Pinegro Products Pty Ltd v Paper Australia Pty Ltd
[2025] VSC 453
•28 July 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2025 02676
| Pinegro Products Pty Ltd (ACN 005 531 546) | Plaintiff |
| v | |
| Paper Australia Pty Ltd (ACN 061 583 533) | Defendant |
---
JUDGE: | Croft J |
WHERE HELD: | Melbourne |
DATES OF HEARING: | 23–26 June 2025 |
DATE OF JUDGMENT: | 28 July 2025 |
CASE MAY BE CITED AS: | Pinegro Products Pty Ltd v Paper Australia Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2025] VSC 453 |
---
CONTRACT — Claim for specific performance — Whether parties agreed upon new contract — Whether previous contract expired — Whether previous contract validly terminated — Whether parties’ conduct constitutes a binding concluded agreement — Masters v Cameron (1954) 91 CLR 353 — Claim unsuccessful — No contract established.
DAMAGES — Loss and damages evidenced in table prepared by employees of the Plaintiff — Loss and damages calculated using unaudited figures — Unable to test or verify calculation — Claim unsuccessful — No basis for award of loss and damages.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J D Catlin | Russell Kennedy |
| For the Defendant | Ms C van Proctor | Corrs Chambers Westgarth |
HIS HONOUR:
Introduction
The dispute between the parties relates to an alleged agreement purportedly entered into by the Plaintiff (‘Pinegro’) and Defendant (‘Paper Australia’) in 2023 for the processing and disposal of sawdust and bark by Pinegro at a pulp and paper mill in Maryvale (the ‘Maryvale Mill’) operated by Paper Australia.
Pinegro contended that this alleged agreement was agreed upon by the parties in May 2023, and was entered into by Mr Tennant, contract manager for Paper Australia, and Mr Van Meel, General Manager for Pinegro, who are said to have authority to bind their respective employers (the ‘Alleged Renewal Agreement’). Pinegro says that this agreement is partly oral and partly written.
Pinegro submitted that the Alleged Renewal Agreement extended the parties’ prior agreement, which provided for Pinegro’s processing and disposal services at the Maryvale Mill, for a further five years. This prior agreement operated through a ‘Facility Operation and Services Agreement’ (‘FOSA’) and ‘Supplemental Facility Operation and Services Agreement’ (‘Supplemental Agreement’) entered into in 2009 and 2015, respectively (collectively, the ‘SFOSA’).
It is said that the Alleged Renewal Agreement contained the following terms:
(a) that the terms of the previous agreements would continue, save for cl 6 of the Supplemental Agreement, the terms of which were complied with and dispensed with prior to the parties purportedly entering into the Alleged Renewal Agreement;
(b) the price to be paid by Pinegro to Paper Australia for pine bark would be increased to $34.00 per tonne plus GST;
(c) the price to be paid by Pinegro to Paper Australia for sawdust would be increased to $22.00 per tonne plus GST;
(d) the SFOSA would be extended for a further five years; and
(e) the Alleged Renewal Agreement would have immediate effect and Paper Australia would serve a written agreement on Pinegro comprising the above terms for signing.[1]
[1]Amended Statement of Claim, [10].
As a result, Pinegro seeks specific performance of the Alleged Renewal Agreement and an order that Paper Australia continue to provide Pinegro with pine bark and sawdust in accordance with the Alleged Renewal Agreement. It also seeks an order that a written agreement, in the terms of the Alleged Renewal Agreement, be executed.
In the alternative, on the basis that the Court refuses to grant an order for specific performance of the Alleged Renewal Agreement, Pinegro seeks damages or equitable compensation to the value of $5,932,500, which it says is the proper calculation for its lost income for the ‘unexpired period’ (being 35 months) of the purported five year Alleged Renewal Agreement.[2]
[2]Plaintiff’s Written Opening Submissions, [51]–[52].
Paper Australia, on the other hand, submitted that no such renewal agreement was entered into by the parties and, instead, as the parties failed to extend the Supplemental Agreement, it continued on a month‑to‑month basis in accordance with cl 2.2, which states:
Upon the expiration of the term under clause 2.1 above, the parties may by agreement extend this Agreement for a further period of up to five years. In the absence of an agreement, this Agreement will continue on a month‑to‑month basis until it is terminated by a party giving a minimum of 3 months’ notice, or in accordance with clause 21 of the [FOSA] or superseded by a subsequent renewal agreement.
Paper Australia further submitted that the conduct relied upon by Pinegro amounted only to negotiations for a potential new contract, and that no binding contract was ever entered into.
Accordingly, in the alleged absence of a written and signed renewal agreement, Paper Australia issued to Pinegro a termination notice on 3 March 2025 (‘Termination Notice’) which stated:
In accordance with clause 2.2 of the Supplemental Agreement, [Paper Australia] is now providing [Pinegro] with a 3‑month termination notice, with the [FOSA, Ground Lease and Supplemental Agreement] concluding on 27 May 2025.
Paper Australia contended that the parties’ contractual arrangements and obligations were validly terminated and, as such, Pinegro’s claim should be dismissed.
Pinegro submitted that the key question for determination is whether the SFOSA expired or whether it was duly terminated. It contended that if the SFOSA was terminated, the services were to end ‘immediately’, which it alleged did not happen. Contrastingly, Paper Australia’s position is that Pinegro has not established that an agreement was ever reached, and in the terms alleged.
Background
It is helpful to briefly set out the parties’ commercial history and the events which took place in the lead up to this proceeding.
Pinegro conducts wood by‑product sales and treatment. Its business involves operating waste composting facilities, as well as manufacturing horticultural and landscape garden products.
Paper Australia is in the business of producing and selling wood by‑products. It owns and operates various paper and pulp mills, including the Maryvale Mill.
The parties’ commercial relationship spans approximately 42 years. Their relationship has been described as being a ‘close’, ‘collaborative’ and an ‘important’ one, which involved the gradual expansion of the parties’ dealings over the years. Pinegro was first engaged by Paper Australia to purchase the pine bark from its pulp and paper mills for disposal. This relationship grew over time to the purchase of sawdust and hardwood waste to, eventually, in 2009, a more comprehensive waste management service for the Maryvale Mill.
The relevant contractual agreements between the parties are set out as follows:
(a) a pine bark purchase agreement entered into on 25 September 1989, which had a three year term (the ‘1989 Agreement’);
(b) a pine bark purchase agreement entered into on 13 November 1995, which had a three year term (the ‘1995 Agreement’);
(c) a pine bark, hardwood waste and sawdust purchase agreement entered into on 7 May 1999, which had a three and a half year term (the ‘1999 Agreement’);
(d) a pine bark, hardwood waste and sawdust purchase agreement entered into on 16 May 2002, which had a six year term (the ‘2002 Agreement’);
(e) the FOSA and a ground lease entered into on 14 February 2009, which had a five year term; and
(f) the Supplemental Agreement and further ground lease entered into on 5 August 2015, which had a five year term.
It is important, at this point, to note that each of the agreements were in writing and signed by the parties’ authorised officers. It is also relevant to note that, throughout the course of the parties’ commercial history, they frequently entered into subsequent agreements only after the prior agreement had already expired.
