La Rosa v Nudrill Pty Ltd
[2013] WASCA 18
•1 FEBRUARY 2013
LA ROSA -v- NUDRILL PTY LTD [2013] WASCA 18
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2013] WASCA 18 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:150/2011 | 3 SEPTEMBER 2012 | |
| Coram: | McLURE P BUSS JA MURPHY JA | 1/02/13 | |
| 27 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| A | |||
| PDF Version |
| Parties: | GIUSEPPE LA ROSA NUDRILL PTY LTD |
Catchwords: | Contract Carriage of drill rig Drill rig damaged in transit Exclusion clause endorsed on back of invoices Whether exclusion clause incorporated into contract by prior course of dealings Whether knowledge of term may be actual or constructive Meaning of 'contractual document' Whether document containing the term must be sent or given prior to, or at the time of, formation of each of the contracts (or one or more of them) constituting the prior course of dealings Whether the term must be incorporated in at least one of the contracts constituting the prior course of dealings Whether reasonably open on the evidence for trial judge to find appellant breached his contractual and tortious duties to exercise reasonable care Whether appellant failed to discharge onus of disproving negligence in bailment Turns on own facts |
Legislation: | Nil |
Case References: | Brambles Holdings Ltd v WMC Engineering Services Pty Ltd (Unreported, WASCA, Library No 990096, 4 March 1999) Chattis Nominees Pty Ltd v Norman Ross Homeworks Pty Ltd (receiver appointed) (in liq) (1992) 28 NSWLR 338 Circle Freight International Ltd v Medeast Gulf Exports Ltd [1988] 2 Lloyd's Rep 427 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 DJ Hill & Co Pty Ltd v Walter H Wright Pty Ltd [1971] VR 749 Hardwick Game Farm v Suffolk Agricultural Poultry Producers Association [1966] 1 WLR 287 Hays Personnel Services (Australia) Pty Ltd v Motorline Pty Ltd [2008] QCA 375 Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31 Hollier v Rambler Motors (AMC) Ltd [1972] 2 QB 71 MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975) 133 CLR 125 McCutcheon v David MacBrayne Ltd [1964] 1 WLR 125 Moratic Pty Ltd v Gordon [2007] NSWSC 5; (2007) 13 BPR 24,713 Nudrill Pty Ltd v La Rosa [2010] WASCA 158 Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; (1988) 165 CLR 197 Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 Pondcil Pty Ltd v Tropical Reef Shipyard Pty Ltd [1994] FCA 1206; (1994) ATPR (Digest) 46-134 Remath Investments No 6 Pty Ltd v Chanel (Australia) Pty Ltd [1992] NSWCA 208 Rinaldi & Patroni Pty Ltd v Precision Mouldings Pty Ltd [1986] WAR 131 Ronstan International Pty Ltd v Thomson [2002] VSCA 75 Spurling v Bradshaw [1956] 1 WLR 461 Taylor v R Singleton (Traders) Pty Ltd (1995) 182 LSJS 112 The Proprietors of Strata Plan 30102 v Energy Australia [1997] NSWCA 251 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : LA ROSA -v- NUDRILL PTY LTD [2013] WASCA 18 CORAM : McLURE P
- BUSS JA
MURPHY JA
- Appellant
AND
NUDRILL PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : KEEN DCJ
Citation : NUDRILL PTY LTD -v- LA ROSA [No 3] [2011] WADC 178
File No : CIV 1523 of 2008
(Page 2)
Catchwords:
Contract - Carriage of drill rig - Drill rig damaged in transit - Exclusion clause endorsed on back of invoices - Whether exclusion clause incorporated into contract by prior course of dealings - Whether knowledge of term may be actual or constructive - Meaning of 'contractual document' - Whether document containing the term must be sent or given prior to, or at the time of, formation of each of the contracts (or one or more of them) constituting the prior course of dealings - Whether the term must be incorporated in at least one of the contracts constituting the prior course of dealings
Whether reasonably open on the evidence for trial judge to find appellant breached his contractual and tortious duties to exercise reasonable care - Whether appellant failed to discharge onus of disproving negligence in bailment - Turns on own facts
Legislation:
Nil
Result:
Appeal dismissed
Category: A
Representation:
Counsel:
Appellant : Dr P R MacMillan
Respondent : Mr J A Thomson
Solicitors:
Appellant : Friedman Lurie Singh & D'Angelo
Respondent : SRB Legal
Case(s) referred to in judgment(s):
Brambles Holdings Ltd v WMC Engineering Services Pty Ltd (Unreported, WASCA, Library No 990096, 4 March 1999)
Chattis Nominees Pty Ltd v Norman Ross Homeworks Pty Ltd (receiver appointed) (in liq) (1992) 28 NSWLR 338
Circle Freight International Ltd v Medeast Gulf Exports Ltd [1988] 2 Lloyd's Rep 427
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
DJ Hill & Co Pty Ltd v Walter H Wright Pty Ltd [1971] VR 749
Hardwick Game Farm v Suffolk Agricultural Poultry Producers Association [1966] 1 WLR 287
Hays Personnel Services (Australia) Pty Ltd v Motorline Pty Ltd [2008] QCA 375
Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31
Hollier v Rambler Motors (AMC) Ltd [1972] 2 QB 71
MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975) 133 CLR 125
McCutcheon v David MacBrayne Ltd [1964] 1 WLR 125
Moratic Pty Ltd v Gordon [2007] NSWSC 5; (2007) 13 BPR 24,713
Nudrill Pty Ltd v La Rosa [2010] WASCA 158
Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; (1988) 165 CLR 197
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451
Pondcil Pty Ltd v Tropical Reef Shipyard Pty Ltd [1994] FCA 1206; (1994) ATPR (Digest) 46-134
Remath Investments No 6 Pty Ltd v Chanel (Australia) Pty Ltd [1992] NSWCA 208
Rinaldi & Patroni Pty Ltd v Precision Mouldings Pty Ltd [1986] WAR 131
Ronstan International Pty Ltd v Thomson [2002] VSCA 75
Spurling v Bradshaw [1956] 1 WLR 461
Taylor v R Singleton (Traders) Pty Ltd (1995) 182 LSJS 112
The Proprietors of Strata Plan 30102 v Energy Australia [1997] NSWCA 251
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
(Page 4)
1 McLURE P: The appellant (defendant) appeals from orders made by Keen DCJ upholding the respondent's (plaintiff) claims in contract, negligence and bailment for damage caused to a drill rig whilst it was being transported by the appellant from Perth to Kalgoorlie on 30 August 2001.
