Flogineering Pty Ltd v Blu Logistics SA Pty Ltd

Background 1 Section 236(1) of the Australian Consumer Law ("ACL", Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the "Act")) provides that if a person (the claimant) "suffers loss or damage because of the conduct of another person", and the conduct of that other person contravenes a provision of Chapter 2 or Chapter 3 of the ACL, the claimant may recover the amount of the loss or damage by action against that person or against any person involved in the contravention. 2 These proceedings are concerned with a claim by the applicant for recovery of the amount of the loss or damage it says it has suffered because of the conduct of the respondents in contravention of s 18 (Chapter 2) of the ACL and s 29 (Chapter 3) of the ACL. 3 The resolution of this question was set aside for separate determination after the determination of the contended contraventions of the ACL. 4 On 28 September 2018, the Court delivered judgment on the separate question of the contraventions: Flogineering Pty Ltd v Blu Logistics SA Pty Ltd [2018] FCA 1479 (the "liability judgment"). These reasons ought to be read in conjunction with the liability judgment. Abbreviations used in the liability judgment will also be used in these reasons. For convenience, some observations from the liability judgment are quoted in these reasons. 5 In the liability judgment, the Court held that the conduct of each of the respondents of affixing the particular pattern Approval number (No 5/6E/13A) to the measuring instruments installed on their trucks/tankers constituted conduct which carried with it a representation to the milk processors and, in a wider sense, to the dairy farmers, that the regulatory regime governing the processes undertaken by relevant participants in the transfer of milk from a dairy farmer's refrigerated vat to a tanker and from the tanker to the milk processor provides for a right in someone, whoever it might be, to apply a pattern Approval number to measuring instruments as a regulatory signification of an authority to so mark the measuring instruments: [168] and [169] of the liability judgment. 6 At [183] of the liability judgment, the Court determined that the representation described at [168] of the liability judgment (taken together with the observations at [169]) constituted a misrepresentation as so described. The Court also made this observation at [183]: 183 … The misrepresentation, in a real and practical sense, is misleading or deceptive or likely to mislead or deceive, either or both of, the dairy processors and the dairy farmers into believing that the flowmetering instruments are marked with a regulatory signification in the form of an approval number by persons who hold the right to do so. The conduct, viewed as a whole, demonstrates a real and not simply a remote chance that those market participants will be misled or deceived or be likely to be misled or deceived. 7 As a result, the Court made the following two declarations: 1. Each of the respondents, by affixing the number "No 5/6E/13A" (an "Approval Number" issued pursuant to the National Measurement Regulations 1999 (Cth) (the "Regulations") made under the provisions of the National Measurement Act 1960 (Cth)) to a measuring instrument described as a milk flowmeter, engaged in misleading or deceptive conduct or conduct likely to mislead or deceive either milk processors or dairy farmers or both because such conduct constituted a representation that the person who had affixed the Approval Number to the particular milk flowmeter installed on the particular tankers as described in Schedule 1 below in respect of each relevant respondent, was someone authorised to do so under an approval issued under the Regulations when that person was not so authorised in accordance with that approval. 2. The conduct of each respondent as described in Declaration 1 constitutes conduct in contravention of Section 18 of the Australian Consumer Law and Sections 29(1)(e) and 29(1)(g) of the Australian Consumer Law. 8 Apart from the declarations, the Court made a number of injunctive orders. The question of the costs of and incidental to the proceeding were reserved until the determination of the separate question as to loss and damage. 9 Schedule 1 to the declarations and orders sets out the name of each respondent, tanker identification details relevant to each respondent and the date of installation on those tankers of measuring instruments (flowmeters) affixed with the Approval number. Those matters will be addressed later in these reasons. 10 Apart from the liability judgment, the Court also gave judgment in relation to questions going to the methodology adopted by the applicant in formulating its case theory on loss and damage: Flogineering Pty Ltd v Blu Logistics SA Pty Ltd (No 3) [2019] FCA 1258 (the "case theory judgment"). 11 The case theory upon which the claim under s 236(1) of the ACL rests was the subject of a document described as amended particulars of loss filed on 2 September 2019. It is now the subject of a document described as further amended particulars of loss filed on 14 October 2019. In that document, the case theory on loss or damage, suffered because of the conduct of the respondents, is put this way (where each factor is said to have prevailed at all material times). 12 First, the applicant was the only entity or person supplying the Instrument (the measuring instrument described in Declaration 1), including instruments comparable to the Instrument falling within the Approval under the National Measurement Act 1960 (Cth) (the "NMA") and the National Measurement Regulations 1999 (Cth) (the "Regulations"): Particulars of Loss ("POL"), 1(a)(i). 13 Second, the applicant was the only entity or person authorised under the Approval to mark a particular instance of the Instrument as complying with the Approval by affixing the relevant Approval number (5/6E/13A): POL, 1(a)(ii). 14 Third, there was no other instrument available to the respondents which was substitutable for the Instrument in measuring the volume of milk being loaded on and off a milk haulage vehicle, at a commercially acceptable flow rate having regard to the need to load milk on and off a truck quickly, and which was the subject of an approval under the NMA and Regulations: POL, 1(b)(i) and (ii). 15 Fourth, in the alternative to the propositions described at [14] of these reasons, the applicant says that there was no other instrument available to the respondents that was sufficiently robust, having regard to the demands of the application in which the instrument was to operate, and which provided the functionality that the Instrument provided (including the measurement of volumes, as well as recording distance travelled and speeds of travel), and which was the subject of an approval under the NMA and Regulations: POL, 1(c)(i), (ii) and (iii). 16 Fifth, consistent with the declarations, each respondent's conduct in marking a measuring instrument with the Approval number conveyed a representation that the relevant respondent enjoyed a regulatory right to so mark the instrument (the "Representation"): POL, 1(d). 17 Sixth, it was material to each purchaser of bulk milk with whom each respondent contracted for the haulage of milk (the "Purchaser") that the measurement of milk, as it was being loaded on or off a tanker operated by one of the respondents, was conducted accurately: POL, 1(e). 18 Seventh, the Purchasers, or alternatively a substantial number of them, were aware of the NMA and Regulations and their content; were concerned to comply with the NMA and Regulations; knew of the requirement that instruments such as the Instrument be marked as complying with an Approval under the NMA and Regulations; and, as a result, would have noticed, in the course of their efforts to comply with the NMA and Regulations, if any example of the Instrument used by a respondent was not so marked: POL, 1(f). 19 Eighth, compliance with the NMA and Regulations formed, or alternatively is likely to have formed, part of the contractual arrangements between Purchasers and the respondents (that being the ready inference from the matters set out in [18] of these reasons: POL, 1(g). 20 Ninth, thus, but for the Representation, it is likely that one or more of the Purchasers would have insisted that the respondents use measuring instruments marked with a number in the manner contemplated by the Approval by someone enjoying the regulatory right to do so: POL, 1(h). 21 Tenth, the applicant suffered loss and damage as each Purchaser relied on the misleading and deceptive conduct in continuing to engage with the respondents to deliver milk to it from dairies: POL, 2(a). 22 Eleventh, to comply with the insistence of each Purchaser as described at POL, 1(h) as set out at [20] of these reasons, the respondents would have to have purchased instances of the Instrument from the applicant, there being no other person who could supply such equipment and mark it as compliant with the Approval (the "lost sales income"): POL, 2(b)(i). In addition, the applicant says that the respondents would have to have had each such instance of the Instrument serviced by the applicant to maintain compliance and it thus lost service income (the "lost service income"): POL, 2(b)(ii). 23 The quantum of the lost sales income and the lost service income is particularised in the report of a forensic accountant, Mr Elia Lytras, dated 2 March 2020. However, in the applicant's closing submissions, the applicant says that it does not maintain the claim identified under para 2(b)(ii) of the Particulars of Loss: see [22] above. 24 As to the Particulars of Loss, it is convenient to now note the opinions expressed by Mr Lytras. 25 In reaching his opinion, Mr Lytras was instructed (among other matters) to assume that if the respondents had not purchased flowmetering systems from an overseas supplier and affixed the Approval number, they would have been required to purchase flowmetering systems from the applicant as there was no similar flowmetering system with a registered Approval number available in the Australian market. Mr Lytras also assumed that customer and supplier invoices disclosed to him for the purposes of his investigation were representative of the types of flowmetering systems that the applicant would have sold to the respondents if not for the misleading and deceptive conduct of the respondents. Mr Lytras recites, as his primary task, assisting the Court in determining the applicant's loss arising from the contravening conduct. Mr Lytras describes such loss as the loss suffered by the applicant due to the respondents affixing the Approval number to the identified tankers thereby avoiding having to purchase flowmetering systems from the applicant. In discharging his task, Mr Lytras also examined the extent to which the applicant's practice of amortising the costs associated with obtaining and maintaining the applicant's Approval number impacts upon the loss suffered by the applicant. 26 As to the objective inherent in the task, Mr Lytras says that the objective in assessing economic loss is to return the injured party to the financial position it would otherwise have been in, if not for the contravening conduct. To use the language of s 236(1) of the ACL, it involves identifying in money terms the amount of the loss suffered by the applicant because of the contravening conduct of the respondents as found so that the applicant may recover that loss by action. 27 As mentioned earlier, Declaration 1 refers to an attached Schedule 1 which sets out the agreed details of the tankers upon which flowmetering instruments were installed by the respondents to which the Approval number was affixed or marked (without the approval or authority of the applicant) and the approximate dates of installation and marking. That Schedule refers to 25 tankers. It should refer to 26 tankers. Tanker 137, Registered Number 275QTG (which Mr Lytras records as having the relevant approximate date of 16 June 2011) seems to have been left off the Schedule agreed between the parties for the purposes of the final orders. That was a tanker operated by Jurss Robertson Pty Ltd ("JRPL"). 28 The following Schedule sets out the tanker number and the approximate date on which the Approval number was affixed to the flowmetering instrument by or on behalf of the relevant respondent. These details, drawn from the Schedule in the report of Mr Lytras, are agreed between the parties. For these tankers, it is not necessary to set out the registered number in each case. Tanker Number Date Approval Affixed 151 20 January 2010 126 21 January 2010 162 9 February 2010 167 1 June 2010 20 7 June 2010 132 21 June 2010 131 22 June 2010 168 27 November 2010 127 9 March 2011 169 7 May 2011 171 30 June 2011 172 31 January 2012 136 14 February 2012 135 17 February 2012 173 2 April 2012 174 15 October 2017 176 17 October 2014 143 18 November 2014 141 19 November 2014 130 19 November 2014 148 26 February 2015 149 2 April 2015 152 12 August 2015 178 24 November 2015 207 29 April 2017 137* 16 June 2011

• The tanker number omitted from the agreed Schedule submitted by the parties for the purposes of the orders 29 Schedule 1 to Declaration 1 also identifies the number of tankers installed with flowmetering instruments affixed with Approval number by respondent. The details by respondent, in the sequence set out in Schedule 1 to Declaration 1 (omitting Tanker 137) are these: Blu Logistics SA Pty Ltd, Tanker 207; Wastell Milk Haulage Pty Ltd, Tankers 151, 162, 168, 171, 172, 173, 174, 176, 178 and 169; Wadene Pty Ltd, Tanker 167; JRPL, Tankers 126, 127 and 20; J R Bulk Pty Ltd, Tankers 131, 132, 135, 136, 141, 143, 148, 149, 152 and 130. 30 The amended statement of claim, at para 12, identifies 26 tankers which the applicant pleads were marked by the respondents with the Approval number without the applicant's authority or consent. The Schedule at para 12 includes Tanker 137, Registered Number 275QTG. At para 12 to the amended defence, the respondents admit that each of them has respectively, on the occasions pleaded in para 12 of the amended statement of claim, caused the tankers installed with the flowmetering instruments to be marked as pleaded. However, at para 12(c) of the amended defence, the respondents plead that "the pattern approval number on the milk flow metering system on tanker registration number 275QTG has since been removed". 31 Nevertheless, the respondents' submissions in relation to the terms of the relief make clear that the parties contemplated that the declaration was to encompass all 26 instances identified in para 12 of the amended statement of claim. 32 At para 5 of the respondents' submissions of 15 October 2018, the respondents said this: 5. In light of those findings, the respondents suggest that the following would be an appropriate form of declaration: It is declared that each of the respondents engaged in misleading or deceptive conduct or conduct likely to mislead or deceive either or both of milk processors and dairy farmers, by affixing a pattern approval number, which had been issued pursuant to the National Measurement Regulations 1999, to a measuring instrument on each of the occasions set out in paragraph [12] of the Amended Statement of Claim filed 27 September 2017, so as to represent that each such measuring instrument was affixed with a regulatory signification in the form of an approval number by persons who held the right to do so. [emphasis added] 33 It is clear enough from the above submissions and the submissions of the applicant and the respondents later filed in these proceedings, that the parties have agreed that there are 26 instances of tankers installed with flowmetering instruments marked with the Approval number, without the consent or authority of the applicant. 34 Mr Lytras examined the detailed profit and loss statements of the applicant for each of the financial years ended 30 June 2010 to 2018 and the period 1 July 2018 to 19 March 2019 which contain what he describes as the "enterprise-wide and Metering System category's sales and costs of sales performance for the identified periods". Mr Lytras says that this information enabled him to obtain an understanding of the applicant's gross profit margins which could then be applied to the contended lost sales so as to calculate the lost gross profit. Mr Lytras sets out a schedule for each period described above (at para 7.9 of the report) showing the key sales, cost of sales and gross profit margin information extracted from the applicant's MYOB profit and loss statements. The schedule sets out the "Metering Systems Gross Profit" for each period and the "Metering Systems Gross Profit Margin" for each period. Mr Lytras then sets out at para 7.10 of the report the analysis he conducted in relation to that data. It is not necessary to set out in these reasons the data contained in the table at para 7.9 of the report. 35 Mr Lytras was also provided with a bundle of customer and supplier invoices including invoices issued by the applicant to customers and supply invoices issued to the applicant by Poul Tarp A/S, the supplier of the MobiCom flowmetering system sold by the applicant. Mr Lytras says that these invoices provided support (although not exhaustively) for the sales and expenses data, and gross profit, attributable to the applicant's flowmetering system undertaking: paras 7.11 to 7.20 of the report. 36 Mr Lytras, at para 7.21 of the report, summarises the data in a table that sets out for each period described earlier, the number of units sold, parts sales, servicing revenue and total revenue. Again, it is not necessary to set out that data here. 37 Focusing only on the "Lost Flowmetering System Sales", Mr Lytras says that the lost gross profit on those sales is simply a function of the number of lost unit sales multiplied by the national unit sale price multiplied by the notional gross profit margin. Based on the actual sales for each financial year to 30 June from 2010 to 2019, Mr Lytras calculates the average sale price for each year and applies that average price to the number of lost sales in each year on the hypothesis that each flowmetering system purchased by the relevant respondent (see [29] of these reasons) and to which the Approval number was applied, would have been a sale to the relevant respondent by the applicant had the contravening conduct of the relevant respondent not occurred. 38 In the result, Mr Lytras calculates the "Lost Flow Metering System Sales as $1,242,114". That amount is said to represent the total lost flowmetering system sales revenue aggregated for all respondents. Mr Lytras then calculates the gross profit margin that would reasonably have been achieved on those sales: paras 8.9 to 8.13 of the report. Mr Lytras calculates the profit margin, having regard to that analysis, as 49%. Applying that profit margin to the "lost sales variable" of $1,242,114.00, the lost gross profit on those sales is $606,636.00. Mr Ivey, the expert who gave evidence on behalf of the respondents, does not contest the conclusion reached by Mr Lytras as to the gross profit margin. The applicant contends that each of the respondents is responsible for the total loss because each of the respondents is responsible for the contravening conduct that caused the total loss. 39 In examining the various issues in relation to the claim arising under s 236(1) of the ACL, it is important to keep in mind the representation made by each respondent as found. The liability (or contravening conduct) finding is that each respondent engaged in conduct. The conduct is affixing the Approval number to a milk flowmeter measuring instrument installed on each tanker. That conduct was found to constitute a representation by conduct made to either milk processors or dairy farmers or both that the person who had affixed the Approval number to the flowmeter instrument installed on the particular tanker was authorised to do so under an Approval issued under the Regulations. The making of the representation bore the character of misleading or deceptive conduct or conduct likely to mislead or deceive each milk processor or dairy farmers or both because the person affixing the Approval number to each flowmetering instrument installed on each tanker was not authorised to do so: see the matters at [6] and the terms of the declarations at [7] of these reasons. 40 In these proceedings, the focus of the applicant's case is upon the representation made to the milk processors otherwise described as the "Purchasers" of bulk milk haulage services from the respondents. The applicant contends that each Purchaser relied on the representation in the sense that having regard to the whole of the evidence concerning the collection of milk from the farm gate to delivery to the processor and the need to maintain precision and accuracy in the measuring and recording of milk volumes so transferred, the representation was a "material" matter to the processor Purchaser. The applicant contends that the materiality of that matter explains why each respondent, without the authority of the applicant, affixed or caused to be affixed, the applicant's Approval number, to flowmetering instruments installed on their respective tankers on the agreed dates. 