In 2013, Mr Banerji and Mr Finnerty, the sole director and shareholder of Peak Performance, decided to work together to provide management training services to potential customers. On 25 March 2013, CBA sent Mr Shaw of PM Works two "Requests for Proposals" (RFPs) seeking expressions of interest to provide project management and business analysis training courses. [3] Mr Shaw forwarded the RFPs to Mr Finnerty who provided draft responses on 4 April 2013. The responses were refined by Dr Stejer of PM Works and the finalised proposal was submitted to CBA on 12 April 2013. [4]
The proposal was submitted to CBA but in the name of PM Works only. This procedure was apparently adopted because of PM Works' prior association with CBA. The pricing model, developed by Peak Performance in conjunction with PM Works, submitted to CBA was a fee per attendee per course.
One of CBA's requirements incorporated into its RFPs was that the services be provided by the contracting party and not be delegated to subcontractors. The primary Judge found that it was for this reason that:
"in substance, although not in form, the offer to provide [the] services was made on behalf of both PM Works and [Peak Performance]". [5]
His Honour also found that CBA was aware and accepted that PM Works' proposal was submitted on behalf of both PM Works and Peak Performance and that both parties would be involved in the provision of services if the proposal was accepted. [6]
On or shortly after 5 April 2013 PM Works and Peak Performance entered into the Original Agreement which stipulated that Peak Performance would provide project management training services to CBA at the prices CBA agreed to pay for those services. PM Works would supply CBA with business analysis training services and would be paid by CBA for those services. Although the parties specifically had in mind that they would provide training services to CBA, the Original Agreement also contemplated that the parties would exploit all similar opportunities that presented themselves during the life of the Agreement. [7]
On 3 or 4 July 2013, CBA notified PM Works that its proposal had been successful. CBA made it clear that it was giving no guarantee as to the nature or extent of services that it might require. [8]
It was not until 26 June 2014 that a contract between CBA and PM Works was signed (CBA Contract). [9] The CBA Contract was for a term of two years commencing on 1 June 2014, but CBA was entitled to terminate it without cause by giving 30 days' written notice. The CBA Contract did not provide for a minimum number of courses and instead required PM Works to supply courses of the appropriate kind (and ancillary services such as assessment and the issue of certificates of completion) as and when CBA might require. [10] In the meantime further discussions took place between CBA and PM Works and between PM Works and Peak Performance as to an appropriate fee structure. [11]
CBA also required the contracting party to be appropriately accredited so as to be able to issue assessments and certificates of completion to course participants. Peak Performance had appropriate accreditation as a Registered Education Provider (REP) with the Project Management Institute (PMI), an organisation based in Philadelphia. PM Works was not accredited as a REP. Accordingly Peak Performance could issue certificates to course participants showing that they had earned Professional Development Units (PDUs), but PM Works could not. For these reasons the parties agreed that Peak Performance would provide the management training and certification services once the CBA Contract came into force.
As explained below, [12] in August 2014 CBA expressed dissatisfaction with the project management training services provided by Peak Performance. As a consequence PM Works and Peak Performance engaged in correspondence which, as the primary judge found, resulted in the parties entering into the Variation Agreement on 1 September 2014. [13]
Because CBA was dissatisfied with Peak Performance's presenters, Dr Stejer of PM Works presented a "Project Risk Management" pilot course to CBA on 1 September 2014. Dr Stejer used course materials that included materials prepared by Peak Performance. PM Works needed Peak Performance to issue course completion certificates for that course and in an email of 11 September 2014 Mr Finnerty said that Peak Performance would be happy to do so. Peak Performance provided the relevant certificates on 24 September 2014. [14]
On 3 September 2014 Dr Stejer attended a meeting with representatives of CBA who expressed dissatisfaction with the course materials and asked Dr Stejer to undertake a "full course rewrite". Dr Stejer subsequently did so in conformity with a schedule set out in a Gantt Chart provided by CBA. The primary Judge found that Dr Stejer was immensely qualified both by training and experience to prepare the courses and the required materials "from scratch". [15]
After 1 September 2014 PM Works used its own course materials, not any materials prepared by Peak Performance. [16] There was no evidence that Peak Performance issued course completion certificates in respect of any courses conducted by PM Works after 1 September 2014.
In late 2014 PM Works applied to be a REP and was accredited on 6 February 2015, apparently through the Singapore chapter of PMI. Thereafter PM Works was able to attend to all aspects of training including assessment and certification of course participants.
Between 2 September 2014 and 6 February 2015 (when PM Works obtained accreditation as a REP), PM Works conducted several project management training courses for CBA using PM Works' own materials. There was no evidence as to which entity, if any, provided certificates to participants completing those courses.
The relationship between the parties broke down irretrievably in the first part of 2015 and at some time between April 2015 and January 2016 came to an end.
[2]
Events leading to the Variation Agreement
Mr Finnerty and two "facilitators" presented the first project management training course to CBA employees on 16 July 2014. [17] Shortly thereafter CBA expressed dissatisfaction with the quality of the presentation. [18] After a follow-up workshop presented by Mr Finnerty and a facilitator on 29 July 2014 CBA remained dissatisfied. [19] Mr Finnerty agreed to stand down as a presenter.
On 4 August 2014 Dr Stejer and Mr Shaw, also of PM Works, met a representative of CBA who said that the course materials should be rewritten and future courses should be delivered by new facilitators. [20]
On 6 August 2014 CBA emailed Mr Shaw indicating that CBA wished to review the project management course content and materials. [21] The following day Mr Finnerty sent Dr Stejer Peak Performance's course materials in editable format. Dr Stejer made some amendments and provided the material to CBA, which approved it. [22]
A second project management course was given to CBA on 11 August 2014. The presenters were two facilitators selected by Peak Performance (but did not include Mr Finnerty). [23] Despite the changes CBA remained dissatisfied with the presentation. Mr Shaw informed Mr Finnerty that CBA had cancelled further courses for the time being to allow time to review the structure and content of the courses. [24]
Dr Stejer then did a great deal of work redrafting the course materials, particularly in relation to project management training. He did so at CBA's request. [25]
[3]
The exchange of emails
On 25 August 2014, Mr Banerji met with Mr Finnerty and gave him a three page document (Banerji Document). [26] It included the following:
"The CBA have requested that the project management courses are delivered by PMWorks Facilitators and we are in the process of reconstructing the courses in terms of workbooks and presentation slides with reference to the original Peak Performance course material. The CBA have changed their focus over the last 6 weeks and they are now looking for capability uplift with a high level of engagement and industry leadership to inspire students to follow professional careers in project management and business analysis. They now need CBA specific examples and live exercises. In addition to this they also want the Students to be able to generate PDUs [Professional Development Units] to give themselves the option of gaining full certification with the PMI [Project Management Institute of Philadelphia].
The changing focus has made the PMWorks Facilitators attractive as they do have extensive experience of the modern banking environment that exists at the CBA and their evolving practices that have substantially developed in the last 2 years. Whereas the CBA do like some Peak Performance facilitators, they do believe that there is a lack of complete understanding of their environment and the changing requirements of the bank. It is clear that this is now a necessity to provide the inspirational leadership to underwrite the training and take the students on a journey of professional development.
