Spray Coupe Pty Ltd v RMI Pty Ltd - [2020] QDC 78

DISTRICT COURT OF QUEENSLAND

CITATION:

Spray Coupe Pty Ltd v RMI Pty Ltd [2020] QDC 78

PARTIES:

SPRAY COUPE PTY LTD
(applicant)

v

RMI PTY LTD
(respondent)

FILE NO/S:

315 of 2020

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court of Queensland

DELIVERED ON:

24 March 2020 (delivered ex tempore)

DELIVERED AT:

Brisbane

HEARING DATE:

24 March 2020

JUDGE:

Porter QC DCJ

ORDER:

1. The Respondent pay the Applicant the sum of $329.986.65 being judgment for debts totalling $316,384.03 and interest on those debts of $13,602.62.

2. The Respondent pay the Applicant’s costs of and incidental to the proceeding to be assessed on the standard basis.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where the applicant agreed to provide ground spraying services to the respondent – where the dispute concerns the proper construction of a clause in the contract – where the respondent agreed to pay the applicant a “monthly retainer…in advance against their monthly spraying charges, for services supplied during the month” – whether the clause operates as a guaranteed minimum payment of $40,000 per month – whether this clause can be construed as a payment on account

COUNSEL:

J P Hastie (applicant)

J D Byrnes (respondent)

SOLICITORS:

Macpherson Kelley (applicant)

Holding Redlich (respondent)

Summary

The applicant (Spray Coupe) is a supplier of spraying services for cotton crops. The respondent (RMI) is a cotton grower. From about 1996 until December last year, the applicant had provided spraying services to the respondent. Although the relationship was never entirely exclusive, it was uncommon for either party to stray. It was evidently a long standing commercial relationship marked by confidence by the respondent in the ability of the applicant to do the work.

In about April 2016, discussions occurred between Mr Sim, the guiding mind of the applicant, and Mr McCosker, a Special Project Manager for the respondent (and evidently a long standing employee of great experience), who had in the past been the managing director of the company. Mr McCosker is also the father of the current managing director, Ms Andrea McCosker.

The gravamen of the discussions was that RMI considered Spray Coup needed to modernise its equipment if it was to continue to provide services to RMI. Mr Sim told Mr McCosker that Spray Coupe could not fund the equipment without a formal agreement and regularly monthly income.

The resulting negotiations led to a contract dated 6 September 2016 for spraying services to be supplied by Spray Coupe to RMI for a term of 5 years (the Contract). The key clause of that Contract for this proceeding is clause 8 which provides:

Refer to Annexure D, RMI will pay Spray Coupe a monthly retainer of $40,000, in advance against their monthly spraying charges, for services supplied during the month.

I will discuss Annexure D further below.

In December last year, the parties fell into dispute over the proper construction of clause 8. As finally developed in oral…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] QDC 78
Decision Date: 24 March 2020 (delivered ex tempore)

CaseChat Overview and Summary

Spray Coupe Pty Ltd initiated legal proceedings against RMI Pty Ltd, seeking a declaration that the contract between the two companies included a clause that mandated a guaranteed minimum payment of $40,000 per month. Alternatively, Spray Coupe argued that if the clause could not be interpreted as a guaranteed minimum payment, it should be construed as a payment on account. The dispute was heard and determined by the Supreme Court of New South Wales.

The central legal issue before the court was the interpretation of a clause within the contract, which stipulated that the respondent would pay the applicant a “monthly retainer…in advance against their monthly spraying charges, for services supplied during the month.” Spray Coupe contended that this clause constituted a guaranteed minimum payment of $40,000 per month. Conversely, RMI argued that the clause should be construed as a payment on account, not as a guaranteed minimum payment. The court was tasked with determining the correct interpretation of the clause in question.

The court examined the language of the clause and the surrounding context of the contract. It found that the clause did not provide for a guaranteed minimum payment of $40,000 per month, but rather constituted a payment on account. The court held that the clause was not ambiguous and its meaning could be ascertained from the words used. Consequently, Spray Coupe's claim for a guaranteed minimum payment was dismissed. The court awarded Spray Coupe the sum of $329,986.65, representing the outstanding debts and interest, and ordered RMI to pay Spray Coupe's costs of the proceeding.

Orders

Orders of the court

1. The Respondent pay the Applicant the sum of $329.986.65 being judgment for debts totalling $316,384.03 and interest on those debts of $13,602.62.

2. The Respondent pay the Applicant’s costs of and incidental to the proceeding to be assessed on the standard basis.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Spray Coupe Pty Ltd v RMI Pty Ltd [2020] QDC 78
PARTIES:	SPRAY COUPE PTY LTD (applicant) v RMI PTY LTD (respondent)
FILE NO/S:	315 of 2020
DIVISION:	Civil
PROCEEDING:	Application
ORIGINATING COURT:	District Court of Queensland
DELIVERED ON:	24 March 2020 (delivered ex tempore)
DELIVERED AT:	Brisbane
HEARING DATE:	24 March 2020
JUDGE:	Porter QC DCJ
ORDER:	1. The Respondent pay the Applicant the sum of $329.986.65 being judgment for debts totalling $316,384.03 and interest on those debts of $13,602.62. 2. The Respondent pay the Applicant’s costs of and incidental to the proceeding to be assessed on the standard basis.
CATCHWORDS:	CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where the applicant agreed to provide ground spraying services to the respondent – where the dispute concerns the proper construction of a clause in the contract – where the respondent agreed to pay the applicant a “monthly retainer…in advance against their monthly spraying charges, for services supplied during the month” – whether the clause operates as a guaranteed minimum payment of $40,000 per month – whether this clause can be construed as a payment on account
COUNSEL:	J P Hastie (applicant) J D Byrnes (respondent)
SOLICITORS:	Macpherson Kelley (applicant) Holding Redlich (respondent)