2 The drill rig was on a low-loader attached, via a dolly, to a prime mover being driven by the appellant. Whilst negotiating a roundabout on the outskirts of Kalgoorlie the wheels on the right-hand side of the low-loader lifted from the road surface causing the drill rig to fall from the low-loader. The trial judge found that the appellant failed to exercise reasonable care and skill by driving the prime mover at an excessive speed in the circumstances.
3 The appellant relies on two grounds of appeal. First, he claims the trial judge erred in finding that he drove at an excessive speed in the circumstances. Second, he claims the trial judge erred in finding that an exclusion clause was not incorporated in the oral contract between the appellant and the respondent (the cartage contract) by a course of dealing between the parties.
Background and findings on breach
4 The cartage contract was negotiated by Mr Geoffrey Webster, the respondent's operations manager, and the appellant in a telephone call.
5 The appellant, with Mr Brian Webster, loaded the drill rig on the low-loader at a service station in Gnangara on 29 August 2001 at around 2.00 pm. The appellant, who had transported the drill rig previously, widened the low-loader from 2.5 m to 2.7 m for greater stability. The drill rig was 2.6 m wide. It could sit on the low-loader without any overhang.
6 The appellant estimated the weight of the prime mover at around 9.5 tonnes, the dolly at 3.5 tonnes, the low-loader at 10.5 tonnes and the drill rig at between 36 and 38 tonnes. Three stabiliser legs or jacks on the drill rig were lowered in order to stabilise the rig on the low-loader. The appellant then chained the drill rig to the low-loader. There were two chains at the front of the drill rig and two at the rear. They were placed in cross-action to help eliminate any movement in the load. After ensuring that the chains were correctly tensioned and carrying out a visual inspection, the appellant commenced his journey. From time to time the appellant stopped to check his load and its security. On each occasion everything was in order.
(Page 5)
7 The appellant stopped for the night just east of Merredin. The next morning he set off for Kalgoorlie. On route from Perth the appellant successfully negotiated a left-hand turn of approximately 90 degrees and a 90 degree turn to the right on approaching Kalgoorlie. He arrived there around midday on 30 August 2001. The appellant was ahead of schedule and not in any hurry. The accident occurred at a roundabout at the junction of Anzac Drive, Lane Street and Goldfields Highway, Boulder.
8 The appellant's evidence on the circumstances surrounding the accident was as follows. He travelled along Anzac Drive, on his approach to the roundabout, at approximately 60 km per hour. At about 300 to 350 m from the roundabout he started his usual procedure, which was to switch on the engine brake and to change down in gears to reduce speed. The prime mover had an 18-speed gear box. He went down through the gear box to the point where he was in low range fourth gear as he approached the roundabout. He was very familiar with the roundabout, having transported heavy equipment through it many times before.
9 The appellant estimated his speed at approximately 15 km per hour as he entered the roundabout which he said was not abnormally low considering the weight of the rig, its height and the weight distribution. This estimation of speed was based on his general experience of the vehicle, how the surroundings flashed past him and the gear his truck was in. On that subject he said in re-examination:
I was in fourth gear. That is in low range of the transmission and that would be the speed that – the gear I would need to maintain that speed. The speed being any higher would stall the vehicle because the wrong gear was engaged. The speed any lower would stall the vehicle because a lower gear would be required (ts 304).
10 The appellant said he approached the roundabout, swung to the left into the roundabout and then started to swing to the right. Just prior to starting to turn to the left again, the right-hand wheels of the low-loader lifted off the road surface and the drill rig fell off it. The chains going from the left side of the rig to the right side of the low-loader snapped and the other two proceeded to fold over with the drill rig and follow it. The drill rig fell onto its right-hand side (it had been reversed onto the low-loader).
11 Mr La Rosa was cross-examined about the cause of the accident:
And as you pulled into the roundabout, you were going towards the left---Yes.
(Page 6)
- And the dolly and the low-loader when it was loaded were significantly heavy---Yes.
And when you changed direction to pull to your right - - ----Yes.
- - - you have to take into account the effect of the weight that you're pulling---Yes.
And the weight that you are pulling produces its own momentum---This is the - - - -
Well, let me put it a different way---Yeah.
It's a dead weight, isn't it---Yes. Yes.
Very well. And as you pulled to your right to negotiate the roundabout - - ----Yes.
- - - I think your evidence was that you looked into a rear view mirror---Into my driver's mirror, yes. Just glanced in there.
Yes---Briefly, yes.
And you saw that the low-loader and the drill rig were leaning off to the left-hand side---Were leaning to the left, yes.
You also said, I think, that you saw that the wheels of the low-loader had lifted off the ground---Were in a position to lift off the ground, yes.
THOMSON, MR: Right. Now, I'm not suggesting to you at the moment that you were proceeding too fast, but if you had been proceeding too fast, isn't that the exact movement that you would have expected as you pulled to the right - - -
[Objection.]
THOMSON, MR: Now, based on your experience as a truck driver, if you were driving a truck which was going too fast and you pulled to the right, is it not the case that what would occur is that the low-loader with its load on it, of the drill rig, would lean to the left---Yes, I would.
And if you were going quite a bit too fast, that would produce the effect, in your experience, of the wheels of the low-loader lifting off the ground---At a substantial speed, yes.
THOMSON, MR: Right.
KEEN DCJ: Can I just interject, to clarify something on that, please, Mr Thomson. Which wheels of the low-loader?
…
(Page 7)
- THOMSON, MR: Yes. In reference to the last answer, the wheels of the low-loader that would lift off the ground would be the wheels on the right-hand side of the low-loader---That is correct.
Yes. So what occurred on the occasion when the accident occurred is a movement of the low-loader and the drill rig which is exactly consistent with what would have happened if you had been driving too fast---Perhaps, yes.
And it is the case, is it not, that the drill rig fell onto the outside of the roundabout---Yes (ts 293 - 295).
12 Neither party adduced independent expert evidence relating to the cause, or possible causes, of the events leading to the drill rig falling from the low-loader.
13 The trial judge found that the right-hand wheels of the low-loader lifted from the road surface just before the drill rig fell from the low-loader [194]. He said there was no evidence to contradict the appellant's evidence that at the time of negotiating the roundabout the truck was in low range fourth gear and travelling at a speed he estimated at approximately 15 km per hour [195].
14 The trial judge considered the bailment claim first followed by the contract and negligence claims together. I infer he did so because in the bailment claim the appellant bore the onus of proving that the damage to the drill rig was not caused by reason of want of care on his part. See Nudrill Pty Ltd v La Rosa [2010] WASCA 158 [16]. The respondent bore the onus proving breach of contract and negligence.