PMWorks wants to work with Peak Performance and do [sic] see a future at the CBA where Peak would operate on a similar basis to B2T. [27] This is a critical part of the training program and it is a role that [P]eak [P]erformance can provide PMWorks and the CBA.
Therefore based on our previous discussions and making some easy assumptions we suggest the following as a way forward:
1. Peak Performance sits behind PMWorks and acts as an accredited entity for PMI and generates PDUs accordingly. [28]
2. PMWorks uses the Peak Performance course material as reference information for reconstruction of the course workbooks and presentation slides.
3. For all project management courses, PMWorks will make all workbooks and presentation slides available to Peak Performance which they can use without restriction and adapt at their own leisure for any of their other clients.
4. For all project management courses, PMWorks will pay Peak Performance a royalty of $150 per student per full engaged training day for this service and where there is reference [sic] their material and generation of PDUs.
5. In the case of the CBA, there are some follow on workshops for 2 hour periods and in these cases PMWorks will pay Peak Performance a royalty of $50 per student. Please note that PMWorks would also agree a suitable royalty charge should they be engaging with the CBA on a webinar or webcast basis. Peak Performance would also have access to these webcasts without any restrictions should there be no breach in confidentiality of our contract with the CBA.
6. PMWorks will undertake all development of work books [sic] and presentation slides and we suggest to recompense for this that PMWorks does not have to pay any royalties for the first course that facilitates.
7. PMWorks would set up robust processes with Peak Performance to execute such an agreement and would be responsible for managing the interface with the CBA for course administration purposes.
8. PMWorks will then conduct regular discussions with Peak Performance to explore joint business opportunities that may arise.
9. PMWorks will also construct an agreement between PMWorks and Peak Performance which will make reference to these terms and also mirror the relevant terms and conditions in our contract with the CBA.
Costing Example based on 12 students:
Course Structure Royalty per student Total Royalty
1 day face to face $150 $1800
2 hour workshop $50 $600 "
[4]
(Emphasis Added)
The Banerji Document attached a chart which showed, among other things, that Peak Performance would be paid at the rate of $150 per student per day. [29] The daily rate was shown as $1,800 on the assumption that 12 students attended. [30]
Mr Finnerty replied on 29 August, as follows (Finnerty Email):
"My apologies for the delay in getting back to you, post our Monday last meeting.
Anyway we had the opportunity to chat, earlier today, on this and other matters.
I have had a look through the three sheets of information notes, that you provided on the day and I comment as follows:
Whilst I note that the option, now afforded to Peak Performance PM, moves considerably from the originally envisaged position, that we set out to achieve together, through joint submission of the original tender documents, I raise no concern over this.
This is based on the understanding that my interpretation of the current offer, as laid out hereunder, is correct.
I note that this current offer applies to only seven Peak Performance PM courses, for use on the CBA contract. That is all that I presently proposed [sic] be covered by this current offer, at this time. Anything else arising later can be jointly reviewed, on a case by case basis.
Of the courses covered, four have integral follow on workshop sessions, three do not.
On the basis that all sessions are run for a minimum of 12 persons, as originally envisaged, (we will not underwrite any client no show risk), the fee payable by PMWorks to Peak Performance PM would be:-
Course Title Fee per Course Fee for Follow on Workshop or Webinar Total Fee
Project Management Fundamentals $1,800.00 $600.00 $2,400.00
Risk Management $1,800.00 None $1,800.00
PM Advanced $1,800.00 $600.00 $2,400.00
Project Finance $1,800.00 None $1,800.00
WBS & Scheduling $1,800.00 $600.00 $2,400.00
Project Controls &
Stakeholder $1,800.00 None $1,800.00
Management
Advanced Scheduling $1,800.00 $600.00 $2,400.00
[5]
The first fee, for each course, is waived, by Peak Performance PM, upon presentation in soft copy editable format, of the revised presentation and workbook materials currently being developed by PMWorks.
For the ongoing accruing fees Peak Performance PM would not be required, in any way, to front up or to face the end client, or to provide any facilitation services. PMWorks will entirely handle all course delivery facilitation, all CBA client meetings and all CBA end client related administrative matters
Peak Performance PM will be required to keep the seven sets of courseware current, in line with PMI requirements for compliance.
Peak Performance PM will be required to generate appropriate PDUs for all attendees, through the issue of the related Course Completion Certificates.
Please confirm that the above is a correct interpretation.
Assuming the above is correct, then there a few administrative issues, that we will need your help and support with. These are necessary to allow us to maintain our excellent relationship with PMI, satisfy our compliance undertakings to PMI, as part of our Global REP accreditation and to ensure that all the accruing PDUs are verifiable. These administrative matters are:-
Peak Performance PM will need to understand the actual course dates, locations and duration timings, as well as the estimated or intended duration timings of any out of course exercises and the location, date and duration timings of the follow on workshops and/or webinars. All of this is necessary to calculate the correct number of verifiable PDUs and to maintain auditable records, as part of our PMI compliance administration.
Peak Performance PM will also need to see the actual client signed attendee daily attendance sheets, which are required to be annotated, by the course facilitator, if any attendee is only partly present. Again this is required to calculate the appropriate PDU allocations and again is required in the event of a PMI audit of our course delivery records.
Peak Performance PM will need to receive end of course attendee generated Feedback Forms. This is necessary to demonstrate that we have gathered this feedback, as part of our development and lessons learned commitment.
Again this is required in case of a PMI audit of our course records.
Peak Performance PM will need periodic access, for ongoing audit purposes, to the course deliveries, (say 1 in 15), the workshops, (say 1 in 15), and the webinars, (say 1 in 15). Again we need to be able to demonstrate that this has been accomplished, in the event of a PMI audit.
I would also like to see the advance rollout schedule, as it is released from CBA, from time to time, for our ongoing information and back of house logistics.
I hope I have got everything correct here and I hope that none of this is any surprise, after the numerous hours we have spent talking about every aspect of this contract previously." (Emphasis Added)
Mr Banerji responded to Mr Finnerty on 1 September 2014, as follows:
"It's good that we have a basis to move forward from. I'm hoping that once we get the Bank to sign off on the Facilitator Guides and Workbooks for each course, the mode of operating with the Bank will become easier and more transactional. We are not at that point yet but are well on the way.
We accept that you will need visibility of course participants and of course review and feedback materials in order to maintain your REP status with the PMI. This is also important for us as we are looking to Peak to provide the PDUs for the courses delivered to the Bank. We will engage with the Bank accordingly to ensure we get access to participant lists and course feedback materials.
I'm arranging an Agreement between Peak & PMWorks to be drawn up to cover the commercial aspects between our two organisations. I anticipate that we will be in position to give you an initial draft of an Agreement for your review in the next week or two."
