Marad P/L v Master Paving P/L - [2013] SADC 127

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
MARAD P/L v MASTER PAVING P/L
[2013] SADC 127
Judgment of His Honour Judge Costello
23 September 2013
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH
DAMAGES
In November 2000 the plaintiff entered into a contract to carry and deliver goods for the plaintiff – the defendant agreed to pay the plaintiff a guaranteed annual income of $75,000.00 plus GST for the term of the Contract which was due to expire in 2010 – the defendant’s obligation to pay was subject to the plaintiff having an appropriate truck available and otherwise performing its contractual obligations – plaintiff observed and performed its obligations – defendant failed to pay the plaintiff the agreed minimum annual amount from 2004 onwards – defendant in breach of contract in failing to pay – defendant’s breach caused plaintiff loss and damage – actual amount of plaintiff’s loss unable to be ascertained with precision.
HELD: Judgment for the plaintiff against the defendant for damages in the sum of $309,848.00.
Limitation of Actions Act 1936 s 36, s 38, referred to.
Aerial Advertising Co v Batchelors Peas Ltd (Manchester) [1938] 2 All ER 788; Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64, considered.

MARAD P/L v MASTER PAVING P/L
[2013] SADC 127
Introduction

The plaintiff claims the sum of $336,538.59[1] as a debt. The defendant denies that it is indebted to the plaintiff as alleged or at all.
[1] Although the plaintiff led evidence of losses it had suffered additional to those claimed, it confined its claim to a period from January 2004, due to the time limitations imposed under Limitations of Actions Act 1936, ss 36 and 38.
Alternatively, it claims damages for breach of contract. In answer to the claim for damages for breach of contract, the defendant asserts that the plaintiff agreed to abandon the Contract. Alternatively if the Contract remained ‘on foot’ it asserts that the plaintiff either repudiated or breached the Contract by failing to fulfil its obligations thereunder. In the result the defendant denies that it is liable to the plaintiff for damages for breach of contract as alleged or at all.
Background Circumstances
Although what follows under this head constitutes a narrative of events it also contains, where indicated, some of my findings of fact on matters in issue between the parties.
In November 2000 Gregory Donald Witham, a director of the plaintiff,[2] entered into a Contract dated 10 November 2000[3] (‘the Contract’) on behalf of the plaintiff with the defendant whereby he agreed to carry and deliver goods for the defendant. It was a term of the Contract that Mr Witham would incorporate a company,[4] if one was not already in existence, to conduct the business of carrying and delivering goods for the defendant. To that end, on 22 December 2000 Mr Witham assigned his interest in the Contract to the plaintiff.[5]
[2]    T6.
[3]    Exhibit D34 – T7.
[4]    Exhibit D34 – Clause 5.2.
[5]    T10.
A further term of the Contract obliged the plaintiff to provide a tip truck with a capacity of 9 or more tonnes to carry out the cartage work.[6] At this time the defendant owned such a truck which it agreed to sell to the plaintiff for $15,000.00.[7]
[6] Exhibit D34 – Clause 5.5.
[7] T8; T9 & Exhibit P3.
The Contract also provided that in consideration for the defendant making cartage work available to the plaintiff, the plaintiff would pay to the defendant the sum of $50,000.00.[8]
[8] Exhibit D34 – Clause 5.1.1 and Schedule 8.
On 10 January 2001 the parties acknowledged that the sums owing by the plaintiff for the truck and the right to carry and deliver for the defendant had been paid.[9]
[9] Exhibit P2; P3 and T9.
The Contract
Amongst other things the Contract also relevantly provided:
...
3.Commencement Date
This Agreement shall commence and come into force, on the date referred to in Item 3 of the Schedule hereto, and shall continue in force (subject to it being terminated in accordance with Clauses 8 & 9 hereof) for the period set out in Item 4 of the Schedule hereto (hereinafter referred to as ‘the term’).
4.The Owner’s Obligations
The Owner shall:
4.1Grant to the Contractor the non-exclusive right to carry & deliver its goods.
4.2Make available to the Contractor, the minimum number of hours specified in Item 5 of the Schedule hereto, and guarantee the annual rate of income specified in Item 7 of the Schedule hereto, for each year of the term referred to in Item 4 of the Schedule hereto...
4.3Pay the Contractor for the work done by him or his employees agents and/or sub-contractors at the hourly rate specified in Item 6 of the Schedule hereto.
