Landcourt Management Pty Ltd v Racing Victoria Ltd
[2011] VCC 1216
•26 July 2011
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL LIST
GENERAL DIVISION
Case No. CI-10-00649
| LANDCOURT MANAGEMENT PTY LTD | Plaintiff |
| (ABN 006 407 423) | |
| v | |
| RACING VICTORIA LTD | Defendant |
| (ABN 096 917 930) |
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| JUDGE: | HIS HONOUR JUDGE SHELTON |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 2, 3 and 6 June 2011 |
| DATE OF JUDGMENT: | 26 July 2011 |
| CASE MAY BE CITED AS: | Landcourt Management Pty Ltd v Racing Victoria Ltd |
| MEDIUM NEUTRAL CITATION: | [2011] VCC 1216 |
REASONS FOR JUDGMENT
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Catchwords: Whether group booking arrangement is enforceable contract – equitable estoppel – Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 64 ALR 481 – Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M G Roberts | Lobb & Kerr |
| For the Defendant | Mr R G Craig | Clayton Utz |
| HIS HONOUR: |
1 The plaintiff is a family company which, in 2009, was operating a thirty-eight room boutique hotel/motel known as “Hotel Bruce County” at Blackburn Road, Mt Waverley. It alleges that the defendant breached an accommodation arrangement made with it on or about 10 June 2009 (“the accommodation arrangement”) and claims damages for such breach. Alternatively, it relies upon an estoppel.
The Facts
2 Since 1994, horses from overseas have taken part in the defendant’s Spring Racing Carnival. These horses, upon arrival in Australia, have been required to spend some time in quarantine. A quarantine station was established at Sandown Racecourse for this purpose. It was necessary to arrange accommodation for those handling the quarantined horses close to Sandown Racecourse. In 1994, an arrangement was made between Andrew Harmon, a director of the plaintiff who had racing interests, and Les Benton of the defendant whereby some months before the Spring Racing Carnival, the defendant would block book a number of rooms with the plaintiff, that is, these rooms would be held for the defendant and not be available for booking by others. Then, as the Spring Racing Carnival approached, rooms would be allocated from those block booked to specific individuals. The defendant would forward their credit card details to the plaintiff. These individuals settled their accounts for accommodation, dining and incidentals directly with the plaintiff. No financial obligation was imposed upon the defendant.
3 The arrangements were, of necessity, fairly flexible. Whether a particular international horse was taking part in the Spring Racing Carnival was often a last-minute decision. Likewise, the time for which a particular international horse stayed in Australia depended on its performance in the Spring Racing Carnival and other matters. Thus individual bookings might be quickly terminated short of the period for which they were booked or, alternatively, the period of stay extended. As I say, there was, of necessity, considerable flexibility in the arrangements. This, however, worked satisfactorily over the years with a measure of goodwill on both sides.
4 2009 was no different to other years. On 9 June 2009, Delwyn Caulfield, front office manager of Hotel Bruce County, sent the following email to Jane Rogan, executive assistant/international racing co ordinator of the defendant:
“Hi Jane
I hope you are well.
Just a quick query in relation to the 2009 Spring Carnival.
It has been mentioned that Werribee Quarantine Centre will not be in operation until 2010. I was wondering (or hoping) that Bruce County may still be available for accommodation for the international stables.
It was great working with you last year.
Delwyn”
5 Rogan responded by email of 10 June 2009 at 9.47 am, as follows:
“Hi Delwyn,
It has been on my to do list to get in touch with you……..you beat me to it!
You are right, we will be using Sandown again this year and would love to use Bruce County again. Will you be able to provide us with the same rates as last year?
Like any other year, we have no idea of numbers as yet but can only assume (hope) we have as many as last year. Can we go ahead a[nd] block out the same number as we did for 2008 and then as we get closer to the time I will let you know numbers and provide payment details?
Thanks Delwyn, look forward to hearing back.
Jane”
(sic)
6 Caulfield responded an hour later on 10 June 2009 at 10.48 am, as follows:
“Hi Jane and are pleased to again offer accommodation. As we have done in past years, I will block an allotment of 15 rooms from October 1st until after Melbourne Cup. I understand that you can’t predict the numbers coming this year so we’ll just liaise closer to the time.
I am also pleased to advise that room rates have not increased so we will honour last years rates of:
Standard Queen - $169.00 per night
Executive / Garden Suite - $192.00 per night
As always, these room rates include a full breakfast daily.
Thanks Jane, and I look forward to working with you again this year.
Delwyn”
7 Shortly thereafter, on 10 June 2009, Rogan sent the following email to Caulfield:
“Great, thanks Delwyn.
