TMA Australia Pty Limited v 100% Bottling Company

[2023] NSWDC 231

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:

TMA Australia Pty Limited v 100% Bottling Company [2023] NSWDC 231

Hearing dates:

6, 7 (for directions), 20, 21, June 2023

Date of orders:

28 June 2023

Decision date:

28 June 2023

Jurisdiction:

Civil

Before:

Newlinds DCJ

Decision:

Plaintiff’s claim is dismissed.

The plaintiff is to pay the defendant's costs of the proceedings, including the reserved costs of the adjournment of the hearing on 6 June 2023.

Catchwords:

Contract: Proof

Cases Cited:

Briginshaw v Briginshaw (1938) 60 CLR 336

Clarke v Flanagan (1934) 52 CLR 416

Guest v The Nominal Defendant [2006] NSWCA 77

Jackson v Lithgow Council [2008] NSWLR 312 Jones v Dunkel (1959)101 CLR 298

Neat Holdings v Karajan Holdings (1992) 110 ALR 449

Category:

Principal judgment

Parties:

TMA Australia Pty Limited (Plaintiff)
100% Bottling Company Pty Ltd (Defendant)

Representation:

Counsel:
Mr A Gandar (Plaintiff)
Mr E Ball with Ms C Nguyen (Defendant)

Solicitors:
Blackstone Waterhouse Lawyers (Plaintiff)
Russell Kennedy Lawyers (Defendant)

File Number(s):

2021/00291978

Publication restriction:

None

JUDGMENT

1. HIS HONOUR: The plaintiff is a commercial printer. By Amended Statement of Claim filed 4 March 2022, the plaintiff claims against the defendant $179,890.40 together with interest and costs.

2. The claim is based in contract, said to have been formed following the acceptance by the plaintiff of an order placed by the defendant for a quantity of bottling labels. The plaintiff claims that the contract is recorded in an exchange of emails between the parties dated 23 November 2015 ("the email exchange").

3. It is common ground that if the email exchange occurred on 23 November 2015 then the defendant is liable to the plaintiff in the amount claimed. This is because it is also common ground that earlier in November 2015 the parties agreed on the physical characteristics of the labels and a price per 1000 units which would be the price upon an order being placed.

The Issue for Determination

4. The case therefore devolves into the resolution of but one issue. That is, whether the email exchange actually occurred on the date it bears. The plaintiff says it did. The defendant contends that it was not sent and received, that it is in fact a fabrication, or in the alternative that it has not been proved that they are genuine contemporaneous documents.

The Provenance of the email exchange

5. The plaintiff called direct evidence to the effect that the email exchange was sent and received. The defendant called evidence supporting the inference that they were not.

6. For the plaintiff Mr Mouawad gave evidence that he has a "clear and distinct recollection" of the email exchange. For the defendant Mr Shaw gave evidence to the contrary. Mr Shaw's evidence was not based on him asserting he had a memory of the email exchange not occurring. Rather it was based on him explaining his usual practice at the time and pointing out that what the email exchange attributes to him is entirely at odds with that practice. For that reason, he says that he would not have sent the email attributed to him.

7. Neither party was able to produce from their computer records any record of the emails being sent and received. Expert evidence from Mr Sim was called by the plaintiff on this topic. Mr Walsh also gave evidence relevant to this issue. For the defendant the lack of computer records is relied upon as evidence of the fact that the emails were not sent and received. For the plaintiff there is evidence that the plaintiff's computer system has suffered from various "glitches" over the years which are consistent with the emails no longer being available on a server. Instead, the plaintiff relies upon a "hard copy" email exchange. Mr Mouawad's affidavit evidence was that in accordance with what he described as the "usual practice" of the plaintiff as at 23 November 2015, members of the plaintiff's staff printed the emails and placed them in the "job bag" relating to the matter. In his affidavit he explains the usual business practice of the plaintiff to the effect that each time an order for the printing of labels is received a "job bag" is created referable to that order. In that job bag various documents are placed including a copy of the particular order. In this case the order is the email exchange. It would follow that if that practice was followed the email exchange should have been placed in the job bag when it was created.

8. In his affidavit Mr Mouawad describes how the email exchange was eventually located. His affidavit evidence is to the effect that he discovered the email exchange in the job bag, although when that happened is not at all clear. Under cross-examination it became clear that in fact his evidence was that an unidentified staff member of the plaintiff discovered the email exchange. When this occurred was not the subject of any evidence. The staff member was never identified, let alone called to give direct evidence of the discovery of the email exchange.

The structure of these Reasons

9. To resolve the question at hand it is necessary for me to consider the oral evidence given by all witnesses, to assess that evidence by reference to the objectively known facts, i.e. evidence which is either not in dispute or is proved by undisputed objective evidence, and to assess all of that against the probabilities.