15 On the bailment claim the trial judge said:
[Mr La Rosa] has given no explanation as to why the wheels of the low-loader lifted causing the rig to fall from the low-loader. In cross-examination he acknowledged that travelling too fast and pulling to the right would cause the wheels to so lift. Further, he acknowledged that what occurred was exactly consistent with what would have happened had he been driving too fast.
In the circumstances Mr La Rosa has failed to satisfy me that the damage to the rig was not caused by want of care in his part. There is nothing before me to suggest that the rig was properly secured immediately before the accident other than Mr La Rosa's own explanation of the use of chains, or that the speed at which he was travelling around the roundabout was in fact a reasonable and safe speed in all the circumstances which includes the nature of the load he was transporting and the equipment he was using to transport that rig. There is simply no other explanation for the accident.
(Page 8)
- In the circumstances I find that Mr La Rosa is liable in bailment [199] - [201].
16 The trial judge then considered the claims in contract and negligence. He found that the appellant owed both a contractual and tortious duty to the respondent to exercise reasonable care and skill in the performance of his contractual obligations.
17 The trial judge went on to make factual findings on the contract and negligence claims, only some of which overlapped with the findings on the bailment claim. He accepted the evidence of the appellant as to the speed of the vehicle at the relevant time, the gear it was in and what he said about any variation in that speed causing the vehicle to stall [204]. The trial judge also accepted the appellant's evidence that the drill rig was properly positioned and secured on the low-loader which he had extended from 2.5 to 2.7 m, that the stabilisers on the drill rig were activated, that he made frequent stops throughout the course of the journey in order to check the load which was secure and that the journey was uneventful until the incident [205], [207] - [208]. He continued:
Why then at the roundabout did the wheels on the low-loader lift causing the rig to move with the attendant breaking of the chain and the rig falling from the low-loader and being damaged?
The only explanation for such an event, given my findings that he had properly secured the drill rig to the low-loader, had engaged the stabilisers and had extended the width of the low-loader to give further stability, is that he was travelling at excessive speed.
A speed of 15 km [per hour] is not of itself a great speed. However whether it is excessive depends upon all of the circumstances and conditions. It is telling that Mr La Rosa accepted that the movement of the low-loader and the drill rig was exactly consistent with what would have happened if he had been driving too fast …
That concession as to the wheels lifting, being consistent with speed, ie as a result of centrifugal force, was made by him after earlier cross-examination attempting to elicit this concession and in respect of which he was, in my view, evasive. I find that he was evasive because he did not want to admit that even travelling at 15 km per hour with this load on this roundabout was an excessive speed [210 – 213].
18 During the hearing of the appeal, the appellant's counsel sought leave to add a further ground of appeal to the effect that the trial erred in concluding (in [200]) that there was no evidence to suggest that the drill rig was properly secured and positioned immediately before the accident. Counsel for the respondent conceded that it was no part of its case at trial
(Page 9)
- that the drill rig was not properly positioned or secured immediately before the accident and that there was evidence to support a finding that the drill rig was properly secured and positioned at the relevant time. Indeed that is the trial judge's finding in the contract and negligence claims at [205]. In those circumstances it is unnecessary to add the further ground.
19 Although nothing turns on it, the appropriate course would have been to first consider and determine whether the respondent had proved its positive case that the appellant had breached his contractual and tortious duties by failing to exercise reasonable care by driving at an excessive speed. That would determine all claims, including that in bailment. Relying on the same findings of fact but assuming the respondent had not proved breach, the court would then determine whether the appellant had succeeded in the more difficult task of disproving negligence solely for the purpose of the bailment claim.
Breach - Excessive speed
20 The appellant contends that it was not reasonably open on the evidence adduced at trial to find that the appellant drove at a speed that was excessive in all the circumstances. I disagree. The direct physical cause of the drill rig falling from the low-loader was the right-hand wheels of the low-loader lifting off the road surface causing the drill rig to move and the chains to break. Potential alternative causes were positively excluded by the trial judge. He found that the drill rig was at all material times properly positioned and secured on the low-loader. There was nothing in the condition of the road surface, weather or otherwise which provided an explanation for the wheels of the low-loader leaving the road surface. The appellant's evidence of his general experience established that the lifting of the wheels was not an unavoidable risk associated with the road transport of heavy machinery or equipment through the roundabout in question or generally. The appellant was familiar with the roundabout, having transported heavy equipment through it on many occasions without incident. Moreover, the appellant conceded that the actual movement of the low-loader in the roundabout was consistent with excessive speed.
21 Against that evidentiary background, the only reasonable explanation for the right-hand wheels of the low-loader lifting off the road surface was that the vehicle was being driven at a speed that was excessive in all the circumstances. It was open to the trial judge to draw that inference. There were two possible routes to the inference. Either the appellant's
(Page 10)
- estimate of speed and associated gear level was unreliable or, even if reliable, his speed was too fast in the circumstances. The fact that there are two alternative routes to the same conclusion does not prevent the trial judge from finding that the appellant drove at a speed that was excessive in the circumstances.
22 Moreover, even if it was not reasonably open on the evidence to make a positive finding on the balance of probabilities that the appellant drove at a speed that was excessive in all the circumstances, the appellant would remain liable in bailment for the damage caused to the drill rig. The trial judge found, correctly in my respectful opinion, that the appellant had not discharged the onus of proving that the damage to the drill rig was not caused by want of care on his part. I would dismiss this ground.
The exclusion clause
23 From time to time, the appellant carried on the cartage business either on his own account, in partnership with his wife or through a company, Rojo (WA) Pty Ltd (the company). The business operated under various names. In 1989 it operated under the name 'Joe's Tilt Tray & Crane Service'; in 1990 and 1991 it operated under the name 'Joe's Tilt Tray Crane & Loader Service'; and from 1997 it operated under the name 'J-Can Transport Service'. Equipment was transported for the respondent under each of those trading names.
24 After performing each job for the respondent, the appellant sent an invoice to the respondent specifying the equipment carried, the location of the pick up, the place of delivery and the cost of the work, whether by reference to a quoted sum or an hourly rate. There were eight invoices from Joe's Tilt Tray & Crane Service in the period January - May 1989 (exhibit 15); two invoices from Joe's Tilt Tray Crane & Low Loader Service dated January 1990 and September 1991 (exhibit 16); and 17 invoices from J-Can Transport Service in the period July 1997 to June 2001 (exhibit 17).