The FOSA, which represented an expansion of the parties’ relationship, required Paper Australia to supply Pinegro with wood by‑products at set prices, and Pinegro to provide waste treatment services at the Maryvale Mill at set prices. Notwithstanding the expiration of the five year term, on 14 February 2014, the parties continued performing their respective obligations under the FOSA.
Approximately one and a half years after the expiry of the FOSA, on 5 August 2015, the parties signed the Supplemental Agreement. The Supplemental Agreement incorporated the majority of the terms within the FOSA and continued the operation of the FOSA for a further five year term. It also included a new cl 2.2, which provided that:
(a) on the expiration of the five year term, the Supplemental Agreement would continue on a month‑to‑month basis;
(b) termination on the expiration of the five year term required a minimum three months’ notice period, or would otherwise have to comply with the termination clause (being cl 21) under the FOSA; and
(c) the Supplemental Agreement could continue with a subsequent renewal agreement.
Prior to and on the expiration of the SFOSA, which occurred on 5 August 2020, the parties did not enter into a further agreement to continue or otherwise vary the terms of their existing agreement. Accordingly, following the lapse of the Supplemental Agreement on 5 August 2020, the operation of the SFOSA continued on a month‑to‑month basis.
The subsequent timeline is the subject of the parties’ dispute. Pinegro submitted that the Alleged Renewal Agreement was entered into by the parties in May 2023, which is denied by Paper Australia. The Alleged Renewal Agreement is said to be evidenced by the emails exchanged between Mr Tennant and Mr Van Meel, and supported by each individual’s viva voce evidence.
On 3 March 2025, Paper Australia served a termination notice on Pinegro, which purported to end the parties’ contractual obligations under the SFOSA by 27 May 2025. A subsequent letter was sent by Mr Jayawardena, General Manager of Paper Australia, to Mr Van Meel on 17 April 2025, stating that the reference to 27 May 2025 in the Termination Notice was incorrect due to a clerical error, and that the termination notice would take effect three months after 3 March 2025.
On 12 May 2025, ahead of the effective date of the Termination Notice, being 3 June 2025, Pinegro instituted proceedings in this Court via the Urgent Hearing Applications List seeking injunctive relief and an order for specific performance. The proceeding was set down for the hearing of Pinegro’s interlocutory application on 19 May 2025, however, an early trial was subsequently scheduled by agreement. On this basis, Paper Australia undertook not to act on the Termination Notice until the trial was completed and further orders were made, and Pinegro gave the usual undertaking as to damages.
Alleged Renewal Agreement
The Alleged Renewal Agreement is said by Pinegro to be partly oral and partly written, and contained in the email correspondence between Mr Tennant and Mr Van Meel. Unlike the parties’ prior agreements, the Alleged Renewal Agreement was neither formally contained in a written contract nor signed. Accordingly, considerable and significant weight must be placed on the email correspondences and oral evidence of Mr Tennant and Mr Van Meel.
The relevant email correspondence between Mr Tennant and Mr Van Meel is summarised below.
On 29 November 2022, Mr Tennant and Mr Van Meel met to discuss Paper Australia’s proposed price rises for the sale of pine bark and sawdust to Pinegro.[3]
[3]CB273–4.
On 30 November 2022, Mr Tennant and Mr Van Meel exchanged emails regarding the pricing for pine bark and sawdust. In response to the rates provided by Mr Tennant, Mr Van Meel proposed the following terms:
Pinegro value our long term mutually beneficial relationship with Australian Paper, and wish to continue by proposing the following offer:
Pinebark Price $27.50 per ton plus GST
Pine/Euc Sawdust $15.00 per ton plus GST
…
Pinebark / Sawdust Contract Term: 5years plus 5 year option with annual CPI Increments.
Waste Contract: 5years plus 5 year option …[4]
[4]CB267.
Mr Tennant responded on the same day agreeing to the prices set by Pinegro, but stating that Paper Australia was ‘not currently in a position to commit to a long‑term contract’. That email stated:
As per our conversation on the phone, I can confirm that OPAL will accept the pricing proposal in your email below:
Pinebark $27.50 per ton plus GST
Pine/Euc Sawdust $15.00 per ton plus GST
Due to the ongoing uncertainty regarding timber supply, we are not currently in a position to commit to a long‑term contract. We are however committed to revisiting the conversation in the new year and negotiating a new long‑term contract.[5]
[5]CB266 (emphasis added).
Notwithstanding Mr Tennant communicating that Paper Australia was ‘committed to revisiting the conversation in the New Year’, the parties did not reconvene discussions until March 2023. The resumed conversation related only to the pricing of pine bark, with Mr Tennant stating to Mr Van Meel that he was ‘under a lot of pressure’ to obtain a response regarding Paper Australia’s new pine bark pricing request.
On 18 April 2023, Mr Tennant sent an email to Mr Van Meel suggesting that if the price of $34 per tonne for pine bark was agreeable, the parties could ‘lock in’ a 12 month agreement. That email stated:
Thanks for taking my call earlier. As discussed, if we can achieve a price of $34 for Pine Bark we can lock in a 12 month agreement with a commitment to review at the end of the year.
Where government charges/levies increase outside of your control, we understand that these charges would need to be passed on. All other rates would remain unchanged or the 12 month period.[6]
[6]CB261 (emphasis added).
In the absence of a response to his 18 April 2023 email, Mr Tennant sent a further follow up email on 30 April 2023, requesting that Mr Van Meel ‘please get back to [him] tomorrow so that [they] can finalise and if acceptable put in place a 12 month contract to provide some certainty for both parties’.[7] Mr Van Meel’s subsequent response, on 4 May 2023, did not accept the terms as proposed by Mr Tennant, but offered alternative terms, having consulted with the Pinegro board. Mr Van Meel stated in this email:
As discussed, l have spoken to the Pinegro board and we would like to offer the following:
Ungraded Pinebark $34.00 per ton plus GST Contract Term: 3 years plus a 3‑year option.
Pine/Hardwood Sawdust $15.00 per ton plus GST Contract Term: 3 years plus a 3‑year option.
ESR $18.00 per ton plus GST Contract Term: 3years plus a 3‑year option.
M4 Waste $200.00 per ton plus GST Contract Term: 3years plus a 3‑year option.[8]
[7]CB260.
[8]CB260.
The subsequent documentary evidence shows that the parties continued engaging in negotiations, as to both the price and the term (length) of the agreement sought. On 8 May 2023, Mr Tennant said:
We would consider a longer term contract as an incentive. 5 years with a 2‑3 year extension option could be a starting point for negotiations.[9]
[9]CB259.
Further correspondence from Mr Tennant to Mr Van Meel, on 16 May 2023, made changes to Mr Van Meel’s 4 May 2023 proposal, following discussions held on 15 May 2023. The proposed contract term was increased by two years, from a three year term plus a three year option to a five year term plus a three year option. Mr Tennant also stated:
If you can confirm the above is acceptable I will start drafting a new contract for your review.
The intention would be for the new pricing structure to commence on the 1st June.[10]
[10]CB257–8 (emphasis added).
