The current invoices for incoming units are
INV 019336 for direct shipment (pre-release obtained with 5% discount applied to invoice - this was prior to agreement to apply to parts a/c's)
INV 019403 will apply 5% ($5,575 to parts accounts)
INV 019322 Bond stock - discount does not apply
INV 019857 still awaiting payment - Redirect, discount does not apply.
26 I interpose to note that the significance of this email depends on whether it is construed as an acknowledgment of the general discount (as Carrington contends) or related solely to a particular transaction (as Hyundai contends). However, that is a determination that would only properly be made on a final hearing in relation to the debt, assuming the statutory demand is set aside.
27 In relation to the first of those invoices (19336), it is said (for Hyundai) that the agreement to give a 5% discount was, in effect, a one off discount related solely to that invoice. Reference is made to a document annexed to the affidavit of Mr Hector, being an e-mail of 13 November 2009 from Mr Stuart referring to "my generous initial offer to apply 5% on the basis of direct payment on 3 November, it is now 13 November and we will need the required processed today or the offer will not apply" (which suggests that Mr Stuart did not consider the discount strictly applicable on that item). That followed an e-mail of 4 November 2009 "please find attached pro forma invoice for requested invoice R55-7 - I have applied the 5% discount based on this being able to be processed directly". Mr Hector's response was "please apply the 5% to our parts account."
28 Thus, for Carrington, it is submitted that this email amounts to recognition of an entitlement to a 5% discount, irrespective of who placed the relevant order; on Hyundai's part it is said to be evidence of no more than a particular arrangement entered into for one acquisition. Insofar as the document might support either construction, it cannot be said that Carrington's position is unarguable on that point.
29 There was a different discount arrangement offered in relation to the purchase of wheel loaders for the period from November 2009. During this period it is accepted that an order was placed by Carrington for one of the wheel loader models covered by the "10% wheel loader campaign" (that being model HL 740-7). There seems no dispute that a 5% discount was applied to the relevant order. What is disputed is whether that was the "wheel loader" discount (as Hyundai says it was and which acknowledges Carrington was entitled to obtain on the wheel loader discount) or the 5% EDOS discount only (to which Hyundai says Carrington was not entitled) thus leaving Carrington in the latter event in the position that it did not obtain the additional 5% wheel loader discount. (An error in the calculation of the 5% discount, of whichever kind it was, was conceded by Hyundai which accepts that a small adjustment to the claim is warranted.)
30 In late 2009/early 2010, disputes seem to have arisen in relation to the business relationship between the parties. In part they seem to have related to a dispute as to whether Hyundai should contact GE directly in relation to the obtaining of pre-release numbers or should, as Carrington contended, deal with Carrington directly on the machinery orders. Carrington seemed to attribute some delay in payment of orders to this issue. There was also reference to Carrington's 'commercial' restrictions, which might have indicated an awareness of financial problems.
31 On 5 February 2010 Mr Hector e-mailed Mr Stuart "Re 5% discount", responding to the 28 January 2010 e-mail by saying "please e-mail me through the sales bulletin that outlines the 5% as my records reflect a different amount to you so I would like to confirm my start dates and the units we believe should have the 5% discount. I would like this to be taken off our parts account ASAP as this is causing us major issues as you are aware." (Up to this point there does not seem to have been any suggestion by Hyundai that some orders, at least, qualifying for the 5% discount had been placed (ie more than the one-off invoice that Hyundai says it agreed to treat as within the discount arrangements). Nor, as I have already noted, does there seem to have been any suggestion that Hyundai would not be prepared to credit any rebate against the parts account.)
32 On 17 February 2010, the dealership agreement was terminated. On 19 February 2010, Mr Stuart e-mailed Mr Hector referring to the 23 September dealer bulletin and stating that this discount "applies to all monthly machine stock orders receipted via the EDOS system only" from 9 September through Tuesday, December 22, 2009 and that, as Carrington had not submitted any orders through this process, Carrington "therefore are technical not eligible for any discounts" (my emphasis). (Use of the word "technical" perhaps suggests a recognition that this was placing reliance on the strict letter of the discount programme and not its intent.) Mr Muston relies on the earlier correspondence in 2010 (in which there had been dissent expressed as to outstanding amounts) as gainsaying any suggestion that the denial of the 5% discount was something first raised after termination of the dealership.
33 Mr Hector's response to the February email was that orders had not been submitted by it through the EDOS system because Hyundai had an employee (presumably Mr Robertson) who was assisting Carrington and who had done this for Carrington "with the view of supporting the dealers". A request was made for Hyundai to reconsider its position.
