Western Freight Management Pty Ltd v Toll Transport Pty Ltd

Case •

[2024] NSWCA 124

•

24 May 2024

No judgment structure available for this case.

Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Western Freight Management Pty Ltd v Toll Transport Pty Ltd [2024] NSWCA 124
Hearing dates: 17 April 2024
Date of orders: 24 May 2024
Decision date: 24 May 2024
Before: Bell CJ at [1];
Payne JA at [82];
Griffiths AJA [83]
Decision:

Appeal dismissed with costs

Catchwords:

CONTRACTS – construction – breach of contract – action in debt – no issue of principle

Cases Cited:

Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337; [1982] HCA 24

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52

Category:Principal judgment
Parties: Western Freight Management Pty Ltd (Appellant)
Toll Transport Pty Ltd (Respondent)
Representation:

Counsel:

A Leopold SC with J Young (Appellant)
D Stanton with H Cooper (Respondent)

Solicitors:

TPS & Co Lawyers (Appellant)
Norton White (Respondent)
File Number(s): 2023/193143
Publication restriction: N/A
 Decision under appeal 
Court or tribunal:
District Court of New South Wales
Jurisdiction:
Civil
Citation:

[2023] NSWDC 176

Date of Decision:
26 May 2023
Before:
Montgomery DCJ
File Number(s):
2020/236136

HEADNOTE

[This headnote is not to be read as part of the judgment]

On 9 October 2017, the Appellant, Western Freight Management Pty Ltd (WFM) and the Respondent, Toll Transport Pty Ltd (Toll), entered into the Australian Road Freight Subcontractor Agreement (the Contract), pursuant to which WFM was to provide return road freight line haul services between Sydney and Melbourne (the Trips) for 36 months, commencing on 5 December 2017 and expiring on 4 December 2020.

The Contract included two Schedules as well as attachments and appendixes to those Schedules. Attachment 2 to “Schedule 2 – Statement of Engagement” to the Contract (the Statement of Engagement) provided, under the heading “Fees”, that Toll would pay WFM $3,200 per Trip with “minimum quarterly committed volumes” of 120 Trips per quarter. Attachment 2 also stipulated that “in the event that minimum committed quarterly volumes are not achieved, these will be rolled into the next quarter with agreement from [WFM].”

On WFM’s case, Attachment 2 represented a promise to pay a guaranteed amount of money over the term of the Contract, being 120 [return Melbourne-Sydney Trips, the “minimum committed quarterly volumes”] multiplied by 12 [quarters i.e. three years] multiplied by $3,200. The parties agreed that across the term of the Contract, the total number of Trips performed was 1,396 (or 2,792 single runs) such that there was a cumulated shortfall of 44 Trips. That shortfall did not include “Cut Runs” which were single direction runs whereby a truck returned empty to a WFM departure depot and in relation to which the parties had reached a separate informal agreement. WFM thus argued that it was owed 44 multiplied by $3,200, amounting to $140,800.

On 20 February 2020, WFM emailed Toll complaining that Toll was 70 Trips short of what it was obliged to have offered WFM across the term of the Contract. This complaint was predicated on a view of the Contract that any shortfall rolled into the next quarterly period continued to do so from quarter to quarter, as opposed to one time only. Toll replied on 5 June 2020. Although it took issue with WFM’s construction of the Contract, it nonetheless offered to provide WFM with “70 additional round trip runs at a rate of $3,200” and “[f]or the avoidance of doubt, in the event that the additional round trip runs are not provided prior to the expiry of the [Contract] on 4 December 2020”, to “extend the term of the [Contract] and enter into a new Statement of Engagement in respect of the additional round trip runs.”

The Court held (Bell CJ, Payne JA and Griffiths AJA agreeing), dismissing the appeal:

  1. The primary judge did not err in concluding that WFM had no claim against Toll in debt separate from its claim in damages: [59] (Bell CJ).

  2. The Contract cannot be construed as entailing a promise to pay a guaranteed amount at the end of the Contract represented by the multiplication of 1,440 Trips by $3,200. Rollover of any shortfall volume into the next quarter was not automatic; rather, it required the agreement of WFM. If WFM did not agree, there would be no cumulation of the shortfall of Trips. Any failure to achieve minimum committed quarterly volumes which were not rolled into the next quarter would, at most, sound in an action for damages for breach of contract constituted not by a failure to pay, but by the non-provision of Trips: [64] (Bell CJ).

  3. This construction of Attachment 2 to the Statement of Engagement is consistent with several other provisions of the Contract: [65]-[68] (Bell CJ).

  4. Pre-contractual material relied upon by WFM as supporting its contention that WFM would never have agreed to the Contract unless a guaranteed amount of money would be paid over three years simply did not do so: [71] (Bell CJ).

  5. There was no breach of contract. Even if any shortfall could be rolled continually from quarter to quarter, as opposed to one time only, Toll offered to provide WFM with 70 Trips. The primary judge’s finding that this offer was not accepted was not challenged. Any unachieved volumes did not rollover into the final two quarters because WFM did not agree for that to happen: [74] (Bell CJ).

JUDGMENT

  1. BELL CJ: This appeal concerns the proper construction of an agreement, the Australian Road Freight Subcontractor Agreement (the Contract), entered into by the Appellant, Western Freight Management Pty Ltd (WFM) and the Respondent, Toll Transport Pty Ltd (Toll) on 9 October 2017. Under the Contract, WFM was to provide return road freight line haul services between Sydney and Melbourne (the Trips) for a term of 36 months, commencing on 5 December 2017 and expiring on 4 December 2020.

  2. Attachment 2 to “Schedule 2 – Statement of Engagement” to the Contract (the Statement of Engagement) provided that Toll would pay WFM a fee of $3,200 per Trip with “minimum quarterly committed volumes” of 120 Trips per quarter. Attachment 2 also stipulated that “in the event that minimum committed quarterly volumes are not achieved, these will be rolled into the next quarter with agreement from Western Freight Management Pty Ltd”.

  3. By way of a Statement of Claim filed on 13 August 2020, WFM commenced proceedings in the District Court seeking recovery of a debt of $224,000 for a shortfall of 70 Trips at a rate of $3,200 per Trip which it alleged had, pursuant to Attachment 2 to the Statement of Engagement, accumulated across the duration of the agreement. WFM also made an additional two claims, both of which were abandoned prior to the hearing. Those claims concerned the cancellation of 68 Trips by Toll and an “unpaid fee” of $42,377.37.