Mr Van Meel replied on 19 May 2023, with changes having spoken to the Pinegro board. His email ‘marked up’ Mr Tennant’s 16 May 2023 email in red, either stating that the price terms were ‘ok’ or subject to a different proposal. The contract term proposed by Mr Tennant was not the subject of any proposed changes, but there was no express response by Mr Van Meel that the terms were acceptable, nor instructions for Mr Tennant to begin drafting a new contract.[11]
[11]CB257.
Further communications between Mr Van Meel and Mr Tennant occurred between 19 and 25 May 2023. Mr Tennant requested again, on 19 May 2023, that Mr Van Meel ‘confirm that [they] are now in agreement’ so that Mr Tennant can ‘start drafting the new contract documentation and [they] can discuss next week’,[12] however, no express confirmation was provided by Mr Van Meel in his 25 May 2023 email, which sought to vary the terms of the three year option.[13]
[12]CB256.
[13]CB256–7.
Mr Van Meel’s final email to Mr Tennant, on 25 May 2023, stated:
If all below is acceptable, please prepare agreements for signing.
I have a board meeting on 7 June and it would be great to get the agreement signed off then.[14]
This email was left unanswered by Mr Tennant. There was no further communication between Mr Van Meel and Mr Tennant after this point, as Mr Tennant subsequently departed his role at Paper Australia.[15]
[14]CB254 (emphasis added).
[15]T95.6–11.
Paper Australia submitted that the email communications between Mr Tennant and Mr Van Meel between March and May in 2023 records the entirety of the alleged communications which Pinegro relies on in support of a purported contract being made out.[16] Paper Australia contended, and as is made clear by the documentary evidence, that none of the communications include any statement to the effect that the parties had reached a binding agreement.[17]
[16]Defendant’s Written Closing Submissions, [7].
[17]Defendant’s Written Closing Submissions, [10].
Post-‘contractual’ conduct
Where parties engage in what is alleged to be the entering of an agreement, their post‑contractual conduct may be examined as a means of ascertaining whether, proved objectively, the parties intended to enter into a contractual relationship.[18]
[18]See, eg, Lederberger & Anor v Mediterranean Olives Financial Pty Ltd & Ors (2012) 38 VR 509; Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153, [25]; Quadling v Robinson (1976) 137 CLR 192; see also, FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343.
Increased pricing
It is not in dispute that Pinegro began paying Paper Australia for wood by‑products at the increased rates, set out in Mr Van Meel and Mr Tennant’s email correspondence.
Pinegro submitted that its payment, and Paper Australia’s receipt, of the increased rates is post‑contractual evidence of an agreement in the terms alleged. It is said by Pinegro that the price and term are mutually intertwined, and operated on a quid pro quo basis. As a consequence of payment of the increased rates, Pinegro said that the conduct is consistent with the Alleged Renewal Agreement being made out. Pinegro referred to McHugh JA’s decision in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (‘Empirnall’), where his Honour said:
Where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that the offer was accepted according to its terms.[19]
Pinegro contended that the terms of the Alleged Renewal Agreement fit squarely within the analogy drawn by his Honour.
[19](1988) 14 NSWLR 523, 535.
Contrastingly, Paper Australia drew a different inference from the payment of increased prices by Pinegro. It said that, as the SFOSA continued to operate on a month‑to‑month basis pursuant to cl 2.2 of the Supplemental Agreement, the price increases were expressly permitted by cl 21.7(f) of the FOSA, which states:
Notwithstanding termination or expiry of this Agreement for any reason, [Paper Australia] agrees that [Pinegro] will continue to purchase the Wood by‑products from [Paper Australia] following termination, at prices to be negotiated in good faith between the parties.
Accordingly, it is Paper Australia’s submission that the payment of increased rates is not unequivocal evidence of the parties entering into the Alleged Renewal Agreement. Paper Australia further submitted that the increased pricing is explainable on the basis that Paper Australia valued its longstanding relationship with Pinegro; the new rates reflected market prices;[20] and that the increased prices were paid in anticipation of the parties entering into a binding agreement.[21]
[20]T202.19–22; T208.15–26.
[21]Defendant’s Written Closing Submissions, [28].
On the evidence adduced, I am of the view that Paper Australia’s position is to be preferred. I am not convinced by Pinegro’s submission that the price and term were necessarily intertwined, and therefore subject to a quid pro quo agreement. It is made clear, by the documentary evidence, that there is nothing to suggest that price could not be agreed upon if the term was not settled contemporaneously. Indeed, this position is entirely contrary to the basis in which the December 2022 price rise was made. Whilst I do accept that the parties envisioned the price rise could lead to a subsequent long‑term binding agreement, and that was the basis in which the increased prices were negotiated and subsequently paid, I am not satisfied that this demonstrates the existence of an agreement as alleged by Pinegro. Furthermore, I do not find McHugh JA’s statement of law in Empirnall to be of any assistance to Pinegro’s position in all the circumstances. It is clear on the evidence that the parties’ contractual relationship and, in particular, the operation of cl 21.7(f), allowed for the continued purchase of the wood by‑products ‘at prices to be negotiated in good faith’. Notwithstanding the evidence that the precise clause may not have been referenced by the parties during their negotiations,[22] it nonetheless exists to govern the parties’ relationship and provides a clear basis of distinction from the circumstances in Empirnall. Accordingly, I find that the payment of increased rates does not support Pinegro’s allegation that a renewal agreement existed between the parties as at May 2023.
[22]T79.12–29; T143.6–19.
Further email correspondence
Paper Australia also contended that the further email correspondence between the parties in September 2023 and during 2024 demonstrates the absence of any alleged renewal agreement. This email correspondence is summarised below.
In September 2023, Mr Ernst of Paper Australia sent an email to Mr Van Meel of Pinegro which stated: ‘[it] was good speaking with you and I will send you the new contract in due time’.[23] Mr Van Meel did not reply to that email and express confusion or doubt as to why a ‘new contract’ was required on the basis that the parties had already entered into the alleged new agreement. This conduct, Paper Australia said, is inconsistent with the parties having entered into the Alleged Renewal Agreement.
[23]CB252.
In late 2024, the parties engaged in numerous email exchanges relating to their current commercial relationship. Paper Australia said, and the documentary evidence indicated, that at no time during these email exchanges did Mr Van Meel state that the parties had already entered into an agreement in May 2023 and, accordingly, the evidence is that, viewed objectively, the Alleged Renewal Agreement was never entered into. Most damaging to Pinegro’s case, perhaps, is the email exchange between Mr Jayawardena, General Manager of Paper Australia, and Mr Van Meel occurring in late October. On 28 October 2024, Mr Jayawardena sent an email to Paper Australia’s suppliers, which included Pinegro. His email stated:
Dear Suppliers,
Firstly, thanks for working with us to date in our review of Opal Maryvale’s organics and waste streams.
As we move forward in our process, we would like to request your best and final offer by COB, 29th October 2024.
We acknowledge the time and effort you have put in thus far but we want [to] ensure that you have put your best offer in for Opal’s final consideration.[24]
[24]CB335–6 (emphasis added).
On 29 October 2024, Mr Van Meel replied to that email, and said:
As per your discussions with John O’Connor and on your advice that you are comfortable with other suppliers to manage the Maryvale Mill M4, ESR and Hardwood Waste streams, Pinegro will increase our offer for the Pinebark and Sawdust residues.
