Waste Recycling & Processing Corporation v Global Renewables Eastern Creek Pty Limited

Case •

[2009] NSWSC 453

•

29 May 2009

No judgment structure available for this case.
CITATION: Waste Recycling & Processing Corporation v Global Renewables Eastern Creek Pty Limited [2009] NSWSC 453
HEARING DATE(S): 18/05/09 - 21/05/09
 
JUDGMENT DATE : 
29 May 2009
JURISDICTION: Equity Division
Commercial List
JUDGMENT OF: Einstein J
DECISION: Proceedings to be dismissed. Parties to bring in short minutes of order.
CATCHWORDS: Contract - Proper construction of Waste Processing Deed - Difficulties in Court determining what "business commonsense" may mean - Expression "in accordance with" an ordinary English expression meaning "in agreement or in conformity with” - Primacy to be given to actual words used in written contract - Principles which inform branch of estoppel known as ‘conventional estoppel’ - Assumption to be relied upon must be clear, precise and unambiguous - Estoppel by convention may be terminated - Once a common assumption is revealed to be erroneous the estoppel will not apply to future dealings between the parties - Reliance - Good faith provision - Duty of good faith does not require a party to subordinate its interests or contractual rights - Implied term for parties to cooperate with one another to obtain the benefit of contract and to not prevent the other party from performing its contractual obligations does not rise beyond express terms - Relief - Consideration of circumstances in which Court would not order specific performance or grant mandatory injunctive relief which would have the effect of requiring constant supervision of the Court and continued co-operation of parties - Relief sought would expose party to penalties for contempt for future non-compliance with obligations or breaches of contract - Defendant must know what a court order requires to be done
LEGISLATION CITED: Banking Act 1959 (Cth)
Waste Recycling and Processing Corporation Act, 2001 (NSW)
CATEGORY: Principal judgment
CASES CITED: Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Co Ltd (2008) 66 ACSR 594
Bell Group Ltd (in Liq) v Westpac Banking Corporation (No 9) [2008] WASC 239
Biscayne Partners Pty Ltd v Valance Corp Pty Ltd [2003] NSWSC 874
Chint Australasia Pty Limited v Cosmoluce Pty Limited [2008] NSWSC 635
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226
Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1
Equuscorp Pty Ltd v Glengallen Investments Pty Ltd (2004) 218 CLR 471
GEC Marconi Systems Pty Ltd v BHP Information Technology Limited (2003) 128 FCR 1
GMA Garnet Pty Ltd v Barton International Inc [2009] FCA 439
Grundt v Great Boulder Gold Mines Pty Ltd (1937) 59 CLR 641
Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151
JC Williamson Limited v Lukey and Mullholland (1931) 45 CLR 282
Johnson Matthey Ltd v AC Rochester Overseas Corp (1990) 23 NSWLR 190
La v Federated Furnishing Trade Society of Australasia (1993) 113 ALR 137
Land & National Development Corporation Pty Ltd v Tatebrook Pty Ltd [1999] NSWSC 669
LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2001] NSWSC 886
Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2008] NSWSC 738
Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181
Manifest Shipping Co Ltd v Uni-Polaris Shipping Co Ltd [2001] 2 WLR 170
Masterton Homes Pty Limited v Palm Assets Pty Limited [2008] NSWSC 274
MK & JA Roche Pty Limited v Metro Edgeley Pty Limited [2005] NSWCA 39
Moratic Pty Limited v Lawrence James Gordon (2007) 13 BPR 24,713; [2007] NSWSC 5
Norwegian American Cruises A/S v Paul Mundy Ltd (The Vistafjord] [1988] 2 Lloyds Rep 343
Overlook Management BV v Foxtel Management Pty Ltd [2002] NSWSC 17
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
Pacific National (ACT) Ltd v Queensland Rail (2006) ATPR (Digest) 46-268; [2006] FCA 91
PRP Diagnostic Imaging Pty Limited (in its capacity as trustee for the Pittwater Radiology Trust) v Pittwater Radiology Pty Limited [2008] NSWSC 701
Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603
Seaton v The Council of the Municipality of Mosman & Anor [Supreme Court of New South Wales Court of Appeal, Priestley, Meagher and Beazley JJA, 18 October 1996, unreported, BC9604870]
Sydney Cove Redevelopment Authority v Chief Commissioner of Land Tax (NSW) (1995) 30 ATR 517
Thompson v Palmer (1933) 49 CLR 507
Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Incorporated (1992) 38 FCR 1
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Waterman v Gerling Australia Insurance Company Pty Limited (2005) 65 NSWLR 300
Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530
TEXTS CITED: The Concise Oxford Dictionary.
The Macquarie Dictionary;
PARTIES: Waste Recycling & Processing Corporation (Plaintiff)
Global Renewables Eastern Creek Pty Limited (Defendant)
FILE NUMBER(S): SC 50020/09
COUNSEL: Mr M Walton SC, Mr J Potts (Plaintiff)
Mr F Gleeson SC, Mr R Foreman (Defendant)
SOLICITORS: Clayton Utz (Plaintiff)
Watson Mangioni (Defendant)


IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

Einstein J

Friday 29 May 2009

50020/09 Waste Recycling & Processing Corporation v Global Renewables Eastern Creek Pty Ltd

JUDGMENT

The proceedings

1 The proceedings broadly concern the respective rights of the parties in terms of a Waste Processing Deed [WPD] entered into on 11 March 2003 and amended on 30 June 2008. Issues of construction are raised. Questions of conventional estoppel are raised. Important questions of entitlement to the claimed relief are raised.

The plaintiff

2 The plaintiff [WSN] is a State owned statutory corporation established under the Waste Recycling and Processing Corporation Act, 2001 (NSW). Relevant parameters which required to be understood from the purpose of these proceedings include:


          i. The objectives and functions of WSN are set out in sections 5 and 6 of the Act.

          ii. One of its principal functions is the establishment, maintenance and operation of waste facilities: section 6.

          iii. In exercising its statutory functions section 6 also dictates that WSN must strive to achieve international best practice in waste management and to act in accordance with the principles of ecologically sustainable development.

          iv. Among the principal objectives in section 5 is for WSN to to be an efficient and responsible provider of waste management services and to minimise any adverse health and environmental impacts of its activities and services relating to waste management.

The defendant

3 The defendant [GRL] currently operates a waste management Facility owned by the plaintiff located at Eastern Creek, next to the plaintiff’s landfill site.

4 The Facility processes domestic and commercial waste, leading to a large proportion of it being recycled, or put to other productive uses, rather than being sent to landfill.

The issues

5 In broad terms, the proceedings involve the following issues:


          i. Whether GRL’s conduct in early February 2009 in not accepting deliveries of waste in excess of the tonnages nominated by GRL constituted a breach of the WPD. With limited exceptions what occurred factually is not in dispute; the dispute between the parties relates to the proper construction of the WPD and an alleged estoppel by convention on which WSN relies. Relevant provisions in this connection include clauses 4.4 and 5.1 of the WPD, Schedules 4 and 11 to the WPD, and associated definitions. [“The Monday to Friday issue”]

          ii. The extent of GRL’s contractual right to reject waste that does not conform with specifications in the WPD. This issue primarily involves the determination of the proper construction of clause 6.2 of the WPD. [“The right of rejection issue”]

          iii. Whether, in any event, WSN is entitled to the relief sought. This issue involves a consideration of the form of relief sought by WSN (which GRL submits is in the nature of specific performance) and various discretionary factors. [“The issues concerning relief”]

Questions concerning the proper approach to contractual construction

6 Whilst it will become necessary from time to time to advert in more detail to the principles which inform the construction of a commercial contract such as the WPD, at least at this early stage it is appropriate to make the following observations:


          i. A commercial contract should be interpreted having regard to what a reasonable person would have understood the language used by the parties to mean: Pacific Carriers Ltd v BNPParibas (2004) 218 CLR 451 at [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40]; International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151 at [53].