34 On 15 March 2010 (again, this was after notice terminating the dealership had issued), Mr Stuart advised Mr Hector that he believed that there were no units currently delivered that qualified for forward order discount but suggested that "a simple way to check is through EDOS or review history of prerelease notices from GE as all forward orders need a prerelease". (This would arguably suggest, as asserted by Carrington, that so far as Hyundai considered the discount would be reflected in the pre-release notices, it was not necessarily seen as being limited to orders placed through the EDOS system).
35 Exhibited to Mr Hector's affidavit (MRH26) is a document Mr Hector obtained from GE, being the "prerelease" history. Relevantly, that document includes the invoices to which reference had been made in the "critical" 28 January 2010 email (including invoice number 19336, with date of release noted as 2 November 2009 and date of purchase 22 December 2009; invoice 19403, with date of release 4 January 2010 and date of purchase also 4 January 2010; and invoice 19322, that being noted "Bond Stock" ordered on 22 December 2009). It is difficult to know, from those documents, when precisely orders were placed with Hyundai, although if the placement date is taken to be the pre-release date then that would seem to be identified in this document.
36 I should note that an affidavit was read from Shane White, (a director of Carrington, who was Carrington's sales director and responsible for training and supervising the sales staff dealing with customers directly) deposing as to conversations he had with Mr Robertson in relation to the EDOS discount program. Mr White says that Mr Robertson had told him the 5% discount would not be an issue, "just get Mike to send an email through with the details and we are ready to roll". (Given that Mr White himself says that it was Mr Hector who was responsible for ordering machines with supplies and dealers, it is submitted for Hyundai that the evidence of Mr White can take matters no further as he cannot relevantly have relied on any representation made by Mr Robertson, though it may be that if Mr Robertson understood that the information was being conveyed to Mr Hector reliance might have been placed by Mr Hector on that statement in circumstances where Hyundai might be said in some way to be bound by it.)
37 According to Mr Barnsdall, none of the orders referred to in exhibit MRH-26 to Mr Hector's affidavit was receipted by the EDOS system. In relation to the front wheel loader discount, Mr Barnsdall says he has recalculated it and accepts that it should have been $6,242.50 instead of $6,132.50. He accepts that Carrington is entitled to a further $110 for the discount but not for the $6,242.50 it has claimed (on the basis that the discount given was a front wheel loader discount (as offered) but there was no entitlement a further 5% EDOS discount because the order was not made using the EDOS system).
38 Mr Barnsdall contends that Hyundai is entitled to $96,309.22 as the correct amount due and owing by Carrington.
Carrington's claim
39 Carrington maintains that it has a claim in contract for a 5% discount that was to be treated as offsetting amounts payable on the parts account provided that orders were placed for machinery within a particular period and, alternatively, that it has a claim based on estoppel in that it was alleged to believe that certain things were done (i.e. that Mr Robertson would place orders for Carrington in a way that would entitle Carrington to a discount) such that it would be entitled to the discount which would then give rise to a rebate against the parts account for orders placed in the usual way in the relevant three months. On the question of reliance, it is said by Mr Golledge that this is a question of fact not to be determined on a hearing of this kind but that the evidence shows reliance in the form of the continuation of placement of orders in the way Carrington had previously done. Alternatively, it is said that there was a representation made on behalf of Hyundai in relation to the placement of orders giving rise to a claim for relief under s 87 under the Trade Practices Act 1974 (Cth) or the equivalent provision of the Fair Trading Act 1987 (NSW).
40 Mr Muston accepts that there is a low threshold in establishing a genuine dispute or a genuine offsetting claim but says that even if one accepts unreservedly Carrington's evidence, the court could not be satisfied as to the offsetting claims.
Contract/Estoppel Claim
41 For Hyundai, it is submitted that to the extent that Carrington relies upon a breach of contract (or an estoppel claim referable to the alleged breach of contract) it cannot succeed even if the evidence of Carrington were to be accepted. This submission is premised, first, on the relevant contract being between GE and Hyundai and, secondly, on the conditions to which that offer was subject not being met.
42 As to the first, it is said that any claim for breach of contract would rest with GE and not with Carrington.
43 Reliance is placed in that regard on the Bailment Agreement, and the seemingly undeniable proposition that the purchases in question were made by GE, not by Carrington. It is said that Carrington cannot point to any contract between itself and Hyundai pursuant to which items of equipment were sold to Carrington. Thus, the threshold problem, according to Hyundai is that Carrington was at most the agent of the ultimate purchaser, (GE) and not entitled to pursue any breach of contract claim against Hyundai.