I pause to observe that the Owner’s obligations in Clause 4.2 were subject to the plaintiff making a truck available to conduct the cartage. It was also agreed that the guaranteed income and hours could be reduced for every day a truck was not available.
5.The Contractor’s Obligations
The Contractor shall:
5.1Pay to the Owner:
5.1.1The sum specified in Item 8 of the Schedule hereto, in consideration for the rights granted hereunder and the obligations undertaken by the Owner (hereinafter referred to as ‘the Purchase Price’), which sum shall be payable by the Contractor to the Owner contemporaneously with the execution of this Agreement.
...
5.3Perform its obligations and duties under this Agreement, in good faith, and in a proper & businesslike manner, and shall not do, or cause, or permit to be done, anything to the detriment of the Owner’s business, and without limiting the generality thereof, the Contractor shall not prejudice or seek to exploit for his own benefit, customer contracts & relations established and/or maintained by the Owner.
5.4Duly & promptly deliver the Owner’s goods as directed, to any place within a radius of ONE HUNDRED (100) kilometres of the Owner’s place of business.
5.5Provide ONE (1) motor vehicle, being a tip truck with a capacity of NINE (9) or more tonnes, and a driver, to be available for the carriage & delivery of the Owner’s goods (hereinafter referred to as ‘the stated purpose’) for a minimum of FIVE (5) days per week, which days shall be nominated by the Owner, at his own discretion, save & except for Sunday, which day, if nominated by the Owner, shall only be available with the mutual consent of the Contractor.
...
5.7In the event that the motor vehicle breaks down, or is otherwise unavailable for the stated purpose, replace the vehicle with another vehicle of an equivalent standard, forthwith, at the Contractor’s expense.
...
8.Termination by the Owner
If:
8.1The Contractor fails to observe or perform any provisions or terms of this Agreement on the part of the Contractor to be observed or performed,
...
then, and in such event, the Owner may, notwithstanding that the Owner may have waived some previous default hereinbefore referred to, give the Contractor SEVEN (7) days notice of the Owner’s decision to terminate this Agreement, and thereupon the Agreement shall terminate, and all costs & expenses incurred by the Owner in exercising, or attempting to exercise his rights under this Clause, shall be paid by the Contractor to the Owner, on demand.
9.Termination by Either Party
Either party may terminate this Agreement by the giving of THREE (3) months’ written notice to the other of such decision to terminate, and the Owner shall continue to pay the Contractor for all services rendered until such termination shall take effect.
Schedule
Item 3Commencement date of Agreement    8/1/2001
Item 4Term of the Agreement                  Five (5) years plus a further Five (5) years
Item 5Minimum number of hours’ work       (1668 hrs) One thousand six hundred and

to be provided by the Owner            sixty eight hours per annum
Item 6Hourly rate payable by the Owner     $45.00 (Forty five dollars per hour)
Item 7Minimum annual rate of Income        $75,000.00 per annum

guaranteed by the Owner                plus GST ($7,500.00)
Item 8Purchase Price payable to the Owner $50,000.00 Fifty thousand dollars
...
By agreement between the parties, in or about January 2001, it was decided that, in lieu of the plaintiff being paid for the cartage work on an hourly basis, the plaintiff would be paid at a mileage rate per tonne determined by reference to cartage rates charged by Boral Resources Ltd.[10] I am satisfied that this arrangement effected a change to the Contract but that otherwise the Contract remained ‘on foot’ as to its other terms.
[10] T9; Exhibit P4.
It was also agreed early in the Contract period (probably 2001) that where possible the defendant would give the plaintiff one day’s notice of proposed work orders. This was to enable it, where possible, to organise its work schedule. To that end, Mr Witham provided the defendant with his phone, fax and email details.[11]
[11] T13.
In 2002 the plaintiff’s truck began to experience mechanical problems. In order to continue to fulfil the Contract the plaintiff purchased a replacement truck.[12] In August of 2002 Mr Witham met with the defendant’s then managing director, Mr Darren Walmsley in an endeavour to determine how the plaintiff could service the defendant in a better way due to the fact that some of the defendant’s customers had complained that other cartage contractors employed by the defendant were taking too long to deliver their goods.[13] Mr Witham told Mr Walmsley that he could help but only if he purchased another truck which he was prepared to do.[14] At that meeting Mr Witham also raised the fact that there had been a shortfall in the ‘guaranteed minimum income’ for 2001 of some $14,000.00.
