Revolve Ltd v Thiess Services Pty Ltd
[2013] ACTSC 47
•22 March 2013
REVOLVE LTD v THIESS SERVICES PTY LTD and ANOR
[2013] ACTSC 47 (22 March 2013)
PRACTICE AND PROCEDURE – application by defendant for summary judgment – applicable principles – court satisfied plaintiff’s claim as pleaded bound to fail – summary judgment entered
Court Procedures Rules 2006 (ACT) r 1147
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Galovac Pty Ltd v Australian Capital Territory [2010] ACTSC 132
No. SC 425 of 2007
Judge: Master Harper
Supreme Court of the ACT
Date: 22 March 2013
IN THE SUPREME COURT OF THE )
) No. SC 425 of 2007
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN: REVOLVE LIMITED
Plaintiff
AND:THIESS SERVICES PTY LIMITED
First Defendant
AND: THE AUSTRALIAN CAPTIAL TERRITORY
Second Defendant
ORDER
Judge: Master Harper
Date: 22 March 2013
Place: Canberra
THE COURT ORDERS THAT:
Summary judgment be entered for the second defendant against the plaintiff.
The second defendant’s costs of the action and of the application for summary judgment be paid by the plaintiff.
The plaintiff have leave to amend its statement of claim by substituting the draft amended statement of claim attached to the letter from Collaery Lawyers to the ACT Government Solicitor dated 19 April 2011.
The amended statement of claim be filed and served within fourteen days.
The first defendant’s costs of the application for leave to amend the statement of claim and its costs thrown away consequent on the amendment be paid by the plaintiff.
The action be listed for directions before the duty judge on a date to be fixed being a date not less than twenty-eight days from the date of these orders.
IN THE SUPREME COURT OF THE )
) No. SC 343 of 2010
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN:THE AUSTRALIAN CAPTIAL TERRITORY
Plaintiff
AND:REVOLVE LIMITED
Defendant
ORDER
Judge: Master Harper
Date: 22 March 2013
Place: Canberra
THE COURT ORDERS THAT:
The orders staying execution upon the judgment debt and in respect of costs be discharged.
The plaintiff’s costs of the application for discharge be paid by the defendant.
IN THE SUPREME COURT OF THE )
) No. SC 344 of 2010
AUSTRALIAN CAPITAL TERRITORY )BETWEEN:THE AUSTRALIAN CAPTIAL TERRITORY
Plaintiff
AND:REVOLVE LIMITED
Defendant
ORDER
Judge: Master Harper
Date: 22 March 2013
Place: Canberra
THE COURT ORDERS THAT:
The order staying execution in relation to costs be discharged.
The plaintiff’s costs of the application for discharge be paid by the defendant.
Before the Court are applications in three actions. Action number SC 425 of 2007 was commenced in June 2007 by Revolve Ltd against Thiess Services Pty Ltd as first defendant and the Australian Capital Territory as second defendant. The relief claimed was specified in the originating claim as damages, reinstatement and costs, with a claim for interlocutory injunctive relief. In the accompanying statement of claim, the orders sought were not spelt out. The plaintiff claimed damages and “reinstatement of its contractual position”.
Although the statement of claim which accompanied the originating claim remains formally on the record, the plaintiff no longer relies upon it and seeks leave to amend, by substituting a different statement of claim. Over the years since 2007 those advising the plaintiff have prepared in draft form a number of proposed amended statements of claim, and have at least once made formal application to the Court for leave to amend, but no amendments have previously been made.
The plaintiff now seeks leave to amend the statement of claim to substitute a draft which was sent to the solicitors for the second defendant on 19 April 2011, and received on the following day. I assume that it was also sent to the solicitors for the first defendant, and received by them, on the same dates. On 20 April 2011 the second defendant made a formal application for summary judgment.
Whilst the second defendant opposes the plaintiff’s application for leave to amend the statement of claim, it accepts that the plaintiff no longer proposes to proceed to trial on the 2007 statement of claim, and the application for summary judgment was argued with reference to the proposed amended statement of claim. That is to say, the second defendant submits that assuming that leave to amend is granted, the plaintiff cannot succeed on the amended pleading.
The first defendant has not applied for summary judgment and does not oppose the plaintiff’s application for leave to amend, provided that its position is protected as to costs.