Our Offer is:
Pinebark ex Maryvale Mill $80.00 per ton plus GST
Pine and Hardwood Sawdust ex Maryvale Mill $40.00 per ton plus GST
The contract term we are seeking is 5 years plus a 5 year option with market reviews annually.[25]
This correspondence, Paper Australia contended, is particularly detrimental to, and completely inconsistent with, Pinegro’s submission that the Alleged Renewal Agreement was entered into in May 2023.
[25]CB335.
It is further said that Mr Van Meel’s failure to draw Mr Jayawardena’s attention to the purported existence of the Alleged Renewal Agreement, and instead stating that Pinegro was making a renewed pricing offer for pine bark and sawdust, and seeking a term of five years plus a five year option, is entirely incompatible with the parties having agreed on the terms of the Alleged Renewal Agreement. Paper Australia submitted that, had such an agreement existed, Pinegro would not have needed to renegotiate pricing terms, which would have been subject to what had already been allegedly agreed upon, nor would it have requested a five year term plus a five year option, given the alleged five year agreement was still on foot.
In my view, the position advanced by Paper Australia is correct. The existence of negotiations between the parties in 2024 for a new contract indicates the absence of an agreement on the terms alleged by Pinegro and, possibly, the absence of any agreement altogether. No credible reason was advanced by Pinegro to explain away Mr Van Meel’s 29 October 2024 email and why, having purportedly entered into the Alleged Renewal Agreement with Mr Tennant binding the two parties, he engaged in negotiating the very essential terms which the alleged agreement purported to cover. On this basis, the parties’ post‑‘contractual’ conduct strongly tends against Pinegro’s submission that the Alleged Renewal Agreement was entered into.
Witness evidence
Pinegro called three witnesses:
(a) Stuart Tennant, who formerly held the position of ‘contracts manager’ for Paper Australia from around 2018 to 2023, who was subpoenaed by Pinegro to attend and give evidence in the trial;
(b) John Van Meel, who is, and was at all relevant times, the General Manager and Secretary of Pinegro; and
(c) John O’Connor, who is, and was at all relevant times, a director of Pinegro and a 50% shareholder.
Mr Van Meel and Mr Tennant primarily undertook the negotiations in question on behalf of Pinegro and Paper Australia, respectively. Mr O’Connor’s evidence was less relevant to the issues in dispute in the proceeding and is, therefore, not discussed in depth in these reasons.
Mr Tennant gave evidence that, whilst in his role as ‘contracts manager’, he reported initially to Bernie McKenna and, once he left the business, Damian Pyle and, once he left the business, Bjorn Luxmann.[26] Mr Tennant’s evidence was that his role as ‘contracts manager’ included contract negotiations; tenders; issuing requests for proposals; contractor briefings; meetings, and the like.[27]
[26]T68.12–21.
[27]T68.22–5.
Mr Van Meel’s evidence was that in his position as General Manager and Company Secretary, he reported to the Pinegro board.[28] Mr Van Meel gave evidence that, as Pinegro’s General Manager, it was his responsibility to negotiate contracts and that he had negotiated several contracts on behalf of Pinegro.[29]
[28]T117.22–4.
[29]T117.25–31.
For context, Mr Van Meel’s evidence was that Pinegro and Paper Australia developed the process for repurposing the materials together, and specifically with Pinegro’s extensive experience in this area.[30] Mr Van Meel gave evidence that Pinegro invested close to $1 million on the Morwell site to establish its facilities.[31]
[30]T125.12–5.
[31]T208.9–10.
Mr Tennant’s evidence was that contract negotiations commenced with Pinegro in late 2022, as the contract was ‘outdated’, ‘old’ and ‘needed review’.[32] He indicated that Paper Australia were not happy with the current pricing regime. Mr Tennant said the contract needed to be updated, given Paper Australia had moved to modern contract precedents which included new standard terms. For example, addressing current statutory requirements in various respects.
[32]T72.15–6.
Mr Van Meel’s evidence was that Pinegro never took steps to extend the Supplemental Agreement after August 2020 when it expired,[33] until Mr Tennant commenced communications to arrange for the contract to be updated on around November 2022.
[33]T140.2–7.
Mr Tennant emphasised that Paper Australia valued the long-term relationship with Pinegro. Mr Tennant indicated that he attended several meetings with Mr Van Meel where contract negotiation discussions took place. Mr Van Meel’s evidence was, likewise, that Pinegro valued the long-term relationship as it assisted and, in fact, enabled them to establish the market for the products Pinegro sells.[34] Mr Van Meel stated ‘[Pinegro] needed supply’ and indicated Pinegro’s business would not survive without the supply from Paper Australia.[35] Mr Van Meel’s evidence was also that all agricultural customers relating to the ‘ESR’ (sludge) output would be lost without supply from Paper Australia.[36]
[34]T127.5–6.
[35]T127.6; T128.9–12.
[36]T128.19–21.
Mr Van Meel’s evidence was that no price changes for bark and sawdust occurred outside of entering into new contracts.[37] Mr Van Meel said that outside of price increases, government levies and EPA fees, which fluctuated, were passed on to Paper Australia from time to time.[38] Furthermore, Mr Van Meel stated that price reviews never occurred around 30 June each year for all products, as contemplated by the SFOSA, other than for M4 waste.[39]
[37]T130.22–7.
[38]T131.9–14.
[39]T137.11–8.
Mr Tennant gave evidence that an interim increase in price was agreed upon, in order to allow for further negotiations to take place. Mr Tennant said that once a ‘final pricing structure’ could be agreed, Paper Australia would look at drafting a new contract.[40] Mr Tennant’s evidence was that, at this time, it was not contemplated that a new contract would be entered into and only an interim pricing amendment was agreed to. In cross‑examination, Mr Tennant stated that, if a contract for a fixed term was entered into, it would have had to be in writing and signed.[41] During cross‑examination, he further stated that, in December 2022, when Pinegro commenced paying $27.50 per tonne for pine bark, it was not on the basis of any specific contract term at that time, even though there were discussions about a potential extension of the terms of any such contract.[42]
[40]T76.28–77.7.
[41]T103.1–8.
[42]T104.13–8.
Conversely, Mr Van Meel’s evidence was that Pinegro paid the increased price on the understanding that the parties were in agreement as to the other terms of a new contract.[43]
[43]T166.12–8.
Mr Van Meel’s evidence was that when previous contracts were under negotiation, those negotiations took the parties almost 12 months to reach an agreed position and sign a further contract.[44] Paper Australia highlighted that this is in accordance with the usual practice of the parties whereby negotiations continued until a new or supplemental contract was signed.[45] Paper Australia therefore submitted that the Court should find that, if the parties were to enter into a new contract in 2023 (or at any time), the negotiation period would end upon execution of and entry into a written signed contract.[46]
[44]T134.20–3.
[45]Defendant’s Written Closing Submissions, [6].
[46]Defendant’s Written Closing Submissions, [6].
