B & R Stevens Transport Pty Ltd v Burkitt

Court of Appeal (NSW)|2016-09-02|Before: Macfarlan JA, Meagher JA, Leeming JA, As Leeming JA, MacFarlan JA

Solicitors: Mercantile Legal Services (Appellant) Higgins Lawyers (Respondent) File Number(s): 2015/359228 Decision under appeal Court or tribunal: District Court of New South Wales Jurisdiction: Civil Date of Decision: 12 November 2015 Before: Sorby DCJ File Number(s): 2014/199775

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Appeal grounds 1-3 - challenge to the validity of the "side deal"

As Leeming JA observes, the appellant contended that the alleged oral "side deal" was invalid because it was followed by a written agreement between the parties that was intended to be a comprehensive statement of their bargain. If the appellant had demonstrated that such a subsequent agreement had been made, the earlier oral agreement would indeed have been ineffective. This would have been so whether that subsequent agreement was oral or in writing and whether or not the earlier agreement was "collateral" to it in the sense that it was made in consideration of the later agreement. In each of these instances the later agreement would have superseded the earlier agreement. However no such later comprehensive agreement was shown to have been made. As a result, the earlier "side deal" could subsist without being inconsistent with any later agreement: it was not in any way contradicted by the latter: see Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55 at [36]; Skyrise Consultants Pty Ltd v Metroland Funds Management Ltd [2011] NSWCA 406 at [13]-[15].

Appeal grounds 4-6 - whether there was a "goodwill" component

The appellant argued that it did not receive what it bargained for because it received a truck but no business or other rights, contrary to references in some of the documents and discussions to the sale including "goodwill". As Leeming JA observes, emphasis on the word "goodwill" in this context is liable to distract attention from the real issue between the parties. That issue was whether the appellant received all to which it was entitled under the sale, irrespective of the label that might have been attached to any perceived right.
The letter dated 2 April 2009 from the first respondent to the appellant (quoted at [15] below), although not identifying the purchase price payable by the appellant to the first respondent, clearly identified what the appellant was to receive under the agreement. Apart from the truck itself, this was to be a right to use the truck as a bulk pressure tanker hauling for the first respondent. Although the letter contained reasons why the appellant could be confident that work would be available to enable it to do this, the first respondent clearly stated in the letter that it did not guarantee the availability of that work.
Thus, in addition to the truck, the appellant obtained an opportunity, but not a right, to obtain work. It would have been justified in considering this opportunity valuable as, under then current arrangements, Mr Burkitt was in a position to allocate work to the appellant. After the purchase, the appellant did in fact receive such work for a period and there was no basis on the evidence for concluding that the later unavailability of work was in conflict with any promises or representations that could be gleaned from the letter of 2 April 2009, or elsewhere.
In these circumstances, the appellant did not prove that it did not receive that for which it bargained.
MEAGHER JA: I agree with Leeming JA that this appeal should be dismissed, with costs.
LEEMING JA: This appeal arises out of a largely oral agreement involving the sale of a prime mover. It was common ground that an agreement was reached, and that the vendor promised more than merely a sale of the chattel. However, what the purchase price was, and precisely what was promised in addition to the prime mover, were and are in dispute.
The appellant, B & R Stevens Transport Pty Ltd (BRST), one of whose directors is Mr Brian Stevens, commenced an action in the District Court seeking damages for breach of contract in the amount of $110,000 and damages for unpaid invoices in the amount of $49,987.27. The defendants were G W & H W Burkitt Pty Ltd and one of its directors, Mr Gary Burkitt. The company traded under the name "Cement Express", and I will refer to the company by that name. Some documents record that Cement Express was the trustee of a trading trust known as the "Gary Burkitt Family Trust" and use the acronym "GBFT"; nothing relevant to this appeal turns on the presence of a trust, save to explain the reference.
By a reserved judgment following a three day trial, the primary judge gave judgment in favour of the defendants. The appeal is as of right. The principal issue at trial and on appeal was as to the terms of the agreement struck between Messrs Stevens and Burkitt and their companies.
The convenient course is to start with the matters which were uncontroversial, then to identify findings and other aspects of the reasoning of the primary judge which are challenged on appeal, and then to resolve the grounds of appeal.

