Francis Gregory Hannigan v Inghams Enterprises Pty Limited

Case [2019] NSWSC 321

Supreme Court


New South Wales

Medium Neutral Citation: Francis Gregory Hannigan v Inghams Enterprises Pty Limited [2019] NSWSC 321
Hearing dates: 6, 7, 8 and 9 August, 21 September and 8 November 2018
Date of orders: 29 March 2019
Decision date: 29 March 2019
Jurisdiction:Equity
Before: Robb J
Decision:

(1)        The Court declares that the parties are bound by an agreement the terms of which are recorded in the document styled “Queensland Broiler Chicken Growing Agreement” between Inghams Enterprises Pty Limited and F G & L M Hannigan – Avoca Vale, a copy of which is at pages 12 to 43 to the affidavit of the plaintiff sworn 2 February 2018 (being pages 3 to 34 of Annexure FGH-7).
(2)       As per [390], the Court will hear the parties on the issue of whether a declaration in the terms of prayer 4 of the plaintiff’s summons should be made.

(3)      Subject to [391], order that the defendant pay the plaintiff’s costs of the proceedings.
Catchwords:

CONTRACTS — Formation — Acceptance of offer — Acceptance by conduct — Principles applicable – Where the parties initially intended that contractual document would be signed by both parties if acceptable – Where the parties did not sign the contractual document – Where the parties acted over a significant period as if they were bound by the detailed provisions of the contractual document – Whether contract entered into by conduct of both parties in the absence of formal offer and acceptance

 

CONTRACTS — Termination — Whether the defendant was entitled to terminate the contract under the terms of the contract or for breach of the contract by the plaintiff – Breach by terminating party — Whether termination effective in circumstances where the party asserting a right to terminate is also in default, and where that default contributed to the breach by the other party — Principles relating to novus actus interveniens

 

CONTRACTS — Terms — Classification of terms — Fundamental breaches of contract — Breaches of fundamental or essential terms

 

CONTRACTS — Construction — Interpretation — Meaning of “negligence” in a particular contractual context

  EVIDENCE — Burden of proof — Civil proceedings — Whether the burden of proof lay on the plaintiff who sought a declaration that a contract remained on foot to establish that there were no grounds available to the defendant to validly terminate the contract — Whether the burden of proof lay on the plaintiff who sought a declaration that there were no breaches of the contract that would justify its termination to establish that there were no such breaches — Significance of the defendant alleging that it had validly terminated the contract on identified grounds
Cases Cited: A v N [2012] NSWSC 354
Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499
Apple and Pear Australia Ltd v Pink Lady America LLC [2016] VSCA 280; (2016) 343 ALR 112
Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (No 9) [2016] NSWSC 1005
Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647; [1908] HCA 88
Beneficial Finance Corporation Ltd v Multiplex Constructions Pty Ltd (1995) 36 NSWLR 510
Blanch v British American Tobacco Australia Services Ltd (2005) 62 NSWLR 653
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833
Broadlex Services v RCR Resolve FM (No 2) [2015] NSWSC 1514
Chappel v Hart (1998) 195 CLR 232; [1998] HCA 55
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 346; [1982] HCA 24
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523
Fulham Partners LLC v National Australia Bank Ltd [2013] NSWCA 296; (2013) 17 BPR 32,709
Gooley v Motasea Pty Ltd [2015] NSWCA 31
Hevilift Ltd v Towers [2018] QCA 089
Hume v Munro (No 2) (1943) 67 CLR 461
In the matter of Asia Pacific Data Centre Limited [2018] NSWSC 1375
Kriketos v Livschitz [2009] NSWCA 96; (2009) 14 BPR 26,717
Kyrwood v Drinkwater [2000] NSWCA 126
March v Stramare (E & MH) Pty Ltd (1991)171 CLR 506; [1991] HCA 12
Massoud v NRMA Insurance Ltd (1995) 62 NSWLR 657
New Zealand Shipping Co Ltd v Societe des Ateliers et Chantiers [1919] AC 1
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; [1985] HCA 14
Re Idoport Pty Ltd (in liq) (recs apptd) [2012] NSWSC 524
Roadshow Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd (recs and mgr apptd) (1997) 42 NSWLR 462
Sanpine v Koompahtoo Local Aboriginal Land Council [2005] NSWSC 365
Sharjade Pty Ltd v Commonwealth of Australia [2009] NSWCA 373; (2009) 15 BPR 28,443
Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359
Stapley v Towing Masters Pty Ltd (trading as Dynamic Towing) [2009] NSWCA 382
State of New South Wales v Fahy (2007) 232 CLR 486; [2007] HCA 20
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35
Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632
White v Johnston (2015) 87 NSWLR 778; [2015] NSWCA 18
Ying Mui Pty Ltd v Hoh (No 3) [2017] VSC 29; (2017) 349 ALR 296; (2017) 119 ACSR 577
Texts Cited: Cheshire and Fifoot Law of Contract (11th, Australian edition)
Category:Principal judgment
Parties: Francis Gregory Hannigan (plaintiff)
Inghams Enterprises Pty Limited (defendant)
Representation:

Counsel: M Henry SC (plaintiff)
D Neggo (defendant)

  Solicitors: Hannigans Lawyers (plaintiff)
Charnock O’Brien (defendant)
File Number(s): 2017/264087

Judgment

Introduction

  1. The plaintiff in this matter is Mr Francis Gregory Hannigan, who is a farmer as well as a solicitor and company director.

  2. Mr Hannigan is the owner of six chicken sheds at 900 Benns Road, Woodview, near Casino in this State. The property on which the sheds are erected is known as “Avoca Vale Farm” (the Farm).

  3. The sheds were built by Mr Hannigan and his late wife, for the purpose of entering into contracts with commercial chicken suppliers for growing chickens on behalf of the suppliers.

  4. Initially, Mr Hannigan and his wife entered into a contract to grow chickens with a firm that traded under the name “Sunnybrand Chickens” (Sunnybrand). In about 2011, Sunnybrand was taken over by the defendant, Inghams Enterprises Pty Ltd (Inghams), which is a major supplier of broiler chickens to the market in this country.

  5. Mr Hannigan contracted with a company called Rawhide Pty Ltd (Rawhide) to manage the chicken enterprise. The shareholders and directors of Rawhide have at all times been Mr Hannigan’s son, Brett Anthony Hannigan, and Brett’s wife Angela. In practical terms, Brett Hannigan has acted as the manager of the chicken farm.

  6. Until about November 2015, Inghams effectively adopted the contract that Mr Hannigan had with Sunnybrand, and Inghams supplied chickens to Mr Hannigan, together with the necessities for growing the chickens, and Mr Hannigan, through the management of Brett Hannigan, continued to grow the chickens and to deliver them when mature to Inghams, in accordance with the terms of the Sunnybrand contract, including as to the price that Mr Hannigan was entitled to receive.

  7. On 5 January 2016, Inghams issued to Mr Hannigan a new draft contract that, as I understand it, was in the standard form that Inghams adopted for use with chicken growers in Queensland. The first of the two primary issues in this case is whether, as Mr Hannigan alleges, he and Inghams entered into a binding contract in the terms of the draft that was supplied by Inghams. Inghams denies that it entered into any contract on the terms of the draft contract, and claims instead that it merely had a “chicken growing relationship” with Mr Hannigan, which, whatever its other terms and effect may have been, could be terminated by Inghams at will or on short notice.

  8. On 8 August 2017, Inghams purported to terminate its agreement or relationship with Mr Hannigan. The second primary issue in this case is whether, assuming that there was a binding contract between Mr Hannigan and Inghams that could not be terminated at will by Inghams, the termination that Inghams purported to effect on 8 August 2017 was effective.

  9. Throughout the relevant period, Inghams delivered substantial numbers of chickens to Mr Hannigan at Avoca Vale Farm in a number of batches, and also delivered the feed necessary to grow the chickens. Inghams provided various technical services necessary for the growth of the chickens. In due course, Mr Hannigan allowed carriers contracted by Inghams to collect the batches of mature chickens. Inghams paid Mr Hannigan substantial sums for the batches of chickens that were grown by Mr Hannigan. In-so-far as it was disclosed by the evidence, all of these steps were taken in accordance with the applicable provisions in the draft agreement that Inghams supplied to Mr Hannigan. The parties agreed that all of these steps could not be explained by, and were not consistent with, the terms of the earlier Sunnybrand contract.

Amended summons

  1. After Inghams purported to terminate its arrangements with Mr Hannigan, Mr Hannigan commenced these proceedings by summons filed on 30 August 2017.

  2. Although this case is one that conventionally would require pleadings, for reasons that are not apparent pleadings have not been served.

  3. Mr Hannigan filed an amended summons on 9 February 2018, by which he sought the following relief:

A declaration that the parties are bound by an agreement the terms of which are recorded in the document styled “Queensland Broiler Chicken Growing Agreement” between Inghams Enterprises Pty Limited and F G & L M Hannigan – Avoca Vale, a copy of which is at pages 25 to 58 of Exhibit AW-2 to the affidavit of Andrew Walsh sworn 5 December 2017.

A declaration that the agreement referred to at paragraph 1 above was not terminated by the letter dated 8 August 2017 from Quinton Hildebrand to Brett Hannigan and Frank Hannigan.

Alternatively, a declaration that the parties are bound by an agreement the terms of which are recorded in the document styled “Queensland Broiler Chicken Growing Agreement” between Inghams Enterprises Pty Limited and F G & L M Hannigan – Avoca Vale, a copy of which is at pages 12 to 43 to the affidavit of Francis Gregory Hannigan sworn 2 February 2018 (being pages 3 to 34 of Annexure FGH-7).

A declaration that the agreement referred to at paragraph 3 above was not terminated by the letter dated 8 August 2017 from Quinton Hildebrand to Brett Hannigan and Frank Hannigan.

An order that the defendant pay the plaintiff’s costs of the proceedings.

…

  1. The version of the agreement identified in prayer 1 is a copy of the original document that Mr Hannigan received from Inghams, altered in handwriting by Mr Hannigan by changing clause 28, and attaching letters from Inghams to Mr Hannigan dated 5 and 18 January 2016. The version identified in prayer 3 is the original draft agreement without any changes. At the hearing, Mr Hannigan abandoned his claim in prayer 1 of the amended summons and, accordingly, the claim in prayer 2 also ceased to be relevant.

  2. The difference between the terms of the two documents the subject of prayers 1 and 3 of the amended summons was minor, and will be explained in more detail below.

Statements of facts and contentions

  1. At a pre-trial directions hearing on 10 May 2018, in order to facilitate the identification of the real issues in dispute between the parties, I made the following orders in relation to the parties filing and serving statements of facts and contentions in relation to the amended summons:

By 1 June 2018 the plaintiff is to file and serve a Statement of Facts and Contentions stating the facts and contentions upon which he relies in support of his claims for relief in the Amended Summons.

By 22 June 2018 the defendant is to file and serve a Statement of Facts and Contentions stating the facts and contentions upon which it relies opposing the relief sought in the Amended Summons, including:

identifying the agreement, including its terms, that the defendant claims to have terminated by its letter dated 8 August 2017;

stating the ground, or grounds, upon which the defendant claims to have terminated the agreement referred to at (a) above; and

in respect of each ground stated in response to (b) above, stating the facts relied upon by the defendant to terminate the agreement referred to at (a) above.

By 6 July 2018 the plaintiff is to file and serve any Statement of Facts and Contentions in Reply

…

Mr Hannigan’s statement of facts and contentions

  1. Mr Hannigan filed his statement of facts and contentions on 6 June 2018. The document is succinct. Many of the particulars are precisely expressed, but are somewhat obscured by reason of having been given by reference to identified parts of the evidence. Therefore, it will be more intelligible for me to outline the more significant parts of the document. First, it may be noted that Inghams styled its draft agreement as “Queensland Boiler Chicken Growing Agreement”. I will call this document the “Inghams Agreement”, or the “Agreement”.