Just to let you know, if we have the same arrivals as last year, the first group will be arriving on 28th September (Grand Final Day) so we may need a few blocked out from then. Also this year, we may have one horse arriving even earlier, in August but if this does happen, it will probably be only one room they need. Again, I will let you know as we get more info.
Looking forward to Spring!
Regards,
Jane.”
8 Five minutes later, Caulfield sent the following email to Grogan:
“Thanks Jane
I’ll block some from Grand Final weekend.
Cheers
Delwyn.”
9 The next contact between the parties is an email of 11 August 2009 from Rogan to Caulfield, which reads as follows:
“Hi Delwyn,
Hope you are well. of the horses arrival this year. Looks to be another busy year.
This year we have 1 horse arriving earlier than the others. It is trained by a Japanese trainer in Singapore and will be arriving from Singapore next Saturday 22 August (soon I know!). There will be 3 people looking after the horse, one from Brisbane and two from Singapore.
They have asked me to find a serviced apartment for them to share as it may reduce costs but personally, I would prefer to have them at the Bruce County so they are all together when the others arrive in September. As they will be staying for an extended period (approx 2½ months) is there a discounted rate that could be offered for them?
Let me know what you think, feel free to give me a call or email back.
Thanks Delwyn, talk soon.
Regards,
Jane.”
10 Caulfield responded to Rogan by email of 12 August 2009 at 10.19 am, as follows:
“Hi Jane
I have spoken this morning with Olga from Gateway on Monash who can offer you the following:
Apartment with 2 bedrooms (1 x queen bed /2 x single beds) for $209.00 per night room only or $250.00 per night inclusive of full breakfast. This apartment has its own cooking facilities and will be serviced twice per week, being Mondays & Fridays.
Gateway on Monash is only 1.5km from Bruce County, so they are just a short distance should they need to attend anything here.
Just let me know if you wish to reserve the apartment and I’ll make the arrangements for you.
Kind regards
Delwyn.”
(Gateway on Monash was also owned by the plaintiff and was located close to
Hotel Bruce County).
11 Rogan responded to Caulfield forty minutes later, at 10.50 am, by email, as follows:
“Hi Delwyn,
Thanks for this.
Did you manage to speak to Debra [Harmon] regarding a rate for 3 individual rooms at Bruce County also?
I will be going back to these guys with the pricing options so would like to have both options in one email.
Thanks a lot.
Jane.”
12 Half an hour later, Caulfield responded to Rogan by email, as follows:
“Hi Jane
I have just spoken to Debra and the best rate available for these three rooms at Bruce County is $155.00 per night, inclusive of full breakfast.
Thanks Jane
Regards
Delwyn.”
13 Twenty minutes later, Rogan responded to Caulfield by email, as follows:
“Ok, thanks Delwyn.
I will go back to them today with both quotes and let you know ASAP.
Also, Leigh [Jordon] and I will be out at Sandown next Thursday for a meeting. Would it be ok if we came in on the way back and met with you to just go through everything for this year? Leigh is keen to discuss the rates for accommodation and the dinners and other nights we will have out there this year.
Are you available next Thursday afternoon, around 3.30?
Thanks
Jane.”
14 On 13 August 2009, Rogan emailed Caulfield, as follows:
“Delwyn, me again!
The 2 Singapore lads were to share one twin room — what rate could you offer them?
They are still trying to negotiate costs with the owner of the horse and explore all options.
Thanks Delwyn, look forward to hearing back.
Regards
Jane.”
15 On 19 August 2009, Rogan emailed Caulfield, as follows:
“Hi Delwyn,
The 2 Singapore grooms have decided to stay at the accommodation hut in the quarantine centre however Hiro who [is] in charge while the trainer is not here, would like me to book him into the Bruce County.
His family will be coming down to stay with him every now and then so he wants to stay at Bruce County for a few nights to get his bearings and look into longer term accommodation. He is aware of the serviced apartments down the road so he may choose to take up that offer.
So, can I please book him in from this Sat 22/8 until Thurs 27/8 (he may extend this)?
VISA
4564 …………
07/11
…
Thanks, let me know if there is any probs.
Jane.”
16 Ten minutes later, Caulfield emailed Rogan, as follows:
“Hi Jane
I have reserved this room as requested. I’ll liaise further with him once here in relation to future accommodation requirements.
I assume that he will not be holding this visa card, so should I charge all charges or just the accommodation to the visa?
Are you still coming here tomorrow?
Regards
Delwyn.”