The evidence

10. Before turning to the specific evidence of the relevant witnesses, I must say I find it implausible that Mr Mouawad would have any memory of sending and receiving the email exchange. This is because, the event, whether it occurred or did not occur, would have been so run of the mill at the time that it is the type of thing one would not expect any person to remember, one way or the other, many years after the event.

The witnesses

Mr Mouawad

11. Mr Mouawad gave oral evidence on 6 June 2023 on the first day of his hearing. I was told shortly prior to him giving evidence that he was feeling ill and there was a concern that he might have Covid 19. I stood the matter down for half an hour to allow a Covid test to be undertaken and suggested to the plaintiff's counsel, Mr Gandar, that if the view was formed that Mr Mouawad was not well enough to give evidence, then the matter would have to be stood over for the obvious reason that his oral evidence seemed to be extremely important to the resolution of the issues at hand. Moreover, as the defendant positively asserts that Mr Mouawad had created the email for the dishonest purpose of misleading the defendant and the Court, it seemed unfair to the witness that he deal with such serious allegations when ill. Mr Gandar, after speaking to Mr Mouawad, stated that he wished to proceed and there was cross-examination by Mr Ball, who with Ms Nguyen appeared for the defendant, for about half an hour. That cross-examination focussed on the usual practice evidence referred to in paragraph 8 of Mr Mouawad's affidavit together with questions to the effect as to why, if that usual practice had been followed, the relevant emails had not been found in the job bag until some time in late 2021. He was unable to provide any explanation in response to this cross-examination and indeed, I formed the view that he did not really understand the point that was being made.

12. Mr Mouawad did however confidently stand by his evidence that he had a "clear and distinct memory of sending and receiving those emails". On the day I found this aspect of his evidence unconvincing but was concerned his obvious ill health was causing him to struggle.

13. When Mr Mouawad stood down prior to lunch on the first day, I indicated to counsel that I had concerns about his evidence. To put it bluntly, either he was seriously labouring from ill health, or he was coming across as, at best, an unreliable witness who was just not engaged with the process. I said it was difficult for me to judge how much his ill health was affecting him. I again invited counsel for the plaintiff to consider whether in those circumstances he wished to proceed. After lunch an application was made to adjourn the matter which over the opposition of the defendant I acceded to on the grounds of the witness's ill health.

14. Nonetheless, based on the initial round of cross-examination, I was comfortably satisfied that Mr Mouawad was unable to give any direct reliable evidence as to the relevant business practices of the plaintiff.

15. This topic was revisited by the cross-examiner when the matter resumed on 20 June 2023. On that day, Mr Mouawad no longer appeared to be sick, nor was it suggested he was sick. Yet he continued to present as a wholly unreliable witness. Whilst again purporting to stand by his asserted “clear and distinct memory” it became very clear to me that he had no memory at all of the email exchange, nor was any of his asserted memory in relation to any emails or conversations in 2015 and thereafter reliable at all. His evidence to the effect that he had discovered the emails was admitted to be wrong. Eventually, he said it was other staff who discovered it. At best, Mr Mouawad was doing his best to reconstruct what he thought might have happened by reference to documents which he was looking at for the purpose of giving his evidence. At worst, he was being deliberately dishonest. He was, to say the least, a most unimpressive witness. It was put to him that he was being deliberately dishonest. Without necessarily accepting that submission, I concluded that I was not prepared to give any weight to Mr Mouawad's evidence of his memory of relevant events or as to the practices of the plaintiff.

16. In any case, objectively, Mr Mouawad's failure to refer to, or even seek to locate the email exchange for many years after the parties were discussing the alleged debt the subject of these proceedings, confirms to me that he had no memory of the email exchange at that time. I will develop this aspect of my reasons in due course.

Kevin Walsh

17. Mr Walsh gave evidence which was largely unchallenged to the effect that the customer service department at the plaintiff in 2015 had access to Mr  Mouawad's email account and could access his emails from multiple computers. He said the customer service department was able to access Mr  Mouawad's email inbox to place them in job bags. Once an order is placed it is the customer service department's role to process the order which involves preparing a job bag containing all the information relevant to the printing run such as the job ticket, the printing plates, records of the order and like matters. He explained that the Symantec banners on various emails in evidence known as "disclaimers" most commonly appear at the bottom of email chains because of the default setting and become part of the email, not when it is created by the sender, but inserted into the outgoing email by the Symantec software process. He said that there are user settings that can affect where the Symantec banner appears on outgoing emails and the system can be configured to enable the Symantec disclaimer to appear at the end of each email which has been filtered through the software after the user's email signature. If that is set as the "default setting" it can be changed manually by the user.

18. Mr Walsh was an impressive witness who in any event was not really the object of challenge in cross-examination. I accept his evidence.

Andrew Sim

19. Andrew Sim gave expert evidence going to the question of the recoverability of emails from 2015 in both the plaintiff and defendant's system.

