TT Import and Export Pty Ltd v Polytrade Pty Ltd
[2021] VCC 1403
•28 September 2021
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
EXPEDITED LIST
Case No. CI-20-02797
| TT Import & Export Pty Ltd | Plaintiff |
| and | |
| Polytrade Pty Ltd | Defendant |
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JUDGE: | His Honour Judge Woodward | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 8-12 and 18 February 2021 | |
DATE OF JUDGMENT: | 28 September 2021 | |
CASE MAY BE CITED AS: | TT Import & Export Pty Ltd v Polytrade Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 1403 | |
REASONS FOR JUDGMENT
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Subject: CONTRACTS
Catchwords: Agreement for hire of shipping containers containing recyclable plastics – whether parties agreed to amend the agreement – mutual assent – terms of amendments – consideration – mitigation of loss – estoppel – late application to amend counterclaim
Legislation Cited: Personal Property Securities Act 1999 (Vic) ss123 and 128, Supreme Court Act 1986 (Vic), s37
Cases Cited:Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193, Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424, Wigan v Edwards (1973) 1 ALR 497, Je Maintiendrai v Quaglia (1980) 26 SASR 101, Aon Risk Services Pty Ltd v Australian National University (2009) 239 CLR 175
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiff | Mr A Bailey | Dandanis & Associates |
| For the defendant | Mr J Waters | Becketts Lawyers |
HIS HONOUR:
Summary and Outcome
1On 15 March 2018, the plaintiff, TT Import & Export Pty Ltd (“TT”) and the defendant, Polytrade Pty Ltd (“Polytrade”) entered into a master hire agreement (“Hire Agreement”) for the storage by TT of shipping containers loaded with recyclable materials (mostly plastics). By early December 2019, TT was storing about 260 such containers and Polytrade was incurring storage fees totalling approximately $44,000 (including GST) per week. TT had been sending weekly invoices to Polytrade for those storage fees, seeking payment on 14-day terms. By 17 December 2019, the total amount owing by Polytrade to TT was approximately $350,000, with some of this outstanding for 40 days or more.
2In the weeks leading up to 17 December 2019, the relationship between the parties had become increasingly tense. The sole director of TT, Tony Tang, had been chasing payment. For its part, Polytrade had been making ad hoc requests for the return of particular containers, but because of the way the containers were stored, TT was unable to comply with those requests. Mr Tang instead proposed that TT begin returning 10 containers each week. However, Polytrade was unable to accept that many containers at that time.
3By the evening of 16 December 2019, Mr Tang’s frustrations with the late payment got the better of him, and he directed that a container be delivered to Polytrade’s premises in Hallam and left blocking the driveway. A meeting was hastily arranged the following afternoon at TT’s premises in Clayton, attended by Mr Tang, Louie Cheng, Polytrade’s director and Frank Fraiia, Polytrade’s assistant director (“17 December meeting”). Each of Mr Tang, Mr Cheng and Mr Fraiia gave evidence.
4The outcome of this proceeding essentially turns on what (if anything) was agreed between the parties at the 17 December meeting. In particular, the success of Polytrade’s defence and counterclaim, essentially depends on a finding that there was no agreement to increase the hire rate, but that the parties did reach a binding agreement in relation to the return of containers. For the reasons below, I have found against Polytrade on both these issues.
5There will therefore be judgment for TT against Polytrade on its claims and Polytrade’s counterclaim must be dismissed. I will hear further from the parties on the precise form of the orders giving effect to these reasons, as discussed below.
Factual background
6Polytrade provides recycling services to local government, servicing around 27 councils across Melbourne, Sydney and Brisbane. It receives fully comingled recycling disposed of by households and business in their yellow recycling bins. The material is collected by another subcontractor to the councils, and then delivered to a Polytrade material recovery facility or “MRF”. The material then goes through various sorting processes, some manual and some automated. Polytrade owns and operates about 15 MRFs throughout Australia, including (relevantly) a facility at Dandenong in Victoria and another at nearby Hallam.
7The sorting process undertaken at these MRFs produces (among other things) bales of what are known as “bulky plastics” (larger plastic items such as plastic crates, buckets and storage drums) and bales of “mixed plastics”. Mixed plastics comprise household plastic waste. Mr Cheng’s evidence was that this generally comprised around 40% HDPE product (such as opaque plastic milk bottles and coloured detergent and shampoo bottles) and 40% PET (such as plastic soft-drink bottles), with the balance being mostly polyethylene, with a little bit of PVC, polystyrene and other miscellaneous plastics and contamination.
8The effect of Mr Cheng’s evidence was that up until around 2018, most mixed plastics (along with other recyclable materials) were exported unsorted and in bulk to China. In 2018, China stopped accepting these exports. At this time, Polytrade was still taking delivery of around 400 to 500 tonnes of material each day to its Dandenong facility, and around 6% of this comprised mixed plastics. As a result of the growing constraints on exporting this material, Polytrade began to accumulate stocks of recyclable product in excess of what it could store, process or export.
9For a year or two before this time, TT had been one of a number of companies providing transport services to Polytrade. This comprised essentially transporting empty shipping containers to one of Polytrade’s MRFs (primarily, if not exclusively, the Dandenong facility) for filling with recyclable materials, and then transporting the filled containers to the wharf for shipping. When Polytrade began facing difficulties with exporting the product to China, it entered into an agreement with TT for TT to store shipping containers of excess recyclable materials (mainly bulk and mixed plastics) at TT’s two premises in Clayton.
10These arrangements were negotiated by Mr Tang of TT, with Colin Tsang and Eric Hui at Polytrade. Neither Mr Tsang nor Mr Hui gave evidence. It seems that Mr Tsang had recently suffered a stroke and was too unwell to give evidence. There was no explanation for Mr Hui not giving evidence, except that he had left Polytrade’s employ two to three years before the matter came to trial. Mr Cheng had a general understanding at the time that the arrangements with TT were being made, but was unaware of the detail and did not see any of the documents giving effect to the arrangements.
11On 2 March 2018, Mr Tang sent Mr Tsang at Polytrade a document headed “Quotation Ref# Polytrade010318” (“the Quotation”). The Quotation had the following relevant terms:
“RE: Transport & Storage
Descriptions
Rate
Storage and Hire
$22.5 / Day
Handling LO/LO
$36 / Box
40’ HQ Local Cartage
From Polytrade Dandenong back to TT Logistics Company Yard
$340.00 / Box
Return Trip to Polytrade (Where applicable)
$340 / Box
CityLink Levy
$58 / Box
Remarks: Above Pricing Excluding GST. Container Hire Minimum 2 Month
Please find our terms & conditions at
12The Quotation also had a handwritten annotation of “$22”, indicating (and it is not in dispute) that the initially agreed daily rate for “Storage and Hire” was $22, not the typed rate of “$22.5”.
13Soon after sending the quotation, Mr Tang downloaded a form of hire contract from the internet and adapted this for the purposes of documenting TT’s agreement with Polytrade. This is a four-page document headed “Master Hire Agreement” and is signed by Mr Tsang on behalf of Polytrade and dated 15 March 2018. It was not in dispute that the Hire Agreement constituted the agreement between the parties for the transport and storage by TT of Polytrade’s recyclable plastic product.
14It should be noted that a number of the terms of the Hire Agreement do not reflect the reality of the arrangement between TT and Polytrade. For example, the provisions for delivery and storage (clause 3) appear to contemplate that the containers were to be stored at the premises of the “Hiree” (namely, Polytrade), when in fact they were being stored by the “Hirer” (TT). Thus, a provision giving TT access to Polytrade’s site to inspect the containers would have had no practical application. Fortunately, nothing of substance turns of the construction of these and similarly incongruous provisions.
15The Hire Agreement relevantly provided that:
(a) the Hire Agreement represents the entire agreement between the parties and “may be amended or modified only by agreement in writing” (chapeau, page 1);
(b) the “Hire Rate”: “Please refer attached Quotation Reference# Polytrade 010318” (cl1A);
(c) GST “will be added to each invoice”, to be charged on the daily hire rate (cl1C);
(d) “All cleaning, removing of labels and graffiti both exterior and interior and any damages which have occurred during the hire of the container, are to be for the account of the Hiree [Polytrade] subject to survey upon return” (cl headed “Repair Criteria”);
(e) all transport and handling costs to and from the site shall be payable by Polytrade up front prior to delivery (cl4.1);
(f) TT would invoice Polytrade for the first month, with transport and handling costs prior to delivery and Polytrade thereafter to be invoiced monthly in advance. “Payment MUST be made Polytrade within 7 days of the date of invoice” (cl5.1);
(g) “In the event of default in payment by the Hiree the Hirer shall without prejudice to other rights and remedies be entitled to be paid interest on the outstanding sums as the rate of 15% per annum” (cl5.2);
(h) “In the event should the Hiree wish to terminate the Hire it must give the Hirer seven (7) days notice of termination before each monthly rollover, failing which the Hire will rollover for a further month” (cl13.1);
(i) Under the heading “Personal Property Securities Act 1999”: “The Hirer acknowledges and agrees that…it grants a Security Interest in all present and after-acquired goods as security for the Hiree’s obligations to the Hirer” (followed by reference to various rights under provisions of the Personal Property Securities Act 1999 (Vic) (“PPSA”) as applying or not applying to the parties) (cl 15); and
(j) “No waiver of any breach or failure to enforce any provision of these terms and conditions by the Hirer shall in any way affect, limit or waive the Hirer’s right to subsequently enforce these terms and conditions” (cl16.1).
16Mr Tang’s evidence was that, to enable him to provide the transport and storage services, he entered into container hire agreements with a number of shipping companies (including ANL, SCF and Royal Wolf). He said that he hired containers “bit by bit” as TT progressively took delivery of the product that Polytrade needed to have stored.
