Rooney v ABB Grain Ltd

Witnesses 8 The applicant called two witnesses, Ms Margaret Rooney and Ms Helen Rooney. Their evidence-in-chief was contained in affidavits which were tendered and in some brief oral evidence. They were both cross-examined at length and there was a substantial attack on the credit of both of them. Despite that attack, I formed the view that both of them were honest witnesses. There was an element of indignation at what they perceived to be high handed conduct by the respondent, but I think they were telling the truth. 9 Having said that, I do not accept Ms Margaret Rooney's evidence that the ninth contract was entered into before there was mention of a multigrade contract for reasons which I will give. Furthermore, I place more weight on Mr Timothy Martin's evidence about how multi-variety and multigrade bin contracts work than I do on the evidence of Ms Helen Rooney. I do not discount entirely her evidence on that topic, but it seemed to me that Mr Martin had the greater expertise. 10 The respondent called two witnesses, Mr Stephen Howells and Mr Timothy Martin. Both were, and are, employees of the respondent. As with the applicant's witnesses, their evidence-in-chief was contained in affidavits. 11 Mr Howells was employed as National Accumulation Manager of the respondent and he was in charge of the administration and working out of the ABB Basis Contracts and the Gro-Logic Contracts. He also had some input into the preparation of the respondent's Product Disclosure Statements. There were matters where the evidence of Mr Howells and that of Ms Helen Rooney were in conflict. Although I do not think Mr Howells was trying to mislead the Court, I think that there was an element of reconstruction in his evidence on those matters, and I prefer the evidence of Ms Helen Rooney. Those matters are discussed in detail later in these reasons. 12 Mr Timothy Martin gave evidence about multi-variety and multigrade bin contracts based on his experience as a grain trader for approximately 15 years. He was an honest witness and I accept his evidence. 13 The respondent also tendered affidavits of Ms Samantha Cosh and Ms Belinda Matthews. They were not required for cross-examination. Their evidence, so far as it goes, is uncontroversial.

The Contracts 14 At the centre of the dispute between the parties are nine contracts they entered into during the period from April 2006 to May 2007. Each of the contracts is referred to as an ABB Basis Contract and each is said by the applicant to have been "acquired" by it, no doubt reflecting the language of the Corporations Act (see s 761E(1)). There is no dispute between the parties that each of the nine contracts involved a facility which constituted a "financial product" within the meaning of that term in Chapter 7 of the Corporations Act. 15 I will start by identifying features of the nine contracts which are not in dispute. 16 Each contract was numbered. Three contracts (numbered 39292, 39293 and 39294) were entered into on or about 11 April 2006 and during a telephone conversation between Ms Margaret Rooney on behalf of the applicant, and Mr Henry Carracher on behalf of the respondent. Mr Carracher was an employee of the respondent. Each of those three contracts was for 136 metric tonnes of multi-variety wheat delivered Port Adelaide Port Zone 2007/2008. The quantity of 136 metric tonnes equates to one standardised CBOT (Chicago Board of Trade) Wheat Futures Contract. The applicable wheat basis was a grade known as APW, which means Australian Premium White. The futures component locked in on 11 April 2006 was $4.40 US/bu (December 2007). Finally, the relevant Product Disclosure Statement ("PDS") for the three contracts was a PDS issued by the respondent and current as at February 2006 ("February 2006 PDS"). 17 Three contracts (numbered 50946, 50947 and 50948) were entered into on or about 15 May 2006 and during a telephone conversation between Ms Margaret Rooney on behalf of the applicant and Ms Prue Standen, on behalf of the respondent. Ms Standen was an employee of the respondent. Those three contracts had the same characteristics as the three contracts entered into on or about 11 April 2006, save and except that the futures component locked in on 17 May 2006 was $4.80 US/bu (December 2007). Again the relevant PDS was the February 2006 PDS. 18 The six contracts to which I have referred all required delivery of wheat in the 2007/2008 season. I will refer to them as the 2007/2008 contracts. 19 Two other contracts (numbered 50949 and 50950) were also entered into on or about 15 May 2006 and they had similar characteristics to the three contracts I have already mentioned save that they provided for the delivery of wheat in the 2008/2009 season. I will refer to them as the 2008/2009 contracts. The futures component under these contracts was locked in on 18 May 2006 at $4.70 US/bu (December 2008). 20 Two other matters about the telephone conversation between Ms Margaret Rooney and Ms Standen on 15 May 2006 may be noted at this stage. First, the conversation was recorded by the respondent and the audio recording and a transcript of the conversation have been tendered in evidence. Secondly, two other contracts (numbered 50944 and 50945) were entered into during the course of the telephone conversation. Those contracts are not in issue in this proceeding. 21 One contract (numbered 53242) was entered into on or about 31 May 2007 and during a telephone conversation between Ms Margaret Rooney, on behalf of the applicant, and Ms Natalie Jenkins, on behalf of the respondent. Ms Jenkins was an employee of the respondent. The quantity of wheat under this contract was 408 metric tonnes which equates to three standardised CBOT wheat futures contracts. Under the contract the wheat was to be delivered during the 2007/2008 season. The futures component locked in on 31 May 2007 was $5.48 US/bu (March 2008). The relevant PDS was a PDS issued by the respondent and current as at November 2006 ("November 2006 PDS"). Although like the 2007/2008 contracts, the wheat was to be delivered during the 2007/2008 season, the contract entered into on 31 May 2007 raises considerations which differ from those raised in relation to those contracts. I will refer to this as the ninth contract. 22 The telephone conversation between Ms Margaret Rooney and Ms Jenkins was also recorded, and the audio recording and a transcript of the conversation were tendered. There was a suggestion in the evidence that there might have been two conversations between Ms Margaret Rooney and Ms Jenkins on 31 May 2007. As it happens, it is not necessary for me to decide whether there was one conversation or two. 23 An important issue in this case revolves around the specification of grain type as multi-variety wheat or multigrade bin wheat. There is no dispute that the 2007/2008 contracts and the 2008/2009 contracts were for a grain type specified as multi-variety wheat. A plea by the respondent that those contracts were converted from multi-variety wheat to multigrade bin wheat during the telephone conversation between Ms Margaret Rooney and Ms Jenkins on 31 May 2007 has been abandoned. 24 There is a dispute between the parties about whether the ninth contract was for multi-variety wheat (the applicant's contention) or multigrade bin wheat (the respondent's contention). The price paid for the wheat delivered under the contract is calculated on a different basis depending on whether the contract is for multi-variety wheat or multigrade bin wheat. I explain the differences below.

The requirements of the Corporations Act 2001 (Cth) with respect to a Product Disclosure Statement 25 There are different types of contracts for the sale of wheat. There is a warehouse transfer where a grower delivers wheat to a company like the respondent for storage and then subsequently agrees upon a sale. There is a cash contract under which a grower enters into a cash contract on agreed terms for immediate delivery. There is a forward contract under which a grower undertakes to deliver wheat in the future to a company like the respondent at an agreed price. An ABB Basis Contract is a particular type of forward contract. The price of wheat in Australia is made up of three components, namely, a basis component, a futures component and a foreign exchange component and under the ABB Basis Contract, each component of the price was able to be locked in independently of, and at different times from, each other component. 26 As I have said, it is common ground that an ABB Basis Contract involved a facility which was a financial product within Chapter 7 of the Corporations Act and the respondent was required to issue a PDS. The Corporations Act and the Regulations contain a number of provisions which specify the information which must be included in a PDS. I will not identify all the relevant provisions. It is sufficient if I set some parts of s 1013D which contains the main content requirements of a PDS: 1013D Product Disclosure Statement content - main requirements (1) Subject to this section, subsection 1013C(2) and sections 1013F and 1013FA, a Product Disclosure Statement must include the following statements, and such of the following information as a person would reasonably require for the purpose of making a decision, as a retail client, whether to acquire the financial product: (a) a statement setting out the name and contact details of: (i) the issuer of the financial product; and (ii) if the Statement is a sale Statement - the seller; and (b) information about any significant benefits to which a holder of the product will or may become entitled, the circumstances in which and times at which those benefits will or may be provided, and the way in which those benefits will or may be provided; and (c) information about any significant risks associated with holding the product; and (d) information about: (i) the cost of the product; and (ii) any amounts that will or may be payable by a holder of the product in respect of the product after its acquisition, and the times at which those amounts will or may be payable; and (iii) if the amounts paid in respect of the financial product and the amounts paid in respect of other financial products are paid into a common fund - any amounts that will or may be deducted from the fund by way of fees, expenses or charges; and (e) if the product will or may generate a return to a holder of the product - information about any commission, or other similar payments, that will or may impact on the amount of such a return; and (f) information about any other significant characteristics or features of the product or of the rights, terms, conditions and obligations attaching to the product; and (g) information about the dispute resolution system that covers complaints by holders of the product and about how that system may be accessed; and (h) general information about any significant taxation implications of financial products of that kind; and (i) information about any cooling off regime that applies in respect of acquisitions of the product (whether the regime is provided for by a law or otherwise); and (j) if the product issuer (in the case of an issue Statement) or the seller (in the case of a sale Statement) makes other information relating to the product available to holders or prospective holders of the product, or to people more generally - a statement of how that information may be accessed; and (k) any other statements or information required by the regulations; and (l) if the product has an investment component - the extent to which labour standards or environmental, social or ethical considerations are taken into account in the selection, retention or realisation of the investment; and (m) unless in accordance with the regulations, for information to be disclosed in accordance with paragraphs (b), (d) and (e), any amounts are to be stated in dollars. 27 As I have said, the February 2006 PDS is the relevant PDS for the 2007/2008 contracts and the 2008/2009 contracts and the November 2006 PDS is the relevant PDS for the ninth contract. 28 Two other Product Disclosure Statements were tendered in evidence. There was a PDS issued by the respondent and current in August 2006. It made some changes to the February PDS but it is common ground that those changes are immaterial for present purposes. There will be no need for me to refer to it again. There is a PDS which was issued by the respondent in June 2007 and which dealt with a product called a Gro-Logic Contract. I will refer to this PDS as the Gro-Logic PDS. It is not directly relevant. However, an understanding of some of its features will be important to an understanding of the events which occurred in the latter part of 2007.

The differences between a multi-variety wheat contract and a multigrade bin wheat contract 29 There was a good deal of evidence about the difference between a multi-variety wheat contract and a multigrade bin wheat contract. I should say at this point that I accept Mr Howells' evidence that the terms, "multi-grade", "bin grade" and "multigrade bin" are used interchangeably. The difference between a multi-variety wheat contract and a multigrade wheat contract is relevant to the pricing of the contract. 30 The principal evidence came from Ms Helen Rooney and Mr Timothy Martin. 31 Ms Helen Rooney is employed by Santos Limited as a commercial adviser. Previously, she had worked for the respondent and its predecessor, AusBulk. She occupied a number of positions and worked within a graduate management programme involving work in the field and in the finance section and then, a little later, in financial services. She became familiar with Basis Contracts and worked on the grower helpline. She also worked on what was known as the wheat book. She was familiar with multi-variety wheat contracts and multigrade bin wheat contracts. 32 Mr Martin is employed by the respondent in a position called Director, International Grain - Wheat and Sorghum, based in Singapore. Prior to January 2010, he was the Cereals Business Manager and prior to that he was a grain trader for about 15 years. One of his responsibilities was to fix a daily cash bid price for cereals (including wheat) for any given season in which the respondent was currently trading. 33 Although Ms Helen Rooney did not have the level of expertise that Mr Martin had, she understood the fundamental features of an ABB Basis Contract and the basic differences between a multi-variety wheat contract and a multigrade bin wheat contract. 34 The differences between a multi-variety wheat contract and a multigrade bin wheat contract are to some extent explained in an information circular dated 10 November 2006 from the respondent to growers. 35 A multi-variety wheat contract pays on the variety grown rather than the quality of wheat upon delivery. There is a grade spread having regard to the ABB Traditional Pool Grade spreads as at 1 October in the season of delivery and an adjustment for protein, screenings and moisture based on the ABB Traditional Pool Quality Scales as at 1 October in the season of delivery. 36 A multigrade bin wheat contract pays for the quality as determined by the bulk handler upon receival. A grower delivering on a multigrade bin wheat contract receives the base price (APW1) as determined on the contract, plus or minus the ABB Multi-Grade Spreads at the time of locking in the Multi-Grade Basis. The information circular states: Multi-Grade contracts are now flat price, which means there are no further adjustments for protein, screenings or moisture. 37 The particular example given in the information circular shows a multigrade bin wheat contract to be more advantageous to the grower than a multi-variety wheat contract because, although there are no grade spreads and quality increments in the former, the base price is higher. 38 Mr Martin explained the multi-variety payment system and the multigrade bin payment system. He said that there are a number of different agronomic varieties of wheat grown in Australia. There is a grading system whereby a particular variety of wheat is placed in a particular grade having regard to that variety and its quality characteristics. Mr Martin identified the eight primary grades of wheat and the acronyms for them according to varietal grade and bin grade. They are as follows: Varietal Grade Bin Grade Australian Prime Hard APH APH2 Australian Hard AH H2 Australian Premium White APW APW1 Australian Standard White ASW ASW1 Australian Soft ASF1 SFE1 Australian Premium Durum APDR DR1 Australian General Purpose AGP AGP1 Feed Grain FEED FED1