          ii. That normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction: ibid.

          iii. The process of construction is not a “free-wheeling exercise”: GMA Garnet Pty Ltd v Barton International Inc [2009] FCA 439 at [97]. Primacy must be given to the actual words used in a written contract (particularly one that has been carefully drafted by lawyers): see e.g. Masterton Homes Pty Limited v Palm Assets Pty Limited [2008] NSWSC 274 at [26]; Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 at [107]-[111].

          iv. The subjective beliefs or understandings of the parties about their rights and liabilities are irrelevant: Pacific Carriers Ltd v BNPParibas (2004) 218 CLR 451 at [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40]; International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151 at [53]; Equuscorp Pty Ltd v Glengallen Investments (2004) 218 CLR 471 at [34].

          v. While the objective determination of what a particular contract means may require the adoption of a “business commonsense” or “business-like” approach, this does not necessarily mean those expressions are themselves unproblematic. As Gleeson CJ, Gummow and Hayne JJ observed in Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 at [43] what “business commonsense” is may itself be a topic upon which minds may differ and in respect of which an imputed consensus is impossible. See also GMA Garnet Pty Ltd v Barton International Inc [2009] FCA 439 at [98]-[100].

The WPD

7 The WPD defines waste as Input Material. 99 % of the Input Material that is delivered to the Facility for processing is domestic waste collected by local councils, of which 94% is delivered directly by the councils themselves. 5% is transfer station waste which is delivered by WSN. The remaining 1 per cent of Input Material is comprised of commercial and industrial waste.

8 The WPD provides for GRL to procure construction of and then operate and maintain the Facility, and for WSN to deliver waste to GRL for processing at the Facility.

9 The WPD as amended contains provisions as to the minimum amount of waste (termed Input Material) that WSN is to supply to the Facility and the specifications of part of that waste (termed Specification Material).

10 The WPD also provides that GRL is obliged to accept Input Material sufficient to enable the Facility to process 175,000 tonnes of Specification Material in each year: clause 4.3 and the definition of Services. It also provides (as amended) that GRL must accept, subject to certain exceptions, all Specification Material delivered to the Facility by or on behalf of WSN: clause 4.4(a).

The Conventional Estoppel issue

11 At this early point in the reasons the conventional estoppel issues litigated may be introduced in the fashion put forward by the plaintiff in its overview submissions [of course certain of the matters so put forward are contentious and this brief summary is not intended to determine any of the crucial issues]. In short, the plaintiff's case is as follows:


          i. WSN contends that as well as the WPD, a conventional practice has been observed by the parties since the inception of the operation of the Facility established pursuant to the WPD.

          ii. The contention is that under the WPD GRL may choose to notify WSN each day of the tonnages of Input Material it requires to be delivered by WSN to the Facility in respect of the next day. Throughout the operation of the Facility GRL has chosen to notify a daily figure (though not each day as required by the WPD). Until February this year there was no suggestion that waste was required to be delivered other than on week days (ie. Monday to Friday). To date no notification has been made by GRL pursuant to the WPD which would require WSN to deliver waste on a Saturday or a Sunday.

          iii. The plaintiff's case is that it is to be inferred from this conduct of the parties in going about the business of performance of their respective obligations under the WPD that WSN has adopted an assumption that the WPD would be performed in this way and that GRL has adopted the same assumption. WSN is further said to have also adopted as an assumption the fact that the Daily Base Capacity (referred to in Schedule 4 to the WPD) would be recalculated and applied on the basis of a 5 day week, that is Monday to Friday.

          iv. WSN's case is that the result of these assumptions as to the terms of the parties’ legal relationship has been that WSN delivers and GRL accepts the vast majority of waste to the Facility on weekdays, with only relatively small quantities, mostly of non-residential waste, being delivered on Saturdays. It asserts that there are no deliveries on Sundays. It asserts that neither party is authorised respectively to make or accept deliveries on a Sunday, although despite this, for a brief time earlier this year, GRL purported to require WSN to do so.

          v. WSN's case and is that these conventional practices, and the assumptions that it contends may be inferred underlie them, came about because waste collection to the knowledge of both parties was, and still is, normally only made by the local councils on weekdays. WSN's case is that the capacity to store such waste is extremely limited, requiring it to be delivered to the Facility in the most part on the day it is collected.

          vi. WSN’s case is that it has conducted its business affairs on the basis of (in reliance on) these conventional practices. Its contention is that were GRL permitted to depart from these conventions, WSN would suffer irreparable injury. For this reason it contends that it would be unjust or inequitable to permit such a departure.

          vii. WSN's case contends that the invariable way in which the parties chose to give effect to their obligations to each other under the WPD and the detriment WSN would suffer if GRL were permitted to depart from it gives rise to a common law conventional estoppel: see MK & JA Roche Pty Limited v Metro Edgeley Pty Limited [2005] NSWCA 39; Waterman v Gerling Australia Insurance Company Pty Limited (2005) 65 NSWLR 300; Moratic Pty Limited v Lawrence James Gordon (2007) 13 BPR 24,713.

12 The defendant challenged the WSN case raising the conventional estoppel issues across a wide variety of parameters. One only of those parameters was the fact that the particular detailed arrangements made inter se by WSN and sundry councils were:


          i. not only arrangements to which the defendant was never privy,

          but also

          ii. on examination are shown at least in a number of circumstances, to have required that the facility be open to accept councils’ MSW seven days per week, 52 weeks per year, hence being directly inconsistent with the alleged mutual understanding

13 The defendant further relies upon:


          i. the lack of evidence given by the plaintiff to the effect that it had entered into contracts with councils in reliance on any of the pleaded assumptions;

          ii. the absence of any evidence called by the plaintiff from any of the councils as to the understandings which the councils had had when entering into the contracts with WSN;

          iii. the entire agreement clauses in each of the council contracts;

          iv. the dates on which the council contracts were entered into having regard to the overall chronology of events [which it was contended made clear that WSN did not act and was not entitled to act, on the basis of any alleged contravention as to the operation of the facility];

          v. the proposition that WSN had not been able to point to anything which GRL had done that would permit the Court to conclude that GRL had played such a part in the adoption of any assumption as would be unfair or unjust if GRL was free to ignore it: cf Grundt v Great Boulder Gold Mines Pty Ltd (1937) 59 CLR 641 at 675, per Dixon J :
              "Before anyone can be estopped, he must have played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it"


The competing contentions as to breach

14 WSN contends that GRL breached the WPD by its letters dated 6 February 2009 and 10 February 2009 respectively and by not accepting deliveries of Input Material on 9 and 10 February 2009 respectively when the deliveries exceeded the tonnages nominated by GRL. WSN seeks injunctive relief based on an alleged fear that GRL will continue to act in the same manner.

15 GRL contends that its conduct in writing the February letters was a valid exercise of its rights under the WPD, rather than a breach of the WPD. In particular, GRL contends that it is entitled to nominate the Daily Throughput Requirement under the WPD. It contends that this is what it did the letters.

Examining the WPD in more detail

16 The WPD is in three parts:


          a. Part I (clauses 2A to 20) relates to the Operational Phase (being the phase that is presently relevant);

          b. Part II (clauses 21 to 25) relates to the Merchant Phase; and

          c. Part III (clauses 25A to 44) relates to both the Operational Phase and the Merchant Phase.