17The first purchase order from Polytrade to TT for the transport and storage of 50 containers was dated 20 March 2018. TT thereafter arranged the collection of further containers over ensuing weeks, sending weekly invoices for the transport and storage of the containers. The parties also arranged for the return of some of the containers. The return involved TT transporting containers back to Polytrade’s Dandenong or Hallam facilities, the removal of the recyclable material by Polytrade from the containers and then the transporting of the empty containers by TT back to the shipping company from which TT had hired the container.
18There was a distinction drawn in the evidence between the “return” and the “dehire” of containers. The term “return” was generally used to describe the return of the container by TT to Polytrade for unpacking. However, the process of dehire was different, at least from TT’s perspective. According to TT, the dehire of a container (and thus Polytrade’s liability under the Hire Agreement for that container) did not cease until the container was transported by TT from Polytrade’s facility at Dandenong or Hallam, to the shipping company from which TT had hired the container. From time to time, either because of delays in unpacking or delays in collection (or both), a container was not dehired until a day or more after it was returned by TT to Polytrade.
19From as early as late May 2018, issues began to arise between the parties concerning the return of containers. For example, emails between Polytrade and TT refer to requests for the return of containers packed with particular product, delays in returns and then cancellation by Polytrade of return requests. However, for the most part, it seems the parties were able to manage these issues and Polytrade was making regular payment of invoices, albeit on terms considerably longer than the seven days provided for in the Hire Agreement or the 14 days stated in the invoices.
20But by around July 2019, disagreements between the parties began to escalate. In particular, between 18 July and 7 October 2019, Olga Kwan of TT sent at least seven emails to Gloria Gao at Polytrade listing overdue invoices and requesting payment.
21On 29 October 2019, Mr Tang of TT sent an email to Mr Cheng of Polytrade, stating that TT intended to increase the cost per day for the hiring of the storage containers. Relevantly, the email stated (errors in original):
“I have received an increase note $1.5 per container per days. Start from 11/11/2019. That will equate to a large scale of increase in terms of money to Polytrade.
I view Polytrade as a valuable customer. I suggest a couple of ways to overcome this unforeseen increase:
1. Absorb the increase,
2. Returning the containers gradually,
Personally, I prefer the second option. That will provide a permanent solution to you and cut the spending. Can you please tell me your thoughts and strategy moving forward from this point.”
22The following day, Mr Cheng responded (errors in original):
“Hi Tony, I need u to drop yr rate by $2 not increase.
U can keep the plastic if u want.
Louie”
23Mr Tang’s evidence was that the suggestion that TT could “keep the plastic” was also made by Mr Cheng during telephone conversations at around this time. Mr Cheng’s evidence was that he was saying to Mr Tang that if TT tried to increase the rate, then TT can keep the plastic. He said that if TT agreed not to increase the rate, then Polytrade would continue the deal. He agreed that it was a negotiating tactic and nothing more.
24At around the same time, emails were passing between staff of TT and Polytrade concerning the return of containers. For example, on 23 October 2019, Polytrade emailed TT requesting the return of a total of 11 particular numbered containers to Polytrade’s Hallam facility. Emails from Polytrade later in October made requests such as “please help to have x2 containers of Bulky Plastic to be returned to Hallam yard” and “Please return…Mixed Plastic 4 or 5 containers…For Bulky Plastic as much as you can”.
25But then on 4 November 2019, Polytrade emailed TT saying “Please do not deliver the mixed plastic container until further notice” and if TT found a container containing bulky plastic, TT was to call before delivery. On 15 November 2019, Polytrade emailed stating in effect that they had been unable to receive a container that day because: “Our ground are full of stocks”, and that TT should call to re-schedule the delivery.
26On about 19 November 2019, TT sent an invoice to Polytrade that, for the first time, identified that TT intended in future to increase the hire charge to Polytrade from $22 per container per day to $23.50 per container per day. The invoice indicated that TT was at that time storing a total of 260 containers for Polytrade at a total cost (not including the price increase) of $44,044.00 per week (including GST). TT sent similar invoices on 2 and 4 December 2019. On 6 December 2019 Mr Fraiia, who had recently been employed by Polytrade as its assistant director, emailed Mr Tang requesting that the invoices be amended with the original price as: “we haven’t agreed on the increase”.
27Mr Tang responded the following day by email to both Mr Cheng and Mr Fraiia as follows (errors in original):
“Dear Louie [Cheng] and Frank [Fraiia]
I wrote to you on 29/10/2019 about the storage increase of $1.5 per container, that equates to $23.5 per container. Also, we recoginzed that the increase was not an economical solution to you.
We have suggested to return the container yet unfortunately our recommendation was not considered. Ultimately, I had interpreted that you agreed to the increase and agreed to continue to maintain the current arrangement.
I received your email today that you have not agreed the increase, furthermore you have not paid the bill which has currently fallen behind more than 45 days. As terms is 14 days account.
In saying that, I hope this is not the tactic to delay the payment. To resolve the differences, I am going to return 10 containers per week starting Tuesday.
I ask that you make room for those containers and engage the debt collector to recover the outstanding amount.”
28Mr Fraiia responded on 9 December 2019 stating:
“Tony
We are not in a position to receive 10 containers per week nor the increase you have suggested.
Therefore if your invoices were amended to the original agreed price we will pay them pro[m]ptly”
29On that same day, TT issued a further invoice to Polytrade at the increased rate, for storage during the week to 8 December 2019. Polytrade responded the following day requesting that the invoice be amended to the old price. TT replied in an email later on 9 December (copied to Mr Fraiia) requesting that Polytrade settle outstanding invoices from October and early November 2019 (noting these were at the old price), and then TT would consider amending the latest invoice.
30On 11 December 2019, Mr Fraiia emailed TT saying Polytrade required “x1 Bulky Plastic container to be returned today”, but that: “All other containers (x10) discussed with Tony are not to be returned” (emphasis in original). TT responded a short time later stating: “Your account is overdue over 50 days and your account has been locked”. Mr Fraiia replied: “I have spoken with Tony [Tang] about this matter early this week and looking at processing payments. However if we do not receive the bulky plastic container today this will effect [sic] our customer and in turn effect [sic] processing payments.”
31In the early evening of 16 December 2019, seeking to bring matters to a head, Mr Tang arranged for a container to be returned to Polytrade’s Hallam facility and left blocking the driveway into the facility. As stated above, a meeting was hastily arranged for around 3.00pm the following day at TT’s offices on Winterton Road in Clayton. The meeting was attended by Mr Tang for TT and Mr Cheng and Mr Fraiia for Polytrade.
The 17 December meeting
32As noted above, the outcome of this proceeding essentially turns on answers to four questions arising from what transpired at that meeting, namely, did the parties agree:
(a) on a price increase for the container hire;
(b) on terms for the return of containers;
(c) to terminate the Hire Agreement; and
(d) to weekly payments of TT’s outstanding invoices?
33What follows is my summary of the evidence relevant to answering those questions, followed by my findings on each of those question.
34When Mr Cheng and Mr Fraiia arrived at TT’s offices, Mr Tang met them outside. At Mr Cheng’s request, the three of them drove together in Mr Cheng’s car to TT’s nearby yards to view where the containers were stored. One of these yards was a dirt yard with temporary fencing, and it seems that Mr Cheng complained about the poor security and state of the yard, observing that it would be difficult to remove containers after rain. Mr Tang’s evidence was that at one point they discussed Mr Fraiia’s earlier requests for the return particular containers, and Mr Tang pointed out that these containers were in the middle of the yard and impossible to extract from among the surrounding containers.
35Mr Tang’s evidence was that, when they returned to TT’s offices, they went upstairs to the boardroom and the meeting began with Mr Fraiia asking Mr Tang why TT needed a price increase and asking for evidence. Mr Tang said that he showed Mr Fraiia a couple of documents from the container companies. Mr Fraiia gave a somewhat different version of this part of the discussion. His evidence was to the effect that, when they returned to TT’s offices, Mr Cheng was on the phone and stayed outside for a short time to complete his phone call and smoke a cigarette. He said that he and Mr Tang entered the premises and spoke in the reception area downstairs about the price increase.
36According to Mr Fraiia, the discussion began with Mr Tang saying there would be a new rate of $23.50. Mr Fraiia replied that he had done some research and there was no price increase in the industry. Mr Tang disagreed and showed him two documents. Mr Fraiia said these just showed changes in port service charges and had nothing to do with container services. Mr Fraiia said that Mr Tang was a little bit on the defensive side after that and didn’t say any more about it. Mr Cheng then came into the office and they went upstairs to the boardroom.
37For his part, Mr Cheng said that this discussion occurred in the course of the meeting in the boardroom. He said that he asked Mr Tang why TT had increased the rate. Mr Tang said it was because he was being charged an increased rate by a third party. He then asked Mr Tang to show Mr Fraiia the increased rate by the third party. Mr Tang and Mr Fraiia then spoke and Mr Cheng just “sat back”. He may have gone downstairs for another cigarette. Mr Cheng said Mr Tang and Mr Fraiia were looking over some documents, but that when he sees paperwork: “I just want to turn around and run away, that’s my style”. He remembered Mr Fraiia saying that the document did not relate to a container yard increased rate, it was just a wharf increased rate.
38It was not in dispute that most of the rest of the meeting comprised discussion primarily between Mr Tang and Mr Cheng in Cantonese, interspersed with some English. Mr Fraiia does not speak Cantonese.
39Mr Tang said he began the discussion by asking why Mr Cheng was not paying the bills and Mr Cheng replied that he had some cash flow problems and he will pay. Mr Tang said that once Mr Cheng paid the money, Mr Tang would return the containers. On the rate of the return, Mr Tang’s evidence was that he said that he was “happy to return two containers per day because I want to minimise the containers in my yard”. Mr Cheng replied that he did not have room yet but “give him some time and he would clean up the warehouse” and Mr Tang could then start to return containers. According to Mr Tang, Mr Cheng did not give a date as to when he could start accepting containers. Mr Tang said there was no discussion at the meeting about the return to Polytrade of specific containers or containers containing specific types of goods.