Uncontroversial factual background

The following matters were uncontroversial. Cement Express had purchased a Kenworth K108 Prime Mover, new, from a dealer, for a price of $327,400 including GST in July 2008. Cement Express had hauled cement products for Independent Cement and Lime Pty Ltd (ICL) since around 2000. Cement Express was also engaged to subcontract other hauliers to do the same work. Thus Mr Burkitt drove a truck for his company Cement Express as well as allocating work to eight subcontractors.
In around April 2009, Mr Burkitt accepted a position of "transport allocator" for ICL. In that position, he would allocate all ICL transportation work throughout New South Wales. For reasons which it was unnecessary for the primary judge to determine, Mr Burkitt wished to sell the prime mover. Mr Stevens learned of this. Mr Burkitt drove the truck to Mr Stevens' home. Both men had been in the haulage industry for many years (30 and 35 years respectively). Following a series of negotiations, which were mostly oral, an agreement was reached.
Despite an admission in the pleadings to the contrary, it became common ground at trial and on appeal that settlement of the transaction occurred on 10 June 2009. There was no deposit. No formal contract for sale was executed by both parties.
One document which passed between the parties was a letter dated 2 April 2009, on Cement Express letterhead, and addressed to Mr Stevens. Another letter of the same date, which had some minor textual differences, was addressed to Mr Stevens' son, Andrew (Mr Stevens had in mind that his son would drive the truck, which in fact occurred, for some months). The letter to Mr Brian Stevens was relevantly in the following terms: "This letter is to confirm an offer to you, to purchase a 2008 K108 Kenworth Prime Mover and to tow a company owned fully maintained bulk pressure tanker hauling for GW & HM Burkitt Pty Ltd on a full time basis. As you would be aware GW & HM Burkitt Pty Ltd are unable to guarantee your business because we are governed by market demand. Our full intention is to support you whilst Independent Cement & Lime are supporting us & have been doing so for the last ten years. Our forecasted earnings for a tow operator hauling a 19 metre B Double trailer are between three hundred and three hundred and fifty thousand dollars per annum. All payments are made on a fortnightly basis after an initial period of six weeks, payments are calculated by tons carried multiplied by tonnage rate plus GST."
The only difference which was said to be material between the two letters was the inclusion of the words "and job" in the first sentence of the letter to Mr Andrew Stevens, the first paragraph of which read as follows: "This letter is to confirm an offer to yourself to purchase a 2008 K108 Kenworth Prime Mover and job from GW & HM Burkitt Pty Ltd and to tow a company owned fully maintained bulk pressure tanker hauling for GW & HM Burkitt Pty Ltd on a full time basis."
Mr Stevens had purchased some 14 trucks in his career in the haulage industry. He contacted his broker, Mr Greg Garland, to arrange finance. Ultimately, three banks were involved at settlement. The truck had been mortgaged by Cement Express to the National Australia Bank, whilst BRST was borrowing funds from Westpac Banking Corporation ($240,000) and Australia and New Zealand Banking Group ($110,000).
Some of the financing documents were in evidence. The funds from Westpac were provided pursuant to a Westpac Equipment Finance Commercial Loan Agreement and were secured over the truck and by guarantees from Mr and Mrs Stevens. On 30 April 2009, Mr Garland, acting for BRST, made an application for a business loan facility in the amount of $110,000. The application included the following: "Goods to be financed: Client has just paid $240,000 for a Used 2008 Kenworth K108 6x4 Prime Mover fitted with 620HP Cummins Signature Engine Dual Chrome Exhausts Alcoa Polished Rims Quad Fuel Tanks Sleeper & Roof Mounted VIESA Air Conditioning ABS Brakes on 46,000lbs Air Bag Suspension Auto Transmission 19″ LCD TV & DVD Player, CB, UHF & Nokia Bluetooth Communications System Supplier: GW & HM Burkitt Pty Ltd of South Bowenfels NSW 2790 This application is to Finance the $110,000 Goodwill component of the business purchase that includes the above Kenworth Prime Mover over 15 years."