20. The gist of his evidence was that in light of the various glitches and other matters experienced by the plaintiff since 2015, it was possible for emails that had been sent and received to now not be recoverable on either the plaintiff's computers or by reference to a server run by a third party.

21. In relation to the defendant's emails, his evidence was that for the period 2015 to 2017 (prior to the defendant's system being "migrated" to a different provider, Telstra) if emails had been deleted during that period, they would not now be able to be recovered. However, if they had not been deleted as at 2017, then at least they should be recoverable from the server maintained by Telstra. He referred to some evidence to be called by the defendant to the effect that the request made of Telstra by the defendants had produced a negative result in relation to the email exchange. His opinion was that what that demonstrated was that the emails did not exist on the defendant's system as at 2017. That might have been because they never existed at all or that they had been deleted by that time.

22. I accept Mr Sim’s evidence.

Christian Shaw

23. Mr Shaw gave evidence for the defendant. By reference to the email exchange, he said that whilst he did not have a recollection to the effect that the email exchange did not occur, he described his usual practice and compared and contrasted it to what the email exchange records him having agreed to.

24. He gave firm evidence to the effect that he was convinced that he did not send his portion of the email exchange on 23 November 2015 or at all, because it was so out of step with how he performed his job at the time.

25. He was cross-examined to the effect that if the email exchange did not occur then the email immediately preceding it at 7.19pm was never answered. He accepted that to be the case in terms of a written response but pointed out the possibility of there having been further oral communications or alternatively the price having being agreed between other people within the defendant without his knowledge.

26. Mr Shaw presented as an honest and careful witness who was anxious not to overstate his memory and explained the basis upon which he denied the email exchange took place.

27. I found Mr Shaw to be a reliable witness of truth and, in particular, accept his evidence as to his usual practice at the time and that what is attributed to him in the email exchange is not consistent with that practice. He came across as a careful man. I formed the impression that it was extremely unlikely he would have acted in a way contrary to what he said was usual.

28. I think it is of some significance that as to his “usual practice” evidence there was no challenge in cross-examination. Rather, the submission made by Mr  Gandar was that Mr Shaw’s usual practice may be accepted, the fact that it is described as nothing more than usual leaves open the possibility that from time to time he did not follow his usual practice.

29. That is a fair point insofar as it goes, however, I do think that in those circumstances and in light of the impression I formed of Mr Shaw, it is significantly more probable than not that all other things being equal his usual practice would not have been departed from.

David Crewdson

30. Mr Crewdson was called by the defendant.

31. Again, his evidence as to the defendant and perhaps the industry’s usual practice at the time.

32. He was cross-examined on the same topic as Mr Shaw, that is, on the proposition that if the email exchange did not occur then there was no written evidence as to an agreement as to price. He accepted that proposition but said that he thought there probably was an oral agreement as to price which took place some time between July and November 2015. This seems to be accepted as a fact by the plaintiff in the way it presents its case.

33. It was pointed out to him in cross-examination that all of the documents leading up to the 23 November email when the plaintiff was quoting prices to print various labels had been upon the basis of very large quantities of labels and that was consistent with the plaintiff only agreeing to print those large quantities of labels if there was a solid order by the defendant that they be printed so that the plaintiff could get paid in the event that in the future the defendant decided it did not wish to make use of all the labels.

34. Mr Crewdson’s answer to this line of cross-examination was that, as far as he was concerned, it was a matter for the plaintiff as to how many labels it chose to print, and in the circumstances, where there is no express order by the defendant, it was the plaintiff’s commercial risk if those labels were not all subsequently ordered and paid for.

35. Again, Mr Crewdson presented as a careful and honest witness.

36. He made a number of concessions which might have appeared to have been against the defendant’s interest.

37. I found his explanations for what is described in this case as the “commercial common sense” of the transaction to be at least plausible.

38. I accept Mr Crewdson’s evidence.

The objective setting as at 25 November 2015

The Lead Up

39. It is common ground that the parties' relationship leading up to 23 November 2015 is as follows:

40. From January 2016 to February 2017 the defendant ordered, took delivery and paid for tranches of the relevant black and gold labels as and when it required them for bottling runs. The process was:

1. The defendant would send an email identifying the type and number of black and gold labels that it required and would supply a purchase order number;

2. The plaintiff would raise a tax invoice quoting the purchase order number and arrange for delivery of the black and gold labels requested; and

3. The defendant would pay the amount of the tax invoice and take delivery.

41. There was never any issue between the parties as to the quality of the label delivered and all invoices appear to have been paid on or about on time.