40Mr Tang said that the topic of the return of containers was not an important topic on that day. To him, the important topic was the outstanding invoices and how Polytrade was going to pay TT. On that issue, Mr Tang’s evidence was that he said to Mr Cheng that if Polytrade did not pay him that day, he would “drop another container to you to block your driveway”. In response, Mr Cheng said that he would make one of the outstanding payments of $44,213.40 that day. According to Mr Tang, Mr Cheng also agreed that he would keep paying the old invoices weekly. Mr Tang said that he replied to the effect that if Mr Cheng kept paying, then Mr Tang would “keep providing his service”. He said that his service was to continue to store the containers and also to return them on request.
41In relation to what was discussed between Mr Tang and Mr Cheng about the price increase, Mr Tang’s evidence was that Mr Cheng complained about the short notice of the increase, saying it was not fair. Mr Tang responded by suggesting that the price increase start from 1 January 2020, and Mr Cheng agreed to this. Mr Tang said there was no specific reference to the amount of the increase; they just referred to the “increase”. According to Mr Tang, this part of the discussion was again all in Cantonese.
42Mr Cheng’s evidence was that his discussion with Mr Tang began with him asking Mr Tang why TT was not returning containers to Polytrade when a request for return was made. Mr Tang replied that he needed payment and Polytrade was not paying him. Mr Cheng said he responded: “my company has a cash flow issue and you know me, I always pay my bill”. And Mr Tang responded: “as long as you pay, I’m happy to continue”.
43According to Mr Cheng, he said that he had lots of orders and he needed to turn those into money so he could pay TT. Mr Cheng said he wanted to fix the problem between Mr Fraiia and Mr Tang and he wanted Mr Tang to work with Mr Fraiia “to make sure the container deliver, two a day minimum”. Mr Tang responded that he would love to do that. Mr Chang said he warned Mr Tang that “if he continue like this, that is going to create a big problem for me and the deal is off, you can keep the container”. In later evidence, Mr Cheng added that he said: “That the deal is [at an] end, I want my container back and I want to finish the, you know, the agreement”.
44In cross-examination, Mr Cheng denied that he agreed to make weekly payments and also denied that he told Mr Tang that Polytrade would pay the increased rate of $23.50 from 1 January 2020. Mr Cheng denied that Mr Tang asked to be paid that day. Mr Cheng said that, from what he understood, Polytrade had capacity to accept at least two containers a day from October or November 2019. Mr Cheng agreed that the documents in evidence showed that no containers were in fact returned between 14 December 2019 and 20 January 2020. He said he didn’t know whether Polytrade made any complaint to TT about that.
45Mr Fraiia said that the parts of the discussion in English included:
(a) Mr Cheng saying to Mr Tang: “What’s happening with my containers? Why can’t you return them? The deal is off, you can keep my containers”;
(b) Mr Tang complaining that Polytrade was not paying TT’s invoices;
(c) Mr Cheng responding that Polytrade always pays its bills, and if TT cooperated then the invoices would be paid;
(d) (contrary to Mr Cheng’s evidence), Mr Cheng agreeing to make a payment to TT “that very day”;
(e) Mr Fraiia telling Mr Tang: “I can take two containers a day, Monday to Friday, that’s 10 a week and he can start immediately and I would prefer to see the bulky [plastic] containers started first because I do have a customer”; and
(f) Mr Tang nodding and agreeing with the two containers a day.
46Mr Fraiia later elaborated on his evidence about the return of containers. He said he told Mr Tang that “I just needed those boxes ASAP”. He explained that he needed all the boxes, but the priority was the bulky plastic. Seeking then to explain what happened on 20 January 2020, Mr Fraiia said that Polytrade wanted the bulky plastics returned as soon as possible after the 17 December meeting: “However, if he [Mr Tang] wasn’t able to comply, then we had to make another program, so that program, 20 January, we required if he could start returning containers of any sort”. Mr Fraiia later appeared to concede that before 20 January 2020, Polytrade was not in a position to take just any plastics. He said: “that is the case because we were relatively full in Hallam and Dandenong and that’s why we asked for the bulky plastic because we had a solution there, a customer we would have immediately exported that”.
47In cross-examination, Mr Fraiia said that he did not hear anything at the meeting to suggest the agreement to return two containers per business day was subject to Polytrade being entitled to request specific containers. Also, while he first asserted that Polytrade’s obligation to pay a daily fee for storage was dependent on TT returning two containers a day, he later appeared to retract that evidence. He agreed that it was “a simple agreement to return two containers each business day”, and not an agreement that Polytrade would only pay if TT achieved those returns.
48Mr Fraiia said he could not recall anything more said at the meeting because “there was a lot of Cantonese”. In particular, Mr Fraiia said there were no further discussions in English of the price increase. He said that he believed that issue was “done and dusted” as a result of his discussions with Mr Tang at the commencement of the meeting.
Relevant post-meeting communications
49At 5.24pm on 17 December 2019, Olga Kwan of TT sent an email to Ms Gao of Polytrade, copied to Mr Tang and Mr Fraiia. Mr Tang’s evidence was that he instructed Ms Kwan to send the email shortly after the meeting ended “to update what we said in the meeting”. He agreed that the email faithfully recoded what Mr Tang asked Ms Kwan to send. The email stated:
“According to the meeting on today with Louie & Frank from Polytrade, the Storage invoices #04728AAL, 04278AAM, 04278AAN M, 042728AAO # are to be kept as the old rate, new rate will be commenced on 1st Jan 2020.
Please find the revised invoices.
Outstanding Invoices List to be attached as well.”
50The following morning, Mr Fraiia did a “reply all” email to Ms Kwan (so the reply also went to Mr Tang’s email address), and added Mr Cheng and Jessie Loh of Polytrade to the “cc” list. The entire content of Mr Fraiia’s email was as follows:
“Olga
Adding Louie and Jessie
Regards
Frank Fraiia Assistant Director”
51Notably, despite being sent to Mr Tang (among others), Mr Fraiia’s email made no complaint or objection concerning content of the email from Ms Kwan. Nor did it ask Mr Cheng to confirm the accuracy of that content (that is, querying whether Mr Cheng and Mr Tang had in fact reached the agreement referred to in the email). It simply informed Ms Kwan that Mr Cheng and Ms Loh had been added as recipients. When asked about the email, Mr Cheng could not say whether or not he looked at it. He said he did not discuss it with Mr Fraiia and did not know whether Polytrade ever responded. He said it was up to Mr Fraiia and the accounts department to respond.
52In evidence in chief, Mr Fraiia said he thought he first saw the email on the morning of 18 December 2019. He said he did not agree that the new rates would commence on 1 January 2020. He said nothing was discussed at the meeting about that, “unless it was done in Cantonese”. He said: “I was just appalled and dismayed. That’s why I didn’t put any more comments. What more can we say or do after the meeting. We thought at the meeting everything was been resolved and we were on the same page and lo and behold we get this kind of email”.
53In cross-examination, Mr Fraiia confirmed that he was dismayed that the email said that a new rate would be commencing on 1 January 2020. Mr Fraiia agreed that in his email forwarding the email from Mr Tang, he said nothing about the content of Mr Tang’s email and the new rate. He accepted that he did not respond to the email from Mr Tang, and nor did anyone else from Polytrade. When it was suggested to him he should have corrected the record, Mr Fraiia said:
“No. I think I mentioned it yesterday, that like I said, I was flabbergasted, I was surprised and why wasn’t Louis and Jesse copied into this email if it was so important like you say? Simply this was a back-flip of what was really discussed so I just forwarded it to Louis and Jesse for their reference.”
54Mr Fraiia was later taken to emails he sent on 20 December 2019 to various shipping companies, and an email to Mr Tang in which Mr Fraiia stated that:
“Hi Tony,
As discussed, there is no clear evidence of price increases as of the 1st January as ANL Containers, ContainerSpace and Royal Wolf have assured us that there will be no increases in the new year.
Therefore please provide the evidence to support your claim otherwise we cannot consider your increase as genuine price rise in the market”.
55Mr Fraiia agreed in cross-examination that he had conducted further investigations with those shipping companies and then asked Mr Tang for further evidence to support the price increase. Mr Fraiia would not accept that, if any price increase had been flatly rejected at the meeting on 17 December 2019, there would have been no need for any further investigation. He rejected the suggestion that Polytrade was seeking to renege on the deal struck at the 17 December meeting.
56Consistently with Mr Fraiia’s concessions in cross-examination, emails passing between the parties in early January 2020 make clear that Polytrade was not in fact in a position to accept two containers of just any plastics each business day from 17 December 2019. For example, on 9 January 2020, Mr Fraiia emailed Mr Tang providing a list of serial numbers for eight containers and stating: “Below are the containers (Bulky Plastic) still in TT yard. Can you please let me know which containers are accessible so can possibly return some to Hallam”. Mr Tang replied the following day stating, in effect, that the containers requested were not accessible.
57On Monday, 13 January 2020, Mr Fraiia emailed Mr Tang stating: “I sent a list of containers on Friday of mixed plastic and I was hoping to get one of them out. Please advise asap as this would be a good start to evacuating a few units”. Mr Fraiia emailed again on 14 January 2020 requesting particular containers “that are accessible in your yard”. Mr Tang responded later that day as follows (errors in original): “All you ask those container all on deep inside (loaded on Dandenong 2018). What I can do. Is start return all container to Hallam and Dandenong today”. Mr Fraiia responded again on 14 January 2020 as follows:
“Hi Tony
I haven’t instructed you to return all the containers, as you are fully aware our sites are too full to accept.