41 The applicant contends that each respondent understood the regulatory regime under which the Approval had issued to the applicant and understood that it was likely that the processor Purchaser to whom it sought to provide services (and did supply bulk milk haulage services) would want to know that flowmetering instruments, installed on the tankers of each respondent providing those services, were compliant with the regulatory requirements arising under the NMA and Regulations. 42 The next step in the applicant's case is that because participants in the industry (both processors, haulers and dairy farmers) are so concerned about accuracy in the measuring and recording of the volume of milk collected from dairy farms and delivered to processors, and concerned to comply with the regulatory regime established by the NMA and Regulations, processors, as Purchasers of the haulage and transport services, would have insisted that flowmetering instruments affixed to the respondents' tankers comply with the regulatory regime as a condition of contracting with each respondent and would have insisted upon each respondent continuing to comply with the requirements of that regime. 43 To make good the case on materiality and to support the contention that compliance with the requirements of the regime by each respondent would have been a matter insisted upon by processors as Purchasers of the services of the respondents, the applicant relies upon the evidence of the former National Milk Transport Manager for Fonterra Co-operative Group Limited (said to be the world's largest exporter of dairy products), Mr Antony Miller; various documents relating to tenders and tender responses passing between some of the respondents and processors; the contracts made between one or more of the respondents and processors; and the evidence of the industry experience in supplying flowmetering systems of Mr McMahon. Oral evidence was also given by some of the directors of some of the respondents. It will be necessary to go to all of the evidence in due course. 44 The applicant contends that the respondents well knew and understood that the processors cared about accuracy and compliance with the NMA and Regulations, and contends that the respondents marked their flowmetering instruments installed on their tankers with the Approval number without the applicant's authority "for a reason" and the reason, it is said, was that they thought it likely that a processor (to whom an Approval signification mattered), might check for the Approval number signifying that the flowmetering instruments used by the respondents had the Approval, and the lack of such a "mark" would have had adverse consequences for the respondents. 45 The next step in the applicant's case is the proposition that its case on loss depends upon the Court accepting that in the face of the need for the respondents to engage with the processor Purchasers and win milk haulage and transport contracts in a way that satisfied the concerns of the processors about accuracy of flowmetering instruments, and compliance with the NMA and Regulations, the "only way" for the respondents to conduct their business without contravening ss 18 and 29 of the ACL (in the way they did having regard to the declarations and the representation) "would have been to purchase flow meters from the applicant". 46 In that sense, the conduct of the respondents is said to be causative of loss. Had the contravening conduct not occurred, the applicant would have made sales, it is said, to the relevant respondents of every flowmetering instrument (then properly bearing the Approval number lawfully applied by or with the authority of the applicant) required by the relevant respondent in order to undertake the milk haulage activity, while exhibiting fidelity to the concerns of the processors about regulatory compliance. 47 The respondents contend that even if the applicant makes good its case on reliance and materiality and causation (which they contest), they would not have purchased the flowmetering systems of the applicant because they would have purchased an alternative meter called the "THS-Piper meter" developed by Transport Hydraulic Solutions Pty Ltd ("THS"). The applicant contends that the evidence of the directors of the respondents (Mr Timothy Jensen and Mr Stephen Wastell) that they would have purchased the THS-Piper meter had they been confronted with the proposition that their conduct contravened the ACL, ought not be accepted. There are a number of bases upon which that contention is advanced. The contentions will be examined in the course of considering the evidence on that topic later in these reasons. 48 It is important to remember that the question to be answered by the Court in this case is a statutory question: has the applicant "suffer[ed] loss or damage because of the conduct of" the respondents where "the conduct" contravened ss 18 and 29 of the ACL? (s 236(1), ACL). 49 Because the task is one of statutory construction, the question of causation "must be determined in light of the subject, scope and objects" of the statute conferring the right to recover (in this case, the ACL, given force by the Act), the amount of the loss or damage by action against those involved in the contravening conduct: Allianz Australia Insurance Limited v GSF Australia Pty Limited (2005) 221 CLR 568, McHugh J at [41]. Sometimes normative considerations have a "role to play" in deciding issues of causation in a statutory setting but the relevant norms "must be derived from legal principle" based on "legislative norms" to be found, in this case, in the ACL as given force by the Act: Travel Compensation Fund v Tambree (2005) 224 CLR 627, Gleeson CJ at [28] and [29] ("TCF v Tambree"). In the context of considering an issue of causation under s 236(1), the statutory purpose of the Act and the ACL is the primary source of the relevant legal norms. Causation in a legal context is always purposive: Legal Services Board v Gillespie-Jones (2013) 249 CLR 493, Bell, Gageler and Keane JJ at [137]; Comcare v Martin (2016) 258 CLR 467, the Court at [42]. In Comcare v Martin, the Court said this at [42]: The application of a causal term in a statutory provision is always to be determined by reference to the statutory text construed and applied in its statutory context in a manner which best effects its statutory purpose. [emphasis added; citation omitted] 50 In TCF v Tambree, in relation to s 68 of the Fair Trading Act 1987 (NSW) in relation to a contravention of s 42 of that Act (which raised the same questions in the same text as a claim under s 82 of the Trade Practices Act 1974 (Cth) in its application to a contravention of s 52 of that Act), Gleeson CJ at [30] said this: In recent cases, this Court has pointed out that, in deciding whether loss or damage is "by" misleading or deceptive conduct, and assessing the amount of the loss that is to be so characterised, it is in the purpose of the statute, as related to the circumstances of a particular case, that the answer to the question of causation is to be found [citing Henville v Walker (2001) 206 CLR 459 at [18], [96] and [164]-[165]; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 at [26], [50] and [84]]. [emphasis added] 51 In assessing the question of causation at common law, it is sometimes said that the task requires the Court to adopt a "common sense" approach to causation. In TCF v Tambree, Gummow and Hayne JJ observed at [45] that "… it is doubtful whether there is any 'common sense' notion of causation which can provide a useful, still less universal, legal norm" and "[t]here are, therefore, cases in which the answer to a question of causation will require examination of the purpose of a particular cause of action, or the nature and scope of the defendant's obligation in the particular circumstances". That view was affirmed by the Court in Comcare v Martin at [42]. 52 It will be apparent from the earlier discussion of the applicant's case theory that the applicant's claim to have suffered loss because of the contravening conduct of the respondents is not a linear case of "known reliance" (TCF v Tambree, Gleeson CJ at [31]) by the applicant which caused it to do something, or not do something, by which it suffered the claimed loss (typically, entering into a transaction that a claimant would not have entered into in the absence of the contravening conduct giving rise to a typical "no transaction" case). 53 The applicant claims to have suffered loss because of the contravening conduct of the respondents in making the representation described in Declaration 1 to the milk processors which was a misrepresentation having regard to the "legislative norms" in ss 18 and 29 of the Act. The applicant contends that it suffered the claimed loss because of the contravening conduct as, had the respondents not engaged in the contravening conduct in the course of their trading arrangements with the processors, the respondents would have had to acquire (by reason of the interests and imperatives of the processors) flowmetering systems that lawfully affixed to the flowmetering instruments installed on each tanker, the Approved Number they in fact affixed, or caused to be affixed, to their flowmetering systems without the authority of the applicant. Alternatively, the respondents would have had to install flowmetering instruments that enjoyed the benefit of a relevant approval under the NMA and Regulations, marked with a relevant Approval number issued under that regime. The applicant contends (which is contested) that there was no such alternative available over the period of the respondents' contravening conduct. This formulation of the case on the basis of a representation made to a third party resulting in loss suffered by the applicant is, in principle, consistent with Janssen-Cilag Pty Ltd v Pfizer Pty Limited (1992) 37 FCR 526 at 529-530 ("Janssen-Cilag") as affirmed by Gummow J at [102] in Marks v GIO Australia Holdings Limited (1998) 196 CLR 494 at [102] having extensively quoted at [101] the observations of Lockhart J in Janssen-Cilag at 529-530. 54 It is convenient to note here, for completeness, the observations at [24] to [27] of the case theory (or damages) judgment earlier mentioned: 24 However, a claimant might seek to contend that some other person, a third party (not the claimant), relied upon the contravening conduct of another and the claimant's loss or damage results from, or arises "because of", the third party's reliance on the contravening conduct. "Reliance" is said not to be the test of, or a substitute for, causation contemplated by the statute: Addenbrooke Pty Ltd v Duncan (2017) 348 ALR 1 at [499] ("Addenbrooke"). These issues of third party reliance giving rise to loss or damage suffered by a person resulting from third party reliance, have been considered in relation to conduct in contravention of s 52 of the Act (as it was) in the context of the text in s 82(1) of the Act: "A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV or V may recover the amount of the loss or damage by action …" [emphasis added]. In that statutory context, there is authority for the proposition that a claimant may recover loss or damage it "suffers" resulting from a third party's reliance on conduct in contravention of the Act: Ford Motor Company of Australia Ltd v Arrowcrest Group Pty Ltd (2003) 134 FCR 522 at [123] in the context of the discussion at [104] to [123]; Finishing Services Pty Ltd v Lactos Fresh Pty Ltd [2006] FCAFC 177 at [31] ("Finishing Services"); Hampic Pty Ltd v Adams [2000] ATPR 41-737; McCarthy v McIntyre [1999] FCA 805 at [48] and [49]; Addenbrooke at [499]. 25 In Janssen-Cilag Pty Limited v Pfizer Pty Limited (1992) 37 FCR 526 at 529-531 ("Janssen-Cilag"), Lockhart J identified a number of principles accepted in later authorities (and, in particular, Finishing Services at [31], Kiefel, Sundberg and Edmonds JJ; Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494, Gummow J at [101] ("Marks")), in these terms: What emerges from an analysis of the cases (and there are many of them) is that they do not impose some general requirement that damage can be recovered only where the applicant himself relies upon the conduct of the respondent constituting the contravention of the relevant provision. Also, a perusal of the provisions of Pts IV and V, the contravention of which gives rise to an entitlement to an applicant for compensation for loss or damage, points to the conclusion that applicants may claim compensation when the contravener's conduct caused other persons to act in a way that led to loss or damage to the applicant [references are made to many of the provisions of Pt IV]. The use of the preposition "by" in s 82(1) is important; it indicates the requirement that there be a sufficient cause or link between the respondent's conduct and the recoverable loss or damage. … "By" is used in s 52(1) in the sense of "by reason of" or "as a result of". … Loss or damage must directly result from or be caused by the respondent's conduct. The respondent's conduct must be the real or direct or effective cause of the applicant's loss; it must have been "brought about by virtue of" the conduct which is in contravention of s 52. Whilst the applicant's loss or damage must be caused by the respondent's misleading or deceptive conduct, I see nothing in the language of the Act or its purpose to warrant the suggestion that the right of an applicant for damages under s 82 is confined to the case where he has relied upon or personally been influenced by the conduct of the respondent which contravenes the relevant provision of Pt IV or Pt V of the Act [an illustration then follows]. A manufacturer of, say, leather goods may have established over many years a large and valuable reputation amongst the public or a significant section of the public. The respondent may commence to carry on the business of manufacturing leather products under a name deceptively similar to that of the applicant and by which the applicant's goods are known. Members of the public may be misled into believing that the respondent's business is the business of the applicant or associated with the business of the applicant [conduct in contravention of s 52(1)] and they may take their business to the respondent. The applicant has not relied on any representation of the respondent or been misled or deceived by it, but his loss is the loss of business occasioned directly by the respondent's conduct (or the consequent loss of profit). I can conceive of no reason why the Act, which is designed to foster and promote competition and, by Pt V, to prevent misleading or deceptive conduct, should be given a restrictive interpretation in s 82 such that only persons who relied upon the representation are entitled to recover loss or damage from the respondent. The evident purpose of the Act leads in my opinion plainly to a different conclusion. Section 82(1) should not be given a restrictive meaning to be available only to the person who suffers loss or damage by reason of his own reliance upon the representations which constituted the relevant contravention of Pt IV or V. … [A] person who suffers damage by reason of or as a result of the conduct of the contravener (albeit that that person does not himself rely upon the representations) is not to strain the language of [s 82(1)], but to interpret it according to its ordinary and natural meaning. For a person to recover under the section he must suffer loss or damage by reason of or as a result of the contravention. There is nothing unduly wide about that. 26 In Janssen-Cilag, the applicant contended that the contravening conduct of Pfizer induced members of the public (consumers) and pharmacists to purchase Pfizer's drug "Combantrin" instead of the applicant's drug "Vermox" thereby causing the applicant to lose sales of Vermox which would otherwise have been made. Lockhart J held that the applicant could establish causation for the purposes of s 82(1) of the Act by proving that consumers and pharmacists relied on the contravening conduct of Pfizer to the applicant's detriment. There was no suggestion of reliance on the contravening conduct of Pfizer by the applicant. 27 Section 236 of the ACL is not in the same terms as s 82(1) of the Act (so far as it used to apply to contraventions of Part V). Section 236 does not use the phrase by conduct but uses the phrase because of the conduct. The formulation of s 236 did not take up the observations of Mason CJ, Dawson, Gaudron and McHugh JJ in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525 ("Wardley") where their Honours said that the preposition "by" is a "curious word" and "[o]ne might have expected 'by means of', 'by reason of', 'in consequence of' or 'as a result of'". Their Honours observe that, in any event, "by conduct", clearly expresses the notion of causation. Even though s 236 of the ACL is confined in its operation to conduct in contravention of a provision of Chapters 2 and 3 of the ACL and does not have application to contraventions of Part IV which continue to be the subject of s 82(1) of the Competition and Consumer Act 2010 (Cth), there is no reason to believe that the principles identified by Lockhart J as approved in later authorities (see, in particular, Gummow J in Marks at [101]) do not also properly characterise the approach to s 236, having regard to the text, context and purpose of the Competition and Consumer Act 2010 (Cth) and Schedule 2 to that Act constituting the Australian Consumer Law, notwithstanding that s 236 uses the phrase "because of" rather than "by conduct of". 55 In cases where the allegation is that a person has engaged in contravening conduct which has induced others to act in a way which is said to have caused an applicant to suffer loss because of that contravening conduct, rather than a case where an applicant claims to have suffered loss by entering into a transaction induced by contravening conduct, the New South Wales Court of Appeal in Digi-Tech (Australia) Ltd v Brand (2004) 62 IPR 184, Sheller, Ipp and McColl JJA characterised the necessary "chain of causation" in such cases in this way at [155]: [F]irst, misleading conduct by the defendant; second, an innocent party is induced by the misleading conduct to act in some way; third, the innocent party's act, by its very nature, causes the plaintiff loss. On this basis, no act of the plaintiff contributes to the loss. The chain of causation is complete without there needing to be any act or omission on the part of the plaintiff. 56 Although reliance is not the test of, or a substitute for, causation in misleading or deceptive conduct claims contemplated by the statute (Addenbrooke Pty Ltd v Duncan (No 2) (2017) 348 ALR 1, Gilmour and White JJ), as the claimed loss must be shown to have been suffered "because of" the contravening conduct, the difficulty is that without the applicant establishing that a milk processor relied on or acted on the representation (as earlier described), the statutory cause of action under s 236(1) cannot be made out. That would seem to follow as unless the processor is shown to have acted on the Representation, it is difficult to see how the applicant had suffered loss because of the conduct of the respondents. But the question becomes one of what conduct constitutes acting on the representation? 57 The applicant says that if a representation is made to a milk processor which is material to the processor, and the representation is calculated to induce the processor to, for example, enter into a milk haulage contract (where accuracy of measurement of milk volumes by flow metering instruments approved under the regulatory regime is a critical matter) and such contracts were secured, a rebuttable "fair inference of fact" arises that the processor was induced to so act by the representation, and so long as the representation plays "some part, even if only a minor part", in contributing to entry into the contract (or the relevant act of reliance), "[i]t is sufficient": Gould v Vaggelas (1985) 157 CLR 215, Wilson J at 236; see also TCP v Tambree, Gleeson CJ at [32]. 58 As to causation, Gaudron, Gummow and Hayne JJ at [57] in I & L Securities Pty Limited v HTW Valuers (Brisbane) Pty Limited (2002) 210 CLR 109 (in the context of having examined the many possible features of the history of the relevant events that may have contributed to a person suffering loss), said this: "In light of these considerations, it is hardly surprising that it is now well established that the question presented by s 82 of the Act is not what was the (sole) cause of the loss or damage which has allegedly been sustained. It is enough to demonstrate that contravention of a relevant provision of the Act was a cause of the loss or damage sustained" [original emphasis; citations omitted]. 59 The respondents contend that the applicant's claim to have suffered loss because of the contravening conduct of the respondents is fatally flawed at the threshold because the applicant has not adduced evidence probative of a processor Purchaser acting upon or relying upon the representation the subject of Declaration 1. The respondents contend that in order for the applicant to sustain the statutory claim of having suffered loss because of the contravening conduct of the respondents, it must demonstrate that a processor took a step in reliance upon the representation and in the absence of that evidence the statutory claim must fail. 60 It is now necessary to examine the scope of the evidence on these questions.