[6]
The Proceedings
Peak Performance commenced proceedings against the respondents on 18 December 2015. The final iteration of its pleaded case was in the Second Further Amended Commercial List Statement (2FALS) filed on 3 October 2017, the first day of the trial which was conducted over six hearing days from 3 to 10 October 2017. Peak Performance relied on causes of action for breach of contract, breach of fiduciary duty, misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law, unconscionable conduct in contravention of s 21 of the Australian Consumer Law and equitable estoppel. The primary Judge rejected all Peak Performance's claims. His Honour also dismissed claims against Mr Banerji founded on procuring PM Works' alleged breaches of fiduciary duty and being knowingly concerned in or party to PM Works' alleged contraventions of the Australian Consumer Law.
The primary Judge delivered a separate judgment on costs on 16 March 2018. [31] Subject to limited exceptions, he ordered Peak Performance to pay the respondents' costs of the proceedings on the ordinary basis until 8 September 2017 (when the respondents made an offer of compromise) and on an indemnity basis thereafter.
[7]
Primary Judgment
The parties accepted at the trial that although there was no written agreement, the dealings between them resulted in an enforceable contract. The parties also accepted that it was a term of the Original Agreement that they should work together to provide project management training services to existing or potential customers, including CBA. There was, however, a dispute as to the other terms of the Original Agreement. [32]
After considering the evidence in detail the primary Judge found that the circumstances were consistent with the parties having reached a legally binding agreement by 5 April 2013 or shortly thereafter. The terms of the Original Agreement provided for the parties to collaborate in the submission of a proposal to CBA and to participate in and be rewarded for the provision of services if a contract was awarded. [33] In his Honour's view, the evidence was consistent with the Original Agreement being one of "joint venture", [34] although he acknowledged that the expression does not of itself have particular legal significance. [35]
His Honour found that the Original Agreement included terms providing that if a contract was awarded to PM Works and CBA required services to be provided under that contract: [36]
"(1) [Peak Performance] would supply [project management] training services (and follow-up, including assessment and certification) and would be paid [by PM Works] the agreed price for provision of those services; and
(2) PM Works would supply [business analysis] training services, and would be entitled to whatever price it had agreed with CBA for the provision of those services."
[8]
Implied terms
The primary Judge found that the Original Agreement contained implied terms that each party:
owed the other a duty of co-operation; and
was obliged not to hinder or prevent fulfilment of the other party's obligations. [37]
In addition his Honour found that PM Works was obliged to give Peak Performance the benefit of the Original Agreement in respect of any requirement that PM Works provide project management training services, at least insofar as PM Works could do so consistently with the wishes of CBA. [38] However, his Honour rejected Peak Performance's contention that the Original Agreement incorporated additional implied terms. [39]
[9]
Termination
The primary Judge addressed the circumstances in which the Original Agreement could be terminated. His Honour framed the relevant question as follows: [40]
"whether the [Original Agreement] could be terminated during the currency of any contract for the provision of training services gained as a result of the joint venturers' efforts pursuant to the [Original Agreement]. In short, and with reference to the CBA contract, could the contract between [Peak Performance] and PM Works be terminated, so as to deprive one party of the benefit of that contract, whilst that CBA contract was in place?"
In his Honour's view, the answer was clear: [41]
"absent breach justifying termination, neither party could terminate the [Original Agreement] at will so as to deprive the other of the benefit of an extant contract for the provision of training services gained in the course of and as a result of the performance of the [A]greement."
His Honour said that this conclusion as to the termination of the Original Agreement applied equally to the Original Agreement as varied by the Variation Agreement. [42]
[10]
Variation Agreement
The primary Judge found that the parties agreed to vary the Original Agreement on the basis set out in Mr Finnerty's email of 29 August 2014 and accepted by Mr Banerji in his reply of 1 September 2014. There was no reason to think that the parties intended that the agreed variations should not take effect pending the drafting and execution of a formal agreement. [43]
His Honour found that Mr Shaw of PM Works prepared a form of draft contract which he forwarded by email to Mr Finnerty on 15 September 2014. The draft included a term that either party could terminate the contract without cause on 30 days' notice. Mr Finnerty took exception to this provision and no formal contract was entered into. However, this did not detract from the finding that the parties entered into the Variation Agreement on 1 September 2014. [44]
[11]
Misleading, deceptive and unconscionable conduct
The primary Judge rejected Peak Performance's case insofar as it rested on allegations of misleading or deceptive conduct and unconscionable conduct in contravention of the Australian Consumer Law. [45] His Honour's findings on these matters are not in issue on the appeal.
[12]
Repudiation
The primary Judge first addressed Peak Performance's contention that PM Works had repudiated the unvaried Original Agreement by providing project management training to CBA itself instead of using Peak Performance. His Honour rejected this contention on the ground that the Variation Agreement authorised PM Works to provide the training services to CBA. [46] Peak Performance's alternative contention was that PM Works had repudiated the Variation Agreement and, as Peak Performance accepted the repudiation, it was entitled to damages for loss of bargain.
Peak Performance based its alternative contention on two independent grounds:
PM Works' failure to pay the agreed fees for the courses it delivered to CBA evidenced a repudiation of PM Works' obligations under the Variation Agreement.
PM Works repudiated the Variation Agreement on or about 17 February 2015 because, as Mr Finnerty testified, on that date Mr Banerji informed him that PM Works had become a REP in its own right and did not need Peak Performance to be involved any further in the CBA Contract. [47] According to Mr Finnerty, Mr Banerji denied that any contract was in existence between the parties and repeated that denial in a meeting that took place on 13 April 2015. [48]
The primary Judge rejected the first of these grounds: [49]
"…given that PM Works developed its own course materials in about September 2014, and used them thereafter for the presentation of the courses that Dr Stejer himself designed, it is difficult to see how the failure to pay [Peak Performance] the agreed fee under the [V]ariation [A]greement can amount to repudiation."
In considering the second ground advanced by Peak Performance, the primary Judge observed that by 17 February 2015 it was true that PM Works had developed its own materials and that PM Works had gained accreditation in its own right as a REP. [50] However, his Honour did not make an express finding that the conversation took place in the terms alleged by Mr Finnerty.
The primary Judge recorded that on 18 February 2015 Mr Shaw sent an email to Mr Banerji stating that Mr Finnerty needed to invoice Peak Performance for courses conducted on 21 January 2015, 3 February 2015 and 19 February 2015. The amount said to be payable for each of the three courses was $1,800 plus GST. [51] His Honour noted that although Mr Finnerty had not submitted any invoice for these amounts, PM Works accepted that it was liable and was prepared to pay the total of $5,400 plus GST. Neither the email nor other evidence explains why PM Works accepted that it was liable to pay the amounts in respect of each of these three courses. An inference is open, however, that the offer in the email was an outcome of the meeting held the previous day.
The primary Judge recounted the competing versions of the conversation that took place during a meeting that was held between Mr Finnerty and Mr Banerji on 13 April 2015. His Honour did not accept Mr Finnerty's account that Mr Banerji reiterated his position that there was no binding contract and that PM Works was free to dispense with Peak Performance's services in relation to the provision of training courses to CBA. [52] Instead his Honour accepted Mr Banerji's account which was supported by a file note.
