JD & PM Fitzpatrick & Sons (a firm) v Emerald Grain Pty Ltd
[2015] WASC 360
•30 SEPTEMBER 2015
JD & PM FITZPATRICK & SONS (a firm) -v- EMERALD GRAIN PTY LTD [2015] WASC 360
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 360 | |
| 30/09/2015 | |||
| Case No: | CIV:2753/2014 | 9 SEPTEMBER 2015 | |
| Coram: | MASTER SANDERSON | 9/09/15 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | JD & PM FITZPATRICK & SONS (a firm) L & JA ANGEL & SON (a firm) YALGAEB PTY LTD a/t/f THE BEAGLEY FAMILY TRUST t/a WJ & J BEAGLEY TA & D BOYNE & SONS (a firm) MARDENWAY PTY LTD a/t/f THE C & E BYWATERS TRUST t/a C & E BYWATERS & SONS G & A CASHMORE (a firm) WL & MF PTY LTD a/t/f THE CRABTREE TRADING TRUST t/a CRABTREE AGRICULTURAL CONSULTING DAVINA ENTERPRISES (a firm) NYUNDA PTY LTD t/a BP & WF DAVEY JORDINA PTY LTD a/t/f THE GG & KL DAYMAN FAMILY TRUST t/a GG & KL DAYMAN RIDGY RIDGE (a firm) DALGOURING FARMS (a firm) DE LUIS HOLDINGS PTY LTD t/a DE LUIS & SON VALERIVER PTY LTD a/t/f W J DYKES FAMILY TRUST t/a DYKES HOLDINGS BG & CA EDMONDS & SONS (a firm) RHAMILY NOMINEES PTY LTD t/a RJ & RL EDMONDS IB & JS ELLIOT (a firm) LE & M FARINA (a firm) FLORIAN NOMINEES PTY LTD t/a KINTAMANI FARMS FORWARD FARMING CO (a firm) W & V GARNER (a firm) RJ GOODIER & CO (a firm) MM & HE GRANICH (a firm) GRYLLS FARMING KR & SONS (a firm) B & L GUERINI & SONS (a firm) P HAYTHORNTHWAITE & SON (a firm) BOBYVON PTY LTD a/t/f BAANDEE TRUST t/a BOBYVON DAVID ANTHONY HESFORD CP & FG HITCHCOCK (a firm) PJ HITCHCOCK & CO (a firm) DN & EJ JOHNSTON & SON (a firm) LAWSON NOMINEES PTY LTD AG LEEKE & SON (a firm) AMYVALE FARMS (a firm) KIRP NOMINEES PTY LTD G & JA MADDOCK (a firm) PJ & R McDONALD (a firm) SYNANDRA FARMS (a firm) P & SR NEGRI (a firm) PATRONI & CO (a firm) CITIZEN HOLDINGS PTY LTD a/t/f THE RED RANGE UNIT TRUST t/a J & EL PERKS & CO EDENVALE PTY LTD t/a PIKE FAMILY FARM TE & JA PROBERT (a firm) L PUTT & SON (a firm) GB REYNOLDS & CO (a firm) SJ REYNOLDS & SON (a firm) PB SACHSE & DM SACHSE (a firm) SCHILLING HOLDINGS PTY LTD SEABY NOMINEES PTY LTD a/t/f THE SEABY FAMILY TRUST t/a HT & RE SEABY & SONS JASON FREDERICK THOMAS SEWELL HYDERA PTY LTD a/t/f THE SHEEN FAMILY TRUST t/a R SHEEN & CO JR & W STEEL & SON (a firm) DM & DJ STEELE (a firm) CRAIG NORMAN STOKES DEBRA STOKES DELLWOOD NOMINEES PTY LTD a/t/f THE MALKARNA TRUST t/a SJ STOKES & CO R & NE SUTHERLAND & SONS (a firm) DJ URE & LM URE (a firm) D & A VERRALL & SON (a firm) GP WHITE & CO (a firm) BR & RD WHYTE (a firm) WHYTE FARMS (a firm) MD & CH WHYTE (a firm) COOLOOLOO NOMINEES PTY LTD a/t/f THE WILLIAMS FAMILY TRUST t/a R WILLIAMS & CO J & J & D WILSON (a firm) MA & RJ BUTLER (a firm) EMERALD GRAIN PTY LTD |
Catchwords: | Practice and procedure Application for preaction discovery Turns on own facts |
Legislation: | Nil |
Case References: | Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
L & JA ANGEL & SON (a firm)
Second Plaintiff
YALGAEB PTY LTD a/t/f THE BEAGLEY FAMILY TRUST t/a WJ & J BEAGLEY
