TMA Australia Pty Limited v 100% Bottling Company Pty Ltd

JUDGMENT

1. BELL CJ: I agree with Basten AJA.
2. LEEMING JA: I agree with Basten AJA.
3. BASTEN AJA: The appellant, TMA Australia Pty Ltd, is a commercial printer. The respondent, 100% Bottling Company Pty Ltd, is, as its name suggests, a commercial bottling company. Both had relationships with Metcash Ltd, which supplied IGA supermarkets.
4. In 2015, the appellant and the respondent explored a possible agreement by which the appellant would take over printing labels, in particular in relation to Black & Gold cooking oil, which was a house brand used by Metcash. In about December 2015, the appellant printed 1,000,000 back and front self-adhesive labels for Black & Gold cooking oil.
5. The print run greatly exceeded the purchase orders provided by the respondent over the following three years. A dispute arose as to whether the respondent was obliged to pay for the whole of the print run within a reasonable time and no later than 31 July 2018. As the case was run at trial in the District Court, the appellant's entitlement to payment depended upon an exchange of emails between the parties on the evening of 23 November 2015, which included a direction by the respondent to the appellant to undertake the print run forthwith.
6. The respondent disputed the email exchange, alleging, in effect, that the documents produced by the appellant were fabricated. The trial judge (Newlinds DCJ) was not satisfied that the emails were authentic and dismissed the proceedings. [1] The appellant appealed from that decision, challenging the critical finding of fact as to non-satisfaction that the email exchange was genuine. For the reasons set out below, the appeal fails and must be dismissed with costs.