Mr Banerji said that Mr Finnerty demanded immediate payment of $1.3 million for "lost revenue", failing which Peak Performance would sue. Mr Finnerty also made other threats that led Mr Banerji to express regret that their friendship had fallen apart. The primary Judge found that the obvious inference from the events of 13 April 2015 was that both parties recognised that their relationship had come to an end. [53]
In his Honour's opinion it was not necessary to take the matter further because he had reached the view that: [54]
"the joint venture agreement as made was terminable either at will or on reasonable notice except in respect of existing contracts for the delivery of services (and since the variation agreement did not touch on this aspect of the joint venture agreement, the same must apply to the joint venture agreement as varied), termination could not amount to repudiation except where there was, at the time of termination, a contract for provision of services of which further performance was or might be required. It was no part of [Peak Performance's] case that the events of 13 April 2015 … amounted to repudiation because the termination was effective immediately rather than upon some period of notice.
What, then, is the impact of the undoubted fact that the CBA contract was current, and that from time to time PM Works might be required to provide training services pursuant to it? The answer, I think, is 'none'. That follows from my conclusion that the variation agreement was effective. Thereafter, it was open to PM Works itself to provide [project management] training services to CBA, provided that if it used [Peak Performance's] course materials, it would pay the agreed fee. Once PM Works, through Dr Stejer, developed its own training course and its own course materials, the CBA contracts ceased to have any possible relevance or bearing on any question of repudiation."
[13]
Other issues
The primary Judge found that the circumstances said to amount to breaches of the fiduciary duty owed by PM Works to Peak Performance went "nowhere near establishing" that such breaches occurred (assuming the existence of a fiduciary duty). [55] His Honour considered it unnecessary to address Peak Performance's case on equitable estoppel. [56]
[14]
Relief
Since the primary Judge rejected all Peak Performance's claims he did not need to consider the relief that would have been granted had Peak Performance made out its claims. His Honour noted, however, that Peak Performance elected at the conclusion of evidence to take an account of profits as the remedy for breach of fiduciary duty rather than damages or equitable compensation. [57]
The primary Judge pointed out that the question of damages for breach of contract could only arise if he had found that PM Works had breached the Original Agreement as varied by the Variation Agreement. [58] Nonetheless he outlined the approach he would have taken to the assessment of damages for breach of contract had it been necessary to do so. [59] His Honour did not attempt to calculate the precise quantum of damages he would have awarded. [60]
[15]
Notice of Appeal
The issues arising on the appeal are very much narrower than those decided at the trial. Peak Performance's Amended Notice of Appeal alleges that the primary Judge erred in three respects:
"Having found that:
a. the joint venture agreement could not be terminated at will so as to deprive the other party of the benefit of an extant contract for the provision of training services gained in the course of and as a result of the performance of the joint venture agreement: J[116];
b. the joint venture agreement was varied such that the parties were bound by the variation recorded in Mr Finnerty's email of 29 August 2014 accepted by Mr Banerji in his email of 1 September 2014 (the variation agreement): J[143];
c. the grounds upon which the variation agreement could be terminated were the same as those on which the joint venture agreement could be terminated: J[178];
the primary judge:
d. erred in finding that once [PM Works] had developed its own training course and its own course materials, the CBA contracts ceased to have any possible relevance or bearing on any question of repudiation, because this finding involved a misconstruction of the variation agreement as not requiring [PM Works] to pay [Peak Performance] the agreed fee if it developed and used its own course material in performing the CBA contracts: J[168], [179];
and as a consequence:
e. erred by failing to find that failure by [PM Works] to pay the agreed fee to [Peak Performance] for each project management course it delivered in performing the CBA contracts breached the variation agreement;
f. erred by failing to find that [PM Works'] conduct on 17 February 2015, or further or alternatively 13 April 2015, constituted a repudiation of the variation agreement, which [Peak Performance] elected to accept; and
g. erred by failing to find that [Peak Performance] was entitled to damages for breach (up until the date of repudiation), and anticipatory breach thereafter, of the variation agreement: J[203]."
Prior to the hearing Peak Performance filed a further amended notice of motion seeking leave pursuant to s 75A(1) and (8) of the Supreme Court Act 1970 (NSW) to admit two affidavits into evidence on the appeal. The affidavits were said to bear on the assessment of damages by providing more up to date information to the number of courses PM Works provided to CBA and the duration of the CBA Contract. At the hearing the Court reserved its judgment on the motion but indicated that the application would only be relevant if the Court determined that the appeal should be allowed.
As the argument in this Court developed it became clear that the issues raised by the Amended Notice of Appeal had received relatively little consideration at the trial. Most attention at the trial was directed to matters not now in dispute, notably whether the parties had entered into a binding agreement in or about April 2013 and, if so, whether that agreement had been varied in late August or early September 2014. Much attention was also directed to Peak Performance's claims that PM Works had breached the fiduciary duty it owed to Peak Performance and that PM Works had engaged in misleading or deceptive conduct. In these circumstances it is perhaps not surprising that Peak Performance's case underwent some reconstruction on the appeal.
[16]
Peak Performance's submissions
Peak Performance submitted that the primary Judge erred in finding that it was open to PM Works itself, once the Variation Agreement became effective, to provide project management services to CBA and to use its own course materials without being obliged to pay fees to Peak Performance. [61] Mr Assaf, who appeared with Mr Strickland for Peak Performance, contended that the primary Judge misconstrued the Variation Agreement and erroneously rejected Peak Performance's claim that by April 2015 PM Works was unwilling or unable to perform its obligations under the Variation Agreement.
Mr Assaf submitted that if (as his Honour found) the Variation Agreement was wholly in writing, it should have been construed to require PM Works to pay Peak Performance the relevant fee for each management course it delivered to CBA. On this construction, PM Works was required to pay the fee, being either $1,800 or $2,400 per course, regardless of whether it used Peak Performance's materials or its own materials. Since Peak Performance was obliged to prepare certificates evidencing that participants had successfully achieved PDUs and to ensure that course materials complied with PMI requirements, Peak Performance was entitled to be paid the course fees by PM Works. If it provided these services it followed that Peak Performance was entitled to damages by reason of PM Works' failure to pay the fees during the currency of the Variation Agreement.
Mr Assaf further submitted that the evidence established that a reasonable person in Peak Performance's position would have understood PM Works' conduct in February or April 2015 to constitute a renunciation of its obligations under the Variation Agreement. Mr Assaf relied on what he said was Mr Banerji's firm position conveyed to Mr Finnerty, that PM Works no longer needed Peak Performance to be involved in the CBA Contract. Mr Assaf contended that if (as he submitted) the primary Judge had misconstrued the Variation Agreement, it was not open to his Honour to find that PM Works could simply walk away from the Variation Agreement or terminate it at will. The Variation Agreement could be terminated only by mutual consent and Peak Performance clearly would not have agreed to terminate the contract in circumstances where it stood to derive revenue from each project management course provided to CBA.
Mr Assaf accepted that if this Court finds that PM Works repudiated the Variation Agreement, the primary Judge's methodology for calculating loss of bargain damages was correct and should be followed. He attached calculations to Peak Performance's written submissions calculating damages at $140,335.23, exclusive of GST, over the financial years 2015 to 2020.