17 Five minutes later, Rogan emailed Caulfield, as follows:
“Thanks Delwyn,
I mentioned that the card that will be used to settle the account will probably be a different one to the one quoted (the trainer will settle the account), so might be best to confirm with him when he arrives.
Yes, Leigh and I will be out there tomorrow afternoon, around 3.30.
Does this still suit you?
Jane.”
18 The meeting planned for the next afternoon, 20 August 2009, never occurred.
19 The emails show a fairly casual, informal and flexible arrangement between the parties, as might be expected after a fifteen-year relationship.
20 However, behind the scenes, Rogan was moving in another direction. On 10 August 2009, she had forwarded an email to Novotel Glen Waverley, as follows:
“Subject: EXTENDED STAY ENQUIRY
Good Afternoon,
I am looking to get in touch with someone from Novotel Glen Waverl[e]y that can help me with an enquiry I have for an extended stay.
My role here at Racing Victoria involves arranging accommodation for all the people that come over from overseas to care for the international based horses that compete in the Spring racing carnival. We base the staff in the Glen Waverl[e]y area as it is in close proximity to Sandown Racecourse, where the horses are stabled.
We are thinking about using a different option for accommodation this year and I am looking around to see what is the best options for us.
In previous years we have used approximately 20 rooms (give or take if a small amount may share rooms), coming in on 2 different dates.
This year the dates we need rooms for are:
1st GROUP (approx 10 people) – Arr Saturday 26th September – Dep
Thursday 5th November (or a few days after that)
2nd GROUP (approx 10 people) – Arr Saturday Oct 10 – Dep Thursday
5th November (or a few days after that).
In previous years they have stayed at a place which has included breakfast in their room rate and discounts on phone calls, meals, drinks and internet, obviously.
Would the Novotel be able to accommodate a group like this for this year and if so, what sort of rates would be offered?
I look forward to hearing back from someone. Please call or email me if you have any questions. Thank you.
Regards,
Jane.”
(sic)
21 Not surprisingly, this email elicited a swift response from Novotel Glen Waverley. Negotiations ensued.
22 On 21 August 2009, there is an exchange of emails between Rogan and Novotel Glen Waverley indicating that Novotel Glen Waverley can match Hotel Bruce County’s rate of $169.00 per night per room.
23 On Friday, 28 August 2009, Rogan sent an email to prospective international attendees, as follows:
“Subject: Melbourne 2009 — Accommodation Update
Importance: High
Good Morning,
As you have horses nominated for this year[’]s Melbourne Spring Racing Carnival, here is an update relating to stable staff accommodation arrangements for those that do make the trip down under.
This year, Racing Victoria is pleased to announce we will be working with Novotel Melbourne Glen Waverley, to provide accommodation for staff looking after the horses at Sandown Quarantine Facility.
… .”
24 It was not until the following Tuesday morning, 1 September 2009 at 10.46 am, that Caulfield received the following email from Rogan:
“Subject: Change of Plans
Hi Delwyn,
There has been a change of plans for this year. We were recently approached by another hotel, the Novotel, in regards to. accommodation options for stable staff. They have offered us a pretty good deal and due to a few different things (mainly location….close to shops, train station etc.) we have decided to take them up on their offer of rooms for the staff this year.
This is not to say that some of the regulars won’t want to stay at the Bruce County, I know some of them are creatures of habit and would prefer to stay with what they already know. However, there won’t be any need to keep rooms blocked out for us as you did last year.
I really appreciate what you and the rest of the staff there did to look after our guests last year and previous years before my time but we all had a look at our options and decided it was best to go with the Novotel this year.
I will keep in touch, as I said some might prefer to stay at Bruce County again and I will forward them directly to you if this is the case.
Thanks Delwyn, give me a call if you would like to discuss.
Regards,
Jane.”
25 Caulfield and Debra Harmon, group general manager of, and a director of, the plaintiff and daughter of Andrew Harmon, stated, and there is no evidence to the contrary, that this was the first inkling that they had that the defendant would not be utilising its services for the 2009 Spring Carnival. Rogan conceded in evidence that the statement in the email, “We were recently approached by another hotel, the Novotel”, was a lie, in that, as appears from the email of 10 August 2009, the approach was made by her.
26 Caulfield handed the email from Rogan to Harmon, her superior. Harmon attempted to telephone Rogan without success. At 12.59 pm on 1 September 2009, she forwarded the following email to Rogan:
“Hi Jane
I’ve (sic) have left a message on your voicemail for you to give me a call when you get a chance, but I just thought I would touch base with you via email also.
