Mr Fiddaman denied any suggestion that he had only gone to the plaintiff’s property after looking at the property of Mr Bill Sotiropoulos (T1345)  He agreed that he had only been asked to recall the meetings with the plaintiff some two weeks before he gave evidence.

15. Finally, Mr Vito Zerella gave evidence.  He was from the Tatachilla winery and said that the plaintiff came to see him in 1997.  He offered the plaintiff a price for his grapes but the plaintiff was not willing to sell.  In 2001 he spoke to the plaintiff, who again refused to sell his grapes (T1356-1358).  That meeting, he said, was around Christmas 2001, in anticipation of the 2002 vintage.

    Credibility and Reliability

16. Counsel for the defendant attacked the plaintiff’s credibility.  He submitted that on critical issues the plaintiff was, at best, reconstructing events, but more likely misrepresenting them. Among examples he gave of this was the plaintiff’s evidence about the visit by Mr Rogers from Fox Creek Winery to the plaintiff’s vineyard, which the plaintiff at first denied and then later explained.  He submitted that the plaintiff was a man with demonstrable business acumen, whose evidence on important issues could not be explained by mistake or misunderstanding.  Some of his evidence may be explained that way, it was argued, but, if important parts of his evidence were honest mistakes then they are nonetheless unreliable.  Counsel submitted that the plaintiff knew all along that he had no ongoing agreement with defendant for the sale of his grapes.  He knew that each year he met with the defendant to negotiate for the sale and the price of his grapes.  When he was not happy with the price, he tried to sell them elsewhere.  The plaintiff was long-winded in his answers on sensitive issues, in an attempt to avoid answering questions.  It was submitted that I should prefer instead the evidence of Mr Randall, whose evidence was concise, accurate and supported by documentary evidence. (My account of counsel’s submissions is not exhaustive.)

17. Nor am I here exhaustive in my account of the submissions of counsel for the plaintiff.  He also submitted that, on critical points, there was no scope for accepting Mr Randall’s evidence as being an innocent reconstruction.  He submitted that Mr Randall had deliberately falsified some evidence and, indeed, some documents.  As an example of the latter, he referred to notes of the discussion between the plaintiff and the defendant about the 2003 vintage.  He submitted, as he had put to Mr Randall, that the defendant had manufactured that document for this litigation.  He described Mr Randall’s evidence as being verbose and unsatisfactory.

18. I am unable to accept the submissions of either counsel that the principal witness for the other party deliberately  misrepresented the facts.  Dealing with Mr Cavaiuolo first, I am satisfied that, even though he had a slightly discursive style of speech, he was always doing his best to answer the questions.  For the most part, his answers were responsive.  When they were not responsive, they displayed a genuine confusion or inability to satisfactorily answer.  On the other hand, I find that there was a degree of unconscious reconstruction of events.  Mr Simpson made a brief reference to his client’s command of English and the consequences for his reliability.  He said correctly, in my view, that while his client had a good command of the English language, it clearly was not his native language.  That might have created some difficulty, on occasions, with the plaintiff’s evidence, but that that should not reflect adversely on him.  In those respects, I agree with tht the submissions of Mr Simpson.  I would only add that factors such as his language, his cultural background, his age and his having less education than Mr Randall go some way to explain his difficulties in recollecting dates and presenting his evidence in a concise and accurate manner.  It may also be that those factors lead him to perceive things in terms of how he saw his business relationship with Mr Randall.  In recollecting events, he clearly felt betrayed by what he saw as Mr Randall dropping him from the 2004 vintage.  I think at the time, and in retrospect, he saw their relationship in personal terms rather than in strictly business terms.  That may have led him to miss some of the nuances of Mr Randall’s business-like approach.

19. I do not accept that Mr Randall lied or manufactured false documents.  Occasionally he gave long answers but, in my view, only when he could not see any other way of answering a question.  Unsurprisingly, given his eduction and occupation, his evidence was much more concise than that of Mr Cavaiuolo.  For those same reasons, he was able to produce reasonably comprehensive documentation which I find was honestly compiled.  He perceived the relationship between him and the plaintiff as a business relationship, but was astute particularly to the cultural background of the Italian growers in the district.  Hence his networking through the Bocce Club

20. I find that where the evidence of the plaintiff and the defendant is in conflict on important issues, the defendant’s evidence is more reliable and I accept that evidence.

    Discussion of Contractual Principles

21. I refer now to several topics which were the subject of addresses by counsel.

    Oral Contracts

22. As with written contracts, there must be established agreement on basic terms.  There must be proof of offer and acceptance and, subject to what follows, valuable consideration.  The court cannot create an agreement where the evidence does not show there was an agreement (Hall v Busst)[7].  Adapting the title of an article by GHL Fridman[8], the function of the court is to construe, not construct, a contract.