Mr Tennant gave further evidence that Paper Australia was struggling financially and, therefore, he was ‘under a lot of pressure’ to negotiate a deal with Pinegro. I do not draw any inference from this. Mr Van Meel gave evidence that he was aware of this pressure when he first met with Mr Tennant, and indicated to Mr Tennant that Pinegro wanted to increase the term of the arrangement to create a longer term agreement.[47] However, to the contrary, Mr Tennant’s email to Mr Van Meel stated that ‘due to the ongoing uncertainty regarding timber supply, [Paper Australia was] currently not in a position to commit to a long-term contract.’[48]
[47]T141.6–13.
[48]CB266.
Whilst Mr Tennant gave evidence that his role was to negotiate contracts, his evidence was that the ordinary course for negotiation and settlement of a deal, or contract, would take the form of the following steps:
(a) Mr Tennant would draft the contract using the business’ precedents;
(b) the contract would be drafted and then reviewed by the legal team;
(c) the draft contract would be provided to the contractor for their review and any further amendments; and
(d) once this had taken place, a final version of the contract would be circulated for execution. Depending on the value of the agreement, either the ‘procurement manager’ or General Manager would sign the contract.[49]
[49]T87.31–88.18.
It is important to note at this juncture that Mr Tennant was not a ‘procurement manager’. Further, Mr Tennant’s evidence was that a contract such as this one, which was of a high value, would be signed by the General Manager, rather than the procurement manager. Mr Tennant further gave evidence that he had never signed a contract whilst in the role of ‘contract manager’.[50] He also gave evidence that he acted on instructions from management to enter into negotiations with Pinegro.
[50]T99.8–14.
In cross‑examination, Mr Tennant was taken to various policy documents for Paper Australia and gave evidence that, in accordance with those policies, he was aware that:
(a) any expenditure was to be approved per the ‘Opal delegations and material contracts policy’ prior to commitment with a supplier;
(b) all employees were to adhere to the policy and not to make any commitment without completing this process;
(c) all procurement activities were required to be in the form of a written contract unless there was some specific exemption;
(d) prior to contract execution, the contract had to be reviewed internally, as stakeholders and required approvals must be obtained before any commitment was made for the relevant procurement activity;
(e) there was delegated authority for contract execution;
(f) the current contracts and any negotiated new contract with Pinegro were, or would be, a ‘procurement material contract’, requiring approval from a ‘GGM’ or General Manager supply chain procurement review and approval; and
(g) the same policies and approval systems were applied in relation to extensions and renewals of contracts.
Mr Tennant gave evidence that he never acted contrary to these policies,[51] and he never made any representation to any person, including at Pinegro, that was contrary to his obligations under these policies.[52]
[51]T100.5–6; T100.30–1.
[52]T100.10–2; T101.1–2.
Mr Tennant also gave evidence that a person authorised by each company to enter into a written contract document would be required and affirmed that, in fact, he did not have authority to do so.[53] Further, Mr Van Meel confirmed that Mr Tennant never indicated he had authority to agree to any price change.[54]
[53]T106.20–8.
[54]T143.24–7.
Mr Tennant, in cross‑examination, stated that if he had agreed to a new term, it would have had to be signed, in writing and authorised by those senior to him within Paper Australia, and this was how he conducted himself throughout his time at Paper Australia and in his dealings with Pinegro.[55] Mr Tennant confirmed neither he, nor Mr Van Meel, or anyone else, had said or communicated in any way during negotiations that they were, at that point, operating under the terms of a new long-term contract.[56]
[55]T104.19–25.
[56]T105.10–2.
With respect to the substance of the negotiations that took place between Mr Tennant and Mr Van Meel, it is noted that Mr Van Meel’s evidence is that at no time during Pinegro’s negotiations with Paper Australia was cl 21.7(f) mentioned.[57]
[57]T143.6–19.
Mr Van Meel indicated that during negotiations, there was no discussion of other terms, such as new statutory requirements which would be included in the contract.[58] He also gave evidence that a 12 month contract was being negotiated initially, despite coming back at a later stage and requesting a further term of three years.[59] However, when cross‑examined on this point, Mr Van Meel’s evidence was that it was in fact only the price of pine bark that was being negotiated, and no negotiations for waste took place.[60] Mr Van Meel indicated that this was a matter which ‘had not been settled’.[61] He further confirmed the price for waste was important to Pinegro, and ‘beneficial certainly’.[62] Mr Van Meel’s evidence was that the contract would also need to include clauses regarding waste; the ground lease; and statutory or other obligations which might arise.[63]
[58]T145.24–7.
[59]T145.29–146.9.
[60]T166.26–167.1.
[61]T166.2–3.
[62]T167.4–16.
[63]T170.13–29.
Mr Tennant said that at no point did he tell Mr Van Meel that Paper Australia had, or he had on behalf of Paper Australia, agreed to a specific term of five years taking effect immediately.[64] Further, he confirmed that during his negotiations with Mr Van Meel, it was never discussed that these changes would take immediate effect.[65]
[64]T108.3–6.
[65]T108.11–4.
Mr Van Meel went on to give evidence that once Mr Ernst took over negotiations from Mr Tennant, Mr Ernst indicated that he would ‘send [Pinegro] the new contract in due time.’[66] Mr Van Meel’s response to this, in examination in chief, was that he would have chased this up because ‘a contract … was something [Pinegro] really wanted.’[67] I take this to mean that Pinegro would not be satisfied that the deal had been formally struck until a written contract was received and signed by all parties. Mr Van Meel did, in fact, concede that a new contract being drawn up was always contemplated, which is supported by the documentary evidence.[68]
[66]T147.14–6.
[67]T147.17–9.
[68]T163.4–6.
Mr Tennant gave evidence that, in his email dated 19 May 2023,[69] he had intended to convey that if he and Mr Van Meel had agreed on the negotiated matters as commercial terms, he would have drafted new contract documentation, which would have then been discussed with Mr Van Meel the following week.[70] Mr Tennant confirmed that Mr Van Meel, however, came back with further variations, in the form of the three year option periods, to which Mr Tennant agreed to continue negotiating. When taken to this email chain and Mr Van Meel’s email which stated ‘if all below is acceptable, please prepare agreements for signing’, Mr Tennant indicated that he was not aware of any response or confirmation ever being sent.[71]
[69]CB256.
[70]T110.16–29.
[71]T111.14–8.
Mr Van Meel gave further evidence that if the draft contract had come back from Paper Australia with a single term of five years and no further three year option, Pinegro would not have signed such a contract, and this was partly due to Mr Van Meel not being a contract expert.[72] He indicated that Pinegro would need to obtain legal advice regarding the draft contract.[73]
[72]T162.6–17.
[73]T162.18–20.
Paper Australia submitted that the evidence supports the proposition that the parties intended to bind themselves to an agreement for a fixed period of time only by executing a contract document in writing.[74] During closing submissions, Paper Australia contended that the witness and documentary evidence suggested the parties did not have an intention—objectively ascertained from the communications between them and having regard to the context—to bind themselves to a new contract in May 2023 for five years.[75]
[74]Defendant’s Written Closing Submissions, [5].
[75]Defendant’s Written Closing Submissions, [14].
