Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd [2024] NSWCA 211
Hearing dates: 20 June 2024
Date of orders: 27 August 2024
Decision date: 27 August 2024
Before: Bell CJ at [1];
Payne JA at [20];
Basten AJA at [32]
Decision:
(1)   The appellant’s motion dated 7 June 2024 be allowed. Leave to rely on ground 4 refused.
(2)   Appeal allowed in part.
(3)   Set aside the orders of the primary judge made on 31 January 2024 and in lieu thereof order:
   (a) Judgment for the plaintiff against the defendant in the amount of $359,858.
(b) The defendant to pay the plaintiff interest on the amount of the judgment referred to par(a) above pursuant to s 100 of the Civil Procedure Act 2005 (NSW) from 19 June 2019 to the date of this judgment.
(4)   The respondent pay the appellant’s costs of the appeal.
(5)   Within 7 days of the date of delivery of this judgment the appellant file submissions (limited to 3 pages) about the order for costs of the trial which should be made.
(6)   Within 14 days of the date of delivery of this judgment the respondent file submissions (limited to 3 pages) about the order for costs of the trial which should be made.
(7)   The Court will deal with the question of costs of the trial on the papers.

Catchwords:
APPEALS – leave to argue point not raised below – need for statement of findings challenged – Uniform Civil Procedure Rules 2005 (NSW), r 51.36
CONTRACTS – express terms – incorporation of terms – written contract – customer required to tick box on sales agreement agreeing to agree to supplier’s standard terms – link to standard terms not working at time of execution – whether link was to document produced in evidence by supplier
CONTRACTS – construction – commercial context – prior dealings between parties – whether specific terms consistent with minimum annual quantity clause in standard terms – operation of exclusivity clause

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 100
Uniform Civil Procedure Rules 2005 (NSW), r 51.36

Cases Cited:
Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57
Ange v First East Auction Holdings Pty Ltd (ACN 083 112 505) [2011] VSCA 335; (2011) 284 ALR 638
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; [1973] HCA 36
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61
Carnival Plc v Karpik(Ruby Princess) (2022) 294 FCR 524; [2022] FCAFC 149
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33
Current Images Pty Ltd v Dupack Pty Ltd [2012] NSWCA 99
Electricity Generation Corp v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
Ford Motor Co of Australia Ltd v Arrowcrest GroupPty Ltd [2002] FCA 1156
Gispac Pty Ltd v Michael Hill Jeweller (Australia) Pty Ltd (No 2) [2024] NSWSC 356
Hyder Consulting (Australia) Pty Ltd v WilhWilhelmsen Agency Pty Ltd [2001] NSWCA 313
Johnston v Brightstars Holding Company Ltd [2014] NSWCA 150
Karpik v Carnival Plc [2023] HCA 39; (2023) 98 ALJR 45
Lief Investments Pty Ltd v Conagra International Fertiliser Co [1998] NSWCA 284
Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184
McBride v ASK Funding Pty Ltd [2013] QCA 130
Medical Device Technologies Pty Ltd v Health Administration Corporation [2024] NSWCA 142
Mount Bruce Mining Pty Ltd v Wright Prospecting PtyLtd (2015) 256 CLR 104; [2015] HCA 37
O’Brien v Komesaroff (1982) 150 CLR 310; [1982] HCA 24
Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197; [1988] HCA 32
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35
Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989; [1976] 3 All ER 570
Sinclair v Balanian [2024] NSWCA 144
Smith v South Wales Switchgear Co Ltd [1978] 1 WLR 165
Thomas (TW) & Co Ltd v Portsea Steamship Co Ltd [1912] AC 1
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52
Toyota Finance Australia Limited v Gardiner [2016] NSWCA 162
Trustees Executors and Agency Co Ltd v Peters (1960) 102 CLR 537; [1960] HCA 16
Walker v Citigroup Global Markets Australia PtyLimited (2006) 233 ALR 687
Warner Bros Feature Productions Pty Ltd v Kennedy Miller Mitchell Films Pty Ltd [2018] NSWCA 81; 130 IPR 527

Category: Principal judgment
Parties: Michael Hill Jeweller (Australia) Pty Ltd (Appellant)
Gispac Pty Ltd (Respondent)
Representation:
Counsel:
F Roughley SC / B Lambourne (Appellant)
D Sulan SC / R Jameson (Respondent)
Solicitors:
Otto Martiens Lawyers (Appellant)
Bridges Lawyers (Respondent)

File Number(s): 2024/00075177
Decision under appeal

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law

Citation:

[2024] NSWSC 18

Date of Decision:

31 January 2024

Before:

Gleeson J

File Number(s):

2019/187098

HEADNOTE

[This headnote is not to be read as part of the judgment]

In September 2003 Michael Hill Jeweller (Australia) Pty Ltd (the appellant) and Gispac Pty Ltd (the respondent) entered into an arrangement for Gispac to provide packaging (small and large bags) to Michael Hill, a retailer of jewellery and accessories. The parties entered into sales agreements for specified quantities of bags for Michael Hill’s 167 stores in Australia and New Zealand. In about 2012, Gispac offered a new ordering and delivery facility, known as ePlus, which allowed individual stores to send orders electronically to Gispac for bags to be delivered direct to the stores. In 2017, a disagreement arose as to the terms of the sales agreements which adopted the ePlus system. In 2017 a dispute arose as to whether three sales agreements, two signed on 5 May 2014 and a third on 8 May 2015 incorporated Gispac’s standard Terms and Conditions of Trading (the 2012 Terms). The agreements contained a box which Michael Hill was required to tick to confirm that it “agreed to agree” to the 2012 Terms, said to be available at a specified link.

Gispac commenced proceedings in the Equity Division alleging that by agreeing to the 2012 Terms Michael Hill had committed to purchasing a minimum number of bags annually and was required to purchase exclusively from Gispac. Gispac claimed payment of invoices issued to Michael Hill for a shortfall in orders and damages for breach of the exclusivity provision. On 31 January 2024, the primary judge upheld Gispac’s claims and awarded an amount of $2,259,971.40 plus interest from the date of the invoices.

On 22 March 2024, Michael Hill filed a notice of appeal. The issues for determination on appeal were whether:

the 2012 Terms were incorporated into the sales agreements;
the annual quantity in cl 18 of the 2012 Terms was the number identified as “QTY” in the sales schedule to the sales agreements; and
the judge erred in his construction and quantification of the exclusivity clause.

The Court (Bell CJ and Payne JA, Basten AJA agreeing in part) allowing the appeal in part, held:

As to (i) (the incorporation of the 2012 Terms)

by Bell CJ:

The ticking of the box and execution of the sales agreements bound Michael Hill to Gispac’s 2012 Terms, whether the URL link was operable at the time of execution or not: [6], [14].

Lief Investments Pty Ltd v Conagra International Fertiliser [1998] NSWCA 284 considered.

by Payne JA:

The primary judge, addressing the real issues litigated in the trial, found that a set of terms identical in all respects to the 2012 Terms existed at the relevant time. That finding was not challenged by Michael Hill. Whilst the reasoning of Basten AJA is otherwise persuasive, this ground should be dismissed: [22]-[24].

by Basten AJA (in dissent):

The primary judge correctly accepted that by signing each of the sales agreements and ticking the T&C box, the appellant was bound by the terms and conditions so identified: [165]. However, there was an evidential void as to the content of the document referred to in the T&C box: [169], [173].
Where the parties have a long-term relationship, the incorporation of specific terms depends in part on the contextual background: [139]. As at May 2014, the commercial basis on which the parties operated was inconsistent with the application of cll 18 and 21 of the 2012 Terms: [176]. Although Michael Hill’s practice of ticking the box changed, that could be accounted for by a change of personnel at Gispac and did not demonstrate an intention to vary the terms on which the parties were operating: [177]-[178]. There was no intention to conduct a contractual relationship based on cll 18 and 21 of the 2012 Terms: [179].

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 distinguished; Smith v South Wales Switchgear Co Ltd [1978] 1 WLR 165 applied.

As to issue (ii) (annual minimum quantities)

by Basten AJA (Bell CJ and Payne JA agreeing):

On the basis that the standard terms were incorporated into the agreements, it was necessary to determine whether the reference in the sales schedule to “QTY” meant “Annual Quantity” for the purposes of cll 1 and 18 of the 2012 Terms: [180]. The implication that there was a fixed term contractual obligation for Michael Hill to purchase minimum quantities of bags was not supported by the evidence of commercial practice between the parties: [186].
Each sales agreement should be construed as commencing on the date of execution, which did not reflect the operation of cl 21.1 of the 2012 Terms: [191]-[194]. The history of the sales agreements was inconsistent with the terms of cl 21 that they ran for two years and were automatically renewable: [195]. They did not specify a minimum annual quantity, nor obligation to order a minimum quantity on a quarterly basis, as provided by cl 18: [196]-[200].

As to issue (iii) (breach of exclusivity provision)

by Payne JA (Bell CJ agreeing):

Assuming that ground 1 was dismissed, and ground 2 upheld, the appellant did not submit that cl 17, dealing with exclusivity, was not incorporated into the three sales agreements: [26]. It was common ground that the quantum of any damages related to breach of the exclusivity provision should exclude the “late 2018 invoices”; the adjustment was agreed: [27].
Ground 4 sought to challenge a common position at trial as to the basis of calculation of loss. Where no evidence was presented or submissions made to the primary judge as to the factual premise upon which the ground was based, Gispac lost an opportunity to lead evidence, and the case not tested at trial. Leave to rely on ground 4 should be refused should not be allowed: [28].

by Basten AJA (in dissent)

The ePlus terms, cll 17-21, operated as a package. There was no submission that some would operate if others would not. The exclusivity provided in cl 17 applied to “the Products”, defined to mean the “products specified on the front page of a Sales Agreement”. Further, exclusivity made practical sense only in circumstances where there was a fixed term contract, as provided under cl 21: [203]-[204].

JUDGMENT

BELL CJ: I have had the benefit of reviewing in draft the reasons for judgment of Basten AJA in which the background to the parties’ dispute is set out. These reasons assume familiarity with his Honour’s judgment.
I agree with his Honour’s conclusion that ground 2 of the appeal should be upheld. I respectfully disagree, however, with his conclusion in respect of ground 1 to the effect that the primary judge erred in finding that what were identified as the 2012 Terms were incorporated into the three Sales Agreements which underpinned Gispac Pty Ltd’s (Gispac) claims.
These are my short reasons for reaching that different conclusion.
The mechanism for the incorporation of additional terms and conditions in each of three Sales Agreements in issue (two of 5 May 2014 and a third of 8 May 2015) was a requirement to tick a small box in the following clause:

TERMS AND CONDITIONS OF TRADING

Please tick to confirm that you agree to agree to the terms and conditions that can be found at the following link:

start="5">

In each of the three Sales Agreements, Mr Chris Colville of Michael Hill Jeweller (Australia) Pty Ltd (Michael Hill) ticked the box and executed the Sales Agreements. He gave evidence, which was accepted, that he did not seek to open or engage the link provided.