[12] T12; Exhibit P5.
[13] T13.
[14] T13.
Mr Witham said that he was assured by Mr Walmsley that, if he purchased the second truck, extra work would become available to him and that the ‘shortfall’ for the previous year would be addressed.
On the strength of those assurances the plaintiff ‘went ahead’ and purchased another truck, this one being an 8 tonne International Tipper.[15]
[15] Exhibit P6.
Despite there having been a shortfall in 2001, in the following two calendar years, 2002 and 2003, the defendant made available to the plaintiff sufficient work to enable it to earn the guaranteed minimum income of $82,500.00.
However from 2004 onwards, the amount of work provided to the plaintiff declined such that it was unable to earn the agreed minimum amount. The amount of income continued to decline to a point where, in early 2008, the plaintiff threatened legal action to recover the overall shortfall.[16] After an exchange of letters between the parties and a threat of legal proceedings by the plaintiff, from April 2008 no further work was allocated to the plaintiff by the defendant.
[16] Exhibit P23.
As a result, the plaintiff received none of the income guaranteed under the terms of the Contract for the greater part of the final two years of the Contract term.
Mr Witham says that throughout 2004 and 2005 he raised the topic of the lack of work but was regularly met with excuses from another director, Mr Mark Walmsley that e.g. it was ‘Easter’ or ‘tax time’ or generally ‘quiet’ for other reasons.[17]
[17] T14.
In an effort to ameliorate the situation the defendant offered to let the plaintiff take over the purchase of a Bob-Cat, that it was purchasing, as a way of allowing the plaintiff to earn extra income.[18]
[18] T14.
Although the plaintiff subsequently employed the Bob-Cat in work for the defendant, I am satisfied that this arrangement did not replace the parties’ respective obligations under the Contract. Moreover, when Mr Witham was engaged on Bob-Cat work, he employed drivers to ensure that he was able to continue to fulfil the plaintiff’s obligations under the Contract.[19]
[19] T14; Exhibit P7.
As a result of the continuing shortfall, in 2005 the plaintiff resolved to sell one of its trucks to a third party. However, the sale was made on the express understanding that in the event of mechanical problems with the plaintiff’s other truck, the truck it had sold would be used by the purchaser to fulfil the cartage Contract with the defendant.[20]
[20] T15; Exhibit P8.
As I have already noted, the work available and the income earned by the plaintiff under the Contract began to decline from 2004. The plaintiff became increasingly concerned at the shortfalls and in June 2006 engaged its accountant to write to the defendant enclosing a table setting out details of the shortfall and requesting the defendant to indicate what it proposed to do to rectify the situation.[21]
[21] T16; Exhibit P9.
In a letter in response the defendant stated that it believed the plaintiff was too busy to do the cartage work and that in any event it was unreliable in carrying out the work. However, it did indicate that in the recent past it had tried to make more work available. Apart from suggesting a further meeting to address the problem of more work, it made no express reference to the outstanding shortfalls for years 2004 and 2005.[22]
[22] Exhibit P11.
Although the defendant continued to make work available to the plaintiff it became apparent to Mr Witham that the defendant was also employing other contractors to do cartage work which the plaintiff could have done under the Contract.[23] Mr Witham gave an example, of the rate at which one of these contractors was carrying out the work, which he said demonstrated that the defendant was able to have the work done by that contractor far more cheaply than could the plaintiff, based upon the rates agreed upon for the Contract.[24]
[23] T18; Exhibit P15.
[24] T18-T19.
In 2006, in a further, and perhaps final, effort to accommodate the defendant, the plaintiff purchased another truck, this time a flatbed truck with a crane, to enable it to cart cubby houses and ‘Bali’ huts for the defendant.[25]
[25] T21; Exhibit P19.
The anticipated work did not pick up and in June 2007 the plaintiff again wrote to the defendant raising its concerns as to how the shortfalls on payments for the previous years were to be met.[26] Further correspondence from the plaintiff in 2008 was met with a letter from the defendant of 31 March 2008.[27]
[26] Exhibit P21.
[27] Exhibit P24.