Contemporaneous documents
In making an assessment on what occurred during the negotiations, significant weight must be placed on contemporaneous documents. In LL Up Pty Ltd v Kegland Distribution Pty Ltd (‘Kegland’),[76] I referred to Lander J in Brookfield v Yevad Products Pty Ltd who said, in relation to the importance of documents in terms of testing credibility and contemporaneous documents:
Often, especially in commercial causes, the best evidence of the events the subject of the inquiry in the trial is contained in the contemporaneous documents. Usually, documents are created in circumstances where parties do not expect the documents to surface in a trial. They often, therefore, contain the true account of the contemporaneous event.[77]
[76][2024] VSC 651, [23].
[77][2004] FCA 1164, [416].
In Webb v Getswift(No 5),[78] Lee J referred to the reasoning of Leggatt J in Gestmin SGPS SA v Credit Suisse (UK) Limited[79] (which has been cited with approval in this Court) stating:
[78][2019] FCA 1533.
[79][2013] EWHC 3560 (Comm).
As Leggatt J said in Gestmin SGPS SA v Credit Suisse (UK) Limited, there are a number of difficulties with oral evidence based on recollection of events given the unreliability of human memory. Moreover, considerable inference with memory is also introduced in civil litigation by the procedure of preparing for trial. As his Lordship noted, a witness is asked to make a statement, often when considerable time has already elapsed since the relevant events. The statement is usually drafted by a solicitor who is inevitably conscious of the significance for the case of what the witness does nor does not say. The statement is often made after the memory of the witness has been ‘refreshed’ by reading documents. The documents considered can often include argumentative material as well as documents that the witness did not see at the time and which came into existence after the events which the witness is being asked to recall. It may go through several iterations before it is finished. As Lord Buckmaster famously said, the truth ‘may sometimes leak out from an affidavit, like water from the bottom of a well’. This may be overly cynical, but the surest guide for deciding the case will be as identified by Leggatt J:
… the best approach for a judge to adopt in the trial of a commercial case, in my view, to place little if any reliance at all on the witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.[80]
In Gestmin SGPS SA v Credit Suisse (UK) Limited, Leggatt J continues:
This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross‑examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.[81]
[80]Webb v Getswift (No 5) [2019] FCA 1533, [18]–[19] (citations omitted).
[81][2013] EWHC 3560 (Comm), [22].
Similarly, in Armagas Ltd v Mundogas SA (The Ocean Frost), Robert Goff LJ made the following observation:
It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence … reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to a judge in ascertaining the truth.[82]
[82][1985] 1 Lloyd’s Rep 1, 57.
Therefore, having regard to the authorities, significant weight ought to be and is given to the email communications passing between the relevant parties, regarding their intention at the relevant time.
Relevant law
The central question to be determined, on Pinegro’s submission, is whether the parties’ conduct, evidenced by the email correspondences between Mr Van Meel and Mr Tennant, and their respective oral evidence, constitutes a binding concluded agreement pursuant to the principles rehearsed in Masters v Cameron.[83]
[83](1954) 91 CLR 353.
The Masters v Cameron principles are well established and have been subject to over seven decades of legal jurisprudence. There are four Masters v Cameron categories:
(a) first, where the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect;
(b) second, where the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal contract;
(c) third, where the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract; and
(d) fourth, where the parties were content to be bound immediately and exclusively by the terms which they had agreed upon, while expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms.
An ‘agreement’ which falls under the first, second or fourth category is an immediately binding contract, whereas the third category is not. It is Pinegro’s submission that the alleged agreement satisfies one of the first, second or fourth categories and, accordingly, constitutes a binding contract.
The authorities indicate that these categories are not to be applied strictly, and the Court is to determine the objective intention of the parties.[84] This objective intent is ascertained having regard to the language and conduct of the parties, and requires consideration as to what this would objectively convey in all the circumstances.[85] The assessment before this Court is, therefore, to consider the email correspondence between Mr Van Meel and Mr Tennant between March and May 2023, placed in the context of the parties’ negotiations; their commercial relationship; and any existing terms binding the parties.
[84]Molonglo Group (Australia) Pty Ltd v Cahill [2018] VSCA 147, [148]; Radovanovic v Stekovic [2024] NSWCA 129, [22].
[85]See, eg, Pavlovic v Universal Music Australia Pty Ltd (2015) 90 NSWLR 605, [15]; Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, 105–6.
In Rossi Recycling Pty Ltd v Buckland Valley Pty Ltd & Anor, Connock J emphasised that the words used by the parties, where the alleged agreement is in writing, are the strongest indicators of the parties’ intention to be immediately legally bound.[86] His Honour referred to the observations made by Riordan J in Edge Development Group Pty Ltd v Jack Road Investments Pty Ltd which helpfully distilled the following principles:
[86][2022] VSC 467, [131].
The detail of the terms, to which the parties descended in the informal agreement, may indicate whether the parties did or did not intend to be immediately bound. As was stated by Powel JA in Liquorland (Australia) Pty ltd v GYG Holdings Pty Ltd:
In carrying out the task of determining … what was the relevant intention of the parties, a court may have regard, not only to the matters upon which the parties have reached their consensus, but also the areas in respect of which they have failed to reach any consensus.
An informal agreement which deals with a transaction of great magnitude or complexity ‘may suggest that the informal agreement was not intended to constitute a binding contract’.
The established or common practice with respect to agreements of the type in question may indicate that the parties did not intend to be finally bound until the completion of a formal contract …[87]
[87]Edge Development Group Pty Ltd v Jack Road Investments Pty Ltd [2018] VSC 326, [45].
In Steller Vision Operations Pty Ltd v Hills Health Solutions Pty Ltd, the NSW Court of Appeal said:
The existence of matters of importance on which the parties have not reached consensus in their informal agreement will render it less likely that they intended immediately to be bound before the execution of a formal document. That the terms have not been fully or well stated is material to whether a contract has been made. The more important the term, the less likely it is that the parties will have left it over for future decision, but there is no legal obstacle which prevents the parties agreeing to be bound now while deferring important matters.[88]
[88][2023] NSWCA 102, [67] (citations omitted).
What is clear from these authorities, and numerous others,[89] is that the assessment of the parties’ intent is to be drawn from the language employed; the particularity and specificity of the ‘agreement’; the importance of the terms ‘agreed’ upon; and any leftover or additional terms to be subsequently dealt with.
[89]See, eg, Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600, 604 (Gibbs CJ, Murphy and Wilson JJ); Terrex Resources NL v Magnet Petroleum Pty Ltd (1988) 1 WAR 144, 159 (Kennedy J); Australian Broadcasting Corporation v XIVth Commonwealth Games (1988) 18 NSWLR 540, 548 (Gleeson CJ).
During the course of the trial, reference was also made to my decision in Geemaz Management Pty Ltd v Geelong Motors Pty Ltd (‘Geemaz’).[90] Pinegro said that the circumstances here are analogous, if not more advantageous, than the plaintiff’s position in Geemaz. Pinegro submitted that the parties’ transaction is not one of significant complexity, in that only two subject areas were required to be agreed upon: price and term. The absence of a complex transaction, Pinegro said, is the basis on which the Court should be assisted in finding a consensus between the parties.[91]
[90][2013] VSC 571.
[91]Geemaz, [33], [60].
