Whether Lobux made every endeavour to achieve delivery within 8 weeks
138 Clause 6.4 concludes with these words:
However, both parties agree that they shall make every endeavour to enable the Goods to be delivered at the time and place as was arranged between both parties. In the event that [Lobux] is unable to supply the Goods as agreed solely due to any action or inaction of [Willshaun], then [Lobux] shall be entitled to charge a reasonable fee for redelivery and/or storage.
139 Willshaun's case is that Lobux breached this obligation. It complains that Lobux did not make every endeavour to enable delivery of the tank within eight weeks from payment of the deposit. By its particulars, it states that citing cash flow constraints did not permit or entitle Lobux to delay the manufacture and supply of the tank.
140 The agreement by both parties that "they shall make every endeavour to enable the Goods to be delivered at the time and place as was arranged between both parties" commences with the word "however" and therefore appears intended to qualify what came before it in clause 6.4. This means that the "arrangement" between the parties, at least as to time of delivery, is intended to be a reference to the estimated delivery period (if any) provided by Lobux.
141 This means that, notwithstanding that the delivery period was estimated to be eight weeks, and that Lobux was not prepared to accept liability for loss and damage if the estimated time period was not met, it was agreed that both parties would make "every endeavour to achieve it".
142 Counsel for Willshaun agreed that the expression "every endeavour" meant "every reasonable endeavour" and accepted that Willshaun bore the onus of proving that Lobux had not taken reasonable endeavours.
143 By its written submissions, Willshaun submits that the expression "every endeavour" is probably on par with "best endeavours" which is a "slightly higher standard". It cited the decision of QAD Inc v Shepparton Partners Collective Operations Pty Ltd (2021) 159 IPR 285; [2021] FCA 615 at [200] - [202], in which Thawley J stated that:
In Woodside at [41] to [43], French CJ, Hayne, Crennan and Kiefel JJ made three general observations as to the obligation to use reasonable endeavours (footnotes omitted):
[41] Three general observations can be made about obligations to use reasonable endeavours to achieve a contractual object. First, an obligation expressed thus is not an absolute or unconditional obligation. Secondly, the nature and extent of an obligation imposed in such terms is necessarily conditioned by what is reasonable in the circumstances, which can include circumstances that may affect an obligor's business. This was explained by Mason J in Hospital Products Ltd v United States Surgical Corporation, which concerned a sole distributor's obligation to use "best efforts" to promote the sale of a manufacturer's products. His Honour said:
"The qualification [of reasonableness] itself is aimed at situations in which there would be a conflict between the obligation to use best efforts and the independent business interests of the distributor and has the object of resolving those conflicts by the standard of reasonableness … It therefore involves a recognition that the interests of [the manufacturer] could not be paramount in every case and that in some cases the interests of the distributor would prevail."
[42] As Sellers J observed of a corporate obligor in Terrell v Mabie Todd & Co Ltd, an obligation to use reasonable endeavours would not oblige the achievement of a contractual object "to the certain ruin of the Company or to the utter disregard of the interests of the shareholders". An obligor's freedom to act in its own business interests, in matters to which the agreement relates, is not necessarily foreclosed, or to be sacrificed, by an obligation to use reasonable endeavours to achieve a contractual object.
[43] Thirdly, some contracts containing an obligation to use or make reasonable endeavours to achieve a contractual object contain their own internal standard of what is reasonable, by some express reference relevant to the business interests of an [obligor].
As is made clear by the passage at [41], an obligation to use best or reasonable endeavours is not an absolute obligation. It is conditioned on what is reasonable in the circumstances. In making that point at [41], the majority cited (in a footnote to the third sentence) Mason J in Transfield Proprietary Ltd v Arlo International Ltd (1980) 144 CLR 83 at 101; 30 ALR 201 at 216, where his Honour stated:
A "best endeavours" clause thus prescribes a standard of endeavour which is measured by what is reasonable in the circumstances, having regard to the nature, capacity, qualifications and responsibilities of the [promisor] viewed in the light of the particular contract.
In Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41 at 64; 55 ALR 417 at 429; 4 IPR 291 at 303, Gibbs CJ stated that a "best endeavours" clause "does not require the person who undertakes the obligation to go beyond the bounds of reason; he is required to do all he reasonably can in the circumstances to achieve the contractual object, but not more".
144 During closing, Willshaun submitted that Lobux did not have a documented plan or schedule for when, how and by whom the work was to be done. It submits that Mr Crawford had given evidence of documents which had been prepared for the design of the tank, but had not put them into evidence. Willshaun also criticised Lobux for not tendering construction or manufacturing plans which Mr Crawford said had been prepared but "they're not for the customer to see". Willshaun submits that this was a "slapdash approach" which "suggests that not even reasonable endeavours were undertaken" let alone best endeavours.
145 However, when one has regard to Willshaun's pleadings, it was not alleged that Lobux did not have a documented plan or schedule for when, how and by whom the work was to be done and that, by reason of this fact, Lobux breached clause 6.4 because it failed to make every endeavour to enable the tank to be delivered within the eight week delivery period. Nor did Willshaun plead a positive case that the cause of the failure by Lobux in achieving delivery within the eight week period was Lobux's "own difficulties" such as "poor planning" (which is the finding sought by Willshaun in its closing submissions). The failure to plead such facts is contrary to rules 16.02(1)(c) and (d) Federal Court Rules 2011 (Cth).
146 Such an approach is unfair to Lobux which was only appraised of this case during closing submissions. Had such a case been pleaded, as it ought to have been, then the documents which Lobux did not tender might have been tendered by it (assuming that they were relevant to meet this allegation, which is what is suggested by Willshaun's submissions).
147 For these reasons, I am not prepared to permit Willshaun to advance a case that Lobux breached clause 6.4 because it did not have a documented plan or schedule for when, how and by whom the work was to be done so as to achieve the estimated eight-week delivery period and I am therefore not prepared to make the finding sought by Willshaun in its closing submissions.
148 Even if Willshaun was permitted to advance this case, the lack of a documented plan or schedule prepared by Lobux does not justify a finding that Lobux did not use every endeavour to meet the eight week delivery timeframe. Although the tank was a custom-made machine, its price was only $140,000 plus GST. Mr Crawford has been involved in the manufacture of tanks for over 40 years and (according to his unchallenged evidence) sold "1,000". Lobux runs a business of constructing tanks and there was no suggestion that the estimate given of eight weeks was not a reasonable one at the time that it was given. With his experience, Mr Crawford likely had insight and understanding of how long a tank of the kind which was the subject of the September 2018 quote would take to construct. Further, there was no expert evidence adduced by Willshaun which was to the effect that a lack of documented plan or schedule in relation to the construction of the tank was not reasonable such that its lack meant that Lobux did not use reasonable or best endeavours to construct the tank within that time frame. It follows that the lack of a "documented plan or schedule" does not demonstrate a "slapdash approach" such that it is open to find that clause 6.4 was breached by Lobux in the manner submitted (but not pleaded) by Willshaun in any event.
149 Willshaun also seeks a finding that the cause of the delay in achieving delivery within the eight week period was Lobux's "own difficulties" such as "lack of financial resources" (which is the finding sought by Willshaun in its closing submissions).
150 I am not prepared to make the finding sought by Willshaun for the following reasons.
151 In his first affidavit, Mr Crawford referred to the fact that he had contacted Mr Walsh in December 2018 about making progress payments and Mr Walsh told him that "money was tight" and that they agreed that Willshaun would pay suppliers directly rather than make progress payments. This issue has been addressed earlier in these reasons. Such an arrangement could only have benefitted Willshaun, and I accept that it occurred as stated by Mr Crawford (that is, that it was Willshaun and not Lobux which had a lack of financial resources and for this reason, Willshaun paid suppliers directly rather than make progress payments to Lobux).
152 When he was cross-examined about this conversation, Mr Crawford said it was unlikely that he had not requested payment from Mr Walsh prior to 19 December 2018 (other than the deposit), and said that the quotation made clear that progress payments were applicable. He said that Mr Walsh told him that "money was tight all the way along". This evidence was not challenged.