  2. Mr Hannigan alleged that Inghams provided him with unsigned copies of the Inghams Agreement on 5 January 2016 (par 2) and 7 October 2016 (par 4). Between February 2016 and 16 June 2017, Inghams supplied chickens in Batches 159 to 167 to Mr Hannigan (par 5), for the purpose of him growing them (par 6), which Mr Hannigan did (par 7). Between 4 April 2016 and 1 August 2017, Inghams gave Mr Hannigan recipient created tax invoices in respect of the growing of the chickens (par 8), and paid him approximately $1,780,000 (par 9).

  3. Mr Hannigan then alleged, in par 10:

10.    In the premises stated at paragraphs 1 to 9 above, during 2016, [or] alternatively 2016 and 2017, the plaintiff and the defendant entered into an agreement pursuant to which the plaintiff agreed to grow the defendant’s chickens for reward (“the Agreement”).

  1. In par 11, Mr Hannigan alleged that the terms of the Agreement are as recorded in the Inghams Agreement referred to in prayer 3, which is the first draft delivered by Inghams to Mr Hannigan.

  2. Mr Hannigan then alleged, in par 12, that, by letter dated 8 August 2017, the defendant purported to terminate the Agreement. He then alleged:

13.   As at 8 August 2017 there were no grounds upon which the defendant was entitled to terminate the Agreement.

14.   The purported termination of the Agreement by the defendant on 8 August 2017 was invalid, unlawful and of no effect.

  1. The following preliminary observations may be made at this stage about Mr Hannigan’s claim, as advanced in his statement of facts and contentions.

  2. First, Mr Hannigan did not allege that what he called the Agreement became effective by any process referable to any conventional notion of offer and acceptance, as the standard means for parties to enter into enforceable contracts. He referred to the Inghams Agreements as being unsigned when received, and did not allege that those documents were signed by the parties. He did not allege that any offer constituted by the delivery by Inghams of the Inghams Agreements was formally accepted by Mr Hannigan. Instead, Mr Hannigan alleged the receipt of the initial Inghams Agreement on 5 January 2016; he then alleged the growing of chickens in Batches 159 to 167 in the manner summarised above; and then alleged, in par 10, that “in the premises” the parties entered into the Agreement.

  3. Secondly, consistently with prayer 4 of the amended summons, in which Mr Hannigan sought a declaration that the Agreement was not terminated by Inghams’ 8 August 2017 letter, Mr Hannigan made a bare assertion in pars 13 and 14 that there were no grounds upon which Inghams was entitled to terminate the Agreement, and that the purported termination was invalid, unlawful and of no effect. The prayers for relief and the grounds asserted by Mr Hannigan are all in substance statements of a negative.

  4. Thirdly, it is notable that, by his prayers for relief, Mr Hannigan only seeks declarations that the parties are bound by a particular agreement, and that Inghams’ 8 August 2017 letter did not terminate the agreement. Mr Hannigan has not sought any consequential relief, either in the nature of orders obliging Inghams to implement the agreement, or ordering Inghams to pay damages to Mr Hannigan for breach of the agreement. As Inghams ceased to deliver chickens to Mr Hannigan after it purported to terminate the agreement, it may be imagined that Mr Hannigan may have suffered some damage. The Court does not know what Mr Hannigan’s aspirations are concerning the possible continuity of the performance of the agreement, if it is found by the Court to be valid and to continue in effect. The Court does not know what course Inghams proposes to take in that event. If Mr Hannigan succeeds in these proceedings, the only result will be that he will establish that he has an agreement in terms of the Inghams Agreement, and that the agreement has not been terminated. Mr Hannigan will apparently be satisfied with that outcome, and Inghams has not suggested that Mr Hannigan’s claims are incomplete as he has not sought in these proceedings all of the relief to which he may be entitled. As the parties have been content to proceed on that basis, so will the Court.

Inghams’ statement of facts and contentions

  1. Inghams served a statement of facts and contentions dated 27 June 2018.

  2. An amended statement of facts and contentions was filed by Inghams with the leave of the Court on 7 August 2018, which was the second day of the hearing.

  3. Inghams correctly noted that Mr Hannigan had abandoned prayers 1 and 2 in his amended summons.

  4. Inghams then contended that the claims for relief in prayers 3 and 4 should be dismissed because there was no offer and acceptance, so that the version of the Inghams Agreement referred to in prayer 3 did not become binding on the parties. Alternatively, Inghams argued that there was nothing in the conduct of the parties to support a finding that they were bound by the terms of that document. Consequently, the commercial relationship between the parties was determinable by either party either at will or upon reasonable notice.

  5. In the alternative, Inghams contended that, if the version of the Inghams Agreement referred to in prayer 3 was binding on the parties, Inghams had lawfully terminated that agreement.

  6. Inghams expanded upon its contention that there was no contract in the terms alleged by Mr Hannigan in pars 9 to 34, the essence of which I will now summarise. Inghams contended that each version of the Inghams Agreement that was supplied by one party to the other was supplied with the invitation that it be signed if acceptable. No version of the document was ever signed. No conduct by the parties signified acceptance in the absence of a signature. In more detail, on 5 January 2016, Inghams delivered its current version of the Inghams Agreement to Mr Hannigan, and asked him to review it, and sign and return it “if there are no issues”. Mr Hannigan did not sign and return the document. Instead, on 15 January 2016, he wrote a letter to Inghams asking for the insertion of a clause to the effect that “The Fee paid shall not be less than any other grower”, and requested that Inghams send him a draft clause to that effect. On 18 January 2016, Inghams confirmed in writing that the Fee would be the same as for any other grower, but did not provide a draft clause to that effect. Inghams’ letter said that Inghams looked forward to receiving the executed agreement. On 20 January 2016, Mr Hannigan sent Inghams a version of the original Inghams Agreement in which clause 28 (the entire agreement clause) had been amended in handwriting so as to add an exception being the letters written by Inghams dated 5 and 18 January 2016 concerning the Fee, which were annexed to the document. Mr Hannigan’s covering letter said that he had signed the amended Inghams Agreement, and that he looked forward to receiving a copy of the executed agreement. Inghams did not return an executed copy of the document. On 24 March 2016, Mr Hannigan wrote to Inghams asking to be forwarded the executed document he had provided on 20 January 2016. Mr Hannigan asked Inghams for a response on 6 May 2016. Inghams responded on 9 May 2016 to say that there were internal discussions about the matter. On 7 October 2016, Inghams wrote to Mr Hannigan to advise him that the change to clause 28 was not acceptable, and that the two letters referred to were not part of the contract. A further copy of the original Inghams Agreement was provided, with the request: “If you agree with these terms please sign and return this contract to us without alterations.” Mr Hannigan did not sign and return the document. On 5 December 2016, Inghams wrote to Mr Hannigan again, referring to its 7 October 2016 letter, and stating: “We have not received the signed contract indicating your acceptance of the contract sent over eight weeks ago. The offer is now withdrawn with immediate effect. We will continue to operate under the existing contractual terms.” Mr Hannigan did not reply to this letter. Finally, Inghams contended that the commercial dealings between the parties, and the history of payments by Inghams to Mr Hannigan, fell short of establishing the existence of a contract in the terms of the document referred to in prayer 3 of the amended summons.

  1. Inghams contended, in par 39, that the conduct of the parties that Mr Hannigan has relied upon to establish an agreement in terms of the Inghams Agreement only gave rise to what Inghams described as a “[chicken] growing relationship”.

  2. Inghams did not state in any specific way what the nature or effect of this chicken growing relationship was. There was discussion between the Court and counsel for Inghams at the beginning of his final oral submissions as to what the real nature of the chicken growing relationship was. It will be convenient to defer a consideration of the effect of that discussion.

  3. Inghams then set out in detail, in pars 42 to 69, its contentions as to why, if there was a binding contract between Inghams and Mr Hannigan on the terms alleged by the latter, it had been validly terminated for breach.

  4. It will be more meaningful to defer an analysis of the detailed contentions made by Inghams until the Court comes to consider the dispute concerning whether, if the contract asserted by Mr Hannigan was created, it was validly terminated for breach. It is sufficient to note, for the present, that Inghams’ contentions were comprehensive and detailed, and based upon identified clauses of the Inghams Agreement.

The Inghams Agreement

  1. As I have mentioned above, Mr Hannigan had a contract with Sunnybrand before he began to deal with Inghams. The terms of the Sunnybrand contract were not in evidence, but it was agreed between the parties that those terms were materially different to those contained in the Inghams Agreement. The evidence did not make clear precisely when the parties started to act in accordance with the terms of the Inghams Agreement, but it was agreed that they did so, in that they acted consistently with those terms. I infer that the parties started to act consistently with the terms of the Inghams Agreement from about the time that Mr Hannigan received the chickens in Batch 159, which was on 16 February 2016. The evidence did not focus on what this involved, but I will proceed upon the basis that, in the period after Inghams initially provided a copy of the Inghams Agreement to Mr Hannigan, what I will call the mechanics of the parties’ dealings were in accordance with that agreement.

  2. It will be appropriate to set out the relevant terms of the Inghams Agreement.

  3. The initial draft Inghams Agreement that was given to Mr Hannigan contained the typewritten date, 22 December 2015.

  4. By clause 1.1, the term of the agreement was to commence on 6 February 2016 and expire on 6 February 2021, a period of 5 years. 6 February 2016 was apparently the date on which the first batch of chickens to be grown under the new agreement was expected to be delivered to Mr Hannigan, although it was in fact delivered 10 days later.

  5. Clause 1.3 provided for the parties to negotiate the terms of a further 5 year agreement, starting no less than 18 months before the end of the Initial Term. However, apart from having to act in good faith, the parties were free to decide not to enter into a further agreement.

  6. Inghams’ general obligations were provided for in clause 3 in the following terms:

3.1   Subject to this Agreement, the availability of Chickens and the Grower’s capacity to raise those Chickens (in accordance with the terms and conditions of the Agreement), Inghams will supply Batches to the Grower and the Grower will accept and grow those Birds for Inghams in the Sheds.

3.2   Inghams will so far as is reasonably practicable supply the Grower with Batches at placement densities commensurate with the Commercial Growers or such other placement densities which may be agreed by Inghams with the Grower Representative from time to time but subject to variation…

3.3   Inghams will use its best endeavours to provide reasonable notice (either verbally or in writing) to the Grower as to when Inghams will:

3.3.1   make any deliveries to the Grower; and

3.3.2   collect any Birds or other goods from the Grower.

…

3.5   Where Inghams is obliged to supply a Batch to the Grower, Inghams must (unless otherwise agreed) Supply at no cost and free of delivery charges to the Grower:

3.5.1   the Birds (and may upon delivery assist the Grower with placement of the Birds into the Sheds);

3.5.2   feed for the Birds; and

3.5.3   such technical services, medication, vaccines, disinfectant and/or other supplies for the Birds as it considers necessary.

…

3.9   In circumstances where the Growers farming practices fail to meet or comply with Animal Welfare Standards or other regulations, Inghams shall have a right to refuse further placement of Birds and or invoke density cuts on the Grower.

  1. Clause 4 set out the Grower’s general obligations as follows:

The Grower must:

4.1   accept each Batch delivered by Inghams to the Grower pursuant to this Agreement and raise the Birds in each Batch to the stage of maturity determined by Inghams;

4.2   raise the Birds in accordance with the Manual;

…

4.6   furnish all labour, utilities, water, electricity, litter, bedding and all other supplies (other than those Inghams agrees to supply under this Agreement) required to raise the Birds and comply with its obligations under this Agreement and the Manual;

…

4.13   use exclusively the goods and services described under clauses 3.5.2 and 3.5.3 and no other such goods or services, in raising the Birds;

4.14   maintain all such records as Inghams and the Manual reasonably require (“Records”);

…

4.16   without limiting clause 8, allow Inghams’ representatives full and free access at all reasonable times to the Birds, the Records and any other goods belonging to Inghams on the Premises

…   

  1. The “Manual” was defined in clause 30.2.24 as being a number of identified Inghams’ manuals, as amended from time to time (Inghams Manual, or Manual).