[17]
PM Works' submissions
PM Works' submissions appear sufficiently from the reasoning which follows.
[18]
Principles of construction
There was no dispute as to the principles to be applied in construing the Variation Agreement. It is therefore convenient to repeat what I said in Taouk v Assure (NSW) Pty Ltd: [62]
"101 The approach to the construction of contracts was authoritatively stated by the High Court in Electricity Generation Corporation v Woodside Energy Ltd (Woodside): [63]
'Both [parties] recognised that this Court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". As Arden LJ observed in Re Golden Key Ltd, [64] unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption "that the parties … intended to produce a commercial result". A commercial contract is to be construed so as to avoid it "making commercial nonsense or working commercial inconvenience'. (Most citations omitted.)
102 This statement of principle was endorsed by the High Court in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd. [65] In that case, French CJ, Nettle and Gordon JJ explained that: [66]
'Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations.' (Citation omitted.)
103 In Mainteck Services Pty Ltd v Stein Heurtey SA [67] Leeming JA rejected the proposition that the question of whether a contractual provision is ambiguous can and should be resolved before regard is had to the surrounding circumstances and the commercial purposes or objects of the contract. [68] Leeming JA pointed out that the proposition was inconsistent with the reasoning of the High Court in Woodside. His Honour observed that the words of a contract do not have a "natural" meaning that can be determined in isolation from the context in which they are used. Accordingly, a conclusion that language has a plain meaning reflects the outcome of a process of interpretation that has regard to context." [69]
[19]
Construction of the Variation Agreement
Mr Assaf invited this Court to construe the Variation Agreement by reference exclusively to the contents of the Finnerty Email of 29 August 2014. Mr Assaf went so far as to suggest that the Finnerty Email should be construed as a discrete document independently of the Banerji Document of 25 August 2014. Mr Assaf no doubt took this course because he appreciated that the Banerji Document contained terms which, if they formed part of the Variation Agreement, would not entitle Peak Performance to any payments unless PM Works used Peak Performance's course materials in presentations to CBA or relied on Peak Performance to generate PDUs for participants in the courses.
The context in which the parties entered into the Variation Agreement is important as it explains language used in the Banerji Document and the Finnerty Email. Under the CBA Contract PM Works was to provide project management courses as and when requested by CBA, but the CBA Contract did not guarantee that PM Works would be asked to provide a minimum number of courses. Moreover, although the CBA Contract was expressed to be for a two year term, CBA could terminate the Contract at any time without cause, merely by giving 30 days' notice to PM Works. Thus as both parties knew, neither PM Works nor Peak Performance could rely on receiving further requests from CBA to provide training courses.
By 25 August 2014 it was clear that CBA was dissatisfied with the courses that had been presented by Peak Performance. By that time it was also clear that CBA was dissatisfied with the course materials. While CBA did not demand a full rewrite of the course materials until 3 September 2014, it had already informed PM Works that substantial revisions were required to the course materials prepared by Peak Performance and Dr Stejer had commenced work to satisfy CBA's requests. In August 2014 PM Works was not yet an accredited REP, but was entitled to seek accreditation in its own right and did so in late 2014.
[20]
Banerji Document
The Banerji Document was expressed to be based on previous discussions between the parties and suggested a "way forward". The document recorded that Peak Performance stood behind PM Works and acted as an entity accredited by PMI and accordingly generated PDUs (Point 1). This statement correctly described the position concerning PMI accreditation and Peak Performance's role in issuing certificates to course participants.
The Banerji Document addressed the use PM Works proposed to make of course materials prepared by Peak Performance. Point 2 recorded that PM Works "uses the Peak Performance course material as reference for information and reconstruction of the course workbooks and presentation slides". This reflected the fact known to both parties that CBA had already made it clear that substantial amendments were required and that PM Works had commenced to revise the course materials and would continue to do so.
PM Works offered to make all workbooks and presentation slides available to Peak Performance for it to use in project management courses "without restriction and adapt at their own leisure for any of their other clients" (Point 3). This offer implied (as was the fact) that Peak Performance was unlikely to be asked to provide project management courses to CBA in the future, but recognised that Peak Performance might want to use the revised materials in courses it provided to clients other than CBA.
Point 4 recorded an offer by PM Works to pay a "royalty" to Peak Performance, as follows:
"For all project management courses, PMWorks will pay Peak Performance a royalty of $150 per student per full engaged training day for this service and where there is reference their material and generation of PDUs."
Mr Assaf accepted in oral argument that if the Variation Agreement included a term to the effect of Point 4, it would be very difficult for Peak Performance to claim that PM Works breached the Variation Agreement. That concession appeared to rest on Mr Assaf's acceptance that Point 4 entitled Peak Performance to a royalty only if PM Works actually used Peak Performance's course materials for project management courses presented to CBA or other entities. Mr Assaf suggested, however, that even if PM Works did not use Peak Performance's materials in its presentations, it would be entitled to a royalty if it provided certification services for PM Works in connection with the presentations. As he did not develop the argument it was not clear whether he intended to submit that PM Works was bound to use Peak Performance as the certifying body for courses presented to CBA or whether the royalty was payable only if Peak Performance's services were in fact used for the purposes of certifying that participants had earned PDUs.
The Banerji Document stated in Point 5 that PM Works would pay a royalty or "royalty charge" to Peak Performance in other specified circumstances. PM Works offered in Point 6 to undertake all development of workbooks and presentation slides on the basis that it would not have to pay royalties for the first course "that facilitates" (presumably meaning the first course for which the materials would be used).
PM Works also offered to "construct" an agreement which made reference to the terms set out in the Banerji Document and which would mirror the terms and conditions in the CBA Contract (Point 9).
[21]
Finnerty Email
It is clear from the language used in the Finnerty Email that it was a response made on behalf of Peak Performance to the proposals in the Banerji Document. Mr Finnerty said in the Email that he had looked through the three page document. He observed, correctly, that "the option now afforded to Peak Performance" had moved considerably from the originally envisaged position that the parties had sought to achieve. This observation recognised that circumstances had materially changed by reason of CBA's dissatisfaction with the courses and materials provided by Peak Performance. Mr Finnerty expressly stated that he "raise[d] no concern" over the suggested change in the "option" now afforded to Peak Performance. He therefore clearly appreciated that the arrangements PM Works was proposing were materially different from those previously agreed between the parties.
On an objective reading of the documents, Mr Finnerty's statement can be taken only as meaning that he was prepared to accept the new "offer" presented to him by PM Works. Mr Finnerty indicated, however, that his willingness to accept the new offer was conditional on his understanding of the "current offer" being correct. As Mr Assaf acknowledged in argument, Mr Finnerty was clearly referring to his understanding of the proposal put forward in the Banerji Document. Mr Finnerty then proceeded to set out his understanding of the proposal.
Mr Finnerty said that he understood that the "current offer" applied only to seven Peak Performance courses for use on the CBA Contract, with anything else arising later to be reviewed on a case by case basis. That statement only makes sense when read in conjunction with the proposal in the Banerji Document that PM Works would pay a royalty to Peak Performance if it used the latter's material as reference material for its own workbooks and course presentation.