42. In June 2015, the parties had discussions concerning the future pricing for particular labels. What is described as a spreadsheet is found behind Tab 22 of Exhibit A. From that document, it is clear that the pricing quoted by the plaintiff at that time was provided in the context of an expectation as to a level of quantity of labels that would be required. That information is found under the heading "Estimated Quantities". I understand it is the plaintiff's case, and I do not think this is disputed by the defendant, that if a contract was created by the placement of an order for the plaintiff, the defendant would print a certain quantity of labels, but which labels would not be supplied or invoiced until such time as a specific order came in. However, if no order was received after a "reasonable time" the defendant would be liable to pay at the price in the pricing schedule for the labels regardless of whether they were ordered or not.

43. In other words, unless the plaintiff expressly ordered a print run of a certain quantity of labels, the financial risk of the plaintiff not requiring delivery of any labels printed lay with the defendant, who may or may not get paid for all it has printed.

23 November 2015

The 7.19pm email

44. Returning to the objective setting immediately before the email exchange on 23 November 2015 at 7.19 pm, Mr Shaw on behalf of the defendant wrote to Mr Mouawad approving the proofs of some "black and gold labels". He then went on to say:

"I do require delivery of these labels yesterday with the emphasis on the 2 litre and 1 litre canola and vegetable. I would provide you a PO [purchase order] number now, however you are not currently set up as a vendor in our system. This will be rectified tomorrow and a PO number will be sent immediately for the following quantities."

45. There is then set out a series of quantities of 50,000 sets of labels for various types of canola oil.

46. The email then continued:

"Can you please also advise asap pricing of the above items with price breaks 50K, 100K, 150K and 200K+. Can you please also advise as discussed this morning what you can possibly achieve regarding the 600ml x 12 Crystal Peak shrink film".

The significance of the 7.19pm email

47. It is common ground that this email was sent and received. Indeed, this is the document which Mr Mouawad confidently but wrongly asserted was the purchase order in 2018 (Court Book 603).

48. A very significant plank to the plaintiff's case is that if the email exchange did not occur, then there was never any written response by the plaintiff at all to that email. Mr Gandar submits with some force that for there to be no response to such an email at all is implausible. He of course submits that there was a response and it was the email exchange.

The email exchange

49. A full version of the email exchange in one of the various forms it appears in the evidence is attached as Annexure A (and hyperlinked) to these reasons. It is a photocopy of one of two versions that Mr Mouawad wrongly said that he located in the job bag in the way I have described above. The difference between the two versions is they each have a stamp "Entered" on different locations. There are also some differences with the formatting of the two versions. Mr Ball makes something of this. My understanding is that it is said that both versions were found in the job bag at the same time. Although, because of the way Mr Mouawad’s evidence fell out during his cross-examination, there is actually no reliable evidence of this at all.

What happened next

50. After 23 November 2015 the parties conducted themselves as follows:

51. On 22 January 2016 Mr Mouawad provided details of the stock on hand of black and gold oil labels of approximately 1 million. Thereafter, during 2016 various purchase orders were placed for the relevant labels. Those labels were delivered, invoiced and the invoices paid.

52. There was further discussion in August and September about the amount of black and gold labels being held as stock on hand. This course of conduct continued through until about early 2017 when the ACCC published guidelines which would take effect on 1 June 2018 making the black and gold labels obsolete.

53. In late 2017 there was a meeting between Mr Mouawad and Mr Crewdson regarding the stock on hand a request was made for payment of the balance of the stock at which meeting Mr Crewdson denied any order for production. Thereafter, through February to May 2018 there were repeated emails from the plaintiff seeking to resolve the disputed claim for payment. During that period the defendant continued to deny liability, but the plaintiff continued to insist it was entitled to payment.

54. Significantly to my mind, during the whole of that period where the parties were seeking to resolve the disputed claim, the heart of the dispute being a denial by the defendant of any order being placed, there was no mention on behalf of the plaintiff at all of the email exchange as being the basis for the order, let alone any successful attempt to recover it from the computer system or the relevant job bag.

55. The first reference to a written order was not until 2018. After being directly asked for a copy of the purchase order by the defendant on 22 March 2018 (Exhibit A, p 599) the response by the plaintiff on 2 May 2018 was to supply a copy of the 7.19pm email from 23 November 2015 and not the email exchange. This strongly indicates that neither Mr Mouawad nor any other relevant person of the plaintiff, had no memory of the email exchange at all in May 2018. Mr Ball submits this is also evidence that suggests the email exchange did not exist as at May 2018. He submits it demonstrates that Mr Mouawad thought in 2015 that the 7.19pm email was in fact an order for the print run.

56. On 31 July 2018 the plaintiff issued the invoice the subject of these proceedings. A final demand was made in September 2018 which led to the commencement of court proceedings, the details of which are as follows.

57. Proceedings were commenced by the plaintiff in May 2020 by way of statement of claim. The pleading filed on that day not only does not refer to the email exchange, it is premised on seemingly different facts being a partly oral and partly written contract not referable to the email exchange (Exhibit A, p 668).

