(b) Applying the 'global' approach, that Meadow Lea's and Cospak's terms can co-exist given that they appear to be capable of reconciliation so as to give a 'harmonious result' when construed with a 'commonsense and practical approach' that takes account of the 'realities of commerce.' Such an approach, seeking as it does to determine the ad idem of the parties from an objective rather than technical offer and acceptance perspective, is not only consistent with 'battle of the forms' decisions such as Butler and Reese Bros Plastics , but indeed the general trend of modern contract law generally; a strict offer and acceptance analysis, said Heydon JA in Brambles Holdings Ltd v Brambles City Council (2001) 53 NSWLR 153 at [71], "is neither sufficient to explain all cases nor necessary to explain all cases." Rather the salient factor for this nascent doctrine of formation is whether the parties have manifested, by their conduct, 'mutual assent' to certain terms; in Brambles Holdings at [80], Heydon JA continued:
"If offer and acceptance analysis is not always necessary or sufficient, principles such as the general principle that a rejection of an offer brings it to an end cannot be universal. A rejected offer could remain operative if it were repeated, or otherwise revived, or if in the circumstances it should for some other reason be treated, despite its rejection, as remaining on foot, available for acceptance, or for adoption as the basis of mutual assent manifested by conduct."
56 See also: Pobjie Agencies Pty Ltd v Vinidex Tubemakers Pty Ltd [2000] NSWCA 105 at [23], per Mason P.
57 As I have pointed out there is no direct inconsistency between the terms, which can be construed together and reconciled. The Meadow Lea terms unlike the Cospak terms do not purport to be the sole terms or to reject any other terms. They are but one partial response to a standing offer for continuing supplies. Having regard to both of the documents it is clear that both parties recognised that the contract included terms as to merchantable quality and fitness for purpose. The last shot approach is very arbitrary in its results and it seems to me that it is preferable to endeavour, where the parties have proceeded with the contractual arrangements, to reconcile if at all possible the conflicting versions of terms of which they were both aware when they decided to proceed with production and delivery. Thus on this approach which I adopt the express terms of the contract can be said to comprise Cospak's terms of the 4 May letter in its entirety, plus those printed on Meadow Lea's purchase order of 19 May. Thus there are terms as to merchantable quality and fitness for purpose but they are qualified by clause 9 (a) and (b) of the Cospak terms. Vroon v Foster's Brewing Group Ltd [1994] 2 VR 32 at 82, per Ormiston J:
"There is now sufficient authority to justify the Court enquiring as to the existence of an agreement evidenced otherwise than by offer and acceptance."
58 I turn to consider the implied term for which the defendant contends in paragraph 17 of its defence. Clause 1 of the special conditions to which I have referred contains a standard entire contract clause. Such a clause does not however preclude the implication of an implied term. See Hart v McDonald 10 CLR 417 at 430 and Johnson Matthey v A. C. Rochester Overseas (1990) 23 NSWLR 190 at 196.
59 The implied condition which I have set out above in paragraph 29 of these reasons is one which is said to be implied as a result of industry practice. Because of the particular nature of both the production process in the making of the bottle and the filling process which takes place on the purchaser's production line appropriate end results cannot be obtained unless there is a cooperative approach between the two parties. Mr Warne who was the defendant's expert who addressed the cause of the failures in the production run in November gave evidence in respect of this industry practice. The plaintiff's expert Mr Drake both in his reports and cross-examination also addressed it.
60 Mr Warne's explanation of the industry practice and the reasons for its existence is felicitously set out in paragraph 15 and 16 of his report exhibit 2 in these terms.
"15. When new bottles are introduced to a filling line, whether for the first time, or in circumstances where the filling line has previously successfully handled similar bottles from a different supplier, transitional problems not infrequently arise causing jamming, breakages, a slowing down of the line and an overall loss of efficiency. This is especially so where large quantities of containers are sought to be processed. In the majority of cases, incidences such as these are temporary and can be rectified by adjusting the line to suit the new container.