  4. WFM amended its claim several times throughout the proceedings. Ultimately, by way of a Third Further Amended Statement of Claim filed on 10 February 2023, WFM sued primarily for recovery of a debt of $137,901.89. That sum was comprised of $140,800 arising out of a shortfall of 44 Trips at a rate of $3,200 per Trip which WFM alleged had accumulated at the expiry of the Contract, less $2,898.11 in erroneous Trip payments which it conceded were made to it by Toll. In the alternative, WFM sought liquidated damages in the same sum or, in the further alternative, damages flowing from a breach of contract constituted by Toll’s failure to provide 120 Trips per quarter at a rate of $3,200 per Trip across the 36 month duration of the Contract.

  5. The case advanced by WFM at trial was that pursuant to the Contract, it was entitled to be allocated by Toll a minimum committed quarterly volume of 120 Trips over 12 quarters such that if there were less than 1,440 Trips performed at the conclusion of the 36 month duration of the Contract, WFM was entitled to a contractual remedy in respect of the shortfall amount. The parties agreed in item (d) of an Agreed Answers to Questions document filed during the hearing, that the total number of Trips performed was 1,396 (or 2,792 single runs) such that a shortfall of 44 Trips had accumulated at the expiry of the Contract.

  6. The shortfall volume did not include “Cut Runs” which were single direction runs whereby a truck returned empty to WFM’s departure depot and in relation to which the parties had reached an informal agreement, the content of which will be set out more completely below. By way of an Amended Cross-Claim filed on 23 January 2023, Toll alleged that, in addition to the overpayment of $2,898.11 which was admitted by WFM, WFM was liable to repay it $13,484.16 plus $2,232 interest for certain overpayments made between 12 December 2018 and 28 February 2019 pursuant to the agreement concerning the Cut Runs.

  7. Toll’s case at first instance was that in the event that the number of Trips in a quarter did not reach the minimum committed quarterly volume, the only right accruing to WFM was the right to refuse to agree to the continuation of the fee of $3,200 per Trip in the subsequent quarter. Toll denied that it gave any guarantee as to any volume of services, hours of work or income to WFM throughout the duration of the Contract.

  8. On 26 May 2023, Montgomery DCJ (the primary judge) dismissed WFM’s primary action for recovery of a debt and claim for breach of contract and upheld Toll’s Cross-Claim: Western Freight Management Pty Ltd v Toll Transport Pty Ltd [2023] NSWDC 176 (the primary judgment). His Honour found that, in the event of a shortfall in any quarter, Toll’s only obligation was to rollover the shortfall volume into the next quarter and that that obligation would expire in the event that WFM did not agree to the shortfall rollover. Accordingly, the primary judge held that there was no breach of contract arising out of the failure of Toll to provide WFM with revenue equal to 1,440 Trips at a rate of $3,200 over 36 months because the Contract did not oblige it to do so.

  9. The primary judge also held that WFM’s primary action for recovery of a debt failed “because it was based on the revenue value of the shortfall of Trips but not on indebtedness in a sum certain for an executed performance as performance was prescribed under the Contract”: PJ [216(j)].

  10. By way of an Amended Notice of Appeal filed on 18 December 2023, WFM contends that the primary judge erred in his construction of Attachment 2 to the Statement of Engagement and in his consequent dismissal of WFM’s claim for recovery of a debt and breach of contract.

  11. Toll, by way of a Notice of Contention filed on 25 August 2023, contended that the primary judge:

  1. erred at PJ [60] “in rejecting the Respondent’s submission that, in the event that the Respondent did not utilise a minimum of 120 round trips per quarter, Attachment 2 to the Statement of Engagement … on its true construction had the effect that the agreed rates would only be rolled into the next quarter if the Appellant agreed”; and

  2. “ought to have found that the Agreement, on its true construction, did not guarantee a minimum volume of work or a minimum income and that the only right which accrued to the Appellant in the event that the Respondent did not engage services of the Appellant to reach a minimum quarterly volume of 120 round trips was to refuse consent to the agreed rates being rolled into the next quarter.”

  1. The primary judge’s findings in relation to the Cross-Claim were not challenged on appeal.

Factual Background

  1. On 17 July 2017, Mr Alec Trikash, Toll’s “Group Linehaul Specialist”, emailed several linehaul partners, including WFM, to advise them that Toll was conducting a review of its national operations and to invite them to participate in a Request for Quote (RFQ) process in relation to “Intrastate & Interstate Linehaul supply across 40 key lanes”. A “Proposed Contract” which was in identical terms to the Contract, although the “Subcontractor” details were left blank, was contained in the “RFQ document” attached to that email.

  2. On 24 August 2017, Mr Trikash met with Mr Brandon Kidner, WFM’s Chief Executive Officer. Immediately following that meeting, Mr Trikash emailed Mr Kidner a list of the “additional requirements” discussed in the meeting as well as a schedule of lanes for which WFM had entered a bid during the RFQ process, including the “Melbourne-Sydney B-double-full-rig return” lane with which these proceedings are concerned, WFM’s “bid rate” in relation to those lanes, and Toll’s “Target rate” and “(quarterly) volume commitment”. In relation to the Melbourne-Sydney B-double-full-rig return lane, the schedule stipulated that WFM had bid $3,380 and that Toll’s target price was $3,200 with a “Max quarterly volume” of 120 Trips such that there was a “Full potential spend” of $384,000.

  3. The 24 August 2017 email also included a table relating to “Equipment type”. In that table, Mr Trikash also left the following comment:

“If you are ordering new equipment for this contract would you please build 36 pls [pallets] trailer for your bid amount?”

  1. On 4 October 2017, Mr Trikash emailed Mr Kidner advising him of the following:

“Toll has completed its evaluation of responses to the Request for Quotation (RFQ).

I am pleased to inform you that Toll would like to offer WESTERN FREIGHT MANAGEMENT PTY LTD the lanes shown below.

Please note that this allocation is subject to WESTERN FREIGHT MANAGEMENT PTY LTD satisfying all pre-qualification requirements and entering into the necessary contractual arrangements.

Lanes

RFQ Bid

Minimum Committed Quarterly Volumes

MEL-SYD B-double-Full-rig Round Trip

$3,200.00

120

Please note the following:

1.   There is no loss of any existing work. You will continue to be engaged by Toll performing your current tasks at the current rates for the foreseeable future. In other words, business as usual. … Toll has simply chosen not to formally commit volumes based on your RFQ submissions for this other existing work.

2.   The committed quarterly volumes in the above table includes all volumes, whether it be current or additional work. This is the minimum amount Toll is committing to quarterly for the lane/configuration combination.

3.   Toll reserves the right to apply the above rates if volume increases. In the event that minimum committed quarterly volumes are not achieved, the outstanding volumes will be rolled into the next quarter with agreement from WESTERN FREIGHT MANAGEMENT PTY LTD.