Third Plaintiff
TA & D BOYNE & SONS (a firm)
Fourth Plaintiff
MARDENWAY PTY LTD a/t/f THE C & E BYWATERS TRUST t/a C & E BYWATERS & SONS
Fifth Plaintiff
G & A CASHMORE (a firm)
Sixth Plaintiff
WL & MF PTY LTD a/t/f THE CRABTREE TRADING TRUST t/a CRABTREE AGRICULTURAL CONSULTING
Seventh Plaintiff
DAVINA ENTERPRISES (a firm)
Eighth Plaintiff
NYUNDA PTY LTD t/a BP & WF DAVEY
Ninth Plaintiff
JORDINA PTY LTD a/t/f THE GG & KL DAYMAN FAMILY TRUST t/a GG & KL DAYMAN
Tenth Plaintiff
RIDGY RIDGE (a firm)
Eleventh Plaintiff
DALGOURING FARMS (a firm)
Twelfth Plaintiff
DE LUIS HOLDINGS PTY LTD t/a DE LUIS & SON
Thirteenth Plaintiff
VALERIVER PTY LTD a/t/f W J DYKES FAMILY TRUST t/a DYKES HOLDINGS
Fourteenth Plaintiff
BG & CA EDMONDS & SONS (a firm)
Fifteenth Plaintiff
RHAMILY NOMINEES PTY LTD t/a RJ & RL EDMONDS
Sixteenth Plaintiff
IB & JS ELLIOT (a firm)
Seventeenth Plaintiff
LE & M FARINA (a firm)
Eighteenth Plaintiff
FLORIAN NOMINEES PTY LTD t/a KINTAMANI FARMS
Nineteenth Plaintiff
FORWARD FARMING CO (a firm)
Twentieth Plaintiff
W & V GARNER (a firm)
Twenty-first Plaintiff
RJ GOODIER & CO (a firm)
Twenty-second Plaintiff
MM & HE GRANICH (a firm)
Twenty-third Plaintiff
GRYLLS FARMING KR & SONS (a firm)
Twenty-fourth Plaintiff
B & L GUERINI & SONS (a firm)
Twenty-fifth Plaintiff
P HAYTHORNTHWAITE & SON (a firm)
Twenty-sixth Plaintiff
BOBYVON PTY LTD a/t/f BAANDEE TRUST t/a BOBYVON
Twenty-seventh Plaintiff
DAVID ANTHONY HESFORD
Twenty-eighth Plaintiff
CP & FG HITCHCOCK (a firm)
Twenty-ninth Plaintiff
PJ HITCHCOCK & CO (a firm)
Thirtieth Plaintiff
DN & EJ JOHNSTON & SON (a firm)
Thirty-first Plaintiff
LAWSON NOMINEES PTY LTD
Thirty-second Plaintiff
AG LEEKE & SON (a firm)
Thirty-third Plaintiff
AMYVALE FARMS (a firm)
Thirty-fourth Plaintiff
KIRP NOMINEES PTY LTD
Thirty-fifth Plaintiff
G & JA MADDOCK (a firm)
Thirty-sixth Plaintiff
PJ & R McDONALD (a firm)
Thirty-seventh Plaintiff
SYNANDRA FARMS (a firm)
Thirty-eighth Plaintiff
P & SR NEGRI (a firm)
Thirty-ninth Plaintiff
PATRONI & CO (a firm)
Fortieth Plaintiff
CITIZEN HOLDINGS PTY LTD a/t/f THE RED RANGE UNIT TRUST t/a J & EL PERKS & CO
Forty-first Plaintiff
EDENVALE PTY LTD t/a PIKE FAMILY FARM
Forty-second Plaintiff
TE & JA PROBERT (a firm)
Forty-third Plaintiff
L PUTT & SON (a firm)
Forty-fourth Plaintiff
GB REYNOLDS & CO (a firm)
Forty-fifth Plaintiff
SJ REYNOLDS & SON (a firm)
Forty-sixth Plaintiff
PB SACHSE & DM SACHSE (a firm)
Forty-seventh Plaintiff
SCHILLING HOLDINGS PTY LTD
Forty-eighth Plaintiff
SEABY NOMINEES PTY LTD a/t/f THE SEABY FAMILY TRUST t/a HT & RE SEABY & SONS
Forty-ninth Plaintiff
JASON FREDERICK THOMAS SEWELL
Fiftieth Plaintiff
HYDERA PTY LTD a/t/f THE SHEEN FAMILY TRUST t/a R SHEEN & CO
Fifty-first Plaintiff
JR & W STEEL & SON (a firm)
Fifty-second Plaintiff
DM & DJ STEELE (a firm)
Fifty-third Plaintiff
CRAIG NORMAN STOKES
DEBRA STOKES
Fifty-fourth Plaintiffs
DELLWOOD NOMINEES PTY LTD a/t/f THE MALKARNA TRUST t/a SJ STOKES & CO
Fifty-fifth Plaintiff
R & NE SUTHERLAND & SONS (a firm)