153 Mr Crawford also gave this evidence about the conversation on 19 December 2018:
In the conversation that you had with Mr Walsh on 19 December 2018, you told him you needed $20,000 to pay for the motor for the vacuum tank?---That was after the motor was - had been ordered for about, I don't know, so many weeks earlier. It wasn't an off-the-shelf item and it needed to be paid.
Well, you said those words to Mr Walsh, didn't you, Mr Crawford?---I would have said them to him - must have said them to him.
Mr Walsh told you he would pay the motor supplier directly?---Correct.
154 According to Mr Crawford, the change to the size of the motor in the tank was one of the changes made by Willshaun to the tank's design which was the cause of Lobux's failure to achieve the eight week delivery timeframe. For the reasons explained below, I accept that this was the cause.
155 By its reply, Lobux pleads that:
(a) the estimated date of completion was revised and agreed to by Willshaun on account of various variations to the scope and design of the tank requested by Willshaun;
(b) the agreement was varied as a result of the variations to the scope and design of the tank requested by Willshaun and agreed to by Lobux.
156 Mr Crawford gave this evidence in support of this pleaded case:
Throughout the manufacturing process, William Walsh and his son attended our workshop on a regular basis.
I recall that Mr Walsh and/or his son would come to the factory every few days.
When Mr Walsh attended, he would request various changes to the scope and design of the Vacuum Tank.
In total, roughly 22 changes to the original design of the Vacuum Tank were requested.
The requested changes were significant variations to the original quote. These were:
(a) Increased capacity of blower from 1,600 cubic feet per minute to 2,800 cubic feet per minute;
(b) Increased engine size from 4-cylinder, 123 horsepower to 6-cylinder, 220 horsepower;
(c) A larger engine frame;
(d) Change standard ball float to custom stainless build arm cut off;
(e) Increased secondary/cyclone from 470 millimetres to 600 millimetres;
(f) Increased size of muffler from 470 millimetres to 600 millimetres;
(g) Increased size of air cleaner from 470 millimetres to 600 millimetres;
(h) Increased size of the pipework from 125 millimetres to 150 millimetres;
(i) Increased size of hoses from 125 millimetres to 150 millimetres;
(j) Larger fuel tank;
(k) Larger batter box to accommodate extra battery;
(l) Major modification to pump slides;
(m) Major modification to the secondary overfill system;
(n) Larger belt size including more pulleys;
(o) Requested that light be fitted requiring aluminium square to be welded onto both saddle tanks;
(p) Requested lights on the end of the extendable boom which required retractable wiring to be fitted to the boom;
(q) Changed hose reel from standard reel to slewing auto retractable hose reel;
(r) Changed the boom base to enable a hydraulic plug to be fitted;
(s) Various custom-made fitting to fit the boom hose;
(t) Requested a diesel-powered water pump, pipework, plumbing and hose reel to be fitted to Scania hooklift truck.
At the time, Lobux had the components to fulfil the original quote in stock but needed to manufacture or acquire new components to fulfil the requested variations.
I informed Mr Walsh that Lobux could fulfil the requested variations, but it would incur further costs and Willshaun would bear the cost of the variations as the scope of the work had now been changed at their request.
I also informed Mr Walsh that, as a result of the numerous variations, the delivery of the Vacuum Tank would likely take longer than originally estimated.
The conversations with Mr Walsh were numerous, and almost daily.
I do not recall the specific dates and times of the conversations, however all took place at the business premises of Lobux at Unit 2, 11 Shaw Road, Ingleburn in the State of New South Wales.
…
Lobux carried out the variations as instructed verbally by William Walsh.
157 Mr Crawford was not challenged on his recollection that Mr Walsh's son had attended the premises, Mr Walsh did not give evidence to the contrary and Willshaun did not call Mr Walsh's son. There was no explanation as to why he was not called, and I infer from these matters that his evidence would not have assisted Willshaun: Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 at [63] - [64].