Notwithstanding the terms of that letter, the $240,000 borrowed from Westpac was not drawn down until settlement on 10 June 2009. BRST placed reliance upon the reference to the "$110,000 Goodwill component" in support of grounds 4-6 of the appeal.
By letter dated 26 May 2009, ANZ granted a business mortgage loan in the amount of $110,000 for the purpose of "business investment", secured by a second registered mortgage over the Stevens' home and guarantees and indemnities from Mr and Mrs Stevens.
Settlement was preceded by two documents on which Mr Stevens placed particular emphasis in the appeal. The first, dated 26 May 2009, is of central relevance to grounds 1-3 of the appeal and should be reproduced in its entirety: "26/5/09 Invoice & Disbursement Instructions Vendor: GW & HM Burkitt Pty Ltd As trustee for the Gary Burkitt Family Trust ABN 86 759 730 564 Sold To as a Going Concern & Delivered To B & R Stevens Transport Pty Ltd ABN 75 074 448 007 [Address] One only Used 2008 Kenworth K108 6x4 Prime mover fitted with 620 HP Cummins Signature Engine, Dual Exhausts, Chrome Alcoa Polished Rims, Twin Fuel Tanks, Sleeper cab, under chassis sleeper Air Conditioner, ABS Brakes on 46,000lbs Air Bag Suspension, Auto Transmission, 19″ LCD TV & DVD Player, CB, UHF x 2, Road Angel, Fridge, Nokia Bluetooth Communication System. White in Colour 157,450klms Engine No. 79302509 Vin No. 6F5000000A438669 Registration No. GWB 008 Cash Price. $350,000.00 Less Cash Deposit. $110,000.00 Trade In. $n/a $110,000.00 Balance owing. $240,000.00 The above unit is currently owned and operated by GW & HM Burkitt Pty Ltd ATF Gary Burkitt Family Trust and encumbered to National Australia Bank for the current payout figure of $289,879.77 as @ 15/06/09. Please disburse funds as follows: Pay to the Account of GW & HM Burkitt Pty Ltd ATF Gary Burkitt Family Trust NAB Bathurst [BSB and account number] $240,000.00 B & R Stevens Transport Pty Ltd to pay NAB Bathurst [BSB and account number] $49,879.77 Total of NAB Payout Figure see copy of NAB letter attached $289,879.77 Plus B & R Stevens Transport Pty Ltd to pay balance of the purchase price $350,000.00 to the account of GW & HM Burkitt Pty Ltd ATF Gary Burkitt Family Trust. [BSB and account number] See copy of deposit slip $60,120.23 Total of Purchase Price on a Going Concern Basis $350,000.00 For and on behalf of GW & HM Burkitt Pty Ltd."
The document was signed by Mr Burkitt.
The second document was signed by both of Messrs Burkitt and Stevens and their wives on behalf of their companies. It was said to be an agreement between those companies "in relation to GST on the sale of goodwill and plant which has been sold as a going concern". Its operative provision was that the two companies: "hereby agree that the supply of goodwill and plant from GBFT to BRST is the supply of a going concern for the purpose of s 38-325 of the GST Act and that the supply is GST free for the purposes of the GST Law. GBFT will supply to BRST all of the things necessary for the operation of the enterprise for the purpose of that section and GBFT will carry on the enterprise until the day of supply. We confirm that both parties are registered for GST."
Settlement took place on 10 June 2009, and it is clear that shortly afterwards, either BRST or a company associated with Mr Stevens' son Andrew commenced hauling using the prime mover. Between 8 July 2009 and 4 August 2010 there were some 31 deductions on invoices rendered by BRST to Cement Express, totalling $49,987.28.
Slightly more than two years later, Cement Haulage Pty Ltd (the transport arm of ICL) notified Mr and Mrs Burkitt that it would not renew its existing contract with their company, which would cease on the last day of February 2012. The letter advised that Cement Haulage would offer them, and all their contractors, direct contracts for haulage thereafter.
On the same day, Mr and Mrs Burkitt wrote to all their carriers confirming Cement Haulage's decision and noting that Cement Haulage would be offering a three year contract to each carrier with effect from 1 March 2012.
On 26 February 2012, BRST issued invoices to Cement Express for the $49,987.28 said to be owing under the 31 invoices over the period from July 2009 until August 2010.