Fifty-sixth Plaintiff
DJ URE & LM URE (a firm)
Fifty-seventh Plaintiff
D & A VERRALL & SON (a firm)
Fifty-eighth Plaintiff
GP WHITE & CO (a firm)
Fifty-ninth Plaintiff
BR & RD WHYTE (a firm)
Sixtieth Plaintiff
WHYTE FARMS (a firm)
Sixty-first Plaintiff
MD & CH WHYTE (a firm)
Sixty-second Plaintiff
COOLOOLOO NOMINEES PTY LTD a/t/f THE WILLIAMS FAMILY TRUST t/a R WILLIAMS & CO
Sixty-third Plaintiff
J & J & D WILSON (a firm)
Sixty-fourth Plaintiff
MA & RJ BUTLER (a firm)
Sixty-fifth Plaintiff
AND
EMERALD GRAIN PTY LTD
Defendant
Catchwords:
Practice and procedure - Application for preaction discovery - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
First Plaintiff : Mr A P Hershowitz
Second Plaintiff : Mr A P Hershowitz
Third Plaintiff : Mr A P Hershowitz
Fourth Plaintiff : Mr A P Hershowitz
Fifth Plaintiff : Mr A P Hershowitz
Sixth Plaintiff : Mr A P Hershowitz
Seventh Plaintiff : Mr A P Hershowitz
Eighth Plaintiff : Mr A P Hershowitz
Ninth Plaintiff : Mr A P Hershowitz
Tenth Plaintiff : Mr A P Hershowitz
Eleventh Plaintiff : Mr A P Hershowitz
Twelfth Plaintiff : Mr A P Hershowitz
Thirteenth Plaintiff : Mr A P Hershowitz
Fourteenth Plaintiff : Mr A P Hershowitz
Fifteenth Plaintiff : Mr A P Hershowitz
Sixteenth Plaintiff : Mr A P Hershowitz
Seventeenth Plaintiff : Mr A P Hershowitz
Eighteenth Plaintiff : Mr A P Hershowitz
Nineteenth Plaintiff : Mr A P Hershowitz
Twentieth Plaintiff : Mr A P Hershowitz
Twenty-first Plaintiff : Mr A P Hershowitz
Twenty-second Plaintiff : Mr A P Hershowitz
Twenty-third Plaintiff : Mr A P Hershowitz
Twenty-fourth Plaintiff : Mr A P Hershowitz
Twenty-fifth Plaintiff : Mr A P Hershowitz
Twenty-sixth Plaintiff : Mr A P Hershowitz
Twenty-seventh Plaintiff : Mr A P Hershowitz
Twenty-eighth Plaintiff : Mr A P Hershowitz
Twenty-ninth Plaintiff : Mr A P Hershowitz
Thirtieth Plaintiff : Mr A P Hershowitz
Thirty-first Plaintiff : Mr A P Hershowitz
Thirty-second Plaintiff : Mr A P Hershowitz
Thirty-third Plaintiff : Mr A P Hershowitz
Thirty-fourth Plaintiff : Mr A P Hershowitz
Thirty-fifth Plaintiff : Mr A P Hershowitz
Thirty-sixth Plaintiff : Mr A P Hershowitz
Thirty-seventh Plaintiff : Mr A P Hershowitz
Thirty-eighth Plaintiff : Mr A P Hershowitz
Thirty-ninth Plaintiff : Mr A P Hershowitz
Fortieth Plaintiff : Mr A P Hershowitz
Forty-first Plaintiff : Mr A P Hershowitz
Forty-second Plaintiff : Mr A P Hershowitz
Forty-third Plaintiff : Mr A P Hershowitz
Forty-fourth Plaintiff : Mr A P Hershowitz
Forty-fifth Plaintiff : Mr A P Hershowitz
Forty-sixth Plaintiff : Mr A P Hershowitz
Forty-seventh Plaintiff : Mr A P Hershowitz
Forty-eighth Plaintiff : Mr A P Hershowitz
Forty-ninth Plaintiff : Mr A P Hershowitz
Fiftieth Plaintiff : Mr A P Hershowitz
Fifty-first Plaintiff : Mr A P Hershowitz
Fifty-second Plaintiff : Mr A P Hershowitz
Fifty-third Plaintiff : Mr A P Hershowitz
Fifty-fourth Plaintiffs : Mr A P Hershowitz
Fifty-fifth Plaintiff : Mr A P Hershowitz
Fifty-sixth Plaintiff : Mr A P Hershowitz
Fifty-seventh Plaintiff : Mr A P Hershowitz