In that letter the defendant said, amongst other things, that it had endeavoured to help the plaintiff make the ‘guaranteed income’[28] by offering it the Bob-Cat work, and by enabling it to be ‘a middle-man’ with the defendant’s quarry customers. The letter indicated that it had instructed its staff to use the plaintiff exclusively but that this had become impractical and unprofitable because on most occasions the plaintiff was unable to do the deliveries. The letter also spoke of occasions where Mr Witham was unavailable due to illness (one such occasion being for some three months) during which times it said the plaintiff did not notify the defendant. In evidence Mr Witham refuted any suggestion that he had been ill for up to three months or that he had ever been uncontactable.
[28] The letter used the phrase ‘annual quota’ which I interpret to mean the same thing.
The letter spoke of the plaintiff being unavailable for work due to truck mechanical problems. It also alluded to two of its staff threatening to resign if forced to use the plaintiff for deliveries because of its alleged failure to deliver on time or at all.
It is to be noted that this response came after the plaintiff had threatened legal action and for the first time sought to detail the ‘deficiencies’ adverted to above. Mr Witham refuted any of these complaints as having merit.[29] For reasons which follow, I am satisfied there was no basis for these complaints.
[29] T24.
As I have said, no further work was provided to the plaintiff after early 2008. In evidence Mr Witham said that documents produced by the defendant to him made it clear that the defendant had sufficient work during the period of the Contract which, if it had been provided to the plaintiff, would have allowed the plaintiff to earn the guaranteed minimum income. He produced a series of invoices for work supplied by the defendant to other contractors between 2005 and 2009 which he said supported this contention.[30] The defendant did not seek to contradict this evidence and I am satisfied that his contention was well founded.
[30] T25-26; Exhibit P29.
In October 2009, by way of a Creditors Statutory Demand for Payment of a Debt, the plaintiff demanded payment of the shortfall. By letter dated 27 November 2009 the defendant then sought to terminate the Contract purportedly pursuant to the provisions of Clause 8.
Against that background, I propose to consider the evidence of the witnesses for the respective parties. Before doing so I should mention one matter that emerged during the course of the hearing. Mr Witham informed the Court of the existence of court proceedings instituted by the plaintiff in the Elizabeth Magistrate’s Court against the defendant and several other companies in relation to work that the plaintiff had done for them. I was informed that this was for work done outside the Contract. In other circumstances it may have been appropriate for this Court to deal with these proceedings at the same time. However, to do so would have meant adjourning the trial. Furthermore, I do not have details of the identity of the other companies. I do not know what their attitude would be to having their case removed into this Court. Weighing everything up I am of the view that the preferable course, in the interests of justice and overall cost to the parties, is to determine these proceedings and require the parties to bring to the attention of the Magistrate’s Court my reasons for judgment.
The Witnesses
Plaintiff’s Case
In its case the plaintiff called its managing director, Mr Witham, its accountant, Mr Hoff and a former employee of the defendant, Mr Buley.
Mr Witham
Mr Witham recounted the history of his entry into the Contract and the gradual ‘fall-off’ in work particularly from 2004 onwards. He related this, in particular, to the fact that the defendant’s contract with the Salisbury Council came to an end in early 2004. He said that the Salisbury Council contract had been worth as much as $30,000.00 - $40,000.00 per annum to the plaintiff.[31]
[31] T13.
Despite being assured by the defendant, via Darren Walmsley, that there was still nothing to worry about because the defendant had sufficient replacement work, there followed a succession of years where the amount earned by the plaintiff fell well short of the guaranteed minimum.
He agreed that he had undertaken other work, outside the Contract, using the ‘Bob-Cat’, (the purchase of which was taken over by the plaintiff) but that this work was never work in lieu of the Contract cartage work but additional to it.
He maintained that he was always available to carry out the cartage work and that the plaintiff had purchased some four trucks at various times to ensure that it could, not only do some of the defendant’s work more efficiently, but also, eventually, a wider variety of that work.
He said that on an occasion when he was either ill or otherwise unable to personally do the cartage work, he had arranged for others to do it and had provided fax and phone numbers to the defendant for it to contact them.
He said that it was his belief, that the defendant opted to allocate work to other contractors in preference to the plaintiff, because it was cheaper for the defendant, due to these contractors offering lower cartage rates than those agreed to between the plaintiff and the defendant.

He agreed that he had entered into other business ventures during the term of the Contract but that these ventures in no way impacted upon his ability to fulfil the plaintiff’s obligations under the Contract.