I will get back to you on a solution but unfortunately the lack of accessible containers is making it difficult.”
58On 15 January 2020, Mr Fraiia emailed Mr Tang as follows:
“Hi Tony,
Following our conversation this morning can you start to work on the stack where the required containers are berried [sic] by delivering 2x40’ per day commencing Monday, 20 January 2022 to our Hallam site and continue the deliveries Monday to Friday of every week until further notice.
Please ensure deliveries are coordinated with Jesse in our office who is copied in.”
59On the same day, Ms Kwan of TT emailed Polytrade attaching eight overdue invoices for storage totalling $351,335.60 and stating: “please organise payment urgently”.
60On 21 January 2020, Ms Bong of TT emailed Ms Loh of Polytrade noting “for your info” that there would be no deliveries to Hallam on 23 and 28 January 2020. Mr Fraiia responded later that day asking why there were no deliveries on those two days and stating: “As agreed with Tony we require 2 containers every day Mon-Fri”. Mr Tang responded to this email moments later stating: “Please advise why you company don’t pay bill. As agreed with you 14 days account”. Mr Fraiia sent two reply emails in quick succession the following day, as follows:
“Tony,
We had an agreement. It would be mutually beneficial if you can stick to the program and keep your word unless we deem your services unreliable and inform other stakeholders about it.
Tony,
In addition to the below email 14 days terms were never agreed. Polytrade transport terms have always been 60 days.
Please explain the service failure for delivery on the requested days: ‘No deliveries to Hallam on 23.01.2020 and 28.01.2020’.”
61Mr Tang responded later on 22 January 2020 (errors in original):
“Frank,
Please check the Contract 5.1 and 5.2 and also on the Invoice is showing 14 days term.
Now your company is Breach of Contract. 15% interest is started charge 1/1/2020
Don’t waste the time on that topics. And how come you always ask “WHY” like baby…
Simply: No Pay, no service… that just common sense”
62Mr Fraiia replied later that day (errors in original):
“Tony,
Its been a matter of no service no pay.
How come you always address the topic of payment when the service is not given?
First I asked for 4 containers of bulky plastic to be given out of 8. You couldn’t deliver and we lost a customer.
[Second] case we asked to take 1 container out of 24 you could select from, you couldn’t deliver, we lost another customer.
Now you can’t deliver tomorrow and the 28th. So it is a most valid question to ask “why”. I suppose you don’t have an answer for it.”
63On Thursday, 23 January 2020, Mr Fraiia emailed Mr Tang (relevantly) as follows:
“Tony,
It has been a number of times we have asked containers to be returned back and as agreed between you and I that 2x40’ container will be returned each day between Monday to Friday. Apart from the issue of not complying to our agreement for the 23rd Jan and 28th Jan, for reasons unknown and unexplained we have found that your container storage sites to be inadequate and unsafe.
[Mr Fraiia then sets out a number of criticisms of the storage sites observed during the inspection on 17 December 2019 and also refers to information from various container suppliers confirming that prices would not change in 2020]
Due to the poor standards and conditions we found on your sites and given no increases announced by your competitors we find your price increase unacceptable and invalid. If the increase is pursued and service failure continues we will have no alternative but to report our findings to the correct authorities.
Therefore we ask you to amend all your invoices accordingly.”
64These exchanges were followed by emails from Ms Loh at Polytrade in late January and February 2020 stating, in effect, that Polytrade had requested TT to amend the price on its invoice and that Polytrade would not pay the invoices until this was done.
65Mr Fraiia sent further emails to TT on each of 3 and 6 February 2020 noting that Polytrade had not received “our agreed 2x40’ containers per day”. In the later email, Mr Fraiia indicated that Polytrade would be happy to arrange its own transport and noting that Polytrade was “losing another customer” because of TT’s failure to return containers.
66On 7 April 2020, Ms Loh again emailed TT in relation to outstanding invoices and stating that: “As you and your team may have already aware, no action will be taken at my end until I receive the updated invoices with amended price”. TT commenced this proceeding seeking payment of outstanding invoices in June 2020.
Was anything agreed at the 17 December meeting?
67The starting point in finding the answer to this question is to determine whether there was an intention to create legal relations or, more accurately for present purposes, vary or replace existing legal relations. In Ermogenous v Greek Orthodox Community of SA Inc[1], (cited with approval in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd[2] (“Toll”)), the plurality held:
“Although the word ‘intention’ is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. - 5It is not a search for the uncommunicated subjective motives or intentions of the parties.”
[1] (2002) 209 CLR 95, per Gaudron, McHugh, Hayne and Callinan JJ at [25].
[2] (2004) 219 CLR 165 at [38].
68Here, the circumstances in which the relevant statements and actions happened (as set out above) comprised, in summary:
(a) Mr Tang’s increasing frustration over late payment by Polytrade, prompting his proposal to begin returning 10 containers per week;
(b) TT first proposing a price increase and then attempting unilaterally to impose that increase;
(c) ad hoc requests from Polytrade for the return of particular containers and emails from Polytrade indicating that there were limits on the numbers and types of returns it was able to accept; and
(d) that the meeting was arranged at short notice in response to Mr Tang directing that a container be left blocking the driveway into Polytrade’s Hallam facility.
69In my view, these matters point to the focus of the meeting being Mr Tang’s concerns over late payment. Further, they show that it was Mr Tang who had first raised the suggestion of the return of containers at 10 per week (equivalent to two each business day) and the involvement of a debt collector. He had also received an email from Mr Cheng suggesting that TT can “keep the plastic”, thus raising the prospect that TT could be left with some 260 shipping containers loaded with recyclable plastic and no obvious means of disposing of that plastic.
70From Polytrade’s perspective, Mr Cheng was clearly conscious of the late payment problem – he readily conceded early in the meeting that Polytrade was suffering from cash flow problems. It is therefore unsurprising that he would be concerned at the meeting to find ways of placating Mr Tang over his complaints and avoiding the prospect of more containers being left blocking Polytrade’s driveway.
71However, there is nothing in the correspondence or discussions leading up to the meeting to suggest that Polytrade attended the meeting expecting to reach agreement on the return of two containers each business day. On the contrary, the correspondence confirms that Polytrade did not have the capacity at that time to process that quantity of containers.
72At most, it might be suggested that the circumstances in which the meeting occurred included:
(a) a desire on Polytrade’s part to resolve or better understand TT’s apparent inability to meet Polytrade’s ad hoc requests for the return of specified containers, including those containing bulky plastics; and
(b) uncertainty around Polytrade’s capacity to receive 10 containers per week.
However, the likelihood is that the meeting would not have occurred if these were the only issues between the parties.
Did the parties agree on a price increase for the container hire?
73Little of substance turns on the differences in the versions of the initial discussions during which Mr Fraiia asked for evidence to support the price increase. It is not in dispute that the discussion was between Mr Tang and Mr Fraiia, and Mr Cheng was either not present or was not paying attention. If it were necessary to decide, I would be inclined to accept Mr Fraiia’s account of how this part of the discussion occurred, including that it probably happened in Mr Cheng’s absence. Mr Tang and Mr Fraiia agree that Mr Tang showed Mr Fraiia some documents that Mr Tang said justified the price increase. I accept that Mr Fraiia probably said words to the effect that the documents did not justify any increase. But, importantly, none of those present gave evidence that a price increase was either agreed or refused as part of this initial discussion.
74The question then is, was the issue discussed further and agreed during discussions in Cantonese between Mr Tang and Mr Cheng? On this issue, counsel for TT submitted that Mr Tang gave “honest, reliable and effusive evidence” that Mr Cheng agreed to the price increase. He said that Mr Cheng, in contrast, “conceded not being across the details of Polytrade’s business relationship with TT” and that Mr Cheng’s evidence of the meeting “was expressed in vague and general terms and his memory was unreliable”.
75Counsel for Polytrade described Mr Tang’s evidence as “self-serving in respect of his memory of the 17 December Meeting”, but otherwise poor in relation to important occurrences. He said that Mr Tang’s recollection “must be treated with real circumspection”, and also pointed to TT’s failure to provide evidence justifying the price increase to Polytrade or at trial, as reflecting adversely on Mr Tang’s credit. Counsel for Polytrade submitted that Mr Cheng’s evidence “reflected that he had little operational contact with TT, but played a pivotal role in the matters agreed at the 17 December Meeting”.
76On the issue of credibility of Mr Tang and Mr Cheng generally, I agree with counsel for TT. TT’s agreement with Polytrade was a substantial part of TT’s business and was a major focus for Mr Tang. He took a close personal interest in the ebb and flow of the agreement (and, most notably, delays in payment) and seemed to me to have a good recollection of the aspects of the 17 December meeting of greatest interest to him; namely, what and when he was to be paid.
77In contrast, to my observation (indeed, by his own admission), Mr Cheng was not across the details. He had no more than a high-level understanding of the commercial arrangement between TT and Polytrade and seems generally to have left matters of detail to others in his organisation. I was left with the impression that much of his evidence was reconstructed (no doubt in part based on his discussions with Mr Fraiia) and, on key issues, contrived. Mr Fraiia’s evidence was, I thought, more reliable and accurate, except in relation to his explanation for failing to respond to the email of 17 December 2019, as discussed below.
78The issue of unpaid invoices and the price increase were front of mind for Mr Tang. Regardless of whether he thought he had persuaded Mr Fraiia that a price increase was justified, it was clearly something Mr Tang was concerned to pursue. For his part, Mr Cheng came to the 17 December meeting wanting to solve an escalating dispute with TT, being primarily the fact that his company’s cash flow problems had created delays in paying TT’s invoices.