I can not convey how truly surprised and disappointed we are to receive the below news and I would very much like the opportunity to discuss this with yourself or perhaps Paul Bloodworth or Leigh Jordan further to see if there is anyway that we can alter this decision.
We have hosted the international racing guests since the first ‘raiders’ hit our shores in 1993, which would have made this our 17th year, and we have gone out of our way every year to ensure that these guests are made to feel at home and that their special needs in regard to timing of room cleaning, breakfast, etc are seen to with no fuss.
Other benefits offered to the guests include, but are not limited to:
•
Last minute arrival and departure dates changes with no penalties charged to the guest accounts
•
Heavily discounted high speed internet access, which we had just negotiated with our provider to offer at no charge this year
•
Further discounts off food, beverage, phone charges, dry cleaning, etc
• Private rooms for press interviews, etc when required at no charge • We hold a dinner or event in their honour each year at our expense call him to discuss.
I have forwarded you email to Leigh Jordon and he is happy for you to after that would suit.
Regards,
Jane.”
(sic)We have kept our rate increases to an absolute minimum over these 17 years (eg. 2000 - $154 including fully cooked breakfast, 2009 -$169, including fully cooked breakfast) and that includes our boom years of 2006/2007/2008, when we turned away large amounts of corporate bookings at much higher rates, in order to accommodate the Racing Victoria guests and we did this out of loyalty and respect for the relationship we have built over the past 2 decades.
I can understand that the Novotel has come to you this year with a very good rate, given the current global financial situation, but where have they been for the last 10 years, since they first opened their doors?
I understand their proximity to certain facilities would be beneficial to some guests, but we also have easy access to shops, banks, cinema, etc and the station is less than 2km away. With the personalised service that we offer, we have dropped guests to the station on several occasions when they haven’t had access to their car. We would be happy to formalise this service for them this year in a welcome letter.
When we learnt last year that quarantine may be moving to Werribee from 2009 onwards, we were obviously disappointed, but could understand that these decisions were well beyond our and your control. However, to receive the below news now, when we have geared up for one last year with the International guests and have been holding a room block for you since June is, to be quiet honest, crushing.
This is not only from our business perspective, but also from the Harmon family perspective. My father Andrew Harmon has been involved with the horse racing industry as an owner for about 40 years and has always been a big advocate for the industry and the introduction of the international horses with Les Benton decades ago. It would be such a shame for our affiliation to come to a close in this way.
I look forward to hopefully discussing this further and can be contacted at any time on 0419 ……or on the below office number.
Regards.”
(sic)
27 Rogan responded at 3.58 pm on 1 September 2009, as follows:
“Hi Debra
Thanks for the email, I have been in and out of the office all day, apologies for missing you call.
28 Leigh Jordon was General Manager - Racing Operations of the defendant and Rogan’s superior.
29 As suggested, Harmon telephoned Jordon after 4.30 pm on 1 September 2009.
30 Harmon stated that in the conversation, after they discussed the relationship between the plaintiff and the defendant, Jordon said that he would discuss the matter with Rogan and Paul Bloodworth, another employee of the defendant, that he would come back to her with a final decision and that he certainly did not state that their relationship was at an end.
31 Jordon had a different recollection of the conversation. He stated that he did not indicate that the defendant would reconsider its position and said that it would be proceeding with the arrangement with Novotel.
32 Then, at 5.17 pm on 1 September 2009, Harmon sent the following email to Rogan:
“Hi Jane
I have spoken with Leigh this afternoon and he has indicated that he will discuss the Novotel offer with you further and let me know if there is anything that we could counter offer in order to keep the booking with us.
I must apologise if it has seemed ungrateful of us not being in touch more frequently and making the Racing Victoria team feel appreciated. We have in the past tried to arrange lunches and other events for previous Racing Victoria staff and always been told that it is appreciated, but not necessary and that you are all extremely busy and just need us to action any requests that you send through.
With the new team of yourself, Paul and Leigh (and others I’m sure) coming on board over the past 3 years, we should have re-evaluated this approach to ensure that this was still what you wanted. For this I’m am truly sorry, I know it must seem as though we have taken you for granted, but we were just very conscious of not wanting to ‘hassle’ you.
booking change and everything is sorted.
I hope everything is going well. I just spoke to Dougal in relation to a internationals, are thinking about coming out to Novotel for breakfast this Friday after trackwork at Sandown just to have a look around and hopefully meet some of the staff we will no doubt be having a lot more to do with over the coming months. Would this be ok?
As you can imagine, the Bruce County are still trying their hardest to get the business back again for this year. We have no intention of doing so but they have raised a couple of points in regards to services they have provided in the past which I realised I haven’t discussed with you.