Case summary

1. Although there were 15 grounds identified in the notice of appeal, neither the written submissions for the appellant, nor the oral argument followed the grounds with any degree of precision: accordingly, it is more helpful to summarise the submissions. However, before identifying those issues, it is convenient to identify the case run at the trial.
2. First, the appellant had called at trial as its principal witness John Mouawad, who was identified in documents of the appellant during 2015 as its "corporate account manager". Mr Mouawad gave evidence of (i) negotiations between the appellant and the respondent over the printing of labels for Metcash products; (ii) the receipt of the disputed email placing the order on 23 November 2015; and (iii) the appellant's business practices as to the placement and execution of orders and the keeping of records. However, the trial judge found Mr Mouawad to be an unreliable witness. On the appeal, the appellant largely limited its reliance upon Mr Mouawad to his description of business practices of the appellant, but otherwise submitted that, to the extent that he was unreliable, that was a neutral factor in assessing whether the disputed emails were genuine.
3. So far as the appellant's business practices were concerned, the appellant also relied upon the evidence of its IT manager, Kevin John Walsh, who said that (i) the appellant had an "estimating department" that was responsible for pricing orders placed by a customer; (ii) the execution of an order would only be undertaken after the system had received a "confirmation" from the customer as to the notified price, and specifying the required number of labels and (iii) the "customer service department" was then responsible for processing the order, in this case by printing the labels. This evidence was relied upon to distance Mr Mouawad from the decision-making process and the responsibility to order a production run.
4. A second factor relied upon by the appellant at trial, to which significant weight was given on the appeal, was the principle identified as "commerciality". This was said to support an inference that the emails were genuine, because without them there was no confirmation by the respondent of the price. The appellant submitted that the trial judge erred in treating the evidence of commerciality as neutral; rather, the appellant submitted, it provided significant weight to its case.
5. On the other hand, the respondent also challenged the finding that the evidence of commerciality was neutral. It referred to the evidence of its commercial director, David Crewdson, and its operations manager, Christian Shaw, that the respondent never ordered print runs for more than three months in advance and that the order supposedly placed for 1 million labels was many times the practical limit it imposed on its orders for supplies. It submitted that the judge's acceptance of this evidence demonstrated the uncommerciality of the appellant's claim, but the relevant inference in its favour was wrongly discounted by the finding that the evidence was neutral.
6. The third feature of the judge's reasoning and the appellant's challenge to it is less easy to encapsulate. It concerned the "objective evidence" and the inferences to be drawn from it, as opposed to the testimony of the parties' respective witnesses. That evidence included the fact that neither party had any electronic record of the emails. While the appellant was able to offer possible reasons why the documents did not appear on its systems, there was no similar evidence to explain the absence of the documents from the respondent's systems. The respondent submitted that the emails themselves contained indicia of later fabrication. Further, the late discovery of the disputed emails carried with it an inference that they had been fabricated to fill a gap in the appellant's case. These, and related issues, will need to be addressed in due course.
7. In oral argument, senior counsel for the appellant focused upon (i) the negotiations between the parties prior to 23 November 2015 and (ii) the subsequent relationship of the parties. The primary purpose of the first exercise was to demonstrate the absence of any basis for the appellant's customer service department to commence a print run, absent the confirmation provided by the disputed emails. In fact, there was little relevant material predating 23 November 2015, other than the evidence of business practices.
8. The pre-November 2015 evidence was relied on by the appellant to support two inferences. The first was that the customer service department would not undertake a print run without an express and precise confirmation from the customer. The second was that Mr Mouawad had no authority to direct the customer service department to undertake a print run absent appropriate written confirmation from the customer. Indeed, it was not Mr Mouawad's direction, but the document itself which would provide the basis for processing the order. However, that evidence did little more than establish that without the disputed emails there was no confirmation from the respondent. That was indeed the respondent's own position. The genuineness of the disputed emails was an essential element of the appellant's case.
9. Nevertheless, there was no doubt that the appellant's case at trial depended to a significant extent on the evidence of Mr Mouawad, who prepared three affidavits which were read by the appellant. Yet Mr Mouawad was not merely broadly discredited, but made important concessions in the course of his cross-examination. One such concession was that, contrary to his sworn affidavit evidence, it was not he who found the disputed emails in the appellant's records, but someone from the customer service department. The appellant sought to wave that concession away, but it was not without consequences. In the result there was no evidence before the Court from the person(s) who located the disputed emails in the appellant's records.
10. Before turning to the detail, it is convenient to identify the high point of the appellant's case. It was that the pricing quoted by the appellant for the print work in question was based on a high volume, namely 1,000,000 labels for the front and back of the Black & Gold cooking oil bottles. The respondent knew that. The respondent also appreciated that costs (and therefore prices) depended on volume. From that it was to be inferred, the appellant submitted, that in accepting the appellant's pricing, the respondent was accepting the volume to be printed.