25 At the foot of the front of all the invoices was a reference to 'TERMS'. On the invoices in exhibits 15 and 16 there was endorsed:
TERMS: Payment within fourteen days of receipt of invoice - no statements issued.
The terms and conditions set forth on the reverse side of this invoice are fully acknowledged and understood.
(Page 11)
26 At the foot of the front of nine of the invoices in exhibit 17 there was endorsed:
TERMS: Payment within 30 days of receipt of invoice – No Statements issued.
Our Terms and Conditions are set forth on the reverse side of this invoice. Goods are not insured unless requested in writing.
27 Eight of the invoices in exhibit 17 had a reduced payment period of 14 days, but were otherwise in the same terms as the others in the exhibit. The terms and conditions printed on the reverse side of each invoice contained an identical clause in the following terms:
All goods are handled, lifted or carried at owner's risk. The Contractor shall not be liable for any loss or damage of property and/or goods of the Client whether such damage was caused by any act, default or negligence on the part of the Contractor, and/or his servants.
28 The term 'Contractor' is defined in the invoices to mean 'the name of which appears on the face of this document'.
29 It was accepted by both parties that the telephone conversation between Mr Geoffrey Webster and Mr La Rosa giving rise to the cartage contract was confined to matters of price, destination, pick up and time. All previous cartage contracts were also oral. The only documentary component of the dealings between the appellant (and his other entities) and the respondent were the invoices from the appellant claiming payment for contractual services previously provided.
30 It is accepted that the respondent's receipt of the invoices was the only possible source of notice or knowledge of the appellant's terms and conditions. Mr Michael Norburn was responsible for authorising payment of invoices received by the respondent. There was no finding that Mr Norburn, or anyone else on behalf of the respondent, had actual knowledge of the existence or content of the exclusion clause.
31 The trial judge found that the terms and conditions endorsed on the reverse side of the invoices were not incorporated into the carriage contract. The trial judge continued:
Even if [Mr Norburn] had read the terms, unless and until at least one prior contract had come into existence which contained the terms which are now sought to be incorporated into the present contract those terms are a thing writ in water. I respectfully adopt what was said by Burt CJ in [Rinaldi & Patroni Pty Ltd v Precision Mouldings Pty Ltd [1986] WAR 131], that
(Page 12)
- you must first find an earlier contract or contracts containing the term. There is no evidence to show that at any time a contract was preceded by any quotation or other paperwork containing terms intended to form part of a contract then to be formed [169].
32 On my reading, the trial judge appears to require that the exclusion clause be contained in a 'contractual document' containing or evidencing an agreed term in one of the earlier contracts between the appellant and the respondent. However, Rinaldi is not authority for the proposition that contractual terms and conditions in an invoice for prior services are incapable of becoming incorporated in a future contract between the same parties.
33 The facts in Rinaldi are very close to the present. The respondent in that case carried on business as a boat builder. The respondent agreed orally with the first appellant to transport a fishing vessel to Melbourne at an agreed price. On the outskirts of Melbourne the fishing vessel was extensively damage when it was driven under a low bridge. On nine or 10 previous occasions similar contracts had been entered into between the respondent and first appellant. The practice was to agree orally by telephone on the cartage of a boat. The cost was worked out subsequently and entered by the first appellant's driver in a book of cart notes, which were carbonised and prepared in triplicate for signature by the consignee. The third copy of the cart note, after costing, would be stapled to an invoice and sent to the respondent. On the face of each cart note appeared the words 'All goods are accepted subject to conditions on reverse', and on the back of each cart note were printed conditions, one of which was an exclusion clause. It was accepted by the parties that the respondent did not have actual knowledge of the exclusion clause. The Full Court held that the cart notes were not contractual documents and that the terms printed on the back were not incorporated into the contract by a course of dealing. Burt CJ said:
The proposition expressed in general terms is that if it should appear that the parties had over a period of time been conducting business upon terms excluding liability then it should be held that on the occasion in question they contracted upon that basis.
The difficulty in making good that proposition upon the facts of this case is evident enough. Once it is conceded that the use of the cart notes in the way in which they were used could not sustain a finding that the contract first entered into contained as a term cl 5 of the conditions, how does one then establish the relevant course of business which leads to the conclusion that without the respondent being fixed with actual knowledge of that term it is to be implied in subsequent contracts (135).
(Page 13)
34 The Chief Justice distinguished Spurling v Bradshaw [1956] 1 WLR 461, which is relied on by the appellant. The counterclaiming defendant in that case had left the plaintiff eight barrels of orange juice for storage. A few days later he received a 'landing account' which on its face referred to conditions on the back, one of which was an exclusion clause. Burt CJ characterised the 'landing account' as a contractual document, it constituting acceptance of the plaintiff's offer to bail the orange juice with the defendant.
35 Rinaldi was followed in Brambles Holdings Ltd v WMC Engineering Services Pty Ltd (Unreported, WASCA, Library No 990096, 4 March 1999). In that case mining equipment was damaged by the negligence of the appellant in the course of transporting it to the respondent's mining operations at Leinster. The issue was whether the appellant was entitled to the benefit of an exclusion clause printed on the reverse side of the consignment note for the journey. At no time prior to the loss was the consignment note seen by any person outside the appellant, who relied on a regular course of dealing between it and the freight forwarder (GIF) engaged by the respondent. Anderson J (with whom Kennedy and Wallwork JJ agreed) said that what had to be proved was 'a consistent course of dealing, the only reasonable inference from which is that the party to be charged was "evincing an acceptance of, and a readiness to be bound by, the printed conditions …"' (5). The consignment notes in that case were not contractual documents but post-contractual, their purpose being to provide proof of performance of the contract of carriage to which they related and to support the invoice rendered in respect of that work. The Full Court in Brambles upheld the trial judge's conclusion that the GIF had not by its conduct evinced an acceptance of and a readiness to be bound by the exclusion clause.
36 Other cases relied on by the appellant include Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31, Chattis Nominees Pty Ltd v Norman Ross Homeworks Pty Ltd (receiver appointed) (in liq) (1992) 28 NSWLR 338 and Circle Freight International Ltd v Medeast Gulf Exports Ltd [1988] 2 Lloyd's Rep 427.