…

Please note this email does not constitute a contract. No contractual or legal relationship or commitment in relation to the above-referred lanes will exist, unless and until both the Agreement and the SOE have been signed and returned to Toll.” (Emphasis in original.)

  1. On 5 October 2017, Mr Kidner replied to Mr Trikash seeking information about when he could anticipate receiving the Contract and Statement of Engagement, noting that WFM had “committed to some extra equipment … to assist with this service”. Mr Trikash responded on the same day confirming that WFM could expect to receive the Contract and Statement of Engagement by 6 October 2017.

  2. The Contract was signed on 9 October 2017 and the Statement of Engagement was signed and made on 5 December 2017.

  3. On 19 October 2017, Toll and WFM entered into a Variation Deed, the substance of which will be set out more completely below but which generally concerned WFM’s right to redeem its costs should Toll terminate the Contract before the end of its 36 month term.

  4. By way of an Affidavit dated 7 November 2020, Mr John Peters, WFM’s Managing Director, outlined the following in relation to performance of the Contract:

“…WFM had to station two linehaul drivers in the Sydney depot (the Sydney drivers) and two linehaul drivers at its Melbourne depot at Altona (the Melbourne drivers).

The Sydney and Melbourne drivers would carry out nightly journeys from their originating depot in either Sydney and Melbourne and then return that same night to their originating depots having been reloaded in Melbourne (for the Sydney drivers) and Sydney (for the Melbourne drivers).

…

In the industry, and between the parties to the Subcontractor Agreement a journey which was not taken was a journey that was cancelled, or as we call it “cut”, which means the truck and trailer complete the return journey empty (Cut Runs).

…A journey would be cut if Toll did not have payload to be loaded or the time at which the load could be loaded was outside of the departure time for the driver to complete the return journey in the necessary time to comply with the rules and regulations of the Heavy Vehicle National Law and ensuring drivers do not drive while fatigued.”

  1. Under cross-examination, Mr Peters gave the following evidence:

“Q. …You just said that in terms of the quotation there was an indication given by your company that the 120 trips per quarter would roll over until they were used up. Is that the case as you understood it?

A. It was a minimum of 120 a quarter. That’s exactly what it was and if we - can I use the example? … If we only went to 118 in that quarter those two other[s] would roll into the next quarter [which would] mean it would be 122 and then you’ve caught that up. So in the next quarter we’d be back to 120. It just kept doing that in some cases.”

  1. Mr Peters also gave evidence that WFM had agreed to the rollover of a shortfall of Trips during the term of the Contract. He recalled that WFM had requested a rollover of a shortfall “through [Toll’s] line haul department and management” and that “it was always agreed that we’d be doing 120 [Trips] a quarter and it would be rolled over right to the end of the contract.” As was noted at PJ [89], this was the only evidence as to WFM’s agreement or otherwise to the rollover of a shortfall of Trips.

  2. Mr Peters outlined that in January 2018, he met with Toll’s representatives in Melbourne. During that meeting, Toll agreed to pay WFM a reduced rate for Cut Runs of $800 (plus GST and fuel rebate). That agreement was not recorded in writing.

  3. Between 12 December 2018 and 28 February 2019, WFM issued Toll with five invoices for Cut Runs totalling $24,600. It was common ground that in spite of the agreement reached between the parties in January 2018 concerning Cut Runs set out above, WFM had invoiced, and Toll had paid, $1,600 for the Cut Runs.

  4. Mr Peters’ evidence was that by July 2019, Toll refused to pay for Cut Runs. This prompted WFM on 20 February 2020 to send the Respondent a letter headed “LETTER OF DEMAND – Unpaid Overdue Invoices to Western Freight Management Pty Limited”. It provided the following:

“There are fourteen (14) runs that were cut/cancelled from July 2019 … very late in the night and as you will see it has not given WFM any time to seek other work for the night.

The other six (6) runs going back from July 2019 were cut with no notifications at all. All of these runs WFM has run empty to relocate equipment and drivers for the next night to either seek other work so they are in position for Toll the following night, if this was not done WFM would have an unbalanced amount of equipment at one end which would compound the problem.

Based on the ‘Attachment 2 of the Statement of Engagement of the Road Freight Subcontractor Agreement’ (the Contract) between WFM and Toll Group, the minimum committed quarterly volumes are 120 round trips…

It is also stated in the Contract that ‘in the event that minimum committed quarterly volumes are not achieved, these will be rolled into the next quarter with agreement from WFM’...” (Emphasis in original.)

  1. The Letter of Demand went on to specify that the “OVER-ALL SHORT FALL OF TRIPS VS CONTRACT” was “70” and provided that:

“On top of the unpaid run cut trips, WFM is also seeking compensation for the 70 return trips shortfall of the agreed volume in the Contract from January 2018 to February 2020. This would amount to $224,000 plus GST ($3,200 x 70).”

  1. On 5 June 2020, Toll responded to WFM’s Letter of Demand. Toll’s position was the following:

“(a)   WFM does not have a proper basis to seek from Toll payment of the enclosed invoices totalling $36,732.52…;

(b)   WFM is not entitled to any compensation from Toll, let alone the sum of $224,000 (excluding GST) demanded, for 70 round trip runs that WFM has not completed under the Agreement…;

(c)   Toll offers (without any admission of liability) to provide WFM with 70 additional round trip runs.

…

10.   Notwithstanding the above, Toll offers to provide WFM with 70 additional round trip runs at a rate of $3,200 (excluding GST plus … any applicable fuel levy). For the avoidance of doubt, in the event that the additional round trip runs are not provided prior to the expiry of the Agreement on 4 December 2020, the parties will extend the term of the Agreement and enter into a new Statement of Engagement in respect of the additional round trip runs.”

  1. The primary judge found at PJ [180] that, by way of its 5 June 2020 email, Toll had refused to pay monetary compensation for any shortfall of Trips as a debt and, without admission, had offered performance of 70 Trips and that this offer was not taken up by WFM. During cross-examination, Mr Peters gave evidence that he “understood … an offer was made … of performing a further 70 trips … to make up any shortfall” but that “it never happened”.

  2. On 24 January 2023, WFM’s solicitors provided Toll’s solicitors with a schedule of Trips conducted in each quarter between 5 December 2017 and 4 December 2020. That schedule outlined that there was a total of 2,792 single runs (or 1,396 Trips) during the term of the Contract. The schedule also highlighted that there were fluctuations in the Trips achieved each quarter. For instance, in the quarter spanning 5 June 2018 to 4 September 2018, there were 117 Sydney to Melbourne runs and 116 Melbourne to Sydney runs, but in the quarter spanning 5 September 2018 to 4 December 2018 there were 131 Sydney to Melbourne runs and 127 Melbourne to Sydney Runs.