There can be no doubt that, by the combined acts of ticking the box and executing the Sales Agreements, the parties agreed to be bound by Gispac’s terms and conditions of trading that it was said could be found at the identified URL link. That link indicated that the terms and conditions took the form of a PDF document identified with the description “gispac_terms_and_conditions_jan2012.pdf”.

The reason for the preliminary or threshold dispute as to whether terms and conditions additional to those set out in the Sales Agreement (which were expressed in short form) were incorporated arose from the fact that the primary judge was not persuaded that the evidence before him established that the URL hyperlink to the 2012 Terms was operable in May 2014 and 2015 (when the Sales Agreements were respectively executed) in the sense that a person clicking on the link in the Sales Agreements or typing in the URL shown on the Sales Agreement into a web browser, would be directed to the 2012 Terms. There was an “absence of direct evidence supporting the proposition”: PJ [44].

Evidence was, however, led on behalf of Gispac from Mr Edwin Bogatez who had been the Director of Gispac for 22 years and deposed to being the controlling mind of the company and overseeing its day-to-day business operations. He purported to have made his Affidavit on the basis of his personal knowledge and knowledge obtained by him in his capacity as a Director of Gispac through the inspection of Gispac’s books and records.

At [26]-[27] of his Affidavit, Mr Bogatez stated that:

“[26] Each of the Sales Agreements contained a URL link to Gispac 's standard terms and conditions as they existed at the time those agreements were entered (the Terms).
[27] That link was:
URL Terms Link)”

He then, in [28] of his Affidavit, exhibited a “copy of the Terms”. Giving effect to the definition of Terms in [26], this document must be taken to have been “Gispac's standard terms and conditions as they existed at the time those agreements were entered”. The primary judge referred to the Terms, as defined in Mr Bogatez’ Affidavit as the 2012 Terms.

The primary judge’s finding that he was not satisfied that the link was not operable at the time of the execution of the Sales Agreements was not to deny Mr Bogatez’ evidence that (a) Gispac had a set of standard terms and conditions that existed at the time the three Sales Agreements in issue were executed, and (b) that the set of standard terms and conditions were constituted by the Terms, as exhibited to his Affidavit.

At PJ [34], the primary judge held:

“The evidence of Mr Bogatez in pars [26] to [28] was admitted without objection and he was not directly challenged on this evidence. I reject Michael Hill’s submission that in light of the cross-examination of Mr Bogatez his evidence did not establish that a set of terms identical in all respects to the 2012 Terms existed at Gispac’s office, as at 5 May 2014 and 8 May 2015. I also reject Michael Hill’s submissions that Mr Bogatez was a deeply unsatisfactory witness and in effect, tailored his evidence and answered some questions ‘through the lens of Gispac’s case’. By reference to my notes made at the time of cross-examination of Mr Bogatez, I accept that he was a reliable witness, who was doing his best to give honest and accurate evidence in respect of events occurring several years earlier.”

The primary judge held (at PJ [72]) that:

“The Sales Agreements were obviously contractual, as were Gispac’s ‘terms and conditions’ referred to in the box headed ‘Terms and Conditions of Trading’. The question of whether by signing and ticking the terms and conditions box in the Sales Agreements Mr Colvile evidenced Michael Hill’s contractual intention to be bound by the 2012 Terms, is answered by asking what that conduct would have led a reasonable person in the position of the other party to believe: Toll at [40]. Here, Mr Colvile’s act of signing and ticking the box referable to Gispac’s standard terms and conditions indicated an intention by Michael Hill to be bound by Gispac’s terms and conditions regardless of whether they have been read and considered: Oceanic Sun Line v Fay at 228.”

The primary judge, in finding that the Terms were incorporated, necessarily construed the incorporation clause as manifesting an intention to incorporate by reference to Gispac’s terms and conditions as they existed at the time of the execution of the Sales Agreements such that, whether in fact the URL link was operable at the time, was not to the point. On this footing, that part of the clause which stated that the Terms could be found at the particular URL link was not an essential part of the parties’ agreement, objectively ascertained; rather, it was merely pointing out where (or how) Gispac’s Terms could be located, if Michael Hill wanted or needed to consult them. That that advice or guidance may not have been accurate did not detract from Michael Hill’s agreement, by ticking the box, to Gispac’s terms and conditions of trade.

The present is not a case like Lief Investments Pty Ltd v Conagra International Fertiliser Co ([1998] NSWCA 284) (Lief) where the evidence disclosed that, although a short form contract purported to incorporate Sinochem’s standard terms of contract, there were in fact multiple (and different) forms of Sinochem’s standard terms of contract in existence at the time of contracting such that the purported incorporation of terms was too uncertain to have any effect. What was said in that case by Sheller JA, with whom Mason P and Beazley JA agreed, was that:

“Where parties have chosen to incorporate terms, the Court should do its best to identify the terms intended if there is some doubt.”

Michael Hill’s argument, as I understood it, was that the ticking of the box would only bind it to Gispac’s terms and conditions if Gispac could prove that the link was operable in May 2014 and 2015 and exactly what document would be produced by clicking on it. Michael Hill then relied upon Gispac’s inability to demonstrate this to the primary judge’s satisfaction as fatal to Gispac’s attempt to establish the terms of the Sales Agreements upon which it was purporting to sue Michael Hill. This argument involved a subtly different construction to the clause to that favoured by the primary judge and relied upon by Gispac. Michael Hill’s construction was tantamount to saying that, by ticking the box, it was bound by whatever was to be physically found by clicking the link as opposed to a construction that, by ticking the box, Michael Hill was bound by Gispac’s terms and conditions of trade.

Michael Hill’s preferred construction would permit it to take advantage of the serendipitous fact of Gispac’s inability at the time of commencement of the proceedings in 2019 to replicate what may or may not have occurred physically in 2014 or 2015 in circumstances where, as Mr Bogatez explained, “[i]n or about 2016, the Terms were updated to a new set of terms, and accordingly the URL Terms Link to the version '23 1 2012_reviewed' was no longer operational from that point onwards”: [32] of Bogatez’ Affidavit of 17 November 2020.

In circumstances where the parties plainly intended to be bound by additional terms and conditions that did not appear on the face of the Sales Agreements, and manifested that intention by Gispac requesting and Michael Hill ticking the relevant box, the construction adopted by the primary judge is much to be preferred, consistent with what this Court said in Lief, in circumstances where the uncontested and unchallenged evidence was that Gispac had one set of trading terms and conditions that did not relevantly change between 2012 and 2016, and the mind and will of the company identified what those terms were in his evidence.

In relation to grounds 3-5, I agree with Payne JA’s reasons, and the orders his Honour proposes.
PAYNE JA: I have had the benefit of reading the judgments of Bell CJ and Basten AJA in draft.
In relation to ground 1, the underlying evidence about the “2012 Terms” incorporated in the relevant contracts relied upon by Gispac has been set out in their judgments. Each of Bell CJ and Basten AJA have dealt with that evidence and come to different conclusions about its breadth and meaning.
I agree with Bell CJ about ground 1, principally because the primary judge, who was in the best position to address the real issues litigated in the trial, made a finding that the evidence established that a set of terms identical in all respects to the 2012 Terms existed at Gispac’s office, as at 5 May 2014 and 8 May 2015 (being the two dates on which the Sales Agreements were executed by Michael Hill).
There was no challenge made in a statement under UCPR r 51.36 or in the Amended Notice of Appeal to that finding of fact. I am not persuaded that the finding of fact was limited to Mr Bogatez’s state of mind.
Whilst I find the reasoning of Basten AJA about ground 1 otherwise persuasive, I have concluded that ground 1 should be dismissed.
In relation to ground 2, I agree with Basten AJA that the ground must be upheld for the reasons he gives at [180]-[190].
In relation to grounds 3-5, assuming that ground 1 was dismissed, and ground 2 upheld, the appellant did not submit that cl17, dealing with exclusivity, was not incorporated into the three sales agreements executed by the appellant in May 2014 and May 2015.
As to ground 3, the respondent accepted that it should be upheld and accepted that the quantum should exclude the “Late 2018 Invoices” (as sought in ground 3). This would adjust, downwards, the award by $42,727 to the amount referred to at ground 5(b)(ii), leaving a total in dispute of $82,378, which is the subject of ground 4. The remaining sum identified by the primary judge as damages for breach of cl 17 was not in dispute. The appellant submitted that if ground 3 were upheld and ground 4 dismissed, this Court should make an award of $359,858.00 plus interest to the respondent.
Leave to advance ground 4 should be refused. There was a common position at trial that if the product had been ordered during the relevant period but invoiced after, it was caught by the damages claim. This ground seeks to challenge that common position. No submissions were made, and no evidence was led, before the primary judge concerning what was meant by “required at destination”. The factual premise upon which the ground is based (namely that the stock was required by a particular time) could have been tested at trial had the issue been raised. I am satisfied that Gispac lost an opportunity to lead evidence on this subject and that, for that reason, the case not tested at trial should not be allowed.
As the appellant is entitled to succeed on ground 3 and not ground 4, which is what I have found, the appropriate award to the respondent is the amount the appellant agreed (on those assumptions) was appropriate, $359,858 plus interest.
Although only filed for more abundant caution, the appellant’s motion dated 7 June 2024 seeking leave to file the amended notice of appeal should be allowed, although, as I have said, leave to rely on ground 4 should be refused.

Orders

For the foregoing reasons I propose the following orders:

The appellant’s motion dated 7 June 2024 should be allowed. Leave to rely on ground 4 refused.

Appeal allowed in part.

Set aside the orders of the primary judge made on 31 January 2024 and in lieu thereof order:

Judgment for the plaintiff against the defendant in the amount of $359,858.

The defendant to pay the plaintiff interest the amount of the judgment referred to par(a) above pursuant to s 100 of the Civil Procedure Act 2005 (NSW) from 19 June 2019 to the date of this judgment.

The respondent pay the appellant’s costs of the appeal.

Within 7 days of the date of delivery of this judgment the appellant file submissions (limited to 3 pages) about the order for costs of the trial which should be made.

Within 14 days of the date of delivery of this judgment the respondent file submissions (limited to 3 pages) about the order for costs of the trial which should be made.

The Court will deal with the question of costs of the trial on the papers.