Issues at trial and the decision of the primary judge

It was common ground that the parties had agreed to sell not merely the prime mover, but also something else. Mr Stevens contended that he had promised to purchase "the concrete haulage business conducted by G&H to haul concrete with the Truck". Mr Burkitt alleged that there was an agreement to "purchase the Truck with work", in accordance with the representations in the letters of 2 April 2009.
Further, Mr Stevens contended that the purchase price was $350,000, comprising $240,000 for the prime mover and $110,000 for the goodwill of the haulage business. Mr Burkitt contended that the price was $400,000 for the truck "with work", and with no component for goodwill.
There was a direct conflict in the testimonial evidence given by Mr Stevens and Mr Burkitt, which was set out and attended to in some detail by the primary judge. The conflict extended to the terms of the agreement the men had struck, and what had been said after the deductions totalling $49,987.28 had been made. It is not necessary to summarise the detail of these matters, because there was no challenge on appeal to the conclusion of the primary judge, which was that: "Overall however, I consider Mr Burkitt to be a witness of truth. He stated categorically in his affidavit evidence and his evidence in court before me, that there was no component of goodwill in his deal to sell his truck to the plaintiff 'with work'. It was always only a payment per load agreement."
The primary judge found, in accordance with Mr Burkitt's testimony, that the term of the contract was $400,000 for a truck "with work". His Honour also found that there was a "side deal" between the parties. His Honour described it as "in effect, an interest free loan to the Plaintiff", who could only obtain finance in the amount of $350,000. The agreement was for deductions of around $2,000 a fortnight to be made from payments otherwise due to Mr Stevens. That was based upon the direct evidence of Mr Burkitt and the regular payments which had been deducted from what was due to Mr Stevens for haulage.
Accordingly, the primary judge dismissed both aspects of the claim.

Appeal grounds 1-3 - challenge to the validity of the "side deal"