  2. Clause 6 had the effect that all goods supplied by Inghams to the Grower (including live Birds) would remain the property of Inghams, and the Records would also be and remain the property of Inghams.

  3. Under clause 7, Inghams had the right in its absolute and unfettered discretion to determine when the Birds in a Batch would be collected for processing. Inghams was responsible for arranging for the Birds to be caught, loaded for transportation and delivered to Inghams’ chosen destination, free of charge to the Grower.

  4. The Grower’s entitlement to payment was provided for in clause 9 as follows:

9.1   For each Batch raised by the Grower and collected by Inghams from the Grower, Inghams will pay the Grower the Payment calculated on the basis of the Fee but varied as may be required by clauses 9, 10 and 11 and Annexure 1.

…

  1. The clause contained provisions dealing with the consequences of birds being killed or smothered, the weighing of birds, deductions from the amount to be paid in certain circumstances, the time for payment, and the Grower’s right to audit the way that Inghams had calculated the Fee.

  2. Clause 10 was headed “Payment System” and provided:

10.1   From the commencement of this agreement Inghams will make Payments to the Grower calculated in accordance with Annexure 1 and Annexure 2.

  1. Annexure 1 provided, in clause 1, that:

1.   The Fee for all Birds collected on or after the date of this agreement will be:

(a)   for Birds grown in tunnel ventilation sheds – 85.12 cents per Bird (“Tunnel Shed Birds”); or

Plus

(b)   4.0 cents per Bird for RSPCA variable costs.   

  1. The balance of Annexure 1 contained terms governing the method of reviewing the Fee over the term of the agreement.

  2. Annexure 2 contained provisions that governed the relatively complex formula for determining amounts payable to Growers relative to the commercial circumstances of the performance of all Growers within a pool of Growers, and included:

…

The Pool Payment System will be a three week rolling pool – The Pool Growers included in the Pool for the purposes of the Payment calculation for a Batch will be those Pool Growers with Batches settled in the preceding week, the same week and the following week as the relevant Batch of the Grower is settled.

The payment to be made to each Grower shall be equal to:

Fee + ((Grower ALW - Pool ALW) × 100 × Liveweight Point Valuation) + ((Pool CFCR – Grower CFCR) × 100 × CFCR Point Valuation)

…

  1. The terms in this formula are defined in the Annexure. One aspect of the formula is relevant to Inghams’ claim that Mr Hannigan breached a fundamental or essential term of the Inghams Agreement (assuming that the agreement is proved to have been made). The relevant breach was the failure by Mr Hannigan to comply with a requirement that he provide Inghams, at regular intervals, with average weights of the chickens during the period of their growth. Inghams’ case is that receipt of this data was essential to enable Inghams to develop an effective schedule for the collection and processing of chickens so that they would have optimal weights. Inghams submits that the term is essential because, if it is not complied with meticulously, Inghams will be put at risk of processing chickens that are under the desired weights.

  2. A factor that may have relevance to the determination of Inghams’ claim is whether the formula for reimbursement of the Growers makes provision for a reduction in the amount payable by Inghams if chickens grown by particular Growers are underweight.

  3. In the formula set out above, Grower ALW is defined as “(a) the total live weight of all Chickens collected by Inghams from the Grower divided by (b) the total number of Chickens collected from the Grower”. Pool ALW is defined in the same way, except that it relates to all of the chickens grown by all of the Growers in the Pool. The effect of this part of the formula (Grower ALW - Pool ALW) is that, if the average weight of chickens grown by a particular Grower is less than the Pool average, then that part of the formula will yield a negative number, which will lead to a reduction in the Fee payable to the particular Grower. That is, if a Grower permits Inghams to collect chickens that are below average weight because the Grower has failed to provide Inghams with the required average weight data, the amount payable by Inghams to the Grower will be reduced by application of the formula. I will consider below how this result may have a bearing on Inghams’ claim that the relevant term is a fundamental or essential term.

  4. Clause 20 provided for the termination of the agreement, and relevantly provided:

20.1   This Agreement may be terminated:

…

20.1.5   by either party notifying the other party in writing if that other party commits a fundamental breach of this Agreement, provided however that if the breach is one that is capable of remedy, the non-defaulting party must notify the defaulting party in writing of the breach and allow the defaulting party a reasonable time (being not less than seven (7) days) after receipt of that notice to remedy that breach, and may only terminate this Agreement if the defaulting party fails to do so;

20.1.6   immediately by Inghams notifying the Grower in writing if the Grower is negligent in the performance of its duties and obligations under this Agreement;

…

20.1.9   immediately by Inghams providing notice in writing to the Grower if the Grower:

…

(g)   commits any material breach of, or is in material non-compliance with, Animal Welfare Standards…

…

  1. “Animal Welfare Standards” was defined in clause 30.2.2 as meaning:

the relevant Model Code of Practice for the Welfare of Animals, FSANZ standards, RSPCA standards and any other animal welfare standards, codes, guidelines, laws or requirements relevant to Chickens, the activities contemplated by this Agreement and/or nominated by Inghams and which apply to all Growers…

Legal principles

  1. It will be convenient to consider at the outset the principles that are applicable to the determination of a number of issues in dispute between the parties.

  2. Those issues are:

  1. Given the terms of the relief sought by Mr Hannigan, where does the burden of proof lay in respect of the issues raised by the statements of facts and contentions?

  2. What principles govern the creation of a contract in the absence of formal offer and acceptance?

  3. In what circumstances is a party who asserts a right to terminate a contract for breach by the other party prevented from doing so where the event that constitutes the breach is caused by the default of the first party?

Burden of proof

  1. This issue has arisen as a result of the restricted nature of the relief claimed by Mr Hannigan, being only the two declarations in prayers 3 and 4. Prayer 3 is, in substance, a claim for a declaration that the parties are bound by an agreement in the terms of the Inghams Agreement. Prayer 4 claims a declaration that the agreement constituted by the Inghams Agreement was not terminated by a particular letter written by Inghams.

  2. Mr Hannigan submits that Inghams bears the burden of establishing that it had a valid basis for terminating the agreement, if Mr Hannigan succeeds in establishing that the agreement became binding. As I understand it, Inghams submits that, because Mr Hannigan seeks a declaration that the agreement remains in effect and that there were no valid grounds to terminate it, Mr Hannigan has the burden of proving all matters necessary to establish the legal rights that he seeks to have declared, and that the burden extends to negativing the validity of all grounds that may have been available to Inghams to terminate the agreement.

  3. As his Honour has so often done, McLelland CJ in Eq has captured the essence of the legal principles that govern this question in Massoud v NRMA Insurance Ltd (1995) 62 NSWLR 657 (Massoud). His Honour said, at 660:

…

These decisions illustrate what I consider to be the principles by which the incidence of the onus of proof is to be determined, namely:

(1) a party who seeks relief has the burden of satisfying the Court of facts which (in the absence of proof of other facts) would justify the grant of that relief;

(2) what those facts are depends principally upon:

(a) the nature of the relief sought; and

(b) the operation of any relevant presumptions;

(3) in the case of relief by way of declaratory order, the precise terms of the declaration assume particular significance in that (subject to any relevant presumption) the party seeking the declaration has the burden of proof of any matter which is a necessary element of the declaration sought (even if in proceedings by that party for relief of another kind, or in proceedings by the other party, that matter would not arise unless raised (and the burden of proof consequently assumed) by the other party).

  1. His Honour preceded this distillation of principle with a survey of the cases, which Campbell J (as his Honour then was) in Sanpine v Koompahtoo Local Aboriginal Land Council [2005] NSWSC 365 (Koompahtoo) described, at [177], as ostensive definition, where the giving of examples of the practical operation of the law provides an understanding of what its principles are. One of those cases, of particular relevance to the present, was Hume v Munro (No 2) (1943) 67 CLR 461, about which his Honour said, at 658:

In Hume v Munro (No 2) (1943) 67 CLR 461, the plaintiffs sought a declaration to the effect that one of them was not under any liability to the defendant in respect of any agreement for a lease of certain lands. Latham CJ said (at 474):

“… In an action for a declaration that a right alleged to be claimed by the defendant does not exist the onus rests upon the plaintiff of establishing first that a claim sufficiently definite and intelligible in its terms to be a proper subject of adjudication has been made against him by the defendant. … Next, the plaintiff seeking a declaration denying any possible foundation for the alleged claim of right must exhaust the possibilities and show that the claim cannot possibly be supported. It is not for the defendant in such a proceeding to make a claim and to justify that claim.”

  1. Prayer 4 claimed by Mr Hannigan is, in substance, a negative assertion that the agreement between Mr Hannigan and Inghams was not terminated by the letter referred to. Considered in isolation, prayer 4 could not be granted unless Mr Hannigan satisfied the burden of proving that there was no ground that could support the termination of the agreement by Inghams. The grounds would not be limited to those relied upon by Inghams in the letter as, if other grounds existed, Inghams would be entitled to rely upon them to support the termination: see Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 373 and 378.

  2. In Massoud, the plaintiff sought a declaration that was, in substance, of the same nature as prayer 3 in this case. However, for reasons that are not presently material, the plaintiff was not entitled to that declaration. The plaintiff failed to persuade his Honour to make the declaration that was structurally equivalent to prayer 4, because the plaintiff did not satisfy the burden of affirmatively proving that the avoidance of the insurance policy in that case by the defendant “…was wrongful and without proper foundation…” (at 661).

  3. McLelland CJ in Eq nonetheless made the following observations concerning the plaintiff’s claim (equivalent to order 3 in the present case) for a declaration that the insurance policy remained in full force and effect, at 661:

…

Although the terms of order 3 include an implicit assertion that nothing has happened since the issue by the defendant of the plaintiff’s policy to terminate its operation, and the plaintiff has the burden of satisfying the Court of the truth of that assertion, that would in the circumstances involve no more than proof that the policy was issued in respect of a period which has not expired by effluxion of time, since there is a presumption that a contract once made continues in existence. (Such a presumption may of course be rebutted by proof of termination of the contract, for example, by a valid cancellation thereof, but the burden of proof of such a termination would rest on the party alleging it.) A presumption of continuance of this kind is ordinarily relied on in any proceedings to enforce a contract, since the making of the contract invariably precedes its enforcement, and generally speaking the plaintiff has the burden of proving the making of the contract whereas the defendant has the burden of proving any matters alleged to have resulted in the termination of the contract subsequent to its formation. It is immaterial in such a case whether declaratory relief is claimed or not: for example, an order for specific performance of a contract is traditionally preceded by an order declaring the present existence and/or enforceability of the contract.

…

  1. Massoud was followed by Young CJ in Eq (as his Honour then was) in Blanch v British American Tobacco Australia Services Ltd (2005) 62 NSWLR 653 at [7]; and the extract from Massoud in the paragraph immediately above was explained by Campbell J in Koompahtoo in the following terms:

…

[181] In the present case, the only relief which the plaintiffs seeks [sic] is a declaration that the Joint Venture Agreement remains on foot, injunctions to restrain an alleged breach of contract, and damages for breach of contract. To obtain each of those types of relief, so far as the element of the cause of action involving proof that the contract exists is concerned, all that the plaintiff need do is to prove that the contract was entered, that its terms are such that it has not come to an end through effluxion of time, and otherwise to rely upon the presumption of continuance. In relation to each of those causes of action, if the defendant wanted to prove that the contract had come to an end through being validly terminated, it would be for the defendant to allege and prove that matter. Thus, the allegation in paragraph 20 of the Statement of Claim (para [167] above) is an unnecessary allegation for the plaintiff to make. If the plaintiff had never made that allegation, it would be quite clear that the onus of proving a justification for termination of the contract was on the defendant.