    Agreement Silent on Price

    [7] (1960) 104 CLR 206 at 222 per Fullagar J

    [8] Construing, without constructing, a contract 76 LQR 521

23. Theoretically, where there is an agreement for the sale and purchase of goods, payment for the purchase at a reasonable price might be implied (ANZ Banking Group v Frost Holdings)[9]. That consideration does not here arise, because an ongoing agreement for payment of the ADP or an annually negotiated price are the respective positions of the parties.

    Consideration Agreed by Formula

    [9] [1989] VR 695 at 702

1. There would be sufficiently clear valuable consideration if the parties agreed on a formula or mechanism by which the price could be determined (Booker Industries Pty Ltd v Wilson Parking (QLD) Pty Ltd)[10].  That would be particularly so where there are dealings in an industry familiar to both parties (Hawthorn Football Club v Harding)[11].  On the evidence, there would appear to have been a common understanding of the term the ADP, at least for the 2000 to 2003 (inclusive) vintages. 

   Termination

   [10] (1981-2) 149 CLR 600 per Brennan J at 614-615

   [11] [1988] VR 49

2. On the plaintiff’s case, the agreement was silent as to termination.  It would not be fatal to the existence of a binding oral agreement that there was no agreement about how and when the arrangement might be terminated.  In other words, it would not matter if the agreement appeared to be for an indefinite duration.  Termination upon reasonable notice can be implied (Crawford Fitting v Sydney Valve)[12]. 

   [12] (1988) 14 NSWLR 538 at 444 A-B

   Discussion of the Facts

3. The first issue is whether there was ever an ongoing agreement between the plaintiff and the defendant for the sale and purchase of the plaintiff’s grapes.  That is to be determined objectively upon the proved facts.  It is not decisive of that issue that the plaintiff believed that there was such an agreement or that the defendant believed that there was not.  If the evidence of words spoken, actions taken and/or documents produced proves on the balance of probabilities that there was an agreement, then no description by Mr Randall of the plaintiff as an uncontracted grower will negate the existence of that agreement. 

4. One of the factors tending towards the existence of such an agreement is the actions of the plaintiff.  His actions may be seen as reflecting those of someone who regarded himself as bound by an ongoing agreement. He did not sell any of his grapes to anyone else in the relevant vintages.  The evidence is that none of the witnesses, Rogers from Fox Creek, Fiddaman from Ryecroft or Zerella from Tatachilla, was willing to purchase them.  There is, though, a possibility that Mr Kalantzis from River Estates offered to purchase them after there was a clearly concluded annual agreement between the plaintiff and the defendant for the sale of the grapes in the 2000 vintage.  I think it was more likely that that was in late 1999, that is, before the detailed discussions between the parties in early 2000.  I am prepared to accept that the plaintiff sacrificed several hundred dollars per tonne in feeling obliged to sell his grapes in that vintage to the defendant rather than to Mr Kalantzis.  I am also prepared to accept that the plaintiff might have spoken to those three other wineries either to help secure sales for his friends or to compare prices for himself, as a way of achieving peace of mind about what he was receiving from the defendant.  Another factor pointing towards an ongoing agreement was that in 1997 the defendant was particularly keen to secure the supply of grapes because the demand for them was high.  At that time Mr Randall was having to work very hard to secure grapes from growers.

5. On the other hand, there are factors which suggest that there was no meeting of minds between the plaintiff and the defendant.  Mr Randall produced documents that clearly supported his evidence that he had always dealt differently with growers who were contracted in writing and growers with whom he negotiated annually.  This was more than a matter of mere description.  With contracted growers, there were agreed acreages of agreed types of grapes over the period of the agreement. There were also agreed prices.  With annual growers, there was a yearly negotiation about price and a yearly discussion about the estimated yield of the vintage.

6. The factor most telling of there not being any ongoing agreement is the question of price.  I find as a fact that there was an annual negotiation between the plaintiff and the defendant about price.  In my view, that is clear from the evidence of the prices paid in 2001 and 2003.  In 2001, the defendant paid more than the ADP for the older plantings.  I do not accept that the defendant made that payment unilaterally.  I do not accept that it did that, as the plaintiff’s counsel suggested, as a sweetener to secure later supplies from the plaintiff, without any discussion with him.  I cannot perceive any reason why it would do that.  The defendant paid more because the demand was high and the plaintiff was able to negotiate a higher price for the older plantings.  Further, I find that, however reluctantly, the plaintiff eventually agreed to accept the prices below the ADP that the defendant was offering for the 2003 vintage.  I am satisfied that there were discussions between the plaintiff and Mr Randall which resulted in that agreement being made.  The plaintiff did not complain to the defendant when the three letters which arrived in 2003 did not refer to any adjustment payment.  I find that he did not complain because, deep down, he knew that he had reluctantly agreed that there would not be any such payment.  His deep disappointment at what he saw as the defendant’s betrayal by not accepting his grapes for the 2004 vintage sparked a belated, but half hearted protest at not receiving the adjustment payment for the 2003 vintage.  The plaintiff’s difficulty in clearly identifying the time and place of the agreement about price strengthens the conclusion that I have reached. I have previously referred to three passages in the plaintiff’s own evidence which suggests some uncertainty on his part about a binding agreement (see pars 48-50)

7. Finally, there is a matter to which I attach less weight, namely, the comment made by the plaintiff to Mr Kalantzis and Mr Rogers that they might be able to purchase from him grapes which were surplus to the defendant’s requirements.  That position, in my view, is inconsistent with a clear agreement that the plaintiff was obliged to deliver, and the defendant was obliged to purchase, all his grapes for every vintage.