The base grade for a multi-variety wheat contract is APW and the base grade for a multigrade bin wheat contract is APW1. 39 Mr Martin said that contracts are written as either multi-variety wheat contracts or multigrade bin wheat contracts and each provides for a different method of determining the final payment by adjustments to the base grade. There may be a grade spread and quality premiums or discounts depending on screenings, moisture and protein. 40 Mr Martin explained the link between the respondent's Traditional Pool and AWB's National Pool for wheat. I do not need to set out the details. He said that AWB's statutory right to export all Australian wheat expired on 30 June 2008. 41 Mr Martin was involved in the calculation and publication of the respondent's daily cash bid price for wheat and he explained how that price was calculated. The cash price itself is made up of a futures price, basis component and foreign exchange rate. Mr Martin said, and I accept, that the cash bid can be used to derive what he called a multi-variety price and a multigrade bin price on a particular day. 42 Mr Martin said that the futures price component forms the largest percentage of the total price of wheat in Australia and that, for this reason, it was usual in his experience for growers to lock in the futures price component early in the term of a Basis Contract to obtain price security and in particular to secure the largest portion of their price at a price level at which they were comfortable to sell as against their cost of production. 43 Mr Martin said that when a grower locks in the futures price component the respondent makes the corresponding trade on the CBOT. The futures price on the CBOT will vary daily. The respondent is required to settle the difference between the futures price and the locked in futures price for each open contract with the CBOT daily. This involved the respondent settling and funding the daily margin requirements of CBOT from the initial sale value to the daily market close price. 44 Mr Martin explained the features of the basis price component and he said, and I accept, that generally growers will wait until they are satisfied that they will produce grain before locking in the basis component. Until a basis component is locked in a grower is not exposed to the financial risk of production failure. 45 Mr Martin said that from 6 October 2006 to 6 December 2006 the respondent's daily bid sheet contained a cash price and the respondent was willing to bid for both a multi-variety and multigrade bin contract for wheat on that day. From 9 January 2007, the respondent's daily bid sheet contained an APW1 multigrade bin price and a multigrade bin wheat basis for the 2007/2008 season. Mr Martin explained, and I accept, that if necessary the respondent could have derived from the cash price a multi-variety basis component. 46 Mr Martin explained, and I accept, that during a drought the primary market for wheat is the market for feed wheat. In those circumstances, wheat grades with high protein no longer attract a premium. A multigrade bin bid in the market for the 2007/2008 drought-affected season offered growers the benefit of the increased cash bid in the domestic market. 47 Mr Martin said, and I accept, that a multi-variety contract is not inherently more advantageous to the grower than a multigrade bin contract. This is because the multi-variety price will usually be lower than the multigrade price by reason of the quality increments that are paid on top of the base price. He said, and I accept, that the "final return [to the grower] will be around the same". 48 A multigrade bin flat price is one where there may be grade spreads, but there are no increments or decrements for quality (ie screens, protein and moisture). In such a case, the potential for increments is reflected in the flat price. A fixed grade contract is one where a grower agrees to deliver wheat of a particular bin grade. 49 Ms Helen Rooney gave evidence of the advantages of a multi-variety wheat contract over a multigrade bin wheat contract. She referred to two concepts which were disadvantages associated with a multigrade bin wheat contract. They were a voluntary downgrade and cliff face pricing. 50 A voluntary downgrade occurs where a grower's wheat is placed in a bin of lesser quality wheat because an appropriate bin is not available. The tenor of the evidence was that with prudent planning this risk could be avoided or at least largely avoided. 51 Cliff face pricing occurred where wheat of a certain variety just failed to meet the receival standards for a particular bin and the downgrading to a "lesser" bin resulted in a substantial reduction in the price. 52 I accept that there are risks associated with a multigrade bin wheat contract. I accept that in some circumstances a multi-variety contract will be more advantageous to the grower than a multigrade bin wheat contract and I accept that in other circumstances the position will be reversed. Much will depend on the starting price, that is, the price before grade spreads and increments. The quality of the wheat delivered will be relevant. The position may differ depending upon whether the wheat to be delivered is grown during a growing season affected by drought. 53 I do not think it can be said that a multi-variety wheat contract is inherently more advantageous than a multigrade bin contract. As I have said, Mr Martin said that the final return to the grower was likely to be around the same price. Nevertheless, there may be circumstances where a grower achieves a better result under a multi-variety wheat contract and I do not think that a view that a multi-variety wheat contract better suits the requirements of a particular grower is irrational or unreasonable.

The Terms and Conditions of the Contracts 54 The issues relating to the terms and conditions of the contracts are as follows: 1. With respect to the 2007/2008 and 2008/2009 contracts, what documents and conversations (if any) comprise the contract and do the contracts include the express or implied term alleged by the applicant? 2. With respect to the ninth contract what documents and conversations (if any) comprise the contract and was the contract was a multi-variety wheat contract or a multigrade bin wheat contract. In view of my conclusion that the ninth contract was a multigrade bin wheat contract, it is not relevant for me to consider whether the contract included the express or implied term alleged by the applicant.

The February 2006 PDS 55 The February 2006 PDS is divided into a number of sections. It starts by warning the reader that statements in it do not constitute personal financial product advice, legal advice or tax advice. It informs the reader that the information contained in the PDS has been prepared without taking into account the reader's personal objectives, financial situation or needs. It informs the reader that it is designed to help that person understand ABB Basis Contracts so that they can make an informed choice about whether to acquire the product. It informs the reader that it describes the important features of ABB Basis Contracts. It informs the reader that for the sale of wheat, APW Base Grade with multi-varietal payment is a feature. 56 The PDS informs the reader of the essential features of an ABB Basis Contract. It informs the reader of the difference between a "fixed grade" and a "multi-variety/pay grade". Fixed grade requires you to deliver a single specified grade (bin grade) which means you cannot deliver any different grade(s) to satisfy your contractual obligations. ABB Basis Contracts for canola and sorghum are fixed grade contracts. Multi-variety is a classification of wheat determined by the bulk handler based on the variety and grade of the wheat delivered. A schedule of premiums/discounts for quality specifications is normally established on or after 1 October in the season of delivery. The contract price can be adjusted by adding the relevant premium or discount applicable to the pay grade and specifications delivered. ABB Basis Contracts for wheat are multi-variety based on APW as the standard delivery base grade. 57 There is a section informing the reader as to how they enter into an ABB Basis Contract. The reader is told that that can be done over the telephone or in person. The reader is informed that he or she is to nominate what are called "transaction specific terms", and upon an offer being made by the respondent, an ABB Basis Contract is entered into when the offer is accepted by the seller. The PDS contains a statement to the effect that ABB Basis Contracts are firm, and legally binding at the time of formation, and that there is no cooling-off period. The PDS informs the reader that the respondent will send "a written confirmation in the mail as soon as reasonably practicable setting out the transaction-specific terms agreed and other information required by law". 58 The PDS informs the reader that the terms and conditions which apply to ABB Basis Contracts are the transaction-specific terms agreed with the seller at the time of contracting and formally evidenced in the written confirmation, the terms "set out in this document" and the National Agricultural Commodities Marketing Association Ltd ("NACMA") Trade Rules. 59 Section 7 of the PDS is important as it informs the reader of the components of the contract price. I set it out in full in so far as it relates to an ABB Basis Contract for wheat. 7.1 ABB Basis Contract for Wheat 7.1.1 Basis Component The Basis Component for wheat is quoted by ABB and is based on the difference between: a) The settlement rate from the previous trading session of the Chicago Board of Trade (CBOT) March Wheat futures contract price; and b) The ABB APW Multi-Variety, Delivered Port cash bid quoted in USD per bushel for the same delivery period as your contract. 7.1.2 Futures Component The Futures Component for wheat is based on the CBOT Wheat futures contract for March in the relevant season. The value is determined once the order nominated by you is achievable during the trading session, (which must be later than the day of your nomination). We will not transact or broker futures contracts on your behalf. 7.1.3 Foreign Exchange Component The Foreign Exchange Component for the wheat is provided in reference to the Nett Exchange Rate (AUD/USD), priced forward to 15th March (or the nearest business day) in the relevant season as quoted and determined by ABB Grain Ltd. The Foreign Exchange component will also reference an amount of currency in the same denomination as the Futures and Basis components. The actual amount of currency represents the international value of your contract (based on international price and quantity contracted) on the day you elect to lock in the Foreign Exchange Component. The actual amount of currency referenced will be determined as follows: 1. Locked in Futures component (or current market value of CBOT Wheat futures contract for March in the relevant season if the futures component is not locked. If the March contract is unavailable, then the CBOT Wheat futures contract for December in the relevant season, will be used in the calculation). Plus 2. Locked in Basis component (or current market value of basis for the relevant season as determined by the current cash bid if the basis component is not locked in. If there is no cash bid then basis will be valued at an amount determined by ABB for that season). Multiplied by 3. The conversion factor of 36.74371. Multiplied by 4. The number of tonnes contracted. When the Futures and Basis components are locked in, the required amount of currency referenced will be known. 7.1.4 Contract Price: AUD per mt, Delivered Port = [(Futures Component + Basis Component) / Foreign Exchange Component] x 36.74371 - Administration Fee. 60 I draw particular attention to the Basis Component (clause 7.1.1) and the use of the word "quoted" and the reference to "APW Multi-Variety". 61 Section 8 is also important. It provides as follows: 8. How can I find out the current value of each component of the price? You can obtain these figures by: Phone: calling the ABB Grain Marketing Helpline on free-call 1800 018 205. Internet: www.abb.com.au Email: ask one of our grain marketing representatives to put your name on our daily email distribution list. Fax: ask one of our grain marketing representatives to put your name on a weekly fax distribution list. Note: The value of each component can vary from day to day, depending on market conditions. 62 The PDS informs the reader that the Basis Component must be locked in by 15 December in the season of delivery and that each of the Futures Component and the Foreign Exchange Component must be locked in by 28 February in the season of delivery. The PDS provides that if the seller does not lock in the Basis Component of the contract price then he or she will be deemed to have elected to lock in the Basis Component "quoted by us" on 15 December in the season of delivery. 63 Section 13 of the PDS refers to adjustments to the contract price. Section 13.1 deals with adjustments for quality (that is, protein, screenings and moisture composition) and section 13.5 deals with adjustments to the contract price having regard to the grade of wheat delivered. Section 15 sets out the significant risks associated with an ABB Basis Contract. The reader is informed that grain markets are influenced by a number of marketing factors and can be volatile in nature. The reader is informed that ABB Basis Contracts enable him or her to secure known pricing variables, but that after the components of the price are locked in, the seller is not able to realise the benefits of any favourable movements in the fixed component. 64 Section 24 is headed "General Conditions of Purchase for Basis Contracts". Section 24.1 appears under the heading "General". It is important, and I set it out in full. 24.1 General 24.1.1 The contractual relationship in respect of the purchase of commodity by ABB Grain Ltd is governed by the Grain Purchase Contract made between the Buyer and the Seller. The Grain Purchase Agreement is a reference to the relevant Basis Contract. 24.1.2 "Buyer" means ABB Grain Ltd (ABN 59 084 962 130) and "Seller" means the person(s), firm or corporation supplying goods and/or services to the Buyer, as described in the Grain Purchase Contract forwarded by the Buyer to the Seller to confirm the terms and conditions of contract. 24.1.3 Unless there is obvious error, the details of the terms and conditions recorded by the Buyer in the Grain Purchase Contract forwarded to the Seller will be deemed conclusive evidence of those terms. 24.1.4 The Grain Purchase Contract is formed when the Seller accepts (either orally or in writing) the Buyer's offer by entering into a Basis contract (which may either be oral or in writing) for the purchase of commodity on the terms of the Grain Purchase Contract. 24.1.5 Where the Seller has orally accepted the Buyer's offer, the failure by the Seller to sign and return to the Buyer a copy of the Grain Purchase Contract forwarded to the Seller will not cancel nor negate the Grain Purchase Contract or the Seller's obligations to perform the terms and conditions of the Grain Purchase Contract. 24.1.6 The terms and conditions of the Grain Purchase Contract are comprised of: 24.1.6.1 The Trade Rules of the National Agricultural Commodities Marketing Association Limited ("NACMA Trade Rules") applicable at the date of the Grain Purchase Contract; 24.1.6.2 The transaction specific terms (is a reference to the transaction specific terms set out in your confirmation and the terms set out in this document) agreed between the Buyer and the Seller; and 24.1.6.3 These General Conditions of Purchase. 24.1.7 If there is any inconsistency between the NACMA Trade Rules, the transaction specific terms and/or these General Conditions of Purchase, the transaction specific terms will prevail to the extent of that inconsistency, followed by these General Terms and Conditions and last of all the NACMA Trade Rules. 24.1.8 The Grain Purchase Contract, along with the Product Disclosure Statement and General Conditions of Purchase for Basis Contracts, represents the entire agreement between the parties and supersedes any prior understanding, condition or representation in relation to the subject matter. 65 The sections in section 24 which follow deal with acceptance, delivery, price and payment, GST, recipient-created tax invoice, warranties and indemnity, default or inability to perform, other default conditions, intellectual property and other terms. 66 Section 24.8 deals with default or inability to perform by the seller. Its terms are important to the respondent's claim for damages in relation to the ninth contract. I set it out in full: 24.8 Default or inability to perform You are obligated to notify ABB Grain Ltd immediately of your intention to default or any inability to perform on the contract. 24.8.1 Inability to perform includes a failure on the part of the Seller to produce a crop, either in whole or in part, or to produce a sufficient amount of a crop of the quality required by the Grain Purchase Contract for Basis Contracts, for any reason whatsoever. 24.8.2 Notification of default or inability to perform will not excuse the Seller from obligations of the Grain Purchase Contract for Basis Contracts. If the Seller defaults, they must pay liquidated damages to the buying party on demand. The amount of liquidated damage will be determined by the sum of the cost to replace the undelivered quantity at the market value determined by the buyer, the contracts administration fee, and all reasonable legal costs incurred by the buying party as a result of the default. The seller agrees that this represents a genuine estimate of the damages of the buying party. 24.8.3 If the Seller notifies ABB Grain Ltd of intention to default or inability to perform, and the Grain Purchase Contract of Basis Contracts requires physical delivery of the crop, or part thereof, the obligation to deliver may be satisfied in whole or in part by contract washout. 24.8.4 Washout of a Basis Contract will involve a financial settlement, following a representative of the Buyer being satisfied that the Seller has provided sufficient proof of inability to perform on this contract or can confirm that circumstances have changed significantly such that the Seller is unable to produce or deliver the agreed tonnage commitment. The Buyer will approve the request to washout before the financial settlement can be acted upon. 24.8.5 If all the components of the Price have been fixed in full, then the financial settlement will be the Administration fee applied plus the excess of the amount which the Buyer would have to pay to purchase or replace the undelivered quantity of the tonnage committed, over the contract price of the undelivered quantity. The contractual obligation to deliver will be deemed satisfied upon receipt of payment by the Buyer from the Seller of the agreed financial amount. 24.8.6 If the contract remains unpriced, because any or all of the components of the price have not been locked in, the financial settlement amount will equal: the administration fee multiplied by the tonnes contracted any loss suffered by the Buying party as a result of cash settling the difference between any, or all, of the priced components of the contract and the price of entering into a reverse transaction for the components locked in, at the time the washout is requested. When the financial settlement represents a monetary gain for the seller, the administration fee will be deducted from the settlement amount. 2.4.8.7 In the event of a monetary gain for the Seller, the Buyer agrees to pay the finalised amount within the 15 day period following the end of the week of the contracted delivery period. The Buyer reserves the right to withhold payment of such amounts against the Sellers [sic] performance under any other agreement or contract with the Buyer or a related body corporate of the Buyer or to deduct any outstanding debts owed by the Seller to the buyer or related bodies corporate of the Buyer. 24.8.8 Alternatively, the Seller must fulfil the contract by supplying grain acquired from an alternate source.

