Did the single document requirement necessitate sending a complete copy of the MSA to the farmer?
104 The essence of the ACCC's allegations of contravention of the single document requirement in s 22(b) is that once Lactalis entered into an MSA with a farmer, it omitted to send a complete copy of it to the farmer. It asserts that on numerous occasions when Lactalis accepted the farmer's offer it did not send to the farmer all of the documents constituting the agreement. In particular:
(a) on 344 occasions, Lactalis signed and sent to farmers an executed copy of a version of the MSA document (or part thereof) without the Regional Handbook or QDairy Manual attached or otherwise provided with it; and
(b) on 19 occasions, after Lactalis signed the MSA document, there is no documentary evidence to suggest that Lactalis provided the farmer with any pages of the executed MSA document, Regional Handbook or QDairy Manual.
105 The ACCC submitted that on those 363 occasions the MSAs which Lactalis entered into did not consist of a single document. It was not submitted that they did not constitute a single document because they were comprised of three separate but related parts; the signed MSA template, the Regional Handbook and the QDairy Manual. The gravamen of its very narrow complaint was that Lactalis contravened the "single document" requirement by failing to provide farmers with those three parts of the agreement as a single document immediately after its execution of the agreement. In this respect it was said to be irrelevant whether the Handbooks and QDairy Manual were each separately available to a farmer. Likewise, it was said to be irrelevant that these other documents were sent to the farmers by email (or with links) or hand delivered prior to entry into the MSA, or even available on Lactalis's website. It submitted that, if the requirement of the Dairy Code is simply one of availability of all parts of an agreement, the single document requirement has no work to do. Ms Forsyth QC for the ACCC repeated in her closing submissions that the real complaint was that the totality of the documents were not sent by Lactalis to the farmers, and somewhat over zealously contended that "the Court can start and finish there". The essence of her submissions on this point can be seen from the following part of her address (ts 244):
So, in our submission, your Honour, you really need to ask four questions. Has an agreement been entered into? How was it entered into? If it was in writing when the process [sic] entered into it, did it consist of a single document or multiple documents? And if it's a single document, where is it? In the case of Lactalis, we submit the answer is they haven't complied with this. Lactalis hasn't pointed to any standalone document on which it relies and which the entire terms of the contract are contained for these 363 occasions. Now, it was an agreed fact about the 344 occasions, does your Honour recall, and then on 19 occasions there is an agreed fact that nothing was emailed.
We say that there is no evidence that the single document requirement was complied with in those circumstances either because Mr Houlihan, when he was cross-examined about it, accepted that he didn't know if any of those agreements had been provided by way of hand delivery, if they had been provided by email and even if they had, whether - he didn't know what parts of the agreement had been provided. Now, I can hand up to your Honour a list, if it's of assistance, of the 19. I don't think there's a lot in it but it's simply - and the references to Mr Houlihan - essentially, Mr Houlihan explains in each case, "It might have been hand delivered, something else might have happened."
In our submission, there is no evidence. It goes beyond the fact that the evidence is that there was no email, there's no evidence of a communication at all. …
106 These submissions reflect the ACCC's written submission that:
Contrary to the assertions of Lactalis, the ACCC's case on this issue is and has always been clear. Lactalis' MSAs comprise three separate but related documents (paragraph 9(a) of the Concise Statement). Lactalis' contravention of the single document requirement arises out of Lactalis' failure to provide farmers with those three parts of the agreement as a single document when the MSA was entered into (paragraphs 14 and 15 of the Concise Statement).
(Emphasis added).
107 Similarly, the ACCC submitted that Lactalis's "chaotic and piecemeal" approach to entering into its agreements with farmers undermined the express purpose of the "single document" requirement to "prevent other documents which are considered to be part of the agreement, such as handbooks, from being able to be changed unilaterally and provide processors and farmers with certainty regarding the contents of the agreements". Ms Forsyth QC sought to emphasise this point during the cross-examination of Mr Houlihan. The following exchange was said to highlight Lactalis's supposed haphazard approach to entering into MSAs with the farmers:
You had no single process?---Correct.
And that was before they were signed and after they were signed. Is that correct?---Correct, yes.
Some received emails, others didn't. Is that right?---Correct.
Some received documents emailed in addition to emails - sorry, in addition to the first Mailchimp email, but others didn't. Is that right?---Correct.
Some farmers ultimately signed different documents than they might have initially been provided with. Is that right?---Correct.
And sometimes that task doesn't have a record of the agreement beyond the signature page. Is that right?---Correct. Yes, that's correct.
And there was no consistent method of providing farmers with the entire agreement after they were signed, was there?---No, there was not.
108 From this it was submitted that "when you have a processor providing bits and pieces of agreements in a chaotic and inconsistent manner it is not possible to have certainty about the terms of the agreement".