44 There is no dispute that, at the relevant time, there was a dealership agreement in place between Hyundai and Carrington. Nor is it disputed that Hyundai offered to make a 5% discount available to its dealers (i.e. including Carrington) for purchases ordered through the EDOS or, to be precise, "receipted via" the EDOS system). Whatever the way in which the acquisitions were ultimately effected, there seems to me to be an argument open to Carrington that Hyundai promised it that, as a Hyundai dealer, if an order for machinery was placed by or on behalf of Carrington then a 5% discount off the purchase price would be applicable. That discount, insofar as it represented a monetary amount could conceivably have been applied in a number of ways - as a reduction in the purchase price for that item being made available to a third party financing the acquisition of the equipment pursuant to separate arrangements between Carrington and the financier (i.e. to GE and then passed on presumably to Carrington) or by a reduction in the price of future items, or as an offset for other purchases.
45 If the agreement was to the effect that "if you place an order (through EDOS) then we will sell the machinery to your financier at a lower price" then the fact that the sale contract was ultimately between Hyundai and the financier does not mean that Carrington would not have suffered compensable loss if Hyundai failed to sell to GE at the lower price (since Carrington no doubt would have to meet higher finance payments on that piece of machinery). Similarly, if the agreement was, as Carrington contends, an agreement to apply the "discount" as an offset to its parts account, then non-compliance with the agreement would necessarily have an impact on the quantum of the outstanding parts account (for which Hyundai is now seeking payment).
46 There was a suggestion that the sales/marketing bulletin in which the offer was made could not have had any contractual force. I accept that there may be a question as to whether there was an intention to create a binding contract by reference solely to the sales bulletin. However, that is again not an argument that is so clear on its face as to preclude a finding to the contrary. It seems to me that there is a plausible argument open to Carrington that this was a unilateral contract (separate from its formal dealership arrangements) such that, if an order was duly "receipted" or placed in the relevant period, a discount would be made available to Carrington in some fashion (a unilateral contract of the kind considered in Carlill v Carbolic Smoke Ball Co [1892] 2 QB 48 where performance of the condition to which the offer was subject was the event that brought the contract into existence).
47 Therefore, I do not accept that the fact that the finance arrangements are between GE and Carrington is such as to render the offsetting claim based on the alleged contract as one that is spurious, implausible or doomed to failure.
48 The second basis on which it is said that there is no plausible contention of the kind necessary to warrant setting aside the statutory demand (by reference to the contract claim, or the estoppel claim which itself produces a claim based on the contract Hyundai is said to be estopped from denying) turns on the terms of the offer or promise contained in the September bulletin.
49 It was an express term that the discount applied only to orders made through (or "receipted via") the EDOS system.
50 It is said that there are two reasons why the express term was not satisfied in the present case: first, that none of the orders identified in Exhibit MRH26 was submitted through the EDOS system (whether by Carrington or by the Hyundai staff) and, secondly, that the court cannot be satisfied that all of the orders identified in that Exhibit were placed between 9 September 2009 and 22 December 2009 (and it is said that logic suggests they cannot have been).
51 Mr Barnsdall's evidence is relied upon to show that the contractual precondition was not satisfied at least in relation to the first issue. As to that issue, it seems to me that if Mr Hector's evidence of the relevant conversations with Mr Robertson is ultimately accepted, then it would be open to a court to conclude that Hyundai (through its staff) had promised to place the orders through EDOS and that Hyundai could not rely on its own employees' failure to place the orders through EDOS as the basis for denying Carrington the benefit of the promised discount.
52 As to the second perceived problem in the claim based on contract, it is said that there is no reliable evidence that the orders were placed within the relevant period. The document obtained from GE shows a date of release and a date of purchase for the relevant orders. It is not clear whether the former is the date on which the order is placed. If so, then some of the orders (say, the January invoices) cannot seemingly have been within the period. If on the other hand the January orders are within the period then it is said the 9 September order must be out of the relevant period. However, as Mr Golledge submits, on Mr Hector's evidence, Hyundai itself referred to the GE pre-release records as evidencing the orders to which a 5% discount applied, and Mr Hector's evidence (paras 38/39) is that these were the orders placed in the relevant period. It seems to me that on an application of this kind, there is an arguable case that the offsetting claim can be established of somewhere in the order of the claim contended. Uncertainty as to whether one or more of the invoices might have fallen outside the relevant period is not enough to persuade me that there is no plausible contention by Carrington that most (if not all of them) did. Ultimately, that is a matter that would be for evidence on a debt recovery claim if the statutory demand is set aside.
53 As to the wheel loader discount claim, broadly this turns on whether it can be established that the order was not only entitled to a wheel loader discount but also fell within the 5% EDOS discount - since it seems to be accepted that a 5% discount was given for the relevant purchase. The only question is whether an additional discount applied. That turns on the above issues.