Mr Finnerty recorded his understanding that the "fee payable" by PM Works to Peak Performance would be based on workshops run for a minimum of 12 persons "as originally envisaged". The fee payable as shown in the accompanying chart was consistent with the "royalty" proposed in the Banerji Document, namely $150 per student per day (Point 4) and $50 per student per two hour follow-up workshop (Point 5). Mr Finnerty agreed that Peak Performance would "waive" the first fee due to it upon presentation of the revised materials currently being developed by PM Works. In substance this restated the proposal in Point 6 of the Banerji Document.
The references in the Finnerty Email to the "fee" payable by PM Works can only be understood as meaning what the Banerji Document described as a "royalty". Mr Finnerty simply substituted "fee" for "royalty" when recording his understanding of the terms set out in the Banerji Document. Peak Performance's written submissions to the primary Judge used the expression "royalty fee" when describing the conditions Mr Finnerty wished to attach to PM Works' offer, thereby apparently conceding the point.
Mr Finnerty did not address in his email whether Peak Performance would be entitled to a royalty if its materials were not used, but its services were used to generate PDUs for course participants. Nor did he address whether PM Works was bound to use Peak Performance certification services even if it did not use Peak Performance's course materials.
Mr Finnerty did record his understanding that in return for the ongoing fees Peak Performance would not be required to face the end client or to provide "any facilitation services". This was precisely the arrangement proposed by PM Works. It reflected the fundamental change from "the originally envisaged position" required by reason of CBA's dissatisfaction with the courses and with the materials provided by Peak Performance. This was of course a matter of which both parties were well aware.
The additional issues raised in the Finnerty Email were essentially administrative in nature, designed to ensure that Peak Performance complied with PMI requirements and could verify the number of attendees at courses provided by PM Works.
Mr Finnerty concluded by expressing the hope that he had "got everything correct" and that none of what he had to say was a surprise bearing in mind the numerous discussion between the parties.
[22]
Contents of the Variation Agreement
This analysis of the Banerji Document and the Finnerty Email demonstrates that it is untenable to suggest that the Finnerty Email can be read independently of the Banerji Document. The latter did not merely form part of the context to be taken into account in construing a written contract between the parties. It was in effect an offer, framed in reasonably precise terms, to which Mr Finnerty was invited to respond on behalf of Peak Performance. He did so by largely accepting the proposed terms, but proposing some relatively minor modifications.
If the exchange of correspondence is analysed by reference to traditional contractual principles, the Banerji Document was an offer by PM Works to Peak Performance. The latter replied with a slightly modified offer that on one view amounted to a counter-offer. PM Works accepted the counter-offer in Mr Banerji's email of 1 September 2014 thus (as the primary Judge held) bringing about a final and binding agreement between the parties.
Had Mr Banerji not replied to the Finnerty Email on 1 September 2014 there might have been a question as to whether the parties at that stage had reached a final and concluded agreement. The issue is moot because Mr Banerji did in fact reply and accepted that the parties had a basis from which to move forward. The primary Judge found that Mr Banerji's reply constituted acceptance of the terms set out in the Finnerty Email. [70] There is no challenge to that finding.
Mr Assaf submitted that the primary Judge construed the Variation Agreement only on the basis of the contents of the Finnerty Email and that this Court should adopt the same approach. It is true that his Honour concluded that that the parties agreed to vary the Original Agreement "on the basis set out in [the Finnerty Email] and accepted by Mr Banerji in his email of 1 September 2014". However his Honour had previously set out the relevant terms of the Banerji Document and it is clear that he read the two documents together in order to identify the terms of the Variation Agreement. It is impossible to do otherwise.
In my view the Variation Agreement requires PM Works to pay a royalty to Peak Performance if PM Works uses Peak Performance's materials for project management courses presented to CBA or other entities. There is nothing in the language used by the parties which suggests that the royalty is payable if PM Works develops and uses its own materials without reference to any of Peak Performance's materials. It was open to PM Works to completely revise the materials and use its own version for the courses provided to CBA. This is precisely what PM Works did after 1 September 2014. Nor is there anything in the language used by the parties which suggests that PM Works is not entitled to develop and use its own course materials if it wishes to do so. Point 4 in the Banerji Document states that the royalty is payable where there is "reference to [Peak Performance's] material and generation of PDUs". The implication is that no royalty is payable by PM Works if it develops and uses its own materials without reference to Peak Performance's materials.
Point 4 in the Banerji Document is expressed cryptically and to some extent ungrammatically. The language indicates, however, that PM Works is to pay a royalty if its courses refer to Peak Performance's materials and Peak Performance generates PDUs. It can readily be inferred that if PM Works uses Peak Performance course materials it is not to engage any entity other than Peak Performance to certify that participants completing the course are entitled to PDUs. This is consistent with the reference in Mr Banerji's email of 1 September 2014 to PM Works "looking to Peak [Performance] to provide the PDUs for courses delivered to [CBA]".
Despite this reference in the email of 1 September 2014, the correspondence constituting the Variation Agreement does not contain language preventing PM Works from obtaining accreditation in its own right as a REP. It must have been known to both parties in August 2014 that PM Works had, or could readily acquire, the necessary skills, expertise and resources to seek accreditation from PMI, as it did later in that year. If it matters, there is no evidence that Peak Performance protested about PM Works' success in obtaining accreditation as a REP.
The language of Point 4 links, albeit ungrammatically, reference by PM Works to Peak Performance's materials and the "generation of PDUs". The link is consistent with Mr Finnerty's evidence that only REPs could issue "Class A PDUs" because:
"PMI REPs have already met the PMI required quality standard for creating and producing suitable courseware."
In a subsequent affidavit Mr Finnerty noted that an accredited REP had to comply with quality requirements including stringent courseware standards based on a PMI publication. The inference is clearly open that both parties were aware at the time of the Variation Agreement that it would be very difficult for a REP to certify PDUs unless its own course materials had been used in the project management training presentations.
In my opinion an objective observer would construe the correspondence constituting the Variation Agreement as not obliging PM Works to engage Peak Performance to provide certification leading to PDUs for participants in project management courses when PM Works made no reference to any course materials prepared by Peak Performance. The Variation Agreement envisaged that as long as PM Works referred to Peak Performance's materials, it would be obliged to engage Peak Performance to provide any certification services required. Otherwise PM Works would make its own arrangements for the issue of PDUs to course participants.
Mr Assaf submitted that the primary Judge's construction of the Variation Agreement was uncommercial in that it provided little to no benefit to Peak Performance. In effect it was entitled to nothing unless PM Works chose to use Peak Performance's materials and to engage it to certify that participants had successfully achieved PDUs. But, for reasons that have been explained Peak Performance was in an extremely vulnerable position when it negotiated the terms of the Variation Agreement. Its course presentation and materials had failed to satisfy CBA's requirements and PM Works was clearly in a position, if it wished, to take sole responsibility for providing services to CBA and to do so without any involvement from Peak Performance. There was nothing uncommercial in an agreement that offered Peak Performance the possibility of some returns rather than finding itself immediately shut out altogether from providing services to CBA.