The evidence of Mr Carey McMahon 61 In the liability judgment, the Court noted the following aspects of the evidence of Mr Carey McMahon, the owner and managing director of the applicant: 11 Mr Carey McMahon is the Managing Director of the applicant. He is also the beneficial holder of the relevant shares in the applicant company. Mr McMahon says that he acquired the shares in the company in 2005. He says that he has been the Managing Director since 2005. Mr McMahon says that the applicant has more than 30 years' experience in "supplying food processing equipment" and "engineering design services" to food manufacturing companies. 12 So far as the dairy industry is concerned, dairy farmers have a major interest in ensuring that the volume of milk collected each day from their on-farm collection tanks by bulk tanker operators who go from farm to farm, is measured as accurately as possible (with great precision). The quantum of their revenues from the processors depends, in part at least, upon accurate measurement of the volumes collected at the farm gate and the accurate measuring of the volume of milk transferred to the receiving tanks of the processor. 13 The processor also has a vital interest in ensuring that an accurate measure occurs of the volume of milk transferred from the road bulk tanker to the processor through use of a reliable milk flowmetering system, device or instrument. The measuring system, device or instrument must give the producer and the processor confidence about the precise measure of the volume of milk transferred (in a way which takes account of factors such as aeration, bubbles in the fluid etc). 14 Mr McMahon describes this imperative of accuracy in this way at para 7 of his affidavit: Specifically in the Australian dairy industry, the use of trade approved technology to measure the volume of milk collected from farms across Australia on a daily basis provides both the farmer and the dairy processing companies with a robust and equitable system for payment for the milk by the daily processor to the farmer. The NMI Approval certifies that the flowmetering technology that bears the NMI Approval number meets the accepted standards of accuracy and complies with the approved system design. 15 The reference to the "NMI Approval" in para 7 of the affidavit is a reference to, as Mr McMahon describes it, a "Flow Metering and Data Acquisition System" for the daily measuring of milk collected by bulk tankers from Australian dairy farmers, approved for "trade use" by the National Measurement Institute ("NMI") which is a Division of the Department of Industry, Innovation and Science. As to the NMI, Mr McMahon says that it is the peak body responsible for trade measurement and as to trade measurement, Mr McMahon understands that term to refer to all transactions in which the price of commodities or goods is based on measurement of quantity and quality. He understands that the primary purpose of the trade measurement system in Australia is to ensure that the pricing of traded goods is based on accurate measurement: para 5, McMahon affidavit, 26 July 2017. 62 At para 9 of his first affidavit, Mr McMahon sets out a list of companies active in various sectors of the dairy industry which (among others) are customers of the applicant, including Fonterra Limited, Murray Goulburn Co-operative Co Limited and Parmalat Australia Pty Ltd. 63 In the liability judgment, extensive reference is made to the objects of the NMA (as defined at [12] of these reasons) and the statutory mechanism adopted by the NMA and the Regulations made under the NMA, relevant to milk flowmetering systems and the Approval of the "suitability of the pattern" of the relevant instrument for use in trade resulting in the "Approval" in issue in these proceedings: see [17] to [47] of the liability judgment (Court Book ("CB) 395). 64 For present purposes, it is sufficient to note these matters. The NMA and Regulations establish a national system of units and standards of measurement of physical quantities and provides for a national system of trade measurement. 65 As noted at [22] of the liability judgment, units of measurement of physical quantities must be accurately assessed, recorded or realised as and when deployed (especially in trade settings) by properly calibrated instruments, devices or measuring systems, as a true measure of the extent of, for example, elapsed time, distance travelled or the volume of a fluid flowing (in litres or millilitres or otherwise) from, for example, one vessel to another. To that end, the Act provides for the adoption of standards of measurement for each unit of measurement of a physical quantity or one or more known values of a physical quantity. It establishes a procedure for the certification of measuring instruments by a "certifying authority" and a procedure for applying for approval of the "pattern" of a "measuring instrument" and the approval of such a pattern by an "approving authority". It also provides for test procedures for testing the accuracy of measuring instruments. It also establishes a verification process for ensuring that measuring instruments operate accurately. It is now necessary to identify some features of the statutory mechanism. 66 Under the regime, an application may be made to the relevant certifying authority for certification of a measuring instrument submitted for use in trade. If certified, a Certificate of Approval must issue to the applicant for the approval and a copy may be issued to anyone else the relevant authority considers should be given a copy. 67 Regulation 58 provides that applications may be made for approval of the pattern of a measuring instrument. The pattern is sometimes described in the literature as the "design" for the measuring instrument although that term is not used in the NMA or Regulations. For a measuring instrument to be certified it must have an "approved pattern" and "bear a mark that identifies" the particular instrument: Regs 37(5)(a) and (b). 68 Regulation 60 is in these terms: 60 Approval of patterns of measuring instruments (1) On application under regulation 58, the approving authority: (a) may, on payment of any relevant fee, examine the pattern of a measuring instrument; and (b) may approve the pattern of a measuring instrument by certifying that the instrument is suitable for use for trade or as a legal measuring instrument; and (c) if the pattern of the measuring instrument is approved - must issue a certificate of approval to the applicant; and (d) may issue a copy of the certificate to anyone else whom the authority considers should be given the copy. … (4) Approval of the pattern of a measuring instrument is subject to: (a) a condition that a measuring instrument on which the number of the approved pattern is marked must comply with the pattern and any other condition to which the approval is subject; and (b) any other condition stated in the certificate of approval. Note: Regulation 90AA relates to certificates of approval of the patterns of measuring instruments issued before 1 July 2004. [As to the note, the Certificate of Approval relevant to these proceedings was not issued prior to 1 July 2004]. [emphasis added] 69 At [47] of the liability judgment, the Court noted these matters: 47 The NMI has established a Pattern Approval Laboratory for undertaking the testing of measuring instruments and other measuring systems. The administrative arrangements for applying for approval of a pattern are set out in a document described as NMI P 106; Approval and Certification Procedures for Measuring Instruments Suitable for Use for Trade and Other Legal Purposes ("NMI P 106"). That document contemplates that particular instruments and measuring systems will be examined and approved (or not) according to particular standards, some of which are based on international standards. The NMI is an issuing and approval authority for a category of measuring instruments described as "measuring systems for liquids other than water". A document described as NMI R 117; Measuring Systems for Liquids Other than Water ("NMI R 117") specifies the mandatory metrological and technical requirements for the pattern approval of such a system. It is not necessary to examine in these reasons the detail of that document. NMI P 106 says that a certificate of approval as issued recites the approval together with any conditions of the approval; a technical schedule; and a test procedure which specifies the tests to be performed for verification or certification of instruments conforming to the pattern: NMI P 106, Part 4. 70 As to the Certificate of Approval issued to the applicant (CB 395), the Court noted the following matters at [48] and [49] of the liability judgment: 48 In 2004, the applicant obtained an approval issued by the Chief Metrologist for an "instrument" described as a: "Diessel Model IZM-E DN50 G2 Milk Flowmetering System" (the "descriptor"). The certificate of approval was issued on 24 December 2004. There were then 10 variations to the approval between 13 November 2006 and 2 December 2014. The approval, the subject of these proceedings, is Variant 10, although the Certificate of Approval is described as "Rev [Revision] 11" because Rev 10 was the provisional approval of Variant 10 (with an interim certificate issued on 3 October 2014) and Rev 11 was the approval (final approval) of Variant 10 (with the certificate issuing on 2 December 2014). As mentioned earlier, the certificate of approval number is No 5/6E/13A. It approves, for use for trade, "the instruments" under the descriptor earlier mentioned. The certificate recites that instruments by that descriptor (and the application) were submitted by the applicant to the NMI. The subject matter of the approval is recited prominently on p 1 of the certificate in these terms: NOTE: This Certificate relates to the suitability of the pattern of the instrument for use for trade only in respect of its metrological characteristics. This Certificate does not constitute or imply any guarantee of compliance by the manufacturer or any other person with any requirements regarding safety. This approval has been granted with reference to document NMI R 117 Measuring Systems for Liquids Other than Water, dated June 2011. This approval becomes subject to review on 1/01/18, and then every 5 years thereafter. [emphasis added] 49 Page 2 of the certificate recites the Conditions of Approval. The text is in these terms: CONDITIONS OF APPROVAL General Instruments purporting to comply with this approval shall be marked with pattern approval number 'NMI 5/6E/13A' and only by persons authorised by the submittor. It is the submittor's responsibility to ensure that all instruments marked with this approval number are constructed as described in the documentation lodged with the National Measurement Institute (NMI) and with the relevant Certificate of Approval and Technical Schedule. Failure to comply with this Condition may attract penalties under Section 19B of the National Measurement Act and may result in cancellation or withdrawal of the approval, in accordance with document NMI P 106. Auxiliary devices used with this instrument shall comply with the requirements of General Supplementary Certificates No S1/0/A or No S1/0B. Signed by a person authorised by the Chief Metrologist to exercise their powers under Regulation 60 of the National Measurement Regulations 1999. [emphasis added] 71 It is not necessary in these reasons to set out the detail of each variant (or the technical specifications) commencing with Variant 1, CB 395, and the amended Table 1 through to the approval of Variant 10. The Certificate is concerned with certifying (according to its terms read in conjunction with the "Document History") the suitability of the pattern for the instrument for use in measuring accurately (according to the technical specifications recited in the Certificate) liquid (milk) flows (by reference to Document NMI R 117, Measuring Systems for Liquids Other than Water, dated June 2011). 72 There can be no serious doubt that for dairy farmers and milk processors the accurate measuring of the volume of milk collected from a dairy farm (and related statistics such as the temperature of the milk, the journey time of the truck to the processor and other matters) and transferred to the processor is a critical matter. From the perspective of the processor, it is equally clear that accuracy in measurement of milk flows by those entities wishing to supply bulk milk collection and haulage services to the processors was and is a critical matter. So too is the question of whether the bulk milk haulage service provider was and is accredited in terms of the regime established under the NMA and Regulations for the use of instruments which in all respects complied with the regime and any applicable approval. I will return to the evidence on those matters later in these reasons but, for present purposes, it should be noted that Mr Jensen and Mr Wastell (and to a lesser degree, Mr Robertson) accepted that accreditation and compliance with the regime established under the NMA and Regulations so far as it relates to the important matter of the accurate measurement of milk flows, was, at the times relevant to these proceedings (and, no doubt, now), a matter of very significant concern to the processors in the trade dealings of the respondents in offering to supply, and in supplying under contracts, milk haulage services. 73 Returning to aspects of Mr McMahon's evidence, he says that in the period from 2001 to his acquisition of the applicant in 2004/2005, he was involved in software development both in Australia and the United States. That matter is relevant because Mr McMahon has direct experience in aspects of software development. He says that the applicant has sold flowmetering systems with operating software described as the MobiCom system manufactured by a Danish company, Poul Tarp A/S since 2001. He says that on 1 June 2017, the applicant entered into an exclusive distribution agreement with that company in relation to flowmetering equipment systems for trucks and tankers used in the dairy industry. In Mr McMahon's fourth affidavit sworn 13 February 2020, he further explains the reference to the term "DME" in the Approval, and the reference to "MTC". He says this at paras 2 to 5 of that affidavit: 2. I refer to paragraphs 12 to 19 of my First Affidavit. On 24 December 2004, Flogineering was granted a Certificate of Approval from the National Measurements Institute (NMI) under the National Measurements Act 1960 (Act) for the Diessel model IZM-E DN50 G2 Milk Flowmetering System (Instrument), namely an electromagnetic flowmeter approved for measuring milk collected from a milk tank, Approval No 5/6E/13A (Pattern Approval Number). 3. As stated in paragraph 15 of my First Affidavit and paragraphs 2-5 of my third affidavit, originally, Flogineering was granted two approvals from NMI; one for the Diessel system referred to above and another for the Mobicom system. The Mobicom system, which is also known as a DME system, was originally developed by DME (Dansk Mejeri Elektronik A/S, which I understand was acquired by Poul Tarp A/S) (Poul Tarp) whose approval was assigned Pattern Approval Number S393. It is no longer known as DME but now known as Mobicom. I refer to paragraphs 10 and 11 of my First Affidavit in relation to the Applicant's relationship with Poul Tarp. Approval Number S393 was subsequently included in the Certificate of Approval 5/6E/13A. 4. Poul Tarp A/S continues to manufacture both the Mobicom and S1 computer systems. These are proprietary systems that will send data to the Poul Tarp A/S software application known as Milk Transport Computer (MTC). 5. The MTC allows Dairy Processing companies and Milk Haulage companies to access data from flowmetering systems using Mobicom and S12 computer systems. This is the only method of extracting the data from the Mobicom or S12 computers. Once a company installs MTC software they cannot simply buy a competitor's computer as MTC as it will only receive data from a Mobicom or S12. 74 As to the question of whether there was an alternative milk flowmetering system available for installation on the tankers of the respondents on the dates nominated in Schedule 1 to Declaration 1 (and also Tanker 137 on 16 June 2011), which had the benefit of an NMI "pattern approval" and a corresponding "Certificate of Approval", Mr McMahon says this. The NMI issues a new Certificate (and Technical Schedule) for each variant to the terms of an approval. A schedule on NMI's website sets out the history and currency of such "Alimentry Product Flowmeters" (which includes milk sub-category 5/6E). Mr McMahon annexes a copy of the NMI webpage on the website of the Department of Industry, Innovation and Science ("CM-32") setting out a chronological schedule of the history of approvals (and variants) and those that were current, cancelled or had expired as at 12 December 2019. 75 Of the 23 Certificates of Approval in the schedule, 15 Certificates had either expired or had been cancelled as at 12 December 2019. Two Certificates relate to beer flowmetering systems and, based on Mr McMahon's knowledge of the industry, three Certificates concern instruments not offered for sale in Australia. At para 13 of Mr McMahon's fourth affidavit, he sets out the details of the milk flowmetering approvals that, to Mr McMahon's knowledge, remained current during the period of the schedule. He says the following things. 