Events preceding the disputed emails

1. Counsel for the appellant sought to commence with an email from Mr Crewdson to Mr Mouawad of 9 February 2015 in which Mr Crewdson identified certain "self-adhesive labels" saying "assume 1,000,000 orders". [2] However, counsel for the respondent pointed out, correctly, that these were not the labels the subject of the dispute. [3]
2. On 28 April 2015, Mr Mouawad sent Mr Crewdson a spreadsheet setting out a large number of items, including the Black & Gold oil labels, which was the same spreadsheet noted above, which contained the pricing based on an estimated quantity of 1,000,000 labels.
3. On 9 June 2015, Mr Mouawad sent Mr Crewdson an email headed "Pricing Matrix" which contained a number of columns for the various items. Four of the items were the specified Black & Gold oil labels: in the column headed "Estimated qtys" the figure against each was 1,000,000; in a further column headed "annual volume" figures ranging from 125,000 to 250,000 were included; prices were then included for each item, treating a front and back label as a "set", the prices being based upon the estimated quantity, rather than the annual volume.
4. By the end of July, discussions were continuing. On 31 July 2015 Mr Crewdson wrote to Mr Mouawad confirming that the respondent was committed to transferring "Metcash related labels to TMA" on conditions, including one that "TMA are price competitive with the market and can beat our existing prices". The appellant relied on this email, however, for a reference by Mr Crewdson to the transition occurring "once the incumbent exhausts its stock holdings", which indicated that Mr Crewdson was at least aware of an industry practice of printing more than necessary to meet existing orders, so that the printer held stock from which it met purchase orders made from time to time. The inference should be accepted, but it says nothing as to where the risk of excess stock lay.
5. On 8 September, Mr Crewdson emailed Mr Mouawad querying whether TMA's prices, which were compared with existing prices for a number of Black & Gold items and expressed as a dollar figure "per thousand", were per set or per label (a set being back and front labels). In cross-examination, Mr Crewdson agreed that he had met with Mr Mouawad at sometime between mid-2015 and 23 November 2015 and agreed the prices. [4] He also agreed there was no record of the conversation. [5]
6. This was in substance where the parties' recorded negotiations remained up until Mr Shaw's last undisputed email of 23 November 2015. On Monday, 23 November 2015 at 7:19pm, Mr Shaw emailed Mr Mouawad in substance to the following effect: "Hi John, I have reviewed hard copy proofs which arrived today for all Black & Gold Oil Labels - all are approved with the below mentioned copy positions. … I do require delivery of these labels yesterday with the emphasis on the 2ltr and 1ltr Canola and Vegetable. I would provide you a PO [purchase order] number now however you are not currently set up as a vendor in our system. This will be rectified tomorrow and a PO number will be sent immediately for the following quantities: 50,000 sets (fronts and backs combined) of the following: - 1ltr Black & Gold Vegetable - 1ltr Black & Gold Canola - 2ltr Black & Gold Vegetable - 2ltr Black & Gold Canola Can you please also advise ASAP pricing for all of the above items with price breaks 50k, 100k, 150k, and 200k+ Can you please also advise, as discussed this morning, what you can possibly achieve regarding the 600mlx 12 Crystal Peak shrink film. Please also send electronic copies of all labels you have provided me with hard copy proofs. Thanks Christian Shaw 100% Bottling Company."
7. The reference to needing the labels "yesterday" was clearly intended to express the urgency of the task. However, Mr Crewdson stated in the course of his cross-examination that the urgency lay in obtaining agreement from the appellant and that Mr Shaw "could have sourced them elsewhere". [6] With respect to the question of pricing in Mr Shaw's email of 23 November at 7:19pm, Mr Crewdson said that Mr Shaw had not been party to his agreement on prices with Mr Mouawad, that Mr Shaw expected that pricing would depend on volume and that there had not been a reply to Mr Shaw's email. [7]
8. Before leaving the spreadsheet, it is convenient to note two points made by the respondent. First, Mr Crewdson said that the respondent had produced for the appellant a spreadsheet showing actual annual volumes based on historical usage: he was not the source of the estimated quantities column. Secondly, Mr Crewdson said that he was interested in the price but had no interest in the estimated quantities column. [8] He denied being aware that the prices were calculated on a volume of 1,000,000 labels. [9]
9. The appellant sought to rely on the fact that its print run in late 2015 vastly exceeded annual usage. Mr Crewdson had agreed that the respondent itself would not usually produce stock more than three months in advance of orders, and that it would be "very unusual for a label supplier to produce more than three months' stock in advance". [10] He also accepted that it would be "extraordinarily unlikely for a label supplier to produce eight years' worth of stock unless they were told to do so" and that it would be "unheard of". [11] The inference the appellant sought to draw was that Mr Mouawad must have been given such a direction. That, however, raised a separate question as to why Mr Shaw would have given such a direction, a point which will be addressed shortly.