During 2010 the Australian Capital Territory commenced proceedings, number SC 434 of 2010 and SC 344 of 2010, against Revolve Ltd. The first of those actions was a monetary claim, for unpaid licence fees under a contract. In that action judgment was entered for the Territory against Revolve on 1 October 2010, without opposition, in the sum of $101,880.28 plus costs. The second was a claim for possession of a parcel of land at Hume, the subject of the licence agreement. On 30 September 2010, without opposition, judgment was entered for the Territory for possession and for costs.
Both of those judgments have been stayed by consent pending the determination of the applications for summary judgment and for leave to amend in SC 425 of 2007. Revolve seeks a continuation of the stays, if summary judgment for the Territory is not ordered, until the hearing and determination of the action SC 425 of 2007.
The practicality is that if Revolve’s action against Thiess and the Territory is to be permitted to proceed, it will do so pursuant to the proposed amended statement of claim of April 2011. I do not understand the Territory to contend with any vigour that if it fails in the summary judgment application, I should refuse leave to amend. To refuse leave would have the practical effect of requiring the plaintiff to proceed to trial on a statement of claim which it concedes does not plead the cause or causes of action it wishes to agitate. In the circumstances it is unnecessary to set out or summarise the original statement of claim or the various previous draft amended statements of claim.
The plaintiff now seeks against the Territory damages for breach of contract, equitable damages, interest and costs. Against the first defendant the plaintiff seeks nominal damages for breach of contract, and costs. For the purposes of the present application I do not need to consider the claim against the first defendant further.
Against the Territory, in summary Revolve in the proposed amended statement of claim pleads that it is a company limited by guarantee with objects which include assistance to the community through the promotion of recycling. The Territory has maintained the Mugga Lane landfill facility on Block 2114 Jerrabomberra, ACT. The site has been used for dumping of rubbish and unwanted goods, and for recycling of such goods. From about 1988 to 1997, Revolve conducted recycling operations at the site under a series of licences from the Territory. In 1996 the Territory implemented a policy with the objective of eliminating landfill waste and encouraging recycling. On 26 February 1997 the Territory and Revolve agreed that Revolve would be licensed to use a defined part of the land for recycling purposes. In September 2000 the Territory told Revolve in a letter that its intention was that Revolve would continue the recycling operation for the foreseeable future. On 3 January 2001 Revolve and the Territory varied the 1997 contract by inserting a clause as follows:
In respect of the licence to occupy the premises and land at Mugga Lane Landfill, this agreement shall cease when the Territory opens a new materials recovery facility which will be occupied by Revolve under a licence agreement with Thiess Services.
On 19 February 2001 the Territory and Thiess entered a written agreement (the Augmentation and Operations agreement) by which the Territory granted Thiess a licence to construct works on the land and agreed to grant it a sublease of the land; and Thiess agreed to provide operational services for the Territory on the land. The Augmentation and Operations (A and O) agreement was expressed to operate for five years from 1 February 2001, with options for the Territory to extend the term for two further periods each of two years. It was a term of the A and O agreement that any subcontract from Thiess for the operation of the recycling facility must be approved by the Terriroty.
The proposed amended statement of claim goes on to assert that in 2002 the Territory requested Revolve to enter a subcontract with Thiess for the recycling operation. The Territory rejected a claim by Revolve for reimbursement of losses during construction work, stating that the improved facilities would result in substantially increased future sales and revenue for Revolve. In June 2002 the Territory told Revolve by letter that it anticipated that with the improved facilities being provided to Revolve, its operation and status as a role model would continue to grow. In response to a request from Revolve for an assurance that, if it entered a subcontract with Thiess, it would nonetheless have a long-term future as the recycling operator at the site, the Territory told Revolve by letter that it would act to the maximum extent permitted by the A and O agreement with a view to Revolve achieving terms in its subcontract with Thiess which were acceptable to Revolve and Thiess. In November 2002 the Territory granted a sublease of the site to Thiess for five years commencing on 1 February 2001 with options for the Territory to extend the term for two further periods each of two years. Later in the same month Revolve and Thiess entered a subcontract in terms approved by the Territory, in relation to the conduct of the recycling operation.