BASTEN AJA: The appellant, Michael Hill Jeweller (Australia) Pty Ltd, is a retailer of jewellery and accessories, having in 2015, some 167 retail stores in Australia. From 2014, it also traded under the brand name “Emma & Roe”. A related company operated 52 retail stores in New Zealand.
Between September 2003 and May 2018, the appellant purchased small and large paper bags for packaging goods for customers from the respondent, Gispac Pty Ltd. In 2017 a dispute arose as to the terms on which the parties had contracted. Gispac alleged that Michael Hill was committed to purchasing a minimum number of bags annually and was required to purchase exclusively from Gispac. In the event of a shortfall in the number of bags ordered, calculated on a quarterly basis, Gispac claimed it was entitled to invoice Michael Hill for the value of the shortfall. Further, to the extent that Michael Hill had contracted, prior to the termination of its agreements with Gispac, to obtain packaging from a different supplier, Gispac was entitled to damages for breach of an exclusivity provision in the agreements.
The primary judge, Gleeson J, upheld Gispac’s claims and awarded judgment in its favour in the amount of $2,259,971.40 together with interest from the date of commencement of the invoices.^[1] Subsequently, the primary judge varied the costs order to require that Michael Hill pay Gispac’s costs of the proceedings assessed on an indemnity basis on and from 11 July 2020.^[2]
1. Gispac Pty Ltd v Michael Hill Jeweller (Australia) Pty Ltd [2024] NSWSC 18 (“primary judgment”).
2. Gispac Pty Ltd v Michael Hill Jeweller (Australia) Pty Ltd (No 2) [2024] NSWSC 356.
By a notice of appeal filed on 22 March 2024, Michael Hill appealed from those orders, contending that it was not liable under the agreements and that the proceedings brought by Gispac should have been dismissed. In the alternative, depending on the scope and operation of the exclusivity clause (assuming it was engaged), judgment should have been limited to an amount falling between $277,000 and $360,000 plus interest.
A further procedural issue arose in relation to aspects of the appellant’s submissions in support of grounds 1 and 4. Gispac, in its written submissions filed on 5 June 2024, submitted that the construction of the agreements had not been raised below and could only be relied upon with leave of the Court and leave had not been sought. However, order 1 sought in the notice of appeal had sought leave, to the extent necessary, to argue the points raised by grounds 2 and 3-5. By a notice of motion dated 7 June 2024 and filed on 12 June 2024, leave also was sought, if required, with respect to ground 1.^[3]
3. The notice of motion was dated 7 June 2024 and was served on that date.
By consent, the question of leave was stood over for consideration at the hearing of the appeal and was addressed in the course of oral submissions: determination of the issue was reserved and will be addressed below. Although the question of leave does not depend on the merits of the appeal, it cannot usefully be considered without an understanding of the issues and the nature of the submissions, which included claims of prejudice if leave were to be granted. However, it is convenient to record that as to grounds 1 and 2 leave was not required, but that, if it had been, it should be granted.

Issues on appeal

To explain the issues raised by the appeal, it is necessary to set out the contractual background to the dispute.
Only two witnesses were called to give oral evidence. For the plaintiff at trial, Edwin Bogatez, the founder and director of Gispac, gave evidence as to the supplying of packaging to Michael Hill since September 2003. Michael Hill, the defendant below, called Christopher John Colvile, who was during the relevant period its Group Distribution Manager and from late 2012 signed most of the sales agreements in evidence. Each provided two affidavits.

Contractual background

The following matters were not in dispute. On 5 September 2003, at the beginning of the commercial relationship between the two companies, Michael Hill provided an “Account Application”,^[4] and thereafter entered into a number of sales agreements for the supply of packaging products “by way of bulk order”.^[5] When the “Account Application” was discovered is unclear: according to an email from Mr Bogatez to Tom Lima of Michael Hill, dated 7 July 2017, Gispac did not then have a copy of the original account application. However, an account application dated 5 September 2003 was annexed to Mr Bogatez’ first affidavit.
4. The document was annexed to the affidavit of Mr Bogatez 17 November 2020, but was not in the material before this Court.
5. Mr Bogatez’ affidavit, 17 November 2020, par 10.
From an unidentified date, not later than early 2012, Gispac offered a new ordering and delivery facility, known as ePlus, which allowed individual stores to send orders electronically to Gispac for packaging to be delivered direct to the stores.
The earliest sales agreement in evidence was dated 26 November 2012 and was for a bulk delivery; otherwise, it was in relevantly identical terms and form to the subsequent sales agreements. Each sales agreement was in the form of a quotation, valid for 7 days, with a space at the end for signature by both parties. It was to be inferred that the quotation constituted an offer, which was accepted by the customer signing and returning the document to the supplier.
In every sales agreement, the first page identified a postal address and delivery address, being Michael Hill at a GPO box in Brisbane. (The same delivery address was identified even for deliveries to be made in New Zealand or Canada.) The second box, which constituted the bulk of the document, identified the item to be supplied, such as “Michael Hill Large Pink Matt Lamination Paper Bag”, followed by a quantity, a unit price and a total price. Below that line was a detailed specification of the product to be supplied. The final item was “Split Delivery”, with entries such as “Split Shipment x 3”, which was understood to refer to Gispac’s arrangements with its suppliers. For bulk orders, the item simply recorded “Bulk”.
There followed a second heading, “Terms”. Three of the common items under that heading were “Payment Terms”, “Delivery Charge” and “Lead Time”. Where the ePlus facility operated, three further headings were included in the following terms:

“Delivery Charge       EPLUS: Free In Store – Direct to Stores
Delivery Type         EPLUS: Delivery Direct To Stores
Minimum Invoice Value   $400 Minimum Invoice Value”.

Of the 21 sales agreements in evidence, six were for bulk delivery and did not include these items.

Under the identified terms, there was a statement which read:

“*The total price may vary; as per industry standards and subject to production the final quantity may be 10% over or under the actual ordered quantity. This Sales Agreement is valid for a period of 7 days.”

At the foot of the first page there was then a “Sub Total”, which was the total price identified at the head of the box, followed by an amount of GST and a “Total Amount”. There followed a further box and space for signatures:

The second sales agreement in evidence was a quotation dated 11 February 2013 for 100,000 large paper bags, with a total price, including GST, of $50,600. Under the heading “Terms”, there was provision for a “Lead Time” of “Approx 12-14 wks due to Chinese New Year”. Other agreements had lead times of “Approx 8 – 10 weeks”.
The first eight sales agreements in evidence, dated from 26 November 2012 to 12 December 2013, each contained the box headed “Terms and Conditions of Trading” (the T&C box, or incorporating clause) set out above, but in no case was there a tick in the space provided. The first sales agreement in which the T&C box was ticked was dated 15 January 2014. Thereafter, with one exception, in each case, including those for bulk delivery, the box was ticked. The first issue on the appeal was whether the ticked T&C box was effective to incorporate into the terms and conditions applicable to the sales agreement the document which might have been located at the URL provided.

Incorporation of terms

The issue arose with respect to three sales agreements which were the subject of the proceedings, each of which was signed by Mr Colvile and included a tick in the T&C box. The relevant details of the agreements will be noted below, but the first two agreements in issue were signed on 5 May 2014; the third was signed on 8 May 2015.
There were two factual questions at trial, being (i) whether any document was available at the URL referred to in the T&C boxes in May 2014 and 2015, and (ii) if so, what that document was. Gispac contended that the document was a document headed “Terms and Conditions of Trading”, with a subheading “relating to all sale agreements entered into with Gispac Pty Ltd”, a copy of which was downloaded with the identifying footer, “Gispac – Terms and Conditions of Trading – 23 1 12_reviewed (2)”. That document was referred to in the primary judgement as “the 2012 Terms”, a designation continued below.
As to (i), after considering evidence that the document was only available on Gispac’s internal server, that the URL link was not underlined as is usual, and that there was no evidence of complaint from customers that they could not access the document, the primary judge concluded:

“44 Nevertheless, I am not persuaded that the evidence establishes that a URL hyperlink to the 2012 Terms was operable in May 2014 and 2015 in the sense that a person clicking on the link in the Sales Agreement or typing the URL shown on the Sales Agreement into a web browser would be directed to the 2012 Terms, given the absence of direct evidence supporting that proposition.”

As to (ii), Gispac contended that the sales agreements incorporated the 2012 Terms. Gispac contended that that document contained the terms and conditions in force in both May 2014 and May 2015.
On the assumption that the 2012 Terms were effectively incorporated into the sales agreements, a further issue raised by ground 2 of the appeal was the proper construction of the 2012 Terms. The 2012 Terms fell into three categories, namely (i) definitions (cl 1), (ii) general provisions applying to all sales agreements (cll 2-16) and (iii) certain provisions (cll 17-21) appearing under the bolded subheading:

“EPlus Facility
The following terms and conditions apply to Sales Agreements where Gispac has agreed to make the ePlus service available to a Customer”.

Two clauses were of central importance in relation to Gispac’s claims to be entitled to payment in the case of a “shortfall”. These were cll 18 and 21 which provided as follow:

“18 Annual Quantity
18.1 The Customer agrees to purchase from Gispac an amount of each Product that is equal to or exceeds the Annual Quantity specified in the Sales Schedule for each Product.
18.2 If the amount of Product purchased by the Customer during each quarter during the Term is less than 25% of the Annual Quantity (Shortfall), Gispac may do either or both of the following things :
(a) invoice the Customer for the Shortfall; and
(b) charge the Customer for storage of the Shortfall at the prevailing market rate for storage or the actual cost of storage, commencing on the day immediately following the relevant quarter.
…
21 Term
21.1 The Term is 24 months from the date of execution of the Account Application.
21.2 These Terms and Conditions of Trading will automatically renew for a period of 24 months unless the Customer gives Gispac written notice 6 months before the end of the current Tenn that it does not intend to renew the Eplus facility.”

Read together, these provisions envisaged a two-year contract which would automatically roll over for a further two-year period (absent termination on six months’ notice) pursuant to which the customer would be required to purchase a minimum annual quantity in quarterly amounts constituting 25% of the annual quantity. The first issue, identified by reference to the application of cl 18, was whether that regime was consistent with the terms of each of the sales agreements.
There was a subsidiary question as to the commencement date of the agreements, stated in cl 21.1 to be the date of execution of the Account Application. On Mr Bogatez’ evidence, there was one Account Application made by Michael Hill, in 2003, although the terms of the application and the basis on which payment was to be made at that time were not in the material before this Court. The primary judge accepted that each contract commenced to run on the day it was executed by Michael Hill, a finding which is not challenged. However, it will be appropriate to refer shortly to the reasoning by which that conclusion was reached.
Two other clauses were relevant. First, was a general provision relating to termination which provided as follows:

“10 Termination
10.1 If the Customer breaches any provision of these Tenns and Conditions of Trading or any Sales Agreement or commits an Insolvency Event, Gispac may, in its absolute discretion, take one or more of the following courses of action:
(a) terminate any entitlements under any Account Application, these Terms and Conditions and/or any Sales Agreement by written notice to the Customer;
(b) suspend Gispac's performance until the Customer has remedied its breach; and
(c) amend the Terms of Payment for future orders.
10.2 Upon termination of these Terms and Conditions of Trading or any Sales Agreement, Gispac can elect to sell, in which case the Customer must purchase from Gispac, all stocks of Product held by Gispac. Immediately upon making such election Gispac may invoice the Customer for the Products and the Customer must pay the invoice upon receipt. Stocks of Product include but are not limited to Products for which Gispac has placed binding orders from its suppliers. Gispac shall not place orders for Products after it has delivered a notice of termination to the Customer.
10.3 The Customer has no entitlement to terminate any Sales Agreement other than in accordance with these Terms and Conditions of Trading.”