The disputed emails

1. Returning to the email chain, the first of the disputed emails was formulated as a response to the questions raised by Mr Shaw in his email of 23 November at 7:19pm. The email from Mr Mouawad with a date line and time of the same evening at 7:22:01pm AEDT, read: "Christian the prices we already provided are based on full production of 1 million front and back labels of each kind I can't give you pricing on lower quantities of 50k, 100k, 150k and 200k. I have booked this job on a press already to help you out I really need an approval to go ahead and get this done. If you want to order less the price has to go up and I have to requote you. Let me know if you want to go ahead with 1 million fronts and backs of each label. Regards John Mouawad Business Development Manager"
2. The respondent submitted that the reference to Mr Mouawad's position was significant, observing that all the other emails from Mr Mouawad in 2015 gave his position as "Corporate Account Manager"; it was not until two years later that he adopted in emails the title "Business Development Manager".
3. The responding email bearing the date and time "at 7:27:11pm AEDT", over Mr Shaw's name, read as follows: "Hi John, I need them urgently go ahead with full production below I will have to send you a separate PO for each delivery though when we need them."
4. This response may be compared with the email at 7:19pm where Mr Shaw referred to 50,000 sets of four labels. The appellant treated the reference to "them" in the disputed email just eight minutes later as referring to all Black & Gold oil labels. It may also be noted that both emails contained missing punctuation, a feature of Mr Mouawad's genuine emails, but not those from Mr Shaw.
5. Mr Mouawad's evidence concerning the disputed emails will be addressed below; it is convenient at this stage to return to the issue noted above, namely why Mr Shaw would authorise an "unheard of" print runoff up to eight years' supply.
6. Mr Shaw gave evidence that his role with the respondent in 2015 was to manage operations, commercial decisions being made by Mr Crewdson or Mr Will Vautin, the respondent's managing director. With respect to the disputed email of 23 November, he stated: [12] "I did not send the email … . In 100% Bottling's usual course of business, 2 million labels was an extremely large order that would have taken up to two years to use up. I would never have placed such a large order because doing so made no commercial sense and was completely contrary to my usual business practice."
7. In addition, he gave a number of reasons why he would not have placed such an order, including that (i) there was no corresponding commitment from Metcash; (ii) client requests for changes in artwork at short notice were common, including changes required by legislation or regulatory changes; (iii) the plant dedicated to oil bottling had a limited capacity and would have taken up to two years to consume 2,000,000 oil labels; (iv) such a large order would have required approval from Mr Crewdson or Mr Vautin; (v) each of his emails other than the disputed email was copied to Mr Crewdson and Mr Vautin; and (vi) "[t]he risk of being late for a Metcash client deadline was still significantly lower than the financial risk of committing to over forty times the volume and price of oil labels that 100% Bottling could usually manage per [purchase order]". [13]
8. The cross-examination of Mr Shaw, apart from formally putting to him that the email directing "full production of one million of each of the labels" was genuine and sent by him, did not engage with his evidence as to why he might not have sent such an email, beyond suggesting that he had no actual recollection and his evidence was based on "business practice". The trial judge pressed him on that point asking whether he had a "positive recollection of the emails not being sent", to which he replied, "I have a positive recollection that I never sent these emails". [14] Shortly thereafter, he explained to the cross-examiner that "its hard to remember something that didn't happen". [15] However, he explained that his belief that he did not send the disputed email was because he had a number of conversations with Mr Mouawad in which Mr Mouawad was asking him to confirm that he had placed an order for a million of each of those labels. In his affidavit, Mr Shaw had given evidence of discussions with Mr Mouawad in "about late 2017 or early 2018" in the course of which Mr Mouawad asked him to "find that email you sent me asking us to do it" and to "just say you ordered those labels", to which he had responded that "I never asked you to make all those labels" and "I didn't order them and I can't lie for you". [16] He was not directly challenged as to the content of those conversations in the course of his cross-examination.
9. The indirect basis for challenging Mr Shaw's evidence was that, as from January 2016, he was aware of the large number of labels which the appellant had printed. He agreed that he was so aware. [17] He agreed that he "never put in writing to Mr Mouawad between January 2016 and March 2017 that [he] had not placed an order of one million of each these labels". [18] It was then suggested to him that he had not responded at that time, other than by continuing to issue purchase orders for smaller numbers, because he had not been surprised that the appellant had printed such a large number of labels. He initially stated that he had been surprised, [19] but later prevaricated. It was then put to him that he was not surprised "because you directed them to print one million of each label?", a suggestion he denied. [20]