79Against that background, it is entirely plausible that Mr Cheng would agree to the price increase that Mr Tang had been seeking, but negotiate a delay in the commencement of the price increase. I am satisfied that this is what occurred. More particularly, I accept Mr Tang’s evidence that he pressed for the price increase during his discussions in Cantonese with Mr Cheng, Mr Cheng complained about the short notice and they ultimately agreed that the price increase would take effect from 1 January 2020.
80To the extent that there might otherwise have been any doubt about the competing accounts on this issue, to my mind those doubts are put to rest by the email sent by TT to Polytrade under instruction from Mr Tang shortly after the meeting concluded. That is a contemporaneous document that unequivocally records the terms of the agreement reached and strongly supports Mr Tang’s evidence. Further support (if any were necessary) is provided by Polytrade’s complete failure to contradict or raise any objection to the agreement recorded in the email in Mr Fraiia’s “reply all” response, which added Mr Cheng and Ms Loh to the distribution list.
81In my view, Mr Fraiia’s explanation for not raising an immediate objection to the email is improbable and disingenuous. It is clear from his email correspondence with Mr Tang both before and after this time, that Mr Fraiia was not at all reticent about sending prompt and robust replies to emails from Mr Tang that he found objectionable. I am satisfied that if he had genuinely believed that the email did not record what had been agreed at the meeting, he would have said so. If he was in fact “flabbergasted” about the contents of the email, I suspect this was because the email revealed to him that his boss had agreed to the price increase during the meeting, despite Mr Fraiia’s view that no price increase was justified.
82I accept that Mr Fraiia considered that Mr Tang had failed to provide any evidence or other justification for the increase, a view that he no doubt expressed forcefully to Mr Cheng. However, I agree with Mr Bailey that it made no sense for Mr Fraiia to undertake further research about price increases in the market during 2020 and build a case against the price increase, if the price increase had not been agreed. It is far more likely that Mr Fraiia considered the agreement ill-advised and set about justifying Polytrade’s refusal to comply with the agreement and pay the increased rate.
83Similarly, I am not persuaded that Mr Tang’s failure to justify the price increase either to the satisfaction of Mr Fraiia or (arguably) at trial, supports a contrary finding. It may be that Mr Tang considered the price increase was justified to compensate TT for Polytrade’s late payment, and his purported reliance on an increased hire cost to TT was a negotiating ploy. Regardless, for the reasons above, I am satisfied that he pressed for it at the meeting (to take effect from 1 January 2020), and that Mr Cheng agreed.
84Polytrade has sought to argue against the agreement on the price increase only on the basis of the evidence. However, the issue of consideration for the alleged agreement on the return of containers has been raised by TT, so I should make passing reference to it on the agreement for the price increase. The relevant authorities and principles are discussed below in the context of whether there was consideration for Polytrade’s alleged “Return Agreement”. Polytrade has also raised (albeit in a different context[3]) the provision in the Hire Agreement to the effect that it may be amended or modified only by agreement in writing.
[3] Polytrade’s written closing submissions at [22].
85On any sustainable view of the payment terms under the Hire Agreement, payment by Polytrade was well overdue at the time of the 17 December meeting, and thus Polytrade was in breach of the Hire Agreement. So much was effectively conceded by Mr Cheng at the meeting, by reference to Polytrade’s cash flow problems. Further, TT had referred in correspondence to engaging a debt collector and had also engaged in some self-help, by blocking Polytrade’s driveway. The meeting was precipitated by that conduct and, as I have found, was primarily directed to resolving TT’s concerns over late payment.
86In my view, Polytrade’s agreement to the price increase was part of what it was willing to offer in exchange for TT deferring any further action in response to Polytrade’s continuing breach of the Hire Agreement. The other part comprised Mr Cheng’s agreement to make a further payment that day and to continue to make weekly payments of TT’s outstanding invoices, as discussed below. Thus, the consideration moving from TT for Polytrade’s agreement to the price increase, was TT’s forbearance in relation to Polytrade’s continuing breach of the Hire Agreement.
87In relation to the requirement that any amendment to the Hire Agreement be in writing, the question whether this provision precluded the agreement on the price increase was not directly addressed in the submissions of either party. I note that the provision says only that the amendment be “by agreement in writing”. It does not include, for example, a common further requirement that the writing be signed by both parties. To my mind, the email of 17 December 2019 confirming the oral agreement, and Mr Fraiia’s response the following day raising no objection, is sufficient to satisfy any requirement for writing.
88For completeness, I note that Polytrade’s counsel argued in final submissions to the effect that TT’s insistence on payment at the increased rate after 1 January 2020 was a wrongful repudiation of the Hire Agreement or the Return Agreement (or both). This repudiation argument was not pleaded and there is considerable force in TT’s counsel’s oral submission that it should be rejected on that basis alone, for the reasons he gave. Regardless, it follows from my finding that the parties did agree to a price increase to take effect from 1 January 2020, that Polytrade’s repudiation argument must fail.
Did the parties agree on terms for the return of containers?
89In its amended statement of claim dated 12 August 2020, TT has pleaded that the agreement reached by the parties at the 17 December meeting constituted a variation to the Hire Agreement. TT pleads in effect that the variation comprised (among other things) the price increase commencing from 1 January 2020 and in paragraph 17(c) that:
“Polytrade would accept delivery from TT of two containers per business day, every business day from the date of the 17 December Meeting until TT stored no Polytrade containers”
90In its defence to paragraph 17, Polytrade relevantly denied that Polytrade and TT agreed to vary the Hire Agreement and pleaded instead that at the 17 December meeting it was agreed:
(a) “that the Hire Agreement was terminated”;
(b) “that the containers stored by TT were to be returned to Polytrade (the Return Agreement)”.
91However, Polytrade’s defence expressly admitted paragraph 17(c) of TT’s amended statement of claim set out above. It repeated the admission in paragraph 17AA(a) of the defence by pleading that there were terms of the “Return Agreement” that “the containers would be returned as pleaded in paragraph 17(c) above”. And in its counterclaim Polytrade pleads that:
“at the 17 December 2019 Meeting, [it was agreed that] Polytrade would accept delivery from TT of two containers per business day, every business day from the dated of the 17 December Meeting until TT stored no Polytrade containers”.
92Thus, Polytrade has effectively pleaded three times that the “Return Agreement” provided that Polytrade would accept the delivery of two containers per business day every business day from 17 December 2019 until all containers were returned. Importantly, Polytrade did not plead in terms that the “Return Agreement” obliged TT to return two containers per business day from 17 December 2019.
93In his written submissions, Polytrade’s counsel nevertheless argued that “insofar as the three witnesses’ accounts aligned” the parties agreed that “TT was to return two containers per business day to Polytrade”. The written submissions do not say when that return was to commence. Polytrade’s counsel further submitted that Mr Cheng and Mr Fraiia recalled that words were said at the meeting to the effect that the “deal was off”, meaning that it was at an end. However, the parties “appear to have assumed that further terms were implied in fact into the Return Agreement, as to the rates for container storage and transport”.
94In oral submissions, Polytrade’s counsel repeated the submission (consistently with Polytrade’s pleading) that at the 17 December meeting, the Hire Agreement was terminated and replaced with the Return Agreement. He noted that the Hire Agreement did not contemplate in express terms the return of the containers. He argued that the introduction of this new requirement was one of the reasons why the Return Agreement is better described as a new agreement, rather than a variation of the Hire Agreement.
95Counsel explained that, as pleaded, the legacy obligations from the Hire Agreement, such as the obligations to pay the then outstanding debt of around $350,000, the ongoing hire fee of $22 per container per day and handling and transport costs, continued under the Return Agreement, as terms implied in fact. He added, however, that whether the court determined that the return obligation is a variation (as pleaded by TT) or a new agreement, the effect is the same. Either way, the parties agreed that TT would return two containers per day, Monday to Friday.
96In relation to Polytrade’s pleaded admission that the operative term of the Return Agreement was that Polytrade would accept delivery of containers from TT, Polytrade’s counsel accepted that this was different from saying that TT was under a positive obligation to return containers. However, he argued that what came out in evidence supported the latter characterisation of the obligation. He accepted that the evidence showed there was no clear agreement as to when the return would start, but submitted that the agreement on return was put into effect by Mr Fraiia’s email of 15 January 2020.
97Polytrade’s counsel emphasised in oral submissions that the individuals at the 17 December meeting were not talking like lawyers: “These men are Cantonese-speaking businessmen involved in recycling and storage”. He said that they agreed to a new element to their relationship, being TT’s obligation to return the containers. However, it was not realistic to suggest they also reached agreement that the obligation was strict or that time was of the essence. Rather, the best way to characterise what happened was that Polytrade had waived compliance with the return requirement until the email of 15 January 2020. By that email Polytrade was saying “we won’t waive compliance after [20] January, so start returning the containers”.
98Counsel continued:
“We say it does form a condition, to use the language of Koompahtoo [Local Aboriginal Land Council v Sanpine Pty Limited (2007) 233 CLR 115] because it's a fundamental part of the bargain the parties struck. There's simply no way that Polytrade would have agreed to pay down some of its debt, which it did after the meeting, or move forward with TT, had TT not agreed to return two containers per day. So we say that was of the utmost importance to the parties”.
99Counsel submitted that the email from TT to Polytrade on 21 January 2020 stating that TT would not be returning containers on 23 and 28 January 2020 showed that TT did not consider itself bound by the agreement to return two containers per business day. And when TT in fact did not make the delivery on 23 January, it was in breach of the agreement. Counsel argued that from that moment there was a repudiation and a breach by TT of the Return Agreement. From that date, containers were returned at the rate of about one per day, with the result that TT remained in breach of its obligations to return containers and that this conduct was repudiatory.