The formation of the contracts and the contractual documents 67 At least as far as the applicant was concerned, there was a standard procedure in entering into the contracts. First, there was a telephone conversation between Ms Margaret Rooney and an employee of the respondent. As I have said, in terms of the eight contracts presently under consideration, on 11 April 2006, that employee was Mr Carracher, and on 15 May 2006, that employee was Ms Standen. 68 In addition to considering the conversations, the February 2006 PDS and the NACMA Trade Rules, a number of other documents need to be considered in order to determine what conversations and documents make up the contracts between the parties. As the procedure adopted was a standard procedure, I can take the first of the eight contracts (Contract Number 39292) as representative of all the contracts. 69 As I understand it, at the time of the relevant telephone conversation, the employee of the respondent completed a document called a scratch pad, which set out essential features of the contract. The scratch pad for the first contract indicates that an instruction was given to lock in the futures component at $4.40 for December. The instruction contains the abbreviation "GTC" which means good to cancel. That means that the order remains effective until it is filled at the nominated price in the nominated month or cancelled. It is not suggested by either party that the scratch pad forms part of the contract between them. 70 As I understand it, when any of the three components of the price are locked in, the respondent sends a Confirmation Statement to the seller. The statement confirms the fact that a component has been locked in. In the case of the first contract, the applicant was sent a Confirmation Statement indicating that on 11 April 2006 the futures component (December 2007) was locked in at $4.400 US/bu. There is a dispute between the parties as to whether this Confirmation Statement was part of the contract. The applicant contends that it is, whereas the respondent contends that it is not. 71 Some days after the telephone conversation on 11 April 2006 the respondent sent to the applicant a document entitled "Purchase Contract Confirmation - Wheat Season 2007/2008". I will refer to this document as the Purchase Contract. It set out the principal terms of the contract. It consisted of 20 clauses and then a page entitled - ABB Grain Ltd (ABN …) General Conditions of Purchase (Subject to change) 72 As I understood it, there is no dispute between the parties about whether the Purchase Contract formed part of the contract between them. Each party accepted that it did. It is necessary to examine it in some detail. 73 The Purchase Contract starts with an important note to the following effect: This contract is written with reference to the latest version of the ABB Basis Contract Product Disclosure Statement (PDS). Your verbal agreement at time of contract formation implies full and unreserved understanding of these, terms, conditions and risks. 74 The Purchase Contract identifies the parties and, in the case of the first contract and indeed all of the contracts entered into in 2006, identifies the grain type as "Multi-Variety Wheat …". In the case of the first contract, the delivery period is specified as being between 1 November 2007 and 31 December 2007. The Base Price is said to be: To be determined, as per Contact [sic] Pricing in PDS. 75 The Purchase Contract refers to Variations to the Base Price as including: (1) Grade spreads as per ABB Traditional Wheat Pool as at 1 October 2007. (2) Protein, screenings and moisture payments for the relevant grade will be as per ABB Traditional Wheat Pool Quality Scales for the 2007/2008 season as 1 October 2007… 76 The Purchase Contract identifies the pricing components (that is, Futures Component, Foreign Exchange Component and Basis Component) and the payment terms. It contains in clause 14 the following provisions as to the nomination procedure: (1) The seller may nominate to fix any of the pricing components on any business day between contracting and the final nomination day for each of the components, as outlined in the ABB Basis Contract PDS. … (5) Nomination will be deemed to have occurred when the buyer advises that one or more of the components has been locked in by issuing an ABB Basis Contract Confirmation Statement. 77 In clause 15 of the Purchase Contract there are a number of disclaimers, including the following: (1) The final contract price achieved on this contract is dependent on the value at which each of the three pricing components is set. After a component has been locked in, it will not be varied (except for the adjustments referred to in the weighted average of the net exchange rate). (2) The value of each of the pricing components can be volatile and movement in individual components will impact upon the contract price. ABB is not responsible for the effects of adverse movements in the components and does not warrant or guarantee that any component will move up or down or remain stable. (3) It is the responsibility of the seller to nominate the timing to fix for each component. (4) The value of the basis component will be dependent on the cash price offered by ABB at the time. This may be higher or lower or equal to the basis available from other participants in the market at the time. There is a risk that the basis bid may be lower than others in the market in order to overcome liquidity problems from selling large volumes of basis (such as at harvest time). 78 In a clause entitled "Notes" (clause 18) the Purchase Contract provides as follows: Foreign exchange component reference rate not locked in at the time of contract Futures component reference price $4.4000 (Dec. 07) Basis component reference price not locked in at the time of contract Administration $5 If futures component is referencing a futures month other than March an additional administration fee of $1/mt will apply to spread this to reference a March contract at a level set by you. 79 There is then reference to the General Conditions of Purchase which are said to have been accepted by the signatories to the contract and a statement to the effect that any terms where not in conflict with the foregoing shall be in accordance with "ABB Grain Ltd PDS sec 24 General Conditions of Purchase". The document entitled "General Conditions of Purchase" is in similar although not identical terms to section 24 of the February 2006 PDS. Relevantly, it contains the following provisions: The Grain Purchase Contract is formed when the Seller accepts (either orally or in writing) the Buyer's offer (which may either be oral or in writing) for the purchase of commodity on the terms of the Grain Purchase Contract. Where the Seller has orally accepted the Buyer's offer, the failure by the Seller to sign and return to the Buyer a copy of the Grain Purchase Contract forwarded to the Seller will not cancel nor negate the Grain Purchase Contract or the Seller's obligations to perform the terms and conditions of the Grain Purchase Contract. The terms and conditions of the Grain Purchase Contract are comprised of: (i) the Trade Rules of the National Agricultural Commodities Marketing Association Ltd ("NACMA Trade Rules") applicable at the date of the Grain Purchase Contract; (ii) the transaction-specific terms (eg, commodity price, quality, delivery, payment and any special conditions) agreed (whether orally or in writing) between the Buyer and the Seller; and (iii) these General Conditions of Purchase. If there is any inconsistency between the NACMA Trade Rules, the transaction-specific terms and/or these General Conditions of Purchase, the transaction-specific terms will prevail to the extent of that inconsistency, followed by these General Terms and Conditions and last of all the NACMA Trade Rules. The Grain Purchase Contract represents the entire agreement between the parties and supersedes any prior understanding, condition or representation in relation to the subject matter. 80 The question of the documents and conversations (if any) which comprise the contracts is relevant in this case for the following reasons. 81 First, the applicants allege that the following two terms were express terms of the contracts between it and the respondent: 4.3 In respect of each contract, it enabled the applicant to secure known pricing variables (pricing components) and the current values of each of these pricing components (namely, the basis component, futures component and foreign exchange component) could be ascertained inter alia by the applicants subscribing to the respondent's daily email distribution list and the value of each component could vary daily depending on market conditions (clauses 7, 8 and 15.2 of the February 2006 PDS and clause 15.4 of the purchase contract confirmations); 4.4 The respondent would quote the basis component for wheat as based upon the difference between the settlement rate from the previous trading session of the Chicago Board of Trade ("CBOT") March wheat futures contract price and the ABB APW multi-variety, delivered port cash bid quoted in USD per bushel for the same delivery period as the applicants' ABB basis contract (clause 7.1.1 of the February 2006 PDS). The value of the basis component would be dependent on the cash price offered by the respondent at the time (clause 15.6 of the purchase contract confirmations); 82 Whether the applicant's case succeeds on this point depends to a large extent upon whether sections 7 and 8 of the February 2006 PDS were part of the contract between the parties. 83 Secondly, the applicant alleges that the contracts were wholly in writing and that any arrangement whereby the futures component was locked in for December 2007 but later rolled over to March 2008, was not a term of the contracts. The applicant makes a further allegation concerning the rollover arrangement. It claims that the February 2006 PDS specifies a futures component based on the CBOT wheat futures contract for March in the relevant season. It makes no reference to a CBOT wheat futures contract for December in the relevant season. The applicant alleges that the rollover arrangement was a change or event within s 1017B(1A) of the Corporations Act and that there was a failure by the respondent to make the disclosure required by s 1017B of the Corporations Act. I will deal with this issue in that context. 84 Thirdly, the applicant submits that the Confirmation Statement was part of the contract. The resolution of this issue is relevant only to the ninth contract. In the case of the other contracts, the information on the Confirmation Statements does not differ (in a material sense) from the information contained in the Purchase Contracts. In the case of the ninth contract, the position is different because although the Purchase Contract refers to "Multigrade Bin Wheat" and to a base grade of APW1, the Confirmation Statement contains a note with respect to the final price as follows: (Pt Adl Basis, APW Base) 85 The APW grade is the base grade for a multi-variety wheat contract. 86 The applicant claims that the Confirmation Statement is part of the ninth contract and that the reference to an APW Base supports its submission that, despite other indications, the contract is a multi-variety wheat contract. The respondent claims that the reference in the Confirmation Statement to an APW base is a mistake and that the ninth contract is a multigrade bin wheat contract. I will deal with this issue in the course of my consideration of the ninth contract. 87 The determination of the formation and identification of the documents or words comprising a contract involves an objective assessment in the same way as the construction of the terms of a contract: Royal and Sun Alliance Life Assurance Australia Limited v Feeney [2001] SASC 294; (2001) 80 SASR 229 (at 232-233 [10]-[11] per Doyle CJ).