Evidence concerning disputed emails

1. The evidence supporting the authenticity of the two disputed emails was as follows: 1. Mr Mouawad's testimony that he recalled sending and receiving the emails, respectively; 2. the documentary record, being the hardcopy of the emails, which Mr Mouawad stated were found in a "job bag" created when customer service department had finished the print runs. This evidence was supported by evidence given by both Mr Mouawad and Mr Walsh for the appellant as to the practices of the appellant.
2. The evidence casting doubt on the authenticity of the emails was as follows: 1. the absence of any electronic record of either email on systems operated by or on behalf of either the appellant or the respondent; 2. the evidence of Mr Shaw that he had no recollection of sending the email and that such an email would be inconsistent with the business practices of the respondent; 3. the belated "discovery" of the emails; and 4. physical features of the email inconsistent with undisputed emails from the same period.
3. To address these issues requires a summary of the events after 7:27pm 23 November 2015.

Events following the disputed emails

1. There were three further emails sent on the evening of 23 November 2015. The first was from Mr Shaw at 7:41pm, addressed to Mr Mouawad and copied to Mr Crewdson and Mr Vautin, amongst others in the respondent's office, which simply read: "Hi Johnny, Can you please forward through TMA's credit application so we can set up our account? Thanks"
2. At 7:42pm, Mr Mouawad responded: "I will call you first thing tomorrow morning". At 9:38pm Mr Mouawad sent a further email stating: "I will send the forms to you first thing tomorrow Morning". There was no thank you, nor any reference to the major order allegedly just placed. There was never any inquiry from Mr Mouawad as to when delivery would be required for part at least of this urgent order. Mr Shaw never sent an email to Mr Crewdson reporting on the step he had taken on the company's behalf, apparently to avoid paying a higher price, which may or may not have exceeded the prices paid to the existing supplier of labels.
3. Each of the further emails from Mr Mouawad identified him as "Corporate Account Manager". As did many emails to the respondent in 2016.
4. As noted above, on 22 January 2016, Mr Mouawad sent Mr Shaw a "stock count for Black & Gold oil labels" indicating that for eight items, stock in excess of one million or two million labels was in hand. For only two items, "sent goods" (indicating deliveries to the respondent) amounted to 40,000 labels in each case. On 27 January 2016, Mr Shaw provided a purchase order for two sets of 50,000 labels each.
5. On 21 March 2016, there was an email from Mr Mouawad to Mr Crewdson in relation to a trial print run for a separate order, relating to labels for Crystal Peak water bottles. Mr Mouawad attached a spreadsheet and artwork and stated, "I need all these confirmed". It appears that, being new business, Mr Mouawad was dealing with Mr Crewdson, not Mr Shaw.
6. By May 2016, Dominique Sindoni had joined Mr Mouawad as the officer of the appellant described as "Corporate Account Manager". Mr Mouawad continued to use that designation: in April 2017, Mr Mouawad used "Corporate Account Manager"; in an email of November 2017, Mr Mouawad was described as "Business Development Manager", a title he continued to use thereafter.
7. On 31 August 2016, Mr Mouawad sent a "stock on hand report" to Paul Heagney at 100% Bottling. The stock on hand with respect to each set of labels remained in the order of 1.6-2 million labels and for two front labels only, a little below one million. At that time the respondent was transferring this part of its operations from Melbourne to Rutherford, New South Wales. Mr Heagney responded: "I'm a little surprised with the size of the label holdings, are these placed against a PO already or made against a supplied forecast??" No response appeared in the evidence, but this was the first time a query was raised by an officer of the respondent as to the volume of stock on hand.
8. On 28 November 2017, the supply chain manager at the respondent, Glenn Malin, asked Ms Sindoni to advise "if you have any B&G labels in stock". This produced a response indicating that the stock varied from 100,000 to 490,000. Mr Malin responded, "why do you have so many labels?", to which Ms Sindoni responded: "We are internally looking into this and either TMA or David C will come back to you."