These are: Leigh also mentioned that there were some issues with food quality at some dinners held last year. I was not aware of this, but can guarantee you that we have a new Executive Chef and some new key floor staff come on board since last year and we have been getting extremely good feedback on our food and service across all of the restaurants and functions.
Although we may not have expressed this clearly enough prior to today, we are extremely keen to retain these Racing Victoria guests for their final year at Sandown and would greatly appreciate the opportunity to work with you to make this happen. Some of the things we can discuss would be:
• An allotment of complimentary rooms that can be used at the discretion of Racing Victoria • Let Racing Victoria take charge of the dinner or event that we usually host for the guests whilst they are here and allow you to choose the date, invite your own team members and let us know what it is that you would like in regard to food, entertainment, etc. • An additional discounted Dinner (or Lunch) function that can be arranged to suit your Spring Racing schedule, priced to cover our food, beverage and basic staffing costs only • As previously mentioned - complimentary high speed Internet access for all guests in their rooms and in our public areas • Complimentary use of laundry facilities with detergent, etc supplied • Previous discounts to guests on all other hotel amenities would still apply • Assistance with transport for guests to the closest train station and also assistance for yourself with dropping off and collecting hire cars if needed • Open to any further requests or requirements that you may have I look forward to hearing from yourself or Leigh in the next few days. If there is anything at all you would like to discuss, please just let me know and thank you for giving us the opportunity to make amends.”
(sic)
33 On 2 September 2009, Rogan sent an email to Duncan Mars of Novotel Glen Waverley, which stated:
“Hi Duncan,
•
Complimentary use of laundry facilities with detergent, etc supplied - Is there a laundry that can be used at Novotel? Otherwise is there one in the vicinity?
•
Complimentary high speed internet access in their rooms and in our public areas - You have advised previously in regards to free use of the Apple Macs in the lobby, is there any internet access for those that bring their own laptops in their room?
•
Dinner / Lunch or Event that held for the guests — We usually come out to the hotel and have an official dinner with all the guests as a group (last year it was on Cup Eve) as a thank you to them (we are also out there a fair bit for breakfast or lunch or sometimes dinner after race days) but the hotel would also provide a meal for them at the Bruce County’s cost on another night.
•
An allotment of complimentary rooms that can be used at the discretion of Racing Victoria - Really appreciate your offer of a complimentary night at Novotel when needed, as I said I will definitely take you up on the offer! There was a couple of nights last year where I stayed out there for an early start at Sandown.
•
Last minute arrival and departure dates changes with no penalties charged to the guest accounts - As you can imagine, it is the nature of this business, plans can get changed on late notice due to horse injuries or last minute changes.
Thanks Duncan, as you can see there aren’t any major issues, I just thought it is worth running through them with you so we are both on the same page about everything.
Look forward to hearing back.
Regards,
Jane.”
(sic)
(my emphasis).
34 On Friday, 4 September 2009 at 11.39 am, Harmon sent the following email to Rogan:
“Hi Jane
Just a follow up from my emails and phone conversation with Leigh on Tuesday. I just wanted to see if you’d had a chance to catch up with Leigh in regard to the below and if there is anything you might need from me to assist with this discussion?
Kind regards.”
35 Despite her statement in the letter of 2 September 2009 to Novotel Glen Waverley that the defendant would not be using Hotel Bruce County for the 2009 Spring Carnival, Rogan responded by email a few hours later, at 3.29 pm, as follows:
“Hi Debra,
Sorry we haven’t gotten back to you, has been a busy couple of days.
Leigh and I haven’t had a chance to go through everything properly as yet. I am meeting with him on Monday so we will come back to you after that.
Thanks, have a great weekend.
Regards.”
36 Harmon sent an email to Rogan two minutes later, as follows:
“Hi Jane
Thank you for the update. Once again, if there is any further information or clarification that you require, please do not hesitate to contact me.
Thanks and regards.”
37 Finally, on 11 September 2009, Jordon forwarded the following email to Harmon:
“Hi Debra,
My apologies for not getting back to you sooner, as you can imagine it has been a very busy time for us.
Myself, Jane and Paul have thought a lot about our options and what you have offered us for this year to accommodate our guests and we have decided not to take you up on this offer. I understand this will be a disappointing decision for the Bruce County but hope you understand from our point of view, we are always looking to improve the way we do things and change is sometimes necessary.
Everything that has been done over the years for our international guests has been greatly appreciated and we know you have gone out of your way to make them feel welcome and at home when they are in Melbourne which I have no doubt they have appreciated also. Please pass on our thanks to all the staff who looked after them over the years.