Fifty-eighth Plaintiff : Mr A P Hershowitz
Fifty-ninth Plaintiff : Mr A P Hershowitz
Sixtieth Plaintiff : Mr A P Hershowitz
Sixty-first Plaintiff : Mr A P Hershowitz
Sixty-second Plaintiff : Mr A P Hershowitz
Sixty-third Plaintiff : Mr A P Hershowitz
Sixty-fourth Plaintiff : Mr A P Hershowitz
Sixty-fifth Plaintiff : Mr A P Hershowitz
Defendant : Mr B Dharmananda SC & Mr H Jackson
Solicitors:
First Plaintiff : Granich Partners
Second Plaintiff : Granich Partners
Third Plaintiff : Granich Partners
Fourth Plaintiff : Granich Partners
Fifth Plaintiff : Granich Partners
Sixth Plaintiff : Granich Partners
Seventh Plaintiff : Granich Partners
Eighth Plaintiff : Granich Partners
Ninth Plaintiff : Granich Partners
Tenth Plaintiff : Granich Partners
Eleventh Plaintiff : Granich Partners
Twelfth Plaintiff : Granich Partners
Thirteenth Plaintiff : Granich Partners
Fourteenth Plaintiff : Granich Partners
Fifteenth Plaintiff : Granich Partners
Sixteenth Plaintiff : Granich Partners
Seventeenth Plaintiff : Granich Partners
Eighteenth Plaintiff : Granich Partners
Nineteenth Plaintiff : Granich Partners
Twentieth Plaintiff : Granich Partners
Twenty-first Plaintiff : Granich Partners
Twenty-second Plaintiff : Granich Partners
Twenty-third Plaintiff : Granich Partners
Twenty-fourth Plaintiff : Granich Partners
Twenty-fifth Plaintiff : Granich Partners
Twenty-sixth Plaintiff : Granich Partners
Twenty-seventh Plaintiff : Granich Partners
Twenty-eighth Plaintiff : Granich Partners
Twenty-ninth Plaintiff : Granich Partners
Thirtieth Plaintiff : Granich Partners
Thirty-first Plaintiff : Granich Partners
Thirty-second Plaintiff : Granich Partners
Thirty-third Plaintiff : Granich Partners
Thirty-fourth Plaintiff : Granich Partners
Thirty-fifth Plaintiff : Granich Partners
Thirty-sixth Plaintiff : Granich Partners
Thirty-seventh Plaintiff : Granich Partners
Thirty-eighth Plaintiff : Granich Partners
Thirty-ninth Plaintiff : Granich Partners
Fortieth Plaintiff : Granich Partners
Forty-first Plaintiff : Granich Partners
Forty-second Plaintiff : Granich Partners
Forty-third Plaintiff : Granich Partners
Forty-fourth Plaintiff : Granich Partners
Forty-fifth Plaintiff : Granich Partners
Forty-sixth Plaintiff : Granich Partners
Forty-seventh Plaintiff : Granich Partners
Forty-eighth Plaintiff : Granich Partners
Forty-ninth Plaintiff : Granich Partners
Fiftieth Plaintiff : Granich Partners
Fifty-first Plaintiff : Granich Partners
Fifty-second Plaintiff : Granich Partners
Fifty-third Plaintiff : Granich Partners
Fifty-fourth Plaintiffs : Granich Partners
Fifty-fifth Plaintiff : Granich Partners
Fifty-sixth Plaintiff : Granich Partners
Fifty-seventh Plaintiff : Granich Partners
Fifty-eighth Plaintiff : Granich Partners
Fifty-ninth Plaintiff : Granich Partners
Sixtieth Plaintiff : Granich Partners
Sixty-first Plaintiff : Granich Partners
Sixty-second Plaintiff : Granich Partners
Sixty-third Plaintiff : Granich Partners
Sixty-fourth Plaintiff : Granich Partners