Revolve asserts that this constituted an agreement with the Territory that Revolve would conduct the recycling operation for the full extended term of the A and O agreement, and that if the Territory did not exercise its options to extend the term of the A and O agreement Revolve would nonetheless continue to conduct the recycling operation for the same period.
In the alternative, what had taken place constituted an agreement between the Territory and Revolve that if the Territory entered into a further agreement with Thiess which superseded the A and O agreement with respect to the landfill operation, it would include provision for the occupancy or use of the recycling area so as to enable the recycling subcontract to continue to operate. Alternatively, it amounted to an agreement between the Territory and Revolve that Revolve would conduct the recycling operation for the term of the A and O agreement, it being implied that the Territory, in deciding whether to exercise its options to extend the term of the A and O agreement, would act in good faith to ensure that Revolve obtained the benefit of the full extended term.
As a further alternative, the Territory had represented to Revolve that it would permit Revolve to conduct the recycling operation for the full extended term of the A and O agreement regardless of whether it exercised its options to extend the term of the A and O agreement. In reliance on that representation, Revolve postponed planning for the securing for alternative locations to conduct activities in substitution for the recycling operation it was conducting at the site.
In or about 2004, with the intention of excluding Revolve from the recycling operation, the Territory commenced planning to call for public tenders in relation to the recycling operation, and separately for the other operations covered by the A and O agreement at that time undertaken by Thiess, in respect of the period commencing on 31 January 2006.
In November 2005 the Territory and Thiess varied the A and O agreement by extending its term to 31 July 2006. This was subsequently further extended to 30 June 2007.
During 2006 the Territory called for tenders for the right to conduct from 1 July 2007 the recycling operation and the balance of the activities conducted under the A and O agreement. In 2007 the Territory awarded a contract to conduct the recycling operation from 1 July 2007 to another company, Aussie Junk Pty Ltd, and a contract to conduct the balance of the services from that date to Thiess.
The plaintiff then asserts that on 30 June 2007, the Territory, or alternatively Thiess, or alternatively Thiess as the agent of the Territory, locked the recycling area, preventing Revolve from conducting its recycling operation. Revolve claims that this was a breach of contract by the Territory, or alternatively a breach of the representation it had made, causing loss and damage to Revolve in the form of loss of trading income and expense in relocating the operation at short notice.
For the purpose of the summary judgment application, I assume that the plaintiff will be able to establish by evidence at trial the factual assertions in the proposed amended statement of claim. The A and O agreement, the sublease to Thiess and the subcontract from Thiess to Revolve are in evidence but it is unnecessary for me to set out their terms in any more detail. It will, however, be helpful if I set out some direct quotations from the correspondence summarised in the pleading, which has also been tendered without objection.
On 28 September 2000 the then Manager Contracts and Commissioning, ACT Waste, Department of Urban Services, wrote a short letter to Revolve which I quote:
Further to our discussions today, this is to confirm that it is our intention that Revolve Ltd will continue to operate the reusable facility at the Mugga Landfill for the foreseeable future and that the new contractor will be advised accordingly.
On 22 February 2002 the then Minister for Urban Services, Mr Wood MLA, wrote to Revolve. The letter included the following:
With regard to your request for reimbursement of money lost during construction work at Mugga Lane, while it is regrettable that some loss in sales may have occurred, it is anticipated that the improved facilities being provided to Revolve by ACT NOWaste will result in substantially increased future sales and revenue. Additionally, both the Mugga Lane and Belconnen sites are provided to Revolve at a reduced rental. In light of this, it is not considered appropriate to reimburse Revolve for losses that may have been incurred.
On 18 June 2002 the Manager, ACT NOWaste, Department of Urban Services, wrote to Revolve, generally about the terms of the subcontract between Revolve and Thiess, which required Territory approval. That letter included the following:
Despite the change in the day to day management arrangements for the Mugga Lane Landfill, I can see no reason why Revolve can’t continue to operate autonomously under a subcontract with Thiess. In fact, given the improvements in the facilities provided to Revolve through the construction of the new transfer station, I would anticipate that your operation and status as a role model would continue to grow. There appears to be no reason why Revolve cannot have the same objectives and carry on its business largely as it has done previously.