76 Approval 5/6E/13A "Diessel Model IZM-E DN5 G2" both interim and final were current and issued to the applicant. 77 Approval 5/6E/15 "THS Model PIPER-PD340-C76 Milk Flowmetering System" was current although it is not clear from the affidavit which entity held the approval but presumably it was the THS entity. 78 Approvals 5/6E/17, 5/6E/19 and 5/6E/20 are each an approval granted for a Milk Flowmetering System to, respectively, Bartec Benk GMbH (a German company), ACSE Limited and Fonterra Co operative Group Limited (both New Zealand companies). Mr McMahon says that based on his knowledge of the industry none of these three systems have been sold in Australia. 79 Approval 5/6E/23 "Smarta Industrial Model MC104 Vehicle-Mounted Milk Flowmetering System" was current (the "Smarta model"). 80 Thus, Mr McMahon accepts that the THS-Piper model and the Smarta model were current during the period of the search and current as from the relevant date of approval. 81 As to the THS-Piper model, it was approved on an interim basis on 2 December 2010 and the final approval was issued on 10 December 2010. Mr McMahon says that it is a "basic model" and "not comparable" to the applicant's Instrument. Mr McMahon says that it does not provide the same level of data detail to the purchaser of bulk milk concerning "milk and fleet management activity, such as the speed that trucks are being driven or their location". Mr McMahon says that the Certificate recites (at p 5, para 1.2(ix)) that the THS-Piper model uses "version M4 software or equivalent" which Mr McMahon says is not "compatible with MTC". 82 In his oral evidence, Mr McMahon was taken by counsel for the respondents to his description of the THS-Piper model as a "basic model and not comparable" to the Flogineering Instrument for the reasons he identified in his affidavit at para 16 (a lower level of data detail etc as described above). Mr McMahon explained that in describing it as a non-comparable basic model, he was referring to the capability of the applicant's software to use GPS tracking to produce a report showing where each truck (tanker) had been at any particular time at two minute intervals. Mr McMahon gave evidence that the GPS facility used in the THS-Piper model allowed the system to identify the supplier (dairy farm) at the time of collection by the tanker but provided no capability (at the date of his affidavit, 13 February 2020) of producing a report that tracked any particular truck (tanker) over a particular period of time. That was said to be important because drivers of trucks with a tanker load of milk had been known to go and do other things in the middle of a shift. Mr McMahon accepted that a milk haulage company might have their own on-board systems for monitoring driver movements and the tracking advantage in the applicant's system was of benefit particularly to the haulage contractor and not necessarily the processor (except where the processor was the owner of the fleet). 83 At para 35 of his fourth affidavit (mistakenly numbered para 13 at CB 979), Mr McMahon says that if a customer decided to change its flowmetering system from a system within the applicant's Approval to a THS-Piper model (or for that matter a Smarta model) the customer would also need to purchase remote application software unique to that instrument which, he says, would be a "huge expense" for that customer. Mr McMahon says that "once a customer has made a decision to implement a Mobicom system together with the MTC Application, it is likely they will continue using the Mobicom System (and purchase a new one where required) rather than replacing the system and, in turn, the Applicant would continue to make a profit on annual servicing fees". 84 The suggestion was put to Mr McMahon by counsel for the respondents that it would not be a huge expense for the customer to purchase remote application software unique to the relevant alternative model. No evidence, however, of any particular software supply costs or prices were put to Mr McMahon for his comment when he asked on what basis was the suggestion being put to him. He was simply asked to comment on the suggestion. In doing so, he observed that in the evidence of Mr Jensen (Exhibit "TJ-1" at CB 1851), there is a copy of an invoice issued by Transport Hydraulic Solutions Pty Ltd ("THS") addressed to Peter Stoitse Transport Pty Ltd (the "invoice") dated 30 November 2019. That invoice shows a "Piper Data Management Charge" of $46.80 per unit per month and a GPS Monitoring fee of $6.00 per unit per month which in the case of the 73 trucks recited on the invoice (including GST) amounted to $55.08 per unit. The Piper Data Management Charge (the software charge) for 73 vehicles including GST would be $51.48 multiplied by 73 amounting to $3,758.04 (by simply applying the information on the face of the invoice). Mr McMahon gave evidence of his annualised calculation based on the information on the face of the invoice as applied to 54 vehicles operated by the respondents of, in effect, 54 vehicles multiplied by $51.48 multiplied by 12 months amounting to $33,359.04 or as Mr McMahon put it, "$34,000". Mr McMahon says that the applicant's equivalent charge annually for 54 vehicles is $14,000.00 on the basis of which he said, "[s]o it seems like a significant increase to me, and the other point is that, over the course of the time that Blu Logistics had MTC, they invested thousands of dollars in developing software in MTC which, to replicate that in the Piper system, would have been a significant cost". 85 Mr McMahon said that he was assuming that the THS-Piper charge in the invoice is accurate and correct and although he had no independent knowledge of the THS charges, he had no reason to believe that the charge recited in the invoice was incorrect. 86 The proposition was put to Mr McMahon that there was no obligation on a customer (using the THS-Piper model) "to purchase the software" but rather "[t]here's an ongoing licence fee for Piper". Mr McMahon said that he had no independent knowledge of that. 87 As to the Smarta model, the period referred to in Schedule 1 to Declaration 1 is 20 January 2010 to 29 April 2017. Mr McMahon notes that the Smarta model was approved on 9 May 2017 and was not available for use in trade at any time prior to 9 May 2017. Mr McMahon says that based on the approvals issued by NMI, it is clear that if the respondents used, or intended to use, the MobiCom system, the only approval that could be applied to that system was the "Approval" issued to the applicant which could only be applied or affixed to flowmetering instruments "by persons authorised by the submittor" (Flogineering). 88 Mr McMahon says that there was no comparable instrument available to the respondents which could have been substituted for the applicant's instrument in measuring the volume of milk collected at the farm gate and the volume of milk transferred to the processor. That is said to be so due to the functionality limitations of the THS-Piper model and the relatively late approval of the Smarta model. Mr McMahon also makes the point about the transition costs. 89 Next, Mr McMahon in his evidence examines the documents produced by the respondents by way of disclosure and the documents produced by third parties under subpoena. 90 As to the question of disclosure of documents by the respondents, it should be noted that there was a significant interlocutory contest between the parties over disclosure: see [30] to [58] of the case theory judgment. The applicant had been seeking disclosure by the respondents of documents recording or otherwise evidencing any contract, agreement, arrangement or understanding between any of the respondents and another party such as a processor with respect to the haulage of milk. Apart from contesting the case theory on damages, the solicitors for the respondents asserted in correspondence that they were "instructed" that there were "no contracts or agreements between any of the respondents and dairies or milk processors for the transport of milk". Those instructions, as given, were incorrect. There were, not unsurprisingly, contracts or agreements between the respondents and milk processors. Mr Wastell had given evidence by affidavit on behalf of Blu Logistics and Wastell and Wadene of a call for tenders by Parmalat and thus his evidence and, of course, abiding common sense, suggested that as between industry participants such as milk processors and bulk milk haulage companies seeking to win bulk milk haulage contracts, there was likely to be contractual documents or other exchanges by letters, emails and orally (with probable relevant notes) evidencing a supply arrangement. It was likely that those documents would be relevant to the issue of reliance on the part of the processors. See [56] of the case theory judgment. Such documents were, in fact, in the possession and control of the respondents and they were produced in this separate question arising under s 236(1) of the ACL. 91 Having obtained the production of documents in the two ways just described (disclosure from the respondents and subpoenas to third parties), Mr McMahon says a number of things about the importance to the producers of accuracy in flowmeter measurement of milk which the applicant contends says something ultimately about the importance to the producers of the "Approval" having regard to the subject matter of it and the conditions of the approval. In other words, the applicant contends that there is a substantial body of fact about primary facts that support an inference going to the fact in issue, that is, the materiality of, and reliance on, the Approval in the context of the whole of the evidence of the dealings between the respondents and the processors such as Parmalat, Fonterra and others. 92 The first document, produced under subpoena addressed to Lactalis Australia Pty Ltd ("Lactalis", formerly Parmalat Australia Pty Ltd) is a proposal (CB 1105) put to Parmalat in response to a Request for Proposal, by the Jurss Group as described in the "Mission Statement" in the document. It emphasises that the Jurss Group (described as Jurss Transport, Jurss, Robertson and Wastell Transport) were the first operators of "DME and MTC Milk Metering Systems in Australia". The outline of the proposal is set out at [136] of these reasons. It also emphasises a capability through "DME metering systems" and GPS data tracking to enable efficient data transfer and effective "tanker volume control". Mr McMahon notes (at p 19 of the document, CB 1123) the references to the milk metering and data collection system as emphasised by the proponents. The DME Mobicom system and DME software is emphasised and so too is the fact that Jurss Transport operates that system in conjunction with the MTC software. The document explains that Jurss Transport had been conducting a trial on the DME MobiCom system and DME Software for the past two years. The document recites that Jurss Transport in conjunction with GB (from New Zealand) and DME in Denmark had worked together to develop software and hardware configurations for the Australian "Milk Collection Industry". It recites that Wastell is currently in the process of installing a trial unit to be running by June 2009. It recites that the "Metering System" has two main components made up of the MTC software (as extensively described at CB 1123) and the "DME MobiCom Milk Metering computer". 93 Other aspects of the document are mentioned in the course of discussing Mr Jensen's evidence. 94 The second document emphasised by Mr McMahon, discovered by the respondents, is a "Milk Cartage Agreement" dated 1 July 2009 between Jurss Group and Parmalat (CB 1156). Mr McMahon notes that the contract at cl 4.6 refers to a Zevodat device which is included within Approval 5/6E/13A issued to Flogineering. Aspects of the contract are taken up in the discussion of Mr Jensen's evidence, later in these reasons: see [144] and [145] of these reasons. 95 The third document, produced by Lactalis under subpoena, is a "Request For Proposal (RFP) Freight" concerning "Victorian Raw Milk Logistics" (CB 1172) issued by Parmalat on 1 June 2011. Mr McMahon emphasises the recitals at cls 3.3.1 and 3.3.2 of the "General Information" which says this: 3.3.1 Volume Metering Parmalat has a standard that requires all milk collection vehicles to have a flow meter attached to the collection tanker for metering of milk from farm[.] 3.3.2 Information Download The service provider will require the ability for Parmalat to send and receive data via FTP server on the carter's infrastructure on a daily basis seven days a week 52 weeks of the year. Along with the ability to achieve tanker/pickup data daily for downloading of data in case of system failure. The service provider will require a system to accept Zevodat test ticket format for data uploaded back to carter's FTP server. Along with a system to produce that file format of tanker/pickup data based on Parmalat specifications. [emphasis added] 96 The fourth document, produced by Lactalis under subpoena, is a Request for Proposal issued by Parmalat in March 2014 for "Farm Collection Services - Qld" (CB 1189). Mr McMahon emphasises cls 4.1, 4.2 and 4.3 (which are set out at [146] of these reasons). Clause 4.1 refers to the need for all milk collection vehicles to be fitted with accurate flowmeters, regular calibration of the meters and the submission of calibration certificates to Parmalat's "National Milk Logistics group email address". Clauses 4.2 and 4.3 address information download requirements and the provision of summary reports of deliveries. 97 The fifth document, produced by Lactalis under subpoena is described as "Milk Metering and Data Collection Software", submitted under the name "Blu Logistics Solutions". It is said to be dated March 2014 (CB 1211). Mr McMahon notes the emphasis in the document at CB 1212 to GB Control Systems from New Zealand, DME; the text in the system overview; and the references to MTC Software. These matters are further addressed in these reasons in the context of the evidence of Mr Jensen: see [148] and [149]. 98 The sixth document, discovered by the respondents, is a "Transport agreement" between Blu Logistics Solutions and Fonterra Brands (Australia) Pty Ltd dated 21 August 2015 (CB 1219). The particular points of focus emphasised by the applicant are cl 3.1(f) requiring the carrier to meet the key performance indicators in Schedule 3; cl 3.1(g) requiring the carrier to take samples and measure and record the volume and temperature of all milk for collection and to conduct "sense assessment" on all milk made available for collection. Emphasis is also given to the following subclauses of cl 3.1 in relation to the obligations to be discharged by Blu Logistics: 3. Blu Logistics' obligations 3.1 Performance by Blu Logistics During the Term within the Territory, Blu Logistics must: … (h) at Blu Logistics' cost, ensure that all Farm Milk Collection Vehicles used in providing the Services are fitted with accredited flow meter collection devices which can sample Milk collected from each Producer and measure and record: (i) the volumes of Milk collected from each Producer; (ii) the volumes of Milk unloaded from each Tanker at the Facility or any other delivery address; (iii) the temperature of the Milk collected from each Producer; and (iv) the quality data specified in the Fonterra Australia Milk Supply Handbook and the Fonterra Driver Manual. (i) seek Fonterra's consent in writing for the use of alternate or updated flow meter collection devices; (j) if requested by Fonterra and at Blu Logistics' cost, modify its flow meter collection devices to allow for all Milk volume, temperature and quality data recorded in accordance with paragraph (h) to be transmitted to a nominated laboratory; (k) ensure that the flow meter collection devices are properly calibrated annually for temperature and volume accuracy; … (n) ensure that the volume, temperature and time of collection information recorded using the flow meter collection devices is transmitted to Fonterra's MilkPay system and the Facility daily after being recorded; … (w) comply with the daily flow meter test slip verification procedures specified in the Fonterra Driver's Manual; … [emphasis added] 99 Emphasis is also given to aspects of cls 3.6, 3.13 and 3.14. Clause 3.13 addresses the topic of "Equipment, Premises and Rights of Inspection". Clause 3.13(b) and (c), relevantly, are in these terms: (b) Fonterra or its nominated representative may upon giving reasonable notice inspect any premises, Equipment documents or records used or produced by Blu Logistics, its Representatives in the performance of the Services to audit Blu Logistics compliance with the Quality System and the performance by Blu Logistics of its obligations under this agreement. (c) Blu Logistics must ensure all Collection Vehicles: (i) conform to the specification set out in Schedule 8; (ii) comply in all respects with all relevant Laws in relation to the collection, storage and transportation of Milk; … [emphasis added] 100 As to the term "Equipment", Schedule 7 defines Equipment to mean "all equipment (including Collection Vehicles) necessary for the performance of the Services in accordance with this Agreement", which includes flowmetering instruments and flowmetering systems. 