The Contract

  1. It is first necessary to provide an overview of the terms of the Contract.

  2. Pursuant to cl 7 of Part B of the Contract, the “Agreement” comprised, in descending order of priority:

“(a)   Parts A and B;

(b)   Schedule 1 – General Terms and Conditions [the Terms and Conditions];

(i)   Appendix a – Toll Policies and Standards;

(ii)   Appendix b – Provision of Fuel Card for Transport Subcontractors;

(iii)   Appendix c – Anti Corruption Compliance;

(iv)   Appendix d – Toll Group Supplier Code of Practice;

(c)   Schedule 2 – Statement of Engagement(s), inclusive of Services description and Fees;

(d)   Attachments to Statement of Engagement(s), including business unit specific requirements; and

(e)   Any other documents referred to in the Statement of Engagement(s).”

  1. Clause 5 of Part B of the Contract provided the following:

“5.   Provision of Services

(a)   The parties agree that from time to time during the Term, Toll may require the Subcontractor to provide Services to Toll and/or to Toll’s Related Bodies Corporate, and the Services will be subject to the General Terms and Conditions.

(b)   Whenever Toll desires the provision of Services, Toll will issue the Subcontractor with a Statement of Engagement.

(c)   Before issuing a Statement of Engagement, Toll may consult with the Subcontractor in relation to the details to be specified in the Statement of Engagement.

(d)   Toll may require the Subcontractor to provide a written quotation prior to issuing the Statement of Engagement by issuing a written request setting out, without limitation, such matters as:

(i)    the details of the Services required;

(ii)   additional insurance requirements;

(iii)   timeframe for provision of the Services;

(iv)   timeframe for provision of the quote; and

(v)   the information, including pricing, required from the Subcontractor.

(e)   The Subcontractor must provide Toll with a written quotation in the format and within the timeframe specified in the quote.

(f)    After considering the quotation, Toll may complete, sign and send to the Subcontractor a Statement of Engagement substantially in the form of Schedule 2.

(g)   The parties agree that this Agreement (including the General Terms and Conditions) exclusively governs the Statement of Engagement(s) and the relationship of the parties, and that all other terms and conditions which may be provided, issued or published by the Subcontractor, including (without limitation) any form, quotation conditions, order, confirmation or other document are excluded and of no force nor effect.”

  1. Clause 6 of Part B read as follows:

“6.   Fees

(a)   The fees payable to the Subcontractor for performing the Services will be specified in a Statement of Engagement.

(b)   Toll may review the Subcontractor’s fees at any time provided Toll gives the Subcontractor at least seven (7) days prior notice.

(c)   Notwithstanding clause 6(b), Toll will review the Subcontractor’s fees at least annually.”

  1. Clause 8 of Part B of the Contract provides the following:

“8.   No Guarantee

It shall be at the absolute discretion of Toll and Toll’s Related Bodies Corporate to source Services from the Subcontractor. Unless agreed otherwise in a Statement of Engagement, Toll and Toll’s Related Bodies Corporate do not guarantee or make any assurance that any Services or any particular volume of Services will be sourced from the Subcontractor under this Agreement.”

  1. The Terms and Conditions defined the “Services” as “the whole of the operations and services required by TOLL for the Goods, which may be further particularised in a Statement of Engagement.”

  2. The “Goods” were defined as “the goods and all loads referred to on the STO as accepted by The Subcontractor from TOLL or TOLL’s customer together with any container or packaging for the goods and any pallet picked up with the goods or supplied by or for TOLL’s customer but does not include TOLL Equipment or Toll Trailing Equipment.”

  3. “STO” was defined as meaning “the Subcontractor transportation instruction or other work instruction given to the Subcontractor (such as a consignment note or a manifest) prior to or as part of each job/consignment/journey, as the case may be.”

  4. Clause 8 of the Terms and Conditions stipulated that:

“8.   TOLL’s Obligations

8.1   Payment and invoicing requirements are set out in each Statement of Engagement.

8.2   TOLL will not pay interest for late payment of any amount due to The Subcontractor.

…

8.5   Unless stated otherwise in a Statement of Engagement, TOLL must provide The Subcontractor with the following:

8.5.1   minimum number of hours of work – nil; and

8.5.2   minimum income level – nil.

…

8.9   The Subcontractor agrees that TOLL will be entitled to withhold payment of any monies owed to the Subcontractor until such time as the Subcontractor provides TOLL with the written confirmation that the Subcontractor’s obligations have been met, if required under clause 2.17.

8.10   The Subcontractor agrees that TOLL will have no obligation to pay the Subcontractor for part of or all Services in question if:

8.10.1   The Subcontractor’s vendor account with TOLL is established on the basis that TOLL will pay the Subcontractor utilising its Recipient Created Tax Invoice system and the Subcontractor does not return run sheets, consignment notes, proof of delivery documents and other paperwork relating to those Services within 120 days of the date the Services were completed; or

8.10.2   TOLL does not receive the Subcontractor’s tax invoice accompanied by all required supporting documentation for those Services within 120 days of the date the Services were completed.”

  1. Clause 2.17 of the Terms and Conditions outlined that where required pursuant to the Statement of Engagement, WFM was to provide Toll with, “at the same time as providing … paperwork associated with the completion of the Services (such as consignment notes or run sheets or invoices), a written statement” confirming a number of matters set out in cls 2.17.1-2.17.4 which included that remuneration payable to employees and contractors, worker’s compensation insurance premiums, payroll tax and superannuation had been paid.

  2. Clause 12 of the Terms and Conditions concerned termination of the Contract. By way of the Variation Deed referred to at [19] above, the following was inserted at the end of cl 12.2:

“In the event TOLL terminates this Agreement or a Statement of Engagement under the Agreement within three (3) years from the commencement of the Term, TOLL will further pay to the Subcontractor its reasonable, unavoidable costs directly incurred as a result of the termination, providing the Subcontractor can provide documented evidence that it has undertaken commercially, reasonable steps to mitigate such costs.”

  1. Clause 12.5 of the Terms and Conditions provided that where certain preconditions were met, Toll could “at any time, on written notice, suspend supply of all or any portion of this Agreement or a Statement of Engagement.” Upon receipt of any such notice, WFM was to “promptly cease the Services”. Toll was also empowered to “withdraw by written notice all or part of a suspension and, upon receipt of such notice”, WFM was to “promptly resume and diligently continue the Services for which the suspension was withdrawn.” In the event of a suspension, WFM was not “entitled to any price and/or schedule adjustment or to other compensation or relief for the suspension.”