109 The ACCC's submissions in relation to the construction of s 22(b) should be rejected. There is nothing in the text, context and purpose of that section or in the Dairy Code otherwise which requires that, at the time of acceptance of an offer to enter into an MSA, the entire contract must be attached to the correspondence communicating that acceptance. The stated requirement is that the MSA "must consist of a single document". That means that the terms and conditions between the respective parties are contained within a single document and whether that requirement is met is both a legal and factual question. It is legal to the extent that the terms of the agreement between the parties require identification. Once they are, the remaining question is whether they are contained in the one document and whilst that is largely factual it may also involve a question of law. If, therefore, Lactalis enters into an MSA with a farmer that is contained in a single document, in the sense that all of the terms and conditions in respect of which the parties are bound are contained in it, the requirement is satisfied. It is irrelevant to s 22(b) whether, once the agreement has been entered into, the MSA is sent to the farmer. There is nothing in s 22(b) of the Dairy Code requiring that step to occur. It only requires that the terms of the written agreement between the parties are compendiously captured in the one document, neither more nor less.
110 There is no doubt that Lactalis must accept the farmer's offer in order for an MSA to exist and that, in the ordinary course, acceptance will involve an express communication to the farmer. However, acceptance may also occur by implication or conduct. So long as the relevant intention exists to enter into the agreement and the acceptance is objectively ascertainable, the agreement will come into effect. There is, with respect, no perceivable warrant for reading into s 22(b) any obligation that the processor who enters into an MSA to deliver a full and complete copy of it to the former with whom they have contracted. There is no method of interpretation by which the words of the section could be construed to that effect. It would require reading substantial additional words into the section, similar to those which appear in s 18 of the Dairy Code which require the sending of a written record of an oral agreement to the farmer. The circumstances in which a court might construe legislation by reading words into legislation are confined and were referred to by Edelman J in Australian Competition and Consumer Commission v Valve Corp (No 3) (2016) 337 ALR 647, 667 - 668 [96]:
[96] The joint judgment in Taylor referred to the three matters identified by Lord Diplock in Wentworth Securities Ltd v Jones [1980] AC 74 at 105-6; [1979] 1 All ER 286 at 289 (Wentworth Securities) (as reformulated in Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 at 592 (Lord Nicholls). Those matters may be more in the nature of guidelines, which might not be sufficient even if they are established ([39]-[40]). Specifically:
(1) the court must be able to identify the precise purpose of the provision(s) in question;
(2) the court must be satisfied that the drafter and Parliament inadvertently overlooked an eventuality that must be dealt with if the provision is to achieve its purpose; and
(3) the court must be abundantly sure of the substance of the words that Parliament would have used had the deficiency been detected before enactment.
See also Herzfeld and Prince, Interpretation, 2nd ed, (Thomson Reuters, 2020), pp 129 - 133 [5.300] - [5.340].
111 Although the ACCC did not address the requirements referred to by Edelman J, it is abundantly clear that none would be satisfied in the present case. Firstly, the purpose of the section does not require the delivery of documents to the farmers but merely that the terms of the MSA be contained within a single document. Second, given that s 18 the Dairy Code specifically provides for the delivery of documents, it is not possible to reach the conclusion that a similar requirement had been inadvertently overlooked in relation to s 22. Finally, there can be no certainty as to the substance of the words which the Parliament might have used to rectify the alleged deficiency. It might have achieved the alleged intention in a variety of ways.
112 Section 22(b) does not have the meaning for which the ACCC contended.
113 The ACCC's submission that unless s 22(b) is construed in the manner for which it contends there would be great uncertainty, does not assist on the question of construction. It seemed to be suggested that Lactalis's failure to send each farmer a full copy of the MSA into which it entered undermined the purpose of the section which was to prevent the processors being able to alter the terms of the agreement unilaterally. With the greatest respect, the correlation between these two matters is far from clear. There is nothing in s 22(b) which suggests that an MSA might not include a term which permits the processor to alter the terms of an MSA. Indeed, s 33 of the Dairy Code specifically permits the processor to make unilateral alterations in certain identified circumstances. That permission has been adopted in this case where cl 11.2 of Schedule 6 of Lactalis's MSA template permits unilateral variations by Lactalis to ensure consistency with the law.
114 Further, whether or not a processor sends to a farmer a complete copy of an MSA once entered into cannot generate any uncertainty about the terms on which the parties have agreed. The ACCC's submission to the contrary appeared to be an attempt to shoehorn various statements in the Explanatory Statement into the words of the Code itself. In the context of the obligation imposed on a processor to publish the MSAs on its website, it is difficult to ascertain how a farmer might be uncertain of the terms of the agreement into which they offer to enter. As Lactalis submitted, the ACCC did not suggest (or plead, or establish by evidence) that any farmer was not aware of the terms of the MSA prior to entry into it, nor that any farmer was in any doubt as to the content of any MSA, whether before, at the time of or after formation. Further, even if it is accepted that a purpose of s 22(b) was to provide the farmers with the ability to ascertain the terms of the MSAs into which they entered with certainty, that does not warrant its wholesale rewriting so as to impose on the processor an obligation to send the farmers with whom they contract a complete copy of the agreement.