Further, there was provision for price changes in cl 20 (applicable to ePlus sales agreements):

“20 Prices Payable
20.1 The Customer must pay Gispac for the Products that Outlets or Head Office order at the current prices agreed for the Products by Gispac and the Customer. The prices applicable upon commencement of a Sales Agreement are specified in the Sales Schedule. If an order has not been invoiced before a price change in accordance with clause 20.2, the Products that comprise that order will be supplied at the new price for those Products.
20.2 If any Sales Agreement is renewed in accordance with clause 21.2, Gispac may increase the price of the Products by giving written notice to the Customer. Excluding any component of a price increase due to taxation, price increases will not exceed 15% of the Product price as agreed under clause 20.1 during the extended Term.
20.3 Gispac reserves the right, by notice to the Customer at any time before delivery of the Products, to increase the price of the Products to reflect any increase in the cost to Gispac of producing and/or delivering the Products due to any factor beyond Gispac's reasonable control. The Customer shall, by executing the Sales Schedule, accepts and will pay any such price increase as notified to the Customer by Gispac.

20.4 If required by Gispac, the Customer must pay a fee for the use of the Eplus facility service. Such a fee is payable in addition to the price paid for Products under clauses 20.1 and 20.2. If such a fee is applicable to this Sales Agreement it will be set out in the Sales Schedule.”

A separate issue arose as to the operation of cl 17 which was in the following terms:

“17 Appointment
The Customer appoints Gispac for the Term as the exclusive supplier of the Products to Outlets in the Territory.”

After giving notice to terminate the agreements, Michael Hill commenced ordering packaging for a number of products, including large and small paper bags, from a third party (Jewel Pak International), the first invoice being dated 23 October 2016.
The application of the exclusivity provision turned upon a number of considerations, including the period for which the relevant agreement operated, the product in question, and the party bound by the terms of the exclusivity provision. These issues were raised by grounds 3-5.

Grounds 1 and 2

Ground 1 in the notice of appeal read as follows:^[6]
6. The symbol “J” before paragraphs referred to the primary judgment: the symbol has been omitted.

“No incorporation into sales agreements of provisions in ‘terms and conditions of trading’ document.
The primary judge erred at [320] (and [145], [154], [172], [268], [292], [299], [314]) in finding that the appellant was liable, in respect of the three Sales Agreements, to pay the Respondent amounts referable to cll 18 and, in the alternative, cl 17, of the document styled ‘Terms and Conditions of Trading’ (extracted at [21]) by reason that the primary judge:
(a)   erred at [32] in finding that the question of whether the URL link specified in the Sales Agreement (extracted at [17]) was operable in May 2014 and May 2015 ‘does not arise’ if the mode of incorporation is by reference as terms of a signed contract;
(b)   erred at [72] and [73] in finding that, objectively, the box which Mr Colvile ticked (as extracted at [17]) was ‘referable to Gispac’s standard terms and conditions’ and that his signing and ticking the box ‘indicated an intention by Michael Hill to be bound by Gispac’s terms and conditions’ or, alternatively, to the extent [72] and [73] reflect findings of Mr Colvile’s subjective intention, the primary judge erred in relying on that subjective intention for the purposes of construing the terms of the contract;
(c)   ought to have found that, as a matter of construction, each Sales Agreement only incorporated ‘the terms and conditions that can be found at the following link:
whatever the terms at the link may be and which may or may not have been any ‘standard terms’ known to the Respondent;
(d)   having regard to [44] and [50], ought to have found that because the Respondent did not prove that the URL was operable, it failed to prove that any terms were available at the URL and hence ascertainable to the defendant by the means prescribed in the Sales Agreement, and failed to prove that the Sales Agreements incorporated the provisions in the document styled ‘Terms and Conditions of Trading’;
(e)   accordingly, erred at [72]-[73] and [84] in finding that the provisions in the document styled ‘Terms and Conditions of Trading’ were incorporated by reference into each Sales Agreement, and erred in finding the appellant liable for breach of those terms (as summarised at [320]).”

Putting to one side the question of reliance on Mr Colvile’s subjective intention in par (b), ground 1 encompassed two propositions which, as the submissions were developed, were put in the alternative, namely:

the only terms and conditions incorporated into the sales agreements were those which were to be found at the URL identified in the T&C box;

there was no evidence sufficient to establish that the 2012 Terms were the terms which were available in May 2014 and May 2015 at the URL.

As will appear, these arguments were not entirely discrete. In substance, however, the first argument turned on the proposition that if the terms and conditions were not where they were said to be, they were not incorporated. That argument is analogous to saying that where a contract identifies the terms and conditions by reference to an attachment, but there is no attachment, the contents of the attachment do not constitute part of the contract. The second argument, described as the “provenance” of the 2012 Terms, was that, even if one could look elsewhere for the document described by reference to the URL, Gispac had failed to establish that the 2012 Terms were in fact that document.
Ground 2 was in the following terms:

“Whether ‘QTY’ in the Sales Schedule to the Sales Agreement means ‘Annual Quantity’ within cl 1 and 18 of the ‘Terms and Conditions of Trading’
2   In the alternative to ground 1 above, if each Sales Agreement incorporated the provisions in the document styled ‘Terms and Conditions of Trading’:
(a)   the primary judge erred at [115], [117] and [235] in concluding that the reference to ‘QTY’ in the Sales Schedule to each Sales Agreement was within the meaning of ‘Annual Quantity’ in cll 1 and 18 of the Terms and Conditions of Trading (extracted at [21]) and thus gave rise to a contractual commitment by the Appellant to purchase from the Respondent ‘an amount of each Product that is equal to or exceeds the Annual Quantity specified in the Sales Schedule for each Product’ (cl 18.1) and, if the amount of Product purchased by the Appellant ‘during each quarter during the Term is less than 25% of the Annual Quantity’ (Shortfall), the Respondent was entitled by cl 18.2 to invoice the Appellant for the Shortfall and/or charge the Appellant for storage commencing the day immediately following the relevant quarter;
(b)   ought to have found that properly construed, the Sales Agreement, read with the provisions of the Terms and Conditions of Trading, constituted a promise by the Appellant to purchase, during the Term of the Sales Agreement – including as extended pursuant to cl 21.2 – the quantity (‘QTY’) of Product specified in the Sales Schedule for the total price specified in that Schedule, subject to permissible price variation in accordance with cl 20;
(c)   ought to have found that the construction advanced in (b) above was not ‘unlikely’ or ‘not a sensible business-like construction’ (cf [115]) having regard to: (i) the Respondent’s unilateral power to amend the Term of the Sales Agreement pursuant to cl 15.1(c), including so as to vary the length of the Term and the operation of cl 21; (ii) the rights and obligations of the parties pursuant to cll 10.2 in the event of termination; and (iii) cl 17 appointing the Respondent ‘for the Term as the exclusive supplier of the Products to Outlets in the Territory’.
(d)   accordingly, the primary judge erred at [145], [286] and [320] in concluding that the Appellant was liable to the Respondent for any shortfall under cl 18.2 of the Sales Agreements ([145]), that the Respondent had established its shortfall claim under cl 18.2 of the Sales Agreements ([268]), and that the Respondent was entitled to judgment for breach of cl 18.2 and in the alternative cl 18.1 of the Sales Agreements (at [320]).”

The assumption underlying the separate formulation in ground 2 was that the 2012 Terms might have been incorporated by reference, and yet not all were engaged. On their face, the elements of ground 2 required a consideration of the text, structure and purpose of the sales agreements, by reference to the provisions of the 2012 Terms. The appellant’s submissions, however, put those arguments in a broader context, which included the previous dealings between the parties, so far as these were recorded in the evidence, and as represented in part by a chronology of the 21 sales agreements dating from November 2012.
There may be an issue as to the proper manner of addressing the matters raised in ground 2, although the choice may not affect the outcome, as opposed to the structure of the discussion. For example, in Trustees Executors and Agency Co Ltd v Peters,^[7] the High Court considered an option agreement given by a landowner to its lessees permitting the lessees to purchase the land and stating:

“Such sale shall be on and subject to such of the usual terms and conditions of sale of the Real Estate Institute of New South Wales as shall be applicable to sales of land of like tenure under like circumstances.”^[8]
7. (1960) 102 CLR 537; [1960] HCA 16 (McTiernan, Kitto and Menzies JJ).
8. Peters at 542 (Kitto J).

The first question was whether the relevant terms and conditions were to be found in a document approved by the Institute in 1920 and applicable at the time the option was given, or a later version issued in 1953 and applicable when the option was exercised in 1956. Kitto J held that the intention of the parties was to use the version in force at the time the option was granted, but with questions of applicability determined at the time the option was exercised: at 548. Kitto J then stated:

“Accordingly I am of opinion that the proper course is to turn to the Institute’s form of 1920, delete any of its provisions which are inapplicable to a sale for cash of an estate in fee simple in land under the provisions of the Real Property Act, and treat the rest as the terms and conditions of the sale.”

There are, in practical terms, two ways of addressing the problem of inapplicable or inconsistent terms. The one adopted in Peters is to read the incorporating provision as subject to an implied exclusion of terms which are not engaged or are inconsistent with other aspects of the contractual relationship. The alternative approach is to incorporate all the terms of the document referred to and seek to read any inconsistent terms of the resulting contract harmoniously,^[9] or subject to a primacy principle, arguably giving effect to the agreed terms over the incorporated terms.^[10]
9. Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109 (Gibbs J); [1973] HCA 36.
10. Ford Motor Co of Australia Ltd v Arrowcrest Group Pty Ltd [2002] FCA 1156 at [8] (Finkelstein J), applied in Current Images Pty Ltd v Dupack Pty Ltd [2012] NSWCA 99 at [52] (Bathurst CJ, Macfarlan JA and Sackville AJA agreeing).
The former approach is not only consistent with Peters, and that adopted by the House of Lords in Thomas (TW) & Co Ltd v Portsea Steamship Co Ltd,^[11] but conforms to the modern approach to the construction of contractual provisions which requires that they be read in context and with an eye to their purpose.
11. [1912] AC 1.
This approach has the particular merit in the present case where the three sales agreements (in May 2014 and May 2015) followed an extended commercial relationship involving the two parties and a series of like sales agreements. Although the outcome may not differ from the alternative approach, it will be adopted below. The result is that, in considering ground 1, it will be appropriate to have regard to the matters raised under ground 2. However, ground 2 will also be addressed below in accordance with its assumption.

Structure of primary judgment

In order to understand the nature of the challenges set out in grounds 1 and 2, it is necessary to outline the structure of the primary judgment.
After providing a brief background and overview of the issues, the judge dealt with evidential matters under the heading “The material facts”: at [10]-[46]. In the course of that analysis, there was a subheading “Michael Hill’s ticking of the terms and conditions box referring to the 2012 Terms”: at [28]-[32]. There are two aspects of this passage which may be noted.
First, the judge dealt with the evidence of Mr Colvile, who had signed the sales agreements in May 2014 and May 2015. The judge accepted Mr Colvile’s evidence and made the following finding:

“30 I find that in ticking the terms and conditions box located immediately above the signature clause which he signed, Mr Colvile, on behalf of Michael Hill, knew that he was signing and ticking referable to Gispac’s terms and conditions. The evidence of Mr Bogatez establishes that these terms were the 2012 Terms: see [33]-[34] below.”