101 Clause 3.14 provides for the submission of reports by the carter to Fonterra and cl 3.14(c) is in these terms: (c) Milk Quality and Quantity - Daily reporting in accordance with clause 3.1 (n) of: (i) temperature test results for Milk collected from each Producer; (ii) volume measurements for the Milk collected from each Producer; and (iii) time of pick up. 102 As to Collection Vehicles, Schedule 8 to the Agreement at subpara (f) provides that the Collection Vehicles must: (f) have the capacity to be fitted with a pump/flow meter for Farm Milk collection vehicles; calibrated annually or upon suspicion of a calibration defect and also be fitted with a flowmeter data collection system, flow meter printer and electronic sampling device[;] 103 The seventh document, produced by Lactalis under subpoena, is a document described as an "information response" by the Jurss Group to Parmalat for the provision of fleet milk haulage services (CB 1281). The applicant emphasises the references at para 6 to the "Quality Assurance" capability of the Jurss Group including "NMI Accreditation for Certification of Flow meters". The applicant also emphasises the elements of para 11.3 of the document under the topic "Milk Metering and Data Collection System". The document refers to the Jurss Group currently operating the "DME metering system operating from the MTC system". The text of para 11.3 is set out at [152] of these reasons. 104 The eighth, ninth and tenth documents, produced by Lactalis under subpoena, are described, respectively, as "Blu Logistics Farm Milk Collection Services Response" ("FMCSR") to an RFP, 2015, South Australia; a Blu Logistics FMCSR 2015, Victoria; and a Blu Logistics FMCSR 2016 (CB 1295, CB 1312 and CB 1331, respectively). Mr Jensen, director, is nominated in each document as the "Primary Contact" for Blu Logistics. In each document at para 1.8 under the heading "Regulative Compliance", seven accreditations (and one externally verified food supply plan) are recited. One item of regulatory compliance is recited as: "NMI Accreditation for Certification of Flow meter". 105 Notwithstanding that reference to that accreditation in those documents and the similar reference earlier mentioned, the relevant Approval (corresponding to the NMI Accreditation for Certification of the flowmetering instrument) used and affixed to the flowmetering instrument installed on the Blu Logistics tanker in Schedule 1 to Declaration 1 and all the other tankers of the respondents recited in the schedule, was the applicant's Approval, applied without its consent. Clause 3.3 of the Blu Logistics FMCSR 2015, South Australia (CB 1295), is in these terms: 3.3 Volume Metering We currently operate the DME metering system operating from the MTC system. The MTC system has provided substantial benefits to BLU Logistics and our current customers in managing milk collection and data. BLU Logistics has tailored many aspects of the DME/MTC System to satisfy customer requested requirements and we have invested substantially in research and development to both install and maintain these systems allowing us to provide optimum reliability of milk collection and data flow. As such, BLU Logistics will continue to supply Parmalat required data in a format compatible with the current Parmalat operating systems. … We are currently working on a more advanced prototype milk metering system which will take us further into the future with additional benefits for our customers. [emphasis added] 106 Clause 3.3 of the Blu Logistics FMCSR 2015, Victoria (CB 1312) is in the same terms as to the first two paragraphs quoted above but the clause does not contain the third paragraph quoted above. Similarly, cl 3.3 of the Blu Logistics FMCSR 2016 (CB 1331), contains the first two paragraphs but not the third quoted paragraph above. 107 The eleventh document, discovered by the respondents, is described as "Raw Milk Logistics Services Agreement" between LD & D Australia Pty Ltd ("Lion") and Mooloo Sanctuary Pty Ltd as trustee for the Mooloo Sanctuary Unit Trust trading as BLU Logistics Solutions, dated 23 January 2017 (CB 1346). Clause 5 addresses the topic of "Legislative Compliance" and cl 5.1 is in these terms: 5. LEGISLATIVE REQUIREMENTS 5.1 Compliance and compliance system: Without limiting clause 4.1, the Supplier agrees to: (a) perform (and procure that each of the drivers and subcontractors perform) the Services in accordance with all applicable Laws; (b) maintain (and procure that each of the drivers and subcontractors maintain) all necessary licences, approvals, permits and authorities in relation to the performance of the Services; and (c) establish and implement a compliance system in accordance with all applicable Laws, and to ensure that the compliance system applies to all subcontractors and each subcontractor has a copy of and implements the compliance system. [emphasis added] 108 Clause 4.1, referred to in cl 5.1, provides that the "Supplier" agrees to perform the services in accordance with "best industry practice in Australia and with due skill, care and diligence". 109 As to these clauses, it seems clear enough that the term "all applicable Laws" comprehends the NMA and Regulations establishing the regulatory regime leading to the grant of Certificates of Approval, and "best industry practice" in Australia would not include marking flowmetering instruments with an Approval under that regime without the consent of the holder of the approval where doing so was inconsistent with the conditions of the Approval under those "Laws". The point of these references is to demonstrate the importance and materiality of such matters to Lion. Mr McMahon also notes the provisions of the agreement relating to "Data capture and transfer" and the capability requirements of the service provider at cl 1.3(a), (b) and (c) of Schedule 1 to the Agreement. That schedule is concerned with the scope of the services and sets out particular specifications. Clause 1.3(a), (b) and (c) are concerned with a data capture system installed on all milk collection vehicles having a built-in modem for real time data transfer; a flowmeter record of milk volume in litres collected from each provider; a record of the temperature of the milk at the time of collection; a record of the temperature of a stored sample; a capacity to transfer raw milk provider data to the supplier "at each load end" in a format compatible with Lion's standard file structure (among other things). 110 The twelfth document is a Blu Logistics FMCSR 2017, produced by Lactalis under subpoena (CB 1366). Again, Mr Jensen is the primary contact for Blu Logistics. As to volume metering/sampling and labelling, the document says this at CB 1371: Volume Metering/Sampling/Labelling We currently operate the DME metering system operating from the MTC system. The MTC system has provided substantial benefits to BLU Logistics and our current customers in managing milk collection and data. BLU Logistics has tailored many aspects of the DME/MTC System to satisfy customers requested requirements and we have invested substantially in research and development to both install and maintain these systems allowing us to provide optimum reliability of milk collection and data flow. As such, BLU Logistics will continue to supply Parmalat required data in a format compatible with the current Parmalat operating systems. … BLU Logistics is currently involved in the development of a more further advanced milk metering System, which would be implemented at either at the start of the contract or shortly thereafter. Full details of Milk Metering System provided at presentation [original emphasis for this sentence]. [emphasis added] 111 At cl 7 of the document, Blu Logistics says that, as to regulatory compliance, it has "NMI Flow Meter Certification". The certification was the Approval granted to Flogineering for the instrument and flowmetering system described in the quote above. 112 The thirteenth document, produced by Lactalis under subpoena, is a Blu Logistics FMCSR dated 2018 (CB 1378). It describes the primary contact for Blu Logistics as Mr Stephen Fraser. Under the heading "Regulatory Compliance" at para 7, the document sets out seven areas of accreditation said to be enjoyed by Blu Logistics including, "NMI Accreditation for Certification of Flow meter". At para 9.5, the document sets out the following information: 9.5 Volume Metering / Sampling / Labelling We currently operate the DME metering system operating from the MTC system. The MTC system has provided substantial benefits to BLU Logistics and our current customers in managing milk collection and data. BLU Logistics is the first company within Australia to implement and operate this system. Over the past few years BLU Logistics has invested substantially in research and development to both install and maintain these systems allowing us to provide optimum reliability of milk collection and data flow. BLU Logistics has tailored many aspects of the DME/MTC System to satisfy customer requested requirements. As such, BLU Logistics will continue to supply Parmalat required data in a format compatible with the current Parmalat operating systems. [emphasis added] 113 Clause 9.5 also refers to the use of barcode labels, a "dual sampler" and recites that Blu Logistics calibrates all metering systems every six months in accordance with Parmalat's requirements. At cl 9.5.1, the document recites that Blu Logistics is currently trialling a new metering system and hopes to implement that system throughout its fleet by mid to late 2018. The new system is said to have many advantages over the current DME system and once the trial is concluded, Blu Logistics will make a presentation to Parmalat prior to "going live". Nine particular features of the new system are identified and a sample of the system is said to be attached in supporting documentation. 114 The fourteenth and final document, provided under subpoena to Lactalis, is described as "Milk Cartage Agreement" (CB 1390) dated 22 August 2018 between Parmalat and Blu Logistics Solutions for the bulk collection of milk from dairy farms and delivery to Parmalat. The document defines a "Flowmeter" as "a flow metering device used to measure Farm Bulk Milk loaded into a Delivery Vehicle at the Collection Point". As to such a device, the Agreement addresses these matters at cls 4.7 to 4.12: Flowmeter 4.7. The Contractor must install and calibrate a Flowmeter or another milk measuring device approved by Parmalat on all Delivery Vehicles prior to undertaking the Cartage Services. The model of the Flowmeter will be determined by Parmalat in its absolute discretion. 4.8. Any Flowmeter installed on a Delivery Vehicle must be maintained in good working order and operated by the Contractor at the Contractor's expense. 4.9. The Contractor must have the Flowmeter calibrated on a 6 monthly basis. A copy of the calibration certificate must be supplied to Parmalat within seven (7) days of issue. 4.10. Unless an exemption has been sought from and approved by Parmalat in writing, failure to provide a calibration certificate renders the Contractor liable to pay for any volume variation between Parmalat's weighbridge and the Contractor's Flowmeter. 4.11. If discrepancies of greater than five per cent (5%) are noted between the Contractor Flowmeter and any flow metering or weighing device at a Parmalat factory, Parmalat may request the Contractor to calibrate their Flowmeter on a more regular basis than required pursuant to clause 4.9. 4.12. The Contractor must advise Parmalat within 24 hours of any problems associated with the operation of any Flowmeter installed on a Delivery Vehicle. [emphasis added] 115 In the various documents described at [92] to [114] of these reasons, references are sometimes made to a "Zevodat system". Mr McMahon says that it is similar to the MobiCom system and is included in the applicant's NMI Approval 5/6E/13A. It is made in Germany and exclusively distributed in Australia by Flogineering. It does not use the MTC software. It sends data to the Zevodat software. 116 The arrangements between the applicant and Poul Tarp A/S described at para 10 of Mr McMahon's first affidavit have already been noted together with the further matters at paras 2 to 5 of his fourth affidavit. Those matters are further amplified by Mr McMahon at paras 25 and 26 of that affidavit in these terms: 25. … In addition to each Mobicom System, a user must also purchase an on-board computer operating software that receives the data collected from the flowmeters and sends it back to each dairy or milk producer via Milk Transport Computer (MTC). The MTC are supplied by Poul Tarp. The MTC relies on and is only compatible with Mobicom or S12 computers. The software allows the dairy/milk producers to see, in real time, the volumes of milk collected, where the truck has travelled, the speed at which the truck is travelling, and the temperature of the milk before the truck returns to the producer. The Applicant purchases the key components for the Mobicom and S12 system and the MTC application from Poul Tarp. 26. The only Pattern Approval Number that is approved for a system which uses a Mobicom or S12 computer (and therefore the MTC) software is the Pattern Approval Number granted to the Applicant. [emphasis added] 117 Mr McMahon, at para 27, also sets out, by way of example, references in the Certificate of Approval (para 1.2(iii), (v) and (vi) and para 2 "Description of Variant 1") that refer to the Zevodat system, the DME MobiCom system and the S12 computer system. 118 At para 28 of Mr McMahon's fourth affidavit, he describes the representations he finds in the documents just described. Those documents speak for themselves. However, in any event, para 28 was admitted into evidence not for the purpose of reciting further representations said to constitute further contraventions of s 18 or s 29 but rather as evidence pointing to matters that various participants in the industry, particularly milk processes and bulk milk haulage companies, thought important in their trading arrangements one to the other. These matters go to materiality and reliance. The respondents object to Mr McMahon's fifth affidavit sworn 12 March 2020 which goes to the sale of parts and the provision of post-sale services. However, no claim is now maintained in relation to lost service (and parts) revenue. 119 One other aspect of Mr McMahon's oral evidence ought to be noted. 120 At para 33 of his fourth affidavit, sworn 13 February 2020, Mr McMahon says that based on Excel spreadsheets (CB 1434 and CB 1435), provided by Poul Tarp, listing the number of users and trucks connected by the respondents to MTC at the time (of the spreadsheets), Mr McMahon believed the position to be that the applicant's Approval number had been used by the respondents on 50 trucks in the last quarter of 2017 and that "this had increased to 63 trucks in August 2018". 121 Mr McMahon accepted that by 13 February 2020, he knew that a number of the trucks in the spreadsheets did not belong to the respondents as there was, he said, another company that also sent data from their trucks to the MTC database that was owned by the respondents, amounting to 11 trucks. It seems that "Reeves Transport" owned and operated 10 trucks. Mr McMahon gave evidence that including a reference to those trucks in his affidavit was a misunderstanding on his part as he had been given the Poul Tarp spreadsheets which contained the total numbers of trucks and in the course of completing his affidavit, he put down "those numbers that were in the spreadsheet that was provided to me". Mr McMahon was taken to an exchange of emails between Ms Richardson of Kalus Kenny Intelex ("KKI") the solicitors for the applicant and Mr Kuskie of Kuskie Legal, the solicitors for the respondents (at that time), on 16, 17 and 18 October 2018 (and a letter from Rostron Carlyle Rojas to KKI) (Exhibit 3) in which the difference between 50 trucks and 63 trucks is agitated. Mr McMahon accepted that in October when the reference to the trucks owned and operated by Reeves Transport was pointed out to him, he accepted that those trucks were operated by Reeves Transport. 122 On that footing, the proposition was put to Mr McMahon that he had put forward in his affidavit a reference to 63 trucks operated by the respondents notwithstanding that he had accepted in October 2018 that the number was 50. Mr McMahon gave evidence that the incorrect assertion "was not done intentionally, but yes, I'm aware that that's incorrect". Mr McMahon does not accept that the difference in the numbers is accounted for by the sequence of mathematical steps put to him by counsel for the respondents and contends that there are important timing differences which might account for the numbers. Objection was taken to tendering the emails and correspondence because those documents are concerned with October 2018 and do not speak to the position in August 2018. 123 I accept that the spreadsheets at CB 1434 and CB 1435 have gone into evidence in Mr McMahon's affidavit without adjustment to take into account the vehicles operated by Reeves Transport. I accept that that occurred mistakenly. It is unfortunate that the adjustment was not recognised and taken into account in the text of the affidavit but I do not accept that there was any bad faith on the part of Mr McMahon in the framing of the affidavit on the basis of the spreadsheets.