Representations
54 In relation to the claim based on the representations allegedly made (to the effect that the discount would be given even if orders were not placed through the system), it is said that, for the purposes of the proceedings, it may be open to a court to accept the evidence given by Mr Hector but that, in their context, the conversations do not convey the representations alleged.
55 It is said by Mr Muston that the conversations in paragraphs 8, 9 and 13 of Mr Hector's 18 October 2010 affidavit (referred to at [12] and [14] above, these pre-date the dealer bulletin and simply foreshadow a discount program to be announced and that the terms on which that discount was offered was subsequently made clear in the bulletin itself. (They do, however, arguably provide the context in which later statements might be said to be understood).
56 It is said that the conversation referred to paragraph 15 of Mr Hector's 18 October 2010 affidavit (at [17] above does not contain any assertion that the EDOS discount would be applicable to orders other than those placed using that system. In that regard it is said that dealers had known about the EDOS system since at least 25 November 2008, when they were delivered a sales marketing bulletin and operational instructions, and that on 7 September 2009 Mr White had attended a course and was provided with instructions on how to operate the system. However, in contrast, the conversation, if Mr Hector's version is accepted, suggests an ongoing representation that he would be entitled to (or given) the discount.
57 It is said that the conversation in paragraph 17 of Mr Hector's 18 October 2010 affidavit (referred to in [19] above), by its express terms, relates only to the way in which Hyundai had approached the problem with the EDOS system and that there is no evidence that the problem affected Carrington in any way. I accept that is the substance of what was said but again, in the context of the earlier discussions it is not unarguable that this amounted to a further representation that Carrington would obtain the discount.
58 Finally, the conversation referred to in paragraph 20 of Mr Hector's 18 October 2010 affidavit, in which Mr Hector says that Mr Stuart said "You will get the 5% discount - we just need to get the pre-release number" (read in the context of the surrounding paragraphs of his affidavit) and the e-mails and Exhibit MRH 13, must be read it is said as referring to a one-off discount unrelated to either the EDOS discount or the wheel loader discount; and that the one-off discount was offered (and given) and thus could not form the basis of an offsetting claim. (Ultimately, that might be the proper construction to be placed on this conversation but it does not seem to me that it permits of no other construction in the context of the discussions between the parties over the relevant period.)
59 As noted earlier, in relation to the representation claim, Mr Muston submits that any representations to Mr White are irrelevant (since it was Mr Hector who was placing the orders not Mr White).
60 It is submitted that at best it might be inferred that there was a representation that Carrington did not have to place the orders through EDOS because Mr Robertson would do so, but that insofar as this discussion was in the context of a discussion in relation to problems with EDOS, which were fixed by 14 October, the representation could not travel beyond 14 October. Mr Muston characterised this as evidence that in the past there has been some problem and that it had been decided to give a 5% discount anyway for one item, but says that there was no representation to the effect that anyone who used the manual system will be entitled to a 5% discount.
61 Accordingly, for Hyundai it is submitted that the alleged representations rely upon conversations that do not support in their terms the representations that are said to found the basis of the claim since none can be construed as a representation that the EDOS system applies contrary to the EDOS bulletin. In reply, as to the relevant conversations, it is submitted by Mr Golledge that (fairly understood) the factual context of those conversations included an entitlement to the relevant discount (and that Hyundai's "attempt to "explain away" significance of the email document on 28 January 2010 does not take into account the assertion was the Mr Stuart had applied "the" 5% discount). That may or may not be the case, but it gives rise at least to an arguable or plausible contention in Carrington's favour. It seems to me that there is sufficient put forward by Mr Hector to give rise to an argument that a representation was made to it to the effect now articulated - whether the evidence is ultimately accepted as going that far is a different matter.
62 Further, it is submitted by Mr Muston that, even if the court were to accept that a representation was conveyed to the effect that the discount or rebate did not depend on stock orders being placed in the EDOS system, to establish an equitable estoppel, Carrington must demonstrate both reliance on the representation and that it has suffered detriment as a result of the situation not being as it had been led to understand (and must then establish loss and damage in reliance on the representation to the extent that it seeks such relief).
63 It is submitted by Mr Muston in this regard that there has been a failure to establish any of those elements even to the threshold level required in applications of the present kind, on the basis that there is no evidence that Carrington would have acted differently (either in not buying the relevant machines or not ordering them manually or increasing the price of the machines when they are on-sold to the customer). It is submitted that the evidence suggests that Carrington would have bought the machines regardless of the discount offered (in that Mr White stated he was going to order the wheel loader before he had heard of the discount; the long history of purchases placed since the first distribution agreement in July 2003; the dependence of the plaintiff's customers on its ability to source machinery on its behalf; and the existence of the 2008 distribution agreement which obliged Carrington as dealer to fulfill a minimum sales volume).