Relevant to the present issue, the judge continued:

“31 Notwithstanding that each of the Sales Agreements is a signed contract, Michael Hill put in issue whether the 2012 Terms were available for inspection on the website maintained by Gispac at the URL address stated in the Sales Agreements set out at [17] above. The defence of Michael Hill contended that at all times on and after 5 May 2014, the link to the Gispac website that appears on page two of the Sales Agreements was defective or did not exist (par [14(c)]). Michael Hill did not attempt to prove this assertion by way of evidence. Mr Colvile’s evidence was that he did not go to Gispac’s website looking for any terms (affidavit, par [36]), and he agreed in cross-examination that he ‘chose not to read them’ (T69.46).
32 As explained under Issue 1 below, the question of whether the URL link to the 2012 Terms in the Sales Agreements was operable in May 2014 and May 2015 does not arise if, as Gispac contended, the mode of incorporation of the 2012 Terms is by reference as terms of a signed contract. The question only arises if, as Michael Hill contended, the 2012 Terms were incorporated by notice as terms of an unsigned contract. This is the context in which I now turn to the dispute as to whether the link to the 2012 Terms was operable in May 2014 and May 2015.”

The findings as to the subjective beliefs and intentions of Mr Colvile were not relevant to the proper construction of the sales agreements (although they would have been to certain of the defences). Further, although the appellant took exception to the conclusion stated at [32], it is clear that it was not intended as a reasoned conclusion, but merely as an introduction to the succeeding discussion as to whether the URL link was operable at the relevant time. The conclusion as to that issue at [44] has been noted above.
At [47] the primary judge identified as issue 1(a), the question: “Were Gispac’s 2012 Terms incorporated into each of the sales agreements?” The consideration of that question commenced at [49]; the final conclusion was stated at [84].
The judge accepted that Gispac had “the onus of proving that the 2012 terms were incorporated as terms of the sales agreements”: at [50]. He then set out the applicable legal principles: at [54]-[71]. (It will be convenient to deal with the cases relied on by the primary judge in considering the submissions of the appellant.) In his conclusions (identified later), the judge accepted, at least implicitly, the submissions of Gispac, which were stated in the following passage:

“51 By reference to Toll^[12] …, Gispac submitted that the mode of incorporation of the 2012 Terms into the Sales Agreements was the act of Michael Hill’s representative signing the Sales Agreements and ticking the box under the heading ‘Terms and Conditions of Trading’. Alternatively, it is said that such terms were incorporated by reference.”
12. Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52.

The submissions of Michael Hill, set out in the following passages, were rejected:

“52   Although Michael Hill accepted in closing submissions that this case is a signed document case in that the Sales Agreements had been signed on behalf of Michael Hill and are therefore within the principle in Toll (T120.35-37), Michael Hill says that this case should be treated as an unsigned document case. It is said that the contract is a ‘hybrid’ comprising the signed Sales Agreement and the unsigned 2012 Terms referred to in that signed document and therefore the principles in the ‘ticket cases’, not Toll, apply to the incorporation of terms into Sales Agreements.
53   Relying upon the principles in the ticket cases …, it is said that:
•   terms appearing in the unsigned document are incorporated in the (written) contract only if reasonable notice has been given of them: Oceanic Sun Line Special Shipping Company Inc v Fay;^[13]
•   the inclusion of unusual or onerous terms in an unsigned document may require its proponent to draw those terms to the attention of the other party, and an express acceptance of an offer that incorporates other terms does not necessarily connote acceptance of all those other terms; if the person has not read the terms, their consent may be taken as being consent to the terms that are appropriate to a contract of the type in question; and
•   the Sales Agreement ‘did not, in that form, take the Michael Hill representative to a copy of the Gispac Terms’; cll 17, 18 19 and 21 of the 2012 Terms were unusual, or not the kind of terms a purchaser might expect in this type of contract in ‘standard’ terms attaching to the supply of wholesale packaging in Australia, and therefore, Michael Hill is not bound by those terms.”
13. (1988) 165 CLR 197 at 227-229; [1988] HCA 32.

In identifying the applicable legal principles, the judge referred, correctly, and uncontroversially, to the approach to be adopted in construing the contract:

“55 In Oceanic Sun Line v Fay, Brennan J distinguished the two types of cases – signed contracts and unsigned documents, such as a “ticket case” – stating at 228-229:
‘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. But where an exemption clause is contained in a ticket or other document intended by the carrier to contain the terms of carriage, yet the other party is not in fact aware when the contract is made that an exemption clause is intended to be a term of the contract, the carrier cannot rely on that clause unless, at the time of the contract, the carrier had done all that was reasonably necessary to bring the exemption clause to the passenger's notice.’ (Citations omitted; emphasis added).

56 In Carnival Plc v Karpik (Ruby Princess)^[14] …, Derrington J (Allsop CJ agreeing) said of the ticket cases at [166]:
14. (2022) 294 FCR 524; [2022] FCAFC 149 (reversed on other grounds: Karpik v Carnival Plc [2023] HCA 39; (2023) 98 ALJR 45).
‘The ticket cases are concerned with contractual formation and the scope of the terms to which the parties have agreed where an agreement has arisen orally or by conduct, and in the course of which one party seeks to introduce written terms contained on or referred to in a document passing between them.’

57 That is, the ticket cases “form a particular category of cases concerned with the objective assessment of the circumstances in which parties have entered into a contractual relationship in the absence of a signed agreement”: Carnival Plc v Karpik (Ruby Princess) at [206(a)]. That is not the present case.

Written contracts

58 Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 at [114] (Leeming JA, Ward and Emmett JJA agreeing) is authority for the proposition that, given the general rule in Toll, the ‘ticket cases’ have no application to the circumstance where a party executes a written contract, even if it chooses to do so without reading documents to which it refers. Leeming JA said at [114]:
‘The law here is very clear. A unanimous High Court in Toll … confirmed that:
“[57] … The general rule, which applies in the present case, is that where there is no suggested vitiating element, and no claim for equitable or statutory relief, a person who signs a document which is known by that person to contain contractual terms, and to affect legal relations, is bound by those terms, and it is immaterial that the person has not read the document.”

59   Incorporation of a set of terms by reference to those terms in a written contract is commonplace. J W Carter, Contract Law in Australia (J W Carter Publishing, 8th ed, 2023) at [10-19], gives several examples of incorporation in a written contract, including:
•   the standard terms of the business of one of the parties: Smith v South Wales Switchgear Co Ltd [1978] 1 WLR 165, a case involving a written contract: …; and
•   a standard form document approved by a body such as a law society or a real estate institute: for example, Gilberto v Kenny (1983) 57 ALJR 283 at 284F.”

After reviewing the cases, the conclusions reached were expressed under the heading “Application of principles to the facts”, in the following passage:

“72 The Sales Agreements were obviously contractual, as were Gispac’s ‘terms and conditions’ referred to in the box headed ‘Terms and Conditions of Trading’. The question of whether by signing and ticking the terms and conditions box in the Sales Agreements Mr Colvile evidenced Michael Hill’s contractual intention to be bound by the 2012 Terms, is answered by asking what that conduct would have led a reasonable person in the position of the other party to believe: Toll at [40]. Here, Mr Colvile’s act of signing and ticking the box referable to Gispac’s standard terms and conditions indicated an intention by Michael Hill to be bound by Gispac’s terms and conditions regardless of whether they have been read and considered: Oceanic Sun Line v Fay at 228. As said in Carnival Plc v Karpik (Ruby Princess) at [236]:
‘… the affixing of a signature objectively conveys that the party signing ‘either has read and approved the contents of the document or is willing to take the chance of being bound by those contents … whatever they might be’: L’Estrange v Graucob; Toll v Alphapharm at [54]–[59]: and no question of the reasonableness of the notice of any onerous or unusual terms arises.’”

A second passage said to involve the application of the stated principles dealt with Mr Colvile’s subjective state of mind: at [73]. Its relevance to the conclusion that “the 2012 terms were incorporated as terms of the sales agreements” was by no means clear. The passage may have been misplaced as the last sentence implied that the findings were relevant to equitable and other defences relied upon by Mr Michael Hill, which they clearly were. (There was no challenge on appeal to the judge’s rejection of those defences: accordingly, these findings need not be considered further.)
The judge’s conclusion was as follows:

“84 I find that the three Sales Agreements signed by Mr Colvile on behalf of Michael Hill incorporated the 2012 Terms. Contrary to Michael Hill’s submission, this case is not to be treated as an ‘unsigned document’ case, nor is it necessary for Gispac to establish that reasonable steps were taken to bring the 2012 Terms to the attention of Michael Hill.”

Two further observations are in order at this point. First, the discussion of the cases appeared to be primarily directed to the rejection of Michael Hill’s submission that this was “an unsigned document case”: at [54]. The submission was based upon the proposition that, although Mr Colvile signed the sales agreements, and ticked the relevant box, he did not sign the document containing the 2012 terms and the matter should therefore be treated as a “hybrid” case. The proposition that the signed document cases all involved terms which were either not attached to the signed document or not otherwise provided, was, as the judge noted, inconsistent with a “hybrid” analysis. What may have justified that analysis, but which was not pursued on the appeal, was the combination of two factors, namely, first, that the box to be ticked on the sales agreement was “to confirm that you agree to agree to” certain terms and conditions. Implicit in that language was that a further step would be needed to give effect to the 2012 Terms. The second factor, which gave plausibility to that reading, was that the 2012 Terms (if they were the document referred to in the T&C box) included a space at the end for “Customer signature”. However, it is neither necessary nor appropriate to pursue that question on this appeal.
The second observation is that, having stated issue 1(a) as a question whether the 2012 Terms were incorporated into each of the sales agreements, the primary judge answered that question substantially by reference to the fact that the sales agreements were signed, were intended to be contractual and referred to the 2012 Terms. That did not address what the appellant described as an “evidential void” between the language of the T&C box, properly construed, and the 2012 Terms. The primary judge clearly understood the argument that the document referred to in the T&C box had not been demonstrated on the evidence to have been available at the relevant time, but treated that fact as irrelevant, treatment which lay at the heart of the appellant’s challenge in ground 1.