17 WSN’s primary obligations to deliver waste are imposed by clause 5.1(a) and clause 5.1(d).

18 GRL’s primary obligations to accept and process waste are imposed by clauses 4.3 and 4.4(a) of the WPD.

Clause 5.1

19 Clause 5.1(a) provides:


          “Subject to paragraph (d), WSN must, in accordance with this deed:

          (i) procure the delivery of a quantity of Input Material to the Facility such that Specification Material is delivered to the Facility in accordance with the Throughput Schedule and the Daily Throughput Requirement; and/or

          (ii) to the extent that WSN does not procure the delivery of Input Material to the Facility in accordance with sub-paragraph (i), pay to GRL the Waste Processing Fee as if WSN had procured the delivery of, and GRL had processed, Input Material in accordance with the Throughput Schedule as calculated in accordance with paragraph 2 of Schedule 6.”

20 Clause 5.1(d) provides:


          “During the Operational Phase, WSN must deliver or procure to be delivered to the Facility any Input Material which WSN has sourced within the Eastern Creek Waste Catchment Area up to a maximum quantity in any Year equal to the quantity of Input Material required to ensure that the Yearly Base Capacity of Specification Material applicable to that Year is delivered to the Facility.”

21 The Yearly Base Capacity is the sum of the Monthly Base Capacities applicable to that year. The Monthly Base Capacity is the Sum of the Daily Base Capacities applicable to that month. The Daily Base Capacity has the meaning given in the Throughput Schedule.

22 To understand clause 5.1(a), it is necessary to track through some of the defined terms used (in particular Daily Throughput Requirement and Throughput Schedule). These are usefully represented diagrammatically at the end of these reasons. [The diagrams are not always word perfect with the terms used in the WPD but none the less are often useful as an aid to inter related concepts which regularly recur]

23 Daily Throughput Requirement has the meaning given by Schedule 11. Clause 1 of Schedule 11 provides:

          “(a) Subject to WSN not being obliged to supply more than one sixth of the Yearly Base Capacity in any one Month, on or before 5.00pm each day , GRL may give notice to WSN specifying the tonnage of Input Material GRL requires in respect of the next day (Daily Throughput Requirement).

          (b) If, in respect of a day, GRL does not notify WSN of the Daily Throughput Requirement, WSN will deliver the Daily Base Capacity for that day. …

          (d) WSN will use its reasonable endeavours to deliver Input Material in accordance with the Daily Throughput Requirement and otherwise with the Throughput Schedule.” (emphasis added)

24 That is, Daily Throughput Requirement is the amount of Input Material that GRL notifies WSN it requires to be delivered on the next day (in default of which WSN will deliver the Daily Base Capacity). Importantly for present purposes, clause 1 of Schedule 11 – like other provisions of the WPD – uses the word “day”, as opposed to the defined term “Business Day” [Attachment A to the WPD provides that “Business Day means a day on which banks (as defined in the Banking Act 1959 (Cth)) are open for general banking business in Sydney, excluding Saturday, Sundays and public holidays.” Attachment A is given effect by clause 1 of the WPD].

25 The Throughput Schedule is Schedule 4. Schedule 4 relevantly provides that, subject to the terms of the WPD, WSN must deliver a quantity of Input Material such that Specification Material is delivered to the Facility in accordance with the table in Schedule 4. That table lists “480” in the relevant row (as the Facility is presently in the Design Steady State Period), with the corresponding column headed:


          “Daily Base
          Capacity
          (t/day)”

          480 tonnes per day over 365 days equates to 175,200 tonnes of Specification Material.

26 Putting these together, clause 5.1(a) imposes a ‘deliver or pay’ obligation. The delivery option requires WSN:


          i. to deliver to the Facility in accordance with Schedule 11 of the WPD the amount of Input Material that GRL notifies WSN it requires to be delivered on the next day (i.e. the Daily Throughput Requirement); or

          ii. (if GRL does not so notify) to deliver to the Facility sufficient Input Material to yield the current Daily Base Capacity determined by the Throughput Schedule.

27 In lieu of making delivery as specified above, WSN may pay to GRL the Waste Processing Fee calculated in accordance with paragraph 2 of Schedule 6: see clause 5.1(b).

The plaintiff’s construction

28 Notably the defendant [in its further amended commercial list statement ] raised a new construction argument in relation to clause 5.1 (a) (i) of the WPD. The defendant now submitted that in clause 5.1 (a) the words " WSN must, in accordance with this deed" should be read as if they had said "WSN must, so as to achieve".

29 The plaintiff’s full proposition is as follows:


          “On the proper construction of the words, “delivered to the Facility in accordance with the Throughput Schedule and the Daily Throughput Requirement” (clause 5.1(a)(i) of the WPD), the delivery obligation of WSN is to deliver sufficient Input Material such that there is sufficient Specification Material to allow GRL to achieve processing of 480 tonnes of Specification Material per day.”

30 I do not accept that this gloss on the actual words used in the instrument is appropriate. The ordinary meaning of the words "must in accordance with this deed" would be "in conformance with the deed”.

31 In Seaton v The Council of the Municipality of Mosman & Anor (NSW Court of Appeal, 18 October 1996, unreported, BC9604870 at 33) Beazley JA (with whom Priestley and Meagher JJA agreed) observed as follows:


          “The expression "in accordance with" is an ordinary English expression. It means "in agreement or in conformity with": The Macquarie Dictionary; or "in a manner corresponding to": The Concise Oxford Dictionary. See also La v Federated Furnishing Trade Society of Australasia (1993) 113 ALR 137 at 145, Sydney Cove Redevelopment Authority v Chief Commissioner of Land Tax (NSW) (1995) 30 ATR 517 at 528.”

32 WSN’s delivery obligation requires it to deliver in accordance with the Throughput Schedule and the Daily Throughput Requirement. Importantly WSN’s proposed construction deals only with the Throughput Schedule (i.e. Schedule 4). It does not grapple with the Daily Throughput Requirement as defined by Schedule 11. It offers no explanation as to how Schedule 11 can be re-written (as WSN seeks to re-write Schedule 4).

33 Clause 1 of Schedule 11 defines the Daily Throughput Requirement as follows:


          “(a) Subject to WSN not being obliged to supply more than one sixth of the Yearly Base Capacity in any one Month, on or before 5.00pm each day , GRL may give notice to WSN specifying the tonnage of Input Material GRL requires in respect of the next day (Daily Throughput Requirement).

          (b) If, in respect of a day, GRL does not notify WSN of the Daily Throughput Requirement, WSN will deliver the Daily Base Capacity for that day.” (emphasis added)

34 As the defendants have contended, the Daily Throughput Requirement is the amount of Input Material that GRL notifies WSN it requires to be delivered on the next day (in default of which WSN will deliver the Daily Base Capacity). It is an obligation on WSN to deliver the amount that GRL notifies. It has ‘nothing’ to do with processing.

35 The Throughput Schedule is Schedule 4. Schedule 4 relevantly provides:


          “Subject to the terms of this deed, WSN must deliver a quantity of Input Material to the Facility such that Specification Material is delivered to the Facility in accordance with the following schedule, and GRL must process using the Facility, Specification Material in accordance with the following schedule.”

36 Again, this is a plain obligation to deliver in accordance with the schedule. The words “quantity of Input Material to the Facility such that Specification Material is delivered to the Facility” reflect the fact that quantities of Input Material delivered consist of both Specification Material and Out of Specification Material (and so it is necessary to deliver more than 480 tonnes of Input Material to deliver 480 tonnes of Specification Material).

37 WSN’s proposed construction attempts to merge obligations to process with obligations to deliver. This is contrary to the plain words used in the WPD; it is also inconsistent with the clear and consistent distinction apparent to the parties between processing and deliveries.

38 In the context of the above provisions of the WPD – in particular clause 5.1 and Schedules 4 and 11, GRL by its February letters is seen to have nominated the Daily Throughput Requirement in accordance with the provisions of the WPD set out above.