100On the issue of any acceptance of a repudiation, Polytrade’s counsel accepted that there was no notice alleging breach or accepting a repudiation. He submitted that Polytrade accepted the repudiation by ceasing to pay TT for the hire cost. However, counsel then went on to explain that the breach of the return obligation was a separate breach to TT’s insistence on being paid the increased hire rate. He said that Polytrade had made clear in numerous emails that, if TT was not going to amend the invoices, Polytrade was not going to pay. Counsel argued that there were thus two bases on which Polytrade could terminate the Return Agreement. However, Polytrade’s failure to make a payment to TT on 13 March 2020 was precipitated by TT’s repudiatory claim that it was entitled to be paid at the higher rate of $23.50 per day: “At that point, the deal was off”.
101Dealing first with the question whether there was a mutual assent or “meeting of minds” on any aspect of the return of containers, the test is an objective one. The High Court held in Toll[4] that:
“It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. Reference to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement.”
[4] At [40].
102There is an additional layer of complexity where a court is called upon to determine questions as to the formation and terms of an oral agreement:
“The subject matter and the concomitant terms of the [oral contract] must be inferred from a combination of surrounding circumstances including conversations, documents and conduct none of which provide a definitive form of words. The issue is not one of interpretation, because there are no words to interpret. The issue is one of fact: what did the parties agree?”[5]
[5]County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193, per Spigelman CJ at [7].
103Further, as Polytrade’s counsel submitted, the participants were not lawyers, and the articulation of any agreement would therefore have been in the language of business. But there must still be a sufficiently clear manifestation of mutual assent. The approach to be taken in cases such as these is conveniently set out in the following passage from the decision of the Full Court of the Federal Court (Allsop J (as he then was), with whom Drummond and Mansfield JJ both agreed) in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd[6] (emphasis added):
“[Contracts] can also arise when business people speak and act and order their affairs in a way without necessarily stopping for the formalities of dotting i’s and crossing t’s or where they think they have done so … Sometimes this failure occurs because, having discussed the commercial essentials and having put in place necessary structural matters, the parties go about their commercial business on the clear basis of some manifested mutual assent, without ensuring the exhaustive completeness of documentation. In such circumstances,…if it can be stated with confidence that by a certain point the parties mutually assented to a sufficiently clear regime which must, in the circumstances have been intended to be binding, the court will recognise the existence of a contract. Sometimes this is said to be a process of inference or implication. For my part, I would see it as inferring of a real intention expressed through, or to be found in, a body of conduct, including, sometimes, communications, even if it be the case that the parties did not consciously advert to, or discuss, some aspect of the relationship and say: ‘and we hereby agree to be bound’ in this or that respect. The essential question in such cases is whether the parties’ conduct, including what was said and not said and including the evident commercial aims and expectations of the parties’, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract.”
[6] (2001) 117 FCR 424 at [369].
104The correspondence between the parties on this issue leading up to the meeting provides important context for what was discussed at the meeting. As noted above, it was Mr Tang who first suggested the return of 10 containers per week (equivalent to two per business day) in his email of 7 December 2019. Further, as the email makes clear, the suggestion was made “to resolve the differences” between the parties in relation to the price increase and Polytrade’s late payment of TT’s invoices. I accept Mr Tang’s evidence that he was there expressing an intent to return all the containers. Doing so would, of course, bring the Hire Agreement to an end.
105In his response on 9 December 2019 set out in full above, Mr Fraiia relevantly states that “we are not in a position to receive 10 containers per week”. Two days later, Mr Fraiia’s next email in substance repeats this position. He states that Polytrade required one container of bulky plastics that day, but that: “[a]ll other containers (x10) are not to be returned” (emphasis in original). Thus, in the days leading up to the 17 December meeting, Mr Tang was pressing for Polytrade to take 10 containers per week. In response, Polytrade made clear that it was “not in a position” to take that many containers, but required instead considerably fewer containers and only those containing bulky plastics.
106In my view, this shows that the return of containers was a second order issue in the lead-up to the meeting, behind the issue of late payment and the price increase. Further, it was Mr Tang who had first suggested a return at the rate of 10 containers per week, which Polytrade had resisted. There was no indication on the part of Polytrade that it came to the meeting seeking a commitment from TT for the return of two containers each business day from 17 December 2019. Quite the contrary.
107Turning to the meeting itself, the effect of the evidence about what was said on this issue at the meeting as set out above, is as follows:
(a) Mr Tang’s focus was on the payment of overdue accounts. He said that if Polytrade paid what was owing, TT would continue to provide its “service”, including by returning containers. Consistently with his emails in the two weeks before the meeting, he said he was happy to return two containers per day because he wanted to minimise the containers in his yard. According to Mr Tang, Mr Cheng said he did not yet have room for two containers per day, but this would be arranged. He did not give a date for when the return could start.
(b) Mr Cheng’s evidence on this issue largely accords with Mr Tang’s, except that he said Polytrade required two containers per day minimum. He said that “from what he understood” Polytrade had capacity to receive at least two containers per day “from November or October 2019”.
(c) Mr Fraiia’s evidence was that he told Mr Tang: “I can take two containers per day…and he can start immediately” and Mr Tang nodded his agreement. Mr Fraiia accepted that the agreement about return was not subject to Polytrade being able to request specific containers. He also accepted that there was no agreement that Polytrade would only pay if TT achieved the return of two containers per day.
108In my view, Mr Cheng’s evidence on the issue of return was contrived and can be wholly disregarded. As I have found, he was not across the detail of what had occurred up to that point. Clearly Polytrade had not been in a position to receive at least two containers a day in either October or November, as he had asserted (or, for that matter, at any time before 20 January 2020). Against that background, it is inherently unlikely that he said words to the effect that Polytrade required two containers per day minimum. Similarly, I do not accept that Mr Fraiia said that the return of two containers a day “can start immediately”. It is contradicted by his emails both before and after the meeting making clear that Polytrade had very limited capacity to receive containers, with the exception of selected containers of (primarily) bulky plastic.
109And it is not in dispute that the parties did not conduct themselves after the meeting in a manner consistent with any such agreement. No containers at all were returned after 17 December 2019, until 20 January 2020. This passed without complaint from Polytrade – except in relation to the fact that TT had been unable to return the small number of particular containers that Polytrade had requested during that period. Indeed, even as late as 14 January 2020, Mr Fraiia was saying Polytrade’s facilities were “too full to accept” the return of all containers, and that he would work on a solution (leading to his email of 15 January 2020).
110I accept the evidence of Mr Tang to the effect that he said that was happy to return two containers per business day (reiterating the proposal in his earlier email), because he wanted to reduce the number of containers in his yard. Further, I agree with counsel for TT that Mr Tang’s willingness to effect that return “directly correlated to Polytrade continuing to pay TT’s invoices”, as discussed further below. I also accept that Mr Fraiia probably expressed a general willingness to work towards taking that number of containers, noting that his evidence on this issue is consistent with Polytrade’s pleaded case that it agreed to “receive” two containers per business day.
111However, in my view, these statements were aspirational and did not amount to a concluded agreement in the form asserted by Polytrade. There was no discussion (let alone agreement) as to when the returns at the rate of two containers per business day would start, or about the possible consequences of any delays or interruption in effecting the return. Paraphrasing Allsop J in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd,[7] there was no mutual assent to a “sufficiently clear regime”. I agree with the TT’s counsel that:
“The evidence simply doesn’t rise to the level of there being a valid and enforceable contract between the parties setting up an obligation on TT’s part to return 2 containers per day from 17 December 2019 onwards, from 20 January 2020 onwards, or at all. The evidence is too uncertain to support such a finding.”
[7] (2001) 117 FCR 424 at [369].
112TT’s counsel accepted that a finding to this effect also impacted TT’s pleading of a “Varied Hire Agreement”, which included a term that Polytrade “would accept delivery from TT” of two containers per business day from the 17 December meeting”. In oral submissions, counsel accepted that I could safely find that all that took place at the 17 December meeting was a discussion about how the return of containers would be managed over ensuing weeks and that the “legal conclusion would be that there was no agreement”. Counsel added:
“That wouldn't affect our case. We don't sue on the nature of the varied hire agreement that we have pleaded that relates to returning two containers a day. We sue on the failure to pay storage fees”.
113TT’s counsel further submitted that, even if there was an agreement reached on the return of containers, any such agreement was not supported by consideration moving from Polytrade to TT. I agree. In particular, I agree that:
(a) whatever the effect of the alleged agreement on return (whether it is a variation to the old contract or a new contract), the same rules in relation to consideration apply to it as apply to any other type of contract;
(b) to sustain an action on a contractual promise, Polytrade must show that TT’s alleged promise to return the containers is part of a bargain to which Polytrade has itself contributed;
(c) no evidence of such consideration has been adduced by Polytrade;
(d) to the extent that Polytrade relies on an alleged mutual promise to pay for storage, that obligation already existed under the Hire Agreement; and
(e) an agreement to pay money already owing is not good consideration.
114In oral submissions, Polytrade’s counsel initially submitted that consideration for the Return Agreement was the “mutual exchange of promises and I can deal with that in more detail”. He was then diverted (by me) to another question and did not return to the question of consideration, at least not in express terms. However, he later asserted in the passage set out above that there was “simply no way that Polytrade would have agreed to pay down some of its debt, which it did after the meeting, or move forward with TT, had TT not agreed to return two containers per day”. As I understood it, this was the essence of Polytrade’s submission on the consideration point.