The alleged express terms 88 The applicant alleges in its Second Amended Statement of Claim that the transaction-specific terms and conditions of each of the contracts were confirmed by the respondent in the Confirmation Statement and Purchase Contract and that each of the contracts was written "with reference to" the February 2006 PDS and the NACMA Trade Rules. The respondent alleges in its Amended Defence and Cross-Claim that the contracts were partly oral and partly in writing. The oral part of the contracts comprised the conversations between Ms Margaret Rooney, and the relevant representative of the respondent. The written part of the contracts comprised the Purchase Contract and the February 2006 PDS which "incorporated by reference" the transaction-specific terms agreed at the time of contracting and formally evidenced in the Purchase Contract and the NACMA Trade Rules. 89 The starting point is the Purchase Contract. That is part of the contract. It seems to me that it incorporates parts of the February 2006 PDS. I think that the reference next to "Base Price" in the Purchase Contract to the pricing in the PDS incorporates the definitions or descriptions in the PDS and, in particular, the definitions or descriptions of Basis Component, Futures Component and Foreign Exchange Component. It follows from that that the Basis Component for wheat and the ABB APW Multi-Variety Delivered Port cash bid are figures quoted by the respondent. In my opinion, the applicant has established that the express term alleged in paragraph 4.4 of the Second Amended Statement of Claim and set out in paragraph 81 above was a term of the contracts. 90 I turn now to consider whether the term alleged in para 4.3 of the Second Amended Statement of Claim was an express term of the contracts. The applicant's submission in this respect relied heavily on the proposition that section 8 of the February 2006 PDS was part of the contracts. 91 Section 8 is not expressly referred to in the Purchase Contract. I was referred to section 24 of the February 2006 PDS and, in particular, 24.1.6.2 and 24.1.8 (set out at [64] above). If section 24 is part of the Purchase Contract then the argument is that by reason of one or both of these provisions all the statements in the PDS are incorporated into the contract. I reject that argument. 92 Part 24.1.6.2 does not incorporate all the terms set out in the PDS, but only those terms set out in the PDS and agreed between the Buyer and the Seller. One is back to the point of considering what was agreed between the applicant and the respondent. 93 Part 24.1.8 raises a conundrum when considered with the entire agreement clause in the General Conditions of Purchase in the Purchase Contract. The part itself is an entire agreement clause and indirectly suggests that the PDS is part of the contract. It conflicts with the entire agreement clause in the General Conditions of Purchase in the Purchase Contract (set out in [79] above). The provisions of the Purchase Contract must be given a harmonious operation. That contract incorporates the provisions of section 24 of the February 2006 PDS except where there is a direct conflict. There is a direct conflict between Part 24.1.8 and the entire agreement clause in the General Conditions of Purchase. The latter prevails and the former is not part of the Purchase Contract. 94 Even if the general reference in the Purchase Contract to the February 2006 PDS raises the possibility of statements in the PDS being incorporated into the Purchase Contract, that would only include statements which are promissory in nature. 95 In Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41, Gibbs CJ said (at 61-62): A representation made in the course of negotiations which result in a binding agreement may be a warranty - i.e., it may have binding contractual force - in one of two ways: it may become a term of the agreement itself, or it may be a separate collateral contract, the consideration for which is the promise to enter into the main agreement. In either case the question whether the representation creates a binding contractual obligation depends on the intention of the parties. In J. J. Savage & Sons Pty. Ltd. v. Blakney and Ross v. Allis-Chalmers Australia Pty. Ltd., it was said that a statement will constitute a collateral warranty only if it was "promissory and not merely representational", and it is equally true that a statement which is "merely representational" - i.e., which is not intended to be a binding promise - will not form part of the main contract. If the parties did not intend that there should be contractual liability in respect of the accuracy of the representation, it will not create contractual obligations. The intention of the parties is to be ascertained objectively; it "can only be deduced from the totality of the evidence": Heilbut, Symons & Co. v. Buckleton. In other words, as Lord Denning said in Oscar Chess Ltd. v. Williams: The question whether a warranty was intended depends on the conduct of the parties, on their words and behaviour, rather than on their thoughts. If an intelligent bystander would reasonably infer that a warranty was intended, that will suffice. The intelligent bystander must however be in the situation of the parties, for "what must be ascertained is what is to be taken as the intention which reasonable persons would have had if placed in the situation of the parties": Reardon Smith Line v. Hansen-Tangen. 96 I do not think that section 8 of the February 2006 PDS is expressed in terms which are promissory. 97 I reject the applicant's argument that the term alleged by it in paragraph 4.3 of the Second Amended Statement of Claim was an express term of the contract.

The alleged implied term 98 The applicant puts an alternative case to its case that the term alleged by it in paragraph 4.3 of the Second Amended Statement of Claim was an express term of the contract. It claims that it was an implied term of each of the contracts that the respondent would quote and publish on its daily bid sheets an APW multi-variety grade wheat cash bid and an APW multi-variety grade wheat basis component. It claims that this obligation on the respondent operated throughout the relevant period being from the beginning of the commencement of trade of the relevant wheat futures by CBOT, continuing up to and including the contract delivery period and ending on the final date stipulated for the basis component, that is, 15 December in the season of delivery. It claims that such a term was "in accordance" with the obligation to quote these figures and was a manifestation of an implied term that the respondent would cooperate and act reasonably and in good faith in the performance of the contracts. It claims that such a term was to be implied by law "to enable the [Applicant] to make a fully informed decision as to when to lock in its preferred wheat basis component so that it could then determine and lock in a final contract price by the stipulated final lock in date". 99 The background to this issue is that the respondent did in fact publish a daily bid sheet and that bid sheet contained information as to prices. A grower such as the applicant could ask to be put on the respondent's daily email distribution list and once put on the list the grower would receive the daily bid sheet. The applicant was a grower who received the respondent's daily bid sheet. 100 A number of bid sheets were tendered in evidence. I have already referred to Mr Martin's evidence as to what was shown on the bid sheet in late 2006 and early 2007 (at [45] above). The respondent pleads in its defence that it published a multi-variety cash bid in respect of the 2007/2008 season from 9 October 2006 to 11 December 2006, but stopped doing so on and from 12 December 2006. On that day, Mr Howells sent an instruction to other employees of the respondent as follows: Basis Numbers today. Also for 07/08 season, Erin can you remove the Multi-V bid, we will just be posting Multi-G & Multi-P going forward. 101 There is one other background matter. The bid sheets contain a statement that the contract prices were indicative and were subject to change without notice. There was evidence that the market can be volatile and that a grower could only be sure of the price he or she would receive when it was quoted by the appropriate person at the respondent. 102 The nature of the ABB Basis Contract is not in dispute. Its features are evident from the Purchase Contract and the February 2006 PDS. The value of each of the three components under an ABB Basis Contract can vary from day to day, depending on market conditions. They are pricing variables and once locked in the grower is unable to realise any favourable movements in the particular component. No doubt there are trends in the market which may be observed by the grower; at the same time the market can be volatile. 103 The formula for calculating the Basis Component is set out in clause 7.1.1 of the February 2006 PDS. One of the integers is the ABB APW Multi-Variety, Delivered Port cash bid quoted in USD per bushel for the same delivery period as the particular contract. The Basis Component itself is defined as a figure quoted by ABB Grain. 104 Under an ABB Basis Contract it is for the grower to make a decision in what may be a volatile market about when to lock in a component of the price, having regard to the information available to the grower including, in the case of the Basis Component, the respondent's quoted basis component and quoted cash bid. 105 In the above circumstances, it is unsurprising that the parties to the contract contemplated that the respondent would, upon request, make available to the grower on a daily basis the current value of each component of the price. It seems to me that that means the information would be made available to the grower by way of a system or practice and by that I mean a daily distribution list or, at the election of the grower, a weekly distribution list. Section 8 of the February 2006 PDS makes it clear that that was contemplated by the parties. 106 It seems to me that it was an implied term of each of the contracts that the respondent would do all such things as were necessary on its part to enable the applicant to have the benefit of the contract. This duty has been referred to as a duty of cooperation and the authors of Cheshire and Fifoot's Law of Contract (NC Seddon and MP Ellinghaus 8th Australian ed, 2002) at 414 [10.41] refer to it as a universal term because it is a term implied in all contracts. 107 In Butt v M'Donald (1896) 7 QLJ 68 ("Butt v M'Donald"), Griffith CJ said (at 70-71): It is a general rule applicable to every contract that each party agrees, by implication, to do all such things as are necessary on his part to enable the other party to have the benefit of the contract. 108 In Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 ("Secured Income Real Estate (Aust) Ltd"), Mason J (as his Honour then was) after referring to Butt v M'Donald and Mackay v Dick (1881) 6 App Cas 251 said (at 607): It is easy to imply a duty to co-operate in the doing of acts which are necessary to the performance by the parties or by one of the parties of fundamental obligations under the contract. It is not quite so easy to make the implication when the acts in question are necessary to entitle the other contracting party to a benefit under the contract but are not essential to the performance of that party's obligations and are not fundamental to the contract. Then the question arises whether the contract imposes a duty to co-operate on the first party or whether it leaves him at liberty to decide for himself whether the acts shall be done, even if the consequence of his decision is to disentitle the other party to a benefit. In such a case, the correct interpretation of the contract depends, as it seems to me, not so much on the application of the general rule of construction as on the intention of the parties as manifested by the contract itself. 109 Of course, as the authors of Cheshire and Fifoot's Law of Contract go on to say (also at 414 [10.41]), the duty to cooperate can only be applied "by deriving from it some more specific obligation which operates as its emanation in the particular case". It is at that point that the circumstances of the contract must be examined to determine if the specific obligation is part of the general duty to cooperate. 110 In my opinion, the nature of the ABB Basis Contract, the rights and obligations under it and the benefits it apparently offered to the grower mean that it is appropriate to hold that a term of the nature advanced by the applicant was an implied term of each of the eight contracts. 111 I do not think the fact that the prices are said to be no more than indicative leads to a different conclusion. I accept that there may be a difference between the price on the daily bid sheet and the price quoted by the respondent when the grower contacts it, although I note that the likelihood of there being a difference and its nature was not the subject of evidence. I think it is appropriate to proceed on the basis that the daily bid sheet gives the grower a good indication of trends and of the price the grower would obtain on any particular day. It was an important tool for the grower to manage his or her risks and take advantage of the benefits said to be conferred by an ABB Basis Contract. 112 The implied term alleged by the applicant may be supported on an alternative basis. It seems to me that a term of the nature advanced by the applicant may be considered a specific term implied to ensure business efficacy. The test for implying a specific term on the ground of business efficacy is well established. In BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, the Privy Council said (at 282-283): Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that "it goes without saying"; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract. 113 This statement of the relevant principles has been approved by the High Court in a number of cases. It is sufficient to refer to Secured Income Real Estate (Australia) Ltd at 605-606 per Mason J; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 347 per Mason J. 114 It seems to me that on the facts of this case the five necessary conditions are satisfied.