Paper Australia, however, took a different view, and submitted that the decision in Geemaz is plainly distinguishable on its facts for the following reasons:
(a) in Geemaz, a written document was reviewed, revised and signed by both parties in the other’s presence at a meeting, where agreement on contents of the document was reached;
(b) the signatures on the document was a strong indication of the parties’ intent to form binding relations; and
(c) there was no reference to needing approval or any other condition.
Paper Australia submitted, accordingly, that Geemaz does not assist Pinegro’s claim, as the surrounding circumstances in this proceeding concern entirely distinguishable facts to that in Geemaz. In my view, this is correct for the reasons advanced by Paper Australia.
Paper Australia further submitted that, having regard to the commercial nature of the contract, its importance and the parties’ sophistication, and the absence of any express communication that the parties intended to be bound immediately demonstrates that it is highly unlikely the parties reached the threshold to form an agreement.[92] Indeed, nowhere in the email correspondence between Mr Van Meel and Mr Tennant did the parties express, in writing, that they intended to be bound immediately, nor did the viva voce evidence support this position.
[92]Allen v Carbone (1975) 132 CLR 528, 532; Farrall v Super Retail Group Ltd [2024] FCA 1515, [15]; Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149, [69].
In Paper Australia’s submission, there are two compelling reasons why the parties would have intended to reach a formal agreement, instead of being bound by the terms of the Alleged Renewal Agreement, namely:
(a) the contract document is what provides certainty for each party, and which allows them to enter into further arrangements with third parties; and
(b) it being in the interest of both parties to have the matters specifically addressed contained within the written contract document in the event any future issue arose in relation to the matters, particularly having regard to the high level of cooperation required and the overarching statutory obligations, including under various environmental laws.
Finally, Paper Australia submitted that Pinegro’s position, taken at its highest, amounts only to a disappointment of legitimate expectations and, accordingly, the parties’ failure to complete the negotiations cannot amount to the existence of a legally binding contract. In Barrier Wharfs Ltd v W Scott Fell & Co Ltd, the High Court said:
Even if the defendants were shown to have disappointed the legitimate expectations of the plaintiffs for some unworthy reason‑to have meanly backed out of almost completed negotiations‑the action must fail. There is no contract unless the two parties mutually consented to be bound one to the other by one agreement. Moreover‑though it ought to be superfluous to say it‑it is one thing for two parties to settle what are to be the terms of an agreement, if it should be made; and quite another thing to make the agreement.[93]
…
What the defendants did was to intimate their willingness to enter into a contract upon the basis of the terms as to which there had been a provisional agreement, but that a formal contract must be drawn up, which was to be approved by them, and that that approval was to be given before a concluded contract should come into existence.[94]
[93](1907) 5 CLR 647, 650 (Higgins J).
[94](1907) 5 CLR 647, 668 (Higgins J).
Consideration
For the reasons which follow, I find that the parties did not enter into an immediately legally binding agreement as at May 2023. It should be added, for the sake of completeness, that I have significant reservations about the existence of the parties’ alleged ‘meeting of the parties’ minds’ in May 2023. On this basis, where doubt exists as to whether, at any point in May 2023, there was a ‘meeting of minds’ as to the ‘critical terms’ of the agreement, it is not open to me to find that there exists an agreement which falls within the first, second or fourth categories of Masters v Cameron.
In my view, the documentary evidence, in particular, the email correspondences between Mr Van Meel and Mr Tennant between March to May 2023; the viva voce evidence of Mr Van Meel and Mr Tennant; the parties’ historical conduct and post‑‘contractual’ conduct; and the terms of the SFOSA, particularly cls 2.2 and 21.7(f), are all consistent with the parties’ conduct in May 2023 constituting negotiations with a view to later entering into a legally binding document. On the available evidence, no such subsequent document was ever prepared or entered into and Pinegro’s claim must accordingly fail.
I turn first to the parties’ conduct between March and May 2023. The emails between Mr Van Meel and Mr Tennant indicate, in my view, that the parties’ agreement was conditional on the ‘meeting of minds’ on the specified terms and proposed amendments as and when they were sought. Indeed, at no point in the email correspondence did Mr Van Meel or Mr Tennant state or otherwise indicate that they had, on behalf of their respective companies, both agreed to the pricing and term, so as to begin the contract drafting process.
The conditional word, ‘if,’ was used on numerous occasions, and expressed agreement was never communicated in the parties’ emails. Mr Tennant’s email of 16 May 2023 stating, ‘if you can confirm the above is acceptable I will start drafting a new contract for your review’[95] was not met by an express statement that the terms are acceptable in Mr Van Meel’s reply email of 19 May 2023.[96] Further, Mr Tennant’s email of 19 May 2023 once again stated, ‘if you can confirm that we are now in agreement I will start drafting the new contract document and we can discuss next week’.[97] Again, Mr Van Meel’s reply email did not expressly state that the terms were acceptable to Pinegro, nor instructed Mr Tennant to begin preparing the contract document.[98] The two representatives’ final email exchange took place on 25 May 2023, from Mr Van Meel to Mr Tennant, and stated ‘if all below is acceptable, please prepare agreements for signing’.[99] No response to this email was provided and communications between Mr Van Meel and Mr Tennant ceased following this.
[95]CB257–8.
[96]CB257.
[97]CB256.
[98]CB255–6.
[99]CB254.
On the face of this clear documentary evidence, wherein the parties at no time stated that they were in complete agreement and that the terms could be drawn up in a contract, it is not possible, in my view, to draw the conclusion that the parties entered into a legally binding renewal agreement, as alleged by Pinegro. I find that, in the absence of reply correspondence stating that the negotiated terms were acceptable and that a contract to that effect could be prepared, the parties cannot be said to have, viewed objectively, intended for their negotiations to constitute an immediately binding and enforceable legal agreement as between them.
I turn now to Mr Van Meel’s viva voce evidence. Mr Van Meel was, in my view, a credible witness who was clearly very knowledgeable about Pinegro’s operations, its business dealings and the industry at large. However, his evidence did not assist Pinegro’s case. Mr Van Meel’s evidence, consistent during examination, cross‑examination and re‑examination, was that the agreement he believed the parties entered into was for a five year term plus a three year option.[100] This was consistent with the email correspondence exchanged with Mr Tennant, but at odds with Pinegro’s pleaded case, which alleged that the purported renewal agreement was five years in duration with no option to extend available to either party.[101] When pressed during cross‑examination about whether he would have signed a contract with a five year term and no three year option, he indicated that he would have ‘chased’ the option, and conceded that he would have referred the matter for legal advice:
I think what’s being put to you is if the formal document that came back after that the email with the red bits in it, if I can put it like that - - -?---Yes, Your Honour.
- - -was only for a term of five years with no provision for an option of three, what would you have done?---Chase the three year option.
So you reject the document? Well, you wouldn’t have signed it, presumably?‑‑‑ Um because I believe we were agreed I probably would have chased an opinion, because I’m not an expert of contract law; whether this holds up or not.
But you haven’t signed it at that stage. You’ve just been given a draft document?---Yes. Um probably get legal opinion.[102]
On Mr Van Meel’s own evidence, therefore, it is not open for me to find an agreement on the terms alleged by Pinegro in its Amended Statement of Claim.
[100]See above, [69].