Sixty-fifth Plaintiff : Granich Partners
Defendant : Lavan Legal as town agents for Thomson Geer Lawyers
Case(s) referred to in judgment(s):
Nil
1 MASTER SANDERSON: This was the plaintiffs' application for pre-action discovery. At the conclusion of the hearing I dismissed the application and indicated to the parties I would publish reasons for doing so. These are those reasons.
2 There are 65 plaintiffs in this application. They are all farmers or growers of grain. They entered into various contractual arrangements with the defendant whereby each plaintiff delivered grain into a pooling arrangement operated by the defendant for the 2011 - 2012 pool period.
3 The defendant offered pools as grain marketing products to farmers. Pooling is a method of selling grain used by grain producers in Western Australia and other States. The alternative to pooling is to sell grain for a fixed cash price either prior to harvest, at harvest or after harvest. Pools on the other hand typically offer no price certainty. However, because they sell over an extended period growers expect that they will receive an average price for their grain. Growers who choose to deliver grain into a pool, transfer title to their grain to the pool provider in return for an estimated pool return.
4 In his written submissions counsel for the plaintiffs summarised the plaintiffs' position as follows:
Grower expectations are that the pool they choose will provide an average price and at least be comparable to the final return of other pools operated by grain marketers. The growers expect the pool provider to secure a fair average market price for their grain ... [3].
5 The plaintiffs say they received a price considerably less than other grain pool providers for the grain they delivered to the defendant. In support of the application the plaintiffs relied on an affidavit of Nathan John Draper sworn 22 December 2014. Appearing as attachment ND 1 to that affidavit is a document entitled 'Report on losses suffered by Western Australian growers who delivered to the 2011-12 pools managed by Emerald Grain Australia Pty Ltd'. The report was prepared by farm consultants Planfarm. The report focuses on comparative performance of the 2011 - 2012 pools. It is unnecessary to go through the report in detail. It is enough if I provide a flavour of the conclusions reached by the expert. In relation to grade of wheat AH2 the report looks at seven pools. The average price per tonne from these seven pools was $264.03. The price realised by the defendant was $181.75. The report looks at a number of different grains and different qualities of those grains. In each case the defendant's return to the plaintiffs was considerably lower than the average. The report goes on to speculate as to why the defendant may have achieved a lower result. But the experts are unable to come to any conclusion because they do not have sufficient documentation to allow them to do so. That was the point of this application.