58. Particulars were sought and, after some considerable delay were provided in September 2021, being a document that is a "quotation" dated September 2016, (Exhibit A, p 706) which is of course not the case being propounded before me and is inconsistent with the email exchange. Indeed the "quotation" really seems to have nothing to do with the matter at hand. As far as I can tell, it is not connected in any way to the alleged contract the subject of this case.

59. The proceedings then had a chequered procedural history including the original case being dismissed because of procedural failures on behalf of both parties. New proceedings were then commenced. In what appear to be the four iterations of the pleaded case through the life of both sets of proceedings up until December 2021, the case as pleaded by the plaintiff was not only without reference to the email exchange, it was in large ways entirely inconsistent with the email exchange (Exhibit A, pp 1049, 706, 712, 726.02).

60. The first mention of the email is found in an amended statement of claim filed 21 December 2021 (Exhibit A, p 726.02).

61. Mr Ball submits that the lack of reliance upon, or even reference to, the email exchange during any of the time prior to an amended version of the Statement of Claim in December 2021 (some six years after the event and three years since the dispute commenced) is significant.

62. At the very least, that objective fact persuades me that no one, least of all Mr Mouawad, during that period had any memory at all of the email exchange. This is one of the reasons why I do not accept his evidence to the effect that he currently has a "clear and distinct recollection" of the email exchange. It also casts doubt as to him having any idea about the business practices of the plaintiff at all because one would have expected him, at least in 2018, to have searched the job bag for anything resembling a purchase order, yet he did not do so. It also proves to my mind that the "discovery" of the email exchange must have occurred some time in late 2021. Other than that vague date range I have no evidence at all as to when, by whom and how the discovery occurred.

The form of the email

63. Some considerable time was spent in cross-examination and submissions as to the form and content of the disputed email exchange.

Suggested unusual features

64. For the defendant, Mr Ball of counsel who appeared with Ms Nguyen, pointed out that there are two significant unusual factors or "oddities" in the document when compared to all other emails between the parties around the relevant time, many of which are before me. That is, the Symantec Security Scan Notice is found between two lines half way down the page. In all other emails in the evidence (and there are many) that statement, if it occurs, is not found in the middle of the page, but rather is found at the conclusion of the chain of emails. The second "oddity" pointed out by Mr Ball is Mr Mouawad's title at the time which the signoff describes as "Business Development Manager". In fact at the time that was not his role (although he said he had both roles at the time). His role was in fact "Corporate Accounts Manager". Moreover, the defendant points out that in all of the many email communications between the parties around the time (there are about 100 examples in evidence) including one 20 minutes after the email exchange his Corporate Accounts Manager title is used.

65. Mr Mouawad explained in his evidence the history of his job title and email signatures over time at paragraphs 4 and 8 of his third affidavit. In short, he says his title changed but as he used different devices from time to time and those devices contained different job titles on automatic signature lines; sometimes he signed off with one job title and sometimes with another. There is nothing to corroborate this evidence, at least insofar as dealings between the parties is concerned. For reasons already explained I am not prepared to accept any part of Mr Mouawad’s evidence that lacks corroboration.

66. As to the Symantec warning I am satisfied that for the warning to be found in the middle of the page would have required Mr Shaw to have manually changed the default setting in his device and then changed it back. This I find to be highly improbable to the point of fanciful. He would have had no reason to do so. Moreover, it was not put to Mr Shaw that he had done so, not that he would have any reason to do it, let alone that he knew how to do it.

The probabilities

67. Both parties made submissions pointing to objective matters and commercial rationale supporting their competing positions. I will try and identify each of those points and deal with them.

68. As I have said, Mr Gandar relies on the email at 7.19pm and the fact that it called for a response. He also pointed to the undoubted fact of the quantities already discussed between the parties as being consistent with his case. Finally, he points to what he described as a lack of dispute of the claim by the defendant. Mr Ball's answer to Mr Gandar's first point is that it is equally consistent with Mr Mouawad mistakenly thinking at the time that the 7.19pm email was in fact an order. This mistake is consistent with the 7.19pm email being the first assertion by the plaintiff of the order (Exhibit A p 599). He said the production of the larger quantities is a neutral factor which depends on where parties chose to allocate the commercial risk. Finally, he does not accept the characterisation of his client's conduct as not disputing the claim. He in turn points to the late reference and production of the email exchange by the plaintiff in support of his contentions client’s case.

69. Mr Ball originally told me there are at least 10 reasons why I should not accept the email exchange took place. Indeed, he goes further and invites me to make a positive finding that the evidence given as to the provenance of the emails and to the fact that they were sent and received is evidence that is knowingly false, he submits that the email exchange is a fraudulent concoction put together for the purpose of this case.

70. Mr Ball's top 10 reasons (although there were actually nine and they were later reorganised into five) are as follows:

71. First, Mr Shaw denies receiving or sending them. The denial is based on Mr Shaw's usual practice evidence to which I have referred.