On 1 July 2002 Mr Campbell of the ACT Government Solicitors office wrote to the solicitor then acting for Revolve, in response to a long letter seeking the Territory’s response to many issues, and in particular seeking assurances as to Revolve’s long-term position at Mugga Lane. One of the questions asked by Revolve’s solicitor was:
25(2) . . . on the basis that my client wants to operate the new materials recovery facility for the foreseeable future, does the Territory undertake to my client to ensure that Thiess does subcontract with my client, and does not subcontract with any other person, for the operation of the new materials recovery facility?
Mr Campbell’s reply was as follow:
The Territory’s intention is that Thiess enter into a subcontract with your client. The Territory will act, to the maximum extent permitted by the Augmentation and Operation of the Mugga Lane Landfill contract, with a view to Thiess and your client entering into a mutually acceptable and/or reasonable subcontract.
The letters from which these passages have been extracted are in evidence on the hearing of the application. I prefer the precise wording in the passages to the summaries contained in the pleading.
The application by the second defendant for summary judgment is brought under rule 1147 of the Court Procedures Rules 2006 (ACT). For present purposes, the court has jurisdiction to give judgment for the defendant if satisfied that there is a good defence to the plaintiff’s claim on the merits, or that the proceedings should be finally disposed of finally. It has been said that the power “should be reserved for exercise as to actions that are absolutely hopeless”: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 90. The court must exercise care to ensure that a plaintiff is not improperly deprived of the opportunity to have its case properly tried: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130. It is appropriate to exercise the power where the court is satisfied that the plaintiff’s claim cannot succeed: General Steel Industries at 129. The principles applicable on an application for summary judgment for a defendant were set out by Jagot J in Galovac Pty Ltd v Australian Capital Territory [2010] ACTSC 132.
On the present application, the second defendant carries the onus of establishing to the satisfaction of the court that, assuming that the plaintiff establishes at trial all of the factual assertions in the statement of claim, the plaintiff’s claim could not succeed, and that judgment for the second defendant would be inevitable.
The plaintiff’s case in essence is that the Territory is bound by representations which it made to the plaintiff prior to the plaintiff entering its subcontract with Thiess in November 2002. It becomes necessary to examine the various statements made by or on behalf of the Territory during that time, in the context that the plaintiff conducted recycling operations at Mugga Lane from about 1988 until 30 June 2007. It appears that from 1988 until February 2001 this was pursuant to a licence or licences granted by the Territory to Revolve to occupy the land on which the recycling activities were carried out. On 3 January 2001 Revolve and the Territory agreed in writing that the then current licence agreement was to cease on a date when the Territory opened a new facility which would be occupied by Revolve under a licence agreement with Thiess. This happened on 19 February 2001 when the Territory and Thiess entered the A and O agreement. Revolve apparently continued to provide recycling services as before, in anticipation of executing a subcontract with Thiess, although this did not happen until November 2002.
The letter of 28 September 2000, the relevant extract from which is set out at paragraph 21 above, was well before the change. An expression of intention by a middle manager expressed in such imprecise terms (“for the foreseeable future”), an expression which Revolve did not seek to clarify at the time, is much too vague to bind the Territory either contractually or by estoppel, in circumstances where Revolve in fact continued to operate the recycling facility for almost another seven years.
The letter from Minister Wood of 22 February 2002 (see paragraph 22 above) cannot be read as containing a promise of long-term continuation of Revolve’s position at the Mugga Lane site. Read in context, the letter is a refusal of a request for payment of money by the Territory. The letter contains nothing about any period of time during which Revolve could expect to remain at the site, and simply sets out, in the manner one might expect of a Minister in such a letter, some offsetting factors which might be argued to justify the refusal of the request. Nothing in that letter could conceivably be read as a promise of long-term security. It should be remembered, too, that the letter was written after the Territory and Thiess had, to Revolve’s knowledge, entered the A and O agreement, and at a time when the Territory was pressing Revolve to enter a formal subcontract with Thiess.
The letter of 18 June 2002 (see paragraph 23) similarly cannot be seen as extending to Revolve any promise or representation which might give rise to a contract or an estoppel. The letter was from a middle manager, and was again written in the context of the knowledge of the Territory and Revolve that Revolve would be carrying out its recycling operation subject to the terms of the A and O agreement between the Territory and Thiess, including the provisions of that agreement as to its term.