Applying the incorporating provision

Counsel for the appellant correctly identified that where a document is said to be incorporated by reference, the first step is to construe the contractual provision said to have that operation. The relevant language is set out in the box which appears at [46] above.
There was no dispute in the present case that construction of the contracts required “consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose or object of the transaction”.^[15] That proposition in Toll v Alphapharm referred to the following passage in the reasons of the High Court in Pacific Carriers Ltd v BNP Paribas:^[16]

“22 … The construction of the letters of indemnity is to be determined by what a reasonable person in the position of Pacific would have understood them to mean. That requires consideration, not only of the text of the documents, but also the surrounding circumstances known to Pacific and BNP, and the purpose and object of the transaction. In Codelfa Construction Pty Ltd v State Rail Authority of NSW,^[17] Mason J set out with evident approval the statement by Lord Wilberforce in Reardon Smith Line Ltd v Hansen-Tangen:^[18]
‘In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.’”^[19]
15. Toll v Alphapharm at [40].
16. (2004) 218 CLR 451; [2004] HCA 35.
17. (1982) 149 CLR 337.
18. [1976] 1 WLR 989; [1976] 3 All ER 570.
19. See also Electricity Generation Corp v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46]-[50] (French CJ, Nettle and Gordon JJ); [107]-[109] (Kiefel and Keane JJ); [118]-[121] (Bell and Gageler JJ).

Evidence of the surrounding circumstances was admitted in the Court below and the submissions in this Court ranged across that material. That course was appropriate. Questions of context and purpose may be put to one side for present purposes, although it will be necessary to return to them.

First submission – access to URL

As noted above, Mr Bogatez’ evidence was that the 2012 Terms was a document located on Gispac’s internal server: it was said to be available to customers, but not to the public at large or to competitors. It was a PDF document, which was intended to be available at a specific URL.
The appellant’s first submission was that if the URL link was not shown to be available and operative, no terms were incorporated by reference. That condition was satisfied by the finding at [44] of the primary judgment (set out at [51] above) that Gispac had failed to prove that the URL link was operable at the relevant time. While having the attraction of simplicity, that submission should not be accepted.
Reference to terms at an internet location is analogous to a reference to terms in a document attached to the contract. The essential proposition identified in Toll v Alphapharm and related cases discussed above, is that a signature on a document is sufficient, in the absence of vitiating circumstances, to demonstrate acceptance of incorporated terms, even if the document with the terms is not attached as stated in the signed document. Accordingly, even if the party proffering the contract (Gispac) did not make the terms and conditions available in the manner indicated in the signed agreement, and the party accepting the offer (Michael Hill) has not sought to pursue the omission, the accepting party will be bound by the terms incorporated by reference.
The appellant sought to distinguish Toll v Alphapharm. A relevant contextual circumstance which the reasonable observer would take into account in the present case, it was submitted, was the fact that the relevant terms and conditions were not available to the customer at the identified location. The signature, it was submitted, would not carry the same implicit representation in such a case. For reasons which will be explained below, Toll v Alphapharm was distinguishable on its facts, but for a different purpose. It was not itself an “attached document” case.

Alternative submission – the evidential void

The appellant’s alternative submission involved two steps. The first was to construe the incorporating clause; the second was to match the document relied upon by the proffering party as the document which would have been available had the incorporating clause operated according to its terms. The appellant submitted that in this case there was an “evidential void”, because Gispac had not established that the 2012 Terms was the document which would have been available had the URL been accessible.
The T&C box identified the PDF in terms significantly different from the 2012 Terms provided in hardcopy and identified by its footer as “Gispac – terms and conditions of trading – 23 1 12_reviewed (2)”. Further, the evidence of Mr Bogatez, addressed below, provided an inadequate basis to draw the inference proposed by Gispac. The appellant submitted that there was therefore no basis for inferring that the 2012 Terms was a copy of the document which would have been available had the URL been accessible.
Gispac argued that this submission was an attempt to reintroduce the notice requirements which apply to incorporation of terms by reference into an unsigned contract into the analysis of a signed contract. In other words, the submission was precluded on the authority of Toll v Alphapharm. The appellant responded that the signed contract cases generally did not address the issue now raised: Toll v Alphapharm itself was a case where the terms were printed on the back of the very form the customer had signed – no issue arose as to the identification of the relevant terms.

Cases on incorporated terms

It is then necessary to address the cases in the context relied on by the appellant, starting with the seminal reasoning of the High Court in Toll v Alphapharm.^[20] The reasoning commenced by affirming the proposition that rights and liabilities created by a contract are to be assessed objectively:

“40 This Court, in Pacific Carriers Ltd v BNP Paribas …, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction: Pacific Carriers Ltd v BNP Paribas.”
20. See fn 12 above.

The second proposition, which said to be consistent with the first, and which is of immediate relevance was “the significance which the law attaches to the signature (or execution) of a contractual document”.^[21] The principal was stated in the following terms:

“44 In Oceanic Sun Line v Fay, Brennan J said:
‘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.’

45 It should not be overlooked that to sign a document known and intended to affect legal relations is an act which itself ordinarily conveys a representation to a reasonable reader of the document. The representation is that the person who signs either has read and approved the contents of the document or is willing to take the chance of being bound by those contents, as Latham CJ put it, whatever they might be. That representation is even stronger where the signature appears below a perfectly legible written request to read the document before signing it.”
21. Toll v Alphapharm at [42].

This position, Toll v Alphapharm continued, was to be contrasted with the ticket cases and others where there was no signed agreement:

“55 In L'Estrange v Graucob, Scrutton LJ said that the problem in that case was different from what he described as ‘the railway passenger and cloak-room ticket cases, such as Richardson, Spence & Co v Rowntree^’, where ‘there is no signature to the contractual document, the document being simply handed by the one party to the other.’ His Lordship said:
‘In cases in which the contract is contained in a railway ticket or other unsigned document, it is necessary to prove that an alleged party was aware, or ought to have been aware, of its terms and conditions. These cases have no application when the document has been signed.’” [References omitted.]

The appellant accepted wholeheartedly the propositions in Toll v Alphapharm, but said they did not apply in the present circumstances. In Toll, the operative terms and conditions were on the back of the document which the respondent had signed. This understanding of Toll v Alphapharm is confirmed in the joint reasons at [57]:

“The general rule, which applies in the present case, is that where there is no suggested vitiating element, and no claim for equitable or statutory relief, a person who signs a document which is known by that person to contain contractual terms, and to affect legal relations, is bound by those terms, and it is immaterial that the person has not read the document.” [Emphasis added.]

Although referring to “the document” in the singular, there is no doubt that the principle applies where the contract is contained within two or more documents. An example may be found in Mainteck Services Pty Ltd v Stein Heurtey SA;^[22] as explained by Leeming JA at [114]:

“Mainteck executed a formal legal document, the Second Consortial Agreement, which referred repeatedly to the Main Contract, and imposed obligations upon Mainteck by reference (‘mutatis mutandis’) to that contract.”
22. (2014) 89 NSWLR 633; [2014] NSWCA 184 (Leeming JA, Ward and Emmett JJA agreeing).

After reference to Toll at [57], being the passage set out above, Leeming JA further explained:

“123 The Main Contract was the premise of the Second Consortial Agreement. It was the reason for the latter agreement, and it specified the obligations of the subcontractor Mainteck to the contractor Stein Heurtey. It is clear that the words in Art II.1 ‘their respective areas of responsibility being as laid down in technical specification of main Contract’ are a reference to a part of the Main Contract, and (for the reasons already given) not to the Bill of Materials. It is evident that the function of those words is to delineate the obligations arising under the Main Contract which each of the parties to the Second Consortial Agreement was promising to perform. The Main Contract describes (albeit at a level of generality) and attaches a contract price to what was described in two schedules, Schedules 1A and 4, as the ‘Mainteck Portion’.”

Thus, although the agreement was contained in two documents, in circumstances where the second expressly referred back to the first, incorporating obligations under that contract, the contracting parties were bound by those obligations when signing the second agreement. Again, however, this does not engage with the current circumstances where there was no prior contract from which further terms were to be imported. (There had been prior contractual dealings, but they did not engage the Mainteck reasoning, rather the contrary, as explained below.)
This Court again considered incorporation by reference in Warner Bros Feature Productions Pty Ltd v Kennedy Miller Mitchell Films Pty Ltd.^[23] A dispute arose between Warner Bros companies producing Mad Max: Fury Road (the Film) with the services of two well-known identities for production and direction. A Letter Agreement in cl 21 referred to the balance of the terms being “WB standard for ‘A’ list directors and producers”. The only relevant term which was said to have been incorporated by that reference was an arbitration clause, and the Chief Justice restricted his findings to that provision.^[24] The Court accepted that it was so incorporated. Two circumstances appear to have been critical to that conclusion. The first was an affidavit of the senior vice-president and general counsel of Warner Bros Pictures exhibiting 56 agreements which contained the arbitration clause. The Chief Justice accepted that the clause was “standard” as a term which was habitually proffered.^[25] Further, the Chief Justice noted that “there is no reason to assume that those advising [the respondents], who were experienced in the film industry, did not appreciate the meaning of terms which were ‘WB standard for “A” list directors and producers’”.^[26] Thus, while the additional terms were not set out in the Letter Agreement, they were sufficiently described as terms which included an arbitration clause by a description which was understood within the industry.
23. [2018] NSWCA 81; 130 IPR 527 (Bathurst CJ, Beazley P and Emmett AJA agreeing).
24. Warner Bros [75].
25. Warner Bros [82]-[84].
26. Warner Bros [59].
The significance of the case for present purposes, the appellant submitted, was the need for the Court to be satisfied as to those two considerations, a need which demonstrated that a party relying upon a term incorporated by reference had to establish the existence of such a term as objectively satisfying the language of the incorporation provision. It submitted that the evidence in the present case did not do that.
The primary judge referred to the opinion of the House of Lords in Smith v South Wales Switchgear Co Ltd.^[27] Switchgear was carrying out maintenance work on equipment operated by a manufacturing company. Due to the latter’s negligence, a Switchgear employee was injured. The contract for maintenance work was expressed to be “subject to our general conditions of contract obtainable on request”. There was an original document titled “General conditions of contract 24001” and two later versions with the descriptions “revised January 1969” and “revised March 1970”. Switchgear did not request a copy but in July 1970 received a copy of the January 1969 version printed on the back of a purchase order. The conditions contained an indemnity clause requiring the supplier to keep the contractor indemnified against loss or damage. As stated by Lord Fraser of Tullybelton:^[28]

A.   Correct. Three to six months, actually.
Q.   Where does the six months come in? Because, I’ve not seen that in your affidavits.
A.   Well, it’s just, it’s just a, it’s a date that’s a broad range, because when you’re dealing with overseas manufacturers it’s just timeframes are, sometimes you can get product in three months, sometimes it takes a lot longer.”
59. Tcp, p 27(17)-(30).

Although the sales agreements generally described the Lead Time as “approx 8-10 weeks”, later in a year, the period was expanded to “approx 12-14 weeks due to Chinese New Year”.^[60] Yet, according to Mr Bogatez, these periods were regularly exceeded, making a regular quarterly accounting from the date of commencement of the agreements impractical. There was no evidence that any such exercise until June 2017, three and two years respectively after the agreements the subject of the proceedings.
60. See, e.g. Sales Agreement, 3 December 2013.
Furthermore, the “product usage and forecast” reports prepared by Gispac demonstrated large fluctuations from month-to-month: they were provided as a basis for calculating the amounts required under further sales agreements. Two points are significant: first, no such report in evidence identified quarterly figures; secondly, none suggested that the level of fluctuating demand was inconsistent with the contractual arrangements.