16. In such a situation, it is usual practice in the Australian and international glass industry, for the purchaser and the supplier to work together with a view to eliminating the problems on the filling line. In my experience, as a supplier of glass and as an-end user, most of these problems are satisfactorily resolved provided that there is a collaborative approach by both parties. For example, it may be necessary for the packer to adjust machine settings (particularly clearances on infeed and discharge legs), or use lubricants on their filling lines or to adjust existing, or even add new, guide rails. On the other hand, it may be necessary for the supplier to increase the surface coating on the glass containers, or to seek to modify the moulds to incorporate improved design features. Adjustments such as these highlight the fact that neither the bottle nor the packaging line can be considered in isolation. Rather they must be viewed as integral, yet separate, parts of a total packaging system. It is because cooperation of this nature is considered desirable, and is normal in the industry, that most packaging material suppliers and their customers seek to develop, what are commonly referred to as "supply partnerships." To do otherwise is to run the risk poor glass performance and poor line efficiencies. In practice therefore, to achieve the mutual objective of both the glass supplier and the end-user (as befits a supply partnership) there must be orchestrated trials that rely on cooperative resolution of outstanding issues - and for this there is a shared responsibility."
61 In his report Mr Drake agreed with this subject to both parties having the relevant expertise. He had no knowledge of the expertise of the manufacturer and could not comment on that aspect. He had some doubt about whether the parties to the agreement, other than the manufacturer, might have had sufficient knowledge as a result of the comments made in the minutes of the meeting of 25 October 1999. The matter was dealt with in cross-examination in these terms: --
"Q. I just wanted to finish off the topic of the usual practice of rectification. Do you have Mr Warne's second report? In paragraph 14 of that report you will see what Mr Warne has said and you have responded in your paragraph 14, on page 5 of your second report, exhibit H. Would you turn to that?
A. Yes.
Q. Your comment seems to be in two parts. You say Mr Warne's comments are valid, but then you make the reference to both parties having the expertise, again?
A. Yes.
Q. And then you make reference to the statement which has been paraphrased from the minutes of the meeting of 25 October 1999, which refers to silicon?
A. Yep.
Q. Do I understand your problem to be that you think that the reference to silicon displays a lack of knowledge by someone?
A. By the parties, yes, involved in that; yes, I do.
Q. Because you think that anyone who speaks about putting silicon on an existing batch of bottles may not really appreciate the way in which surface coating is applied?
A. Yes.
Q. Did you see the minutes of the meeting of 25 October?
A. I had a copy, yes.
Q. Did you understand that the minutes recorded that the parties proposed that a new batch of 300,000 bottles be produced with an increased level of surface coating?
A. Yes, I read that.
Q. So it wasn't the case of applying silicon to existing bottles?
A. I think in one of the earlier reports it did read that way; in one of the reports I did read.
Q. You have got that from somewhere?
A. Yes, I would have to go - but not in the minutes of the meetings; I agree with you.
Q. It would be in accordance with normal practice after the first real trial, which is what happened on 25 October, for there to be a proposal to produce another fresh batch with an increased surface coating?
A. An improved surface coating, yes.
Q. Surface coating is a slightly intangible business, isn't it? By that I mean it is not always easy to get precisely the right level of surface coating for a particular application to a particular filling line, given a particular bottle?
A. I don't think it is that difficult. It doesn't matter what bottle you are making. If you have permanent surface treatment, the conditions are pretty well the same all through."
62 There is no doubt from this and other passages in cross-examination of Mr Drake that he agrees that having identified a problem with surface coating it would be proper practice for the parties to have endeavoured to correct the problem prior to any production.
63 The law pertaining to the circumstances in which contractual terms may be implied on the basis of trade usages and customs appears inter alia in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Pty Ltd (1986) 160 CLR 226. In a joint judgment, the Court (Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ) held that the implication of terms on the basis of trade usage and custom is a matter of the intentions of the parties in the sense that "the general notoriety of the custom makes it reasonable to assume that the parties contracted on the basis of the custom, and that it is therefore reasonable to imply such a term into the contract"(at 237). Accordingly, the Court outlined the following basal principles (at 236-8):