8. I am not satisfied that Mr Randall said he would purchase the plaintiff’s grapes on an ongoing basis.  I am not satisfied, on the balance of probabilities, that there was an ongoing agreement between the plaintiff and the defendant for the sale and purchase of the plaintiff’s grapes.

   The claims under the Trade Practices Act

9. Alternative to the claim in contract, the plaintiff seeks damages flowing from alleged misrepresentations as to future matters pursuant s 51A of the Act (see the Amended Statement of Claim pars 28.1 and 28.2) and also from alleged misleading and deceptive conduct pursuant to s 52 of the Act (see par 31). Assertions giving rise to these claims are that, on numerous occasions between 1997 and 2003, the defendant represented that it would purchase all of the grapes grown by the plaintiff (par 28.1) and, more narrowly, that, at a meeting in 1999, Mr Randall represented that he would purchase all of the grapes grown by the plaintiff from the 2000 vintage onwards (par 28.2)

10. Neither s 51A nor s 52 provides any basis for relief. Each of those statutory provision proscribes conduct. Those sections state as follows:

    51A Interpretation

    (1)For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.

    (2)For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had a reasonable grounds for making the representation.

    (3)Subsection (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.

    52Misleading or deceptive conduct

    (1)A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

    (2)Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).

    It is s 82(1), which provides the basis for an action in damages it states:

    82 Actions for damages

    (1) A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV, IVA, IVB or V or section 51AC may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.

    The defendant submitted that the plaintiff cannot assert that a representation was a term of an oral contract and then assert, in the alternative, that the representation was a misrepresentation. I am unable to perceive why a representation may not be characterised, alternatively, as one or the other; in my view it can be. Furthermore, a representation may be misleading, as contemplated by s 51A, or may amount to misleading or deceptive conduct under s 52.

11. Dealing first with s 51A, subsection (2) of that section deems a representation to be made without reasonable grounds unless the corporate representor adduces evidence to the contrary. Here the defendant did adduce evidence to the contrary. There is authority for the proposition that, in that event, the deeming provision has no application (ACCC v Universal Sports Change Ltd)[13].  However the view has also been accepted that the section imposes a continuing persuasive burden on the representor that there were reasonable grounds for making the representation (ACCC v Kaye)[14]. I do not consider it necessary to resolve that apparent conflict. The onus only arises once the plaintiff proves that there was a representation. It is only upon such proof that the question of the onus arises. In the context of the claim in contract, I have made findings of fact that bear on the claim under the Act. I am not satisfied that Mr Randall said that he would purchase the plaintiff’s grapes on an ongoing basis. More specifically, I am not satisfied that Mr Randall made the representations alleged in paragraphs 28.1 and 28.2 of the Amended Statement of Claim. I therefore find that there is no liability of the defendant pursuant to s 51A and s 82 of the Act.

    [13] (2002) FCA 1276

    [14] (2004) FCA 1363 at 131-135

12. The scope of s 52 may be greater. It refers to conduct and thus may embrace words and actions. However, paragraph 31 of the Amended Statement of Claim alleges misleading and deceptive conduct consisting only of the representations alleged in paragraphs 28.1 and 28.2. It is not alleged that there was conduct other than those representations. To constitute conduct which amounts to a breach of s 52, there must be a misrepresentation (Taco Company of Australia Inc and Ano v Taco Bell Pty Ltd and Ors)[15].  The court must decide objectively whether the conduct is misleading or deceptive or is likely to mislead or deceive (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd)[16].  It is not necessary that the defendant intended to mislead or deceive. A corporation which acts honestly and reasonably may nevertheless be caught by this section (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd)[17].  Because I am not satisfied that Mr Randall made the representations alleged in paragraphs 28.1 and 28.2, I find that there was no conduct on the part of the defendant that was misleading or deceptive, or that was likely to mislead or deceive. 

    [15] (1982) 42 ALR 177

    [16] (1982) 149 CLR 191 at 198

    [17] ibid 197

13. I am not satisfied that the plaintiff has established his claim under the Act.

    Conclusions

14. I am not satisfied on the balance of probabilities that there was an oral agreement for the ongoing supply by the plaintiffs of grapes to the defendant.  I dismiss the claim in contract.

15. I am not satisfied on the balance of probabilities that the defendant made representations that contravened s 51A of the Act or that it engaged in misleading or deceptive conduct (or conduct that was likely to mislead or deceive) that contravened s 52 of the Act. I dismiss the claims under the Trade Practices Act.