Finally, he said that it was only in 2008, when legal proceedings were threatened, that the defendant particularised its concerns as to his alleged unreliability or unavailability.
I was impressed with Mr Witham as a witness. He gave his evidence in an open and forthright manner. In general his evidence was supported by a range of documentary material as well as evidence from the other witnesses for the plaintiff. Indeed his evidence also gained general support from some of the defendant’s witnesses. In this respect, I refer to the evidence of Ms Walmsley, the defendant’s administration manager, with respect to a reconciliation[32] of payments made by the defendant to the plaintiff, which revealed regular fortnightly payments being made to the plaintiff between 2002 and 2008.[33]
[32] Exhibit D36.
[33] T105.
In my view, the fact that the defendant was making such regular payments tends to support the plaintiff’s case that it was generally available for work and is arguably ‘at odds’ with the defendant’s assertions that the plaintiff was regularly unavailable for work over the lengthy period of the Contract. Similarly, another witness for the defendant Mr Zacker, a supervisor with the defendant, accepted the proposition that the detailed correspondence from Mr Witham to him from 2006 – 2008 was consistent with the plaintiff being generally ‘reliable’.[34]
[34] T102.
I accept the evidence of Mr Witham and, where his evidence differed (in a material way) from the evidence of any of the defendant’s witnesses, I prefer his evidence.
Mr Hoff
Mr Hoff produced an expert report[35] which made an assessment of the difference, between the amounts payable to the plaintiff, assuming the Contract had been performed and the amounts actually received by the plaintiff.
[35] Exhibit P30.
In his opinion the underpayment of amounts due to the plaintiff if the Contract had been performed was $309,848.00.[36] The report and his assessment were based upon documents provided to him by the plaintiff. In final submissions, the defendant criticised the report upon the basis that there had been duplication of invoices which Ms Walmsley in her evidence estimated to account for some $26,000.00.[37] In the reconciliation which she produced to the court (a reconciliation which, duplicated invoices aside, she regarded as reliable),[38] the amount paid to the plaintiff between January 2004 and March 2008 amounted to some $186,855.52. If the Contract had been fully performed during that period the defendant should have paid $506,301.37.[39] In other words, on the evidence of Ms Walmsley, admittedly based upon the plaintiff’s records, the shortfall is some $319,445.85, a figure not dissimilar to that reached by Mr Hoff.
[36] Exhibit P30 - p 5.
[37] T105.
[38] T64.
[39] This figure is arrived at by adding together the amounts of $82,500.00 for each of the calendar years 2004-2009 inclusive, resulting in a total of $495,000.00 plus an amount of $11,301.37 being a pro-rata amount for the 2010 year ending on 27 February 2010 when the Contract came to an end.
On the evidence before me it is not possible to determine the exact amount of the overall shortfall.[40] However the fact that the extent of the loss cannot be determined with precision is not to the point.[41] Where there is evidence of a loss which is not as reliable as might have been possible, I must do the best I can.[42]
[40] In this respect I have also had regard to the 'statements' of Mr Witham to the effect that his bookkeeper, Ms Gladys, had produced a number of reconciliations all of which had produced different results - see T63, 67 & 107.
[41] Aerial Advertising Co v Batchelors Peas Ltd (Manchester) [1938] 2 All ER 788.
[42] Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64, 125.
While there were limitations in Mr Hoff’s evidence, given that he was relying on primary documents supplied by the plaintiff, which documents were susceptible to some of the criticisms echoed by the defendant, I nevertheless accept the evidence of Mr Hoff, on the question of the quantum of the underpayment, as being generally reliable.
Mr Buley
Mr Buley was employed by the defendant between 2001 and 2007.
He was employed by the defendant as its yard manager. He disagreed that he was told to use the plaintiff for deliveries in priority to other contractors or that he was informed of the existence of a Contract between the parties.[43]
[43] T48.
He said that his practice was to use the cheapest contractors e.g. Green Hornet.[44] He said that from time to time he did use the plaintiff for cartage work and always found it to be available and reliable. He said that he had ‘no dramas at all’ when trying to contact the plaintiff.[45]
[44] T48.
[45] T50.
He also related a conversation he had with a then director of the defendant, Darren Walmsley, who rang him, he said, ‘out of the blue’ in August 2008 and requested him to construct a letter discrediting Mr Witham and the plaintiff in terms of their reliability and service.[46] He said that he refused to write such a letter because ‘it wasn’t the truth’.[47]
[46] T47.