158 Further, notwithstanding that the tank is in Willshaun's possession and an expert witness was called, no evidence was adduced by Willshaun that the tank did not have the various features referred to in Mr Crawford's evidence, such as a six cylinder engine.
159 Mr Walsh denied that he requested any of the changes referred to in Mr Crawford's evidence, other than installation of the lights which he had expected would be fitted as standard. However, Mr Walsh's first affidavit also annexes an email from Mr Crawford dated 5 April 2019 which itself quotes from another email from Mr Crawford dated 5 October 2018 and which referred to Mr Walsh's request for "a larger engine and blower than that quoted". Mr Walsh's evidence is contradicted by this documentary evidence.
160 Notwithstanding that the email dated 5 April 2019 support Mr Crawford's evidence, Willshaun submits that Mr Crawford is not a credible witness such that his evidence concerning these variations ought not to be accepted.
161 Mr Crawford did not appear to be a sophisticated person. Generally, however, he gave forthright answers and consistent evidence in relation to the circumstances in which the changes had been requested by Mr Walsh to be made to the design of the tank (which is extracted later in these reasons). Mr Crawford appeared to be doing his best to recall the events of 2018 and 2019. He was also a witness who made appropriate concessions. For example, Mr Crawford conceded that around 1 December 2018, he told Mr Walsh that the tank would be ready by Christmas. When he was asked about the reference in his affidavit to one progress payment being the deposit, he accepted that he had made a mistake. For these reasons, I regarded Mr Crawford to be a witness of truth.
162 Through Lobux, Mr Crawford was asked by Willshaun to construct a custom-made vacuum tank like the many hundreds which he had constructed over the past four decades. Willshaun criticises him for the lack of documentary support for his evidence but it was plain that he was not the type of person who would record every conversation in a piece of paper or email. He was too busy getting the work done in the factory and he obviously trusted Mr Walsh. That he trusted him is apparent from the fact that he let Mr Walsh take the tank away to get work done on it on the basis that Mr Walsh would return it and even though the final invoice was outstanding.
163 Willshaun submits that Mr Crawford was not a credible witness because he was argumentative. I do not agree. While he appeared to become impatient at times during his evidence (perhaps because he considered that his previous answers had not been heard), Mr Crawford did not argue in favour of any position favourable to Lobux.
164 Mr Crawford is also criticised because it is said that there was a "substantial lack of clarity" around the conversations which he had with Mr Walsh during the period between October 2018 and March 2019. However, it would have been a surprising thing if Mr Crawford had been able to supply any such detail. Mr Walsh also could not recall the detail of his conversations with Mr Crawford. That criticism is rejected.
165 Mr Crawford is also criticised because "significant parts of [his] evidence were mentioned for the first time in cross-examination". However, Willshaun does not suggest that Mr Crawford fabricated any aspect of his evidence (or that he had done so during his oral evidence) and so the fact that some matters were only mentioned for the first time during oral evidence does not really take the matter anywhere. For whatever reason, including possible decisions taken by legal representatives, that evidence did not find its way into Mr Crawford's affidavits but that does not affect Mr Crawford's credit.
166 An extraordinary submission was also made that Mr Crawford attempted to give evidence of a document which had been "deliberately withheld from disclosure" which he then tried to read into the record during his evidence, and that the value of Mr Crawford's evidence is compromised by this. However, there was no order for general discovery in this case. More importantly, Willshaun accepts that Mr Crawford did not himself conduct a search for documents. Mr Crawford accepted that the letter was not exhibited to his affidavit but also stated that he did not know if it was in evidence or not, saying, "I was only aware of this [document] last night in fact". When asked whether there were "many other documents" that he had "withheld from disclosure", Mr Crawford answered, "Not withheld. I didn't know about it. I found [it] last night. It would have been to my advantage to put that in". He was not challenged on this response. In the circumstances, there is no basis for a finding that Mr Crawford was fabricating his evidence about his role in the (non-existent) discovery process and about the recent discovery of this document or that he had deliberately acted to withhold this document. For these reasons, I reject this submission.