When the appeal was presented, no challenge was made to any of the findings of primary fact. Grounds 1-3 were based on the proposition that the "side deal" was inconsistent with the document dated 26 May 2009 identifying the "total purchase price on a going concern basis" of $350,000. Mr Sirtes SC, who appeared for the appellant on appeal but not at trial, accepted that these three grounds were interrelated and stood or fell together. The findings of a "side deal" were said to contravene "the principle in" Hoyt's Pty Ltd v Spencer (1919) 27 CLR 133, a matter not addressed by the primary judge for the good reason that, as was candidly acknowledged, no such submission had been advanced at trial. That said, it was submitted that just as had occurred in Nassif v Fahd [2007] NSWCA 269, the point could not have been affected by any evidence and could be raised for the first time on appeal.
In oral submissions, it was put thus: "[T]he only document that was created to actually identify and to form the purpose of being a [memorialisation] of the transaction, being the invoice that was issued as to what B&R Stevens could point to as being the subject matter of what was the transaction, only recorded a total price of 350,000. To the extent that they may have agreed on some other basis for what the defendant contended, was a different price that was not recorded, was the side deal. … [T]he reality of the situation was there was a different price from the way the parties had chosen to identify it in documentation, and in the only document that one can look at to say what could Stevens point to as being an articulation of what was the subject matter of what was being conveyed, and the only document that contained the price and the description of the item and the description of it being sold on a going concern basis was the document of 26 May 2009."
I cannot accept these submissions. While there are a number of principles mentioned in Hoyt's Pty Ltd v Spencer and Nassif v Fahd, the one relied on by BRST was that formulated by Bryson JA at [30]: "a legal rule prevents effect from being given to collateral agreements which are made in consideration of entering into the principal contract but are inconsistent with the principal contract."
His Honour collected statements of that rule in the reasons for judgment of Isaacs J in Hoyt's Pty Ltd v Spencer at 147-148, of Evatt J in Cutts v Buckley (1933) 49 CLR 189 at 201, in the joint judgment in Maybury v Atlantic Union Oil Company Ltd (1953) 89 CLR 507, and in the judgment of this Court in Esanda Ltd v Burgess [1984] 2 NSWLR 139 at 144-145, 145-146 and 152. All those formulations are confined in terms to collateral contracts, being contracts where the consideration is entering into the principal contract. Bryson JA also referred to what was said in Gates v The City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 5-6 and 11, where there are obiter statements of a broader proposition, to the effect that a representation which was not contractual could not be given effect to because it was inconsistent with the main contracts. Bryson JA referred to the rule being stated in Gates "in short terms". His Honour evidently considered that the statements in Gates were not intended to alter the scope of the rule, and, in any event, BRST did not rely upon the formulation in Gates.
Hoyt's Pty Ltd v Spencer was a case of a registered lease. The Court proceeded on the basis that there was a written agreement that the lessor would not exercise a power to terminate contained in the lease (see at 138), upon the basis of which Hoyts took the lease: see at 140 and 141-2. In Nassif v Fahd, there were two written contracts for the sale of land, and an oral agreement for the payment of an additional $150,000. The appeal was allowed on a basis which had not been put at trial, but Bryson JA recorded at [25] that "the only interpretation reasonably available of the conversation evidence which Mr Fahd gave is that the consideration for the promise to make the collateral payments was to be entry into the agreements for sale".