It follows that PM Works' failure to make any royalty payments between the date of the Variation Agreement (1 September 2014) and 13 April 2015 (when the parties agreed to terminate their relationship) did not breach the Variation Agreement. PM Works did not use any materials prepared by Peak Performance in the project training courses PM Works presented during that period. Under the Variation Agreement PM Works was entitled to develop and use its own course materials and it did so without reference to Peak Performance's materials. Peak Performance was not entitled under the Variation Agreement to royalty payments for course materials not used by PM Works.
It also follows that PM Works did not breach the Variation Agreement by not engaging Peak Performance to issue PDUs in respect of the project management courses conducted using PM Works' own materials. PM Works was free to make other arrangements for the issue of PDUs (including obtaining accreditation itself) or, subject to CBA's wishes, to conduct courses without offering participants the opportunity to obtain PDUs.
A possible alternative construction of the Variation Agreement, although not one propounded by Mr Assaf, is that PM Works was bound to use Peak Performance's certification services for courses provided to CBA until PM Works obtained accreditation as a REP in its own right. However, there was no evidence either that Peak Performance requested PM Works to allow Peak Performance to issue PDUs, or that it actually issued PDUs in connection with the project management courses given by PM Works after 1 September 2014. Nor was there evidence that Peak Performance issued invoices to PM Works in respect of any of the project management courses presented by PM Works after 1 September 2014. It may be that the absence of evidence of this kind explains why the alternative construction was not advanced.
As I have noted, on 24 September 2014 Peak Performance issued PDUs in respect of the pilot course conducted by Dr Stejer on 1 September 2014. But in that case Dr Stejer made use of Peak Performance's materials. It is not clear whether PM Works paid Peak Performance for the issue of the PDUs but no complaint has been made by Peak Performance on that score.
[23]
Repudiation
As I understood the argument, Peak Performance's contention that PM Works repudiated the Variation Agreement had two limbs. The first was that Peak Performance's failure to pay fees in respect of courses it provided after 1 September 2014 breached an essential term of the Variation Agreement and this amounted to a repudiation of contract. The second was that Peak Performance by reason of its conduct in February or April 2015 evinced an intention no longer to be bound by the Variation Agreement and in that sense had repudiated the contract.
[24]
Breach of an essential term
The first argument fails because of the conclusions that have been reached as to the construction of the Variation Agreement. PM Works was not obliged to pay royalties to Peak Performance unless it used Peak Performance's materials in the project management courses or received certification services from Peak Performance in connection with the use of Peak Performance's materials. Since PM Works neither used Peak Performance's materials nor its certification services the obligation to make royalty payments under the Variation Agreement was not enlivened.
[25]
Renunciation
The test of whether a party to a contract has renounced the contract is: [71]
"…whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation…".
Mr Assaf relied on Mr Finnerty's evidence that at his meeting with Mr Banerji on 17 February 2015 the latter said that PM Works did not need any further involvement from Peak Performance on the CBA Contract. Mr Finnerty also said that Mr Banerji told him that PM Works had developed its own materials. Mr Banerji's evidence was that he could not recall the meeting and that he denied having any conversation to the effect recounted by Mr Finnerty. [72] The primary Judge made no finding that Mr Banerji made the statements attributed to him. His Honour merely observed that it was in fact that PM Works by this stage had developed its own course materials. [73]
It is not clear whether Mr Assaf intended to invite this Court to accept Mr Finnerty's evidence as to what was said at the meeting of 17 February 2015. On the assumption that Mr Assaf did so intend, the evidence suggests that Mr Finnerty and Mr Banerji in fact had a meeting on that date. In an email of 18 March 2015 to Mr Banerji Mr Finnerty said this:
"Thank you for taking the time to meet with me on the 17th February.
I understand from our discussions at that meeting PMW has now become a PMI Registered Education Provider in its own right and as a result PMW considers it no longer requires PPM to participate in the ongoing performance of the CBA contract.
I mentioned at our meeting that there would be certain matters, of a financial nature, for us to discuss in respect of PMI's intention to terminate PPM's role under the CBA contract.
It has taken no small amount of time to conduct a review of this nature.
I am now ready to present this detail to you, along with other matters and I would suggest that we meet for a discussion, on a without prejudice basis, at your convenience…"
In his reply Mr Banerji did not deny that a meeting had taken place on 17 February 2015 but expressed a willingness to catch up to discuss the matter. The primary Judge comprehensively rejected Mr Finnerty's account of the April 2015 meeting with Mr Banerji. But if that difficulty is put aside, and the letter of 18 March 2015 is taken at face value, all it establishes is that Mr Banerji told Mr Finnerty that PM Works had become a REP in its own right and that therefore it no longer required Peak Performance to participate in the ongoing performance of the CBA contract. If Mr Banerji said words to that effect he was entitled to do so consistently with the terms of the Variation Agreement. The statement cannot reasonably be understood as a renunciation of the contract as a whole.
It is significant that the email of 18 March 2015 suggests that nothing definite had been stated or decided at the 17 February 2015 meeting. Mr Finnerty referred in the email to PM Works' "intention to terminate [Peak Performance's] role under the CBA [C]ontract". The Variation Agreement allowed PM Works to do exactly that if it did not wish to use Peak Performance's course materials or certification services.
There is no basis for overturning the primary Judge's finding as to what was said at the meeting of 13 April 2015. These findings are consistent only with the parties mutually agreeing to terminate their contractual relationship. They are inconsistent with a finding that PM Works repudiated the Variation Agreement at the meeting of 13 April 2015.
The primary Judge said that he did not have to take the events of 13 April 2015 further because in any event it was open to PM Works to terminate the Variation Agreement "at will or on reasonable notice except in respect of existing conflicts for the delivery of services". [74] His Honour observed that renunciation therefore could not amount to a repudiation except where there was, at the time of repudiation, a contract for providing services of which further performance might be required.
His Honour's reference to a "contract for the provision of services" was clearly to a contract for the provision of a particular course entered into within the ambits of the CBA Contract. [75] I did not understand Mr Assaf to challenge the finding that the Variation Agreement was terminable in circumstances identified by the primary Judge. The finding provides another basis for rejecting Peak Performance's contention that PM Works repudiated the Variation Agreement.
[26]
Damages
There is no need in view of these conclusions to address the question of damages. Nor is there any need to rule on the admissibility of the additional evidence on which Peak Performance sought to rely in this Court.
[27]
Orders
The following orders should be made:
1. Appeal dismissed.
2. Peak Performance pay PM Works' costs of the appeal.
[28]
Endnotes
Management Service Australia Pty Ltd v PM Works Pty Ltd [2017] NSWSC 1743 (Primary Judgment).
This section is partly derived from the Primary Judgment at [1]-[8].
Primary Judgment at [58].
Primary Judgment at [60].
Primary Judgment at [4].
Primary Judgment at [65], [75]-[78].
Primary Judgment at [111].
Primary Judgment at [99].
Primary Judgment at [64].
