Franklins Pty Ltd v Metcash Trading Ltd

In the case of *Franklins Pty Ltd v Metcash Trading Ltd*, heard in the New South Wales Court of Appeal before Allsop P, Giles and Campbell JJA, the dispute concerned the interpretation of a formal Supply Agreement between the parties. Franklins sought to appeal the trial judge's construction of the agreement, particularly regarding the calculation of the "Wholesale Price" for a product, and the trial judge's refusal to grant rectification. Metcash cross-appealed, advancing contentions of estoppel and misleading and deceptive conduct.

The Court of Appeal was required to determine several key legal issues. These included whether the trial judge's construction of the Supply Agreement, which mandated the deduction of all allowances and discounts from Metcash's "Wholesale 5 Price" to arrive at the "Wholesale Price" for a product, was correct. The court also had to consider whether the formal Supply Agreement should be rectified to reflect a different common intention of the parties regarding the calculation of the Wholesale Price, and whether the doctrine of estoppel, including estoppel by convention, could be applied to establish a binding agreement that differed from the executed written contract. Furthermore, the court needed to assess Metcash's claims of misleading and deceptive conduct.

The Court of Appeal upheld the trial judge's construction of the Supply Agreement, confirming that the Wholesale Price required the deduction of all allowances and discounts. However, the court varied the trial judge's order for rectification. It ordered that the definition of Wholesale Price be amended to exclude five specified types of allowance or discount from being deducted from Metcash's Wholesale 5 Price, and for clarity, deleted certain words from a specific clause. Metcash's arguments based on estoppel and misleading and deceptive conduct were rejected. The court also made a declaration regarding Franklins' contractual right of access to Metcash documents and remitted the proceedings to the court below for further action. Metcash's cross-appeal was otherwise dismissed, and Metcash was ordered to pay Franklins' costs of the appeal and cross-appeal.