39 The 6 February 2009 letter was based on deliveries occurring 7 days per week [ie 175,000 tonnes delivered 7 days per week for 52 weeks, corresponding to 480 tonnes per day]. The 10 February 2009 letter was based on deliveries occurring 6 days per week [ie 175,000 tonnes delivered 6 days per week for 52 weeks, corresponding to 560 tonnes per day] (reflecting the fact that neither WSN nor GRL has approval to deliver or receive substantial deliveries of Input Material on Sundays). GRL’s letters dated 6 February 2009 and 10 February 2009 are seen to have represented an ‘exercise’ of rights under the WPD, rather than a ‘breach’ of it.

40 It is clear that, as a matter of contract, GRL’s right to nominate the Daily Throughput Requirement, and WSN’s corresponding obligation to deliver, involved deliveries occurring 6 days per week. Prima facie, deliveries are to occur 7 days per week. Yet neither WSN nor GRL has approval to deliver or receive substantial deliveries of Input Material on Sundays. Having regard to, for example, clauses 4.4(b) and 26.1 of the WPD, GRL is not required to accept deliveries where that would cause it to contravene an Approval or Law.

41 Notably, the Deed of Amendment dated 30 June 2008 inserted a new clause 13.6 into the WPD. Clause 13.6(a) provides that:


          “Subject to clause 13.3 (which relates to maintenance), GRL must:

          (i) keep the Facility open during Acceptance Hours to receive Input Material and Green Waste; and

          (ii) use all reasonable endeavours to ensure that the Facility is only Unavailable outside Acceptance Hours.”

42 Further, Attachment A to the WPD provides:


          “ Acceptance Hours means, in respect of each Business Day, 4.00am to 4.00pm and in respect of each Saturday and each Public Holiday (other than Public Holidays which occur on a Sunday), 9.00am to 5.00pm.”

43 As the defendant has contended, the express obligation to keep the Facility open to accept deliveries on Monday to Saturday confirms that there is no basis for re-writing the plain words of the other provisions of the WPD in the manner WSN seeks.

The applications for development consent

44 A significant objective background fact is found in the applications for development consent (and modifications to that consent) made by WSN to the Minister for Planning, together with the consent (and modification) that the Minister subsequently granted.

45 The five important documents are:


          i. First, the document styled “Operational Environmental Management Plan” behind tab 23 of the Exhibit to the Singh Affidavit. Mr Kanofski was cross-examined about this document at T64.36 – 66.47.

              a) This document was submitted by Global Renewables Limited in September 2001 ( “ GR”) to WSN [Singh at [94]].

              b) This document contained the following statements:
                  (i) at paragraph 2.3:
                    “The Eastern Creek WMC is open from 4.00 am to 4.00 pm on weekdays and from 8.00 am to 5.00 pm on weekends….The UR-3R Facility will receive diverted waste during these hours (except for Sunday) and will operate 24 hours seven days a week..”

                  (ii) at paragraph 3.3:
                    “Acceptable waste will be diverted from the weighbridge for the UR-3R Facility and the trucks will transport it over the top of Area 4 of the WMC and into the UR-3R Facility site. Waste will be delivered Monday through to Saturday according to the proposed schedule in Table 3.1..”

                  (iii) at paragraph 4.1.4:
                    “The expected hours for the receival of MSW by the UR-3R Facility would be the same as those for the Eastern Creek WMC, which are as follows:

                    • Monday to Friday, 4.00 am to 4.00 pm; and

                    • Saturday 8:00am to 5:00pm.
                The UR-3R Facility will continue operation on a seven days per week basis..”

          ii. Second, the document styled “Environmental Impact Statement” behind tab 24 of the Exhibit to the Singh Affidavit. Mr Kanofski was cross-examined about this document at T 66.50 – 68.2.
              This document was submitted by GR to WSN in October 2001 [Singh at [95]]

          iii. Third, the development consent granted 25 February 2002.

          iv. Fourth, the document styled “Statement of Environmental Effects” behind tab 22 of the Exhibit to the Singh Affidavit. Mr Kanosfski was cross-examined about this document from T 56.14 – 64.35.
              This was a document prepared for and on behalf of WSN [T 56.31-36] and submitted by GR to WSN in July 2002 [Singh at [92]]. It was submitted as part of an application to modify the development consent [T57.24 ff]. The modification sought was to amend the condition of consent 24 as follows:
              “Receival of was must only occur between 4.00am and 4.0pm on Monday to Friday and 8.00am to 5.00pm on Saturdays with the exception of a maximum number of five vehicles per day which may deliver to the site outside these hours.”
              The document also provided:
              “The UR – 3R Facility will accept waste 6 days per week and the waste will be stored in the receival building prior to processing.”
              The document included a table at 035] which showed the anticipated typical waste delivery schedule for the Facility. It included deliveries of 350 tonnes as typical. Mr Kanofski conceded that the delivery schedule in the table showed the typical waste delivery contemplated for the Facility based on 175,000 tonnes of waste per annum [T 64.31-35]. Mr Kanofski also conceded that 350 tonnes was not relevantly a small quantity [T 62.19-35].

          v. Fifth, the amended development consent granted 25 November 2002 [Ex D8, tab 7].

The relevant sequence of events

46 The sequence of events is summarised in the following cross-examination of Mr Kanofski [the Chief Executive Officer of the plaintiff) [T 68.4-26]:


          “Q. So, in summary what we have is towards the end of 2001, the plaintiff put forward an application for development consent to the Minister for Planning which involved a facility that would accept deliveries Monday to Saturday, you agree?
          A. Yes.

          Q. And the typical delivery schedule involved deliveries on Saturday of approximately 310 tonnes of waste?
          A. It does.

          Q. Then when we move forward to July of 2002 the plaintiff sought a modification to that development and consent that had been granted in February 2002?
          A. Yes.

          Q. And the typical waste delivery schedule which was detailed at the time of the modification contemplated deliveries on Saturday of approximately 350 tonnes?
          A. Correct.

          Q. And you agree that in both cases those amounts are not insignificant amounts are they?
          A. I do.”

47 Hence the relevant objective fact, known to both parties, is that the Minister had granted development consent for the Facility to receive waste on Saturdays and that that development consent had been granted on the basis that 310 tonnes (and, later, 350 tonnes) of waste would be delivered to the Facility on Saturdays.

48 Returning to Mr Kanofski’s cross-examination, he was taken to the above-described ‘Statement of Environmental Effects’ prepared by the National Environmental Consulting Services for WSN. As the Executive Summary to this report made plain in about November 2001 the plaintiff applied for a development consent for the construction of a recycling facility at Eastern Creek and the Minister for Planning gave consent to that development application on 25 February 2002.

49 Mr Kanofski recalled his understanding that the consent that was obtained at that time, related to a facility which proposed to recycle 156,000 tonnes per annum of waste. He also recalled that after that consent was obtained in February 2002, a modification application was made to the development consent. He was also asked under cross-examination to accept that the purpose of the modification application was to deal with a number of matters, one of which was that the design of the facility had been changed so as to now deal with a capacity of up to 175,000 - 220,000 tonnes of waste per annum and he agreed that that was the main purpose of the development, the modification.

50 It was then put to him that a second purpose of the modification was to provide some extra hours of operation of the facility and this became clear from paragraphs 1.5 of the document which was in the following terms:


          COC 24 refers to the hours of operation of the facility and the receiver of waste. The proposed modification includes provision for after-hours access for a small proportion of council vehicles. For this purpose it is sought to amend the COC NO 24 as follows:
              "Receival of waste must only occur between 4 a.m. and 4 p.m. Monday to Friday and 8 a.m. to 5 p.m. on Saturdays with the exception of a maximum number of five vehicles per day which may deliver to the site outside these hours."