  2. Clause 17.2 of the Terms and Conditions similarly provided that “except as stated in paragraph 8 of Part B to this Agreement, TOLL has not given The Subcontractor any guarantee or warranty (considering the charges that TOLL will pay under the subcontract) as to the Subcontractor’s earning capacity, the minimum amount of Services to be provided by The Subcontractor or the minimum level of revenue The Subcontractor may earn under this Agreement.”

  3. Pursuant to the Statement of Engagement, WFM is defined as the “Subcontractor”. Item 1(a) originally stipulated a “Duration of Statement of Engagement” period of 12 months commencing on 5 December 2017. However, “12” was manually crossed out and a handwritten annotation provided “36 as per RFQ”. Item 2 defined the “Services” as “Road Linehaul Services” and listed the “Reference in the Agreement” as “Schedule 1, Clause 1”.

  4. Clause 1 of the Statement of Engagement provided that, to the extent of any inconsistency between any other provision of the Contract and the Statement of Engagement, “the Agreement will prevail”.

  5. There were four attachments to the Statement of Engagement. Attachment 2 to the Statement of Engagement was entitled “Fees”. It read as follows:

“Attachment 2 to Statement of Engagement

Fees

Please note that Toll reserves the right to apply the below rates if volume increases. In the event that minimum committed quarterly volumes are not achieved, these will be rolled into the next quarter with agreement from Western Freight Management Pty Ltd.

These rates are effective for the term of the Statement of Engagement as specified in item 1a of the Statement of engagement (12 months) and are exclusive of GST.”

Lanes

RFQ Bid

Minimum Committed Quarterly Volumes

MEL-SYD B-double-Full-rig Round Trip

$3,200.00

120

The primary judgment

  1. At PJ [216], the primary judge provided the following summary of his conclusions:

“(a)  Performance pursuant to the Contract was the achievement of a Trip for which a Fee of $3,200 was due to be paid by Toll to WFM;

(b)   WFM’s standing by because it expected Toll to provide Trips was not a performance under the Contract;

(c)   Under the Contract, Toll did not promise revenue to WFM other than by way of payment of the Fee on account of the achievement of a Trip;

(d)   Pursuant to the Contract, Toll promised WFM that it would participate in the achievement of 120 Trips per quarter and in the event that Toll failed in that provision; then the shortfall volume of Trips below 120 was to be rolled over into the next quarter contingent upon WFM’s agreement that that occur;

(e)   In the event that Toll failed to provide WFM with a quarterly shortfall below 120 Trips in the next quarter; then Toll would have been in breach of the Contract;

(f)   In the event that the parties did not achieve in the next quarter the volume of the Trips in the shortfall in addition to the 120 Trips of that quarter; then, Toll was not in breach of the Contract if that failure to achieve the shortfall Trips occurred because WFM did not agree to the rollover of those Trips;

(g)   The effect of the preceding conclusions (d), (e) and (f) is that pursuant to the Contract, the parties’ rights concerning any shortfall in the minimum committed quarterly volumes of 120 Trips merged in their performance during the next quarter such that Toll’s obligation was to rollover the shortfall volume into that quarter, which obligation expired in the event that WFM did not agree to achieve the shortfall rollover;

(h)   WFM has failed in its case for breach of Contract based on Toll’s failure to provide WFM with revenue equal to 1440 Trips at the Fee of $3,200 across the three-year term of the Statement of Engagement under the Contract because the Contract did not promise that;

(i)   WFM has failed in its primary action for debt because it was based on the revenue value of the shortfall of Trips but not on indebtedness in a sum certain for an executed performance as performance was prescribed under the Contract;

(j)   As WFM has failed to establish the breach of Contract upon which it conducted its case, WFM is not entitled to damages, even nominal damages;

(k)   WFM has failed in its case for liquidated damages because the terms of the Contract were against the proposition that the Fee of $3,200 was an amount payable as a pre-estimate of damage in the event of each Trip not achieved below the minimum committed quarterly volumes;

(l)   WFM has failed in its claim for contractual damages in terms of loss of profit on the hypothetical basis of placing it, so far as money can do, in the same position as it would have been had the Contract been performed, also because Toll offered on 5 June 2020 (Exhibit H) the provision of additional Trips equal to or in excess of the shortfall of Trips across the whole term of the Contract on an accumulative basis as was WFM’s claim but WFM did not accept that performance;

(m)   In case I am wrong, I have assessed damages on the basis of the case conducted by WFM had it been successful, in the sum of $17,600;

(n)   Toll is entitled to recovery in the sum of $10,586 overpaid by it to WFM because Toll’s mistake when making payment in excess of the informal agreement cut run rate was a vitiating factor obliging WFM to make restitution; and

(o)   Toll is entitled to restitution in the sum of $2,898 on account of other admitted overpayments by it to WFM.”

  1. In relation to the construction of the Contract, the primary judge held at PJ [63] that “Toll promised no further or other provision to WFM than was prescribed in Attachment 2; Part B - Agreement Acknowledgement, Conditions 5(b) and 5(g); Condition 8; Schedule 1 - General Terms and Conditions, Clauses 8.5 and 17.2” and that this construction was consistent with the Contract as a whole. At PJ [65]-[68], his Honour reasoned as followed in respect of Attachment 2:

“…The word ‘committed’ means devoted, wholeheartedly engaged, characterised by commitment, a committed relationship: Macquarie Online Dictionary 2022. The second sentence provided that in the event that Toll and WFM did not achieve their ‘devoted’ engagement for 120 Trips, the shortfall would be rolled into the next quarter if WFM agreed. The second sentence provided that in the event that Toll and WFM did not achieve their ‘devoted’ engagement for 120 Trips, the shortfall would be rolled into the next quarter if WFM agreed. A shortfall below 120 Trips in a quarter was the subject of the sentence identified by the words ‘are’ and ‘these’. Those words refer to the volume of a shortfall of Trips. The word ‘will’, in my opinion, was used in the imperative sense. The shortfall volume was to be rolled into the next quarter. The sentence provided that a shortfall volume below 120 Trips in a quarter must be rolled into the next quarter on the condition that WFM agreed.

In my opinion, the above construction meets with business efficacy because it prescribes the parties’ intention to engage in the Service, whilst within the boundaries of the Terms and Conditions of the Contract which confined Toll’s promise to that prescription. Attachment 2 prescribed that contractual engagement as follows:

(a)   The expected minimum volume of Trips per quarter was 120;

(b)   The fee per Trip was $3,200;

(c)   The Service was not limited to a ceiling of 120 Trips per quarter and in the event of an increase in that volume Toll retained the right to apply the Trip fee of $3,200;

(d)   In the event of a shortfall below 120 Trips in a quarter, Toll had to roll that shortfall volume into the next quarter; and

(e)   In the event of a shortfall of Trips below 120 in a quarter, Toll’s obligation to roll the shortfall volume into the next quarter was contingent upon agreement of WFM to the rollover.