6 It was not in issue between the parties that the defendant had produced inferior results to other grain pools in the relevant period. Nor was it in dispute the defendant had documents which would explain how it obtained the return that it did. The main basis upon which the defendant opposed the application was that the plaintiffs did not have a cause of action. It was on that ground I determined the application. To explain that conclusion it is necessary to say something more about the relationship between the plaintiffs and the defendant and to explain in more detail how the defendant undertakes its operations.
7 In pars 13 and 14 of his affidavit Mr Draper explains the contractual relationship between the plaintiffs and the defendant in the following terms:
On instruction from all of the Plaintiffs and having considered the documents provided to me by them, it appears that the contractual relationship between the Plaintiffs and Emerald is governed by various documents, including Emerald's Western Australia Pool general Terms and Conditions and the Grain Trade Rules.
Not all of the Plaintiffs had the same contract with Emerald. On the documents available to me, it would appear that there were three different types of agreements which governed the contractual relationship between Emerald and the Plaintiffs including:
(a) Either:
(i) a Pre Harvest EOP (Participation Document) ('the Pre-Harvest Contract') which confirmed the farmer's acceptance of a contract in the Emerald Pool; and
(ii) a Contract Confirmation Contract (attachment A) with reference to the availability of the General Terms and Conditions available on Emerald's website or forwarded to a farmer upon request to Emerald.
(b) An Early Order Premium Offer Contract.
(c) Alternatively, the farmer would nominate Emerald as the acquirer of its product through the CBH website.
8 The plaintiffs did not put before the court any of the documents relating to any of the parties referred to in the above paragraphs. In opposition to the application the defendant relied on three affidavits of Wayne Pan. The last of these was affirmed 28 August 2015. Appearing as attachment WP6 to that affidavit is a copy of the defendant's 2011 - 2012 pool contract and its general terms and conditions as at March 2011. Before going to that document in detail I should say something more about the pool marketing arrangements. In pars 7 - 13 of Mr Pan's affidavit affirmed 24 June 2015 he explains in some detail the nature of the business of grain pools. It was not suggested by counsel for the plaintiffs this summary did not present an accurate picture of the defendant's activities. The paragraphs read as follows:
7. Prior to the deregulation of bulk wheat export industry in 2008, the Australian Wheat Board (AWB) was the monopoly operator of Australia's grain pools under a 'single desk' system. Pools are accumulations of grain from various growers, managed by a single entity. Prior to 2008 AWB would accumulate, market and sell grain, deduct pool management costs, and make distribution of pool proceeds to growers. Following deregulation private companies conducted and managed pools on behalf of growers.
8. In 2011/2012, growers of grain typically had two options to market and sell their grain products:
a. selling their grain for an agreed cash price per tonne; and/or
b. committing to deliver a set amount of grain to a grain pool managed by one of a number of grain marketers, and selecting one of the payment options on offer.
9. The main difference between delivering grain for cash and into a pool is that a cash sale is a fixed amount, whereas with grain pools, the relevant marketer would accumulate a grower's grain with that of other growers and then over a typical period of 15 to 18 months aim to obtain the highest return they can for the pooled grain through a range of hedging, marketing and trading activity.
10. Grain pools typically have distribution schedules, where pool managers will pay a portion of estimated pool returns (EPR) at various intervals based on performance of the pool throughout a marketing year. Pool managers each typically offer several pool products (or payment options) which vary the manner in which the distributions are made. This allows growers to choose the pool they wish to deliver to as well as the payment option that best suits their needs.
11. EPRs are only estimates, and can be adjusted by pool managers as prevailing market conditions and factors such as weather impact on the marketing of a grain pool. At the end of each pool marketing program, a final pool return (FPR) is determined, and final distributions to each grower calculated and paid pursuant to the terms of each grower's selected payment option.