The relevant principle was contained in the decision of a unanimous High Court, delivered by Dixon CJ, in Maybury v Atlantic Union Oil Company Ltd at 517: "A collateral agreement made in consideration of a main agreement cannot effectively subsist unless it is consistent with the main agreement. Once an agreement is made in writing it is treated, unless the parties are shown otherwise to intend, as the full expression of their obligations. If it is established that the writing was intended to contain only part of a fuller agreement it may be otherwise." Although the decision was ex tempore, the appeal was argued over two days, K S Jacobs (then a junior of only six years' standing) appearing for Mr Maybury and B P Macfarlan QC leading T E F Hughes for Atlantic Union. The same principle was restated, a generation later, in Skyrise Consultants Pty Ltd v Metroland Funds Management Ltd [2011] NSWCA 406 at [13]-[15] (Macfarlan JA, Beazley and Meagher JJA agreeing).
The premise of BRST's submission is that the only document in evidence which records the entirety of the transaction is the invoice dated 26 May 2009. But the document on which BRST relies does not purport to be an agreement in writing between the parties, still less should it be regarded as a "full expression of their obligations". The document was, on its face, directed to the disbursement of funds at settlement. If, as the respondents maintained, the oral agreement included delayed payment of part of the price after settlement, then there was no occasion for that to be recorded in the document.
Moreover, there was no evidence that the document was contractual. Certainly, it was not signed by Mr Stevens or otherwise executed by BRST. Indeed, the only evidence in BRST's case in relation to the document was contained in Mr Stevens' affidavit as follows: "I have obtained the following documents through issuing a subpoena in these proceedings. … A copy of a letter dated 26 May 2009 from GW & HM Burkitt Pty Ltd (the 'May Letter') referring to the sale of a going concern for $350,000. A copy of the May Letter is included at page numbers 17 to 18 of BS-1."
The document at pages 17 and 18 to which Mr Stevens referred comprised two separate pages. One had a fax header of 27 May 2009 at 9.46. The other had a fax header of 28 May 2009 at 17.59 and was page four of a seven page fax, which appears to be the form in which it had been provided in response to a subpoena. As it happens, a complete copy of the invoice was also attached to Mr Burkitt's affidavit, which also included emails between himself and the broker which appear to have been used to complete some of the information in the invoice. Mr Burkitt said in cross-examination that it was prepared by him based on a "prototype" prepared by the broker. Nothing in this evidence suggests the document had contractual effect.
The letter itself refers to a "cash deposit" of $110,000. That was materially erroneous, as both parties conceded. The error tends to confirm that the purpose of this document was not to record the parties' bargain, but to give instructions for the disbursements at settlement.
Finally, although the primary judge employed the language of "side deal", it would appear that his Honour was employing the informal language of the parties, and not thereby intending to convey that there was a collateral agreement. There was no finding, and the evidence does not persuade me that a finding should be made, that the agreement to pay $50,000 in instalments after settlement was entered into in consideration of the main agreement. Indeed, a fundamental difficulty with BRST's submission is that, in contrast with the position in Nassif v Fahd, the submission is inconsistent with the findings of primary fact made, including his Honour's acceptance of the evidence of Mr Burkitt.