72. Second, there is no electronic record of the emails produced by the plaintiff. They exist only in the form of a photocopy of a printed document. The plaintiff has been unable to produce any copy of the alleged emails in any electronic or native form.

73. Third, the defendant has searched its internal email system and has found no trace or record of the emails.

74. Fourth, Telstra, the internet service provider which maintains the defendant's external email server system, has conducted a 'ordered search' of that system and has found no trace or record of the alleged emails.

75. Fifth, the alleged emails are the only emails which suffer from an inability to produce an original or electronic copy. It is said that about 100 other emails passed between the plaintiff and the defendant between 2014 and 2018 all of which have apparently been located in electronic form without issue.

76. Sixth, the discrepancy between the email signature in recording Mr Mouawad's title as "Business Development Manager" where he is elsewhere in all other relevant correspondence described as the "Corporate Accounts Manager". It is pointed out that Mr Mouawad sent two emails to Mr Shaw on 23 November at 7.42 pm (within 20 minutes of the alleged emails) and then again at 9.38 pm both of which bore his "Corporate Account Manager" email signature. Mr Mouawad did not commence using his "Business Development Manager" email signature in correspondence with the defendant until November 2017.

77. Seventh, the Symantec security statement to which I have already referred, which elsewhere in the evidence only ever appears at the very bottom of an email chain (often repeated multiple times where the chain consists of more than one email), but on the alleged emails (and only on the alleged emails) the notation appears only once in the middle of the chain. Whilst this can be explained by a manual change at Mr Shaw's end, Mr Ball submitted that is unlikely to have occurred.

78. Eighth, Mr Ball says the alleged email make no commercial sense because they purport to record Mr Shaw committing to the purchase of a near two year supply of labels without any corresponding customer commitment.

79. Ninth, the plaintiff through Mr Mouawad or anyone else did not mention or identify the existence of the email exchange in order to justify its claim against the defendant until it filed the Amended Statement of Claim in these proceedings in December 2021, that is, more than six years after the alleged emails were sent and received. During those six years the plaintiff had multiple opportunities to justify its claim by reference to the alleged email but never did so. Instead, Mr Ball points out when ultimately a document was identified it was the September 2015 order and/or the 7.19pm email and not the email exchange. Moreover there is no reliable evidence at all as to who discovered the email exchange or when that happened. The failure to call that person by the plaintiff is said to be significant.

80. To these matters Mr Gandar responds as follows:

81. First, while he accepts that Mr Shaw denies receiving or sending the emails he points out that Mr Mouawad gives the contrary evidence. In that regard, for reasons I have explained, I reject the evidence of Mr Mouawad and accept the evidence of Mr Shaw. Mr Shaw's evidence gives me reason to doubt the email exchange occurred. On that evidence alone the email exchange is improbable.

82. As to Mr Ball's second, third, fourth and fifth points, the response is that these matters are neutral because there are rational and plausible explanations for why neither party can locate an electronic version of the emails. In that regard I accept Mr Gandar's submission insofar as it relates to the plaintiff, but find, notwithstanding Mr Sim's opinion, that the absence of the email exchange from the defendant’s records is significant and is some evidence that causes me to doubt they occurred. Mr Sim's evidence satisfied me that unless the defendant deleted the email exchange prior to 2017 they would probably have been found on the Telstra server. They are not on the Telstra server. I find in the circumstances, it to be very unlikely they would have been deliberately deleted prior to 2017. There was no dispute until 2018. Indeed, this was not put to any of the defendant’s witnesses. Again, the lack of any computer record at all gives me reason to doubt the email exchange occurred.

83. As to the sixth and seventh points being the discrepancies on the face of the emails to which I have referred, it is suggested by Mr Gandar that I should read nothing into the positioning of the warning or the use of the wrong title description because there is no expert evidence before me in relation to the first matter and Mr Mouawad has given an explanation for why sometimes he did use the wrong footer depending on which computer he was sending emails from. In this regard I do find the format of the email exchange, the positioning of the Symantec warning (about which there is Mr Walsh’s evidence) and the use of the incorrect title as suspicious matters. Whilst there are rational explanations for both, I find them unlikely. Again, these matters cause me to have some doubt as to their authenticity.

84. To this it may be added that I have no evidence at all from the person or persons who actually "discovered" the email exchange. I was invited to infer that such person or persons would not have been able to assist the plaintiff's case. Without going that far, it is yet another reason for me to be sceptical of the plaintiff's case. There is a huge hole in the plaintiff’s evidence as to this critical event. As far as I know, that hole could have been plugged by the plaintiff calling admissible direct evidence, yet it did not do so.

85. As to the eighth point, that is, that the emails make no "commercial sense", Mr Gandar submits that they not only make commercial sense, but that they are consistent with quite a large body of material which does suggest that orders in the vicinity of a million units were contemplated by the parties and indeed were the basis of the prices obtained. His submission is that to get the pricing lower the unit number used was higher, but it was the defendant's commercial risk in that regard.