Again, thank you for the Bruce County’s loyalty over the years and all the best for the future.”
38 Harmon replied to Jordon half-an-hour later, as follows:
“Dear Leigh
As you can imagine, I am disappointed to receive the below advice.
In keeping with our Group reservations terms and conditions, there will unfortunately be a cancellation fee charged to Racing Victoria, due to the large number of rooms that have been on hold for Racing Victoria, on Jane’s request via email, since the 10th June 2009. The(sic) the past we have been extremely flexible with Racing Victoria guests in regard to late notice of cancellation and arrival date changes, however the extremely late notice of this group cancellation within 30 days of the arrival date of the first rooms blocked for your group, has made this unavoidable.
Leigh, on Jane’s request from 10th June, we have been holding 580 room nights for your group at a minimum rate of $169 per night:
• 5 rooms from 26th September to 30 September inclusive • 15 rooms from 1st October to 6th November inclusive Our Group Reservation policy states that cancellations of the full group made within 30 days of the group arrival date incur a cancellation fee equivalent to 50% of the expected room revenue of the group, which in this case would be $49,010. Now I understand that this is a very large amount and I am willing to be flexible within reason, however some compensation does need to be made.
Please advise on the above and when you may wish to discuss further, at your earliest convenience.”
Discussion and Conclusions
39 The plaintiff contends that the accommodation arrangement was made on or about 10 June 2009 between the plaintiff and the defendant with respect to the accommodation of international visitors who proposed to use the quarantine facilities at Sandown Racecourse for the purposes of the Spring Racing Carnival 2009. This accommodation arrangement is particularised in paragraph 3 of its Second Further Amended Statement of Claim as follows:
“Particulars
The Accommodation Agreement was partly in writing, and partly to be implied.
A. Insofar as it was made in writing it is contained in:
(a) an email exchange thread dated 9 and 10 June, 2009; and (b) Bruce County’s standard Terms and Conditions. B. Insofar as the terms of the Accommodation Agreement were to be implied, they were to be implied from the:
(a) conduct of the parties; (b) the history of dealing between the parties; and (c) Further and/or in the alternative to paragraph A(b) above trade custom and usage. … .”
40 The plaintiff contends in paragraph 4 of its Second Further Amended Statement of Claim that there were terms and conditions of the accommodation arrangement as follows:
“(a) Bruce County was to reserve an allotment on behalf of Racing
Victoria of:
(i) 5 rooms from 26 September to 30 September 2009 inclusive; and (ii) 15 rooms from 1 October 2009 until 6 November 2009 inclusive; (b) the room rates were:
(i) Standard Queen - $169 per night; and (ii) Executive/Garden Suite - $192 per night; (c) that in the event of cancellation of the Full Group Booking of the reservations placed pursuant to the Agreement within 30 days prior to the arrival date, Racing Victoria would pay 50% of the expected agreed room revenue for the entire group rates in respect of those rooms the subject of the cancellation.”
41 Mr Roberts, who appeared on behalf of the plaintiff, submitted that the accommodation arrangement was an enforceable agreement by which the plaintiff “block booked” or set aside at least fifteen rooms at the request of the defendant for international visitors to the 2009 Spring Racing Carnival.
42 He submitted that it was irrelevant that the defendant had not obligated itself
43 Both Rogan and her predecessor, Aysen Gazi, indicated that, in their view, the plaintiff could not have cancelled the group booking at the last moment and taken another group booking, say, from a tour operator. Mr Roberts submitted that this concession underscored the fact that there was a binding legal relationship between the parties. He submitted that while there was, of necessity, some informality and flexibility about the accommodation arrangement, nonetheless it was a binding and enforceable agreement between the parties.
44 Mr Craig, who appeared on behalf of the defendant, submitted that there was only a commercial relationship between the parties and not a binding legal relationship. He referred to there being no liability imposed upon the defendant to pay the plaintiff for the rooms which were group booked. This, in my view, is not relevant to the plaintiff’s claim in the context of a group booking. He submitted that the alleged “contract” was void for uncertainty in view of the uncertainty of the number of rooms to be occupied and the duration of the occupation.
45 Sub-paragraph (4)(a)(i) of the Second Further Amended Statement of Claim is based upon the email of 10 June 2009 at 11.06 am where Rogan requests a few rooms to be “blocked” from 26 September 2009, and Caulfield’s response that she would block “some” rooms from Grand Final weekend. Mr Craig, who appeared for the defendant, submitted that the use of the words “a few” and “some” brought uncertainty to the alleged agreement, particularly since witnesses had different views on what was meant by “a few” and Caulfield had not advised Rogan that she had in fact “blocked” five rooms.