Grounds 4-6

These grounds challenge the rejection by the primary judge of the submission that BRST was acquiring a component of goodwill. BRST pointed to the document signed by both men concerning GST. BRST emphasised its formality and the important taxation consequences that document had, and that it was agreed that there was a sale of "goodwill and plant" which was sold as "a going concern". It also pointed to the reference to "and job" in the 2 April 2009 letter to Mr Andrew Stevens, the references in the 26 May 2009 invoice which likewise referred to the sale "as a Going Concern", and to the reference to goodwill in the application for finance which had been made on behalf of BRST. It also pointed to the fact that the prime mover had been driven some 150,000km by the time it was purchased, and that the price, according to the respondents, was considerably more than the original purchase price when it was new.
There were also two minor points advanced by BRST in writing but not orally. The first was that BRST referred to the provision of financial statements from Cement Express prior to settlement; it was put that the relevance of those statements "could not have been, and were not, in relation to the sale of a chattel". The second was that BRST paid stamp duty based on a purchase in an amount of $240,000.
All those matters pointed in the same direction, and warranted a conclusion on appeal, so it was said, that there was a component of goodwill which was sold (irrespective of whether the total price was $350,000 or $400,000; these grounds were independent of grounds 1-3).
BRST relied on what Spigelman CJ said in Waverley Municipal Council v Swain [2003] NSWCA 61 at [14]. But that was an appeal from a trial before a judge and jury, and it is as well to recall that his Honour was there reproducing what Jordan CJ had said in Bell v Thompson (1934) 34 SR (NSW) 431 at 437, namely, that it was not sufficient to show that a jury verdict went against the weight of the evidence, but that "it should so strongly preponderate … as to lead to the conclusion that the jury, in finding for the other party, have either wilfully disregarded the evidence or failed to understand and appreciate it". Ordinarily, where an appeal is from a judge alone, with the benefit of reasons, it will not be necessary to invoke the very high threshold formulated by Jordan CJ, and in what follows, I will apply the ordinary approach applicable in such cases to appeals by way of rehearing, where the question is not whether the conclusion of the primary judge was open, but whether it was right or wrong: see Warren v Coombes (1979) 142 CLR 531 at 549.
I turn to the various submissions advanced by BRST. First, a binding agreement to sell a truck may be struck without writing, but s 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) makes the supply of a going concern GST-free only if, inter alia, "the supplier and the recipient have agreed in writing that the supply is of a going concern". That requirement is, it may be inferred, the reason for the relative formality of the GST document.
It is neither necessary nor appropriate to express a view on the correctness or otherwise of the GST treatment of the transaction between the parties, which was not the subject of submissions. It is sufficient to note that irrespective of whether there was the sale of a truck together with a business, or a "truck with work", there was a basis for the parties to reach the view that s 38-325 applied. In particular, Mr Burkitt's evidence included the statement that, "If you sell a truck and it's a going concern, the person doesn't have to pay GST".
Secondly, the notion of "goodwill" is a distraction. As was said in Federal Commissioner of Taxation v Murry (1998) 193 CLR 605; [1998] HCA 42 at [12]-[13], goodwill is not only a legal term but also an accounting and business term which has received a variety of definitions and which is "notoriously difficult to define". I do not consider that anything material turns upon the use of a term of variable meaning in a loan application by or on behalf of BRST which Cement Express never saw and in circumstances where other aspects of the application ("Client has just paid $240,000 for a Used 2008 Kenworth K108 5x4 Prime Mover ...") were materially incorrect.
Although the GST document also refers to goodwill, it is inconsistent with the 26 May 2009 invoice which refers to a "Cash Deposit" of $110,000. The inconsistent documents fall to be assessed in light of the unchallenged finding of the primary judge that there was a promise to sell the truck "with work" to Mr Stevens for $400,000. In the claim as formulated by the plaintiff, the basis on which it was said that the plaintiff did not receive the goodwill was that the defendants did not subcontract cement transport contracts on behalf of Cement Haulage, and did not allocate cement transport contracts to BRST in priority to other subcontractors. However, in cross-examination, Mr Stevens conceded that although Mr Burkitt said that "once he was in allocations, he said he could look after us", he denied that he would be given priority; in his words, "[S]tandard work would be there for you. Not above anybody else".
There was evidence from another haulage contractor which corroborated this: "I have never been aware of any driver being given priority in the allocation of work through Gary Burkitt or Cement Haulage. If other drivers thought someone was getting favoured treatment, 'a war' would break out with the other drivers." The witness was not cross-examined on that paragraph.
Hence, as Mr Lynch SC submitted for the respondents, the evidence showed that the plaintiff received exactly what had been promised, until - more than two years later - Cement Haulage gave notice that it was terminating its arrangements with the Burkitts. This is consistent with the representation in the 2 April 2009 letters to Messrs Brian and Andrew Stevens.
Thirdly, the evidence of value was equivocal. BRST's submissions fall to be tested against the fact that the broker had referred at the time to Mr Burkitt's "recently acquired and heavily specked 2008 Kenworth K108 Prime Mover (today's replacement value would be well [in] excess of the $400,000 price tag for the Prime Mover alone prior to all of the bells & whistles being added)". Of course, that was not necessarily a dispassionate assessment of the value of the prime mover. Further, the evidence did not disclose the value of the promise of work from Mr Burkitt as transport allocator, although the primary judge found that BRST had operated the truck very profitably. Those matters are sufficient to repel the submission based on the discrepancy between the value of the prime mover and the purchase price.
Fourthly, in relation to the submissions which were not advanced orally, the short point is that Cement Express gave both Mr Stevens and his son a written representation as to profitability, and both they and their lenders would have been interested in its recent performance. The evidence relating to stamp duty was sparse, but Mr Burkitt said he was unaware of the price placed on the registration documentation on behalf of BRST. Neither of these submissions warrants a rejection of the findings of the primary judge.
Fifthly, the conclusions of the primary judge were supported by other considerations additional to the foregoing, including (a) the failure by BRST to object in writing to the deductions between July 2009 and August 2010, (b) the delayed invoicing by BRST in 2012, only after ICL had advised that it would cease to use Cement Express for subcontracting, and (c) contemporaneous emails, including on behalf of Mr Andrew Stevens in late August 2009 to Cement Express, "Andrew has asked me to get in contact with you to find out how much is still owing to Garry [sic]".
For all of those reasons, I would reject these grounds of appeal.

Orders

I propose that the appeal be dismissed, with costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 September 2016

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