12. When delivering to a pool, growers carry the risk of the eventual monetary return for their grain being lower than what they could have sold the same grain for in the cash market, but also enjoy the benefit of the critical mass of grain pools and a potential of a return higher than available in the equivalent cash market.
13. Industry reports are available to growers to assist in deciding which pool manager and pool product suits them best, and these reports provide detailed analysis of pool managers, their hedging and trading strategy, and compare their results against the cash market as well as other relevant metrics.
9 Appearing at attachment WP1 to Mr Pan's affidavit is a copy of the contract confirmation between the first plaintiff and the defendant dated 5 September 2011. It was not disputed the contract confirmation included the defendant's terms and conditions. What the contract confirmation did was confirm the mechanics of the agreement. For instance, the quantity of (in this case) wheat to be delivered was 1,000 tonnes. The delivery period was specified. The document was signed by a representative of the first plaintiff and the defendant.
10 Turning again to the terms and conditions under the subheading 'Indemnities and Limitation of Liability' there appears the following:
Neither of Emerald Grain or Emerald will be liable for any contingent, consequential, indirect, special or punitive damage, whether arising as a result of Emerald Grain or Emerald negligence or otherwise, and You acknowledge this express limit of liability and agree to limit any claim accordingly. To the extent permitted by law no other term, condition, agreement, warranty, representation or understanding, whether express or implied, other than these Terms and Conditions, or any other term by which Emerald Grain or Emerald agrees to be bound in writing, is made or given.
11 What is clear then is that there is a contractual arrangement between the plaintiffs and the defendant which contains the exclusion clause I have quoted above. The question for the plaintiffs is how, given that contractual limitation, they say a claim arises. It cannot arise under contract and although the intersection between tort and contract is not always clear it is difficult to see how in this case any tortious claim can be made out.
12 During the course of his oral submissions counsel for the plaintiffs submitted the plaintiffs may have a claim for breach of fiduciary duty. Of course that involves establishing there was a fiduciary relationship between the plaintiffs and the defendant. Counsel for the plaintiffs acknowledged there was not an agency relationship between the plaintiffs and the defendant. He nonetheless submitted the nature of the relationship was such that it could give rise to fiduciary duties.
13 That submission had about it a number of difficulties. First, it was not mentioned in counsel's written submissions and seems, with respect, to have been something of an afterthought. As a consequence counsel was not really in a position to highlight aspects of the relationship between the plaintiffs and the defendant which was said to give rise to the possibility of a fiduciary duty. Counsel did submit the plaintiffs were dependent on the defendant if they were to obtain the best price for their grain. He was unable to point to any other aspect of the relationship which might give rise to a fiduciary duty.
14 In my view there is no prospect of the court concluding there was a fiduciary duty between the plaintiffs and the defendant. It is true the price the plaintiffs would obtain for their grain was uncertain when property in the grain passed to the defendant. But the plaintiffs took that risk. There are a number of other grain pools available and for one reason or another these plaintiffs chose the defendant. That was a commercial decision. Moreover, the use of grain pools is designed to maximise the return to growers. It is a complex business involving forward selling, hedging, and probably management of currency variations. The whole process is speculative. Commodity brokers and futures traders bristle at any suggestion their business is a form of gambling. But it is certainly speculative. Returns can be high or low and the outcome in any year might depend upon a number of factors. In other words, farmers in the position of the plaintiffs go into a grain pool with their eyes wide open and not really in a position of dependency.
15 There was no dispute between the parties as to the principles to be applied in a case such as this. The defendant did raise a number of other objections to the plaintiffs' application including an argument the plaintiffs had not made sufficient enquiries and that to discover the documents sought by the plaintiffs would be oppressive. It is not necessary for me to deal with any of these issues. I am not satisfied the plaintiffs may have a cause of action against the defendant. On that basis the claim must fail.
16 I will hear the parties as to the form of orders and as to costs.
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