9. Mr Crewdson gave evidence that from 18 December 2017 the respondent was aware that new regulations were to take effect from 1 July 2018, making existing labelling information as to country of origin invalid, so that the labels which had been printed by the appellant could no longer be used. Mr Mouawad referred in his affidavit of 7 October 2022 to a meeting with Mr Crewdson shortly after sending an email of 30 November 2017, where the unused Black & Gold labels were discussed. A number of meetings followed over the next six months. Mr Crewdson's evidence (which the judge accepted) was that, having been made aware of the problem, he pressed Mr Mouawad for copies of any purchase order or direction to print such large volumes of labels. In late 2017, Mr Mouawad relied upon the "estimated" quantities in the price index spreadsheet. According to Mr Crewdson, he stated: [21] "These are throw away numbers, these are numbers that you put in here. This isn't a PO. I don't know why you're referencing this. You knew our actual numbers from the information I gave you previously."
10. Consistently with Mr Crewdson's affidavit evidence as to his concern, on 22 March 2018, he sent an email to Mr Mouawad in the following terms: "Hi John Before we discuss SOH for the oil labels, we still need the backup information: - What exact stock do you have on hand? - When was the stock last ordered and in what quantity? - Do you have a PO or email authorising the purchase?"
11. On 2 May 2018, Mr Mouawad responded on the subject "SOH" in the following terms: "Hi David Please read below this was the email we got from Christian regarding for all the labels to be printed and 100% bottling will order the labels the labels we printed as per the spreadsheet pricing and quantities which was part of our conversation between myself yourself and Christian Shaw, once we printed the labels you would then send a P/O with the quantities of which you wanted so that we could send them out to your production factory."
12. Attached was the email from Mr Shaw of 23 November 2015 at 7:19pm. It is no longer relied upon as the order to print the large quantities of labels, and it clearly was not such an order. What was significant was the omission of any reference to the disputed emails.
13. On 7 May 2018, Mr Crewdson sent a further email to Mr Mouawad stating in part: "Thanks for sending through your stock on hand, but you still haven't provided some of the key information to piece together why there is still so much stock on hand."
14. On 31 July 2018, the appellant issued a tax invoice to the respondent for the unused Black & Gold labels, in an amount of $179,890.40. The invoice was not paid. On 22 May 2020, the appellant commenced proceedings in the District Court seeking payment of the amount of the invoice, plus interest. The pleading referred to an agreement "in early 2015 … for the sale of various bottle labels". The agreement was stated to be "partly oral and partly written".
15. On 10 July 2020, solicitors for the respondent sought further and better particulars. In response to the request for particulars of the alleged agreement, on 2 September 2021 the solicitors for the appellant stated: "The agreement was in writing. It consisted of a quotation from the plaintiff dated 19 September 2016, a copy of which is enclosed." The enclosed document was an email from Mr Mouawad to Mr Crewdson in relation to another matter.
16. On 23 September 2021, the appellant's solicitors provided a "proposed amended statement of claim" which again referred to the email of 19 September 2016, particulars of the quotation being identified by reference to the content of the invoice of 31 July 2017. Both the statement of claim and the amended statement of claim were verified on oath by Anthony Karam, the chief executive officer and director of the appellant. However, the main curiosity in relation to this document was that the proceedings had been dismissed by consent some three months earlier, on 29 June 2021, for inactivity.
17. On 14 October 2021, new proceedings were commenced by a fresh statement of claim, in the terms of the amended statement of claim of 23 September 2021. Solicitors for the respondent pointed out that amongst other difficulties, "[n]owhere in the statement of claim is any agreement alleged to have arisen". [22]
18. On 21 December 2021, an amended statement of claim was filed in the District Court. This alleged, for the first time, that "on 23 November 2015 the plaintiff and defendant entered into a contract for the production by the plaintiff of labels for the defendant". The particulars of the contract were said to be contained in an email of 23 November 2015 at 7.22pm, and the response at 7.27pm. Mr Crewdson gave evidence that this was the first time on which he had heard of the disputed emails, copies of which were attached to Mr Mouawad's affidavit of 7 October 2022. [23]