[47] T48.
Mr Buley was not cross-examined by the defendant. I regard Mr Buley as an honest and forthright witness. I accept his evidence.
The Defendant’s Case
In its case the defendant called Ms Vanessa Walmsley, Mr Darren Walmsley, Mr Zacker and Mr Pastore, a former employee of the defendant.
Ms Vanessa Walmsley
Ms Walmsley conducted an extensive reconciliation of the plaintiff’s invoices and bank statements (in conjunction with the plaintiff’s bookkeeper, Ms Gladys). She gave evidence that the defendant had paid the plaintiff, during the period 2002 ‑ 2008, an amount of some $323,153.52. This was some $20,000.00 less than the total amount invoiced by the plaintiff to the defendant during that period. As I said earlier, Ms Walmsley explained this discrepancy as being due to some ‘duplicate’ invoices, the originals of which had already been paid.
I do not have enough information before me to determine why these ‘duplicate’ invoices were raised. I am not prepared to find that there was any deliberate falsity or other dishonesty behind it but I accept the effect of her evidence, namely that the existence of these ‘duplicate’ invoices meant that invoices were subsequently raised for work which had been carried out and already paid for.
The real importance of her evidence however, is that it corroborates the plaintiff’s case as to the quantum of the shortfall during the period of the claim i.e. from January 2004 – 27 February 2010 by showing that during that period the defendant paid to the plaintiff a total sum (identified above) of $186,855.52.[48]
[48] Exhibit D36. This reconciliation covers the period from 2002-2008 and includes relevant payments from January 2004 to March 2008 after which time the defendant ceased providing work to or paying the plaintiff.
As I have already said, when that amount is deducted from the amounts, which should have been paid if the Contract had been performed, there remains a shortfall of approximately $319,000.00.
I generally accept Ms Walmsley’s evidence as to the amounts paid to the plaintiff.[49] However, she too was relying, in part, on documents provided by the plaintiff. To that extent there is some doubt, even on her evidence, as to the precise amounts paid by the defendant and received by the plaintiff.
[49] T64, 105 and Exhibit D36.
Mr Darren Walmsley
He was the managing director of the defendant between 2001 and early 2007. He said there were times when the plaintiff was unavailable. He spoke of an occasion where he saw Mr Witham after not having seen him for some three or four months. He said that Mr Witham ‘just used to disappear’ and ‘then he’d come back and say ‘I need some work’’.[50]
[50] T82.
He said that Mr Witham was off ‘doing other stuff for himself’ and that he didn’t like doing small loads.
However, he also said that his dealings were not with Mr Witham direct and that his impressions about him were gained from feedback from other staff.[51] He then said that Mr Buley, along with others, was told that there was a Contract with the plaintiff and that staff were told to use it ahead of others unless the plaintiff was unavailable.[52] He said that the plaintiff was paid at the same rate as other contractors.[53] Having said that, he accepted that other contractors may have been cheaper for work outside a 15 kilometre radius.[54] He denied ever having a conversation with Mr Buley where he asked him to discredit Mr Witham and the plaintiff.[55]
[51] T83.
[52] T84.
[53] T85.
[54] T85.
[55] T85.
In cross-examination he said that he regretted, in hindsight, not writing to the plaintiff about its unreliability. When it was pointed out to him that the fact, that the defendant regularly paid the plaintiff on a fortnightly basis for invoiced work, was at odds with his assertion of Mr Witham’s regular unavailability (including a period of up to three to four months), he said that Mr Witham did have other people who came in and did the deliveries for him.[56] He also agreed that it may have been cheaper for the defendant to use other contractors rather than the plaintiff depending on how far away the job was and on ‘other things’.[57]
[56] T93.
[57] T96.
He was unable to provide an explanation as to why the shortfalls in income promised under the Contract for the years 2004 and 2005 were not addressed. His general response was that Mr Witham had for some four years gone and ‘done something else’ and that it was not up to the defendant ‘to drive’ the Contract.
I found Mr Walmsley to be an unsatisfactory witness. His evidence was replete with generalised assertions from which he ‘backtracked’ when confronted with specifics. I do believe that he telephoned Mr Buley in an effort to discredit the plaintiff and Mr Witham. Where his evidence conflicted with that of the plaintiff’s witnesses, I prefer their evidence.