The ninth contract 115 To this point, I have been considering whether the 2007/2008 contracts and 2008/2009 contracts contained terms concerning the quotation and publication of a multi-variety Basis Component and multi-variety cash bid. 116 A prior question arises in relation to the ninth contract, namely, whether it was a multi-variety wheat contract or a multigrade bin wheat contract. 117 In November 2006, the respondent sent two important documents to the applicant. 118 The first was the information circular that I have already referred to (at [34] above). It is necessary to say something more about that document. The circular advised growers that the respondent had introduced a multigrade basis in order to provide growers with an alternative basis calculation linked to the stronger flat cash market. The circular advised growers that the respondent was quoting basis against two values, one being multi-variety and the other being multigrade. Growers were advised that they could now select which basis figure they wished to lock in and hence how their contract would be priced. The circular contained the following statement: For growers who select to lock in the multi-variety basis, this figure will be attributed to their contract as per the original terms and conditions. For growers who select to lock in the multigrade basis, their contract will be amended, via agreement, to reflect this value. 119 As I have said, the circular provided an example where a better price was achieved by the grower under the multigrade bin alternative. The basis price was higher although there were no additions for grade spread or protein, screenings and moisture. The circular explained to the grower that a multi-variety contract pays him or her on the variety grown rather than the quality of the variety upon delivery. It stated that for ABB Basis Contracts written prior to 14 August 2006, grade spreads were determined by reference to the ABB Traditional Pool Grade Spreads as at 1 October in the season of delivery. In addition, the grower receives an adjustment for their protein, screenings and moisture based on the ABB Traditional Pool Quality Scales as at 1 October in the season of delivery. By contrast, a multigrade bin contract pays the grower for the quality as determined by the bulk handler upon receival. The grower delivering to a multigrade bin contract would receive the base price (APW1) as determined on the contract plus or minus the ABB multigrade spreads at the time of locking in the multigrade bin basis. The circular advised the grower that multigrade bin contracts were then flat price which meant that there was no further adjustment for protein, screenings or moisture. The change introduced by the respondent was referred to as a choice allowing growers more flexibility in pricing their contract. The change was attributed to changes in market conditions. 120 The second document sent to the applicant by the respondent in November 2006 was the November 2006 PDS. In the introductory section, one of the key features for wheat was stated to be, as it was stated in the February 2006 PDS, "APW base grade with Multi-Varietal payment". However, section 3 contained the following addition to what was in the February 2006 PDS: ABB Basis Contracts for wheat, are Multi-Variety contracts based on APW as the standard delivery base grade. At the discretion of ABB, the contract can be priced as MultiGrade based on APW1 as the base grade or Fixed Grade at the time of setting the basis. 121 The other significant alteration to what was in the February 2006 PDS was the alteration to section 7.1.1. In the November 2006 PDS that section was in the following terms: 7.1.1 Basis Component The Basis Component for wheat is quoted by ABB and is based on the difference between: a) the settlement rate from the previous trading session of the Chicago Board of Trade (CBOT) March Wheat Futures contract price; and b) the ABB APW Multi-Variety, Delivered Port cash bid quoted in USD per bushel for the same delivery period as your contract. or c) at the discretion of ABB, an alternative MultiGrade or Fixed Grade ABB cash price per our daily bid sheet may be made available to set the basis. 122 It is a reasonable inference from these documents that the respondent considered that because of the then market conditions a multigrade bin wheat contract would result in a more favourable return to growers than a multi-variety wheat contract. 123 There was debate before me as to whether the financial product which is described in the November 2006 PDS was in effect two financial products, being a multi-variety wheat contract and a multigrade bin wheat contract or one financial product, being a multi-variety wheat contract, where at about the time the Basis Component was to be locked in the grower was offered a multi-variety Basis Component and, at the discretion of the respondent, a multigrade bin Basis Component. As I understand it, the applicant argued for the latter interpretation of the November 2006 PDS and submitted that the latter interpretation would have a bearing on the determination of whether the ninth contract was a multi-variety wheat contract or a multigrade bin wheat contract. The respondent submitted that even if the latter interpretation of the November 2006 PDS was correct, that was relevant only to disclosure, not to the terms and conditions of the ninth contract. The respondent submitted that the terms and conditions were clear and the ninth contract was a multigrade bin wheat contract. I think the respondent's submissions are correct for the reasons which follow. 124 As I have said, there is an audio recording and transcript of the telephone conversation between Ms Margaret Rooney and Ms Jenkins on 31 May 2007. In the course of the conversation, the following was said: Natalie: I will just let you know Margaret, I am not sure when you last did the basis contract. This one will be issued as a bin grade basis contract. Margaret: Oh, okay. Natalie: Okay 'cos the basis number that we are offering is only a bin grade basis number. Margaret: Oh righteo 'cos they are all varietal weren't they? Natalie: They were but at the moment we're only offering and we only plan to offer a bin grade basis number. Margaret: Ooh … okay. Natalie: So ah yes. Margaret: So will that change from here on in will it? Natalie: Yep, yes. Margaret: Mmm mmm, 'cos it is really lining them up with the cash contract isn't it? Natalie: Correct. 125 The Purchase Contract sent to the applicant by the respondent some days after the telephone conversation refers to a multigrade bin wheat contract and an APW1 base. 126 The applicant put a number of submissions in support of its case that the ninth contract was a multi-variety wheat contract. First, it submitted that it was relevant that Ms Margaret Rooney considered it to be such a contract. She said that she thought the ninth contract had been entered into before that part of the conversation set out above. She paid no real attention to the November 2006 PDS or the reference in the Purchase Contract to "Multigrade Bin Wheat". The question of what constitutes the terms and conditions of a contract is to be determined objectively. The telephone conversation is to be considered as a whole and, considered as a whole, I think Ms Jenkins was offering and Ms Margaret Rooney was accepting a multigrade bin wheat contract. 127 Secondly, the applicant referred to the fact that the Confirmation Statement for the ninth contract referred to an APW Base which is the base grade for a multi-variety purchase contract. That submission led to debate as to whether the Confirmation Statement was part of the ninth contract. I am disposed to think that that part of the Confirmation Statement which refers to the locking in of the futures component is part of the contract because it is a term of the contract which is enforceable. It does not follow that all of the statements in the Confirmation Statement are part of the contract. Even if they are, the reference to an APW base must give way to the clear terms agreed during the telephone conversation and the statements and indications in the Purchase Contract to the effect that the contract was a multigrade bin wheat contract. 128 Thirdly, the applicant submitted that I should draw an inference adverse to the respondent's case from the fact that Mr Howells was unable to explain why his initials as well as those of Ms Jenkins appear on the scratch pad for the ninth contract. I cannot see how this advances the case of either party. 129 Finally, the applicant asked me to draw an adverse inference from the respondent's failure to call Ms Jenkins. The precise inference I should draw was never identified. I have the objective facts and circumstances surrounding the ninth contract and I decline to draw any inference from the fact that Ms Jenkins did not give evidence. 130 I find that the ninth contract was a multigrade bin wheat contract. In those circumstances, the question whether there were express or implied terms of the nature alleged by the applicant does not arise.

The 2007/2008 and 2008/2009 contracts 131 As I have said, the respondent stopped publishing an APW multi-variety cash bid in late 2006. The evidence suggests that the respondent made a decision sometime in late September 2006 to restrict the availability of a multi-variety wheat contract to Western Australia. 132 There appears then to have been an ongoing breach by the respondent of the implied term that it quote and publish on its daily bid sheet an APW multi-variety grade wheat cash bid and an APW multi-variety grade wheat basis component. 133 In order to put this breach into context, I need to describe the key events in 2007 and 2008. These events will also be relevant when I come to consider the question of the termination of the contracts. 134 In mid 2007, the respondent introduced a new financial product called a Gro-Logic Contract. A Financial Services Guide and the Gro-Logic PDS were issued by the respondent. The Gro-Logic Contract contained the same three price components which were part of the ABB Basis Contract, namely, a futures component, a basis component and a foreign exchange component. However, the Gro-Logic Contracts for wheat were multigrade contracts and used APW1 as the base grade. The Gro-Logic PDS described multigrade as meaning that the seller was able to deliver multiple bin grades and quality specifications to fulfil his or her contractual obligations. The wheat basis component and wheat futures component were described in the Gro-Logic PDS as follows: 13.1 Wheat Futures Component The futures component for wheat is based on the Chicago Board of Trade (CBOT) wheat futures contracts in the relevant season. The futures value is deemed to have been set upon confirmation from ABB that the price level nominated by you has been achieved. Note: exchange trade at the nominated level does not guarantee a price will be achieved. 13.2 Wheat Basis Component The basis component for wheat is based on the difference between: a) The settlement rate for the previous trading session of the nominated CBOT wheat futures contract price in the relevant season; and b) The ABB APW1 (APW2 in WA) multi-grade or fixed-grade, delivered port (FIS port zone in WA), cash bid as per ABB's daily bid sheet for the same delivery period as your contract. ABB will quote basis values on the daily bid sheet in US cents per bushel based on the December and March CBOT wheat futures contracts. 135 The Gro-Logic PDS provided that the current values for futures, basis and foreign exchange were available on the respondent's daily bid sheet and that a seller could ask to be added to the respondent's daily email distribution list or weekly fax distribution list. The Gro-Logic PDS also identified four delivery options were as follows: 1. Deliver to the Gro-Logic contract. 2. Convert to an ABB purchase contract. 3. Convert to an ABB commodity pool. 4. Close out. 136 If the grower took the close out option, he or she was required to advise the respondent by 31 October of the relevant season that grain would not be delivered under the contract. One of the changes introduced by the Gro-Logic PDS was that a grower had a discretionary power to close out his or her position and did not need to show a production failure or other reason for non delivery. 137 As to quality adjustments and grade spreads, the Gro-Logic PDS provided as follows: 26.4.1 Quality Adjustments for Wheat The relevant bulk handler will sample and analyse all wheat delivered against the contract for protein, screenings and moisture composition. Unless we agree otherwise in writing, analysis of the wheat conducted by us, or our representative, shall be final and binding. You will receive quality adjustments to your final base contract price as per the ABB Bin-Grade Quality Scales at 1 October in the season of delivery. Adjustments will only be made to good grades with increments stipulated by ABB to apply at the time of locking in the basis component. 26.5 Grade Spreads Gro-Logic contracts for wheat and sorghum are multi-grade contracts. A "grade spread" refers to the difference in price between the standard delivery grade on a contract and other acceptable delivery grades. The adjustment ensures that you will be paid a higher price for better grades and a lower price for poorer grades. 