The evidence of Mr Antony Miller 124 As to the evidence of Mr Antony Miller, the Court noted the following matters at [70] to [79] of the liability judgment. Mr Antony Miller 70 Mr Antony Miller is, and has been since March 2017, the "Vendor and Optimisation Manager" employed by "Visy". For most of 2016 he was the Logistics Manager for "Patties Foods" and prior to that he was responsible for "Transport Safety and Compliance" at one entity, and supply chain excellence at another entity. Relevantly for present purposes, he was employed for 15 years before that by "Fonterra Co-operative Group" ("Fonterra") and in the last 10 years of that period he was solely involved in the activity of "milk transport". He says that Fonterra is the world's largest exporter of dairy products; a leader in dairy science and innovation; and the owner of a significant portfolio of brands in the Asia Pacific area. Fonterra has its headquarters in New Zealand and has a presence in 40 countries worldwide. From 2003 to 2013, he was employed as the "National Milk Transport Manager" at Fonterra. In that role, he was responsible for 200 drivers and 75 heavy vehicles carting milk in Victoria, Tasmania, New South Wales and South Australia. Until 2011, the role also included responsibility for "milk collection" in Western Australia. He says that he was also involved in a "dairy transport collaboration project" with Murray Goulburn. He says that when he first started in the role with Fonterra, the fleet was in part comprised of trucks operated by subcontractors and in part a company fleet. Mr Miller was responsible for transitioning the fleet to almost a 100% company-owned fleet. He also says that from 1998 until 2003, he was the National Logistics Manager at Fonterra. In that role, he managed the "farm milk collection fleet" which consisted of "mixed insourced and outsourced transport providers, as well as export shipping and domestic warehousing". He says that in his role as National Milk Transport Manager at Fonterra, Fonterra was a customer of Flogineering. 71 Mr Miller says that when he was working at Fonterra (and he says the same situation prevailed as at the date of his affidavit on 22 August 2017), any person or company conducting "milk pick up from farms via flowmeters" was required, by law (as he understands it) to operate a system that complied with the NMI "standard of the day". He says that this was particularly important as non-compliant systems could financially penalise either the farmer or the processor. He also says that, in any event, it was important to ensure that the "standard in Australia" was complied with. He says that dipsticks used to be used to measure the volume of milk transferred but that method gave way to the use of flowmetering systems. Because the tolerance for error in measurement is small, flowmetering systems are much more accurate than earlier measures. Mr Miller says that in his experience farmers were however sceptical of the new flowmetering technology as inaccuracies in measurement had previously generally worked in their favour. He says that there was a lot of scrutiny over the technology and any questions from farmers or the processing facilities concerning volume were "escalated to me". Mr Miller says that in order to ensure that the Fonterra fleet complied with NMI "standards", Fonterra used the services of a company called CMV Truck and Bus Pty Ltd ("CMV") as a contractor to conduct annual calibrations on flowmetering systems used by the company. CMV was accredited by the NMI to conduct these calibrations. Mr Miller says that the flowmetering systems installed on the Fonterra fleet of trucks were purchased from Flogineering. He says this at para 15 of his affidavit of 22 August 2017: We knew that Flogineering held a Pattern Approval Number and were therefore confident in their accuracy. About once a year we would check on the NMI website to ensure that Pattern Approval Number was still current and whether changes had been applied to either the rules of the certification or to see if other companies were now selling alternate systems. 72 Mr Miller explained and accepted in oral evidence that "it's the fact that the pattern had been approved by NMI that gave [him] confidence in its accuracy" and "not the fact that it was given a number that gave [him] confidence in its accuracy": T, p 39, lns 19-21. Mr Miller was pressed with the notion that he was checking to see whether the approval had been obtained or altered rather than whether the pattern had been given a number. As to that, he said this at T, p 39, lns 32-46; T, p 40, lns 1-2: Mr Miller: We would check the entire - there were a number of approvals that were within there [NMI website] both with Flogineering and with other companies. We would look in there to see when our systems were being calibrated annually through an external body certified by NMI … We would check what the number was that they were proving against and then we would check what the specifics were within that - that particular number we were proving against. Mr Forrest: Yes. You're talking about the approval thought aren't you: the certificate of approval issued by NMI? Mr Miller: Yes. So we would check on the NMI website to make sure that we were - that we knew which was the approval we were operating under because there were several as technologies changed, in particular. And then we had a calibration organisation that we're required to make sure that they were calibrating our flowmeters. Our decision was to do that annually. I think from the rules at the time it … had to be done at least every second year. And so, yes, we needed to know that - for us we needed to know the number and we needed to know that it was on the NMI website as an approved system. 73 Mr Miller also said this (T, p 40, lns 4-10): Mr Forrest: But when you say that the pattern approval number was still current and whether changes had been applied to either the rules of certification, the changes you're referring to are changes to the approval, isn't it? Mr Miller: Possibly. It was the - certainly within the approval there was some level of detail that we needed to make sure that we were complying with. And whether or not that would change during the course of the year we weren't sure. We just needed to make sure that when we did look at it, that it was still correct. [emphasis added] 74 As to this question of the relationship (if at all) between the pattern approval number and the approval itself, Mr Miller was asked to explain his understanding of the role of "the number stated in the approval verses the approval itself". As to that, he said this (T, p 40, lns 24-28): My understanding would be that the two are integrally linked. The number was the reference that needed to be made during the calibration process of the flow meters. It was important to us to know which was the approval and that was - we would know that by the number that was assigned to it. 75 Mr Miller was also asked to explain what documents he would look at on the NMI website when he undertook his process each year of checking the NMI website to ensure the pattern approval number was still current. He said this at T, p 40, lns 38-44: So we go [onto] the NMI website. We would be checking what was the approval number we're running to. We would then go into that to see what is the description of the system that we are running to and we would be checking that that was the certification number or the approval number that our calibration company, CMV Truck & Bus - that that was the number that they were referencing within their calibrations. 76 Mr Miller says that when calibrated, the variations in measurement very rarely changed much more than +/- 0.1%. Mr Miller says that CMV would calibrate test vessels for him and certify the accuracy of the vessel. Mr Miller says that in his role at Fonterra he regularly looked at calibration records and any variation in accuracy recorded at each calibration. He also attended each depot to check the audited records. He says that the difference in accuracy on the flow meters supplied by Flogineering was negligible, "to within +/- 0.1%". He says that this gave him "confidence in the [Flogineering] flow meter systems". He also says that drivers at Fonterra were also asked to report any inaccuracy in the flow meter measurements if they believed that to be occurring for their truck. This happened rarely. Mr Miller says it occurred maybe twice a year across a fleet of 60 trucks and any inaccuracy was usually due to a damaged part. Mr Miller says the policy was to notify farmers with an affected milk reading and arrange a credit if a short payment had occurred. 77 Mr Miller says that accuracy of flow meters is important throughout the dairy industry. It is the basis upon which farmers are paid and the basis upon which milk companies measure "inbound milk". He says that because it is common practice to collect milk from more than one farm on the same truck, accuracy of measurement when the milk is loaded onto the truck is essential. Mr Miller says that this requirement for accuracy of measurement of milk is "vital" in the industry as it is how farmers get paid and it is part of an integral system for the milk processors to control inbound milk volumes along with a process for control of fat, protein and quality measurement. 78 Mr Miller says that after leaving Fonterra, he worked as a consultant to two contractors working for Murray Goulburn which was also a customer of Flogineering. Mr Miller says that he was involved in the flow meter installation project at Murray Goulburn and later assisted with calibration support. 79 Mr Miller says that flow meters cannot be used in Australia "without an approval number attached".

The evidence of Mr Timothy Jensen 125 As mentioned earlier, these reasons ought to be read in conjunction with the liability reasons. 126 Mr Jensen gave a further affidavit sworn on 13 March 2020 in relation to the issues raised by the separate question. Mr Jensen is a director of the first respondent, Blu Logistics SA Pty Ltd ("Blu Logistics"), and the fourth respondent, JR Bulk Liquid Transport Pty Ltd ("JRB"). Prior to the incorporation of JRB, Mr Jensen was also a partner in a milk transport business trading as Jurss Transport ("JT"). JT was a customer of the applicant. Mr Jensen says that around 2010, he began to feel dissatisfied with the services of the applicant as the prices for "flow meterage systems" were "excessive". He says that JRB purchased a number of DME MobiCom units from a New Zealand company, GB Control Systems Limited ("GB"), for installation on trucks used by JRB. These units were then installed on the tankers and certified by Mr Byron Raddatz, replacing the previous "Diessel" units purchased directly from the applicant. Mr Jensen says that after installing the DME MobiCom units on JRB's tankers, Mr Jensen met with Mr Carey McMahon of the applicant and the Danish manufacturer of the DME MobiCom units, Poul Tarp. Mr Jensen says that Mr McMahon expressed concern that JRB had purchased second hand DME MobiCom units directly from GB and he sought to discuss the business relationship between the applicant and the respondents. This meeting is described by Mr Jensen as the "2010 meeting". Mr Jensen said that Mr McMahon offered to provide a discounted rate to JRB for any future purchases of DME MobiCom units bought from the applicant. With a view to preserving the business relationship, Mr Jensen agreed that JRB would purchase 12 DME MobiCom units from the applicant at the reduced rate. These purchases occurred over a period within six months of the 2010 meeting. Mr Jensen says that he nevertheless remained concerned about the level of customer service support provided by the applicant. 127 Mr Jensen says that during 2010 he worked directly with Poul Tarp to design a software system to be used with the systems JRB had purchased from GB which would reflect and meet the needs of the respondents. He says that notwithstanding the expenses incurred and time spent in developing this software, had he been prevented from purchasing DME MobiCom units from GB, he "would have changed the flow meterage systems purchased from [the applicant] to an alternative model (such as the THS-PIPER system) [which he refers to as the Piper System] as soon as this became available on the market, due to [his] ongoing frustrations with Flogineering" [emphasis added]. Mr Jensen says that for commercial reasons, he would not have "immediately removed all flow metering systems purchased from Flogineering" and instead he would have gradually phased out those systems by purchasing and implementing the Piper system "when required". Mr Jensen says that this would have involved operating two alternative software programs running simultaneously but this would not have been an issue for him. He says that in 2018, Blu Logistics and JRB replaced all of its flowmetering units with "Smarta Industrial Model MC104 vehicle mounted milk flowmetering units". Mr Jensen says that the THS-Piper system became available on the Australian market in and around December 2010 for purchase. He says that the price of that system was generally lower than the applicant's system and he says that on that basis he "would have proceeded with installing the Piper System". He says that he has reviewed a tax invoice issued to a transport company by THS on 30 November 2019 which shows that the data management fee is $46.80 per tanker per month which would have equated to $1.56 per tanker per day to use the Piper system software. 128 Mr Jensen says that installing the Piper system would not have been a "huge expense" as Mr McMahon suggests in his affidavit. Mr Jensen says that he considers the likely costs would have been reasonable "when split across the number of tankers used by the Respondents". 129 As to Blu Logistics, he says that it has 49 trucks in its fleet which collect milk for a number of processors. He says that he has had an opportunity to review Schedule 1 to Declaration 1 in so far as it relates to that company and says that the THS-Piper system was available for use by Blu Logistics at the dates referred to in the schedule. Schedule 1 does not contain a date relating to Blu Logistics but Mr Jensen describes the relevant date for PM 207 (SB-50-MT) as 29 April 2017 which is the same date set out in Mr Lytras's schedule at para 7.1 of his report. 130 As to JRB, Mr Jensen says that the company has nine trucks (tankers) in its fleet which collect milk for processors. He says that he has reviewed Schedule 1 so far as it relates to JRB and says that the THS-Piper system was available for use for the following tankers on the following dates: Tanker 135, 17 February 2012; Tanker 136, 14 February 2012; Prime Mover 141, 19 November 2014; Prime Mover 143, 18 November 2014; Prime Mover 148, 26 February 2015; Prime Mover 149, 2 April 2015; Prime Mover 152, 12 August 2015; and Tanker T130, 19 November 2014. 131 In the course of cross-examination, Mr Jensen gave the following oral evidence. 132 Apart from being a director of Blu Logistics and JRB, Mr Jensen said that he has been involved in the milk haulage industry for "probably" 16 or 17 years. Mr Jensen accepted that he is one of the people responsible for the affairs of Blu Logistics and JRB and that in the past he has been associated with the "Jurss Group". Mr Jensen explained that the DME MobiCom unit is the computer part of the flowmetering system and the function of the unit is to upload data about transport journeys from the metering unit of the flowmetering system. Mr Jensen confirmed that commencing from about 2010 he began purchasing DME MobiCom units from GB in New Zealand and retained Mr Raddatz to certify the units once Mr Raddatz had calibrated them. Mr Jensen accepted that because he had retained Mr Raddatz to certify the units, Mr Jensen understood that there was an "approval" in place for flowmeters in Australia at that time and it was that understanding that was one of the reasons Mr Jensen retained Mr Raddatz to undertake the calibration and certification tasks. 133 Mr Jensen accepted that the "approval" he was "talking about" was the approval at CB 395 which is the Certificate of Approval No 5/6E/13A issued to the applicant. Mr Jensen accepted that under the heading "Description of Variant 1" in the Certificate, the reference to "DME" is a reference to the MobiCom computers earlier described by Mr Jensen in his evidence. 134 Mr Jensen accepted that his "organisations" (which seems to refer to Blu Logistics and JRB) have at times worked with Wastell Milk Haulage Pty Ltd ("Wastell") and Wadene Pty Limited ("Wadene"). Mr Jensen accepted that he worked with Wastell and Wadene "as a collective" to propose arrangements (milk haulage arrangements) to Parmalat which, having regard to Mr Jensen's affidavit of 13 March 2020, is a reference to Parmalat Australia Pty Ltd ("Parmalat"). In that context, Mr Jensen was taken to the document at CB 1105 which begins with a "Mission Statement": see [92] of these reasons. Mr Jensen gave evidence that "yes, for sure" he had "had a hand in preparing that document". 135 Mr Jensen says that the document was prepared in 2009. It recites that the "Jurss Group made up of Jurss Transport, Jurss and Robertson and Wastell Transport have been part of milk collection in Queensland for just on 40 years". It sets out an outline of a proposal to Parmalat in response to Parmalat's Request for Proposal ("RFP"). It recites that "[o]ur proposal to Parmalat's RFP for freight in Queensland is a combination of Jurss Transport, Jurss & Robertson and Wastell Transport". It sets out an offer "collectively" to Parmalat of a milk cartage system. The document recites that "over the past few years, Jurss Transport has sought many areas to improve the Milk Collection business" and one of those areas of improvement is described as the "operation of the first DME & MTC Milk Metering System in Australia". 136 The document outlines the collective proposal in this way: We are offering 2 proposals for Parmalat's consideration: 1. All milk collection with three sites being Ipswich, Gympie & Rockhampton. Implementation of CIP Systems to the Ipswich & Gympie sites within 18 months of contract start date. DME metering systems & Mt Data GPS tracking throughout all fleets to enable efficient data transfer and effective tanker volume control. Better equipment utilization with more night loads in local areas. 2. Existing collection areas of above carriers with DME & MT Data systems throughout all fleets. (This option could be discussed with CIP Plants) [emphasis added] 137 Mr Jensen accepted that the reference in the document to "DME" is a reference to the DME computer system referred to in the Approval issued to the applicant and the reference to "MTC" is a reference to the "software that the computer uploads to", which "produces all sorts of reports that are useful to [Mr Jensen]". Mr Jensen says that the processors are not provided with "our reports" but they are provided with "raw data from the back end of that software". 138 Mr Jensen accepted that the reason he was referring to that "software system and computer system" in the document was that he regarded those matters as "something of a selling point" to Parmalat and he accepted that the reason he regarded those matters as a selling point was that, from his experience in the industry, he knew that "it's the sort of thing that Parmalat is going to be interested in". In the document, Mr Jensen is nominated as the "Contact Name" for the proposal, and his position is described as "General Manager". At para 7.0 of the document the topic of "Quality Information" is addressed under three headings: "International" (7.1); "Legislation Requirements" (7.2); and "Quality Reporting Functions" (7.3). 139 Under the heading "Legislation Requirements" the document recites this: "Office of Fair Trading Flowmeter Calibration Certification - Accredited" [emphasis added]. Mr Jensen gave evidence that this statement is a reference to an approval held by his company which enabled the company to undertake calibration. 140 At p 23 (CB 1127) of the document, the features of the "DME MobiCom" are set out in some detail. The features include: GPS identification of supplier; Collection data sent via GSM Phone Network/GPRS Network (Internet); Software updates to MobiCom over GPRS network; Preset maximum [tanker] volumes (manage legal requirements). After the 11 recited features, the document says this: The DME MobiCom and MTC System (Milk Collection Software) has GSM upload and download capabilities. This giving us the ability to send or receive information from this unit from anywhere that has GSM coverage. This data then is sent back to the MTC Software based on an SQL server unit which manages the incoming data and transmits route plans and data to the mobile unit. … [emphasis added] 141 Mr Jensen accepted that the reason he had set out the features of the DME MobiCom at CB 1127 as described was that he regarded the fact that he had "an advanced system" as a selling point of the proposal to Parmalat. 142 At CB 1139, the document sets out the benefits to Parmalat of the "Jurss Transport, Jurss and Robertson and Wastell Transport Joint Operation" for the collection of "all of the milk in Queensland for Parmalat". Benefits 4 and 5 are in these terms: 4. All collection data will come from one source and not a number of different systems. We can supply all information via our DME system. The need for download points and computer installations within receivals bays would no longer be required. 5. Regardless [of] which sites tankers deliver to, data will be complete and current due to the use of the MobiCom System and the MTC system. [emphasis added] 143 Mr Jensen accepted that the point of these references at paras 4 and 5 of the Statement of Benefits is that he regarded, as a "selling point", the "self-contained nature of that system that [he was] running" as he "could get all the data from one place" and did not have to "manually input it". 144 Mr Jensen was then taken to a "Milk Cartage Agreement" dated 1 July 2009 between Parmalat and Jurss Group commencing at CB 1156. Mr Jensen accepted that this is an example of a contract that would have been performed by a combination of Jurss and Wastell "amongst others" in the sense that tankers from the participating companies would be doing the work. Clause 4.6 of the agreement provides that the contractor agrees to install and operate a Zevodat or other milk measuring device on any tanker used for the purpose of collecting bulk milk and the model of the Zevodat device "will be determined by Parmalat and be maintained and operated by the Contractor at the Contractor's expense". Clause 4.7 of the agreement provides that in order to eliminate differences between Parmalat's "milk receival flow meters and the Zevodat measurement", the contractor must have the Zevodat device calibrated on a 12 monthly basis. A copy of the calibration certificate must be supplied to Parmalat within seven days of issue. Unless an exemption in writing has been obtained from Parmalat, a failure to provide a calibration certificate renders the contractor liable to pay for any volume variation between the Parmalat flowmeter and the Zevodat device. 