37 In Kendall, an issue arose between the defendant (SAPPA) and a third party supplier (Grimsdale) arising out of three oral contracts for the supply of compounded meal by Grimsdale to SAPPA. There had been frequent prior transactions between the parties involving three to four deals a month over the previous three years. The practice had been that Grimsdale would send a contract note to SAPPA either later on the day of an oral contract or on the day following. SAPPA would expect to receive
(Page 14)
- such a contract note. On the back of the contract notes there were terms and conditions, including an exclusion clause. SAPPA knew that there were terms and conditions on the back of the contract notes though had not read them. The House of Lords agreed with the Court of Appeal that the terms and conditions, including the exclusion clause, formed part of the oral agreements. Lord Morris said:
Over the course of a long period prior to the three oral contracts which are now in question SAPPA knew that when Grimsdale sold they did so on the terms that they had continuously made known to SAPPA. In these circumstances it is reasonable to hold that when SAPPA placed an order to buy they did so on the basis and with the knowledge that an acceptance of the order by Grimsdale and their agreement to sell would be on the terms and conditions set out on their contract notes … (90).
The question, therefore, is not what SAPPA themselves thought or knew about the matter but what they should be taken as representing to Grimsdale about it or leading Grimsdale to believe. The only reasonable inference from the regular course of dealing over so long a period is that SAPPA were evincing an acceptance of, and a readiness to be bound by, the printed conditions of whose existence they were well aware although they had not troubled to read them. Thus the general conditions became part of the oral contract (113).
39 Brinsden J noted in Rinaldi (at 146) that the evidence in Kendall established that the contract note was intended to be contractual to the knowledge of the purchasing party.
40 In Chattis Nominees there were regular dealings between the plaintiff, a furniture manufacturer, and the defendant, a discount retailer. Commercial dealings commenced in about 1988. The defendant regularly ordered goods from the plaintiff and on all its invoices, which accompanied the supply of goods, there was in block letters in a prominent position on the front of the invoice a romalpa clause. On an occasion in August or September 1990 a representative of the defendant informed a representative of the plaintiff that the defendant did not recognise romalpa clauses and that the plaintiff would have to remove it from its invoices. The plaintiff's representative responded that he had no authority to do that and the defendant would have to speak to the owner of the business. No further objection was taken to the romalpa clause. Dealings continued between the parties as before with the invoice containing the romalpa clause. The trial judge found that the romalpa clause constituted a term of the contracts entered into by the plaintiff and
(Page 15)
- defendant throughout 1991. Chattis Nominees is distinguishable. The evidence established that the defendant had actual knowledge of the romalpa clause.
41 In Circle Freight, the appellant (plaintiff), a freight forwarding agent, had provided services to the respondent (defendant), an exporter of goods to the Middle East. There had been a course of dealing between the parties in which at least 11 invoices had been sent by the appellant to the respondent. The invoices stated that all business was transacted by the company 'under the current trading conditions of the Institute of Freight Forwarders [IFF] a copy of which is available on request'. The respondent had never asked for a copy of the conditions and had not been sent one. However, prior to entering into the oral contract in issue, the appellant wrote to the respondent advising of a change in ownership of the business and that the business was being carried out under the IFF conditions. The Court of Appeal held that the IFF conditions were effectively incorporated into the contract.
42 See also Pondcil Pty Ltd v Tropical Reef Shipyard Pty Ltd [1994] FCA 1206; (1994) ATPR (Digest) 46-134 and Remath Investments No 6 Pty Ltd v Chanel (Australia) Pty Ltd [1992] NSWCA 208. Both involved post-contractual documents which were held not to be incorporated into contracts as a result of a previous course of dealings between the parties.
43 A review of all the cases reveals that there is no single test for the incorporation of a term into a contract based on prior dealings. However, it is clear that we are not here talking about implied terms in fact (which must satisfy the test in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 347) or a term implied as a matter of trade custom or usage. The question is whether an express term is incorporated into a contract as a result of an inference arising from the prior conduct of the parties as a whole. Moreover, it is not essential in a prior dealing case that the term in issue must have been incorporated in a previous contract between the parties, whether by a contractual document or otherwise. The trial judge erred in that regard.
44 The test applied in the 'ticket cases' is frequently used in prior dealing cases. That test is whether the party seeking to rely on the term did what was reasonably sufficient to give to the other contracting party notice of the term; that is a question of fact having regard to the circumstances of each case and the situations of the contractual parties: Remath Investments; Pondcil; Circle Freight.
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45 In the ticket cases, notice of the terms is given on or around the time of entry into the relevant contract and constructive knowledge of the content of the term(s) is sufficient: MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975) 133 CLR 125. Moreover, in the ticket cases the expression 'contractual document' is used to refer to the sort of document in which a reasonable person would expect to find contractual terms. However, in the prior dealing cases it has a wider meaning to include documents which the parties have by their conduct accepted or treated as a contractual document. Kendall falls within this category.
46 Anderson J in Brambles adopted and applied Lord Pearce's test in Kendall for the incorporation of terms by prior dealings. That test seems more appropriately adapted to the circumstances in which prior dealings are relied on. On that test, actual knowledge of the content of the relevant term(s) may be sufficient to justify an inference of an acceptance of, and readiness to be bound by, the conditions in the document, but is not essential.
47 However, regardless of which test is applied, the facts in this case do not support an inference that the exclusion clause was incorporated in the cartage contract as a result of the prior dealings between the parties. I will assume for present purposes that the dealings between all the various entities can be taken into account. The invoices were not a 'contractual document' within either the narrow or wider meaning of the expression. In each case the invoice was provided to the respondent for services already supplied pursuant to a prior contract. The purpose of the invoices was to secure payment for those services. The receipt of the invoices by the respondent in all the circumstances is not sufficient to justify an inference of an acceptance by the respondent of, and readiness to be bound by, the terms on the reverse of the invoices. Nor is it sufficient notice to the respondent of the terms on which the appellant would do business in the future. I would dismiss this ground of appeal.
Conclusion
48 For these reasons, I would dismiss the appeal.
49 BUSS JA: On 30 August 2001, the appellant was driving a truck towing a low loader. A drill rig was being transported on the low loader. The rig fell from the low loader and was substantially damaged while the appellant was negotiating a roundabout near Kalgoorlie.
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50 Drill Hire Pty Ltd was the owner of the drill rig. It hired the rig and other equipment to the respondent.
51 The trial judge, Keen DCJ, made, relevantly, these unchallenged findings:
(a) Geoffrey Webster, acting on behalf of the respondent, arranged, in a telephone conversation with the appellant, for the appellant to transport the drill rig from Perth to Kalgoorlie. A contract to transport the rig was formed in the course of this conversation. The commencement and termination points for transportation of the rig, and the price for transporting it, were the only matters discussed [23] - [26], [163].