115 The ACCC also submitted that the "single document" requirement compels the provision of a single static source of rights and obligations, and that this was reinforced by the High Court's interpretation of "single document" in AstraZeneca AB v Apotex Pty Ltd (2015) 257 CLR 356 (AstraZeneca). In that case, Nettle J discussed the meaning of "single document" as that expression was used in s 7 of the Patents Act 1990 (Cth) and noted (at 400 [120]) a single document "must be capable of standing alone without interpretative or corroborative assistance from another document or other source of information apart from common general knowledge". However, reliance on AstraZeneca does not advance the ACCC's case. Firstly, it was rightly acknowledged by the ACCC that reference to a single document in that case was made in a completely different context. Second, and more pertinently, Ms Forsyth QC during her oral submissions when referring to this case, once again strayed into emphasising the elusive requirement that an MSA be "physically together" at the time acceptance was communicated. Clearly, this is not what is required under the Dairy Code. It is worth reiterating that the ACCC's submissions eschewed any suggestion that the agreements entered into by Lactalis were not "single documents" merely because the agreements were comprised of three parts.
116 In support of its central submission as to the construction of s 22(b), the ACCC referred to s 55 of the Dairy Code which, inter alia, provides that "a processor that is a party to a milk supply agreement with a farmer must keep the originals, or copies … of the agreement if it is in writing". It seemed to be submitted that this record keeping requirement supported the ACCC's contention that, upon entering into the MSA, Lactalis was required to send a full and complete copy to the farmer. This submission is also flawed. Compliance by a processor with s 55 is completely irrelevant to, and has no bearing upon, the requirements imposed by ss 17 and 22 respectively. No inference suggesting otherwise could possibly be drawn and it would be fanciful to attempt to do so.
117 The ACCC sought also to rely upon the guidance appearing on its webpage titled, "Plain English, single document & written acknowledgment" which was reproduced in its submissions as follows:
Single document
The Dairy Code of Conduct requires that all written milk supply agreements, and all records of unwritten milk supply agreements, consist of a single document. This ensures that:
• both parties are clear about the rights and obligations under the agreement
• parties' rights and obligations cannot be unilaterally varied by amending secondary materials (for example, a milk supply handbook).
The ACCC considers that the requirement to have a single document is generally likely to be satisfied if the milk supply agreement:
• is provided in its entirety to the farmer at the same point in time (for example, in one piece of correspondence)
• does not seek to incorporate other documents (for example, documents that the processor purports to be able to amend without following processes set out in the agreement).
Milk supply handbooks
If processors wish to use a 'milk supply handbook' as part of their milk supply agreement, the ACCC considers this practice is likely to comply with single document requirement in the Code if:
• the agreement expressly incorporates the handbook
• a copy of the relevant handbook is annexed or attached as part of the written agreement or written record of a verbal agreement
• the terms of agreement together with the handbook comply with the Code.
118 There is, with respect, much in those statements which is potentially misleading although there is no need to articulate here the several reasons why that is so. For present purposes it is sufficient to observe that the ACCC's opinions as to how the Dairy Code is to operate is irrelevant to the Court's determination of its actual construction. The principle in Chevron USA Inc v Natural Resources Defense Council Inc (1984) 467 US 837 has no application in Australia: Minister for Immigration v SZVFW (2018) 264 CLR 541, 591 [150]. In any event, as has been identified above, the suggestion that compliance with s 22(b) might be achieved by sending a copy of an agreement to a farmer in the "one piece of correspondence" is erroneous.
119 The ACCC's construction of ss 17 and 22(b) would lead to patently absurd results as appears from the following illustrations identified by Lactalis:
(a) If Lactalis were to make an offer and that offer were to be accepted by a farmer, Lactalis would contravene the Code if the farmer did not attach the entire contract to the written acceptance.
(b) If Lactalis were to communicate acceptance and attach the whole of the contract bar one page, and the error were corrected an hour later, Lactalis would contravene the Code.
(c) If Lactalis were to communicate acceptance by sending the whole contract, but doing so over two emails one of which bounced back but was resent, Lactalis would contravene the Code.
(d) If a farmer expressly asked Lactalis not to email the whole contract because the farmer had limited bandwidth and Lactalis emailed back only, say, the signature page Lactalis would contravene the Code.
(e) If Lactalis were to communicate acceptance via SMS or an email that simply conveyed Lactalis' acceptance (and did not attach any part of the agreement), Lactalis would contravene the Code.
(f) If Lactalis were to communicate acceptance by saying (or writing) "I agree to your offer to enter into a contract comprising the MSA, Handbook and QDairy", that would also involve a contravention of the Code.
120 Such outcomes could not have been intended and they are a strong indication that the ACCC's construction would be commercially incompatible with the myriad ways in which an offer to enter into an MSA might be accepted. A construction which best advances the regulatory purpose that is also harmonious with the general principles of contract law should be accepted over a narrow construction which does not find support in the text of the Dairy Code.