145 Mr Jensen accepted that a Zevodat device is another version of the metering system "covered" under the Approval obtained by the applicant (at CB 395) and that it was the "older system that we operated". 146 Mr Jensen was then taken to the document described as a Parmalat "Request for Proposal" for "Farm Collection Services" in Queensland dated March 2014 (CB 1189). Mr Jensen accepted that he, or at least his company, had lodged a response to the document. Mr Jensen was taken to aspects of cl 4 of the Request for Proposal. Clauses 4.1, 4.2 and 4.3 are in these terms: 4.0 GENERAL INFORMATION 4.1 Volume Metering Parmalat requires all milk collection vehicles to be fitted with an accurate flow meter allowing for the metering of milk from the farm. Parmalat requires that all flow meters are calibrated every 6 months, with certificates of calibration sent to National Milk Logistics group email address [email]. 4.2 Information Download The service provider must have the ability for Parmalat to send and receive data via FTP server (or other electronic means) on the carter's infrastructure on a daily basis, seven days a week, 52 weeks of the year. The service provider must also have the ability to archive tanker/pickup data daily for downloading of data, in case of system failure. A system must be in place to accept flow meter test ticket format for data uploaded back to carter, along with a system to produce flat file format of tanker/pickup data based on Parmalat specifications. 4.3 Delivery Summary Reports The service provider will be required to provide a delivery summary by 9am each morning for the previous day's collections, 7 days per week. Summaries should include total litres collected & volume delivered to each site, as well as including a litres per kilometre travelled for each delivery. These should be electronically delivered to the National Milk Logistics group email address. 147 Mr Jensen accepted that it was correct to say, to his knowledge, that in 2014 when processors like Parmalat were making decisions about whether they would hire companies like the ones associated with Mr Jensen, the accuracy of the systems used by those companies for measuring milk volumes was an important part of their decision-making process; that Parmalat always assumed that all systems would be accurate; and that there was an expectation that everything was accurate. Mr Jensen also accepted that he knew that it was important to Parmalat that flowmetering systems measure milk volumes accurately. Mr Jensen also agreed that one of the reasons why he emphasised the use by his companies of the MobiCom system was that very reason, although, he said that it was more about the "other - different bits and pieces … like information download etc". 148 Mr Jensen accepted that one of the companies with which he has been involved and, at the date of the hearing remained involved with, was Blu Logistics. Mr Jensen was taken to the Blu Logistics document entitled "Milk Metering and Data Collection Software" (CB 1211). Mr Jensen accepted that this is a document that he had a hand in producing. At CB 1212, the document recites these things (among others): Blu Logistics is the first company in Australia to run the DME Mobicom system in conjunction with the MTC Software. Blu Logistics, in conjunction with GB Control Systems from New Zealand and DME in Denmark, have worked together to produce a software and hardware system that has changed the Australian Milk Collection Industry[.] [emphasis added] 149 The document then says that the "Metering System" has two main components made up of the "DME Mobicom Milk Metering computer" and the "MTC Software". In the way earlier described, the document then sets out in some detail the functionality of the software. Mr Jensen accepted that he had put "quite a bit of time into developing a system that worked well for [him] and for [his] customers" which involved activity in "testing it to make sure it worked well … both in terms of measurement and uploading data or managing data …". Mr Jensen accepted that at CB 1212 he had set out a long list of features of the MTC Software (23 bullet points) and that this long list of features was produced for the purpose of impressing the processors. Mr Jensen accepted that the processors were interested to know about the efficiency of the fleets and accepted that efficiency was measured, for example, in terms of the number of litres or the rate of litres collected per kilometre travelled and the time between the start of the run and the end of the run so that "the sooner all the milk got to the processor, the better". Mr Jensen accepted that those features were the "sorts of things" that he would be able to report to companies like Parmalat and Fonterra, using the MTC Software. 150 Mr Jensen was then taken to the contract described as a "Transport agreement" between Fonterra Brands (Australia) Pty Ltd and Blu Logistics (CB 1219) dated 21 August 2015. Mr Jensen was taken to Schedule 3 to the document which sets out in a "Summary Table" the Key Performance Indicators (KPIs) for Blu Logistics for the purposes of the agreement. Mr Jensen agreed that this schedule represents a summary of the things Blu Logistics had to do to "keep the processor happy". Mr Jensen agreed that the references to "Litres Collected per Kilometre Travelled - Farm Milk"; "Hours Worked per 1,000 litres collected - Farm Milk Collection"; "Litres Collected per Tanker per Shift - Farm Milk"; and "Tanker percentage fill" in Schedule 3 were the expression of "spruiking that computer system and that software in the pages that we've looked at". Mr Jensen said that in the early years some of those features were not available but in the later years, "that was an expectation". However, Mr Jensen said that some of the reports such as litres collected per kilometre of travel was never able to be generated from the MTC System because it was not reliable enough. 151 Mr Jensen was then taken to the document at CB 1281 described as an information response which begins with the "Jurss Group Mission Statement". It is a document put to Parmalat designed to serve "[o]ur aim … to have a long term open working relationship with Parmalat that sets the platform for further costs reductions and improvements in the milk collection business for both Jurss Group and Parmalat": see also [103] of these reasons. Mr Jensen accepted that this was a document he had had a hand in preparing. He accepted that it has a lot of similar characteristics to other documents to which Mr Jensen had been taken. Mr Jensen was taken to cl 6 of the statement which sets out a number of accreditations held by Jurss Group one of which is described as "NMI Accreditation for Certification of Flow meters". Mr Jensen accepted that the reference to NMI Accreditation had been included in the Mission Statement because, based on his experience, he knew it was the sort of thing that the recipient of the document such as Parmalat would have been concerned to want to know about in relation to Mr Jensen's business structure or the way in which Mr Jensen went about performing his business undertaking. 152 Mr Jensen was then taken to para 11.3 of the document which (among other things) says this: 11.3 MILK METERING AND DATA COLLECTION SYSTEM Jurss Group currently operate the DME metering system operating from the MTC system. The MTC system has provided substantial benefits to Jurss Group and our current customers in the managing of milk collection and data. We envisage these benefits adding value for Parmalat. Jurss Group is the first company within Australia to implement and operate this system. Over the past few years Jurss Group has invested substantially in research and development to both install and maintain these systems allowing us to provide optimum reliability of milk collection and data flow. Jurss Group has tailored many aspects of the DME/MTC System to satisfy customer requested requirements. [emphasis added] 153 The document says that a full detailed explanation of the DME/MTC System is set out in the supporting documentation. Mr Jensen accepted that the statement that Jurss Group had invested substantially in research and development to both install and maintain the DME metering system operating the MTC System was true and correct and that it would be "no small thing to give up on it and change to another system". However, Mr Jensen said that he had definitely considered doing so. 154 Mr Jensen accepted that it was true to say that he had been aware for a very long time, well before the commencement of the present litigation, that Mr McMahon from Flogineering was unhappy about Mr Jensen's use of that equipment and Mr Jensen's application of the Approval number without his consent. Mr Jensen accepted that he was certainly aware of the issue about use of the Approval number at least from the time of the commencement of the litigation and he accepted that he (his companies) had spent a lot of money on the litigation. 155 The proposition was then put to Mr Jensen that through all of this period and even at trial, he had not transitioned to a new model of a flowmetering system until the trial was over. Mr Jensen said that his companies were "already transitioning … in that period" and he described the start of the transition as "in 2016/2017". Mr Jensen was asked why he had waited so long to commence the transition if it was so easy to transition and a seriously available opportunity to him. Mr Jensen said: "We want to have our own system which we operated, rather than go to the Piper [system] which we could have used …". Mr Jensen accepted that the reason he wanted to have his own system was so that he would be able to "produce something that did exactly what [he] wanted". Mr Jensen accepted that the way to get something that did exactly what he wanted was to invest time and money in such a system in the same way that he had invested time and money in the MobiCom system. 156 Mr Jensen was then taken to the document at CB 1295 (see [104] and [105] of these reasons) described as the Blu Logistics FMCSR 2015, South Australia, document. Mr Jensen accepted that that is another document that he had a hand in producing and so too was the document with the same title at CB 1312: see [104] to [106] of these reasons. Mr Jensen accepted that both of those documents "espoused" the value of the metering system that Blu Logistics was using. 157 Mr Jensen was then asked about the extent to which he and the companies with which he is associated exercise possession or control over the documents to which he had been taken. Mr Jensen accepted that all of these documents are documents which would still be in the possession of companies with which he was involved. Mr Jensen also accepted that over the course of the litigation, he had been made aware that he had an obligation to discover documents relevant to the issues in the proceeding. 158 Mr Jensen was then asked questions about the THS-Piper system. He did not accept that that system does not provide the same level of detail in reports produced from it as compared with the reports produced by the MobiCom system. Mr Jensen said that there are probably not a lot of distinctions between the MobiCom software and the THS-Piper software. He thought that THS-Piper was probably more reliable in relation to "data upload" whereas the MobiCom system was "a bit less" reliable. Mr Jensen also said that the data that flows through to the customer is a lot more reliable under the THS-Piper system than the DME software. Mr Jensen accepted that the "sorts of reports" described in the KPIs earlier mentioned were able to be produced with the DME MobiCom milk metering computer and MTC software, but he had "never used it for that" because, in his view, those reports would have been "far too unreliable out of MTC".

The evidence of Mr Stephen Wastell 159 Mr Stephen Wastell is a director of Blu Logistics, Wastell and Wadene. He swore a further affidavit on 12 March 2020 in the proceeding. He says these things. 160 Wastell and Wadene have been customers of Flogineering from 2009 to 2010 and from 2002 to 2010 respectively. Mr Wastell says that Mr Jensen primarily engaged with Mr McMahon of Flogineering concerning the dealings between the applicant and the respondents. Mr Wastell says that Mr Jensen was responsible for purchasing "flow meterage units" from the applicant on behalf of the respondents. 161 Mr Wastell says that Wastell, from 2009, used the "Diessel system" for which the applicant was the sole distributor in Australia (see Variant 1, Table 1, Diessel Meter Model, Certificate of Approval and "Document History", CB 395). Mr Wastell says that he "along with the other directors of the Respondents" became dissatisfied with the "service and pricing" of the applicant's flowmetering systems. He says that the "Diessel model" and software did not have GPS or wireless transmission capabilities which meant that tankers did not automatically transmit their locality when collecting milk from dairy farms or upload the "end of day" data from the tanker to the server. In his affidavit, Mr Wastell describes the steps taken by Mr Jensen to engage with GB in New Zealand in May 2011 to obtain the DME MobiCom unit and Mr Jensen's work with Poul Tarp to assist in designing an alternative software program having a GPS capability. He says that "once finalised", he was able to install this software into the flowmetering systems already purchased by Wastell and Wadene. 162 Mr Wastell says that the THS-Piper system was another flowmetering system that enabled farmers and processors to accurately track the volume of milk collected from the dairy farm and delivered to the processor. He says that this system was available for purchase from December 2010. Mr Wastell says that the THS-Piper system enabled users to track, by GPS, a tanker's location which provided farmers and processors with specific recorded information about each collection transaction. 163 Mr Wastell then says this at paras 12 and 13 of his affidavit: 12. If we had been unable to purchase flow meterage systems from GB, instead of purchasing from Flogineering, Wastell and Wadene would have begun purchasing new Piper System units after December 2010 whenever they were required to replace the previous flow meterage system, instead of maintaining the Diessel system. I would have taken this step as I was aware of the limitations of the Diessel system, being its lack of GPS ability and its inability to wirelessly transmit data. 13. From my knowledge of the Diessel system and the Piper System, I consider that, if utilised, the Piper System would have been comparable (if not better) to the Diessel model being supplied by Flogineering. [emphasis added] 164 Mr Wastell says that Wastell has 12 trucks (tankers) it uses to collect milk for Parmalat, Norco Co-operative Limited ("Norco") and others. Mr Wastell says that the THS-Piper system was available for purchase by Wastell in relation to the following tankers on the following dates (having regard to Schedule 1 to Declaration 1): Tanker 168, 27 November 2010; Tanker 169, 7 May 2011; Tanker 171, 20 June 2011; Tanker 172, 31 January 2012; Tanker 173, 2 April 2012; Tanker 174, 15 October 2012; Tanker 176, 17 October 2014; Tanker 178, 24 November 2015. Mr Wastell says that no alternative system was available in relation to Tankers 151 and 162 on 20 January 2010 and 9 February 2010, respectively. Mr Wastell also says that Tanker 178 had a flow meterage system that had previously been installed on Tanker 170. 165 As to Wadene, Mr Wastell says that it has two trucks it uses to collect milk for Parmalat and Norco. As to Tanker 167 in Schedule 1, Mr Wastell says that no alternative system was available on 1 June 2010. 166 Mr Wastell also gave oral evidence. 167 Mr Wastell confirmed that he is a director of Blu Logistics, Wastell and Wadene. He says that he has been involved in the milk haulage business for "a bit under 30 years". Mr Wastell accepted that he had been aware of the National Measurement Institute's issue of the Approval the subject of the litigation at least since complaints were made to him by Flogineering that he had been applying the Approval number, and he accepted that he had been aware that that had been happening for a period before he received the complaint of the applicant. Mr Wastell accepted that he had received a complaint from Flogineering that he had been applying the Approval number "for a little while before [he] got the complaint". 168 The proposition was put to Mr Wastell that it followed from the fact that he had been applying the Approval number to relevant instruments (although not with the authority of the applicant), that he must have known that "there was a system that required the [A]pproval number" to be marked on the relevant instrument. Mr Wastell responded that it was only since he had received the complaint from Flogineering "that [he] knew it was wrong" to fix or mark the Approval number. Mr Wastell says that before he received the complaint, it was his understanding and belief that he was not doing anything wrong. He says that although he knew there was a system, he did not understand that what he was doing was wrong "within the system" (applying the Approval number to relevant instruments without the authority of the applicant). 169 Mr Wastell accepted that the approval in issue and about which he had been speaking is the Approval at CB 395 and he says that the first time he saw the Certificate of Approval "would have been around the same time [that is, the time of the complaint by Flogineering]". Mr Wastell says that he would not have seen the document before the time of Flogineering's complaint. 170 Mr Wastell accepted that Wastell, Wadene, Jurss Group and later, Blu Logistics, worked together to perform some of the cartage contracts for firms such as Parmalat, Lion and Fonterra. Mr Wastell described his role within that group as an "operational" role about "how to pick up milk" and logistics. Mr Wastell agreed that he had some "hand" in preparing documents that were sent to Parmalat extolling the services offered to Parmalat. Mr Wastell was taken to the document at CB 1105 which recites that the Jurss Group is made up of Jurss Transport, Jurss and Robertson and Wastell Transport. Mr Wastell gave evidence that his role in Wastell Transport was to act as manager. It was his father's company. He agreed that he had had a hand in preparing the document. Mr Wastell gave evidence that the statement in the document of the many areas of improvement to the milk collection business over the past few years (made on behalf of the Jurss Group) included the "operation of the first DME & MTC Milk Metering System in Australia" and that that statement was a statement Mr Wastell would have known was being made to milk processors at the time such as Parmalat. Mr Wastell accepted that such a statement was understood to be a "selling point" for the group and he agreed that he knew it to be a selling point having regard to his "experience in the industry" and his "knowledge of what the processors were likely to want from people like you [the group proffering haulage services]". 171 Mr Wastell was then taken to the document at CB 1281. That document is addressed to Parmalat. Mr Wastell accepted that although the document does not actually mention Wastell, it is nevertheless a document that was seeking milk haulage work from Parmalat in which Wastell would be involved. Mr Wastell was taken to p 4 of the document (at CB 1284) at cl 6 which addresses the topic of "Quality Assurance". He was taken to the statement "NMI Accreditation for Certification of Flow meters". Mr Wastell accepted that this was a document in which he had a hand in producing and he accepted ("yes, exactly") that one of the reasons that the statement about NMI accreditation is recited in the document is that it was "something that you and your colleagues thought was important for the processors to know" and he accepted that because of his experience in the industry, he understood that the processors were interested in that kind of information. 172 Mr Wastell was then taken to his discussion in his affidavit of the THS-Piper system. Mr Wastell affirmed his view that if he had wanted to, he could have transitioned over to the THS-Piper system. He asserted that it would not have been very difficult for Wastell and Wadene to have done so. 173 Mr Wastell was taken to the Certificate of Approval at CB 395. Mr Wastell said that having received the complaint from Flogineering and having learned of the document he did not ask his legal advisers to explain the document to him. He said it was not necessary to do so because he was able to understand it on his own reading of it. Mr Wastell accepted that having read it, he would have understood it to mean that only Flogineering was allowed to mark instruments with the pattern Approval number. Mr Wastell also accepted that from that point on, he must have thought that he "had a legal problem". The proposition was put to Mr Wastell that, nevertheless, at that point, he did not apparently think that the easiest step for him to take was to simply "just shift out of the MobiCom system and adopt the Piper System", but rather "to fight the litigation". Mr Wastell responded, "we had other systems in play", which he described as "SmartaTrans". Mr Wastell agreed that it was correct to say that he acquired the "Smarta meter", "down the track". Mr Wastell was asked whether it was correct to say that what he wanted to do was "just tide yourself over with the MobiCom system until you could get Smarta in place". Mr Wastell responded, "it [the MobiCom system] was a stepping board to get to the SmartaTrans, yes" [emphasis added]. The following proposition was put to Mr Wastell: Counsel for Flogineering: And it's fair to say, and I don't need you to tell me how much money you've spent or what you've said to your lawyers. It's fair to say you've spent a bit of money on lawyers between when you got the complaint and now, correct? Mr Wastell: Correct.