Primary Judgment at [99].
Primary Judgment at [68].
See at [19]-[23] below.
See at [24]-[27] below.
Primary Judgment at [141].
Primary Judgment at [140].
Primary Judgment at [140].
Primary Judgment at [118].
Primary Judgment at [119].
Primary Judgment at [124].
Primary Judgment at [125].
Primary Judgment at [127].
Primary Judgment at [128].
Primary Judgment at [128].
Primary Judgment at [129].
Primary Judgment at [130].
Primary Judgment at [131].
B2T Training was a company with which PM Works had a licensing agreement.
At this stage PM Works had not yet been accredited as a REP.
Primary Judgment at [131]-[132].
Primary Judgment at [132].
Management Services Australia Pty Ltd v PM Works Pty Ltd (No 2) [2018] NSWSC 336 (Costs Judgment).
Primary Judgment at [48]-[49].
Primary Judgment at [97].
Primary Judgment at [97].
Primary Judgment at [81].
Primary Judgment at [98].
Primary Judgment at [103]-[104].
Primary Judgment at [109].
Primary Judgment at [104]-[108].
Primary Judgment at [113].
Primary Judgment at [116].
Primary Judgment at [117].
Primary Judgment at [138].
Primary Judgment at [139]-[140].
Primary Judgment at [144]-[166].
Primary Judgment at [167].
Primary Judgment at [169].
Primary Judgment at [170], [173].
Primary Judgment at [168].
Primary Judgment at [169].
Primary Judgment at [172].
Primary Judgment at [173]-[174].
Primary Judgment at [177].
Primary Judgment at [178]-[179].
Primary Judgment at [192].
Primary Judgment at [198].
Primary Judgment at [201].
Primary Judgment at [203].
Primary Judgment at [204]-[206].
Primary Judgment at [207].
Primary Judgment at [179], reproduced at [47] above.
[2017] NSWCA 227 at [101]-[103] (Beazley P and White JA agreeing).
(2014) 251 CLR 640; [2014] HCA 7 at [35].
[2009] EWCA Civ 636 at [28].
(2015) 256 CLR 104; [2015] HCA 37 at [46]-[49] (French CJ, Nettle and Gordon JJ); at [109] (Kiefel and Keane JJ). See also Simic v New South Wales Land and Housing Corporation [2016] HCA 47; (2016) 339 ALR 200 at [78] (Gageler, Nettle and Gordon JJ); Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; (2017) 343 ALR 58 at [8]-[9] (Kiefel, Bell and Gordon JJ).
Mount Bruce at [50].
(2014) 89 NSWLR 633; [2014] NSWCA 184.
The proposition was based on observations made by the High Court on a special leave application in Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2012) 85 ALJR 1.
Mainteck at [77]-[80] (Ward and Emmett JJA agreeing).
Primary Judgment at [138].
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61 at [44] (Gleeson CJ, Gummow, Heydon and Crennan JJ); NC Seddon and RA Bigwood, Cheshire and Fifoot Law of Contract (11th ed, 2017) at [21.12].
Primary Judgment at [171].
Primary Judgment at [169].
Primary Judgment at [178].
See Primary Judgment at [179].
[29]
Amendments
14 May 2019 - Amend typographical error
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 14 May 2019
Parties
Applicant/Plaintiff:
Management Services Australia Pty Ltd trading as Peak Performance PM
Solicitors:
Sparke Helmore Lawyers (Appellant)
Resolve Litigation Lawyers (First and Second Respondents)
File Number(s): 2017/384655
Decision under appeal Court or tribunal: Supreme Court of New South Wales
Jurisdiction: Equity - Commercial List
Citation: [2017] NSWSC 1743
Date of Decision: 14 December 2017
Before: McDougall J
File Number(s): 2015/372170
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
HEADNOTE
[This headnote is not to be read as part of the decision]
Peak Performance (the appellant) and PM Works (the first respondent) were parties to an agreement to provide, relevantly, management training services to third parties, including the Commonwealth Bank of Australia (CBA). Mr Banerji (the second respondent) was the sole director and majority shareholder of PM Works.
Peak Performance commenced proceedings in the Supreme Court Equity Division, alleging that PM Works had breached the agreement by providing project management training services to CBA using its own course materials and certification without paying any fee to Peak Performance, and sought damages accordingly. Peak Performance relied on multiple causes of action for breach of contract, breach of fiduciary duty, misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law, unconscionable conduct in contravention of s 21 of the Australian Consumer Law and equitable estoppel.
The primary judge rejected all of Peak Performance's claims, finding on the terms of email communications that the parties agreed to vary the agreement (Variation Agreement). The primary judge also found that PM Works had not repudiated the Variation Agreement by failing to pay fees to Peak Performance in relation to courses which PM Works delivered to CBA using its own course materials and certification. In a separate judgment, the primary judge ordered Peak Performance to pay PM Works' costs of the proceedings on the ordinary basis up until the date on which PM Works made an offer of compromise, and on an indemnity basis thereafter.
Peak Performance appealed and contended that the primary judge erred in:
finding that it was open to PM works to provide project management training services using its own course materials without paying any fee to Peak Performance, provided that if it used Peak Performance's materials it would pay a fee.
not finding that PM Works' conduct comprised in statements made at meetings with Peak Performance in February or April 2015 constituted a repudiation of the Variation Agreement, which Peak Performance elected to accept.
not finding that Peak Performance was entitled to damages for breach of the Variation Agreement.
Dismissing the appeal, the Court (Sackville AJA, Bathurst CJ and Gleeson JA agreeing) held:
The Variation Agreement required PM Works to pay a royalty fee to Peak Performance if PM Works used Peak Performance's materials for project management courses presented to CBA or other entities. There is nothing in the language used by the parties which suggests that the royalty fee is payable if PM Works develops and uses its own materials without reference to any of Peak Performance's materials. It was open to PM Works to completely revise the materials and use its own version for the courses provided to CBA: [1] (Bathurst CJ); [2] (Gleeson JA); [83] (Sackville AJA)
An objective observer would construe the correspondence constituting the Variation Agreement as not obliging PM Works to engage Peak Performance to provide certification for participants in project management courses when PM Works made no reference to any course materials prepared by Peak Performance. It follows that PM Works' failure to make any royalty payments between the date of the Variation Agreement and when the parties agreed to terminate their relationship did not breach the Variation Agreement. It also follows that PM Works did not breach the Variation Agreement by not engaging Peak Performance to certify project management courses conducted using PM Works' own materials: [1] (Bathurst CJ); [2] (Gleeson JA); [88],[90]-[91] (Sackville AJA).
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7; Re Golden Key Ltd [2009] EWCA Civ 636; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37; Simic v New South Wales Land and Housing Corporation [2016] HCA 47; (2006) 339 ALR 200; Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; (2017) 343 ALR 58; Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184; Taouk v Assure (NSW) Pty Ltd [2017] NSWCA 227 applied.
There is no basis for overturning the primary judge's finding as to what was said at the meeting in April 2015. These findings are consistent only with the parties mutually agreeing to terminate their contractual relationship: [101]
Orders