(b) The contract contained implied terms that the appellant would load and secure the drill rig carefully and skilfully; the appellant would exercise, in transporting the rig, the level of care, skill and expertise reasonably to be expected of an experienced truck driver; and the appellant would exercise reasonable care and skill to avoid causing loss to the respondent [122], [190].
(c) The appellant owed the respondent a tortious duty to exercise reasonable skill and care in transporting the drill rig, so as to avoid causing loss to the respondent [192].
(d) The appellant was a bailee for reward, and the respondent was entitled to sue the appellant for all of the damage to the drill rig [189], [221] - [226].
52 His Honour also found (and these findings are, in effect, challenged in the grounds of appeal) that:
(a) an exemption clause contained on the reverse of previous invoices sent by the appellant to the respondent, for other transportation work which he had previously carried out, was not incorporated into the contract in question [167] - [175]; and
(b) the appellant, while negotiating the roundabout, drove the truck towing the low loader at an excessive speed; the appellant failed to exercise or maintain proper control over the truck and the low loader; the appellant drove the truck and the low loader without due care and attention; consequently, the appellant was negligent; and the appellant's negligence caused the damage to the drill rig [194] - [220].
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The relevant facts and circumstances and the material parts of the trial judge's reasons
53 The relevant facts and circumstances and the material parts of the trial judge's reasons are set out in the reasons of McLure P (with which Murphy JA has expressed his agreement). I will not repeat them, except to the extent necessary to explain my reasons.
The grounds of appeal
54 The appellant relies on two grounds of appeal.
55 The first ground alleges that the trial judge erred in finding that the terms on the reverse of previous invoices sent by the appellant to the respondent, for other transportation work which he had previously carried out, were not incorporated into the contract in question.
56 The second ground alleges that his Honour erred in finding that the appellant drove the truck and the low loader without due care and attention and at an excessive speed.
The merits of the first ground
57 Counsel for the appellant submitted that the trial judge should have found that:
(a) there was a consistent course of dealing between the appellant and the respondent over a period of time 'such that the only reasonable inference was that the respondent evinced an acceptance of and a readiness to be bound by the printed conditions on the back of the invoice'; and
(b) the effect of the printed conditions was to exclude liability in the appellant for damage caused to the drill rig by the appellant's negligence.
58 The exemption clause in the printed conditions reads:
The contractor shall not be liable for any loss or damage of property and/or goods of the client whether such damage was caused by any act, default or negligence on the part of the contractor, and/or his servants [186].
59 Counsel for the respondent conceded, in his written submissions in the appeal, that if the exemption clause was incorporated into the relevant contract then the clause would have excluded the appellant's liability to the respondent [8].
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60 In Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22] and Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [40], the High Court reaffirmed the principle of objectivity in determining the rights and liabilities of the parties to a contract. These rights and liabilities are to be ascertained, not on the basis of the subjective beliefs or understandings of the parties, but on the basis of what each party, by words or conduct, would have led a reasonable person in the position of the other party to believe.
61 So, for example, absent a vitiating element such as misrepresentation, duress or mistake, a person who signs a document in connection with a contract of carriage which is intended to affect legal relations, and who knows that it contains contractual terms, is bound by those terms (including an exemption clause), and it is immaterial that he or she did not read or otherwise discover the terms in question. As Brennan J noted in Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; (1988) 165 CLR 197:
If a passenger signs and thereby binds himself to the terms of a contract of carriage containing a clause exempting the carrier from liability for loss arising out of the carriage, it is immaterial that the passenger did not trouble to discover the contents of the contract (228).
- See also Toll [42] - [47] (Gleeson CJ, Gummow, Hayne, Callinan & Heydon JJ).
62 However, where, in the case of a contract of carriage, an exemption clause is contained in a ticket or other unsigned document intended by the carrier to contain the terms of carriage, and the other party was not in fact aware, when the contract was formed, that the intended terms included an exemption clause, the carrier cannot rely on the exemption clause unless, when the contract was formed, the carrier had done everything that was reasonably necessary to notify the other party of the clause. See Oceanic Sun (228 - 229). Brennan J observed in that case:
In differing circumstances, different steps may be needed to bring an exemption clause to a passenger's notice, especially if the clause is an unusual one (229).
63 The parties to a contract may, by their conduct, incorporate terms into the contract. For example, terms may be incorporated by a previous course of dealings between the parties. A course of dealings, for this purpose, refers in general to the existence of a prior consistent history of comparable transactions between the parties when the relevant transaction is undertaken.
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64 In Hardwick Game Farm v Suffolk Agricultural Poultry Producers Association [1966] 1 WLR 287, there were more than a hundred prior dealings between the parties, of a similar character, over a period of three years, in which an oral contract for the sale of goods had been followed by a confirmatory 'Sold-Note', sent the next day, by the seller to the buyer containing, on the reverse, 'Conditions of Sale'. The buyer's agent knew that there were conditions on the reverse, but had never read them. The points at issue in the litigation included whether the conditions of sale had been incorporated into the contracts in question by the previous course of dealings. Diplock LJ said:
Where … the parties have not agreed to embody their contract in a written document but have entered into an oral contract with the intention of thereby creating legal rights and liabilities and it is sought to rely upon a term contained in some written document as modifying the respective rights and liabilities which would arise by implication of law from the nature of the contract, the only question is whether each party has led the other reasonably to believe that he intended that the rights and liabilities towards one another which would otherwise arise by implication of law from the nature of the contract, namely, a contract for the sale of goods, should be modified in the manner specified in the written document (340). (emphasis added)
65 On appeal in Hardwick, as Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31, Lord Pearce held that the court's task was 'to decide what each party to an alleged contract would reasonably conclude from the utterances, writings or conduct of the other' (113). His Lordship elaborated:
The question, therefore, is not what [the respondent] SAPPA themselves thought or knew about the matter but what they should be taken as representing to Grimsdale about it or leading Grimsdale to believe (113).
66 In Hardwick/Henry Kendall, the Court of Appeal and the House of Lords enunciated and applied an objective test, namely what each party was reasonably entitled to conclude from the actions or conduct of the other.
67 The reasonable objective expectation test has been applied consistently in the United Kingdom, and a similar approach has been taken in Australia. See Pondcil Pty Ltd v Tropical Reef Shipyard Pty Ltd [1994] FCA 1206; (1994) ATPR (Digest) 46-134, 53,654 - 53,656 (Cooper J); Ronstan International Pty Ltd v Thomson [2002] VSCA 75 [10] (Buchanan JA, Chernov & Eames JJA agreeing); Moratic Pty Ltd v Gordon [2007] NSWSC 5; (2007) 13 BPR 24,713 [21] (Brereton J); Hays
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- Personnel Services (Australia) Pty Ltd v Motorline Pty Ltd [2008] QCA 375 [17] (Holmes JA, Keane JA & McMeekin J agreeing); and the cases cited in those authorities.