The evidence of Mr Brian Robertson 174 Mr Brian Robertson affirmed an affidavit in the proceedings on 13 March 2020. He said these things. 175 Mr Robertson is a director of Blu Logistics and Jurss Robertson Pty Ltd. JRPL has purchased milk flowmetering systems from the applicant for approximately 20 years. Mr Robertson says that he has had very little dealings with Mr McMahon. He says that the majority of the dealings with the applicant were conducted by Mr Jensen or Mr Wastell. He says that in terms of alternative systems available for use by Blu Logistics and JRPL, Blu Logistics has 49 trucks in its fleet which it uses for the collection of milk for Parmalat, Fonterra, Norco and another entity. He says that the THS-Piper system was available for use in relation to Tanker No. PM207 referred to in Schedule 1 to Declaration 1. Schedule 1 does not refer to a date in relation to the Blu Logistics Tanker PM207 but the material suggests that the relevant date is 29 April 2017. So far as JRPL is concerned, Mr Robertson says that it uses five trucks to collect milk for Parmalat and another company and in relation to its fleet, Mr Robertson says that the THS-Piper system was available for use in relation to Tanker 127 as at 9 March 2011 although there was no alternative system available for Tankers 126 and 20 on 21 January 2010 and 7 June 2010 respectively. 176 Mr Robertson also gave oral evidence. He agreed that over the years of his experience he had been involved in the business of milk haulage or milk cartage with Blu Logistics and the Jurss Group as part of a consortium to do work together for companies such as Parmalat and Fonterra. He agreed that over the period of those joint operations, submissions had been put to processors such as Parmalat and Fonterra for the purpose of winning milk haulage contracts. However, he gave evidence that he had not personally "done that" as he is not part of the "sales team" but he has "helped with the pricing". Mr Robertson was taken to the document at CB 1281 which is a document directed to Parmalat. Mr Robertson says that this is the "sort of document" that was used to his knowledge to promote the consortium to a processor. Mr Robertson said that he did not have a lot to do with producing a document like that. He said that most of the time other people would put such a document together but they would "run it past" him before sending it off and "the bits that I had things to do with [were] [t]he price, mainly". He said that he had no experience of dealing on his own or applying on his own for work with Parmalat or "anyone like that".

Conclusions 177 Having regard to all of the evidence, the following matters emerge: (1) It is clear that milk processors know and understand that the conduct of a milk processing undertaking requires a high level of prescription or control to be exercised by the processor over the many requirements to be met by participants providing services as a part or element of that overall undertaking and that is particularly true in relation to participants providing bulk milk haulage services to the processors. (2) The detail of the responses to the RFPs by the respondents and the detailed terms of the 60 page Transport Agreement (at CB 1219 to CB 1279) and the Lion Raw Milk Logistics Services Agreement at CB 1346 to CB 1364 demonstrate the degree of prescription by the processors of the requirements that must be met by entities seeking to supply and supplying bulk milk haulage services to the processors. The documents illustrate the range of matters of importance to the processors in those aspects of the undertaking and in achieving best practice in respect of those aspects of the undertaking. (3) It is also clear that the processors know and understand that one of the regulatory regimes that directly affects their business undertaking is the regime established under the NMA and Regulations for the granting of approvals by a relevant authority in relation to instruments and devices used for measuring fluid flows and, relevantly here, fluid flows in liquids other than water (that is, milk flows as described by Mr McMahon). (4) The processors also know and understand that a person seeking to provide bulk milk haulage services to them (which requires the collection of milk from many dairy farms and the transfer of collected bulk milk volumes to processors) must have flowmetering instruments installed on their trucks that accurately measure (by reason of being properly calibrated to the very particular requirements of the specification relating to a particular "approval"), the volume of milk collected at each dairy farm in a shift and the total volume of milk ultimately transferred to the processor at the end of the shift or the "day end". The processors know and understand that the instruments that are used for such a critically important purpose must be the subject of an approval by the NMI under the regime established by the NMA and Regulations. Neither Mr Jensen nor Mr Wastell contests the proposition that approvals by the NMI were important to the processors. (5) It is also clear that the process by which approvals are granted by the NMI of the kind at CB 395 is understood by both the processors, and the respondents as bulk milk haulage service providers, as, put simply, an "accreditation". That is the language used by the respondents in the responses to the RFPs and it appears a number of times in the documents described above. The NMI accreditation, as a shorthand reference to the Approval in issue in these proceedings, mattered to both the respondents and the processors. It mattered to the processors because it mattered that the respondents were able to, and would, comply with all applicable "Laws", one of which involved the laws relating to the accreditation which involved the legal foundation for the regime established under the NMA and Regulations by which conditions are imposed as part of an approval under that regime. (6) The processors required a person providing bulk milk haulage services to them to be accredited as to many matters but relevantly for present purposes they required the respondents to demonstrate the relevant accreditation in the sense that instruments used by such persons as part of a flowmetering measurement system had to be approved and the person providing the service was required to comply with all of the conditions of the relevant approval and thus the conditions of the accreditation. (7) In this case, in respect of 26 tankers, the respondents made the representation in Declaration 1. The respondents plainly thought that it was important and material and at the very least a selling point for them to affix an Approval number to the relevant instrument so as to be able to offer and provide their services in conformity with an accreditation for a milk flowmetering instrument within a milk flowmetering system used by them on the basis that they asserted that they had the regulatory right conferred by the Approval granted under the regime to affix the regulatory signification of accreditation to their instruments (and thus vehicles). Hence the Representation as found. They, of course, did not have that right with the result that the Representation was a misrepresentation in contravention of the legislative norms in ss 18 and 29 of the ACL. But, of course, in truth they understood that it was critical to their ability to be able to supply their services to the processors that they be able to affix an Approval number to the relevant instrument in conformity with an NMI approval otherwise they would not be acting under and in conformity with the conditions of the Approval. (8) At no point in any of the material in evidence did Mr Jensen (who was primarily responsible for the dealings between the respondents and the processors) or Mr Wastell ever say to any of the processors something along the following lines: "we just want you to clearly understand that the Approval represented by Approval number 5/6E/13A was granted by the NMI to Flogineering Pty Ltd and although we apply that Approval number to our instruments used in our flowmetering system we have no right to do so under the conditions of the Approval granted under the provisions of the Commonwealth National Measurement Act and Regulations without the consent of Flogineering and we do not have that consent". (9) I am willing to infer that something along those lines was never said to any of the processors because Mr Jensen and Mr Wastell understood that drawing that matter to the attention of the processors in the context of discussions about NMI accreditation is something which would have put at risk acceptance of any submission in response to an RFP and would have put at risk the prospect of a contract for the provision of services to the processors. The respondents knew they had to have accreditation and they knew they had to affix an Approval number corresponding to the accreditation. They chose to affix the applicant's Approval for the purpose of demonstrating accreditation. (10) These matters are important because they go to, and for present purposes, only go to the materiality from the perspective of the processors (but also the transport companies) of affixing an Approval number to the relevant instrument and, in particular, the Approval number in issue in the proceedings. (11) As to the evidence, I accept the evidence of Mr McMahon. I also accept the evidence of Mr Miller on these issues of the importance of all elements of the regime to the processors. I accept the evidence of those witnesses generally. As to the documents, they speak for themselves. (12) I accept that there is no direct evidence that a processor checked an instrument installed on any one of the respondents' 26 trucks referred to in the schedule to Declaration 1 so as to note and be satisfied that an Approval Number was affixed to the instrument in apparent conformity with the relevant approval and that in doing so saw the applicant's Approval Number affixed without authority and then took a step such as entering into a contract with one of the respondents or took the step of continuing in an arrangement with one or more of the respondents in reliance on the affixing of the Approval Number on an assumption that the Approval Number was lawfully applied, when it was not. (13) The respondents say that that is the end of the matter so far as any case made in reliance upon s 236(1) of the ACL is concerned. (14) However, that is not so as the question of whether the applicant has suffered loss because of the conduct of the respondents in circumstances where the conduct contravenes ss 18 and 29 of the ACL (having regard to the two declarations made by the Court) must be determined having regard to the whole of the evidence, the nature of the relationship between the parties and the character of the undertaking in which they were participating, in light of the relevant conduct as found. (15) There can be no doubt, as the question is already the subject of findings and two declarations, that the respondents misled the processors as an element of their trade in their bulk milk haulage services businesses. All aspects of the NMI accreditation were material to the processors. It is difficult to imagine a more central element of a milk processing undertaking (apart from the critical matter of food safety and hygiene standards and best practice) than confidence in the mind of the processors that bulk milk haulage companies can accurately measure the volume of milk collected from dairy farms and transferred to the processors, in complete conformity with approvals governing accreditation in relation to the measurement of milk volumes collected and transferred to the processors. I am willing to infer, based on the overwhelming evidence of foundation facts going to accreditation, that the processors relied on the affixing of the Approval number to instruments by the respondents as a critical element of the provision of their services and I am willing to accept that it is more likely than not that from time to time producers took a step of checking to see whether an Approval number had been affixed to instruments. (16) I am satisfied that on the whole of the evidence, reliance is made out. (17) In relation to the question of the quantum of the loss, I accept the evidence of Mr Lytras and I accept that the gross profit in relation to the 26 trucks and tankers the subject of the schedule to the declaration amounts to $606,636.00. (18) However, a question arises in relation to the counterfactual for the purpose of determining the measure of loss. (19) The respondents contend that had they understood that there was an issue as to the quality and character of their conduct in affixing the applicant's Approval number to the relevant instruments, they would have transitioned to the THS-Piper system and would have done so as from the approval date of 10 December 2010. However, I do not accept that evidence. In the affidavits on this question, Mr Jensen and Mr Wastell put the position in black and white emphatic terms that had they known the true position about what was wrong or not in affixing the applicant's Approval number to their instruments, they would have transitioned to the THS-Piper system from 10 December 2010. In that sense, those two deponents simply "swear the issue". (20) In cross-examination, the position was not as black and white or emphatic as that set out in the affidavits. In fact, the correct position seems to be that the respondents relied upon the DME Mobicom and MTC system (software) as a "stepping stone" to the Smarta model. It is unlikely that they would have moved to the THS-Piper model from 10 December 2010 for all new acquisitions and then to the Smarta model once that model had been approved. In addition, the respondents had emphasised to the producers throughout the period that they had invested substantially in the DME Mobicom system and the MTC system. It is more likely than not that they would have continued with the system with which they were familiar and in which they were heavily invested, until they found themselves in a position to transition to the Smarta model. In the documents, there are references by the respondents to a new flowmetering system being developed by them. It emerges in 2015 but is not present in the 2016 or 2017 documents. It appears again in 2018. In addition, the applicant makes the point that although the respondents were confronted by the applicant about the use of its Approval number, the respondents nevertheless persevered in the defence of the litigation, contested the liability trial and did not transition until late in the chronology after having expended a significant sum on the litigation. That approach seems inconsistent with a ready willingness to transition to an entirely new flowmetering system for the purposes of the counterfactual hypothesis. (21) In making these remarks about the evidence of Mr Jensen and Mr Wastell, I do not mean to suggest that either witness sought to mislead the Court about these matters. Rather, each witness sought to assist the Court. However, in forming views about what the respondents would have done in the postulated circumstances and swearing the issue in the way they did in their affidavits is simply an example of one of the well-known heuristics in the form of hindsight bias discussed extensively in the leading work of the Nobel Prize winning economist, Emeritus Professor Daniel Kahneman (discussed in Kahneman's work, Thinking Fast and Slow, Penguin Group, 2011 (first published in the United States by Farrar, Straus and Giroux, 2011); the academic work which led to the Nobel Prize on heuristics was undertaken by Kahneman together with Amos Tversky although Tversky was not awarded the Nobel Prize as he had died before it was awarded), which, understandably, has affected their view. (22) Nevertheless, the possibility that the respondents may have turned to an alternative system cannot be excluded and in order to properly determine the quantum of the opportunity lost to the applicant suffered because of the conduct, it is necessary to discount the amount of $606,636.00 to take account of that possibility. I discount the quantum by 25% with the result that the quantum of the loss is $454,977.00. (23) Having regard to all of these considerations, the applicant is entitled to judgment in an amount of $454,977.00 together with interest for the period during which it has been held of the loss. The applicant is also entitled to the costs of and incidental to the proceedings. Having regard to the evidence of Mr Jensen, Mr Wastell and Mr Robertson, judgment is to be entered for the full amount against all respondents having regard to the joint participation in the totality of the conduct as reflected in the documents and the evidence. 178 The applicant will be directed to submit draft orders within seven days. I certify that the preceding one hundred and seventy-eight (178) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Greenwood.

SCHEDULE OF PARTIES QUD 883 of 2016 Respondents Second Respondent: WASTELL MILK HAULAGE PTY LTD (ACN 147 389 302) Third Respondent: WADENE PTY LIMITED (ACN 010 248 307) Fourth Respondent: JR BULK LIQUID TRANSPORT PTY LTD (ACN 143 639 276) Fifth Respondent: JURSS ROBERTSON PTY LTD (ACN 114 767 734)