51 The cross-examination of Mr Kanofski then continued as follows:


          Q. You then go to the next page please, page 10 of the document, the number at the bottom is .018. You’ll see a paragraph there under 3.1.2 under the heading ‘Access’ and I refer you to the third paragraph which describes that the facility will utilise existing weigh bridge facilities from Monday to Saturday for waste receival and operate seven days a week 24 hours a day....

          Q. …And you understood, you understand reading that paragraph today that that draws a distinction between receival of waste and processing of waste?
          …
          A. Yes.

          Q. And in relation to receival, you understand now reading it today, that the modification was being put on the basis that waste would be received Monday to Saturdays?
          A. Yes that’s what the document says.

          Q. You don’t suggest the document’s incorrect do you?
          A. No.

          Q. It’s a document prepared on behalf of the plaintiff, isn’t it?
          A. It is.

          Q. For the purpose of obtaining a development consent modification from the minister for planning?
          A. Correct.

          Q. And the plaintiff would not have been engaged in any attempt to mislead the minister when seeking this modification, would it?
          A. I don’t know that I can speculate on that but I wouldn’t have thought so.

          Q. It’s a serious question Mr Kanofski. The plaintiff does not engage in the process of misleading the minister for planning does it?
          A. Not that I’m aware.

          Q. …And you’re not aware that the plaintiff was misleading the minister for planning when it submitted this development consent modification in about July of 2002 are you?
          A. I don’t think that’s the purpose, no.

          Q. You’re not suggesting that the plaintiff was attempting to mislead the minister are you?
          A. No.

          Q. You’ll then see in the next paragraph a reference to after hours access and an expectation that some of the council customers who use the facility would seek after hours access and there’s an anticipation that that would be an amount of about less than five vehicles per day. Do you see that? Do you now recall that issue?
          A. I don’t recall it at the time, no.

          Q. Could you turn to the next page please, numbered in the bottom .019. I refer you to paragraph 3.3.1, the concluding sentence. You’ll see there Mr Kanofski a reference that “the facility will accept waste six days per week”?
          A. Yes.

          Q. And “the waste will be stored in a receival building prior to processing”?
          A. Yes.
          [Transcript 56-60]

52 Although Mr Kanofski during his cross-examination had said that he could not recall the document it is clear that in his affidavit sworn on 17 April 2009 he had referred in detail to the document [cf paragraph 33]

53 As an aside, these clear mistaken recollections by Mr Kanofski pose difficulties in accepting fundamental propositions put by the plaintiff as part of its case. That is a parameter which bedevilled the plaintiff's case which ultimately founded on a number of issues, including its not being able to prove the essential matters of fact which formed the underpinning of its case.

54 Later in the same cross-examination, Mr Kanofski was taken to a section of the Operational Environmental Management Plan which in paragraphs 2.3 under the heading Site Facilities and Services, read as follows:


          The Eastern Creek WMC is open from 4 a.m. to 4 p.m. on weekdays and from 8 a.m. to 5 p.m. on weekends. It is close to the public on Good Friday and Christmas Day, but is open to council vehicles for restricted hours on those two days. The UR-3R Facility will receive diverted waste during these hours (except for Sunday) and will operate 24 hours seven days a week.

55 Mr Kanofski [at transcript 65] accepted that this was the case at that time and that he was familiar with those hours and that the document drew a distinction between the days and hours when waste would be received : ie Monday to Saturday; and the days and hours of operation said to be 24 hours seven days a week.

Commissioning of the Facility

56 As the reasons which follow make clear it becomes important to understand some of the parameters concerning the commissioning of the Facility and some of the terminology in respect thereof. This is an area which should be briefly dealt with presently.

57 As Mr Kanofski deposed [paragraphs 45-47 and 39-50 of his first affidavit] two particular periods [amongst others] may be described as follows:


          “The Ramp-Up Period

          GRL engaged GRD Minproc Ltd to build the Facility. Construction of the Facility was completed and on 11 September 2004, Nolan-ITU Pty Limited issued a Certificate of Practical Completion in respect of the Facility [WAS.001.093.0295]. It read in part (at page 0296):

              "In the WPD Practical Completion "means, in respect of the Facility, the date on which the Facility has been successfully designed, constructed and commissioned (without waste) in accordance with this Deed to the satisfaction of GRL and an Independent Engineer...being the start of the Ramp-Up period."

              The description of Practical Completion in the extract above accords with the definition in the WPD [WAS.001.097.0001] at page 0557. Schedule 4 of the WPD (at page 0166) records that the processing capacity of the Facility moves through a series of stages from its commissioning to when (and if) it is expanded. The first of these stages is the "Ramp-Up Period". This is defined in the WPD (at page 0557) as the period between Practical Completion and Final Completion, during which Input Material is introduced to the Facility in accordance with Schedule 4 of the WPD, which is also called the Throughput Schedule.

              During the Ramp-Up Period (11 September 2004 to 13 March 2006) the usual practice between WSN and GRL, which I oversaw, was that GRL would nominate the delivery target of Input Material for each day on a Monday to Friday basis. The procedure was that a GRL employee would telephone the WSN operated weighbridge at the WMC and tell a WSN employee what the delivery target was for the given day. This call was made either on the night before or early in the morning on the given day. The WSN employee would record on a working sheet various details from these calls including the name of the GRL employee who made the nomination, the tonnage called in and the time the call was made. On occasion these telephone calls were confirmed by email. An example of such a working sheet and email to WSN are documents WAS.005.001.0210 and WAS.005.001.0214. During this period WSN would endeavour to deliver to the target nominated by GRL. The weighbridge records maintained by WSN during this period [WAS.001.079.0001] show the actual deliveries Monday to Friday and that occasional deliveries of up to 33.1 tonnes of Input Material were also made on Saturdays during this period.

          Design Steady State Period

          The description of Final Completion in the extract above accords with the definition in the WPD [WAS.001.097.0001] at page 0543. As set out in Schedule 4 of the WPD (at page 0166), from the date of Final Completion the Facility entered the "Design Steady State Period", under which it was to process waste in accordance with Schedule 4 of the WPD.

          During the Design Steady State Period, and in particular the period 14 March 2006 to 12 May 2006, the usual practice between WSN and GRL, which I oversaw, was that GRL would nominate a delivery target for each day on a Monday to Friday basis and WSN would endeavour to deliver to that target, in the same way as I have outlined in paragraph 0 above, except that the staff at the weighbridge kept a diary which recorded the information of each call from GRL. I have been informed by WSN's solicitor, Sid Wang, that this diary has not been located at the time of affirming my affidavit. The weighbridge records maintained by WSN during this period [WAS.001.079.0001] show actual deliveries Monday to Friday to the Facility and that no deliveries of Input Material were made on Saturdays during this period.”

The plaintiffs conventional estoppel case

58 As will have been noted from the earlier statement of the issues, the plaintiff placed heavy reliance upon its conventional estoppel case in these proceedings.

The principles which generally inform the branch of estoppel known as estoppel by convention

59 Estoppel by convention is a species of common law estoppel: see e.g. Bell Group Ltd (in Liq) v Westpac Banking Corporation (No 9) [2008] WASC 239 at [3515].

60 In GEC Marconi Systems Pty Ltd v BHP Information Technology Limited (2003) 128 FCR 1 at [426], Finn J approved of the following statement of principle (subject to one qualification):


          "The authorities show that for an estoppel by convention to arise the following points must be established by the party claiming the benefit of the estoppel (the proponent):

          (1) The parties have proceeded on the basis of an underlying assumption of fact, law, or both, of sufficient certainty to be enforceable (the assumption).

          (2) Each party has, to the knowledge of the other, expressly or by implication accepted the assumption as being true for the purposes of the transaction.

          (3) Such acceptance was intended to affect their legal relations in the sense that it was intended to govern the legal position between them.

          (4) The proponent was entitled to act and has, as the other party knew or intended, acted in reliance upon the assumption being regarded as true and binding.