The business efficacy of rollover of Trips being conditional upon WFM’s agreement was that it avoided the otherwise risk of an onerous obligation on WFM. This might, hypothetically, occur such as in the event that in a quarter Toll instructed no Services and in the next quarter expected WFM to service trucks, trailers, and drivers for 240 or more Trips which might have been beyond WFM’s then capacity to meet.

It is significant that these commercial parties chose to engage in a commercial endeavour which was of their regular business activity of line haulage of loads, the genesis of the transaction was the Request For Quotation process which disclosed the terms of the Contract to be made (Exhibit A), in the course of which WFM selected the Melbourne-Sydney/Sydney-Melbourne B-double-full-rig Lane and through negotiation under that process, its bid was ultimately accepted: Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46]-[49]. This observation supports finding the commercial terms of engagement in the express language of the Contract, at which I have arrived.”

  1. At PJ [83], his Honour held that Mr Peters’ subjective understanding of the operation of the contract and the fact that he was looking for a “guarantee” of revenue under the Contract to protect WFM’s commitment of resources could not be decisive because it was not consistent with the contractual intention expressed in the wording of the Contract read objectively by a reasonable business person in the position of the parties. Parenthetically, for it to be taken into account would have been heterodox: see, Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 at [35]-[36] citing Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352; [1982] HCA 24 (Mason J).

  2. The primary judge went on to hold that:

“[88]   The Contract prohibits an expansive construction of Attachment 2 and makes it unavailable for WFM to claim an amount owing for a performance not prescribed. A claim for an amount owing on account of trucks, trailers and perhaps drivers standing by, pending Toll booking Trips, is a claim not based on that contractual prescription. It is a claim based on a performance not found within the Attachment 2 prescription of the engagement. Again, Attachment 2 prescribed the obligation of Toll in the event of a shortfall in the achievement of the minimum committed quarterly volumes within a quarter, to be that Toll rolled over into the next quarter that volume shortfall with WFM’s agreement. The Contract did not provide any promise of a liability beyond that prescription in the event of such shortfalls. WFM was entitled not to agree to the engagement of taking up the shortfall in the next quarter. Whether WFM took up the shortfall or did not do so, the contractual prescription of Toll’s obligation and of WFM’s entitlement to the benefit of the shortfall so offered expired. Toll’s obligation to rollover a shortfall in the next quarter was contingent on WFM’s agreement. In this way, WFM had a choice between alternative remedies or rights open to it. The choice was to accept the shortfall rolled over when offered in the next quarter or to reject it without there being a breach of the Contract by Toll or WFM: Sargent v ASL Developments Ltd; Turnbull v ASL Developments Ltd (1974) 131 CLR 634 per Mason J at 654 - 656.

…

[91]   It is my opinion that WFM’s claim for shortfall loss equal to a total of revenue below a promised $384,000 per quarter x 12 quarters is not proved on the evidence. There was no contractual wording obliging Toll to pay the $3,200 Trip rate on account of non-achievement of the minimum quarterly volumes generally and specifically when a shortfall was not rolled over to the next quarter. The evidence does not even permit a finding that the $3,200 Trip rate could have formed a reasonable pre-estimate of damage; or is presently a reasonable estimate of the damage. WFM’s submission in relation to liquidated damages calculated on that basis appears to be, as the case was run, not more than a repeat of its debt claim whilst cloaked in terminology of damages.”

  1. At PJ [101], the primary judge reasoned that the requirements concerning the provision of paperwork contained in cls 2.17 and 8.9 of the Terms and Conditions did not apply in relation to payment for a shortfall so as to contractually bar WFM’s claim. Rather, cl 2.17 referred only to “paperwork associated with the completion of the Services” because “Services” referred only to Trips actually performed and not shortfall volumes, being Trips not run. Similarly, his Honour held that the requirement in cl 8.10 that WFM issue Toll with a tax invoice within 120 days was “focused on Services” and did not apply to the shortfall volume: PJ [105].

  2. In rejecting WFM’s action for debt, separate from its claims for breach of contract, the primary judge held that WFM had identified its executed performance of the Contract entitling it to sue for the shortfall of 44 Trips as being that it had “made the trucks available”, irrespective of whether it got the Trips or not: PJ [117].

  3. At PJ [181], his Honour held that the failure of WFM to accept Toll’s offer of performance of 70 Trips in its 5 June 2020 email amounted to a failure by WFM to complete the Contract and not a failure by Toll to perform the Trips. His Honour went on to hold that even if his construction of the Contract was wrong and shortfall volumes could accumulate over the whole term of the Contract, then Toll’s offer on 5 June 2020 satisfied performance and if WFM had accepted that offer, its claim of a shortfall and resulting loss would have been expunged: PJ [183].

  4. In the event that his construction of the Contract was incorrect, the primary judge went on to hold in relation to damages that the loss of revenue associated with the shortfall of 44 Trips would equate to $140,800 plus GST. His Honour noted that WFM had withdrawn its argument that there were no cost savings accruing to it as a result of not having to perform the shortfall number of Trips because there were “unladen trucks actually travelling the route”, irrespective of whether they were performing revenue-earning trips for Toll: PJ [146], [186]. The primary judge then held at PJ [187] that, on the basis of the evidence, he was “not persuaded on the balance of probabilities of what, if any, cost of drivers was incurred in the event of a shortfall of Trips”. Ultimately, his Honour held that WFM’s “performance of a trip was a relatively high overhead and low profit margin activity” and thus allowed as damages “a profit of $400 per Trip for 44 Trips” amounting to $17,600: PJ [193].

  5. In relation to Toll’s Cross-Claim, the primary judge held that although the fee per Trip was $3,200, being a loaded return Trip fee, the parties “were in the routine [practice] of quick accounting for and payment of single direction Lane trips (one half of a Trip fee - $1,600)” and that “a delay in payment of five months, was exceptional”: PJ [205]. His Honour went on to hold that Toll had paid invoices in the sum of $1,600 for a Cut Run, that being the standard Trip fee, by mistake and that this mistake was the product of Mr Peters “deliberately and unilaterally” causing the invoices for the Cut Runs to be issued for the sum of $1,600: PJ [208]. His Honour then reasoned at PJ [211] that this decision of Mr Peters, and the mistake made by Toll in paying the invoices in circumstances where it quickly processed payment for loaded Trips, were vitiating factors sufficient to give rise to a prima facie obligation on the part of WFM to make restitution: PJ [209]-[211].