167 It is not the case that there was no objective support for the evidence of Mr Crawford.
168 First, the email of 5 October 2018 referred to above, and the lack of any evidence of a response from Willshaun disputing that there was any request for "a larger engine and blower than that quoted", supports Mr Crawford's version of events.
169 Second, when Lobux sent an email on 5 April 2019 which referred to additional costs "to answer your question" and which referred to and quoted from the 5 October 2018 email, there is no evidence of any response from Willshaun (whether oral or in writing) disputing the content of that email. Further, it is objectively unlikely that the email of 5 April 2019 would have been sent by Lobux had there been no variations as Willshaun claims. It is apparent from the opening words of that email that there had been communications between the parties about the extra costs which Lobux would be charging for the changes requested by Willshaun.
170 The following evidence indicated that Mr Walsh played a bigger role in selecting the features of the tank than was portrayed by Willshaun's counsel:
Other than capacity, Mr Walsh had no input into the other specifications field?---I discussed with him what he required and this is what he required. We did custom built tanks. So whatever he wanted, within reason, we did.
Well, what Mr Walsh asked you for was a vacuum tank. He didn't say - isn't that right?---No. he wanted to do - he wanted a pressure washer. He wanted a hydraulic ..... remote control. Powerpack. The whole works is what he was quoted on.
171 Mr Crawford gave evidence that he had many conversations with Mr Walsh. He said that Mr Walsh was a constant visitor to the factory "so there was no need for emails. It was talking face to face".
172 Mr Crawford gave this evidence concerning the variations generally:
Mr Walsh didn't ask you to procure any specific motor?---He paid for it .....
You don't have a good recollection of these conversations?---Not perfect, no.
Well, it's not even very good, is it?---Well, you will note in your own evidence that he paid 17-odd thousand plus GST for a six-cylinder Caterpillar when he was quoted on a four-cylinder Caterpillar.
Mr Crawford, your recollection of these conversations is not good, is it?---It's not perfect.
You cannot say when they occurred?---Roughly when they occurred because it was sometime after discussing the larger blower and larger motor. He paid for the larger motor.
Can I ask you to look at paragraph 27 of your affidavit. There you give evidence that you don't recall the specific dates and times of the conversations?--- Correct. Sorry, paragraph 27, I've got page 27. Correct.
Now, you don't even give evidence of the rough dates or times of any of the particular conversations?---Well, it would have been in the months of October, November, and December. Most likely November for the major changes.
Well, as you sit there giving evidence today, Mr Crawford, you don't have a recollection of any particular conversation?---Not - not perfectly, no.
Or not at all, I suggest to you?---Yes, of course. They didn't change themselves. We must have discussed the changes. We had built all the items prior to December to suit the original quote as far as ..... and the like, and then we had to - well, then he changed the size of the blower which in turn changed the size of the motor, also changed the size of those other items that we had to build on and after Christmas. So it was in that period of November to December, most definitely.
You don't recall Mr Walsh using any particular words?---No, I don't.
And there's no documents which records any of these variations?---From him, no - or me, I haven't seen any.
You never sent an email with a revised scope of works?---No, it was verbal.
You never instructed Ms Glover to send an email with a revised scope of works?---Well, the changes were constant and many, so it was a bit hard to keep up.
Your evidence is that the variations would have required the purchase and manufacture of new components?---Correct.
…
One of the variations that you referred to paragraph 21 that was discussed in these conversations was to the engine management system?---Correct.
Your evidence is that the engine management system was not part of the original quote?---Of the bigger engine? Of course not. Caterpillar couldn't supply it with it fitted at that stage because of the short timeframe that it was fitted.
Can I ask you to go to your second affidavit, Mr Crawford - - -?---Yes.
- - - and read page 3 paragraph 4?---Yes.
And there you say that the engine management system was not part of the original quote?---Correct.
It was one of the changes to the scope and design of the vacuum tank?---The original quote was for a four-cylinder motor which had the engine management system fitted by Caterpillar. The six-cylinder one didn't come fitted with it.