          (5) The proponent would suffer detriment if the other party were allowed to resile or depart from the assumption.

          (6) In all the circumstances it would be unconscionable to allow the other party to resile or depart from the assumption."
              [The qualification was that the assumption of law may well be limited to one relating to private legal rights].

61 In Moratic Pty Ltd v Lawrence James Gordon [2007] NSWSC 5 at [32], Brereton J said:


          “In common law conventional estoppel, it is necessary for a plaintiff to establish (1) that it has adopted an assumption as to the terms of its legal relationship with the defendant; (2) that the defendant has adopted the same assumption; (3) that both parties have conducted their relationship on the basis of that mutual assumption; (4) that each party knew or intended that the other act on that basis; and (5) that departure from the assumption will occasion detriment to the plaintiff”

62 As indicated by the above authorities, the proposition that the necessary foundation for an estoppel by convention must be an assumed state of facts presently in existence, as stated by the High Court in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 244–245, has been qualified by later authority.

63 The assumed state of affairs may extend to an assumption of law: see e.g. Pacific National (ACT) Ltd v Queensland Rail (2006) ATPR (Digest) 46-268; [2006] FCA 91 at [668] (and the cases there cited). However, conventional estoppel does not extend to assumptions concerning future matters: see Pacific National (ACT) Ltd v Queensland Rail (2006) ATPR (Digest) 46-268; [2006] FCA 91 at [668].

64 In addition, the assumption relied on must be clear, precise and unambiguous: see Bell Group Ltd (in Liq) v Westpac Banking Corporation (No 9) [2008] WASC 239 at [3527]-[3534] (and the cases there cited); Land & National Development Corporation Pty Ltd v Tatebrook Pty Ltd [1999] NSWSC 669 at [56].

65 An estoppel by convention may be terminated: see Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 at [232] and Norwegian American Cruises A/S v Paul Mundy Ltd (the Vistafjord) [1988] 2 Lloyds Rep 343 at 352. Once a common assumption is revealed to be erroneous the estoppel will not apply to future dealings between the parties: ibid.

Returning to deal with the issue

66 When closely tested the conventional estoppel case was clearly not made out. There are a number of close highways and by-ways which require to be examined in terms of the facts. A number of the hurdles in the plaintiff’s path have already been mentioned.

67 Reliance will be dealt with separately.

68 In relation to some of those matters Mr Richards, the Group General Manager Service Delivery, accepted under cross-examination in relation to particular correspondence drafted by him in collaboration with WSN's lawyers and sent to GRL, statements were made which were false. In particular in a letter dated 10 February 2009 part of paragraph 2.4 had read as follows:


          "Following extensive discussions, WSN and GR EC agreed a written protocol dated 10 December 2007 (which was further amended and agreed on 1 June 2008) (Protocol Agreement) pursuant to which the parties acknowledged and agreed amongst other things, that :

          (a) WSN will deliver 175,000 tonnes of Specification Material to the Facility over a five day week, Monday to Friday (ie 672 tonnes of Specification Material per week day) in satisfaction of its obligations under the WPD; and

          (b) WSN has contracted with various councils and will endeavour to supply this volume on a daily basis as determined by the delivery profile of those contracted councils."

69 Mr Richards’ cross examination included the following:


          Q. I want you to direct your attention firstly to paragraph 2.4, the first statement there “WSN and GREC are agreed a written protocol dated 10 December 2007 which was further amended and agreed on 1 June 2008”, do you see that statement?…

          Q. Now sitting here today that statement is not correct, is it?
          A. In, in the words that you’ve said it wouldn’t be correct but I believe that by the process of the way that we’ve been delivering over that period of time it is, it was accepted….

          Q. The words that I have read out to you are your own words aren’t they Mr Richards?
          A. That’s correct.

          Q. Let’s deal with the first one. There was no written protocol agreed dated 10 December 2007 between WSN and GRL, was there?
          A. Not that I’m aware.

          Q. Thank you. So that statement is incorrect, isn’t it?
          A. It’s not as agreed, that’s right.

          Q. Sorry?
          A. It’s not as agreed by, by verbal or by correspondence that I’m aware.

          Q. The next statement says that the 10 December 2007 protocol was further amended and agreed on 1 June 2008, that statement was also incorrect wasn’t it?…

          Q. Paragraph 2.4, just keep reading on the second line please, do you see the words, “WSN and GREC agree a written protocol dated 10 December 2007” with the words in brackets, “(which was further amended and agreed on 1 June 2008)”?
          A. That’s right...

          Q. What I am putting to you is those words in brackets are also incorrect, aren’t they?
          A. I believe so, yes.

          Q. There was no agreement between WSN and GRL made on 1 June 2008, was there?
          A. No.

          Q. So that statement was false, isn’t it?
          A. It is as, as you’ve outlined, yes.

          Q. And you understood it was false at the time you approved this letter and prepared it, didn’t you?
          A. No.

          Q. What happened on 1 June 2008 in your mind to make you express this statement, “There was a further amendment and an agreement”?…

          Q. No sorry my asked question is what happened on 1 June 2008?
          A. Could I - at the time GRL were seeking to increase the amount of volume that was being delivered into the facility and at the time we exchanged a, the protocol under which we would supply that material. The problem we’d had in the past was that GRL kept turning off and on the volume and therefore it was making it difficult for us in order to deliver the amount of material on a five day week in order to meet their, their processing capacity. So consequently we agreed in principle that the protocol would be the document that we’d work to. Now it wasn’t agreed to in specifically to the words but in practice we’d delivered the 725 tonnes or the increased amount over that five day period. That’s my belief behind the agreement.

          Q. That’s your belief. When you say “we agreed in principle” you have already told this court this morning that there is no written agreement as at May or June 2008, haven’t you?
          A. That’s correct.

          Q. And there was no oral agreement as at May or June 2008?
          A. That’s correct.

          Q. But in this letter you are very specific to identify that there was an agreement on 1 June 2008, weren’t you?
          A. On my understanding by the parties acting the way that we had, that we had an agreement in principle on that basis.

          Q. There’s no reference to your understanding of the parties acting upon that basis in this letter that you prepared on 10 February, is there?
          A. That’s correct.

          Q. Because the position you wanted to assert was that the parties had reached agreement on 1 June 2008 to the terms of a protocol, isn’t it?
          A. We were close to agreement on most of the parts of that protocol, that’s correct.

          Q. But you didn’t agree all of the parts of the protocol that were sent back to you by Mr O’Lachlan, did you?
          A. That’s correct.

          Q. And you never agreed to all of the terms of the revised draft that was sent by Mr O’Lachlan, did you?
          A. That’s correct.

          Q. Did you bother to check when you were preparing this letter what day of the week was 1 June 2008?
          A. Sorry no.

          Q. Have you got a diary with you?
          A. No I don’t.

          Q. Have a look at this, could the witness be shown this document. Does that assist you now Mr Richards?
          A. Yes.

          Q. What day of the week was 1 June 2008?
          A. A Sunday.

          Q. There was no agreement made on Sunday 1 June 2008 as asserted in this letter, was there?
          A. That’s correct.

          Q. That statement is false, isn’t it?
          A. That’s correct.
              [Transcript 106-108]

The plaintiffs reliance on protocols is abandoned

70 Ultimately Mr Walton, in final address, abandoned the plaintiff's case to the extent that it had relied on protocols agreed between the parties as establishing the conventional estoppel. Instead he contended that the conventional estoppel is made out in face of the admitted practice of the parties.