68 It will be a question of fact and degree whether, in a particular case, the parties, by their conduct, have incorporated a term into their contract by a previous course of dealings. Each case turns on its own facts and circumstances. Factors of relevance in determining whether the alleged term was incorporated include the number of prior dealings, how recent they were, and the consistency in the prior dealings and the dealing in question (for example, the similarity between the subject matter of the dealings and the manner in which the dealings were entered into or concluded). This is not, of course, an exhaustive statement of relevant factors.
69 The factors which I have identified are relevant to what each party was reasonably entitled to conclude from the actions or conduct of the other. The requisite frequency will vary depending on the facts and circumstances of the particular case. See M Clarke, Notice of Contractual Terms [1976] CLJ 51, 60. Consistency is required in that, as Lord Pearce noted in McCutcheon v David MacBrayne Ltd [1964] 1 WLR 125, when the conduct is not consistent 'there is no reason why it should produce an invariable contractual result' (138).
70 A term may be incorporated by a previous course of dealings without it being essential for the party seeking to rely on the term to establish that the other party had actual knowledge of it. See Henry Kendall (90) (Lord Morris of Borth-y-Gest), (104 - 105) (Lord Guest), (130) (Lord Wilberforce); Rinaldi & Patroni Pty Ltd v Precision Mouldings Pty Ltd [1986] WAR 131, 138 (Burt CJ, Smith J agreeing); Pondcil (53,651 - 53,652); The Proprietors of Strata Plan 30102 v Energy Australia [1997] NSWCA 251 (Stein JA, Handley & Beazley JJA agreeing). The House of Lords in Henry Kendall disapproved the observations of Lord Devlin in McCutcheon (134) to the effect that previous dealings are only relevant if they prove actual knowledge of the terms, and assent to them.
71 It is not an essential pre-condition to the incorporation of a term by a previous course of dealings that:
(a) any document containing the relevant term have been sent or given to the party sought to be bound at or prior to the formation of each
- of the contracts (or one or more of them) constituting the previous course of dealings; or
- (b) the relevant term have been incorporated in at least one of the contracts constituting the previous course of dealings.
72 However, the time when any document containing the alleged term was in fact given or sent to the party sought to be bound, and that party's degree of knowledge (if any) of the document or the alleged term, will be relevant in determining whether it was given reasonable notice of the alleged term and, if so, what the party seeking to rely on the alleged term was reasonably entitled to conclude from the actions or conduct of the other party. See Hollier v Rambler Motors (AMC) Ltd [1972] 2 QB 71, 77 - 78 (Salmon LJ); Rinaldi & Patroni (138); Circle Freight International Ltd v Medeast Gulf Exports Ltd [1988] 2 Lloyd's Rep 427, 433 (Taylor LJ); Taylor v R Singleton (Traders) Pty Ltd (1995) 182 LSJS 112 (King CJ, Duggan & Nyland JJ agreeing); Pondcil (53,654).
73 In the present case, the trial judge was of the view that the Full Court of the Supreme Court of Victoria (Winneke CJ, Starke & Anderson JJ) in DJ Hill & Co Pty Ltd v Walter H Wright Pty Ltd [1971] VR 749, and Burt CJ in Rinaldi & Patroni, held that a term could not be incorporated into a contract by a previous course of dealings unless the term was contained in an earlier contract or contracts between the parties [120], [169]. This view was, with respect, erroneous.
74 In DJ Hill, the defendant agreed to carry machinery for the plaintiff. An oral contract was made between the parties. The machinery was damaged in transit as a result of the defendant's negligence. On delivery of the machinery, the defendant's representative gave a document to the plaintiff's representative for signature. The plaintiff's representative signed it. The document was in form a request for the carriage of goods 'subject to the terms and conditions endorsed on the back'. These conditions included an exemption clause. About 10 prior transactions had been completed between the parties during the 10-month period preceding the transaction in question. On each of the prior occasions a similar document was presented by the defendant's representative to the plaintiff's representative for signature upon delivery of the goods. The documents were signed. Some of the plaintiff's employees knew that there were terms and conditions on the back of the documents, but there was no evidence that any representative of the plaintiff had ever read or knew of the contents of the terms and conditions. It was held that the terms and
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- conditions endorsed on the back of the documents were not, by a previous course of dealings, incorporated into the contract in question.
75 In Rinaldi & Patroni, a representative of the plaintiff orally agreed with a representative of the first defendant that the first defendant would transport a fishing vessel from Perth to Melbourne. The vessel was damaged in transit as a result of the first defendant's negligence. On nine or 10 previous occasions the plaintiff and the first defendant had entered into similar oral contracts. These previous transactions had been completed during the seven-month period preceding the transaction in question. It was understood by the parties that a reasonable price would be paid for the work, calculated at an hourly rate. The cost was calculated by the first defendant after the work was completed and was then entered by the first defendant's driver in a book of cart notes, which were carbonised and prepared in triplicate for signature by the consignee. The cart note was signed on seven of the previous occasions. After the cost of the work was calculated, the third copy of the cart note would be stapled to an invoice and sent by the first defendant to the plaintiff for payment. On the face of each cart note appeared the words, 'All goods are accepted subject to conditions on reverse'. On the back of the cart note were printed conditions. The conditions included an exemption clause. There was no evidence that any representative of the plaintiff had read or was aware of the nature of the conditions on the back of the cart note. It was held that the conditions had not been incorporated by a previous course of dealings into the contract in question.
76 I respectfully agree with the analysis by Burt CJ in Rinaldi & Patroni of the decision and reasoning of the Full Court in DJ Hill. His Honour said:
The reasoning in Hill'scase as I understand it is to be found at 753 of the report. What is there being said is that in every case, as in the instant case, the document containing the exemption clause was presented for signature after the contract had been performed and that it was not a contractual document in that the respondent reasonably regarded it, being presented as it was, as being nothing more than an acknowledgment by it of the delivery of the goods. In that respect, I think that that case is on all fours with the present case. Indeed, that case on its facts would seem to me to be considerably stronger in favour of the importation of the condition. The documents in Hill's case were at least in terms contractual, each taking the form of a request to carry the goods and to provide the crane 'subject to the terms and conditions endorsed on the back hereof' and each was after the event signed by an employee of the respondent. In the instant case the cart notes do not take the form of a request to carry the goods. They take the form of a request to accept delivery: 'Please receive from Rinaldi &
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- Patroni Pty Ltd.' The cart note in its terms is a request by the first appellant to the consignee to accept delivery of the goods. It is not a request to it by the consignor to carry the goods. The reasoning of the Full Court in Hill's case proceeds to point out that as the documents signed on the earlier occasions were not contractual documents there was
'no evidence of any course of prior dealing in which the parties mutually regarded the terms and conditions endorsed on the back of the form as part of the contract between them.'