86. I have concluded that the "commercial sense" submissions made by both parties are both meritorious and as so often happens in this type of case really do not assist in the resolution of the issue. Where the parties intended the commercial risk to lie was a matter for them to work out by negotiations. I think it would be dangerous to reason backwards from my own views as to the commercial risk allocation to determine whether the emails were sent or not. I regard this point as neutral.

87. The ninth point made by Mr Ball relates to not just the late production of the emails, but importantly the failure to mention them until December 2021. Again, I find this conduct extremely unusual and suspicious to the point that it gives me pause to doubt the authenticity of the email exchange.

Disposition

88. This is a difficult case. The issue can be simply stated, but its resolution is not so easy. Whilst ultimately to decide the case I have to resolve only one question of fact, to get there I must determine a number of subsidy/subsidiary factual questions and then consider what inferences can be drawn from all of the proved or accepted relevant facts.

Some basic legal propositions

89. As I have explained, the defendant has taken it upon themselves and therefore assumed the onus and burden of proving a positive case that the email exchange is a fabrication deliberately created some time after November 2015 with a view to being used falsely as evidence in these proceedings.

90. Mr Ball has submitted that Mr Mouawad engaged in that fraud and has given evidence that he knows to be untrue.

91. Obviously, this is an extremely serious allegation and one to which the standards of “strict”, “cogent” or “clear” proof explained in cases like Briginshaw v Briginshaw (1938) 60 CLR 336 and Neat Holdings v Karajan Holdings (1992) 110 ALR 449. There is a general presumption that people don’t ordinarily engage in such conduct and that courts should not “lightly” make such a finding. Moreover, it is a finding of such gravity that in my view I should refrain from making it unless to do so is necessary to resolve the issues in the case.

92. The way the evidence ultimately fell out, I am satisfied that Mr Mouawad, despite his affidavit evidence to the contrary, was not the person who “discovered” the emails and therefore if they are a fabrication that may be the consequence of other people’s conduct, of which Mr Mouawad is not aware. That being so, I am not prepared to find Mr Mouawad has engaged in fraud or given deliberately false evidence.

93. Of course, the onus of providing the email exchange starts with and ends with the plaintiff. Mr Gandar sought to frame the case by reference to the defendant's allegation to persuade me that if I was not satisfied to the requisite level that the alleged fraud had been made out then the only result was that the plaintiff must succeed. In other words, he said that the result was binary based on the fraud allegation. His position is if the fraud allegation is made out then the plaintiff loses but if the fraud allegation is not made out then the plaintiff must succeed, unless I find the conflicting theories evenly balanced. He referred to Guest v The Nominal Defendant [2006] NSWCA 77; Jackson v Lithgow Council [2008] NSWLR 312 and Jones v Dunkel (1959)101 CLR 298 per Dixon J at [304] to [305].

94. I do not think that is right as a matter of logic or law. This type of submission was dealt with and disposed of by the High Court in 1934 in Clarke v Flanagan (1934) 52 CLR 416. At 428 Dixon J said as follows:

That was a case where the authenticity of a document was in question and it was sought to throw the burden of proving it to be a forgery on the party impugning it ...

In a civil case the onus of proving the genuineness of a deed is cast upon the party who produces it and asserts its validity. If there be conflicting evidence as to its genuineness either by reason of alleged forgery, or otherwise, the party asserting the deed must satisfy the jury that it its genuine. The jury must weigh the conflicting evidence, consider all the probabilities of the case, not excluding the ordinary presumption of innocence, and must determine the question according to the balance of those probabilities.

95. I do not see the result of the case to be determined by my conclusion as to the positive fraud case made by the defendant. I do understand Mr Gandar's submission that if the email exchange is not found to be fraudulent then it must be found to be genuine. However, I think that submission overstates the legal position and overlooks that the question of proof involves a significant application of common sense. Even if I am not satisfied of the matters positively asserted by the defendant to what might be called the Briginshaw standard, it still remains for the plaintiff to satisfy me, on the balance of probabilities, to the requisite degree of satisfaction or persuasion that the email exchange is authentic and contemporaneous. I need to be actually persuaded to a level of preponderance of probability: Briginshaw at 354 per Dixon J. The submissions made by Mr Ball in support of his fraud allegations, even if they do not make good the serious conclusion of fraud can and must be taken into account when considering whether the plaintiff has discharged its burden of proof.

Conclusion

96. Having heard the oral evidence of the primary witnesses, and considered the probabilities in light of the objective proved facts, I have not been persuaded to the appropriate level that Mr Mouawad was deliberately giving false evidence and has been complicit in creating the emails for the purpose of giving such false evidence. That being said, I do think that there was real force in the submissions Mr Ball made and I do hold strong suspicions that Mr Ball's allegation may be right, although I am not at all sure if Mr Mouawad was knowingly involved. Indeed, if not for the caution required by Briginshaw I think I might well have accepted Mr Ball’s submissions that the document had been fabricated albeit by someone other than Mr Mouawad.