Exclusivity clause

There is a further question as to whether, even if cll 18 and 21 were not engaged, cl 17, requiring that the appellant obtain packaging exclusively from Gispac, was engaged.
No submission was made to the effect that there might be incorporation of some of the 2012 Terms relating to ePlus agreements, but not others. The submissions for the appellant on the assumed basis that the 2012 Terms were incorporated, to the effect that it would be necessary to construe the 2012 Terms harmoniously with other aspects of the sales agreements, proceeded on the basis that there was general incorporation, rather than that there was no general incorporation.
Apart from the lack of a basis in Gispac’s submissions for treating one particular clause as incorporated when others were not, it may be observed that there was good reason for treating cll 17-21 as a package. First, exclusivity, as provided in cl 17, applied to “the Products”. The Products were defined to mean the “products specified on the front page of a Sales Agreement”. The term “Sales Agreement” was defined in cl 1 to mean “a Sales Schedule and these Terms and Conditions of Trading”. The term “Sales Schedule” was defined to mean “the schedule contained on the front page of the sales agreement setting out the product specifications”. Thus, it was only in circumstances where the 2012 Terms were engaged that there was a Sales Agreement.
Secondly, exclusivity made practical sense only in circumstances where there was a fixed term contract, as provided under cl 21.
Thirdly, there was no exclusivity provision in relation to any contract other than one providing for ePlus delivery, confirming that ePlus delivery was treated as a benefit to the customer for which a package of conditions operated.
It follows that there was no exclusivity condition engaged with respect to the appellant’s agreements entered into in May 2014 and May 2015, the subject of the proceedings.

Leave to rely upon new submissions

In written submissions, filed on 5 June 2024, Gispac questioned the entitlement of the appellant to make submissions in support of ground 1, on the basis that the point had not been raised before the primary judge. Gispac noted that ground 1,

“raises a construction question as to whether the words in the box ‘you … agree to the terms and conditions that can be found at the following link’ means [sic] that only terms that were available at the link could be incorporated. So, according to Michael Hill, if there were no terms available at the link (because it had not been established the link was operable) then there were no terms and conditions incorporated into the sales agreements”.

Gispac also submitted that the case proceeded on the basis that there was a “hybrid” signed and unsigned document case and that the “ticket cases” principles applied. The appellant’s response to these submissions was to seek leave to rely upon its written submissions, to the extent that they departed from the case ran at trial. Nevertheless, the appellant denied that leave was required.
The immediate answer to Gispac’s first complaint is that, for the reasons noted above, the submission in those terms (the appellant’s first alternative) cannot succeed. It will be necessary to say more shortly about the so-called “hybrid” case submission.
Further, Gispac submitted at par 7:

“Michael Hill also raised at trial (belatedly) a factual provenance issue as to whether it had been established on the evidence that the 2012 Terms were the actual terms that existed at the time that the Sales Agreements were signed…. That question was answered in favour of Gispac …. His Honour found that the terms referred to in the box were the 2012 Terms …. Again, there is no challenge on appeal to the factual finding as to the provenance of the 2012 Terms.”

This point was not that the “provenance” argument had not been raised at trial, but that there was no challenge to the finding that the terms identified by Mr Bogatez were the terms which were intended to be engaged by the ticking of the T&C box.

The prejudice to the respondent

Gispac submitted that it would suffer prejudice if the matter were allowed to be pursued. Its written submissions suggested that leave was opposed on the basis that the new contentions were without merit; prejudice was not explored. However, in oral argument the question of prejudice was put in the following terms. The first point relied on was that counsel,

“would have got more heavily involved in cross-examining as to how the parties operated through their conduct on rise and fall type issues, web ordering ePlus to make good. Because one can look at post contractual conduct for the purposes of working out contract formation.”^[61]
61. CA Tcpt, 20/06/24, p 43(12).

It is true that in Brambles Holdings Ltd v Bathurst City Council^[62] Heydon JA stated a principle that “post-contractual conduct is admissible on the question of whether a contract was formed”, but not admissible on the question of what a contract means. However, Heydon JA further stated:

“27 The fourth relevant principle is that the construction of a contract is an objective question for the court, and the subjective beliefs of the parties are generally irrelevant in the absence of any argument that a decree of rectification should be ordered or an estoppel by convention found.”
62. (2001) 53 NSWLR 153; [2001] NSWCA 61.

There was no doubt that each of the relevant contracts existed; there was no doubt as to the identity of the parties.^[63]
63. Cf Sinclair v Balanian [2024] NSWCA 144 at [16] (Leeming JA) referring to Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57 at [35].
In Medical Device Technologies Pty Ltd v Health Administration Corporation,^[64] a case relied upon by Gispac, Payne JA stated:

“91 The primary judge correctly found that post contractual conduct was admissible in considering whether the contract had already been formed: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [25]. Ms Hanigan’s enquiry quoted at [64] would have been unnecessary had she thought that the Purchase Order Terms and Conditions governed the first Agreement. Of course, Ms Hanigan’s subjective state of mind is not relevant to the question of determining the terms of the first Agreement. But the primary judge was correct to conclude that this enquiry, viewed by an objective bystander, supported the conclusion that the parties did not intend the Purchase Order Terms and Conditions to be incorporated into the first Agreement.”
64. [2024] NSWCA 142 (Payne JA, Stern and Harrison JJA agreeing).

There is good reason to maintain a tight rein on the admissibility of post-contractual conduct, even as evidence as to the formation of a contract. In most cases such evidence will constitute a direct challenge to the objective determination of the existence of a contract. Subsequent conduct of a party may indicate that the party does or does not believe there is a contract in place, but that will be an expression of a subjective opinion and, indeed, quite likely an opinion as to a matter of law.^[65]
65. Johnston v Brightstars Holding Company Ltd [2014] NSWCA 150 at [120]-[121] (in my reasons) and [134] (Gleeson JA agreeing).
The point of prejudice was further explicated by senior counsel in the following terms:^[66]

“So we would have, at least, wished to consider at trial, if this point was properly in the ring, (a) whether we cross-examine in a slightly different way (b) whether we introduce new topics through cross-examine or (c) whether we make additional submissions to his Honour about all these points. That’s one matter we may have done differently.”
66. CA Tcpt, p 43(42).

In so far as there were further submissions of law which might be put, that course was open on an appeal by way of rehearing. In so far as there was an intention to explore factual issues further in relation to subsequent conduct, there was no sound basis put forward for permitting such a course.
The second element of prejudice was stated, somewhat obliquely, in the following terms:^[67]

“The other one… is it is true that the question of whether the link was in operation was a fact in issue, but as one knows, facts in issue arise in a particular forensic landscape and if the forensic landscape we were facing was this is a hybrid signed/unsigned case, it’s possible to take a view that claim will fail or that argument will fail…
…
It is possible one takes a forensic view that we’re going to prove it’s a signed contract and, therefore, the working of the link is not really central. If one had put the incorporation point either in opening or at some point prior to now, that is in the Court of Appeal, one may have addressed the forensic landscape of the importance of the link in a different way and one can’t rule that out as being something that we would have done on this side of the bar table. It’s all about dealing with the factual issue in the context of what one understands the arguments are going to be.”
67. CA Tcpt, p 43(45).

The suggestion was that an alternative factual case might have been put, thereby attracting the principle identified in Coulton v Holcombe,^[68] in the following terms:^[69]

“In a case where, had the issue been raised in the court below, evidence could have been given which by any possibility could have prevented the point from succeeding, this Court has firmly maintained the principle that the point cannot be taken afterwards …. In O’Brien v Komesaroff,^[70] Mason J, in a judgment in which the other members of the Court concurred, said:
‘In some cases when a question of law is raised for the first time in an ultimate court of appeal, as for example upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is expedient in the interests of justice that the question should be argued and decided ….
The consequence is that the appellants’ case fails at the threshold. They cannot argue this point on appeal; it was not pleaded by them nor was it made an issue by the conduct of the parties at the trial.’

In our opinion, no distinction is to be drawn in the application of these principles between an intermediate court of appeal and an ultimate court of appeal.”
68. (1986) 162 CLR 1 at 7-8; [1986] HCA 33.
69. Coulton at 7 (Gibbs CJ, Wilson, Brennan and Dawson JJ).
70. (1982) 150 CLR 310 at 319; [1982] HCA 33.

In the present case, Gispac’s amended statement of claim expressly pleaded at par 14 that “[e]ach of the Sales Agreements incorporated the Terms and Conditions”. (The phrase “Terms and Conditions” was identified by reference to the 2012 Terms.) Michael Hill’s denial further stated that Gispac “did not give, or otherwise make available, to it any documents separate from, and in addition to, the sales agreements that contain terms and conditions in relation to the supply of its packaging products” and that upon and after 5 May 2014 “the link to the website … was defective or did not exist”.
As Gispac’s case, supported in evidence by Mr Bogatez, was that the terms were supplied, or at least available at the URL, and not otherwise, the question of the availability of the terms through that medium was always in issue. If Gispac had a case to bring in response to Michael Hill’s defence, the evidence should have been available prior to the opening of the trial on 22 August 2022.
In a written opening dated 11 August 2022, Gispac noted as the first issue, “Were Gispac’s 2012 standard terms incorporated into each of the sales contracts?” It stated that its answer was “yes”: at par 8. It relied upon the signing of the agreement and the ticking of the box as incorporating the terms governing the supply of paper bags to Michael Hill under each of the sales agreements: pars 16, 24-25. It noted that it did not matter that the document was found on a website: par 26. It then noted the submission that the link was defective or did not exist and responded:

“The evidential basis for Michael Hill’s positive factual contention is not apparent.”

It then to sought to place on Michael Hill the burden of establishing the negative.

Michael Hill’s opening submissions, dated 18 August 2022, asserted that it was “for Gispac to make out the contract it asserts, and it cannot do so on the available evidence”: par 3. It took issue directly with the contention that “the website address in the box was a functioning hyperlink, and that it took a person who clicked on it to an electronic document with its purported standard terms and conditions. It has not proved this fact.” Michael Hill noted the contrary assertion by Mr Bogatez but dismissed it as not being evidence demonstrating that the hyperlink was operational at the relevant time: par 10. It repeated what it described as a “fatal problem” in Gispac’s case, namely that “it has offered no evidence of any probative value that shows the hyperlinked worked in 2014 and 2015”: par 16(a). The allegation was repeated at pars 17 and 18.
In closing submissions dated 24 August 2022, Gispac asserted that the “act of signing the sales agreements and ticking the box is sufficient to incorporate the 2012 standard terms into its contracts”: par 17. Assuming that the link did not work, it submitted that “it does not matter”: par 26. It repeated its contention (correctly rejected by the primary judge) that “given the contention that the link did not work is a factual assertion propounded by Michael Hill, it bears the evidential onus in establishing the fact”: par 33.
The cross-examination of Mr Bogatez and Mr Colvile were completed on the first day, 22 August 2022. On the second day, there was discussion about expert evidence, in the course of which the primary judge outlined a number of the issues which have been addressed above, including the contextual considerations raised by the sales agreements prior to the ones relied upon by Gispac. With respect to the last day of the first tranche of hearings (the second tranche only addressed expert evidence as to quantification of loss) counsel for Michael Hill identified the hyperlink dispute as involving two problems faced by Gispac.^[71] The first was the availability of the link and the second was that even if the link were in operation, Gispac had not proved the “provenance of this document”:

“They have a document which has 2012 written on it. Mr Bogatez says that that was the agreement that applied to other customers. But there’s really no chain of evidence that shows when it was produced and who produced it. So you don’t actually know what was ever sitting behind this link, if it worked.”
71. Tcpt, 25/08/22, p 136(45)-137(20).