[182] I do not see how the plaintiff having made the unnecessary allegation makes any real difference. Of course, having made it, if at the end of the case the plaintiff is still urging the Court to make a declaration, or a positive finding, that there was no justification for the termination of the contract, the plaintiff would bear the onus of establishing it. But if it fails to discharge that onus, or if, as happened here, the plaintiff was asserting from the time of its opening submission at the hearing that it was the defendant who had the onus of proving there was a justification for termination of the contract, so far as obtaining a declaration that the contract is on foot, an injunction to restrain a breach of it, or damages for its breach, the plaintiff is back in the same situation it would have been in if it had never made the allegation in the first place.

…

[185] In the present case, where the remedy of declaration which the plaintiff seeks is in the particular form it is, the defendants bear the onus of establishing that the termination of the contract was justified, even though the plaintiff has made the unnecessary allegation in paragraph 20 of the Statement of Claim (para [167] above).

…

  1. One or all of Massoud, Blanch and Koompahtoo have been approved in many cases, including Stapley v Towing Masters Pty Ltd (trading as Dynamic Towing) [2009] NSWCA 382 at [4], [107] and [120]; Fulham Partners LLC v National Australia Bank Ltd [2013] NSWCA 296; (2013) 17 BPR 32,709 at [51], [110] and [111]; White v Johnston (2015) 87 NSWLR 778; [2015] NSWCA 18 at [1]-[3], [18] and [108]; Gooley v Motasea Pty Ltd [2015] NSWCA 31 at [1], [5] and [57]; and In the matter of Asia Pacific Data Centre Limited [2018] NSWSC 1375 at [48]. In A v N [2012] NSWSC 354, Ward J (as her Honour then was) at [388], and, in Re Idoport Pty Ltd (in liq) (recs apptd) [2012] NSWSC 524, Ball J, at [68], applied the principle stated in Massoud that, where a plaintiff seeks an order that a contract remains on foot (the burden being on the defendant to prove a right to terminate) the making of a superfluous allegation by the plaintiff that the defendant had no right to terminate does not affect how the burden of proof lies.

  2. The present case is relevantly similar to Koompahtoo, given that, by prayer 3, Mr Hannigan claims a declaration that an agreement remains in effect; and then, in support of the claim for a declaration that the agreement has not validly been terminated by Inghams, Mr Hannigan made the allegations in pars 13 and 14 of Mr Hannigan’s statement of facts and contentions that I have set out above, to the effect that there were no grounds that entitled Inghams to terminate the agreement, and the purported termination was invalid.

  3. The Inghams Agreement was expressed in clause 1.1 to expire on 6 February 2021, so Mr Hannigan has the benefit of the presumption of continuation in this case (assuming that he proves in the first place that the parties did enter into that agreement).

  4. The authorities considered above establish that the burden of proof will fall upon Inghams to establish that the agreement has validly been terminated for breach by Mr Hannigan, if Inghams is to successfully resist Mr Hannigan’s claim in prayer 3 that the parties are bound by the agreement.

  5. A question may arise as to what is the legal significance of the fact that, in this case, Inghams has positively alleged the grounds upon which it claims it was entitled to terminate the Inghams Agreement, if that agreement was made. In the extract from the judgment of Latham CJ in Hume v Munro (No 2) set out by McLelland CJ in Eq in Massoud, the Chief Justice referred to the need for the plaintiff to “…exhaust the possibilities and show that the claim cannot possibly be supported.” His Honour then said: “It is not for the defendant in such a proceeding to make a claim and to justify that claim.” The question is: what, if anything, is the forensic effect of the defendant in fact specifying the grounds upon which the defendant relies to justify its actions, and then, in an attempt to defeat a claim for a declaration in the form of prayer 3 in this case, failing to satisfy the burden of proof?

  6. Ordinarily, the plaintiff must “exhaust the possibilities” and disprove all of the grounds that may have been available to the defendant to terminate the contract. But if, in response to the Court’s case management processes, the defendant specifies in detail the grounds upon which it relies to justify termination, the Court may be entitled to infer that there are not any other grounds. Inghams’ action in specifying the grounds may do Mr Hannigan the service of defining the available grounds for Inghams to terminate the agreement for breach, and free him from the need to identify all possible breaches and then negative them.

  7. The parties in the present case did not make submissions on the question of whether Mr Hannigan may be entitled to a declaration in the form sought in prayer 4, if Inghams fails to defeat the claim for the declaration in prayer 3, because it fails to establish that it had a right to terminate the Inghams Agreement. I will revisit this issue below, after I have dealt with Inghams’ claim that it was entitled to terminate any agreement that is proved to have been made between Inghams and Mr Hannigan.

Creation of contract by the parties’ conduct

  1. A key issue between the parties is whether the effect of their conduct was that a contract was created between them on the terms of the Inghams Agreement, notwithstanding that they both contemplated that a copy of the document would be signed if acceptable, and neither ever signed the document.

  2. Mr Hannigan relied upon the decision of Vickery J in Ying Mui Pty Ltd v Hoh (No 3) [2017] VSC 29; (2017) 349 ALR 296; (2017) 119 ACSR 577 at [151]-[157] as a sufficient encapsulation of the effect of prior authority. Inghams also relied upon this case, on the issue of when conduct is sufficient to establish agreement, as well as on the decisions in Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499 at [39]; and Apple and Pear Australia Ltd v Pink Lady America LLC [2016] VSCA 280; (2016) 343 ALR 112 at [221].

  3. It will be convenient to set out the part of the judgment of Vickery J that was extracted in Mr Hannigan’s written submissions, in order to demonstrate the difference in position between the parties. His Honour said (footnotes omitted):

…

[151] It is now well established that a ‘contract need not be made by formal offer and acceptance’. Indeed, it has been said that ‘it is sufficient to ask whether the existence of a contract has been established on the evidence’.

[152] A contract may be inferred from words, acts or conduct. The conduct to which the Court can have regard in assessing whether a contract has been formed includes ‘post-contractual conduct’. Thus, it has been observed that:

[W]here there is a dispute as to the existence of a contract, or the contract is oral or there is a question as to how the contract is to be characterised or there is a question of whether a term was incorporated into a contract, or where there is a question of an implied term, the parties’ subsequent conduct may be relied upon to establish the existence of that contract, and what the terms of the contract were.

[153] In a passage which has been often cited with approval, Allsop J (Drummond and Mansfield JJ agreeing) in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd held that:

I would see it as the inferring of a real intention expressed through, or to be found in, a body of conduct, including, sometimes, communications, even if it be the case that the parties did not consciously advert to, or discuss, some aspect of the relationship and say: “and we hereby agree to be bound in this or that respect. The essential question in such cases is whether the parties’ conduct, including what was said and not said and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract.

[154] Thus, it is accepted that it is open to a court to infer the existence of a contract from the parties’ conduct on the basis of the objectively ascertained manifestation of mutual assent.

[155] However, such cases are rare and it will only be ‘in a very clear case that a promise will be implied from facts which do not involve written or oral communication from which a promise appears’.

[156] As noted recently by Tate JA in Apple and Pear Australia Ltd v Pink Lady America LLC, commenting upon the observations of McHugh JA in Integrated Commercial Services Pty Ltd v Digital Equipment Corp (Australia) Pty Ltd:

… in the “unrefined” commercial context the benchmarks of the classical theory of offer, acceptance, consideration and intention to create legal relations may not readily apply, and instead courts may infer a contract from conduct, [McHugh J] still insisted that it is necessary to draw from those circumstances “a tacit understanding or agreement” and that the parties’ conduct “must be capable of proving all the essential elements of an express contract”. Moreover, it is “not enough that the conduct is consistent with what are alleged to be the terms of a binding agreement. The evidence must positively indicate that both parties considered themselves bound by that agreement”.

[157] Thus, in assessing the evidence relied upon to establish a manifestation of mutual assent, which in turn points to an intention to be legally bound to the essential elements of a contract, the conduct must be capable of satisfying the Court on the balance of probabilities that a contract is to be inferred. The evidence must positively indicate that both parties considered themselves bound by that agreement. Equivocal conduct, or conduct which, when looked at as a whole, falls short of providing the requisite degree of satisfaction, will not result in a contract being proven.

…

  1. At par 10 of his submissions, Mr Hannigan employed the terminology of Allsop J (as his Honour then was) in the extract from Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 at [369], set out by Vickery J, of “…a body of conduct…” that “…reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be bound by the terms of a contract.” Mr Hannigan submitted that the terms of what I have called the Inghams Agreement, and only that document, are the terms by reference to which the “body of conduct” is explicable. In this way, Mr Hannigan submitted that, objectively, there was a body of conduct that is only explicable on the basis that Mr Hannigan and Inghams had reached a position of mutual assent that they would be bound by the Inghams Agreement.

  2. Inghams, on the other hand, focused, at par 61 of its written submissions, on the proposition that it is not enough that conduct is consistent with what are alleged to be the terms of a binding agreement (Inghams’ emphasis), and submitted: “The evidence must positively indicate that both parties considered themselves bound by that agreement”. This is a reference to [221] of the judgment of the Victorian Court of Appeal in Apple and Pear Australia Ltd v Pink Lady America LLC, where Tate JA (with whom Ferguson and McLeish JJA agreed) said: “…Moreover, it is ‘not enough that the conduct is consistent with what are alleged to be the terms of a binding agreement. The evidence must positively indicate that both parties considered themselves bound by that agreement.’” Tate JA adopted the statement of Sundberg J in Adnunat at [39] in making that statement of principle.

  3. In taking this approach, Inghams stressed the proposition that the evidence must positively indicate that both parties considered themselves to be bound, and submitted that the conduct of the parties that was established by the evidence, although substantial, simply did not establish that either party considered themselves to be bound. Inghams appeared to focus on the difference between objective conduct, however consistent it may be with the parties acting in accordance with the terms of a written document, and the subjective consideration of the parties as to whether or not the document binds them as a contract. No amount of proof of the former will be sufficient, according to Inghams, if there is no evidence to establish in addition that the parties actually considered themselves to be bound.

  4. The principles that govern the determination of whether parties have entered into a contract have been set out in a manner binding on this Court by the Court of Appeal in Kriketos v Livschitz [2009] NSWCA 96; (2009) 14 BPR 26,717. McColl JA (with whom relevantly Allsop P and Macfarlan JA agreed) stated the relevant principles extensively at [106]-[120]. I will respectfully limit my extract from those paragraphs to those that are more directly pertinent to the question of when a contract may be formed in cases where formal offer and acceptance cannot be demonstrated. Her Honour said:

[111] The respondent accepts that the clear indications called for by the conventional approach cannot be identified in the three letters. In particular, he concedes that the only letter from Mr Roth, that of 2 May 2002, contains no words of acceptance. He relies, however, on the authorities which support the proposition that some, albeit limited, recognition has been given to finding a contract even though it is not easy to locate an offer and/or acceptance: Brambles (at [71], [74]) per Heydon JA. As Giles JA said in Hendriks v McGeoch [2008] NSWCA 53 ; (2008) Aust Torts Reports 81-942 (at [10]), “[a] contract need not be made by formal offer and acceptance, or by an overt course of negotiation [and] [e]ntry into a contract can be found in the conduct of the parties, in what they said and did towards each other.”

[112] In Empirnall (at 534) McHugh JA observed “communication of acceptance is not always necessary”, giving as an example cases where the offeror will be bound if he dispenses with the need to communicate the acceptance of his offer: see Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 (at 269). There is no suggestion there had been any such dispensation in this case. It was necessary, therefore, on the respondent’s pleaded case, to identify from the letters some communication on the appellant’s part of his acceptance of an offer communicated to him by EML.

…

[115] McHugh JA (Hope and Mahoney JJA agreeing) discussed the approach to the inference of a contract from conduct in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 (at 11,117–11,118) as follows:

… [A] contract may be inferred from the acts and conduct of parties as well as or in the absence of their words … The question in this class of case is whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement … The conduct of the parties, however, must be capable of proving all the essential elements of an express contract … Care must also be taken not to infer anterior promises from conduct which represents no more than an adjustment of their relationship in the light of changing circumstances … Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled. Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties’ subsequent conduct become sufficiently specific to give rise to legal rights and duties. In a dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed. (emphasis added)

See also Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 (at [369]) per Allsop J (Drummond and Mansfield JJ agreeing); Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 (at [5]–[9]) per Macfarlan JA; (at [58]) per Handley AJA.