Mr Zacker
Mr Zacker is employed by the defendant as a supervisor, having been with it, in various guises, for 17 years.
He said that he was instructed to use the plaintiff pursuant to the Contract but that after a few months Mr Witham was not available ‘on quite a few occasions’ to do the deliveries he required.[58]
[58] T100.
However, in cross-examination, he agreed that the correspondence, received by him from Mr Witham between 2006 and 2008, suggested that the plaintiff was largely reliable.[59] When asked to nominate any times when the plaintiff was unavailable for work he could not, nor did he have any documentation to support that suggestion.[60]
[59] T102.
[60] T103.
I do not accept Mr Zacker’s evidence. His evidence was, like that of Mr Darren Walmsley, vague and general in nature. His suggestion that, after the first few months, the plaintiff was ‘unavailable’ is very much at odds with the regular work it must have been carrying out during that time, as evidenced by the regular payments made to the plaintiff shown in the reconciliation statement[61] and by the fact that there were no shortfalls in the years 2002 and 2003.
[61] Exhibit D36.
Mr Pastore
Mr Pastore was a yard manager with the defendant between 1995 and 2007.
He said that most of the time Mr Witham was available to be contacted but that there were occasions when he could not do the deliveries or where, due to the size of the delivery, it was not viable to use his truck.[62] He also said that they would not use Mr Witham sometimes because a job was too far away.[63]
[62] T117.
[63] T117.
He then said that they would not use Mr Witham on Saturdays because ‘he works Monday to Friday’ not on Saturdays.[64] From the tenor of his evidence it would appear that this was a notion which he had formed independently and not as a result of any agreement or understanding with Mr Witham.
[64] T118.
I accept his evidence insofar as it establishes that the defendant chose to use other contractors for loads seen to be more viable for the defendant and that Mr Witham was otherwise generally contactable. I also accept his evidence that there were occasions when, due to the fact that Mr Witham was, at that time, ‘too far away’, the defendant elected not to use him. [65]
[65] T117.
Against the aforementioned background circumstances and my assessment of the various witnesses, I turn to consider my findings.
Findings
I am satisfied that:
·       The parties entered into a written cartage Contract on 10 November 2000.
·       The terms of the Contract, amongst others, obliged the defendant to pay a minimum annual rate of income of $75,000.00 plus GST.
·       The terms of the Contract entitled the defendant to terminate the Contract upon 7 days notice if the plaintiff failed to make a truck available to cart the defendant’s goods for a minimum of five days per week or if the plaintiff failed to perform its obligations in good faith and in a proper and businesslike manner.
·       In or about January 2001 the parties agreed that, in lieu of the defendant paying the plaintiff on an hourly basis, the defendant would be paid for cartage services in accordance with a mileage rate per tonne, determined by reference to cartage rates charged by Boral Resources Ltd.
·       The parties did not, at that time by reason of this change, or at any time thereafter, agree to abandon the Contract.
·       In all other respects the terms of the Contract remained the same.
·       During the term of the Contract (including its extended period) the plaintiff was generally ready, willing, available and able to carry and deliver goods for the defendant.
·       During the term of the Contract, up to April 2008, the plaintiff performed its obligations under the Contract in a proper and businesslike manner.
·       The defendant did not at times during the term of the Contract (including its extended period) make sufficient work available to the plaintiff to enable it to earn the minimum income specified under the Contract.
·       Although the defendant met its guaranteed income obligations in 2002 and 2003, from 2004 onwards and following the loss of the Salisbury Council Contract it ceased to do so.
·       The Salisbury Council contract had been worth between $30,000.00 to $40,000.00 per annum to the plaintiff.
·       The mileage rate per tonne agreed between the parties meant that for some jobs the plaintiff’s rates were more expensive for the defendant than a number of other contractors.
·       The defendant did not use the plaintiff in preference to other contractors on a number of occasions. On the contrary for a number of jobs the defendant elected to use other contractors in preference to the plaintiff because it was cheaper for it to do so.
·       During the term of the Contract the defendant had sufficient cartage work available to it such that if it had made that work available to the plaintiff it could have earned the guaranteed minimum income.
·       The plaintiff, through Mr Witham, went to ‘considerable pains’ to assist the defendant in carrying out the Contract cartage work e.g. the purchase of multiple trucks, and making approaches, on the defendant’s behalf, to customers such as Resource Co to attempt to arrange better contractual terms.