[101]Plaintiff’s Amended Statement of Claim, [10].
[102]T162.8–20.
Indeed, given the significance of the term of the purported agreement, and Mr Van Meel’s concession as to the importance of the further option, it cannot be said that the agreement pleaded by Pinegro was entered into by the parties. It is certainly no reflection on Mr Van Meel that both his viva voce evidence and the documentary evidence as to the term of the purported agreement were inconsistent with Pinegro’s pleaded case, but this inconsistency was not satisfactorily addressed by Pinegro and, accordingly, its claim must fail.
I turn finally to the parties’ past, and post‑‘contractual’ conduct. On neither of these bases do I find that the evidence of the parties’ dealings supports the existence of the Alleged Renewal Agreement. In my view, both the past form of dealings, which had always involved the parties engaging in negotiations followed by the execution of a formal, written and signed contract, and the post‑‘contractual’ conduct, indicate the parties did not intend to be immediately bound by the negotiations between Mr Van Meel and Mr Tennant between March to May 2023.
Over the course of the four day trial, the Court was frequently reminded of the parties’ long‑standing commercial relationship. Whilst both parties sought to draw differing interpretations as to what this commercial relationship meant for the parties’ present dealings, it is not disputed that the parties enjoyed a commercial relationship which spanned over four decades, and entered into at least six contracts during that time. Further, it is not disputed that, whilst subsequent agreements were, at times, entered into after the prior agreement had lapsed in time, each of those further agreements were executed via a formal document which was in writing and signed by the relevant representatives. In my view, this consistent historical method of dealing and no evidence of deviation from this method having been led during trial indicates that, in all the circumstances, the parties could not have intended to enter into a legally binding and immediately enforceable agreement as at the cessation of communications in May 2023. Indeed, this historical modus operandi is also consistent with the parties’ correspondence indicating that if the terms were acceptable, a draft contract would be prepared, demonstrating that no bargain was to be struck until the formal document was executed.
For the reasons indicated above,[103] the parties’ post‑‘contractual’ conduct is also consistent with the absence of any intention to be bound by the parties’ negotiations in May 2023. Without restating what has been already discussed in these reasons, the negotiations between the parties in October 2024 and, in particular, Mr Van Meel’s purported ‘offer’ containing new terms of agreement are plainly inconsistent with the parties having intended to be bound by the Alleged Renewal Agreement.
[103]See above, [39], [45].
In all the circumstances, I find that no agreement in the terms alleged by Pinegro existed as at May 2023. Accordingly, Pinegro’s claim fails, and the subsequent issues regarding authority, quantification of loss and relief sought all fall away. For the sake of completeness, however, they are briefly addressed below.
Authority
Mr Tennant’s authority to enter into a binding agreement on behalf of Paper Australia was the subject of dispute between the parties at trial. Paper Australia submitted, and Pinegro denied, that Mr Tennant’s authority, as ‘contract manager’ for Paper Australia, extended only to the negotiation of agreements, but not to entering into contracts on Paper Australia’s behalf. Paper Australia said further that this authority belonged to Mr Ernst and Mr Jayawardena, who held the positions of ‘portfolio manager’ and General Manager respectively, and that this was understood by Mr Van Meel. Indeed, this is consistent with the evidence of Mr Tennant, who indicated that any new negotiated term had to be in writing and signed by a senior employee of Paper Australia,[104] and Mr Van Meel’s evidence that Mr Tennant never indicated that he had authority to agree to any price change.[105] However, as indicated by the reasons above, having found that the parties did not enter into the agreement as alleged by Pinegro in May 2023, the question of Mr Tennant’s authority falls away and is not an issue which requires determination.
[104]See above, [62].
[105]T143.24–7.
Part performance
Pinegro raised briefly, in its written closing submissions, the doctrine of part performance.[106] This alternative was not pleaded in Pinegro’s Amended Statement of Claim and, accordingly, as was made clear to the parties during oral closing submissions, the matter is to be disregarded.[107]
[106]Plaintiff’s Written Closing Submissions, [134]–[139].
[107]T244.23–245.3.
Relief sought
Pinegro seeks:
(a) a declaration that the Termination Notice is void and without effect; and
(b) an order that Paper Australia execute a written agreement in the terms of the Alleged Renewal Agreement; and
(c) an order that the Alleged Renewal Agreement be specifically performed; or in the alternative
(d) damages pursuant to s 38 of the Supreme Court Act 1986; and
(e) equitable compensation.
Specific performance
Specific performance is sought, if the Court finds the parties agreed to be immediately bound in advance of the execution of a written contract.[108] Paper Australia, however, submitted that if liability was established, the usual and more appropriate remedy is damages.[109] In light of the reasons indicated above, that the parties did not enter into an agreement, no orders for specific performance will be made.[110]
[108]Plaintiff’s Written Closing Submissions, [148].
[109]Defendant’s Written Closing Submissions, [81]–[84].
[110]See above, [86]–[96].
Loss and damage
Pinegro’s Reply annexed a ledger setting out its claim for damages. The ledger was not created by Mr Van Meel but was, however, reviewed by him.[111] The ledger contains figures for the financial years ending 2023 and 2024 which includes figures that have not been audited and which do not include the time value of money.[112] Mr Van Meel indicated, in his viva voce evidence, that the figures in the ledger came from management reports.[113] He gave evidence that he could have adduced the source documents to explain and support the table provided, however, this did not occur.[114]
[111]T156.11–2.
[112]T186.21–5.
[113]T178.30–1.
[114]T179.4–8.
Pinegro’s ledger was subject to criticism from Paper Australia on the basis in which the monetary amounts had been calculated. Specifically, Paper Australia submitted that damages must be proved with a degree of precision which reflects proof that is reasonably available to the parties.[115] Paper Australia contended that if the party seeking damages fails to provide a rational foundation for a proper estimate of damages, the Court should decline to make such orders.[116] It is said that if there is ‘an absence of raw material to which good sense may be applied’,[117] a figure should not be ‘plucked out of the air’. Paper Australia, therefore, submitted that the Court should conclude, in circumstances where the internal accounting figures (which are not audited) cannot be tested, together with the absence of the source documentation, the evidence as to any alleged loss and damage should be given no weight.[118]
[115]Defendant’s Written Closing Submissions, [85].
[116]Defendant’s Written Closing Submissions, [85].
[117]ReBailey Roberts Group Pty Ltd (in liq) [2025] NSWSC 227, [168].
[118]Defendant’s Written Closing Submissions, [40].
Although it is not strictly necessary for me to make findings in relation to the quantification of any loss and damage in circumstances where I find no agreement has been entered into, I note that, given the issues identified by Paper Australia regarding Pinegro’s quantification of damages, I would not have found there to be an appropriate basis to award such damages without further documentary evidence as would, in the usual course, be expected to be provided in support of such a claim.
Orders
For the preceding reasons, I find no agreement in the terms alleged by Pinegro, or at all, has been made out and, therefore, the Termination Notice issued by Paper Australia to Pinegro is valid and effective. Paper Australia is released from its obligations pursuant to its undertaking contained in my orders made on 16 May 2025.
The question of costs is reserved, and the parties will be heard on this issue, as required.
---
18
0