[116] In Empirnall (at 528, 531), Kirby P described the process by which acceptance of an offer can be inferred notwithstanding absence of specific assent as one of “implied acceptance”.

[117] In Integrated Computer Services (at 11,117) McHugh JA approved the statement in W Howarth, “Contract, Reliance and Business Transactions” (1987) Journal of Business Law 122, 127 that it is an error “to suppose that merely because something has been done then there is therefore some contract in existence which has thereby been executed”. As the passage I have already cited from Integrated Computer Services demonstrates, his Honour went on to explain the circumstances in which a contract could, nevertheless, be inferred from the acts and conduct of the parties and even from silence. However, for conduct to amount to implied acceptance of an offer, it must be “of such a character as necessarily to lead to the inference on the part of the defendants that the agreement had been accepted on the part of the Plaintiffs, and was to be acted upon by them”: Brambles (at [162]) per Ipp AJA (Mason P agreeing), citing Lord Hatherley in Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 (at 686). Other adjectival phrases used in Brogden as descriptive of the degree of satisfaction which must be attained to lead to a conclusion of contractual formation in the absence of specific assent were collected by Macfarlan JA (Beazley JA agreeing and Handley AJA relevantly agreeing (at [93]) in Laidlaw (at [5]–[6]): per Lord Cairns LC, “no explanation can be given of it unless it refers to the contract in question” (at 678) and that the conduct was “referable in my mind only to the contract … ” (at 680) and Lord Selborne (at 689), “it appears to me that every single circumstance points quite unequivocally to this agreement”. (emphasis added) It is necessary that the conduct “point to the existence of a contract in the terms alleged in the proceedings”: Laidlaw (at [9]).

[118] In Empirnall (at 534–535) McHugh JA discussed the circumstances in which the silence of an offeree in conjunction with the other circumstances of the case may indicate that the offer has been accepted…It is useful, in those circumstances, to set out McHugh JA’s remarks which cast light on the relevance of silence in contractual analysis:

Under the common law theory of contract, the silent acceptance of an offer is generally insufficient to create any contract: Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 at 692 and Robophone Facilities Ltd v Blank [1966] 1 WLR 1428 at 1432; [1966] 3 All ER 128 at 131–132. After a reasonable period has elapsed, silence is seen as a rejection and not a acceptance [sic] of the offer. …

Nevertheless, the silence of an offeree in conjunction with the other circumstances of the case may indicate that he has accepted the offer: Rust v Abbey Life Assurance Co Ltd [1979] 2 Lloyd’s Rep 334 at 340. The offeree may be under a duty to communicate his rejection of an offer. If he fails to do so, his silence will generally be regarded as an acceptance of the offer sufficient to form a contract … But more often than not the offeree will be bound because, knowing of the terms of the offer and the offeror’s intention to enter into a contract, he has exercised a choice and taken the benefit of the offer. In Laurel Race Course Inc v Regal Construction Co Inc 333 A 2d 319 (1975) a contractor proposed that it would do additional work upon the basis that, if the work was the result of its defective workmanship under the original contract, there would be no charge. Otherwise the work would be charged on a ‘cost-plus’ basis. The building owner made no reply to this offer. The contractor commenced work on the job to the knowledge of the building owner who was held bound by the terms of the offer. Speaking for the Court of Appeals for Maryland, Judge Levine said (at 329):

… Where the offeree with reasonable opportunity to reject offered services takes the benefit of them under circumstances which would indicate to a reasonable person that they were offered with the expectation of compensation, he assents to the terms proposed and thus accepts the offer.

This formulation states acceptance in terms of a rule of law. However, the question is one of fact. A more accurate statement is that where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that the offer was accepted according to its terms. A useful analogy is to be found in the “ticket cases” where an offeree, who has or ought to have knowledge of the terms of a contract of carriage or bailment, is generally bound unless he raises objection: cf Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163 at 169 and MacRobertson Miller Airline Services v Cmr of State Taxation (WA) (1975) 133 CLR 125 at 136–140.

The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signalling to the offeror that his offer has been accepted. (emphasis added)

[119] In each case “the inference from silence, if any, must depend on the facts of the case and on common sense”: Barrier Wharfs (at 661–662) per Higgins J.

[120] In Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 (at 326) Mahoney JA identified three questions to consider in determining whether parties have made a binding contract: “ … did the parties arrive at a consensus?; (if they did) was it such a consensus as was capable of forming a binding contract?; and (if it was) did the parties intend that the consensus at which they arrived should constitute a binding contract?”

  1. It is necessary to bear in mind, by reference to what McColl JA said at [112], and what Allsop P found at [13], that the Court of Appeal found that the question of whether or not a contract had been formed in that case depended upon the effect of three emails that had been exchanged, and that it was too late for the respondent to claim that the contract had arisen out of the conduct of the parties after the exchange of the emails. The case is therefore different from the present, in which Mr Hannigan relies exclusively on the conduct of the parties after the provision of the draft Inghams Agreement to establish the contract.

  2. The present is not a case where the parties have exchanged communications, and the question is whether those communications should be interpreted as signifying mutual consent of the parties to be bound by the terms of some agreement. This is a case where the question is whether the conduct of the parties, in the context of silence as to whether they accepted that they would be bound by a document containing contractual terms, has given rise to a binding contract on its terms.

  3. In my view, the principles extracted by McColl JA at [118] from the judgment of McHugh JA (as his Honour then was) in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 are particularly relevant. As McHugh JA said (see [118]): “…However, the question is one of fact. A more accurate statement is that where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that the offer was accepted according to its terms…” The following statement by Higgins J from Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647; [1908] HCA 88, extracted by McColl JA at [119], is also significant: “…the inference from silence, if any, must depend on the facts of the case and on common sense.”

  4. In the earlier decision of the Court of Appeal in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61, Heydon JA (as his Honour then was) approved the statement by McHugh JA in Empirnall Holdings Pty Ltd at 535, which was also approved by McColl JA. His Honour also made the following observations, which are of particular relevance in my view to the present case:

…

[78] A similar principle was enunciated in Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 at 682, where Lord Hatherley adopted the language of a concession by Mr Herschell QC as sound:

"he says that he will not contend that this agreement is not to be held to be a binding and firm agreement between the parties, if it should be found that, although there has been no formal recognition of the agreement in terms by the one side, yet the course of dealing and conduct of the party to whom the agreement was propounded has been such as legitimately to lead to the inference that those with whom they were dealing were made aware by that course of dealing, that the contract which they had propounded had been in fact accepted by the persons who so dealt with them."

Thus if a vendor of property, having been informed of its real estate agent's scale of fees, permits the real estate agent to continue endeavouring to sell the property, the vendor will be taken to have agreed to that sale by conduct (Way & Waller Ltd v Ryde [1944] 1 All ER 9 at 10).

…

  1. Heydon JA added:

…

[80] If offer and acceptance analysis is not always necessary or sufficient, principles such as the general principle that a rejection of an offer brings it to an end cannot be universal. A rejected offer could remain operative if it were repeated, or otherwise revived, or if in the circumstances it should for some other reason be treated, despite its rejection, as remaining on foot, available for acceptance, or for adoption as the basis of mutual assent manifested by conduct.

[81] In the light of the above cases, it is relevant to ask: in all the circumstances can an agreement be inferred? Has mutual assent been manifested? What would a reasonable person in the position of the Council and a reasonable person in the position of the defendant think as to whether there was a concluded bargain?

…

  1. Finally, Heydon JA expressed the applicable test in the following way:

…

[85] One way of putting the applicable test is the way that Scrutton LJ put it in Sullivan v Constable (1932) 48 TLR 369 at 370:

"If the [defendant] had so acted that the plaintiff was reasonably entitled to believe that [the defendant] was assenting to the position which had been asserted by the plaintiff, the [defendant] was bound."

A similar test was stated by Chitty on Contracts (28th ed, 1999) Vol 1, para 2-027: "conduct will only amount to acceptance if it is clear that the offeree did the act with the intention (actual or apparent) of accepting the offer" (emphasis added). A reasonable person in the Council's shoes would, in the light of the defendant's decision to charge the higher fees of which the Council speedily learned, have been reasonably entitled to believe that the defendant was assenting to the position asserted in the 19 September 1991 letter despite its initial rejection. That was the apparent intention underlying its conduct.

…

  1. In Broadlex Services v RCR Resolve FM (No 2) [2015] NSWSC 1514, McDougall J stated the test of whether a contract has been created by the conduct of the parties in the following terms:

…

[134] … The ultimate issue is whether a contract has arisen on the proved dealings of the parties. Where those dealings comprise the making of an offer by the tender of a printed form of agreement and conduct said to amount to acceptance of that offer, the test is whether an objective bystander, considering those facts, would conclude that there had been acceptance of the terms stated in the printed document.

…

[136] The test stated by McHugh JA in Empirnall Holdings was applied by Heydon JA in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at [82]. His Honour made the point that “it is the reaction of reasonable parties, not the actual parties, which must be analysed“…

…

  1. The question must be asked: is there some inconsistency between the statement of Tate JA above that the “…evidence must positively indicate that both parties considered themselves to be bound by that agreement…”, and the observations of McHugh JA and Heydon JA that, where the response to an offer is silence, but there is conduct by a party consistent with an understanding that a contract has been made, the existence of the contract depends upon what reasonable people in the shoes of the parties would understand the effect of the conduct to be? In the latter case, the determination of the question depends upon inference and common sense and whether reasonable people would infer from the conduct an apparent intention of the parties to be bound. Positive evidence of intention to be bound is not required.

  2. In my view, these approaches are not inconsistent, and are in reality different expressions of the overarching test, as observed by Vickery J in Ying Mui Pty Ltd v Hoh (No 3) at [151]: “It is now well established that a ‘contract need not be made by formal offer and acceptance’. Indeed, it has been said that ‘it is sufficient to ask whether the existence of a contract has been established on the evidence’.” Where the parties exchange communications, but those communications do not clearly demonstrate the acceptance of an offer, the question will be whether the evidence nonetheless positively indicates that both parties considered themselves to be bound by an agreement. In other cases, the parties’ conduct may go beyond the exchange of communications and they may conduct themselves so consistently with the terms of a document containing contractual terms, that the effect of their conduct, as viewed by reasonable observers, may become paramount in the determination of whether either party remains able to assert against the other that a contact has not been created. As time goes by, ever more consistent adherence to the conduct required by a contractual document may come to overwhelm the effect of initial inconclusive communications, in the objective determination of whether a contract has been created. When it becomes unreasonable, because of a party’s conduct, to claim that there is no agreement, the other party will be entitled to assert the enforceability of that agreement, notwithstanding the absence of positive evidence that they both initially considered themselves to be bound by the agreement.

Effect of breach by terminating party on right to terminate

  1. The principal ground relied upon by Inghams for terminating the agreement is its claim that Mr Hannigan failed to provide feed for thousands of chickens for periods in excess of the periods allowed for in the relevant Animal Welfare Standards.

  2. Mr Hannigan relies upon the terms in the Inghams Agreement whereby Inghams was required to provide all feed at no cost to Mr Hannigan, and Mr Hannigan was obliged to use only that feed. Inghams had a standing arrangement with a carrier to deliver feed to Mr Hannigan following orders made by him. Brett Hannigan made an order with the carrier that the carrier failed to satisfy. The carrier was Inghams’ agent for the purpose of complying with its duty under the agreement to supply feed. If the ordered feed had been supplied in due time, Mr Hannigan would not have run out of feed (assuming Inghams’ claim in that regard is established).

  3. Mr Hannigan argues that, if it is proved that the chickens were without feed for a period that put him in breach of the Animal Welfare Standards, the breach was caused by Inghams through the conduct of its agent. Inghams responds that the default remained the conduct of Mr Hannigan, because the carrier’s failure to deliver occurred at a time when compliance by Mr Hannigan with the Manual would have caused him to inform Inghams of the non-delivery, which, if done, would have led to the delivery of the missing load of feed in time to remove the risk that the chickens would run out of feed.