The judge expressed doubts about the second issue, but it was not abandoned or withdrawn. In response, senior counsel for Gispac took issue with the second point in the following terms:^[72]

“The other matter that my learned friend started to try to put in closing was some provenance issue with the 2012 terms. She didn’t open on that point. She can’t be allowed, in my submission, to run a new case, now, that the 2012 terms that went into evidence without objection somehow are not the 2012 terms referred to by reference to the link. That’s a new case put in closing. It would cause me unfairness if she was permitted to advance that case now.
And in any event, its not persuasive. And one only needs to look at the footer on the 2012 general terms to see that they reflect the description in the hyperlink.”
72. Tcpt, p 146(49)-147(10).

There was no ruling that it was a new case, presumably because, given the earlier references set out above, it clearly was not. While it is true that it was not addressed in the judgment, except in the conclusory form of rejection by an express finding to the contrary, the issue was open at trial and was entitled to be relied on by the appellant on the appeal.

The ‘hybrid’ case

At the trial, and on the appeal, Gispac’s position was that there were only two classes of cases involving incorporation of terms and conditions by reference. The first class, of unsigned contracts, was exemplified by the so-called “ticket” cases; the second was that of signed contracts, which included the sales agreements. There was no “hybrid” category. Yet, Gispac submitted, the focus of the trial was upon the existence or otherwise of a “hybrid” category: that was the “forensic context” in which the submissions now sought to be run on appeal should be evaluated. Furthermore, no “hybrid” category was asserted on appeal.
It appears that the term “hybrid” was first used by counsel for Michael Hill in closing oral submissions and picked up by the primary judge as meaning that the case involved “the hybrid electronic and hardcopy nature of the contract”.^[73]
73. Tcpt, p 138(38).
The judge immediately expressed “difficulty with that submission”, noting that the quotation was a PDF file sent by email, printed out by Mr Colvile, “so he actually has a hard piece of paper”, which he signs, ticks the box and returns to Gispac. The judge continued:^[74]

“The fact that the terms exist at Gispac is no different to a case, is it, where someone signs and returns a facsimile by facsimile a quotation [which] incorporates the standard terms and condition[s] of the supplier, which the supplier has sitting in his or her office and hasn’t given to the potential customer. But the potential customer takes the chance that those conditions are not going to be disadvantageous. What’s the difference? …
Instead of sitting in the file drawer at the supplier’s office, it sits as a PDF and the witness has come along and says ‘Here it is’…. You suggest there’s some doubt about the provenance.”
74. Tcpt, p 138(46).

Counsel then responded, submitting that the Court should not accept Mr Bogatez:^[75]

“So the Court would have to have a real doubt about whether he, in fact, knew what the story was with the 2012 terms and whether they were Gispac’s terms in 2014. He just didn’t have the level of knowledge to assure the Court that anything he said on those topics was reliable.”
75. Tcpt, p 139(25).

In short, the response is that the case differs from other signed contract cases in that, contrary to the primary judge’s assumption in the passage set out above, it had not been established that “there were standard terms and conditions of the supplier, which the supplier has sitting in his or her office”. The term “hybrid” may not have helpfully encapsulated that proposition, but the point raised on appeal was squarely raised at trial and, for the reasons set out above, had merit.

Conclusion on leave application

The second point with respect to ground 1 for which leave was said to be required was in fact raised by the appellant in its defence, was identified in its written opening, and was addressed in oral closing submissions. It was never abandoned. Other issues may have been given greater weight, but it was, in the ring and was not a new case, either at trial (said to have been raised for the first time in closing submissions) or in this Court.
As to the first point, the issue is largely moot, given its rejection. But were leave required, it should be granted. No legitimate claim of prejudice was established, the question being one of law involving the proper construction of the incorporating clause, read in the context provided by the documentary record of prior dealings.
As leave was not required, the appellant’s defensive notice of motion should be dismissed. The costs of the motion should, however, be the appellant’s costs in the appeal.
Although nothing turns on it, there may be doubt as to whether a notice of motion was necessary: there is no formal requirement for leave to rely on submissions, or a ground of appeal which is not the subject of a strike out application. If further evidence had been required to support the factual case for leave, that might have raised a separate issue.

Conclusions

For the reasons set about above, the primary judge erred in finding that Gispac had established that cll 17, 18 and 21 of the 2012 Terms were incorporated into the three sales agreements executed by the appellant in May 2014 and May 2015 respectively. Because of that conclusion as to the incorporation of, in particular, cll 17 and 18 of the 2012 Terms, it is not necessary to consider grounds 3 to 5, which were limited to the quantum of damages for breach of the exclusivity provision in cl 17.
The Court should make the following orders:

Dismiss the appellant’s notice of motion dated 7 June 2024.

Allow the appeal and set aside the judgment in the Equity Division.

In place thereof, dismiss the amended statement of claim with costs.

Order that the respondent pay the appellant’s costs in this Court.

**********

Endnotes

Decision last updated: 27 August 2024

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Citations

Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd [2024] NSWCA 211

Most Recent Citation

Re BRC Group [2024] VSC 563

Cases Citing This Decision

5

Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd (No 2) [2024] NSWCA 274

In the matter of Spring Street Property Group Pty Ltd [2025] NSWSC 422

In the matter of WSP Australia Pty Ltd [2024] NSWSC 1375

Cases Cited

32

Statutory Material Cited

2

Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57

Medium Neutral Citation:	Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd [2024] NSWCA 211
Hearing dates:	20 June 2024
Date of orders:	27 August 2024
Decision date:	27 August 2024
Before:	Bell CJ at [1]; Payne JA at [20]; Basten AJA at [32]
Decision:	(1) The appellant’s motion dated 7 June 2024 be allowed. Leave to rely on ground 4 refused. (2) Appeal allowed in part. (3) Set aside the orders of the primary judge made on 31 January 2024 and in lieu thereof order: (a) Judgment for the plaintiff against the defendant in the amount of $359,858. (b) The defendant to pay the plaintiff interest on the amount of the judgment referred to par(a) above pursuant to s 100 of the Civil Procedure Act 2005 (NSW) from 19 June 2019 to the date of this judgment. (4) The respondent pay the appellant’s costs of the appeal. (5) Within 7 days of the date of delivery of this judgment the appellant file submissions (limited to 3 pages) about the order for costs of the trial which should be made. (6) Within 14 days of the date of delivery of this judgment the respondent file submissions (limited to 3 pages) about the order for costs of the trial which should be made. (7) The Court will deal with the question of costs of the trial on the papers.
Catchwords:	APPEALS – leave to argue point not raised below – need for statement of findings challenged – Uniform Civil Procedure Rules 2005 (NSW), r 51.36 CONTRACTS – express terms – incorporation of terms – written contract – customer required to tick box on sales agreement agreeing to agree to supplier’s standard terms – link to standard terms not working at time of execution – whether link was to document produced in evidence by supplier CONTRACTS – construction – commercial context – prior dealings between parties – whether specific terms consistent with minimum annual quantity clause in standard terms – operation of exclusivity clause
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 100 Uniform Civil Procedure Rules 2005 (NSW), r 51.36
Cases Cited:	Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57 Ange v First East Auction Holdings Pty Ltd (ACN 083 112 505) [2011] VSCA 335; (2011) 284 ALR 638 Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; [1973] HCA 36 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 Carnival Plc v Karpik(Ruby Princess) (2022) 294 FCR 524; [2022] FCAFC 149 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33 Current Images Pty Ltd v Dupack Pty Ltd [2012] NSWCA 99 Electricity Generation Corp v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 Ford Motor Co of Australia Ltd v Arrowcrest GroupPty Ltd [2002] FCA 1156 Gispac Pty Ltd v Michael Hill Jeweller (Australia) Pty Ltd (No 2) [2024] NSWSC 356 Hyder Consulting (Australia) Pty Ltd v WilhWilhelmsen Agency Pty Ltd [2001] NSWCA 313 Johnston v Brightstars Holding Company Ltd [2014] NSWCA 150 Karpik v Carnival Plc [2023] HCA 39; (2023) 98 ALJR 45 Lief Investments Pty Ltd v Conagra International Fertiliser Co [1998] NSWCA 284 Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 McBride v ASK Funding Pty Ltd [2013] QCA 130 Medical Device Technologies Pty Ltd v Health Administration Corporation [2024] NSWCA 142 Mount Bruce Mining Pty Ltd v Wright Prospecting PtyLtd (2015) 256 CLR 104; [2015] HCA 37 O’Brien v Komesaroff (1982) 150 CLR 310; [1982] HCA 24 Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197; [1988] HCA 32 Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989; [1976] 3 All ER 570 Sinclair v Balanian [2024] NSWCA 144 Smith v South Wales Switchgear Co Ltd [1978] 1 WLR 165 Thomas (TW) & Co Ltd v Portsea Steamship Co Ltd [1912] AC 1 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 Toyota Finance Australia Limited v Gardiner [2016] NSWCA 162 Trustees Executors and Agency Co Ltd v Peters (1960) 102 CLR 537; [1960] HCA 16 Walker v Citigroup Global Markets Australia PtyLimited (2006) 233 ALR 687 Warner Bros Feature Productions Pty Ltd v Kennedy Miller Mitchell Films Pty Ltd [2018] NSWCA 81; 130 IPR 527
Category:	Principal judgment
Parties:	Michael Hill Jeweller (Australia) Pty Ltd (Appellant) Gispac Pty Ltd (Respondent)
Representation:	Counsel: F Roughley SC / B Lambourne (Appellant) D Sulan SC / R Jameson (Respondent) Solicitors: Otto Martiens Lawyers (Appellant) Bridges Lawyers (Respondent)
File Number(s):	2024/00075177
Decision under appeal	Court or tribunal: Supreme Court Jurisdiction: Common Law Citation: [2024] NSWSC 18 Date of Decision: 31 January 2024 Before: Gleeson J File Number(s): 2019/187098

[2024] NSWCA 211

27 August 2024

Key Legal Topics

Areas of Law

Commercial Law

Contract Law

Civil Procedure

Legal Concepts

Appeal

Contract Formation

Offer and Acceptance

Costs

Statutory Construction