Plaintiff v Defendant

Plaintiff v Defendant - [2012] VSC 604 - VSC 2012 case summary — Zoe

[104]

As is noted above SME understand the reasoning for the Services Agreement. Unfortunately in this instance its effect is to negate the formal Proposal and MHA. As you said this morning the Services Agreement is used for all suppliers and all types of services, from this I assumed you may have meant it was probably not interned to be used for this type of rental arrangement.

Given the above following are some of my thoughts as to how we can progress this with the minimum amount of time delay as well as removing the cost factor of having to get SG's legal input and potential amendments to the contract.

Option One: Spotlight are comfortable with and have accepted the formal Proposal and the previously supplied MHA (which is a standard rental contract) so the question is, is there really a need for the Services Contract?

If it isn't really necessary and Spotlight's requirement for the Services Agreement was withdrawn then we are approved and ready to go.

Option Two: If Spotlight believes it necessary to retain the Services Agreement, perhaps a solution would be for Spotlight to enter into an agreement with NCON acknowledging that NCON will be assigning their rights to the rental payments to SME/SG but such assignment will not include any of NCON's other obligations under the Services Agreement.

Spotlight will agree to make the rental payments to SME/SG pursuant to the requirements and conditions of the MHA and that SME/SG will not assume any of NCON's obligations. Furthermore Spotlight would acknowledge it will pursue any claims pursuant to the Services Agreement solely against NCON without any right if set-off counterclaim, defence etc.

Again, this is a non-legal suggestion however we are obligated to refer any arrangements, other than the standard approval procedures already agreed to with, to SG and their legal department,. If this was to be the case I would assume that at best we may need to have some minor amendments made to the MHA, e.g. additional clause(s) relation to payment commitments, and this will probably result in additional costs.

I trust the above gives you enough information with any additional queries you have being able to be resolved over the phone (best to contact me on mobile 0418 982 789), alternatively please let me know if you believe a face to face meeting would be more productive.

I look forward to finding a quick and mutually acceptable solution. It would also be appreciated if you could confirm receipt of this email by return, many thanks in advance and kind regards.

[187]

Good Morning Jim

I spoke with Zac on Friday re pushing forward with the negotiations and installation of the NCON Yes Box Smart Controllers into Spotlight. Zac said Hugh was now looking at it and to speak with you about setting up a meeting with Hugh this week if possible please.

Given that Spotlight gave the green light in December 2007 to proceed, we have stepped back patiently while you tried to get your head around the technology and now we want to accelerate the process which we have proved will save Spotlight a significant amount of money and greenhouse emissions.

As a footnote we have just secured 2 major wins over our closest competitor in Australia and after exhaustive scrutiny our product, installation process and rental rates come up well ahead which should be some consolation to you. One if one of Australia's major transport and warehousing company, the other a major shopping centre group throughout Australia. This is a result in saving them millions as well as assisting them in reaching their greenhouse gas reductions as set out by the government.

We have also just completed trials with Lincraft (the store you visited) and the results have actually surpassed our conservative reporting. I must recall that although on your visit to this store you were very happy with the lighting ambience in the store, however the Lux reading based on the Lincraft's lamps being at their life's end seemed to be the stumbling block for you. As you so rightly said the light in your stores was imperative as customers were selecting material and needed to see the detail. I pointed you to and reiterate that when in your Whangarei store in New Zealand my wife commented on the very poor light in this store and on looking upward at the lights only one in three were live, so if we had done a lux reading there I am sure it would have fallen far short of your expectations.

So to move forward and save Spotlight the money we projected, I look forward to hearing from your hopefully today, in setting up a meeting...

[363]

[24] The award of damages for breach of contract protects a plaintiff's expectation of receiving the defendant's performance. That expectation arises out of or is created by the contract. Hence, damages for breach of contract are often described as "expectation damages". The onus of proving damages sustained lies on a plaintiff and the amount of damages awarded will be commensurate with the plaintiff's expectation, objectively determined, rather than subjectively ascertained. That is to say, a plaintiff must prove, on the balance of probabilities, that his or her expectation of a certain outcome, as a result of performance of the contract, had a likelihood of attainment rather than being mere expectation.

[25] In the ordinary course of commercial dealings, a party supplying goods or rendering services will enter into a contract with a view to securing a profit, that is to say, that party will expect a certain margin of gain to be achieved in addition to the recouping of any expenses reasonably incurred by it in the discharge of its contractual obligations. It is for this reason that expectation damages are often described as damages for loss of profits. Damages recoverable as lost profits are constituted by the combination of expenses justifiably incurred by a plaintiff in the discharge of contractual obligations and any amount by which gross receipts would have exceeded those expenses. This second amount is the net profit.

....

[28] The corollary of the principle in Robinson v. Harman is that a plaintiff is not entitled, by the award of damages upon breach, to be placed in a superior position to that which he or she would have been in had the contract been performed. In L. Albert and Son v. Armstrong Rubber Co Learned Hand C.J. said:

"(O)n those occasions in which the performance would not have covered the promisee's outlay, such a result imposes the risk of the promisee's contract upon the promisor. We cannot agree that the promisor's default in performance should under this guise make him an insurer of the promisee's venture".

Learned Hand C.J. went on to approve the statement made by Fuller and Perdue in their celebrated article, "The Reliance Interest in Contract Damages":

"We will not in a suit for reimbursement for losses incurred

in reliance on a contract knowingly put the plaintiff in a

better position than he would have occupied had the contract

been fully performed." [21]

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Judgment (481 paragraphs)

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Cases Cited (5)