There's no reference to that in your affidavit?---Yes, there is. There it is there. The six-cylinder motor was never quoted.
Can I ask you to go back to page 21 of the exhibits to your first affidavit, Mr Crawford?---Right.
And you will see in about the fourth line of the line "items of payments" there's a reference there for a payment director or ..... invoice?---Correct.
And that was the cost for the engine management system?---It was.
That's deducted from the purchase price of $140,000?---At that stage, yes.
You didn't tell Mr Walsh that he would incur further costs?---Yes, I did.
You didn't tell Mr Walsh it would take more time to deliver?---Yes, I did. Everyday he would come in and make a change. I told him it was going to take longer. And in the end, I told him to stop making changes.
Mr Walsh didn't request any of the variations in paragraph 22 of your affidavit, did he? 21, I'm sorry. I'm corrected?---No, he ..... he requested all of them.
In fact, these were changes that you made to produce a tank that was appropriate for Mr Walsh's purposes?---No. It was a change from what was quoted originally which was 1600 CFM to the larger blower. I will explain it to you not knowing exactly what is involved. But if you had ordered a four-cylinder car and when it's delivered you said, "No. I want a six-cylinder car" the radiator, engine, gearbox, fuel tank, batteries - everything would have had to have been changed. Very similar in this case. The blower that he had requested or changed to was, I think, twice the capacity of the original one. Therefore, the aircloner, cyclone, primary, secondary, pipework, fuel tank, batteries, frame all had to be upgraded. And Mr Walsh was no idiot. He knew what mechanical things were. And he came in and saw it every couple of days. Things being changed - and asked for changes along the way.
…
MR RUSSELL: You had a conversation with Mr Walsh in early March of 2019. Do you recall that?---Yes.
You told him - - -?---At that - - -
You told him the vacuum tank would be ready by the end of March?---Correct.
Mr Walsh told you - - -?---If - sorry. If he didn't make any more changes was the end of the conversation.
Mr Walsh told you that if it wasn't ready by the end of March he was going to take the tank and get it finished somewhere else?---He did. I agreed to it.
Yes. You haven't given any evidence of the work which was performed in March?---In what respect? It was all being still built. The changes were still being made.
Well, there's no evidence of what particular work you were doing in March or what was left to be done at that stage?---There is. At one - there's one - I think ..... fabrications which he engaged in March to put extra lights on the unit and some other extra work done. So yes. There is evidence there was work being done in March.
…
You did not prepare a work schedule setting out what work would be done on the vacuum tank and by when?---Because it changed daily or every - every two or three days it changed. Put an extra or an addition or an alteration on it.
Well, even from the - - -?--- ..... only take eight weeks. We had built - - -
Well even - - -?---All the items we had built were for the - what we had quoted. All the cyclones, airclones, and the like were all sitting there ready to go. He changed all of that. So they all had to be remanufactured. And apart from that, the size we had to fit all the items was limited. The diameter of the standard aircloner is 470 millimetre. The ones he needed were 600 millimetre. That by three or four times makes it very, very difficult and tight and time-consuming and expensive to fit. That's the reason why it took so long.
…
(emphasis added)
173 Mr Crawford was shown a photo from the first Technoweld report, and said it was unfinished work. His evidence continued:
You didn't intend to reweld that section prior to delivering the vacuum tank to Wilshaun?---Certainly would have - the customer has got to approve the job before he takes delivery. The work doesn't go out looking like that. It's like an unfinished painting.
You hadn't dealt with that issue at any point between December 2018 and March 2019?---The item was never finished.
It could have been fixed at any point between December of 2018 and March 2019, couldn't it?---Not while the changes going on regularly, no. Only had three to four people working on it, so - didn't have an army.
(emphasis added)
174 Mr Walsh's credibility was damaged by the fact that he admitted under cross-examination that he had agreed with Mr Crawford that the tank would be removed from Lobux's possession for certain works to be performed on it and "there was [an] agreement that [he] would bring it back to Lobux [and] Lobux would then finish production of the tank". This was his evidence:
And when you were there that night, you told Mr Crawford that you wanted to take the tank to GAE Electrical the next day; is that correct?---Yes.