Following the time line

71 Close attention needs to be given to the relevant time line which informs the factual position.

The factual findings appropriate in relation to the alleged conventional estoppel issue

72 Each of the following findings contended for by the defendant is made out on the evidence before the court:


          a. the Facility was in the Ramp-Up Period from 11 September 2004 until 14 March 2006 [T 92-93; Kanofski (No 1) at [45]-[47]; Richards (No 1) at [35]];

          b. to the knowledge of WSN, during the Ramp-Up Period the Daily Base Capacity specified in the Throughput Schedule (Schedule 4) was indicative only [T 92.44-47; ECB 2066];

          c. WSN was aware that the Facility was not able to process 175,000 tonnes during the Ramp-Up Period (and was not able to do so until the Design Steady State Period) [Richards (No 1) at [36]];

          d. during the Ramp Up Period, the amounts delivered by WSN were generally below 725 tonnes per day [see bar charts at ECB 8689 - 8708;

          e. the amounts delivered to the Facility during the Ramp-Up Period were variable [Richards (No 1) at [49]];

          f. the Design Steady State Period commenced on 14 or 15 March 2006 [T 93.1-3; Kanofski (No 1) at [50]; Richards (No 1) at [34], [36]];

          g. on or about 12 May 2006, there was a fire at the Facility [Richards (No 1) at [40]; T 93.9-14];

          h. the fire had the effect of greatly affecting the ability of the Facility to process waste delivered to it [T 93.16-18];

          i. there was a substantial period of time from 12 May 2006 to 31 December 2007 during which there was a rebuilding and repair program going on at the Facility [T 93.20- 23];

          j. the Facility was re-certified on 31 December 2007 as being in a position to process waste in accordance with the WPD on 31 December 2007 [Richards (No 1) at [42]-[43]; T 93.25-34];

          k. the Facility was not operating in the Design Steady State in the period from 12 May 2006 to 31 December 2007 [Richards (No 1) at [42]-[43]; T 93.36-38] [See also clauses 11.1 – 11.3 of the WPD, in particular clause 11.3(a), which provides for recommencement of the Services within 3 years where GRL is required to repair or rebuild the Facility];

          l. the amounts delivered to the Facility during the period from 12 May 2006 to 31 December 2007 were variable [Richards (No 1) at [49]];

          m. during the period from 12 May 2006 to 31 December 2007, there were some deliveries on Saturdays not exceeding 144.54 tonnes of Input Material [Richards (No 1) at [41]];

          n. WSN was aware (via Mr Richards) that there was nothing in the WPD that restricted GRL requesting delivery of tonnages of waste on a Saturday [T 94.23-26];

          o. from 19 July 2007, WSN attempted to secure GRL’s agreement to a document styled “operational protocol” [see separate chronology at Annexure A to these submissions];

          p. by the draft operational protocols, WSN was seeking certain acknowledgements from GRL [T 75.31 – 76.28];

          q. it was important for WSN to obtain the acknowledgment from GRL that waste from contracted councils would be delivered over a five day week Monday to Friday as determined by the delivery profiles of those contracted councils [T 76.5-14];

          r. WSN sought an acknowledgment from GRL that if the Facility did not accept Input Material based on the delivery from councils, then WSN was not obliged to make up the shortfall (which acknowledgment was designed to avoid the deliver or pay obligation in clause 5.1 of the WPD) [T 76.15-24];

          s. GRL consistently indicated that it did not agree with WSN’s proposed operational protocols and that those protocols were inconsistent with the WPD [T 74.50 – 75.5; T 75.20-24; T 75.40-42; T 76.25-28; T 79.25-28 T 80.47 – 81.14; T 95.1 - 97.41; ECB 3778; ECB 3783; ECB 3807; T 98.45-50; T 99.19-21; Ex D3; Ex D4; T 106.20-50; T 113.10-18; ECB 4700]

          t. WSN’s attempt to have the draft operational protocol agreed was a serious endeavour [T 77.44-50];

          u. as at May 2008, WSN (via Mr Richards) believed that the WPD contained a number of shortfalls [T 100.1-4; Ex D3; Ex D4];

          v. WSN (via Mr Kanofski) was aware that the draft operational protocol he sent to Mr Rogers in May 2008, if agreed to by GRL, would have the practical effect that GRL could not request delivery of Input Material on a Saturday [T 80.14-18];

          w. as at May 2008, WSN (via Mr Kanofski) was aware that GRL had not agreed with the operational protocol [T 79.25-28];

          x. WSN never accepted the draft operational protocol sent by GRL to WSN on 29 May 2008 [T 81.1-7; T 96.18-24; 100.37 – 101.3; 101.42-45; 106.45-50; T 107.21-27; 107.43-50; 108.15-20 notice to produce and nil answer];

          y. the draft operational protocol sent by GRL to WSN contained provisions which were inconsistent with WSN’s rights under clause 6.2, which rights Mr Richards:

              i. regarded as important rights;

              ii. which he would not give away;

              iii. which he could not give away without Mr Kanofski’s approval; and

              iv. which he did not, in fact, ever give away [T 102.25 – 103.9; T 104.20 – 105.5];

          z. the statement made by Mr Richards in a letter dated 10 February 2009 that “WSN and GREC agreed a written protocol dated 10 December 2007 (which was further amended and agreed on 1 June 2008)” was false [T 106.20-50; 108.1-20; Ex D6 and D7];

          aa. there was no agreement between GRL and WSN made on 10 December 2007 or 1 June 2008 [T 106.20-50];

          bb. WSN sought to include the draft operational protocol in the 30 June 2008 Amending Deed but GRL did not agree with this proposal [T 101.30-40; see also T 77.44 – 78.4];

          cc. the draft operational protocol was not incorporated into the 30 June 2008 Amending Deed [ECB 4757; T 80.43-45];

          dd. clause 2.3(b) of the 30 June 2008 Amending Deed inserted a new clause 13.6 into the WPD, which required GRL to keep the Facility open from Monday to Saturday to receive Input Material [ECB 4764];

          ee. by clause 3 of the 30 June 2008 Amending Deed, WSN and GRL ratified and confirmed the WPD as amended by the Amending Deed in accordance with clause 44.8 of the WPD [ECB 4767] [Clause 44.8 of the WPD provides that “A variation or amendment of this deed must be in writing and signed by the parties” [ECB 2051]]

          ff. WSN (via Mr Richards) regarded it as necessary to enter into a protocol agreement to amend the terms of the WPD [T 108.21-34; 109.14-33];

          gg. WSN (via Mr Richards) was aware that the draft operational protocol was inconsistent with the terms of the WPD [T 110.18-40];

          hh. WSN (via Mr Kanofski) was aware that the WPD could only be varied by writing signed by the parties [T 70.37-46];

147 Lastly there are significant practical impediments if GRL is required to separate Out of Specification Material from a Delivery before it may exercise its right to notify its intention to reject.

148 In conclusion, in applying the plain language of clause 6.2, in the context of support definitions and criteria in Attachment A and Schedule 12, GRL is entitled to notify its intention to reject an entire Delivery.

The relief sought by WSN

149 As is apparent from the number of variations to the Commercial List Summons across a period, the plaintiff appears to have had considerable difficulty in framing with precision the relief to which it claims to be entitled.

150 The reasons make clear that the plaintiff has not established any entitlement to any form of relief of the type ultimately claimed.

151 Nonetheless it is appropriate to make a number of observations in relation to the claims for relief. In this regard it is fair to observe that when answering the defendants attack on the forms of relief, Mr Walton appeared to accept at least some of the problems exposed. In referring [at transcript 283] to the plaintiff’s submissions [as having made much of ‘the machinations’ set out in the plaintiffs claimed relief in paragraph b of the Summons] Mr Walton conceded that he had some sympathy with those comments.

152 Each of the following propositions for which the defendant contended in relation to the shortcomings of the plaintiff’s claims for relief would have had substance had the plaintiff achieved the point where the scope of relief required consideration.