46 In my view, nothing turns on this. Over fifteen years, fairly fluid arrangements had developed between the parties. The fact is that when the block booking was made, the plaintiff had “put a black texta” in the accommodation bookings register through the rooms booked which were not then available to others.
47 The agreement was to provide a block booking on a very flexible basis for a few rooms from 26 September 2009 and certainly for fifteen rooms from 1 October 2009. The fifteen rooms referred to in sub-paragraph 4(a)(ii) result from the email of Rogan to Caulfield of 10 June 2009 at 9.47 am requesting a block-out of the same number of rooms as for 2008, and Caulfield’s response of 10 June 2009 at 10.48 am.
48 Mr Craig submitted that there was no intention to create legal relations. However, as indicated, both Rogan and Gazi indicated that, in their view, it would not have been open to the plaintiff to set aside the accommodation arrangement in favour of, say, another tour operator. In my view, there is no merit in this submission of Mr Craig.
49 The fact that the accommodation arrangement was flexible and informal does not, in my view, lead to the conclusion that it was not an enforceable agreement.
50 I conclude that the accommodation arrangement was an enforceable agreement.
51 The term alleged in paragraph 4(c) of the Second Further Amended Statement of Claim is relied upon by Harmon in her email of 11 September 2009. This term is contained in the plaintiff’s “Group Accommodation Terms & Conditions” which are referred to in paragraph A(b) of the Particulars of paragraph 3 of the Second Further Amended Statement of Claim referred to above. There was no evidence before me that these terms and conditions had been given by the plaintiff to the defendant. Nor was there any evidence that the defendant was aware of these terms and conditions. This is not surprising, given the longstanding flexible relationship between the parties. Perhaps these terms and conditions were made known to the defendant some years ago; probably not, given their relationship. In the circumstances however, there is no basis upon which I can find that the term alleged in paragraph 4(c) formed part of the accommodation arrangement.
52 In that event, as appears from paragraph B(c) of those Particulars, Mr Roberts submitted that I should imply such a term from trade custom and usage. He relied upon Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 64 ALR 481. At p. 485, the Court stated that to imply a term on the basis of trade, custom or usage –
“There must be evidence that the custom relied on is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract. … .”
53 The 9th edition of Cheshire & Fifoot’s ‘Law of Contract’ states, at paragraph 10.54, that “occasionally” terms are implied into contracts on the basis of trade usage and that “the burden of proving a custom is difficult to discharge”. While it might be well known that late cancellations attract a penalty, the difficulty I see for the plaintiff is in establishing that that fee payable on cancellation is 50 per cent of the anticipated room revenue.
54 David Breadmore was called by the plaintiff as an expert witness. He had extensive experience in hotel management and his expertise was not challenged. He gave evidence of various cancellation fees imposed by hotels. In the circumstances, I am not prepared to imply the term sought.
55 Mr Craig submitted that in this situation the accommodation arrangement could be cancelled at will or on 24 hours’ notice. He referred to the
56 Mr Breadmore stated that a block booking was quite different to individual room bookings. He rejected Mr Craig’s proposition that since the plaintiff was prepared to accept individual cancellations on 24 hours’ notice, that therefore a block booking could be cancelled on such notice. I reject Mr Craig’s argument that the group booking was cancellable at will or on 24 hours’ notice.
57 Alternatively, Mr Craig submitted that the group booking could be cancelled upon reasonable notice without penalty and he submitted that reasonable notice had been given here. In a report dated 4 May 2001, Mr Breadmore stated:
“Racing Victoria’s email dated 1 September to Landcourt Management advising them that the cancellation was very short notice and in my opinion does not represent reasonable notice … .
Given the notice period provided by Racing Victoria, Landcourt Management would have found it incredibly hard to re-sell the room block booking to other customers in the 25 day time period to re-coup any losses. The notice period may also have affected the ability to make adjustments to staffing, pre purchased perishable stock etc.”
58 Mr Breadmore was referred to the Cancellation Policy of the Rydges Group of Hotels and Resorts which were less onerous than those of the plaintiff in its “Group Accommodation Terms & Conditions”. He indicated however that the Rydges’ Terms & Conditions applied rather to tour operators where different considerations applied.
59 Mr Breadmore reached his opinion on the basis that the email of 1 September 2009 constituted the cancellation of the booking. Although that email indicates that the plaintiff was not required to keep the block booking, the subsequent emails indicate that that Harmon is under the impression that the plaintiff still has an opportunity to accommodate international guests for the
60 Again, Rogan’s behaviour leaves much to be desired. While she was indicating to Harmon that matters were still under review in, for example, her email of 4 September 2009 to Harmon, in fact she had already indicated in her email to Novotel Glen Waverley of 2 September 2009 that the defendant would not be proceeding with the plaintiff.