26.5.1 Grade Spreads for Wheat The contract price is based on APW1 (APW2 in WA) as the standard delivery grade, which means we will adjust the contract price if you deliver other grades against your contract. The grade spreads will be determined at the time of locking in the basis component and will be the ABB declared grade spreads of that day. 138 On 21 June 2007, the respondent wrote to the applicant in the following terms: Dear Grower Important changes to your ABB basis contract. As an existing ABB basis contract holder you are no doubt aware how this type of contract helps you manage your price risk separately to your production risk in the lead up to harvest. The feedback we have received, however, indicates that growers want even more flexibility when it comes to managing futures and foreign exchange positions, as well as a non-deliverable option on their contract. In response to this feedback we have amended the terms and conditions of the basis contract and are relaunching it as the Gro-Logic, with key features that include: . greater flexibility to manage futures and foreign exchange by having the ability to initiate your hedge in a variety of futures contract months, we set the position and re-enter at a later date and/or roll the position from one month to another. . the facility to close out of your position without needing to prove a failure of production. - this means the contract is non-deliverable up until pre-determined dates provided your basis component has not been locked in. - multiple ways to deliver your grain to ABB including converting to an ABB purchase contract or an ABB pool contract. For a more detailed summary of how the Gro-Logic contract works, please refer to the enclosed product disclosure statement and financial services guide. ABB is proposing to convert all growers who agree to the amended terms and conditions, including the non-payment of a harvest advance for unpriced contracts from their existing ABB Basis Contract to a new Gro-Logic contract. The transaction-specific terms nominated by you on your existing Basis Contract, including quantity, port zone, delivery date and contract number, will remain the same and provided you have not locked in your basis component, the enhanced flexibility and extra benefits of the Gro-Logic Contract will be available to you. To make it easy, we will automatically convert your Basis Contract to a Gro-Logic contract without you having to do anything further. If, however, you have concerns or do not want to convert your contract, please contact your local field officer by Friday 27 July 2007 to discuss your options further. 139 I need to explain the applicant's reaction to this letter, but before doing so I will explain why that topic is relevant. Later in these reasons I conclude that the implied term was not an essential term of each of the contracts, but rather an intermediate or innominate term. An innocent party will only be able to terminate for breach of such a term where, speaking generally for the moment, the breach is sufficiently serious. A contention advanced by the respondent is that the applicant decided to terminate the contracts in order to take advantage of what was undoubtedly a sharply rising market, and that it had no real concern about whether the contracts were multi-variety or multigrade bin wheat contracts. The applicant's failure to react to the letter dated 21 June 2007 is (so the respondent contends) an item of evidence which supports the latter proposition. 140 Ms Margaret Rooney's evidence as to what she did upon receiving the letter dated 21 June 2007 is not disputed. 141 Ms Margaret Rooney received the letter and Financial Services Guide and Gro-Logic PDS in late July 2007. She considered that multi-variety wheat contracts enabled the applicant to manage its production risk better than multigrade bin wheat contracts and that she did not want the contracts converted from the former to the latter. 142 In early August 2007, Ms Margaret Rooney spoke to Mr Michael Cousins who was a representative of the respondent. She explained her concerns. Mr Cousins said that he did not know much about "these types of contracts" and he suggested Ms Margaret Rooney contact the respondent's Adelaide office. 143 In late September 2007, Ms Margaret Rooney read a copy of a newsletter entitled "Callum Downs Community News Grain Report". As a result of what she read, she decided that she would not lock in a basis component until "immediately prior to the commencement of harvest, when production volumes could be determined and the final port zone would be known". 144 Ms Margaret Rooney spoke to Mr Cousins at a grain industry forum on 16 October 2007. She again advised of the applicant's position. Mr Cousins suggested that she speak to Mr Howells. On 17 October 2007, Ms Margaret Rooney had telephone conversations with Ms Jenkins and Mr Cousins respectively. 145 On 18 October 2007, Mr Howells, on behalf of the respondent, wrote to the applicant and in the letter he referred to the 2007/2008 contracts and the ninth contract as "your open 07/08 ABB Gro-Logic wheat contracts". Mr Howells said that to manage effectively the contracts the respondent needed to know the applicant's intentions regarding delivery by "the Gro-Logic declaration date of 31 October 2007". The four options referred to in the Gro-Logic PDS are identified and the letter concludes with the following statement: To notify ABB of your decision, please complete the enclosed delivery declaration form, or call your local field officer or rural adviser, no later than 31 October 2007. 146 On or about 18 October 2007, Ms Margaret Rooney asked her sister, Helen, to consider the matter and to conduct any further discussions or dealings with the respondent. 147 On 30 October 2007, Ms Helen Rooney spoke to Mr Howells on the telephone. By letter dated 31 October 2007, Ms Helen Rooney, on behalf of the applicant, wrote to the respondent purporting to terminate at least the 2007/2008 contracts and the ninth contract. On 15 November 2007, Ms Helen Rooney again spoke to Mr Howells on the telephone. On or about 4 December 2007, she sent Mr Howells another copy of her letter dated 31 October 2007. Each of these events is important in the context of termination and I will need to expand on them in that context. 148 On 14 December 2007, Ms Sarah Graves sent an email to Ms Helen Rooney. At that time, Ms Graves was legal counsel for the respondent. Ms Graves stated that at that point in time the respondent did not accept the arrangements proposed in the letter dated 31 October 2007 and that it would provide its "reasoning" for this in a formal response. 149 By letter dated 13 December 2007, Mr Howells wrote to the applicant and advised it of its open contracts for the 2007/2008 season. The contracts referred to were the 2007/2008 contracts and the ninth contract. This letter was received by the applicant on 18 December 2007. 150 On 2 January 2008, the respondent provided a formal response to the applicant's letter dated 31 October 2007. In its letter, the respondent asserted that the applicant did not contact its local field officer by Friday 27 July 2007 as requested in the respondent's letter to the applicant dated 21 June 2007. The respondent said that it had decided to honour its contracts for the 2007/2008 season "on the original terms dated 22 February 2006". This appears to have been a reference to the February 2006 PDS. The proposal put forward by the respondent was in the following terms: Wheat basis component ABB will, upon application, offer Mr and Mrs Rooney an 07/08 Multi-Varietal basis up until 15 January 2008, provided the AWBIN National Pool in the Port Adelaide Zone remains open. Should the National Pool close prior to this date, ABB will continue to offer a 07/08 MultiGrade basis. By 15 January 2008, Mr and Mrs Rooney will be required to fully price and deliver on the aforementioned contracts or alternatively close out any open positions. In light of changes to the structure of wheat marketing in Australia, Mr and Mrs Rooney's 08/09 contracts (50949 and 50950) will be subject to the terms outlined in the Gro-Logic Contract PDS. 151 As a result of receiving this letter, Ms Helen Rooney decided to contact the respondent's board to discuss the situation. She spoke to Mr Max Venning, Deputy Chair of Directors of the respondent. She met with Mr Ashley Roff on 21 January 2008 to discuss a proposal made by the respondent. On 22 January 2008, Ms Helen Rooney sent an email to Mr Roff wherein she advised him that a proposal put by the respondent had been rejected. 152 The respondent wrote to the appellant by letter dated 25 January 2008. In its letter the respondent referred to what was characterised as unfortunate confusion between Ms Helen Rooney and Mr Howells. The letter goes on to say the following: [It is not clear whether Helen was purporting to terminate all of the above contracts, but we note that one of the contracts (53242) is a multigrade contract and two others (50949 and 50950) are not deliverable until December 2008. Termination of these contracts would certainly not be appropriate and they should not be regarded as "relevant contracts".] We suggest that the best way to repair the misunderstanding is for ABB to provide you with daily multi-variety and multigrade prices for the relevant contracts for the period 31 October 2007 to 15 January 2008 and allow you to choose the basis most favourable for you to lock in. In this way, you will, at the very least, be restored to the position you would have been in had a multi-variety price been provided on 31 October 2007 and had you chosen to lock in the basis on that date. Furthermore, as you will see from the attached schedule, the ability to select a price from a range of prices will serve to significantly improve your position over a 31 October 2007 basis. We are willing to allow Helen to have full information and input into how the multi-variety price is constituted so that you can have confidence that it is a market-derived price. In addition, if physical delivery of the wheat is a problem, we can discuss a cash settlement in accordance with relevant contract terms. 153 Ms Samantha Cosh is employed by the respondent in a position called a trading compliance and operations officer. She prepared the schedule of prices and values which accompanied the respondent's letter to the applicant dated 25 January 2008. I am satisfied from her evidence, the evidence of Mr Howells and the evidence of Mr Martin that Ms Cosh adopted an appropriate methodology in preparing the schedule which contains the prices and values in respect of the period from 31 October 2007 to 24 January 2008. 154 On 31 January 2008, Ms Helen Rooney, on behalf of the applicant, wrote to the respondent advising it that its offer was rejected. 155 I turn now to summarise the events leading up to the purported termination by the applicant of the 2008/2009 contracts. 156 The commencement of the 2008/2009 season wheat basis component that was to apply to the 2008/2009 contracts was 23 April 2008. Ms Margaret Rooney sent a copy of the respondent's daily bid sheet to Ms Helen Rooney on that day. The daily bid sheet did not quote a multi-variety cash bid or multi-variety wheat basis component. 157 On 2 May 2008, the respondent's solicitors wrote to the applicant advising it that it considered the 2008/2009 contracts "to still be in force and is ready, willing and able to perform". On 28 July 2008, the applicant's solicitors wrote to the respondent's solicitors asking for clarification of its assertion that it was ready, willing and able to perform the 2008/2009 contracts, bearing in mind the statement in the respondent's letter dated 2 January 2008 that the Gro-Logic PDS would apply to those contracts and the fact that the respondent had not published an APW multi-variety wheat basis in 2007 nor to date throughout 2008. On 8 September 2008, the respondent's solicitors wrote to the applicant's solicitors advising the applicant that the respondent would perform the contracts according to their terms "(ie in accordance with the February 2006 Product Disclosure Statement)". 158 On 18 September 2008, the applicant's solicitors wrote to the respondent's solicitors again raising a question as to whether the respondent was ready, willing and able to perform the contracts. On 25 September 2008, the respondent's solicitors wrote to the applicant's solicitors seeking further clarification of various statements made by the applicant's solicitors and correspondence between the solicitors for the respective parties followed. 159 On 8 October 2008, Mr Howells wrote to the applicant referring to the 2008/2009 contracts as Gro-Logic contracts, and referring to the grower's rights under the Gro-Logic PDS. On 22 October 2008, the respondent's solicitors wrote to the applicant's solicitors in the following terms: We are instructed that a letter in the form of 8 October letter was inadvertently automatically generated electronically (including the application of Mr Howells' signature) and sent out in relation to every open contract ABB then had recorded in its system. The automatic production and despatch of that letter to your client was - as would be apparent to you from the history of this matter and more particularly, our letter of 13 October - clearly an error. Our client's position remains set out in 13 October letter, namely that contracts 50949 and 50950 are subject to the terms and conditions of the February 2006 Product Disclosure Statement. 160 In October 2008, the applicant received a brochure from the respondent entitled: 2008 Harvest Information The ABB Pool The brochure contained a number of statements, including the following: ABB Grain will run one National Pool each for wheat, barley and canola for the 2008/2009 season … Growers who deliver to the ABB Pool for wheat will be paid on the bin grade of their wheat as determined by their bulk handler. 161 On 31 October 2008, the applicant's solicitors wrote to the respondent's solicitors purporting to terminate the 2008/2009 contracts. At no time between late 2006 and 31 October 2008 did the respondent quote and publish on its daily bid sheet an APW multi-variety grade wheat cash bid and an APW multi-variety grade wheat basis component.