115However, the assertion is misconceived. Polytrade was contractually obliged to pay down its existing debt on any version of the agreement after the 17 December meeting. And as TT’s counsel submitted, its agreement to pay pre-existed any discussion about return of containers and was ongoing. In relation to the promise to pay constituting consideration for the so-called Return Agreement, the relevant principle is best articulated in Wigan v Edwards,[8] (emphasis added):
“The general rule is that a promise to perform an existing duty is no consideration, at least when the promise is made by a party to a pre-existing contract, when it is made to the promisee under that contract, and it is to do no more than the promisor is bound to do under that contract. The rule expresses the concept that the new promise, indistinguishable from the old, is an illusory consideration. And it gives no comfort to a party who by merely threatening a breach of contract seeks to secure an additional contractual benefit from the other party on the footing that the first party’s new promise of performance will provide sufficient consideration for that benefit.
An important qualification to the general principle is that a promise to do precisely what the promisor is already bound to do is a sufficient consideration, when it is given by way of a bona fide compromise of a disputed claim, the promisor having asserted that he is not bound to perform the obligation under the pre-existing contract or that he has a cause of action under the contract. The qualification recognizes that for the Court itself to examine and determine the correctness of the promisor’s claim would be a pointless exercise when the new bargain indicates that the promisee regarded the fresh promise as a benefit presumably viewing the promise of performance as more advantageous than the remedies available to him for breach of a contract. But the law, by insisting that the claim in dispute is one which was honestly or bona fide made, prevents the qualification from assisting the party who would seek to gain an unfair advantage by threatening unscrupulously to withhold performance under a contract.”
[8] (1973) 1 ALR 497 [512].
116While a dispute later arose in relation to both the return of containers and the price increase, there was no dispute being raised by Polytrade over the terms of the Hire Agreement at the time of the meeting, which TT might have agreed to compromise. The only live dispute between the parties at that time concerned Polytrade’s late payment which, as Mr Cheng explained at the meeting, had resulted from Polytrade’s cash flow problems. Polytrade was not then suggesting that the late payment was due to some alleged breach of the Hire Agreement by TT. It would be nonsensical to suggest that TT regarded Polytrade’s promise to continue a weekly (late) payment as a benefit, in circumstances where Polytrade’s justification for late payment was entirely self-inflicted.
117I note that Polytrade did not seek to argue that an agreement on the return of containers was reached on or about 15 January 2020 and is reflected in (or constituted by) Mr Fraiia’s email of that date. Rather, Polytrade pleaded as set out above that the agreement was reached at the 17 December meeting, and its counsel unequivocally advanced that case at trial. He submitted that having reached the agreement that day, Polytrade waived compliance until the email of 15 January 2020, which confirmed that compliance should commence on 20 January 2020. As I have found that no such agreement was reached on 17 December 2019, it is unnecessary for me to consider the legal effect (if any) of the 15 January 2020 email.
Did the parties agree to terminate the Hire Agreement?
118As noted above, Polytrade has pleaded and submitted that the parties also agreed at the 17 December meeting that the Hire Agreement was terminated and was replaced by the so-called Return Agreement. My finding that there was no Return Agreement, probably means that the question of the termination of the Hire Agreement falls away. However, for completeness, I reject the submission on the evidence. At most there may have been an acknowledgment during the discussions of the self-evident fact that, once the containers were all returned and dehired, the agreement would end. Indeed, the was the effect of Mr Cheng’s evidence: “That the deal is [at an] end, I want my container back and I want to finish the, you know, the agreement”. That is, first the containers are returned and then agreement would finish.
119Further, even if Mr Cheng had more definitively stated the agreement was at an end, there is no evidence that Mr Tang acceded to this. On the contrary, Mr Tang was concerned to secure Polytrade’s ongoing compliance with the payment obligations under the Hire Agreement. It makes no sense for Mr Tang to put TT’s rights under the existing and ongoing Hire Agreement at risk. Absent TT’s consent to termination, termination by Polytrade could only occur in accordance with cl13.1 of the Hire Agreement, or by Polytrade’s repudiation. Neither of these options is alleged or supported on the facts.
Did the parties agree to weekly payments of TT’s outstanding invoices?
120Although this issue arises on the pleading (in particular, as part of TT’s pleaded “Varied Hire Agreement”), it ultimately goes nowhere. I will therefore deal with it only briefly. Payment was Mr Tang’s primary concern at the 17 December meeting, and there can be no doubt that he was seeking some reassurance from Polytrade about this. Further, it is not in dispute that Mr Cheng explained that Polytrade was having cash flow problems, but that “he always pays his bills”. It is likely that he agreed to make a first payment of $44,213 that that day and that payment was duly made.
121However, whether Polytrade agreed at the 17 December meeting to make ongoing weekly payments is less clear. On balance, Mr Cheng probably did give some assurance to Mr Tang about weekly payments during the meeting. But if he did, all he was doing was confirming that Polytrade would meet its existing obligations under the Hire Agreement. TT had been invoicing weekly and many of those invoices were overdue. Thus, agreeing to pay weekly was doing no more than agreeing to pay outstanding invoices. It was another way of saying that Polytrade always pays its bills. It is difficult to see how an assurance to that effect can be elevated to an agreement to “vary” the existing Hire Agreement – the Hire Agreement already provided for it.
122In any event, it seems from TT’s counsel’s written submissions that this argument has been advanced essentially to answer Polytrade’s assertion that TT had breached the Return Agreement. TT’s counsel submitted that if there was a Return Agreement, that agreement was dependent on Polytrade making regular weekly payments to TT to pay down its outstanding invoices. He then argued that it was only following Polytrade’s failure to continue making payments after 13 March 2020, that TT stopped returning containers, with the last container returned on 31 March 2020. Having found that there was no agreement relating to the return of containers, it is unnecessary to reach a concluded view on this question.
Remaining matters
123In view of my findings above concerning what was agreed and not agreed at the 17 December meeting, it is also unnecessary for me to reach a concluded view on a number of other issues raised in the parties’ submissions. However, I set out below a brief summary of those issues and my response to each.
Payment terms - TT estopped from insisting on strict compliance
124Polytrade’s counsel submitted that the provisions of the Hire Agreement do not reflect the realities of the business relationship between Polytrade and TT. In particular, he noted that the Hire Agreement provided for payment within 7 days of invoice, but that it was clear that “neither party treated the payment terms in the Hire Agreement as binding on them”. He said Mr Tang thought the payment terms were 14 days, and TT continued to accept and return containers even though Polytrade routinely delayed payment for considerably longer than this. Counsel submitted that: “TT’s conduct in not requiring that Polytrade pay according to certain payment terms gives rise to a promissory estoppel that TT is prevented from strictly enforcing the payment terms”.
125After then setting out the elements of the alleged estoppel on the facts and referring to and relying on Je Maintiendrai v Quaglia,[9] counsel submitted that:
“Applying the reasoning in Je Maintiendrai, it would be unconscionable for TT to rely on strict performance of the payment terms, whether they were seven days (under the Hire Agreement) or 14 days (under the Varied Hire Agreement, or otherwise), in circumstances where Polytrade had assumed that such terms would not be enforced, and exposed itself to additional liability for the risk of breaching its agreement with TT.
As a result of this estoppel, TT cannot claim that the failure to pay in accordance with the terms in the Hire Agreement (or Varied Hire Agreement) constituted a breach of contract.”
[9] (1980) 26 SASR 101.
126The issue of estoppel is not pleaded and was the subject of only passing reference by counsel for Polytrade in opening. It is therefore unclear what (if any) currency the issue has, given my findings above. It seems that it is primarily relied on by Polytrade to counter TT’s argument that it was entitled to stop returning containers under the Return Agreement, because Polytrade stopped making weekly payments. It would be surprising if it were being seriously suggested that the alleged estoppel somehow prevented TT from ever recovering amounts due under the Hire Agreement.
127Regardless, the estoppel argument is misconceived and must be rejected for any one or more of the following reasons (all of which were succinctly stated by TT’s counsel in the course of oral closing submissions):
(a) It is not pleaded. Further, this is not a case where Polytrade can assert that the issue can be determined on the evidence, and the absence of express pleading can be overlooked. I agree with TT’s counsel that the failure to plead had real implications for the evidence adduced at trial. In particular, the absence any pleading of an estoppel claim meant that neither Mr Cheng nor Mr Fraiia was asked about Polytrade’s knowledge of, or reliance on, any purported representation or assumption.
(b) The evidence does not support the assertion that TT gave any assurances or promises on payment. On the contrary, while it appears that TT believed that payment terms were 14 days and tolerated some delay beyond that, it was regularly and stridently chasing late payment. Indeed, the 17 December meeting itself came about because of Mr Tang’s frustrations with late payment. There was nothing even remotely approaching the formal agreement to a reduced payment seen in the Je Maintiendrai case.
(c) There is no evidence of reliance by Polytrade and no basis for asserting that it changed its position or suffered any detriment by relying on any representation or assumption. As TT’s counsel submitted, what Polytrade seem to be saying is Polytrade altered its position by maintaining the status quo. That is not an altering of position.
(d) The Hire Agreement expressly provides that no waiver of any breach or failure to enforce any provision of the Hire Agreement by TT shall in any way affect, limit or waive the TT’s right to subsequently enforce the terms and conditions (cl16.1).
No interest – TT estopped from strict compliance
128Polytrade’s counsel submitted that the term in the Hire Agreement relating to interest (cl5.2) cannot be strictly enforced by TT. He said that TT did not claim interest in respect of any amounts owing by Polytrade in 2018 or 2019, that Polytrade relied on this to its detriment by assuming interest would not be charged “and did not provision a claim for interest” and “it would now be unconscionable for TT to seek to levy interest on 22 January 2020, backdated to 1 January 2020”.
129My comments above in relation to estoppel on payment also apply to this claim. Again, it is not pleaded and there is no evidence of any relevant representation, assumption or reliance. I am unaware of any circumstance where a mere failure to strictly enforce a contractual right could ever give rise to a promissory estoppel, particularly in the face of an express contractual “no waiver” provision. There must be some conduct on the part of the promisor amounting to a representation or assurance that the right will not be enforced. There was none here.