·       On or about 27 November 2009 the defendant terminated the Contract.[66]
·       In the event that the plaintiff properly performed its obligations, the terms of the Contract obliged the defendant to pay to the plaintiff, during the period January 2004 to 27 February 2010, a total of $506,301.37.
·       During the period January 2004 to 27 February 2010 the defendant underpaid plaintiff an amount somewhere between $309,848.00 and $319,445.85.
[66] In the event that the plaintiff had failed to perform its obligations under the Contract, Clause 8.1 permitted the defendant to terminate on 7 days notice. In the event that the provisions of Clause 8.1 did not apply, either party could terminate the Contract on 3 months written notice in which event the defendant was required to pay the plaintiff during that period.
Discussion
The plaintiff has brought its claim for a debt or for damages for breach of contract. There is some doubt in my mind as to whether a claim in debt properly arises on these facts. In the circumstances, it is unnecessary for me to decide that question because (for reasons which follow) I am satisfied that there has been a breach of the Contract.
Breach of Contract
In my view the terms of the Contract, whereby the defendant agreed to provide work and pay a minimum amount per annum, are quite clear. It is equally clear that, provided the plaintiff made itself available (via the provision of a truck) to do the work, and otherwise properly performed its cartage obligations, it was entitled to expect that it would receive the agreed minimum payment. I have found that at all material times it was ready, willing, available and able to do the work.
As such, the defendant was not entitled to terminate the Contract in November 2009 in purported reliance on the provisions of Clause 8.1. It was, pursuant to Clause 9, entitled to terminate on giving three months notice. Accordingly, when the defendant gave Notice of Termination on 27 November 2009 it was obliged to continue paying the plaintiff until 27 February 2010.
In failing to make work available to the plaintiff and pay the agreed amount of $75,000.00 per annum plus GST, in the calendar years ending 2004-2009 inclusive and for the period in 2010 ending on 27 February 2010, the defendant was in breach of the Contract. It is also clear to me that the defendant’s breach caused the plaintiff’s loss. Without more, the plaintiff is entitled to damages for breach of the Contract, at a figure somewhere between the amounts $309,848.00 and $319,445.85. The uncertainty surrounding the reconciliation and the ‘duplicate’ invoices leaves me in some doubt as to the precise amount.
As I have already observed, in circumstances where an accurate assessment is not possible due to insufficient material being provided, (or as here where it is due to a degree of uncertainty surrounding the precise amount of the loss) a plaintiff cannot complain if a lesser amount is awarded.[67] In these circumstances I would be prepared to allow the plaintiff damages in accordance with the assessment arrived at by Mr Hoff.
[67] Aerial Advertising Co v Batchelors Peas Ltd (Manchester) [1938] 2 All ER 788.
Plaintiff’s Alleged Repudiation/Abandonment of Contract
Insofar as it was alleged that the plaintiff has repudiated or breached the Contract, I expressly reject any such assertion.
The basis for these defences was the alleged failure of the plaintiff to make itself reasonably available for cartage work. For the reasons already adverted to there is no substance in this assertion. Nor do I accept that the parties abandoned the Contract by agreeing to substitute a mileage rate for an hourly rate. This did no more than alter a relatively small (albeit important) part of the Contract, which alteration was thereafter incorporated into the Contract by agreement between the parties and performed accordingly.
Mitigation
In my view the plaintiff did not at any stage, act other than reasonably, in endeavouring to fulfil its contractual obligations and compensate for its losses. On the contrary its actions, including the purchasing of a number of trucks to better accommodate delivery work and employing extra drivers from time to time to meet the defendant’s requirements, indicate a plaintiff which was continually striving to ameliorate the situation In this respect, I have also had regard to the actions of Mr Witham in attempting to intercede with customers like Resource Co in an endeavour to get better rates for the defendant.
In any event, the onus in this respect is on the defendant to demonstrate that the plaintiff has not mitigated its loss and it has not done so.
Conclusion

The plaintiff has succeeded in establishing that the defendant breached its Contract with the plaintiff by failing to make the minimum payments stipulated under the Contract in the years 2005-2009 inclusive and from 1 January 2010 to 27 February 2010.
The defendant’s breach of Contract has caused loss and damage to the plaintiff which I assess to be $309,848.00.
Formal Order
There will be judgment for the plaintiff against the defendant in the sum of $309,848.00.
I will hear the parties on interest and costs.