This is the difficulty which I referred to earlier in these reasons (138). (emphasis added)
77 Earlier in his reasons, Burt CJ referred to the submission advanced on behalf of the defendants in the appeal:
In argument it was conceded that there was no basis upon which the term could be implied in the contract of carriage first entered into which on the facts would appear to be a contract entered into on 30 April 1980 - cart note 13385. The submission is that at some unspecified time thereafter, the oral agreements should be held to have been made upon the terms of the 'conditions' and it should be so held by reason of 'a course of dealing' between the parties. The proposition expressed in general terms is that if it would appear that the parties had over a period of time been conducting business upon terms excluding liability then it should be held that on the occasion in question they contracted upon that basis.
The difficulty in making good that proposition upon the facts of this case is evident enough. Once it is conceded that the use of the cart notes in the way in which they were used could not sustain a finding that the contract first entered into contained as a term cl 5 of the conditions, how does one then establish the relevant course of business which leads to the conclusion that without the respondent being fixed with actual knowledge of that term it is to be implied in subsequent contracts (135). (emphasis added)
78 A little later, after referring to McCutcheon and the speech of Lord Reid in that case, Burt CJ said:
And on the facts and for the reasons which [Lord Reid] gives he held that there had been no established 'constant course of dealing' and hence the implication could not be made. In the same way a course of dealing cannot be established on the facts of the instant case. On the facts of this case, as it seems to me, to contend that the conditions ought to be implied for that reason begs the question to be asked because you must first find an earlier contract or contracts containing that term (136). (emphasis added)
79 In my opinion, it is apparent from the reasons of Burt CJ in Rinaldi & Patroni, considered as a whole, that:
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- (a) it was conceded by counsel for the defendants in the appeal that the printed conditions (in particular, the exemption clause) were never incorporated into the first contract of carriage entered into between the parties;
(b) the plaintiff did not at any material time have actual knowledge of the conditions;
(c) on the facts of the particular case, the first defendant was not reasonably entitled to conclude from the actions or conduct of the plaintiff that it had accepted and agreed to be bound by the conditions and, as a result, those conditions were not, by a previous course of dealings, incorporated into the contract in question; and
(d) his Honour did not hold that it was an essential pre-condition to the incorporation of a term into a contract by a previous course of dealings that the term was contained in a previous contract between the parties.
80 In Hardwick/Henry Kendall, the respondent (SAPPA) had regularly received more than a hundred contract notes from the appellant (Grimsdale), similar to the contract note in question, in the course of dealings over three years. SAPPA knew of the existence of the conditions on the reverse of the contract note and it had never raised any query or objection. Lord Pearce concluded:
The only reasonable inference from the regular course of dealing over so long a period is that SAPPA were evincing an acceptance of, and a readiness to be bound by, the printed conditions of whose existence they were well aware although they had not troubled to read them. Thus the general conditions became part of the oral contract (113).
81 In the present case, the appellant from time to time carried on a business involving the carriage of goods on his own account, in partnership with his wife or through a company, Rojo (WA) Pty Ltd. The business operated under various trading names. Equipment was carried for the respondent under each of the names. After each contract was performed an invoice was sent to the respondent. The invoice specified the equipment carried, the location of the places where the equipment was collected and delivered, the cost of the work, and whether the cost was calculated by reference to a quoted sum or an hourly rate. As I have mentioned, the printed conditions were on the reverse of the invoices. There were eight invoices for the period January 1989 - May 1989, two
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- invoices dated January 1990 and September 1991, and 17 invoices for the period July 1997 - June 2001.
82 Nine of the invoices during the period July 1997 - June 2001 carried the following endorsement at the foot on the front of the document:
TERMS: Payment within 30 days of receipt of invoice – No Statements issued.
Our Terms and Conditions are set forth on the reverse side of this invoice. Goods are not insured unless requested in writing.
83 The other eight invoices during the period July 1997 - June 2001 had a reduced payment period of 14 days, but otherwise were relevantly identical to the other invoices for that period.
84 In my opinion, the appellant was not reasonably entitled to conclude from the actions or conduct of the respondent that it had accepted and agreed to be bound by the printed conditions on the reverse of the invoices (in particular, the exemption clause) and, as a result, those conditions were not, by a previous course of dealings, incorporated into the contract for the carriage of the drill rig. I have arrived at this opinion on the basis of the following matters, which I have evaluated and weighed in combination.
85 First, in the context of the absence of any transactions between September 1991 and July 1997, the transactions during January 1989 - May 1989 and in January 1990 and September 1991 were not sufficiently proximate to the formation of the contract for the carriage of the drill rig (or the contracts entered into during the period July 1997 - June 2001) to constitute a course of dealings relevant to the contract in question.
86 Secondly, the transactions during the period July 1997 - June 2001 were not sufficiently numerous or frequent to constitute a proper foundation for inferring that the respondent, by failing to query or object to the conditions, would have led a reasonable person, in the appellant's position, to believe that the respondent had assented to the incorporation of the conditions into the contract for the carriage of the drill rig.
87 Thirdly, the trial judge did not find that any representative of the respondent had actual knowledge of the existence of the conditions or had actually read them, and the appellant does not challenge the absence of such a finding. As I have mentioned, although it is not essential, before a term may be incorporated by a previous course of dealings, that the party
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sought to be bound had actual knowledge of the term, any knowledge possessed in fact by that party is a relevant factor in determining whether the term was incorporated.
88 Fourthly, each invoice was sent to the respondent after the contract had been performed, and in the circumstances a reasonable person, in the respondent's position, would have been entitled to regard the invoice as merely a request or demand for payment of the contract price, and would not have expected to find contractual terms in relation to the completed work in the invoice.
89 Fifthly, the relevant course of conduct between the appellant and the respondent was to contract orally without the incorporation of written terms, and the parties never departed from this course of conduct.
90 The first ground of appeal fails.
The merits of the second ground
91 I agree with McLure P, for the reasons she gives, that the second ground of appeal is without merit.
Conclusion
92 I would dismiss the appeal.
93 MURPHY JA: I agree with McLure P.
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