Grounds of Appeal and Notice of Contention

  1. WFM raised the following Grounds of Appeal:

“1  The primary judge erred in failing to conclude that, on the proper construction of the Australian Road Freight Subcontractor Agreement dated 9 October 2017 between the Respondent and the Appellant (Agreement), the Respondent was obliged, over the 36 month term of the Agreement commencing on 5 December 2017, to facilitate the carriage by the Appellant of freight for the Respondent on a minimum of 1440 such Trips (whether undertaken or not) over that 36 month term.

2   The primary judge erred in failing to take into account, as a background fact or surrounding circumstance, known to both parties at the time of contracting and relevant to the construction of the Agreement, that there was at least a real possibility that the Appellant would have to build or acquire extra “equipment” for the purposes of performance of the Agreement by it, which “equipment” objectively the parties knew would inevitably include several trucks; and that the Appellant would inevitably have to devote several drivers to the performance of the Agreement.

…

4   The primary judge erred in concluding that the Appellant had no claim against the Respondent in debt separate from its claim in damages and in failing to conclude that the Respondent was indebted to the Appellant in the sum of $137,901.89 (together with $14,080 in respect of the GST payable on the price for the services comprising the Trips) or alternatively was liable to the Appellant for damages in that sum.

5   The primary judge erred in concluding that the offer in the letter dated 5 June 2020 from the Respondent to the Appellant’s solicitor (Exhibit H) “satisfied … performance” by the Respondent of its obligations under the Agreement (J[183];[216(I)]).

6   The primary judge erred in treating as withdrawn by the Appellant the “proposition of unladen trucks actually travelling the route” (at J[186]) and in concluding that, if Toll was liable to WFM for damages, then damages were either nil or $17,600 (at J[193]).” (Emphasis in original.)

  1. Grounds 1 and 2 of Toll’s Notice of Contention were as follows:

“1  The trial judge erred at J[60] in rejecting the Respondent’s submission that, in the event that the Respondent did not utilise a minimum of 120 round trips per quarter, Attachment 2 to the Statement of Engagement, which is Schedule 2 of the Australian Road Freight Subcontractor Agreement (the Agreement), on its true construction, had the effect that the agreed rates would only be rolled into the next quarter if the Appellant agreed.

2   The trial judge ought to have found that the Agreement, on its true construction, did not guarantee a minimum volume of work or a minimum income and that the only right which accrued to the Appellant in the event that the Respondent did not engage services of the Appellant to reach a minimum quarterly volume of 120 round trips was to refuse consent to the agreed rates being rolled into the next quarter.”

Grounds 1, 2, 4 and 5 and Notice of Contention grounds 1 and 2

  1. These grounds fall to be considered together as they all relate, in one way or other, to the proper construction of the parties’ contractual arrangements pursuant to the Contract which, as set out at [31] above, comprised not only the general set of Terms and Conditions but also incorporated a Statement of Engagement to which there were attachments.

  2. Both as pleaded and as argued on appeal, WFM characterised the Contract as, in effect, an agreement by Toll to pay WFM a “sum certain” which would sound in an action for debt in an amount represented by the difference between 1,440 Trips and the number of Trips in fact undertaken, defined as the “shortfall”, multiplied by $3,200.

  3. True it is that the Third Amended Statement of Claim pleaded that, in addition to there being a “debt due and payable”, in breach of the contract, Toll failed or refused to pay the “shortfall” and that WFM was entitled to the shortfall as damages.  This pleading was somewhat unconventional in that no term of the parties’ contractual arrangements was identified as having been breached, and no breach was identified other than the failure to pay. There was no plea, for example, that there was an obligation to book 1,440 return Trips over a three year period and that the failure to do so amounted to a breach of contract. Contrary to Ground 4 of the appeal, the primary judge did not err in concluding that WFM had no claim against Toll in debt separate from its claim in damages. They were two sides of the same coin.

  4. To understand WFM’s case, it is necessary to commence with a consideration of the terms of Attachment 2 to the Statement of Engagement set out at [45] above.

  5. On WFM’s case, Attachment 2 (which was headed “Fees”) was contended to represent a promise to pay a guaranteed amount of money over the term of the Contract, being 120 [return Melbourne-Sydney Trips, the “minimum committed quarterly volumes”] multiplied by 12 [quarters i.e. three years] multiplied by $3,200 or, as it was put, 1,440 Melbourne-Sydney return Trips for which WFM would be paid $3,200 per Trip. Because only 1,396 Trips were made (a fact which was agreed by the parties), WFM’s simple argument was that it was entitled to a payment of 44 multiplied by $3,200, amounting to $140,800.

  6. WFM placed great emphasis on the expression “minimum committed quarterly volumes” which twice appeared in the text of Attachment 2. The text contemplated, however, the possibility that minimum committed quarterly volumes might not be achieved. Thus, in Attachment 2 it was stated that “[In] the event that minimum committed quarterly volumes are not achieved, these will be rolled into the next quarter with agreement from WFM” (emphasis added).

  7. Although Toll argued that the word “these” in this sentence referred to fees rather than unachieved volumes, the word “these” in my view obviously refers to unachieved volumes. Importantly, the rollover of these unachieved volumes into the next quarter was not automatic under the parties’ contractual arrangements; rather, it required the agreement of WFM. The requirement that WFM agree to a rollover was plainly an element of Attachment 2 inserted for its benefit. If WFM agreed to the rollover, the minimum committed quarterly volume for the next quarter would be increased by the unachieved volume which was rolled over. But if WFM did not agree, for whatever reason, there would be no cumulation of unachieved minimum committed volumes. It follows that the Contract did not provide for a minimum committed three yearly volume of 1,440 Trips.

  8. In the event that WFM did not agree, for whatever reason, to rollover any unachieved volume into a following quarter, it would have no subsequent entitlement to insist on Toll increasing the minimum Trips promised by that unachieved number. Any failure to achieve a minimum committed quarterly volume which was not rolled into the next quarter would, at most, sound in an action for damages for breach of contract. The breach would not be a failure to pay but the non-provision of certain Trips.

  9. This analysis and conclusion is also consistent with cl. 8.5 which provided that “unless stated otherwise in a Statement of Engagement”, Toll must provide WFM with the following:

“8.5.1   minimum number of hours of work – nil; and

8.5.2   minimum income level – nil.”

  1. Accepting that Attachment 2 formed part of the Statement of Engagement, it did not in terms state a “minimum income level”. At its highest, it might be suggested that the Attachment implied a minimum income level but any such implication does not necessarily or obviously arise by reason of the matters noted in [63]-[64] above. Moreover, if a “minimum income level” was intended to be stated, one would expect that to have been “stated” expressly.