The ninth contract 162 In view of my conclusion that the ninth contract was a multigrade bin contract, no question of breach of the ninth contract by the respondent arises. In fact, the applicant was in breach of the ninth contract.

The 2007/2008 contracts 163 The applicant's case is that it terminated the 2007/2008 contracts and the ninth contract by its letter to the respondent dated 31 October 2007. 164 There was an important telephone conversation between Ms Helen Rooney and Mr Howells on 30 October 2007. Both gave evidence of the contents of the conversation but their accounts differed. 165 It is common ground that the telephone conversation occupied a period of 40 to 45 minutes and was at times quite heated. 166 Prior to her telephone conversation with Mr Howells on 30 October 2007, Ms Helen Rooney said that she prepared a table comparing the features of ABB Basis Contracts with the features of Gro-Logic Contracts. She also noted that there was no multi-variety Basis Component or multi-variety cash bid on the respondent's daily bid sheet for that day. 167 It is not necessary to discuss every aspect of the conversation as there is a good deal of common ground between Ms Helen Rooney and Mr Howells. I will identify the main topics discussed and the principal differences. 168 Ms Helen Rooney said that she discussed with Mr Howells the proposed conversion of the contracts for the 2007/2008 season from Basis Contracts to Gro-Logic Contracts. There was some discussion about the advantages and disadvantages of each of these types of contract. By the end of the conversation Mr Howells agreed that the existing ABB Basis Contracts would not be converted to Gro-Logic Contracts. 169 Ms Helen Rooney said she discussed with Mr Howells the fact that the respondent was not publishing a multi-variety or APW the wheat basis component on its daily bid sheet. She said that Mr Howells told her that the respondent no longer offered or supported multi-varietal Basis Contracts and that in fact "they hadn't all year". He said that the respondent was unable to calculate an APW cash price to derive the APW wheat basis component that the applicant required. Ms Helen Rooney told Mr Howells that if the respondent could not perform the contracts according to their terms, the applicant would terminate the contracts. 170 Ms Helen Rooney said that Mr Howells asked for the opportunity to speak to "the boys" (that is, the relevant wheat traders) to see "if an APW wheat basis component could be calculated and published on its daily bid sheet". Mr Howells said that he would get back to Ms Helen Rooney as soon as possible and, in any event, he would speak to her the next day. 171 Ms Helen Rooney said that she expressed concern about whether any multi-variety price put forward by the respondent would be transparent. Ms Helen Rooney said that she expressed to Mr Howells the importance of him confirming with her by the following day, the respondent's ability to quote and publish an APW wheat basis component. Otherwise, the contracts would be terminated. Mr Howells told her that he would get back to her the following morning in relation to whether the respondent could provide an APW wheat basis component as she had requested. 172 Mr Howells, on the other hand, said that during the conversation he told Ms Helen Rooney something along the following lines: What I would like is for you to put your concerns in writing so that we can address them properly. and I will contact you once your concerns are in writing. 173 There is no dispute that Mr Howells did not contact Ms Helen Rooney on the following day. Ms Helen Rooney checked the respondent's daily bid sheet for 31 October 2007 and noted that it did not contain either an APW multi-variety cash bid or an APW wheat basis component. She started to prepare a letter terminating the contracts. Ms Helen Rooney said that she posted a letter dated 31 October 2007 to the respondent for the attention of Mr Howells at its Adelaide office on the evening of 31 October 2007. The letter recorded the following: 1. That the parties had agreed on 30 October 2007 that the ABB Basis Contracts would not be converted to Gro-Logic contracts. 2. That the applicant was asserting that the failure to meet the obligation to offer a varietal wheat basis component was a fundamental breach of the contractual terms. 3. That the applicant terminated "immediately" the "relevant wheat Basis Contracts held". 174 The letter states that Ms Helen Rooney was "formalising" the telephone conversation on 30 October 2007. 175 Ms Helen Rooney attached to the letter a copy of the comparison table which she said she had prepared prior to 31 October 2007. 176 For reasons which are unclear, the letter dated 31 October 2007 and attachment did not come to Mr Howells' attention before 15 November 2007. On that day, Mr Howells contacted Ms Helen Rooney by telephone and, according to Ms Helen Rooney, advised her that that was the last day to lock in the Basis Component for the contracts for the 2007/2008 season. In fact, that was the case under a Gro-Logic contract (for a December wheat position) but it was not the case under an ABB Basis Contract. Under an ABB Basis Contract the last day to lock in the Basis Component was 15 December 2007. 177 Mr Howells said he telephoned Ms Helen Rooney on 15 November 2007 because he wished to know whether she wanted to roll the December futures position to a March futures position in relation to the 2007/2008 contracts. 178 Ms Helen Rooney said that she told Mr Howells that she was surprised to hear from him having regard to their telephone conversation on 30 October 2007. She said that the applicant did not have any Gro-Logic contracts with the respondent. She said that as the respondent had not quoted and published an APW wheat basis component, the applicant had terminated the contracts for the 2007/2008 season. There was a discussion about the respective understandings of the parties at the end of the telephone conversation on 30 October 2007. Mr Howells told Ms Helen Rooney that he had not received the letter dated 31 October 2007 and that he would contact the respondent's Adelaide office to obtain a copy of it. 179 Ms Helen Rooney said that approximately 15 minutes later Mr Howells again contacted her and advised her that the respondent's Adelaide office had not been able to locate the letter. Mr Howells asked Ms Helen Rooney to provide him with another copy of the letter. She said that she would do this, but that it would be difficult to obtain the copy as it had been sent to the farm. 180 Ms Helen Rooney sent another copy of the letter dated 31 October 2007 to Mr Howells by email on 4 December 2007. On the following day, Mr Howells sent an email to Ms Helen Rooney advising her that he had received the letter and that the respondent would be reviewing the applicant's correspondence and formulating a response. 181 There was a strong attack on Ms Helen Rooney's credit. It was suggested that she and Margaret Rooney were aware of the increase in market prices and were looking for a way to take advantage of that increase. I have no doubt that they were aware of the rise in market prices. They may well have had in their minds the fact that if they terminated the contracts then they could take advantage of the increase. At the same time, I have no doubt that Ms Helen Rooney considered that the respondent's action was high handed. I am satisfied that she believed that there were advantages to the applicant in the multi-variety wheat contract as compared to the multigrade bin wheat contract. 182 Counsel for the respondent submitted that Ms Helen Rooney's evidence was unsatisfactory in a number of respects. He identified the following: 1. Ms Helen Rooney must have known from the documents sent to her by her sister, Margaret, that the ninth contract was a multigrade bin wheat contract not a multi-variety wheat contract. 2. Mr Howells did not receive the letter dated 31 October 2007 until 4 December 2007, despite Ms Helen Rooney saying that she had sent the letter on 31 October 2007. 3. Ms Helen Rooney gave no satisfactory explanation as to why she did not send Mr Howells a copy of the letter dated 31 October 2007 between 15 November and 4 December 2007. 4. Ms Helen Rooney gave no satisfactory explanation as to why she was sending to her sister, Margaret on 4 December 2007, an abbreviated form of the comparison table said to have been attached to the letter sent on 31 October 2007. 5. Ms Helen Rooney did not explain why she did not mention in her letter dated 31 October 2007 Mr Howells' agreement to contact her on the morning of 31 October 2007. 183 The respondent also relied on evidence given by Ms Matthews. Ms Matthews is employed by the respondent in a position called administrator, operations - storage and handling. She was previously employed in the position of executive assistant in marketing. Part of her responsibility was the distribution of mail to members of the marketing team. She gave evidence of her practice and she said that as part of her practice in October 2007, mail for Mr Howells would have been collected by Ms Matthews and placed on his desk or keyboard in his office. It appears that Mr Howells was in Melbourne in 2007 and that he moved to Adelaide in 2008. 184 I had ample opportunity to observe Ms Helen Rooney in the witness box. I formed the opinion that she was telling the truth and I accept her account of the two telephone conversations. I have considered her explanation as to the matters set out above where she was able to give an explanation and nothing she said causes me to doubt the reliability of her evidence. She said in evidence that she had decided to terminate the contracts on 30 October 2007. She was angry on that day. She was confronted with an assertion that the contracts were Gro-Logic contracts and that a delivery declaration was required by the next day. She was persuaded to hold her hand until the following day. When Mr Howells did not contact her the following day, she carried out her original plan. There is no reason why she would not then and there send a letter to the respondent and I find that she did so. Her subsequent conduct on 15 November 2007 in referring to the letter and the fact that the applicant had terminated the contracts (accepted by Mr Howells) is consistent with her having done so. 185 I find that where his account differs from Ms Helen Rooney, Mr Howells was mistaken in his recollection of the telephone conversation on 30 October 2007. Perhaps there was a reference to formalising the conversation and Mr Howells assumed that he need take no action until that was done. Perhaps he did not see the need to contact Ms Helen Rooney as particularly urgent. 186 A party is entitled to bring a contract to an end where the other party repudiates the contract. The act of repudiation may involve a renunciation, that is to say, conduct by a party which would 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 under it. The act of repudiation may involve any breach of the contract which justifies termination of the contract. The type of breach of contract which justifies termination of the contract is breach of an essential term, or a sufficiently serious breach of an intermediate or inominate term: Koompahtoo Local Aboriginal Land Council & Anor v Sanpine Pty Ltd & Anor (2007) 233 CLR 115 ("Koompahtoo") at 135 ([43] et seq) per Gleeson CJ, Gummow, Heydon and Crennan JJ. 187 In Koompahtoo their Honours cited the well-known passage from the reasons for judgment of Jordan CJ in Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR(NSW) 632 at 641-642 concerning the difference at common law between conditions and warranties. In determining whether a term is essential, it is "the common intention of the parties, expressed in the language of their contract, understood in the context of the relationship established by the contract and (in a case such as the present) the commercial purpose it served, that determines whether a term is 'essential', so that any breach will justify termination" (at 138 [48]). 188 Their Honours approved statements in Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 concerning the circumstances in which the breach of a non-essential term will be sufficiently serious to give rise to a right of termination. Such a term is one where some breaches of it will deprive the innocent party of substantially the whole benefit of the contract and other breaches will not. Breaches of an intermediate term that had the consequence that the other party is entitled to terminate have been described as breaches "going to the root of the contract" (Treitel, Remedies for Breach of Contract (1988) pp 350-351). 189 Their Honours made the point (at 140 [55]) that whether a breach goes to the root of a contract rests primarily upon a construction of the contract. One looks first to whether, as a matter of construction, the particular breach is such as to deprive the injured party of the substantial part of the benefit to which he is entitled under the contract and then to an assessment of the seriousness of the breach and the adequacy of damages as a remedy. 190 The applicant submits that the respondent's failure to quote and publish an APW multi-variety grade wheat cash bid and an APW multi-variety grade wheat basis component was a breach of an essential term of the contract, or, in the alternative, a sufficiently serious breach of an intermediate term or, when coupled with the respondent's failure to contact the applicant on 31 October 2007, a renunciation of the 2007/2008 contracts. 191 I do not think the term was an essential term of the contract. I say that because breaches of the term could vary widely in terms of their significance to the parties. For example, I cannot think that the parties intended that a right of termination would arise if the respondent failed, due to a computer malfunction or human error, to publish a multi-variety grade wheat cash bid and a multi-variety wheat cash component for say a single day in May 2007. 192 On the other hand, it seems to me that a breach of the term over a prolonged period and during a relevant part of the year would constitute a sufficiently serious breach of an intermediate term. Such a breach would go to the root of the contract because it would deprive the grower of the information necessary to lock in one of the components of the price. 193 The respondent contends that the breach in this case was not sufficiently serious because the applicant would not ordinarily consider locking in the basis component until mid to late November 2007. It is true that Margaret Rooney said that the applicant had decided that it would not lock in the Basis Component until mid to late November 2007 when the production volumes and final port zone were known. 194 However, all the circumstances must be considered. From late 2006 to 30 October 2007 the respondent had not published on its daily bid sheet a multi-variety cash bid or a multi-variety wheat basis component. That had a direct bearing on what was said in the February 2006 PDS to be one of the advantages of an ABB Basis Contract, namely, "the added flexibility [for the grower] of being able to lock in each of the individual components that make up the price". One of the advantages to the grower of having the information is that trends can be discerned and decisions previously made reversed. On 30 October 2007, the respondent was unable to say whether it could provide the relevant information. Mr Howells did not contact the applicant the following day. This was all taking place in a context where important dates were looming. The dates of 31 October 2007 and 15 November 2007 were important dates under a Gro-Logic contract and although it had been agreed that the applicant's contracts would not be converted to Gro-Logic contracts, that was only "formalised" by Ms Helen Rooney in her letter dated 31 October 2007. 195 I think the applicant had the right to terminate the 2007/2008 contracts on 31 October 2007 and that it lawfully exercised that right. 196 In the alternative, I think that there was a sufficiently serious breach of the term by 15 November 2007. The respondent had taken no action to publish a multi-variety cash bid and a multi-variety wheat basis component on its daily bid sheet between 30 October 2007 and 15 November 2007, nor had it communicated with the applicant in any way. I think that what Ms Helen Rooney said to Mr Howells on 15 November 2007 was sufficient to convey to him that if the applicant had not previously terminated the contracts, it was then doing so. 197 The respondent submitted that the applicant did not have a right to terminate the contracts on 15 November 2007 because, on the applicant's own case, it was not ready, willing and able to perform the contracts on that date. I reject that submission. The applicant is not claiming damages, but only that it terminated the contracts. In circumstances where a party seeks to do no more than terminate for a serious breach of an intermediate term, I do not think that it is precluded from doing so on the ground that a purported earlier termination for breach of the intermediate term was not, at the time of the purported termination, sufficiently serious: Foran v Wight (1989) 168 CLR 385 at 437-438 per Deane J; Sharjade Pty Ltd v Commonwealth [2009] NSWCA 373 at [54], [57], [59], [64-65] and [68-69] per Hodgson JA (see also "Terminating a Contract: Dispensing with the requirement of readiness and willingness", by Mr Andrew Beech, (1995) 5 Journal of Contract Law 47). 198 I find that the applicant lawfully terminated the 2007/2008 contracts by letter dated 31 October 2007. In the alternative, Ms Helen Rooney lawfully terminated those contracts during her telephone conversation with Mr Howells on 15 November 2007. It is not necessary for me to deal with two other arguments advanced by the applicant. The applicant argued in the alternative that by words and conduct the respondent had renunciated the contracts or, in the further alternative, that even if it had no right to terminate the contracts, nevertheless the respondent could not recover damages from it because the respondent was not ready, willing and able to perform its obligations under the contracts.

The 2008/2009 contracts 199 Although the applicant's letter dated 31 October 2007 was not entirely clear as to whether the applicant was purporting to terminate not only the 2007/2008 contracts but also the 2008/2009 contracts, both parties proceeded on the basis that there was then no right to do so and thereafter proceeded on the basis that those contracts were still on foot. 200 The position with respect to the 2008/2009 contracts did not occupy much time at the trial. That was probably because the damages claimed by the respondent were claimed on the basis of what the respondent called the "futures reversal" approach and not the "replacement" approach and totalled $8,671.36. 201 The applicant's case was that it was entitled to terminate the contracts on 31 October 2008 because: 1. At no time did the respondent publish a multi-variety price on its daily bid sheet; and 2. On 20 October 2008, the respondent sent to the applicant the brochure containing the statements set out in [160] above. 202 The respondent's case is that any breach by it was not sufficient to warrant termination, bearing in mind the following: 1. The respondent had demonstrated in January 2008 that it was able to offer multi-varietal basis prices irrespective of whether it appeared on the bid sheet. 2. Ultimately the respondent made clear its position that it would perform the 2008/2009 contracts according to their terms. 3. Despite repeated invitations, the applicant never took up the respondent's invitation to offer multi-varietal prices, nor did it take up the respondent's invitation to be given further information about the way in which they could be calculated. 4. According to the applicant's own evidence, it would not have been looking to lock in a Basis Component before 31 October 2008. 203 In my opinion, the applicant was entitled to terminate the 2008/2009 contracts on 31 October 2008. It was clear by that time that the respondent was not going to publish a multi-variety wheat cash bid and multi-variety wheat basis component on its daily bid sheet.

The ninth contract 204 The applicant did not have the right to terminate the ninth contract at any time and its purported terminations of that contract in October and November 2007 were ineffective.

The 2007/2008 contracts and 2008/2009 contracts 205 The 2007/2008 contracts and 2008/2009 contracts were lawfully terminated by the applicant and the respondent has no right to claim damages with respect to them.

The ninth contract 206 The respondent does have a right to claim damages with respect to the ninth contract. 207 Part 24.8 of the February 2006 PDS dealt with the damages which could be recovered by the buyer in the event of default or inability to perform by the seller. There are two possibilities. 208 The general rule is contained in Part 24.8.2 and it is the usual rule for the measure of damages recoverable by a buyer of goods against a seller who fails to deliver. 209 The alternative measure of the buyer's damages under the February 2006 PDS arises if the buyer is satisfied that the seller has provided sufficient proof of an inability to perform on the contract or can confirm that circumstances have changed significantly such that the seller is unable to produce or deliver the agreed tonnage commitment. Under the alternative measure the wash-out of the contract involves a financial settlement. The amount depends on the extent to which the components of the price have been locked in. If priced, Part 24.8.5 applies (at [66]). If the contract remains unpriced or partly unpriced, Part 24.8.6 applies. 210 On the face of it, the alternative measure does not apply here as the applicant produced wheat which it sold under other contracts. The applicant failed to deliver to the respondent the quantity of wheat specified in the ninth contract. That was a breach of contract. The respondent is entitled to damages for that breach. I think it appropriate to award damages on the replacement value approach rather than a reversal of futures approach. The applicant did not request a wash out of the ninth contract and the applicant was not unable to deliver nor have any changed circumstances been identified. 211 On the applicant's case the replacement value approach results in damages of $112,510.68. I am satisfied that the respondent has proved an entitlement to damages in that amount.