130Rather, there is evidence to the contrary. I refer above to Mr Tang’s email dated 22 January 2020 expressly stating that payment terms were 14 days and that now Polytrade was in breach of the contract, TT would be charging 15% interest. Also, a few days earlier on 14 January 2020, TT’s lawyer wrote to Polytrade demanding payment and threatening legal action, including a claim for interest. There is also no evidence to support the assertion that Polytrade relied on any assumption that interest would not be charged or that it in fact changed position or suffered detriment by such reliance.
Security interest under the PPSA and lien
131It is not in dispute that TT was entitled under the terms of the Hire Agreement to register a security interest under the PPSA, and that it had done so on 22 May 2020. Except on the question of mitigation of loss discussed below, the issue of TT’s security interest under the PPSA and its claim to a lien is essentially only relevant to TT’s defence to Polytrade’s counterclaim. In circumstances where Polytrade has failed on its claim in relation to the existence of the Return Agreement and therefore must fail on its counterclaim for breach of that agreement, it is not necessary for me to reach a concluded view on the alleged lien.
132Had the position been otherwise, my tentative view is that TT’s claim to a lien should fail, essentially for the reasons submitted in Polytrade’s counsel’s written submission. In particular, in the absence of evidence from either Mr Tsang or Mr Hui, I cannot safely conclude that Polytrade had sufficient notice of the website terms giving rise to the purported contractual lien. There is some force in TT’s counsel’s submission that a Jones v Dunkel inference can be relied on in relation to Polytrade’s failure to call Mr Hui on this issue. However, to my mind this is not sufficient to overcome the lack of evidence of any step taken by TT to draw the reference to the website terms (and the terms themselves) to Polytrade’s attention. The failure by TT to give formal notice to Polytrade, similarly defeats TT’s reliance on a lien pursuant to the Warehousemen's Liens Act 1958 (Vic).
TT’s failure to mitigate its loss
133This is one of the remaining issues raised on the submissions that does appear (at least in part) to have currency, notwithstanding my findings above in relation to the 17 December meeting. Polytrade’s counsel first argued that TT had failed to mitigate its loss by seeking to have storage fees continually accrue, “long after it had repudiated the Return Agreement”. Clearly, if there is no Return Agreement, there can be no repudiation of that agreement, so that part of Polytrade’s argument falls away.
134However, Polytrade’s counsel then submitted that “TT has also failed to avoid loss in relation to its continued detention of Polytrade’s recyclable plastics”. He argued that:
“On and from that date, it had a statutory right to appoint a receiver over Polytrade to recover its alleged indebtedness. It has not exercised this right, and continues to detain the recyclable plastics. TT could have returned the plastics, so that Polytrade could sell them, and retain the fixed and floating charge conferred by the Hire Agreement. TT’s failure to return the containers, and allow storage fees to increase is a clear failure to mitigate its loss.”
135During oral submissions, I expressed some doubt about whether the PPSA confers any statutory right to appoint a receiver, as Polytrade’s counsel had asserted. Counsel was unable to point to the relevant provision of the PPSA and I invited him to send a note of the provision to my chambers. He later provided a brief submission confirming that the PPSA does not confer the power, but there was a power under s37 of the Supreme Court Act 1986 (Vic). He also referred to ss123 and 128 of the PPSA as conferring power on a secured party to seize and dispose of collateral.
136TT’s counsel’s submissions on this issue were that:
(a) Polytrade had not pleaded the failure to appoint a receiver as an element of the failure to mitigate pleading – its particulars of this pleading stated only that the TT failed to mitigate by “failing to return the containers”;
(b) the size and scope of Polytrade’s business was such that appointing a receiver to Polytrade would have been a lengthy and expensive process, and was likely to have been heavily contested;
(c) TT instead sought to pursue its rights by promptly commencing this proceeding, which was an entirely reasonable course.
137I agree. Seeking to appoint a receiver, particularly by way of any application under s37 of the Supreme Court Act 1986 (Vic), would have been very expensive and is likely to have failed. Such applications are notoriously difficult to maintain.[10] Further, a receiver (or TT itself) having taken control of the collateral comprising the recyclable plastics, would almost certainly have faced even greater difficulty in disposing of that plastic than those relied on by Polytrade in support of its counterclaim for damages. In my view, the claim that TT failed to mitigate its loss by failing to enforce its security interest is without merit and must be rejected.
[10] National Australia Bank Ltd v Bond Brewing Holdings Ltd [1991] 1 VR 286.
Polytrade’s counterclaim (including amendment)
138On the first day of trial, the defendant applied to file and serve an amended counterclaim. The proposed amendments were to the effect that:
(a) Polytrade had received payments under applicable New South Wales legislation for “the majority of” the plastics stored by TT, and was thus obliged to ensure that the plastic is recycled and not exported;
(b) the cost to Polytrade to recycle the plastic was $580 per tonne, being the price payable by Polytrade under a Supply Agreement between Polytrade and Recyclecare Australia Pty Ltd dated 28 January 2021 (“Recyclecare Agreement”); and
(c) Polytrade claims the cost of recycling ($2,371,968.80) in addition to lost sales (a total of $3,815,595.80).
139Counsel for both parties made brief submissions in relation to the proposed amended pleading on the first day of the trial. Not wishing to prejudice any party and not being in a position to determine whether there was a real chance of success without being taken through the evidence, I determined that parties should proceed with the trial as if the proposed amended pleading was accepted, and I would deal with the application for amendment in my reasons for judgment.
140The primary ground raised by TT’s counsel in opposition to the amendment, was that the amendment had no real prospects of success at trial.[11] I have found on the evidence that that Polytrade’s claims based on the so-called Return Agreement (and therefore its counterclaim) must fail. However, I am satisfied that it is unlikely that I could have reached that finding with a sufficient degree of confidence without first hearing in full the evidence concerning the discussions at the 17 December meeting. Although the evidence directly relevant to proving the matters pleaded in the proposed amendments was more questionable, again it is unlikely that I could have dismissed it entirely without hearing the evidence of Mr Cheng (including cross-examination) and argument. Accordingly, despite comfortably rejecting Polytrade’s counterclaim on the evidence at trial, I am not persuaded that it had no real prospects of success at the time the application to amend was made.
[11] ABL Nominees Pty Ltd v McKenzie (No 2) [2014] VSC 529 at [19].
141In relation to the principles in Aon Risk Services Pty Ltd v Australian National University,[12] I accept that Polytrade’s delay in seeking the amendment and the fact it was filed and served on the first day of trial, weigh against allowing the amendment.[13] However, neither party suggested that the amendment necessitated an adjournment and the further evidence that Polytrade needed to adduce on the additional claims was relatively confined. Accordingly, there was no real prejudice to TT resulting from the amendment, and nor was there any material additional demand on the resources of the court.[14]
[12] (2009) 239 CLR 175.
[13]Ibid, at [5] and [102].
[14] Ibid, at [182] and [213]-[215].
142Therefore, I will give Polytrade leave to file and serve the proposed further amended defence and counterclaim dated 4 February 2021, such leave to take effect as at the first day of trial, namely, 8 February 2021.
143On the issue of Polytrade’s counterclaim generally, as I have already observed, it stands or falls with the alleged Return Agreement. I have found above that there was no Return Agreement in the form advanced by Polytrade, or at all. The parties’ submissions in relation to TT’s alleged repudiation of the Return Agreement and Polytrade’s claim for loss and damage for the TT’s alleged breach of the Return Agreement, were complex and relied on detailed and sometime confusing and contradictory evidence. In view of my primary findings on the evidence, I do not propose to undertake any analysis of those issue or the evidence bearing on them. However, I will make one observation.
144On the whole, I found Polytrade’s case on loss and damage unpersuasive, essentially for the reasons set out the TT’s counsel’s written submissions.[15] In particular, to my mind, there was considerable force in TT’s counsel’s submission[16] that the Recyclecare Agreement was not arm’s length and, indeed, was a sham.
[15] At [47]-[67].
[16] At [64], confirmed in oral closing submissions.
Relief
145As noted above, there will be judgment for TT against Polytrade on its claim, and Polytrade’s counterclaim will be dismissed. As to the precise form of the orders to give effect to the judgment for TT, in his closing submissions, TT’s counsel sought “orders for relief sought by TT in its amended statement of claim”. These were relevantly in two parts, namely:
(a) judgment for the debt owing under (in effect) the Hire Agreement as varied to allow for the price increase on and from 1 January 2020, comprising unpaid storage fees of $956,919.56 as at 22 June 2020 (plus interest at the rate of 15% per annum), $20,433.60 for unpaid cartage and $110.00 for cleaning; and
(b) specific performance of the Hire Agreement and a declaration that Polytrade is liable to continue to make payments under the Hire Agreement or, alternatively, damages in lieu of specific performance in the sum of $481,142.20.
146However, at the conclusion of closing submissions, counsel for both parties indicated that the parties would be endeavouring, pending my reasons, to make arrangements (on a without prejudice basis) to return and dehire all of the remaining containers, and thus bring the risk of escalating liability to both parties to an end. I strongly encouraged this course and, in doing so, observed that I had reservations about whether an order for specific performance was viable, given the level of court supervision likely to be required.
147I am aware that the parties had some initial difficulties in finalising arrangements for the return and dehire and I am uncertain as to whether those issues were ultimately resolved and thus whether TT maintains is application for relief in the form of specific performance. In the circumstances, I will invite the parties to endeavour to agree orders to give effect to these reasons, but if they are unable to do so, I will list the matter for directions with a view to making orders for further submissions on the question of final relief, interest and costs.
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Certificate
I certify that these 47 pages are a true copy of the judgment of His Honour Judge Woodward delivered on 28 September 2021.
Dated: 28 September 2021
Claire Findlay
Associate to His Honour Judge Woodward
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