  2. There are other reasons why Attachment 2 should not be construed as in the nature of a guarantee of the kind and extent required for WFM to succeed in its argument. First, cl 12.2 of the Terms and Conditions (see [40] above) gave Toll a right of termination prior to the expiry of three years. It specified what was to be paid in that event. The amount was not the balance of any guaranteed amount pursuant to Attachment 2 to the Statement of Engagement. Mr Leopold SC, for WFM, fastened on the word “further” in the varied cl 12.2 but that word was plainly in relation to any accrued payment obligations. Next, cl 12.5 of the Terms and Conditions permitted Toll to suspend its obligations under the Contract and Statement of Engagement for a variety of reasons including if:

“(i)   in TOLL’s reasonable opinion, the Subcontractor is performing the Services in an unsafe manner or its standards of operation are such that performance of the Services represents an unacceptable risk of injury to persons or damage to property or the environment; or

(ii)   a fatality occurs in connection with the Services which may have a negative impact on TOLL (including adverse publicity or media); or

(iii)   suspension is necessary due to a compliance requirement at law or under this Agreement; or

(iv)   in TOLL’s reasonable opinion, the conduct or behaviour of the Subcontractor or its personnel is in violation of this Agreement.”

  1. This right of suspension was entirely inconsistent with WFM’s “guarantee” case. Clause 12.5 of the Terms and Conditions took precedence over the Statement of Engagement and any attachment thereto and, if suspension occurred, such a suspension would necessarily qualify any committed quarterly volume of trips.

  2. WFM sought to support its argument by seeking to call in aid pre-contractual material and complained that the primary judge erred in not taking this material into account. This material was said, by Ground 2 of the appeal, to constitute:

“a background fact or surrounding circumstance, known to both parties at the time of contracting and relevant to the construction of the Agreement, that there was at least a real possibility that the Appellant would have to build or acquire extra ‘equipment’ for the purposes of performance of the Agreement by it, which ‘equipment’ objectively the parties knew would inevitably include several trucks; and that the Appellant would inevitably have to devote several drivers to the performance of the Agreement.” (Emphasis in original.)

  1. The contention appeared to be that WFM would never have agreed to the Contract unless a guaranteed amount of money would be paid over the three years of the Contract.

  2. There were a number of difficulties with this argument. Most fundamentally, the material sought to be relied on to establish the proposition for which WFM contended simply did not do so. That material comprised the email of Mr Trikash to Mr Kidner sent on 24 August 2017 referred to at [15] above and the email sent by Mr Kidner to Mr Trikash on 5 October 2017 referred to at [17] above. The first of these emails was in the form of a question, scarcely a source of a mutually known background fact. The second email referred to WFM having “committed to some extra equipment … to assist with this service” (emphasis added). What this equipment comprised was not specified, nor was the cost of it. This communication was a wholly inadequate basis to found the inference sought to be drawn. Further, even if such an inference were available, it was scarcely one which lent any material support to WFM’s construction of the Contract.

  3. Attention has already been drawn to the fact that the terms of Attachment 2 upon which WFM’s argument was founded gave it an option or contractual right to agree to the rolling over of any unachieved volume from a previous quarter into the next quarter. That was not a matter in respect of which WFM was required to agree. On 20 February 2020, whilst the Contract still had three quarterly periods to run, WFM complained that Toll was 70 Trips short of what it was contractually obliged to offer to WFM: see [25]-[26] above. This complaint was predicated on a view of the Contract that any shortfall rolled into the next quarterly period continually from quarter to quarter as opposed to one time only. The primary judge disagreed with this construction of the Contract but even if his Honour was wrong to do so, WFM’s argument still ran into a fatal problem. That was because, by its letter of 5 June 2020, set out at [27] above, Toll, although taking issue with WFM’s February letter and the contentions contained in it, nevertheless offered to provide WFM with 70 “additional round trips at the rate of $3,200 per trip.”

  4. Mr Leopold criticised the terms in which this offer was made as being too vague. I disagree. It could scarcely have been clearer. He contended that the words:

“For the avoidance of doubt, in the event that the additional round trip runs are not provided prior to the expiry of the Agreement on 4 December 2020, the parties will extend the term of the Agreement and enter into a new Statement of Engagement in respect of the additional round trip runs”

forming part of the offer were a source of obscurity and meant that it was not an offer to provide these Trips within the contractual term. Not unlike the terms of Attachment 2 itself, the offer contemplated the possibility that the 70 Trips may not be able to be achieved within the contractual time period and indicated “for the avoidance of doubt” how the offer would remain beneficial to WFM after that date. That did not, however, mean that the offer was not to make the unachieved 70 Trips available in the contractual timeframe.

  1. In any event, as explained in [28] above, the primary judge found that the offer was not accepted. This finding was not challenged. Applying the terms of Attachment 2, any unachieved volumes did not rollover into the final two quarterly periods because WFM did not agree for that to happen. Toll was therefore under no obligation to make available any more than 120
    Trips in each period, which it did. That it in fact provided goods for delivery allowing more than 120 Trips in each of the two final quarterly periods was neither here nor there. The Contract always contemplated that the quarterly
    Trips may exceed 120.

  2. In short, for these reasons, there was no breach of contract, and the primary judge was correct to so conclude.

  3. His Honour was also correct to conclude that the Contract cannot be construed as entailing a promise to pay a guaranteed amount at the end of the Contract represented by the multiplication of 1,440 Trips by $3,200 (less any amounts which had been paid for actual trips which had been performed and invoiced).

  4. Having reached these conclusions, it is not necessary to address Ground 3 of the Notice of Contention.

Ground 6

  1. Much time was occupied in the course of the hearing of the appeal by the question of whether or not WFM’s trucks had travelled unladen on the Melbourne to Sydney return route. This Ground relates to that topic.

  2. The relevance of that topic was never clearly articulated by Mr Leopold, despite questions as to its relevance being put to him on several occasions. In addition, evidence as to whether there were in fact unladen trucks on the route (other than those that returned to their origin unladen as part of a “Cut Run” referred to in the evidence) was wholly obscure. Mr Leopold ultimately accepted that the topic of unladen trucks had no proper bearing on the construction of the Contract.

  3. Given the conclusions reached in relation to other aspects of the appeal, it is not necessary to deal further with this ground of the appeal.

Conclusion

  1. The appeal must be dismissed with costs.

  2. PAYNE JA: I agree with the Chief Justice.

  1. GRIFFITHS AJA: I agree with the Chief Justice.

**********

Decision last updated: 24 May 2024

Actions
Download as PDF Download as Word Document
Cases Citing This Decision

0