153 Although they are drafted as restraints, orders 1(b), 1(c), 1(c1), and 1(e) are, in substance, orders for specific performance of a long term commercial contract. For example, an order that GRL be restrained from refusing to accept deliveries is, in substance, an order compelling GRL to accept deliveries.

154 This is the paradigm case in which the Court would not order specific performance or grant a mandatory injunction which has the effect of requiring the constant supervision of the Court and the continued co-operation of parties. See e.g. JC Williamson Limited v Lukey and Mullholland (1931) 45 CLR 282 at 297-298. The relief sought would compel GRL to engage in repeated acts and/or ongoing conduct: see e.g. Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 at 13.

155 Orders 1(b) and 1(c) concerning deliveries of waste Monday to Friday, are both subject to clause 13.6. That is, WSN seeks to maintain GRL’s obligation to keep the Facility open on Saturdays to accept Input Material. Even in the relief sought in these proceedings, WSN’s conduct is inconsistent with the alleged convention.

156 The terms of the relief sought are imprecise, vague and uncertain. What is meant by “approximately” 725 tonnes or 672 tonnes? What level of variation is permissible? What is meant by the non-capitalised word “deliveries”.

157 Moreover, orders 1(b) and 1(c) attempt to embody detailed contractual terms and conditions in a form that is both incomplete and inappropriate as a matter of substance. For example, the restraint in order 1(b) is subject to eight other clauses in the WPD and a factual matter (namely whether acceptance of Input Material would have an adverse economic effect). Whether or not accepting deliveries “would have an adverse economic effect on the profitability of the Facility” is a question of fact and degree about which minds would legitimately differ.

158 The relief sought would expose GRL to penalties for contempt for future non-compliance with obligations or breaches of contract. As Lord Hoffman said in Co-operative Insurance v Argyll Stores Ltd [1998] AC 1 at 12:


          “… the only means available to the court to enforce its order is the quasi-criminal procedure of punishment for contempt. This is a powerful weapon; so powerful, in fact, as often to be unsuitable as an instrument for adjudicating upon the disputes which may arise over whether a business is being run in accordance with the terms of the court's order. The heavy-handed nature of the enforcement mechanism is a consideration which may go to the exercise of the court's discretion in other cases as well, but its use to compel the running of a business is perhaps the paradigm case of its disadvantages …”

159 This issue is compounded by the form of the order sought, that would compel GRL to perform obligations that are dependent on a number of detailed and complex contractual terms over a period of time. I accept that GRL should not be required to track through a complex contractual document, and determine – as a matter of fact – whether accepting material would have an adverse economic effect on the profitability of the Facility – to know whether or not it will be guilty of contempt.

160 A defendant must know what must be done or what it is restrained from doing: Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 at 66. Courts do not grant injunctions and expose parties to the potential to be punished for contempt when compliance depends on the interpretation of a complex contractual document and the determination of uncertain factual matters. Orders of that kind do not quell the controversy between the parties.

161 This is reflected in further comments by Lord Hoffman in Co-operative Insurance v Argyll Stores Ltd [1998] AC 1 at 13:


          “… the seriousness of a finding of contempt for the defendant means that any application to enforce the order is likely to be a heavy and expensive piece of litigation. The possibility of repeated applications over a period of time means that, in comparison with a once-and-for-all inquiry as to damages, the enforcement of the remedy is likely to be expensive in terms of cost to the parties and the resources of the judicial system.”

162 Further, the relief sought is inconsistent with, and/or contrary to, the terms of the WPD, in particular, clauses 4.4(e), 6.1, 6.2 and paragraphs 1 and 2 of Schedule 11.

163 For example:


          (a;) Order 1(b) seeks to restrain GRL from refusing to accept deliveries of Input Material – GRL has no such obligation under the WPD. Clause 4.4(a) only requires GRL to accept Specification Material . It does not require GRL to accept Input Material . From the exceptions referred to in paragraph 1(b)(A) and (B), it appears that order 1(b) is “based” on clause 4.4(b) of the WPD. Clause 4.4(b) does not impose obligations on GRL. Clause 4.4(b) creates an exception to GRL’s obligation under clause 4.4(a) to accept Specification Material. WSN does not allege that GRL has breached clause 4.4(b): see paragraphs C34 and C37 of the Further Amended Commercial List Statement. Presumably this is because clause 4.4(b) does not create a promissory obligation capable of being breached. It is incapable of supporting an injunction.

          (b) Neither order 1(b) nor order 1(c) refer to clause 6.2. That is, the restraints on refusing to accept deliveries are not subject to clause 6.2 of the WPD (or for that matter GRL’s rights under clause 6.1). The effect of orders 1(b) and 1(c) would be to rob GRL of its contractual right to notify an intention to reject in accordance with clause 6.2. Moreover, order 1(e) (and the corresponding declaration in order 1(d)) are inconsistent with clause 6.2).

          (c) Orders 1(b) and 1(c) give no scope for the exercise of GRL’s right to nominate its Daily Throughput Requirement under paragraphs 1 and 2 of Schedule 11 to the WPD.

164 The parties have specified the consequences of GRL not complying with clauses 4.4(a) or 6.2 of the WPD, in clauses 4.4(e) and 6.2(c) to (g) and 6.3 of the WPD.

165 Clause 4.4(e) provides that “The consequences of GRL not complying with paragraph [4.4] (a) are limited to the consequences set out in clause 6.2 and 18.4”. Breach of clause 4.4(a) does not entitle WSN to an injunction (especially a mandatory injunction akin to an order for specific performance).

166 Order 1(c) renders absolute and permanent a 7% relationship between Input Material and Specification Material (i.e. that 100 tonnes of Input Material is required to produce 93 tonnes of Specification Material). The 7% relationship is not immutable. It is based on prior levels of rejected hazardous and incompatible waste. Moreover, it does not take into account the proportion of material that is Out of Specification for compositional reasons.

167 There is no time limit in respect of the orders sought. Apparently it is intended that the orders will continue for the remainder of the 25 year term of the WPD. The convention alleged by WSN even had it been established, could not justify such extensive relief.

Reserved rulings on evidence

168 During the hearing and after some persuasion to do so from the Court, the parties usefully agreed in the main on the rulings to be given in respect of objections to evidence. Many of the rulings became common ground and many of the objections originally taken by both parties were no longer pressed.

169 In a few instances the parties agreed that questions of admissibility be determined in the final judgment. In the main the type of issue so dealt with concerned the admissibility of evidence, conversations or documents having occurred anterior to the signing of the 11 March 2003 WPD.

170 With respect to Mr Kanofski's affidavit of 17 April 2009 paragraphs 27-32 and 37 are rejected.

171 With respect to Mr Kanofski's affidavit of 8 May 2009 paragraphs 7-9, 11 and 13-31 are rejected.

172 With respect to the affidavit of Mr David Singh sworn on 1 May 2009 the rulings are as follows:

· As to paragraph 31 - allow the evidence: ie the second sentence

· As to paragraph 37 - reject the paragraph

· As to paragraph 38 - reject the evidence

· As to paragraph 39 - reject the evidence

· As to paragraph 41 - allow the evidence: ie the second and following sentences. The ruling as to the firs sentence is agreed.

· As to paragraph 45 - reject all save for the first sentence which is agreed as to the ruling

· As to paragraph 58 - allow the evidence

· As to paragraph 59 - reject the evidence

· As to paragraph 60 - reject the evidence

· As to paragraph 61 - reject the evidence

· As to paragraph 70 - allow Doc/136

· As to paragraphs 71 - allow the evidence

· As to paragraphs 74, 75, 76 – reject the evidence

· As to paragraphs 77 and 78 – reject the evidence

· As to paragraphs 79 and 80 – reject the evidence

Short Minutes of Order

173 The parties are to bring short minutes of order on which occasion costs may be argued.

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                            ANNEXURE E

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