  4. In these circumstances, the question is whether breach of contract by a party who purports to terminate the contract for breach by the other party (whether the right to terminate arises under the terms of the contract or under the law of contract relevant to the consequences of breach), precludes a valid termination. In this case, Inghams has claimed that any contract between Inghams and Mr Hannigan was validly terminated (1) by Inghams exercising contractual rights of termination; and (2) at general law for breach by Mr Hannigan of terms of contract that were fundamental or essential in their nature, such that any breach by Mr Hannigan entitled Inghams to terminate.

  5. Mr Hannigan’s primary submission (at par 30 of his written submissions) is that a party whose breach of contract causes a breach by the other party is not entitled to terminate the contract for non-performance by that other party. He relies for this proposition on Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (No 9) [2016] NSWSC 1005 at [172]. In that case, Ball J said:

[172] A party in breach of a non-essential term is not prevented by that breach from terminating the contract for a fundamental breach or repudiation by the other party. An exception exists where the breach or the repudiation was caused by the terminating party’s breach. A party whose breach causes a breach by the other party or makes performance by the other party futile is not entitled to terminate the contract for non-performance by that party: Nina’s Bar Bistro Pty Ltd v MBE Corporation (Sydney) Pty Ltd [1984] 3 NSWLR 613 at 632; Roadshow Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd (rec and mgr apptd) (1997) 42 NSWLR 462, 479ff per Gleeson CJ, Handley JA and Brownie AJA.

  1. Mr Hannigan submits that the proposition is an application of the principle that a party to a contract is not entitled, as against the other party, to rely upon an event resulting from the first party’s wrongful act, as established by Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 440 to 442; [1950] HCA 35, and other cases cited.

  2. I accept Mr Hannigan’s submission that there is a principle of construction whereby the Court will strain against construing a contractual right to terminate an agreement in a manner that will permit a party whose default has created the apparent right to terminate to do so in the exercise of that contractual right.

  3. In this regard, I accept the following statement of principle by Young J in Beneficial Finance Corporation Ltd v Multiplex Constructions Pty Ltd (1995) 36 NSWLR 510 at 534, which was relied upon by Mr Hannigan:

…

It has been argued before me that there is a corresponding common law principle which flows from the maxim that no-one can take advantage of his or her own wrong. It is clear that such a principle exists. However, on closer examination, the maxim really comprehends three principles.

…

The second principle is one of construction, that there is a presumption that a party to a contract should not be permitted to take advantage of his or her own wrong against the other party: New Zealand Shipping Co Ltd v Societe des Ateliers et Chantiers de France [1919] AC 1 at 9; Cheall v Association of Professional Executive Clerical and Computer Staff [1983] 2 AC 180 at 189; Alghussein Establishment v Eton College [1988] 1 WLR 587; TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130; Micklefield v SAC Technology Ltd [1990] 1 WLR 1002; Thornton v Abbey National plc [1993] TLR 111 and Little Hayes Nursing Home Ltd v Marshall (1993) 66 P & CR 90. This principle of construction will yield in at least two instances namely: (a) where there are clear express provisions to the contrary (Cheall (at 189)); or (b) where no damage would be caused to the innocent party (Thornton's case). Furthermore, one must be very careful to define what is the “wrong” of which the wrongdoer cannot take advantage and to whom a duty has been breached which causes that conduct to be wrong: Cheall (at 189).

…

  1. The authorities relied upon by his Honour clearly support the principle stated, and also demonstrate the width of the circumstances in which it applies. The expression of the rule of construction that a party to a contract must not be permitted “…to take advantage of his own wrong…” is found in the speech of Lord Atkinson in New Zealand Shipping Co Ltdv Societe des Ateliers et Chantiers [1919] AC 1 at 9, and in the judgment of Latham CJ and Williams and Fullagar JJ in Suttor v Gundowda Pty Ltd at 441.

  2. There was no suggestion by Inghams in the present case that the rule of construction was displaced by any wording in the Inghams Agreement.

  3. It is then necessary to consider whether there exists, in parallel with the rule of construction, a substantive principle of law that a party to a contract cannot terminate the contract in reliance upon the general principles of the law of contract, when the event that would justify termination is caused by the terminating party’s own default.

  4. A number of decisions of the Court of Appeal of New South Wales, in my view, support the summary of the law made by Ball J in Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (No 9), which I have extracted above.

  5. In Roadshow Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd (recs and mgr apptd) (1997) 42 NSWLR 462, the Court (Gleeson CJ, Handley JA and Brownie AJA) said at 479-480:

…

The decision in this appeal does not require a comprehensive analysis of the effect of a breach on a party's right to rescind. This is not a case where the party attempting to rescind was in breach of a condition or had otherwise repudiated: compare Morris v Barron & Co [1918] AC 1 at 9, Nina's Bar Bistro Pty Ltd (formerly Mytcoona Pty Ltd) v MBE Corporation (Sydney) Pty Ltd [1984] 3 NSWLR 613 at 632-633, per Priestley JA and Fercometal Sarl v Mediterranean Shipping Co SA (The Simona) [1989] AC 788. Timely payment by Roadshow was not a condition precedent to be performed before CEL/Vision became bound to perform the obligations repudiated by the sale and was independent of those obligations: compare Foran v Wight (1989) 168 CLR 385.

As a general rule, a party in breach of a non-essential term is not prevented from rescinding for a fundamental breach or repudiation by the other party: see J W Carter, Breach of Contract, 2nd ed (1991) at 347 and Halsbury's Laws of Australia, vol 6, “Contract” (1992) par 110-9520, by the same author. The question is whether there is an exception or qualification to this general rule which prevented Roadshow from rescinding. Such an exception or qualification might exist if there were a causal relationship between the breaches of non-essential terms by the party attempting to rescind, and the fundamental breach relied upon: see Nina's Bar Bistro Pty Ltd (formerly Mytcoona Pty Ltd) v MBE Corporation (Sydney) Pty Ltd (at 614, 620-621, 632); and compare Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 440-442.

…

  1. As appears from the first sentence of this extract from the Court of Appeal’s judgment, the Court did not embark upon a comprehensive analysis of the effect of a breach on a party’s right to rescind. Consequently, it may be that the Court’s observation, in the second paragraph, that there may be an exception to the general rule that a party in breach of a non-essential term is not prevented from rescinding for a fundamental breach, in cases where there is a causal connection between the terminating party’s breach and the fundamental breach by the other party, was not intended to be authoritative.

  2. However, in Kyrwood v Drinkwater [2000] NSWCA 126, Powell JA (with whom Meagher JA agreed) said (footnotes omitted):

…

[154] I agree with Young J that the breach by the Messrs. Drinkwater of the provisions of cl 12 did not disentitle them to determine the Agreement. In Nina's Bar Bistro Pty Ltd v MBE Corporation (Sydney) Pty Ltd. it was held by this Court that, if non-compliance with a contractual obligation is to take away the defaulting party's right to terminate, there must be a direct causal relationship between the non-compliance and the failure to complete, the onus of proving which lies on the non-defaulting party, and there must be an absence of repudiation by the defaulting party prior to that time.

  1. Brett Hannigan ordered a further three 41 tonne loads on 13 July 2017. Two of these loads were for sheds 5 and 6, and even though there was a shortfall in delivery of about 12 tonnes, that shortfall is not relevant to the present case. However, according to his primary affidavit at par 86, Brett Hannigan also ordered a third load of 41 tonnes, to “…cover any shortfalls in feed that looked like happening for any of the sheds.” During the course of the proceedings, this load came to be known as the “swing load”. It was ordered to protect Mr Hannigan from the risk that, for one reason or another, the chickens would eat more feed than had been delivered.

  2. The swing load was ordered to arrive on 21 July 2017, but was not delivered by Chambers at all. Mr Brandt Chambers confirmed in cross-examination that he omitted to send notice of this order to Inghams’ feed mill, so it was not processed for delivery in the ordinary course.

  3. The consequence of the manner in which deliveries of feed were actually carried out was that the available feed was reduced by a number of shortfalls in deliveries, and then the swing load that was intended to be a buffer against the unexpected was not delivered at all.

  4. It was possible for Brett Hannigan to tell what loads of feed had been delivered, and how they had been allocated between the silos, by looking at his copies of the delivery dockets left by the Chambers drivers.

  5. Brett Hannigan did not keep formal records of feed consumption by the chickens. He monitored the feed levels in the silos every day by looking through the viewports that were spaced at two equal heights up the side of the silos. He kept a mental note of the feed levels.

  6. Brett Hannigan gave evidence, which I accept, that 26 tonnes of the missing load was intended for the chickens in sheds 3 and 4.

  7. Brett Hannigan said in evidence, at T 129.19-.24, that, at about 5 PM on Saturday, 29 July 2017, he was checking the sheds and noticed that the "feed" for the chickens in silos 4, 5 and 6 was "low".

  8. At 5:06 PM on the Saturday, Brett Hannigan sent a text message to Mr Chambers that said: "Mate any chance of getting a load or part of a load tomorrow?"

  9. Mr Chambers did not respond until 8:10 AM on Sunday, 30 July 2017, when he said: "I can get a load to you Monday night. Just send a order [sic] through, you can have a split load if that makes it easier Thanks".

  10. Brett Hannigan responded: "No mate that will be to [sic] late will have to go without".

  11. In his affidavit, from par 69 onwards, Mr Chambers gave the following evidence of what happened after he received Brett Hannigan's second text message on Sunday, 30 July 2017:

69. Some minutes after Brett Hannigan's second text message to me on Sunday 30 July 2017, I received a telephone call from him and we had a conversation to the following effect:

Brett:   Can you get me a load of withdrawal feed today?

Me:   No. As I said, I can make sure you receive a load of withdrawal feed tomorrow evening. There are no loads of withdrawal feed scheduled to go out today or tomorrow at the moment. I do not know if they have withdrawal feed at the mill at the moment. If you really need it, I can call the mill to see if they have got a load available that we can deliver to you".

Brett:   Do not worry, mate. It does not matter. They will be going out tonight anyway.

…

71. After that telephone call, I did not receive a further order for withdrawal feed from Brett Hannigan.

72. On Monday 31 July 2017, during the afternoon whilst I was returning to Brisbane from Casino, I received a telephone call from Brett Hannigan and we had a conversation to the following effect:

Brett:   Inghams has told me the birds that went out last night were not acceptable due to low weight. We ran out of feed a couple of days ago. I really need a load. Inghams may not be taking my birds from Shed 4 tonight because they are underweight. Can you arrange an emergency delivery of withdrawal feed?

Me:   We do not have any withdrawal feed coming out today. I will call the feed mill to see what they can do.

73. Following that telephone call, I immediately telephoned Monica Harvey at the feed mill and arranged a load of withdrawal feed for Avoca Vale Farm to be delivered urgently that evening of Monday, 31 July 2017.

…

  1. Brett Hannigan’s version of the conversation that took place with Mr Chambers on the Sunday was, as per par 55 of his primary affidavit, as follows:

…

[I said:]      “Are you able to deliver a load of feed today?”

…

[He said:]   “I do not think I can get a load of feed to you today, it should be there by Monday night. I will ring the mill to see if Inghams can assist you. I do not think the mill has made any withdrawal feed.”

  1. 40.32 tonnes of withdrawal feed was then delivered to Avoca Vale Farm at approximately 11 PM on the evening of Monday, 31 July 2017. That feed was used to feed the chickens in shed 4 that had not yet been collected for processing.

  2. As I understand it, Inghams did not challenge Mr Hannigan’s assertion that, if the swing load had been delivered, the problem of the chickens in sheds 3 and 4 running out of feed, whenever that happened, would not have occurred.