Revolve now seeks to have the court construe Mr Campbell’s letter of 1 July 2002 strictly, almost as though it were a deed. Again, that letter was written during the period when the Territory was pressing Revolve to sign a subcontract with Thiess, and Revolve was attempting to extract from the Territory an undertaking as to its future at the Mugga Lane site. The solicitor then acting for Revolve, in his questions to the Government Solicitor, used the expression used in a departmental letter two years earlier, “the foreseeable future”, without seeking to define the expression with any precision. Mr Campbell’s reply plainly gave no undertaking, and on a proper analysis said no more than that the Territory would do what it could to see that Thiess and Revolve entered a mutually acceptable subcontract. This they did, some months later. There was nothing in Mr Campbell’s letter which could be read as a promise or representation that Revolve could expect any greater continuity of its position at Mugga Lane than was provided ultimately in the subcontract agreement.
I have been troubled to some degree by the assertion in the statement of claim that during 2004 the Territory had an intention of excluding Revolve from the recycling operation (see paragraph 16 above). For the purposes of the application for summary judgment I must assume that this will be made out by evidence at trial if the action proceeds. Ultimately I have come to the view that the assertion does not assist Revolve’s case. To the extent that the Territory can have had an intention, the fact that it had an intention during 2004 to exclude Revolve is not relevant to a case which is dependent on correspondence between 2000 and 2002. Additionally, the assertion about the Territory’s intention is related only to the commencement of planning by the Territory to call for public tenders in relation to the recycling operation. The Territory in fact called for tenders during 2006. It is not asserted in the proposed amended statement of claim that Revolve lodged a tender, nor is there any allegation of any impropriety in the Territory’s decision during 2007 to accept the tender of Aussie Junk Pty Ltd. The assertion about the intention of the Territory during 2004 can be seen only as a red herring.
I conclude that the facts sought to be pleaded by Revolve in the proposed amended statement of claim, if established, would be inadequate to prove an agreement between the Territory and Revolve as alleged, and inadequate to prove a representation by the Territory to Revolve as alleged.
Revolve has not suggested, on the hearing of the application, that in the event of an adverse finding it should be given any further opportunity to consider amendment to the statement of claim. An application to amend further at this point would be bound to fail. It is almost six years since the action was commenced, and nearly as long since those representing the plaintiff first gave notice of their intention to seek leave to amend their statement of claim. On any view the plaintiff has had more than enough time to produce a statement of claim in final form, and the proposed draft statement of claim attached to the letter from Revolve’s solicitors to the Government Solicitor of 19 April 2011 must be seen as final.
For the above reasons, I have come to the conclusion that the plaintiff cannot succeed on that pleading against the second defendant. In the circumstances the second defendant is entitled to summary judgment against the plaintiff with costs.
In the separate proceedings between the Territory and Revolve (number SC 343 of 2010 and number SC 344 of 2010) the stays of execution will be discharged.
This leaves on foot the plaintiff’s claim against the first defendant. This is a claim limited to nominal damages and expenses only. The first defendant does not oppose the grant of leave to amend the statement of claim, and leave will be granted to the plaintiff to file and serve an amended statement of claim in the form on the document attached to its letter of 19 April 2011 within fourteen days. The plaintiff must pay the first defendant’s costs of the present application and the costs thrown away by reason of the amendment.
The further progress of the action will require some case management. I direct that it be listed before the duty judge for directions, on a date not less than twenty-eight days from the date of this decision, to be notified by the Registrar to the parties. It appears that the claim by the plaintiff against the first defendant will be for a modest amount, almost certainly within the jurisdiction of the Magistrates Court, in which event it would be appropriate for the action to be remitted to that court for hearing. There may be relevant considerations in that regard to be taken into account of which I am unaware, and the question of remitter should be left to the duty judge.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Master Harper.
Associate:
Date: 22 March 2013
Counsel for the plaintiff: Mr RJ Arthur
Solicitors for the plaintiff: Collaery Lawyers
Counsel for the first defendant: Mr M Roser
Solicitors for the first defendant: Ashurst Australia
Counsel for the second defendant: Mr RP Clynes
Solicitors for the second defendant: ACT Government Solicitor
Date of hearing: 11, 12 August 2011
Date of judgment: 22 March 2013
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