97. That does not relieve the plaintiff from its onus of proving on the balance of probabilities that the emails were sent and received. Having considered all of the evidence and the competing submissions of the parties, and in particular the various suspicious or odd factors to which I have referred, each of which on its own would probably not have been determinative but together, gather momentum and weight, I find myself unable to reach a level of satisfaction as to that fact so as to make the finding necessary to discharge the plaintiff's onus. Does that mean that I cannot decide between the two conflicting possibilities? I am not sure. All I can say is that I have not been persuaded by the plaintiff that the email exchange probably occurred.

98. To the extent I have not already explained, my reasoning can be summarised as follows.

99. Regardless of whether he was sick or not, it was clear to me from Mr Mouawad's first period of cross-examination that his evidence as to the usual practices of the plaintiff was wholly unreliable. To put it another way, he really gave me no more than his understanding of what the practice was and then, when confronted with the proposition that his understanding of the usual practice must have been in fact not complied with in this case, was unable to even understand the point. Common sense would dictate that whatever practice the plaintiff had, if it involved placing orders in job bags the job bags would have been searched long before late 2021. Yet, no search was undertaken in the job bags for many years.

100. The identity of the person(s) who "discovered" the email exchange is unknown. That person(s) has not been called to give direct evidence of the discovery. That person's(s) lack of evidence has not be explained. The lack of any reliable evidence at all on this important matter is to my mind significant.

101. I reject Mr Mouawad's evidence that he has any memory of the email exchange. Conversely, I accept Mr Shaw's evidence that he would not have been sent the email by reference to his usual practice at this time. I therefore find it unlikely that Mr Shaw sent his portion of the email exchange.

102. The two discrepancies ("oddities") within the emails are, both, difficult to reconcile. It is the fact that Mr Mouawad's signature block and his sign-off was consistent at the time when dealing with the defendant, other than the one on the email exchange. True it is he has given an explanation, it is plausible but I think it much more likely to the point of close to inevitable that if the emails were created contemporaneously he would have used what appears to have been his usual email sign-off. Again, this gives me reason to doubt the contemporaneous creation of the emails.

103. As to the warning from Symantec on the email, again, there is a rational explanation for what is a discrepancy between this particular email chain and all other email chains in the body of evidence I have. Yet that rational explanation is highly unlikely to have occurred.

104. I have concluded that the parties' competing submissions as to the "commerciality" of each side's version of events cancel each other out and become a neutral factor.

105. As to the existence of the emails on either side's hard drives in electronic form, it is of course something that would be expected from email exchanges between commercial parties that at least one of them would retain on their computer records a copy. Especially so in circumstances where a vast quantity of emails between these parties at around the same time have been produced. Again, the lack of anyone's ability (regardless of the plaintiff's evidence as to computer glitches and the like since the date) and accepting Mr Sim's evidence that they might have been deleted by the defendant before 2017, gives me another reason to doubt the contemporaneous existence of the documents.

106. I do find significant the extremely late addition to the plaintiff's case of what is now the central fact, i.e. the existence of the email exchange. The first reference to a written purchase order in 2018 was the 7.19pm email. It then became an entirely irrelevant September quote. I do not accept the submission by the plaintiff that this is explicable by the fact that it had not been suggested by the defendant that any purchase order was received. The defendant had made it entirely clear well prior to that time that it had no knowledge of any relevant order and was asking to be shown the order. The only rational response to this would have been to look in the job bag(s) and produce the email exchange, yet this did not happen.

107. I have not overlooked the submissions made by Mr Gandar. I do agree with him that it is odd that the first email of 23 November 2015 on the defendant's case stood unanswered. This is a powerful submission which does point in the other direction, but if, as Mr Ball has suggested, Mr Mouawad thought, mistakenly, that the 7.19 email was in fact a purchase order, then perhaps that explains this anomaly. I also agree that the large quantities the subject of the quote in the spreadsheet demonstrate that a large purchase order was anticipated. However, if that order was not placed then there was no order.

108. For these reasons, I have concluded that the plaintiff's claim should be dismissed upon the basis that I am not satisfied on the balance of probabilities that the email exchange of 23 November 2015 occurred.

Orders

1. The plaintiff's claim is dismissed.

2. The plaintiff is to pay the defendant's costs of the proceedings, including the reserved costs of the adjournment of the hearing on 6 June 2023.

3. I will hear the parties on a costs variation to the costs order but only if I am satisfied by email of such an application within 48 hours of these reasons being published.

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Annexure A - MFI2 (679515, pdf)

Amendments

03 July 2023 - Removed duplicate hyperlink.

Decision last updated: 03 July 2023