61 For good reason, in my view, Harmon did not remove the defendant’s block booking from the plaintiff’s accommodation register until 11 September 2009.
62 In my view, 11 September 2009 should be taken as the date of cancellation.
63 Accepting Breadmore’s evidence that the defendant had not provided reasonable notice at 1 September 2009, a fortiori giving notice on 11 September 2009 was not reasonable notice.
64 Having concluded that the defendant did not give the plaintiff reasonable notice of cancellation of the block booking, it follows that the defendant has breached the accommodation agreement.
65 It was sensibly agreed between the parties that if the plaintiff’s claim for damages for breach of the accommodation arrangement succeeded at common law, damages were $57,069.00, being loss of room rental and loss of associated catering and hospitality revenue.
66 The plaintiff further claimed $14,007.00, being the sum paid by way of salary and superannuation contributions to Matthew Rowan. He was engaged as assistant food and beverage manager by the plaintiff in late August 2009 to assist with the influx of the international guests organised by the defendant. His employment was terminated in early December 2009 and the total sum of $14,007.00 was paid to him by way of salary and superannuation contributions. A claim is made for this sum. However, Mr Craig submitted that under paragraph 23.1 of the plaintiff’s Collective Agreement (2007), the plaintiff was only entitled to one week’s notice of termination. Harmon gave evidence that she incorrectly thought that to enforce this provision she needed grounds for terminating Harmon’s employment and, in any event, having gone to some trouble to employ Rowan, and given that he had family commitments, she was not disposed to terminating his employment immediately. While this approach is laudable, the extra wages and superannuation contributions paid as a result of this approach should not form part of the damages payable by the defendant. I am prepared to allow a claim until 18 September 2009, one week after the defendant’s email to the plaintiff of 11 September 2009. The plaintiff’s records show that it paid the sum of approximately $3,349 by way of gross salary to Rowan and superannuation contributions on his behalf to 20 September 2009. For the period to 11 September 2009, I allow the sum of $3,000.
67 There will be judgment for the plaintiff for the sum of $60,069.00, being the agreed sum of $57,069.00 for loss of room rental and loss of associated catering and hospitality revenue and $3,000.00 in respect of Rowan’s employment.
68 As mentioned, the plaintiff pleaded its case in the alternative in estoppel should I find the accommodation agreement not an enforceable agreement. For the sake of completeness, although strictly unnecessary, I deal with this alternate basis for the plaintiff’s claim.
69 It was agreed that the relevant legal principles in relation to equitable or promissory estoppel are set out in the judgment of Brennan J in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, at 428 and 429, where his Honour stated:
“…it is necessary for a plaintiff to prove that (1) the plaintiff assumed or expected that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. … .”
70 I turn to consider the six elements identified in the above extract:
(1)
On the basis of their fifteen-year relationship, the plaintiff assumed and expected that the defendant would honour the accommodation agreement.
(2) Until 11 September 2009, the defendant induced the plaintiff to adopt
that belief and the inducement continued until that date.(3) Until 11 September 2009, the plaintiff abstained from endeavouring to
obtain bookings for the period covered by the group booking.(4)
The defendant intended the plaintiff to “put a black texta” through the rooms group booked and Rogan Gazi expressed the view that the plaintiff was not at liberty to cancel the group booking at the last moment.
(5) See (3). (6) This is self-evident. 71 In addition, it was common ground, on the basis of Walton Stores, that it was necessary to show unconscionability. In my view, this is provided by the duplicitous conduct as outlined above of Rogan and, after 1 September 2009, of Jordon.
72 I conclude that, in the alternative, the plaintiff could rely upon estoppel. It was common ground that in such a case the measure of damages is the minimum equity to do justice. Mr Roberts submitted that the agreed common law damages of $57,067.00 was of almost equal value to the sum claimable under the plaintiff’s Group Accommodation Terms and Conditions, the appropriate measure of damages. However, the sum claimed under those provisions was $49,010.00 as indicated by Mr Roberts in his opening submission. Therefore, on the basis of an estoppel I would award the plaintiff the sum of $52,010.00, being $49,010.00 plus the sum of $3,000.00 claimed in respect of Rowan’s employment.
73 There will be judgment for the plaintiff against the defendant in the sum of $60,069.00. I will hear from the parties on the question of interest and costs.
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