Declarations of Contraventions of the Corporations Act 212 The applicant seeks a declaration that the respondent has contravened s 1017B of the Corporations Act and a declaration that the respondent has contravened s 912A(1)(c) of that Act. As I have said, the applicant alleges that the financial services law which has been contravened by the respondent for the purposes of s 912A(1)(c) is s 1017B of the Corporations Act. I would not make two declarations in relation to the one act or series of acts and in those circumstances I can confine my consideration to s 1017B of the Corporations Act. 213 The applicant's claim in its Amended Application is a claim for a declaration that the respondent has contravened the provisions of s 1017B of the Corporations Act. Even if I was otherwise disposed to make a declaration, I would not make a declaration in those bare terms. Any declaration should contain the gist of the factual matters giving rise to the contravention (Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53) at 91 [89], [90] per Gummow, Hayne and Heydon JJ). 214 The Amended Application refers to the grounds stated in the Amended Statement of Claim. In that document it is alleged by the applicant that there are three matters, and that each of them gives rise to a contravention of s 1017B of the Corporations Act. 215 First, the applicant alleges that the respondent decided that it would no longer offer or support ABB Basis Contracts providing for an APW multi-variety grade wheat basis component and that it failed to disclose or disclose adequately the fact that growers, including the applicant, could not lock in a wheat basis component that referenced an APW multi-variety grade wheat cash bid. Particulars are provided of this plea and they are in the alternative. First, it is alleged that subsequent to the issue of the February 2006 PDS and the November 2006 PDS, the respondent determined that it would no longer offer or support ABB Basis Contracts providing for an APW multi-variety wheat basis component and, accordingly, as a consequence, the respondent would no longer quote and publish an APW multigrade wheat basis component. The respondent did not quote an APW multi-variety grade wheat basis component throughout the 2007/2008 and 2008/2009 delivery seasons. Secondly, and in the alternative, it is alleged that subsequent to the issue of the February 2006 PDS and prior to the issue of the November 2006 PDS, the respondent decided that for the 2007/2008 delivery season, it would not quote and publish an APW multi-variety grade wheat basis component and subsequent to the issue of the February 2006 and the November 2006 PDS, the respondent decided that for the 2007/2008 delivery season, it would no longer quote and publish an APW multi-variety grade wheat cash bid, and hence it would no longer offer multi-variety grade wheat contracts. 216 Secondly, the applicant alleges that the respondent failed to disclose or disclose adequately the rollover process and the associated risks and that that constituted a contravention of s 1017B of the Act. The rollover process is described as the process of the closing out of the CBOT December wheat futures that were locked in by the respondent and the subsequent replacement of those futures with the CBOT March wheat futures for the season of delivery. The applicant alleges that there was a failure to disclose the rollover process in the February 2006 PDS and the risks, including the risk of financial loss, associated with the rollover process. 217 Thirdly, the applicant alleges that the respondent failed to disclose or disclose adequately the definitions of multigrade contracts for wheat and fixed grade contracts for wheat. The applicant alleges that the respondent failed to disclose or disclose adequately in the December 2006 PDS whether references to the term "multigrade contract for wheat" were references to multi-variety grade contracts for wheat or multigrade bin contracts for wheat, to disclose the payment terms to apply to multi-grade contracts for wheat, namely, varietal grade or bin grade payment terms and to disclose the wheat grades applicable to fixed grade contracts for wheat. 218 The changes and events which had to be disclosed by the respondent to holders of ABB Basis Contracts by virtue of s 1017B of the Corporations Act are as follows: (1A) The changes and events that must be notified are: (a) Any material change to a matter, or significant event that affects a matter, being a matter that would have been required to be specified in a Product Disclosure Statement for the financial product prepared on the day before the change or event occurs; and (b) Any other change, event or other matter of a kind specified in regulations made for the purpose of this paragraph. 219 The applicant alleges that each of the three matters identified above are material changes or significant events within s 1017B(1A)(a). 220 I note that the applicant alleges that the second matter should have been disclosed in the February 2006 PDS, and that the third matter should have been disclosed in the November 2006 PDS. I record the fact that it was not suggested that in those circumstances s 1017B had not been contravened because that section is concerned with ongoing disclosure and not a failure to disclose in the first place. 221 As a general proposition, a statutory power to grant a declaration is given a broad construction. A number of factors which might appear to be limits on the power, are in fact, discretionary considerations: J N Taylor Holdings Ltd v Bond (1993) 59 SASR 432 at 435-437 per King CJ (with whom Prior and Perry JJ agreed). 222 This Court has a statutory power to make declarations of right in relation to matters in which it has original jurisdiction: Federal Court of Australia Act 1976 (Cth) s 21. The word "Court", when used in the Corporations Act, includes this Court. 223 The respondent put a submission to the effect that the provisions of the Corporations Act excluded the power of a private citizen to obtain a declaration of a contravention of s 1017B. The submission was that the Corporations Act provided a range of remedies and that the specification of those remedies excluded the remedy of a declaration of a contravention of s 1017B at the suit of a private citizen. For present purposes, the remedies provided in the Corporations Act may be summarised in the following way. First, the Australian Securities and Investments Commission is able to take action to suspend or cancel an Australian financial services licence if the licensee has not complied with their obligations under s 912A (s 915C). Secondly, a private citizen can bring a civil action for an order to recover loss and damage or other orders (s 1022B and s 1022C) resulting from the failure to comply with certain provisions of Chapter 7. Thirdly, declarations of contravention may be obtained in relation to sections identified as "civil penalty provisions" in s 1317E and there is a standing requirement in s 1317J. Finally, a number of contraventions are made offences by reason of s 1311 and Schedule 3 and they include a contravention of s 1017B. 224 The respondent referred to this Court's decision in Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89. I would reserve determination of the submission to a case where it is necessary to the Court's decision. In this case, I have reached the firm conclusion that, as a matter of discretion, relief should not be granted. 225 The principal reason I would exercise the discretion to refuse declaratory relief is that, whatever the merits of the applicant's arguments, the applicant does not, in the circumstances, have a "real interest" in seeking a declaration and "the Court's declaration will produce no foreseeable consequences for the parties": Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582 per Mason CJ, Dawson, Toohey and Gaudron JJ. 226 As far as the applicant is concerned, none of the alleged contraventions are central to the matters upon which it has succeeded. Furthermore, in the case of each of the three matters, the applicant had a level of knowledge of the alleged change or event. That is a matter which is relevant to discretion. 227 First, it is the non-publication of the multi-variety price (I include in that expression the cash bid and the wheat basis component) which gave rise to the applicant's right to terminate the 2007/2008 contracts and the 2008/2009 contracts, not the fact that the respondent's decision not to publish the multi-variety price was not disclosed. In fact, the applicant had knowledge, or means of knowledge, by way of the daily bid sheets, that the multi-variety price was not being published from late 2006 onwards. 228 Secondly, the rollover process was not the cause of the contractual dispute between the parties. The process is relevant in relation to the 2007/2008 contracts and the 2008/2009 contracts. It is not relevant to the ninth contract because a March futures component was locked in at or about the time of that contract. The February 2006 PDS refers to a futures component for wheat being based on the CBOT wheat futures contract for March of the relevant season. It makes no reference to the rollover process. However, subject to one matter, the rollover process was explained in documents called "Market Alerts" sent by the respondent to growers in January and February 2006. Those market alerts described the rollover process. For example, in the Market Alert dated 27 January 2006 the following appears: As market liquidity improves over time, growers can buy back the initial December 07 hedge and sell March 08 at the same time. Any gain/loss in buying back December 07 is then added to your new sold position in March 08. This is called a "spread". 229 The one matter not disclosed in the Market Alerts was the final date for the rollover process which was about 15 November 2007. 230 There was some debate before me as to whether the rollover process was a term of the contracts. It is not clear to me how this issue is relevant to the applicant's contract claim because there was no reliance on the rollover process or any aspect related to it in terms of breach. At all events, I am satisfied that the rollover process was a term of the contract. I have reached that conclusion because of the telephone conversations at the time of the contracts and because the Purchase Contract incorporates the definitions of the three components in Section 7.1 of the 2006 PDS and in cl 18 entitled "Notes" it refers to the rollover process. 231 I am satisfied that Ms Margaret Rooney had a level of understanding of the rollover process in May 2006. I have reached that conclusion having regard to her conversation with Ms Standen on 15 May 2006. I am satisfied that Ms Helen Rooney had a good understanding of the rollover process in October 2007. I have reached that conclusion having regard to emails which passed between her and her sister at that time. 232 Thirdly, I am satisfied that those in the industry including growers understood that a reference to multigrade based on APW1 was a reference to a multigrade bin contract. It may be, as Messrs Martin and Howells explained, that a mere reference to multigrade will lead to that conclusion. Mr Howells said that the terms "multigrade", "bin grade", "multigrade bin" were all used interchangeably. For present purposes, it is sufficient for me to find that a reference to multigrade based on APW1 will indicate a multigrade bin contract. I have considered the provisions of the November 2006 PDS and I think there was sufficient disclosure of the nature of a multigrade contract having regard to the reference to a base of APW 1. I also find that there is sufficient disclosure of the features of a fixed grade contract particularly having regard to Section 13.5 of the November 2006 PDS. 233 I find that Ms Margaret Rooney understood the differences between a multigrade contract and a multi-variety contract. That is plain from her affidavit and her telephone conversation with Ms Jenkins. I am also satisfied that Ms Helen Rooney understood the features of a multigrade contract based on APW1. 234 There is nothing to suggest that a declaration will be of use to the applicant in the future. 235 There is nothing to suggest that any wider public interest will be served by the making of a declaration. As I understand it, the ABB Basis Contract has been overtaken by the Gro-Logic Contract and the Gro-Logic PDS. There is evidence of other growers who had ABB Basis Contracts with the respondent but there is no evidence of growers with similar disputes with the respondent. There is no difficult point of law involved where a declaration might be of assistance to the public or a section of the public. 236 In addition to these matters (including the scheme of remedies provided by the Corporations Act), there is the fact that a contravention of s 1017B is a criminal offence. That is a reason to be cautious about granting of declaratory relief: Corporate Affairs Commission of New South Wales v Transphere Pty Ltd (1988) 15 NSWLR 596; ASIC v Intertax Holdings Pty Ltd [2006] QSC 276; ASIC v Warrenmang Ltd (2007) 63 ACSR 623. 237 I refuse the applicant's claim for declaratory relief.

The Applicant's Application to Amend and other pleading points 238 The applicant applied to amend its Application on the first day of trial. The proposed amendment was to add claims for declarations that, in addition to contravening s 1017B and s 912A(1) of the Corporations Act, the respondent has contravened each of ss 1012B, 1013D, 1013E and 1014A of the Corporations Act. 239 A brief summary of the facts alleged by the applicant to support the contraventions is as follows: 1. If the ninth contract was, as the respondent alleged, a contract for multigrade bin wheat, then there was no PDS for this particular type of financial product, and s 1012B of the Corporations Act was contravened by the respondent. 2. As far as the 2007/2008 contracts and 2008/2009 contracts were concerned, there was in the PDS current as at February 2006, no disclosure of the rollover of the futures component from December 2007 to March 2008, and, in those circumstances, there was a contravention by the respondent of each of ss 1013D, 1013E and 1014A of the Corporations Act. 3. As far as the ninth contract was concerned, there was a contravention by the respondent of each of the same sections by reason of the fact that there was no disclosure of the definitions of multigrade contracts for wheat and fixed-grade contracts for wheat in the PDS current as at November 2006. 240 I refused the applicant's application to amend to add these claims. In doing so, I had regard to the principles which are relevant to applications to amend pleadings shortly before trial, and, in particular, to the decision of the High Court in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 17. 241 It seemed to me that the application to amend should be refused for a number of reasons. First, the application was made on the first day of trial and there was no explanation for it being made so late in the course of the proceeding. It could not be inferred that the applicant had only just considered relief under the Corporations Act. Such an inference was clearly negated by the relief claimed in the existing Application (which was in fact an amended Application) and by the original Application, that is to say, the application at the time the proceeding was commenced. The original Application sought relief under a number of sections in the Corporations Act, including s 1022B (Civil Action for Loss or Damage) and s 1022C (Additional Powers of Courts to Make Orders). 242 Secondly, the pleadings supporting the proposed claims were in the applicant's Amended Reply. If the claims were to be made, the pleadings supporting them should have been in the Statement of Claim not the Reply. If I allowed the amendments to the Application, the pleadings would also have to have been amended. It would have been very late in the day to be doing that. 243 Thirdly, the prejudice to the applicant in not allowing the amendments was not substantial. It still had its contract case against the respondent and its case of contraventions of two sections of the Corporations Act. I did not understand counsel for the applicant to suggest that, should the amendment be allowed and the declarations ultimately made, any particular benefit would flow to the applicant. In the circumstances, I did not need to consider at that stage, the respondent's argument that the applicant did not have standing to seek a declaration of a contravention of the sections of the Corporations Act which the applicant identified. 244 It followed from my refusal of the application to amend, that paragraph 6.1.4 and 20.5 of the Amended Reply filed and served shortly before trial should, as sought by the respondent in the Notice of Motion filed on the first day of trial, be struck out pursuant to O 11 r 16 of the Federal Court Rules and I made such an order. I declined to strike out paragraph 6.1.3 of the Amended Reply as it seemed to me to be relevant to existing claims for relief. 245 The respondent's Notice of Motion also sought an order striking out the claims in the Application for declarations that the respondent had contravened s 1017B and s 912A(1) of the Corporations Act. Those claims have been in the Application since it was amended on 9 April 2009 and it seemed to me that an application to strike them out on the first day of what was estimated to be a five-day trial should not be entertained without very good reason. The arguments the respondent wished to put in support of its application could be put as part of the trial. 246 The respondent also sought an order striking out an allegation in the Amended Defence to Cross-Claim (paragraph 18.2) to the effect that the respondent's claim for liquidated damages was a penalty. After some submissions on the issue, counsel for the applicant indicated that he did not pursue that plea.

Conclusion 247 In my opinion, the 2007/2008 contracts and 2008/2009 contracts were lawfully terminated by the applicant. The respondent's cross-claim with respect to those contracts must be dismissed. 248 The applicant acted in breach of the ninth contract and must pay damages to the respondent which I assess in the sum of $112,510.68. 249 I dismiss the applicant's application for declarations of contraventions of s 912A(1)(c) and s 1017B respectively. 250 I will hear the parties as to the orders necessary to give effect to these conclusions, costs and any other orders. I certify that the preceding two hundred and fifty (250) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.