  3. Nonetheless, Inghams submits that the only real cause for any material non-compliance by Mr Hannigan with any Animal Welfare Standards was Brett Hannigan’s failure to respond to the non-delivery of the swing load by acting quickly enough to place a new order with Chambers, in time for a further delivery to be made to cure the problem of the missed delivery. Inghams’ claim was that this failure by Brett Hannigan broke the chain of causation, and was, to use the technical term, a novus actus interveniens.

  4. I reject Inghams’ submission for the following reasons, and conclude that Inghams’ breach of the agreement by failing, through its agent Chambers, to deliver the swing load, was a material cause of any non-compliance by Mr Hannigan with relevant Animal Welfare Standards.

  5. Inghams’ case was based upon the submission, which was accepted by Mr Brett Hannigan, that the swing load that was ordered on 13 July 2017 for delivery on 21 July 2017 could be expected to be delivered within a 36 hour window of time. That would mean that Brett Hannigan had the opportunity to telephone Mr Chambers at any time between 23 and 28 July 2017. Brett Hannigan agreed in cross-examination that he could have done so, and that he did not know why he had not. He accepted that there was no reason for optimism that the swing load would simply turn up late. However, equally, it would be unreasonable to expect Brett Hannigan to appreciate immediately when the load became overdue that it was not going to be delivered at all, and he would be entitled to some period of grace before it would be reasonable to expect him to become concerned about the non-delivery.

  6. Further, it does not follow that it is so obvious that Brett Hannigan could have cured the problem by ordering a further load of feed that it is proper to treat Inghams’ failure to deliver the swing load as having no causal consequence for the feed running out.

  7. It is proper to judge the significance of Brett Hannigan’s conduct in the context in which these events occurred.

  8. First, even though, as the days went by, any basis for optimism that the swing load would be delivered late would naturally diminish, Brett Hannigan could not reasonably be expected to have appreciated immediately that the load would not be delivered at all. It would be natural for Brett Hannigan to wait for perhaps a number of days before the thought impinged upon him that the swing load might not be delivered. The expected date for delivery of the swing load, 21 July 2017, was a Friday, and Brett Hannigan could understandably not expect delivery to occur on the weekend. It would be reasonable for him not to appreciate a real risk that the swing load would not be delivered at all until about the middle of the next week.

  9. The measurement of the feed in the silos was not an exact science, because the viewing ports were placed about one third and two thirds respectively up the sides of the silos, and, as the swing load was only required as a fall back, Brett Hannigan would not have had a precise measure of the feed that was available, or be able to precisely gauge the risk that the existing feed would run out before the birds in sheds 3 and 4 were collected.

  10. The chickens in shed 2 were collected on 27 July 2017, and Brett Hannigan began the process of cleaning shed 2 on that date. The chickens in shed 1 were collected on 28 July 2017. Brett Hannigan was occupied for part of the Thursday and the Friday in the work of cleaning out shed 2.

  11. I accept Brett Hannigan’s evidence that he did not in fact notice that the feed for the chickens was low until about 5 PM on Saturday, 29 July 2017, when he noticed that the clear red plastic cones at the bottom of the silos had only dust in them. Although Inghams submitted that Brett Hannigan should have been able to make more precise calculations of the quantity of feed that was necessary, I view that as too extreme an expectation of what Brett Hannigan should have been able to achieve, given the practical realities of the chicken farming operation.

  12. It is also material that the short deliveries made by Chambers would have had the tendency to progressively throw out Brett Hannigan’s calculations, and create a variance between his expectations and the actual level of feed available. It is possible that Brett Hannigan’s failure to monitor and appreciate the possible consequences of the short deliveries of feed, and the somewhat imprecise means available to him to check how much feed remained in the silos, may have been a contributing cause of the feed for the chickens running out, to the extent that it did so. However, the question is not simply whether any default by Brett Hannigan on Mr Hannigan’s part was a cause of the feed running out. The question is whether, the feed having run out because of short deliveries and the failure to deliver the swing load for which Inghams was ultimately responsible, Brett Hannigan’s default was so significant that no continuing effect should be attributed to Inghams’ own defaults.

  13. Inghams relied upon the fact that the Manual, at page 48, contains the statement:

…

If you have problems with feed or feed delivery, you should contact your Feedmill or Feedmill Transport Company.

…

  1. In his affidavit, Mr Walsh gave the following evidence of what he would have done if Brett Hannigan had called him to warn him of the likelihood that the feed for the chickens would run out:

…

169. If Brett had informed me after 5:00 pm on Saturday 29 July 2017 or on Sunday 30 July 2017 that he had run out of feed (or even that the feed was about to run out soon), I would have telephone [sic] the manager of the regional feed mill at Hemmant, Richard Sevil, to organise a load of withdrawal feed to be processed (or diverted from another Grower’s order) and delivered to Avoca Vale Farm as soon as possible on Sunday 30 July 2017.

170. If Inghams' feed transport contractor, Chambers Bulk Transport, could not make the delivery, I would have organised another of Inghams’ feed transport contractors who supply feed to other Growers from that feed mill to deliver the load.

…

  1. The implication from this evidence is that Mr Walsh held himself out as being constantly available on the weekend to receive sundry calls from growers, if they needed assistance from Inghams. I would not find that Mr Walsh, as the Queensland Farming Manager of Inghams, offered that availability to growers, unless there was specific evidence to establish that fact. Brett Hannigan gave some general evidence that he found it difficult to communicate with Inghams' staff and that, when he did send messages, they were often not responded to in a timely way.

  2. Mr Chambers gave evidence, at par 10 of his affidavit, that the feed mill operated 6 1/2 days a week, and usually did not operate after midday on Saturday. He added, at par 69, that there were no loads of withdrawal feed scheduled to go out from the feed mill on Sunday or Monday, and that he did not know if there was withdrawal feed at the mill.

  3. The evidence given by Mr Chambers suggests that, for Brett Hannigan to have secured a replacement load for the missed swing load, he would have had to have placed a new order with Chambers early enough to have had the order processed and the feed delivered on Friday, 28 July 2017, in the same manner as would any Grower who needed a delivery of feed before the weekend.

  4. If a reasonable view is taken of Brett Hannigan’s response to the failure of Inghams, through Chambers, to deliver the swing load on or shortly after 21 July 2017, there would as a practical matter only have been a small window for him to have averted the shortage of feed for the chickens that eventuated. He might reasonably not have appreciated the reality of the problem until Tuesday or Wednesday, and then, notwithstanding all of his other duties, it would be necessary for him to have made the new order on Wednesday or Thursday in time for delivery on Friday.

  5. I have concluded that the primary cause of the chickens running out of feed, to the extent that that may have happened, was Chambers’ failure to deliver the swing load at all, and that that failure by Inghams' agent was a breach of clause 3.5.2 of the contract, and the primary cause of any non-compliance with the Animal Welfare Standards that may have occurred.

  6. The failure by Brett Hannigan to cure Inghams' breach was not a novus actus interveniens that had the effect that Inghams' breach ceased to operate. Inghams' breach created the risk that the chickens would run out of feed, and did so in a context where Brett Hannigan was in fact absorbed in other essential and pressing activities necessary for the performance by Mr Hannigan of his obligations under the contract. Once Inghams' breach had created the conditions necessary for the non-compliance with the Animal Welfare Standards, Inghams could not in the circumstances argue that Brett Hannigan's failure to appreciate the magnitude of the risk caused by that conduct should be held against Mr Hannigan, as absolving Inghams from being the true cause of the non-compliance.

  7. Consequently, even if it had been established that Mr Hannigan was in material non-compliance with any relevant Animal Welfare Standards, I would have concluded that Inghams was the primary cause of that non-compliance, in breach of the contract, so that it would be precluded from exercising any contractual entitlement to terminate the contract, or relying upon any principle of contract law for the same purpose.

Fundamental or essential terms of the contract

  1. The next issue that must be addressed is Inghams' claim that a number of terms in the Inghams Agreement were fundamental or essential terms, such that any breach by Mr Hannigan justified termination of the agreement, irrespective of the seriousness of the consequence of the breaches.

  2. Inghams submitted, at par 83 of its written submissions, that: "…the terms requiring the Grower to comply with each of the Animal Welfare Standards and the Manual were fundamental or essential terms, being of such importance to Inghams that it would not otherwise have entered into the Agreement. A breach of those terms by Mr Hannigan would entitle Inghams to terminate the Agreement."

  3. As I have found above that there was not an implied term requiring Mr Hannigan to comply with each of the Animal Welfare Standards, it will only be necessary for the Court to deal with this submission in relation to Inghams’ claim that the requirement that Mr Hannigan comply with the Manual was a fundamental or essential term.

  4. The parties do not appear to have addressed the principles that govern whether a term of a contract should be treated as fundamental or essential, so that the party with the benefit of the term may terminate the contract for any breach.

  5. The Court of Appeal in Roadshow Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd (recs and mgr apptd) (1997) 42 NSWLR 462 made the following observations on the test of whether a term in a contract is essential, at 478:

…

The test of whether a term is essential, so that a breach will give rise to an immediate right of rescission, is that stated by Stephen J, Mason J and Jacobs J in DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 431:

“… the quality of essentiality depends … on a judgment which is made of the general nature of the contract and its particular provisions, a judgment which takes close account of the importance which the parties have attached to the provision as evidenced by the contract itself as applied to the surrounding circumstances.”

One of the decisions they referred to was Bentsen v Taylor, Sons & Co

[1893] 2 QB 274 at 281, where Bowen LJ said:

“… There is no way of deciding that question except by looking at the contract in the light of the surrounding circumstances, and then making up one's mind whether the intention of the parties, as gathered from the instrument itself, will best be carried out by treating the promise as a warranty sounding only in damages, or as a condition precedent by the failure to perform which the other party is relieved of his liability.”

As Kerr LJ said in State Trading Corporation of India Ltd v Golodetz Ltd

[1989] 2 Lloyd's Rep 277 at 283:

“… the Court may have no alternative but to follow the general statement of Lord Justice Bowen in Bentsen v Taylor … by making what is in effect a value judgment about the commercial significance of the term in question.”

Earlier (at 282) he had cited the statement by Fletcher Moulton LJ in Wallis

v Pratt [1910] 2 KB 1003 at 1012 that conditions are terms:

“… which go so directly to the substance of the contract, or in other words, are so essential to its very nature that their non-performance may fairly be considered by the other party as a substantial failure to perform the contract at all.”

…

  1. Later, in Kyrwood v Drinkwater [2000] NSWCA 126, Powell JA said (footnotes omitted):

…

[137] The general test to be applied in determining whether or not a term of a contract is to be regarded as essential may be found in the judgment of Jordan CJ in Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd. where his Honour said:

The test of essentiality is whether it appears from the general nature of the contract considered as a whole, or from some particular term or terms, that the promise is of such importance to the promisee that he would not have entered into the contract unless he had been assured of a strict or substantial performance of the promise, as the case may be, and that this ought to have been apparent to the promisor: Flight v Booth ((1834) 1 Bing. (NC) 370, 377; 131 ER 1160, 1162–1163), Bettini v Gye (1876) 1 QBD 183 at 188), Bentsen v Taylor, Sons & Co (No 2) [1893] 2 QB 274 at 281), Fullers Theatres Limited v Musgrove (1923) 31 CLR 524 at 537–538), Bowes v Chaleyer (1923) 32 CLR 159), Clifton v Coffey (1924) 34 CLR 434 at 438 and 440). If the innocent party would not have entered into the contract unless assured of a strict and literal performance of the promise, he may in general treat himself as discharged upon any breach of the promise, however slight.

…

Were clauses 4.2, 4.14 and 4.16 fundamental or essential terms?

  1. Inghams relied upon clause 4.2, which obliged Mr Hannigan to raise the birds in accordance with the Manual; and clauses 4.14 and 4.16, which required the Grower to maintain all such records as Inghams and the Manual reasonably required, and to allow Inghams' representatives full and free access at all reasonable times to the records. It is these provisions that Inghams submits were fundamental or essential.