And you told him that you wanted to do it because you wanted to get an emergency stop fitted?---Yes.
And you needed GAE Electrical to fit that emergency stop because Lobux didn't have anyone qualified to fit it; is that correct?---Yes.
And just to clarify, the installation of that emergency stop, that wasn't to rectify the oil drip, was it?---No.
So it was something entirely different?---Yes.
Okay. Now, the emergency stop was not something that you had initially asked Lobux to perform, was it?---It's a standard item on machinery.
My question was did you ask them to perform - to install an emergency - an electrical stop?---No.
And it was on that basis that Michael told you that you could take it to - or could - by "it" I mean the vacuum tank to GAE to get it fitted; you agree with that?---Yes.
And he said that you could take it the next morning, which was 23 March 2019; do you agree with that?---Yes.
And he told you you could take it there, but it needed to be returned later that day?---I don't recall him telling me to return it. That's incorrect.
But you knew you needed to return it to Lobux once the stop had been finished?---Yes.
And you knew that the vacuum tank wasn't finished at that time, didn't you?---Yes.
So Mr Crawford agreed to let you take the vacuum tank to GAE on 23 March to install the electrical stop; is that correct?---Yes.
And that once that had been installed, there was agreement that you would bring it back to Lobux; is that correct?---Yes.
And that Lobux would then finish the production of the vacuum tank?---Yes.
And that that - you agree that that was to have been finished by the end of March?---Yes.
175 When asked about the reason why he did not return the tank, Mr Walsh alluded to litigation being threatened by Mr Crawford in a letter. However, the date of this letter was not provided. It is possible that this was a reference to the email of 5 April 2019 although that email does not refer to litigation. Regardless, the fact that Mr Crawford wrote a letter which threatened litigation does not explain why the tank was not returned to Lobux to enable the construction to be completed as had been agreed.
176 I infer from these matters, and from the fact that the tank was taken shortly after the final invoice was issued by Lobux, that, in fact, Willshaun either took the tank with the intention of never returning it to Lobux or, after having removed it, it decided not to return it in order to avoid having to pay for it. Either way, Mr Walsh did not do what he said he would do, and when he was asked about the reason for that, he gave an implausible explanation.
177 Having regard to Mr Crawford's evidence, which I accept, Willshaun (by Mr Walsh) requested that changes be made to the design of the tank and these changes caused delays to the construction of the tank.
178 Further, I accept Mr Crawford's evidence that, prior to the conversation in March 2019 when he told Mr Walsh to stop making changes, he advised Mr Walsh to the effect that Lobux could fulfil the requested variations but it would incur further costs and Willshaun would bear the cost of the variations as the scope of the work had now been changed at their request. This evidence is corroborated by the email dated 5 October 2018. It is also corroborated by the email dated 5 April 2019 which responded to an apparent request by Mr Walsh for information about the additional costs.
179 I also accept Mr Crawford's evidence that he informed Mr Walsh that, as a result of the numerous variations, the delivery of the tank would take longer than originally estimated. Notwithstanding this, Willshaun (by Mr Walsh) continued to request changes until March 2019.
180 In conclusion and for these reasons, Willshaun has failed to establish that Lobux did not use every endeavour to enable the tank to be delivered to Willshaun within the eight week delivery period referred to in the September 2018 quotation. This has the consequence that Willshaun has failed to establish that Lobux breached clause 6.4.
181 Further, it is evident from Mr Crawford's evidence that Lobux accommodated the requests for changes by Willshaun, but that, in circumstances where Lobux had agreed to deliver the finished tank by the end of March 2019, it got to the stage where Mr Crawford had to tell Mr Walsh to stop making changes.
182 For these reasons, the failure by Lobux to deliver the tank within the eight week delivery period (or, indeed, on any date prior to 23 March 2019) did not constitute repudiatory conduct which entitled Willshaun to terminate the agreement by removing the tank on 23 March 2019 and not returning it.