  2. As I understand Inghams' submissions, the factual basis of its complaint is set out in par 151 of its written submissions, which is as follows:

In breach of clauses 4.2, 4.14 and 4.16 of the Agreement, Mr Hannigan failed to (1) raise the Birds in accordance with the Manual (clause 4.2); (2) maintain all such records as Inghams and the Manual reasonably require ("Records") (clause 4.14); and (3) allow Inghams' representatives full and free access to the Records, by failing, contrary to Page 39 Point 3 of the Manual, to sample weigh the chicken flock weekly and compare the average weight obtained thereby with the current weight-for-age standard, and forward the weights to Inghams farming staff, on a weekly basis and in particular…

…

  1. Inghams went on to give particulars in its submissions of seven breaches between 7 July and 2 August 2017, one for each of five sheds and two for one of the sheds. The relevant part of the Manual required Mr Hannigan to determine sample weights for the chickens "weekly", and to forward the weights to Inghams' farming staff. The allegation is that Mr Hannigan delayed in weighing the chickens in the various sheds between 12 and 16 days.

  2. There may be scope for argument about whether these failures only constituted a breach of clause 4.2, and not in addition clauses 4.14 and 4.16. It may be that the requirement in the Manual to weigh the birds weekly did not amount to a requirement that Mr Hannigan maintain records of same, and his failure to send the weight records to Inghams may not have involved any failure by him to give Inghams' representatives full and free access to the records. I consider that, in fact, the failure during the specified periods to weigh the chickens and to provide the weights to Inghams constituted breaches of clause 4.2, as is admitted by Mr Hannigan.

  3. The issue is whether those breaches provided a separate justification for Inghams to terminate the contract on the basis that clause 4.2, or all of the clauses relied upon, were fundamental or essential terms of the contract.

  4. It appears from page 39 of the Manual that the need for regular weighing of the birds during their growth cycle is required because "…[b]ird weights are the most accurate guide to flock health and progress. Changes in weight gain often precede or accompany clinical symptoms in the flock. Early action can minimise loss of birds and performance…" However, the period the subject of Inghams' complaint in the present case was the period immediately before Inghams was due to collect the birds for processing. Inghams' need to be supplied the weights for the birds at that time was different to the reasons for regular weighing of the flock during the growing period.

  5. Mr Nillegoda, the New South Wales Breeder Manager for Inghams, explained in his 29 November 2017 affidavit the purpose for weighing the chickens as follows:

…

Livestock Planning

…

11.   Two sizes of chickens are grown by Inghams’ Growers, referred to as “small birds” and “large birds”. For Ross chickens, the target weight for small birds is 1.95 kg and the target weight for large birds is 3.4 kg.

12.   Small birds are expected to reach their target weight at 33 or 34 days of age. Large birds are expected to reach their target weight at between 45 and 47 days of age. Sometimes, the birds reach their target weights before those ages and sometimes some days later than the expected age. Our job as livestock planners was to arrange the pick up of the chickens from the Growers in our region once they reached their target weights.

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17.   Kristen and I were responsible for planning the timetable for thin-outs and clean-outs of sheds on the farms of the Growers in Andrew Walsh’s region. Each week, we prepared a plan for the collection of small and large chickens from the Growers’ farms and their transportation to the local Inghams processing plant.

18.   As livestock planners, Kristen and I had access to the Broiler System in Inghams’ computer system, which was a database programme into which was inputted all information about the Growers, their farms and chicken-growing set-up and the batches of chickens in their care.

19.   The Broiler System held all information relating to each batch of chickens, including in respect of each shed on each Grower’s farm the parentage and birth dates of the chickens, the dates of their placement with the Growers, the number of chickens placed, and the information provided in relation to each batch by the Growers, the Broiler Service Team and others at Inghams, the live-haul contractors, the processing plant and others involved with the batch.

20.   Information in the Broiler System was used in a Mid-Term Planning system, which we used to plan in advance over the next 13 weeks all the batch placements with and pick-ups from the Growers in Queensland and northern New South Wales. Information from that system was pulled into a third database programme which we called the Weekly Pick Up System, which we used to set the next week’s schedule or plan for thin-outs and clean-outs of the Growers’ sheds.

21.   We were also provided with standard growth and mortality charts for Ross and Cobb chickens, showing the standard for weight for age of the chickens and standard mortality rate in percentage terms per shed according to the age of the chickens.

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28.   Using the 7, 14, 21 and 28-day birthday weights from the Grower as entered into the Weekly Pick-Up System and the growth standards chart, we estimated the number of days of age at which the chickens in any given Grower’s shed would reach the target weight for small birds and set the date for “thin-out” or “clean-out” of the shed.

29.   We did the same in relation to large birds, relying also on the 35 and 42-day birthday weights from the relevant Growers, to set the dates for “clean-out” of the shed.

30.   If the birthday weights from a Grower showed that the chickens were growing faster or slower than the standard expectation, we adjusted the thin-out or clean-out date, either bringing it forwards or pushing it back.

31.   We then confirmed the pick up dates for the birds and finalised in the Weekly Pick-Up System the plan for the next week…

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37.   If the Grower failed to provide the check weights and mortality count for their sheds due for thin-out or clean-out due to be collected from the Grower's farm were underweight, it was not possible for us to confirm that the birds were likely to be ready for a thin-out or clean-out of their shed.

38.   In the case of clean-outs of large birds, it is difficult to estimate the weights of large birds based only on the earlier weights sent by the Grower for the small bird pick up.

39.   Chickens’ growth rates can change significantly within the period of seven days and therefore can can [sic] grow from being one to two days behind to two days in front or slow to more days behind…

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  1. Mr Nillegoda also gave the following evidence concerning how it came to the attention of Inghams that Mr Hannigan may have run out of feed for the birds:

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73.   On Monday 31 July 2017 at approximately 9:30 am, I had a conversation with Kristen Bettridge to the following effect:

Kristen:   I just got a call from the processing plant. The weights of the birds from Avoca Vale Farm were pretty poor.

Me:      How bad were they?

Kristen:    About 4 to 5 days behind. They say they weighed a significant number at 2.82 kg, 2.75 kg and 2.72 kg.

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  1. This evidence, albeit hearsay, suggests that the birds were large birds with a target weight of 3.4 kg, and that a significant number of them weighed between 2.72 kg and 2.82 kg at the time of slaughter.

  2. The question is whether, taking into account the principles that have been considered above concerning the circumstances in which a term of a contract will be found to be a fundamental or essential term, clause 4.2, either considered separately or together with clauses 4.14 and 4.16, should be found to be a fundamental or an essential term.

  3. Having regard, in particular, to the test laid down by Jordan CJ in Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632, at 641-642, whereby the promise must be of “…such importance to the promisee that he would not have entered into the contract unless he had been assured of a strict or a substantial performance of the promise, as the case may be, and that this ought to have been apparent to the promisor…”, I conclude that neither clause 4.2 nor the other clauses relied upon in the Inghams Agreement were fundamental or essential terms.

  4. While I have not attempted to set out the terms of the Manual, I note that it is a document of some 226 pages that contain specifications that govern all aspects of the growing of chickens in the minutest technical detail. For clause 4.2, which requires the Grower to “…raise the Birds in accordance with the Manual…” to be a fundamental or essential term, it would be necessary for the Court to find that Inghams would not have entered into the contract at all unless it had been assured of strict or substantial performance of the prescriptions in the Manual in their entirety. The argument that Inghams did so, or that it ought to have been apparent to Growers that they would be required to ensure strict or substantial performance of every single requirement of the Manual, or risk the contract being terminated by Inghams, is not sustainable.

  5. Using the part of the Manual that dealt with the requirement for the weighing of birds merely as an example, I do not accept that there was anything in the contract as a whole, or the surrounding circumstances, that would justify a conclusion that Inghams only entered into the contract on the basis that Growers would strictly or substantially comply with the requirement every single week during the growing cycle of every single batch of chickens.

  6. One reason for that conclusion arises out of the formula for the calculation of the Payment due to Growers, which has been considered above. Appendix 2 contained a formula that would lead to the amount payable to Growers being reduced in the proportion that the weight of the Grower’s chickens that were processed fell short of the average weight of the chickens grown by all Growers in the Pool.

  7. As Inghams provided for the consequences of undersized chickens being processed in the formula for the Payment, which would tend to protect Inghams from the consequences of any conduct on the part of the Growers that led to Inghams collecting chickens for processing early, the argument that, in respect of that part of the Manual, Inghams would not have entered into the contract at all unless assured that the Grower would strictly or substantially comply with the weighing requirement in the Manual on all occasions, is untenable.

  8. Consequently, even though Mr Hannigan admitted that he had failed to comply with the Manual in the manner asserted by Inghams in respect of the weighing of the chickens on seven occasions in July and August 2016, that breach (whichever terms of the Inghams Agreement applied) did not provide a basis for Inghams’ termination of the contract.

Conclusion

  1. For these reasons, I find that Mr Hannigan is entitled to a declaration in the terms of prayer 3 of his summons.

  2. I will hear the parties on the issue of whether a declaration in the terms of prayer 4 should also be made in favour of Mr Hannigan. I note that, although I have rejected all grounds relied upon by Inghams to sustain the validity of its termination of the contract, in relation to its reliance on clause 20.1.9(g) of the Inghams Agreement, that rejection involved the particular claim for breach that was made by Inghams. It is an open question whether there were other allegations of breach of contract that were available to Inghams, but were not relied upon in this case. There may be a question about whether it remains open to Inghams to make any further allegations concerning its right to terminate the contract, given the making of the declaration in terms of prayer 3 and the failure by Inghams to raise those further allegations in this case. As I have said, this is a matter that the parties have not addressed.

  3. Mr Hannigan is entitled to an order for the payment of his costs of the proceedings by Inghams. I will hear the parties, if Mr Hannigan claims that he is entitled to those costs on any basis other than the ordinary basis.

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Details
AGLC
Francis Gregory Hannigan v Inghams Enterprises Pty Limited [2019] NSWSC 321
Case
[2019] NSWSC 321
Decision Date

CaseChat Overview and Summary

The matter of Hannigan v Inghams Enterprises Pty Limited involved a dispute between the plaintiff, Francis Gregory Hannigan, and the defendant, Inghams Enterprises Pty Limited, over the formation, terms, and termination of a contractual agreement. The case was heard in the Federal Court of Australia, where the plaintiff sought declarations that the contract was still in effect and that there were no grounds for its termination. The central issues before the court were whether the contract was formed by the conduct of both parties, despite the absence of a formal signature, and whether the defendant was entitled to terminate the contract under its terms or for breach by the plaintiff. Additionally, the court needed to interpret the meaning of "negligence" within the context of the contract and determine the burden of proof in relation to the termination and breach claims.

The court examined whether the contract was formed through the conduct of both parties, despite the lack of a signed document, by considering the detailed provisions of the contract and the parties' actions over a significant period. The court applied principles of contract formation by conduct, recognising that the parties had acted as if they were bound by the contract's terms. The court also addressed whether the defendant's right to terminate the contract was valid, considering the defendant's own default and its contribution to the breach by the plaintiff. The court applied principles of novus actus interveniens to assess the effectiveness of the termination in such circumstances. Furthermore, the court had to classify certain breaches as fundamental or essential terms and interpret the meaning of "negligence" in the context of the contract.

The court held that the contract was indeed formed by the conduct of both parties, as they had acted over a significant period as if they were bound by the contract's detailed provisions. The court found that the defendant was not entitled to terminate the contract because its own default contributed to the breach by the plaintiff. The court applied the principle of novus actus interveniens, determining that the defendant's default was an intervening act that affected the breach. Additionally, the court clarified the burden of proof, stating that it lay on the plaintiff to establish that there were no grounds for termination and no breaches that would justify termination. The court interpreted "negligence" in the context of the contract and found that certain breaches were fundamental or essential terms.

The court made declarations that the contract was still in effect and that there were no grounds available to the defendant to validly terminate the contract. The court further declared that there were no breaches of the contract that would justify its termination. The court's decision provided clarity on the formation, terms, and termination of the contract in question, as well as the burden of proof and the interpretation of specific contractual terms.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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