Discovery of disputed emails

1. The history of the appellant's pleadings suggest that the disputed emails were discovered between 14 October 2021 and 21 December 2021, that is more than five years after Mr Heagney had questioned the authority for the print run.
2. In his first affidavit of 7 October 2022, Mr Mouawad described the disputed emails by their contents, and also referred to his various exchanges with Mr Crewdson during 2017 and 2018 as to the alleged responsibility of the respondent to pay for the printed Black & Gold labels. He provided no explanation as to why the critical emails supposedly providing authority to undertake the full print run of a million labels was not then relied on. There was no reference in the affidavit to the discovery of the emails.
3. Four months later, on 17 February 2023, Mr Mouawad affirmed a second affidavit, the purpose of which was to reply to affidavits of Mr Shaw and Mr Crewdson. In reply to Mr Shaw not having the disputed emails, he provided an explanation as to "why I could not locate an electronic version of this email exchange and how I located the hardcopy of the email exchange in a job bag kept by TMA in relation to its work for 100%". [24] He ascribed the absence of the disputed emails from TMA's electronic records to "various glitches" and "a recent loss of a large amount of information in a cyber-attack", identified in his first affidavit as occurring in about 2020. Clearly the latter explanation could not account for his failure to find electronic copies in 2018 or 2019 when he claims to have searched for them. It is also difficult to understand how "glitches" may have led to the loss of the disputed emails when three emails sent within half-an-hour, on either side of the disputed emails, were not lost.
4. Mr Mouawad then set out his usual practice of forwarding a new order to the customer service representatives to print and place in a job bag together with the job ticket and other information relating to the labels for printing. He stated: [25] "Because of this usual practice, I knew that there would be a hard copy of this email exchange in the job bag for 100% and I decided to search through the job bags to locate it. This took a long time as TMA has thousands upon thousands of job bags archived in storage boxes. There are six job bags produced by TMA for 100% relating to Black & Gold labels." He then stated: "Inside job bag S-3159, I found two printed copies of the [disputed emails]."
5. Mr Mouawad continued: [26] "In the course of preparing this affidavit, I have personally obtained from TMA's secure storage room each of these job bags and scanned the entire contents of each job bag."
6. This account did not reveal when Mr Mouawad searched the job bags; nor did it explain why the six job bags which were in numerical order (with one other bag interleaved) took a long time to find; nor, most importantly, why, since he understood the usual practice would be to include a hardcopy of the email exchange in the job bag he did not look for them there between late 2017, when he was being asked by the respondent to provide the basis on which he claimed the respondent was responsible for the printing, and late 2021.
7. On 17 May 2023, Mr Mouawad affirmed a third affidavit in which he addressed the use of the title "Business Development Manager" in the one (disputed) email of 23 November 2015. He stated that, "at some point in or about 2014, my position began to be described as Business Development Manager" and that the role of "Corporate Account Manager" and "Business Development Manager" were not two separate roles. He annexed "three screen shots from my current email software … in which I demonstrate that I can select between these two email signatures (and others) from a dropdown menu or in the email signature options". Nevertheless, it remained a fact that he did not use the business development manager title at any point in communicating with officers of the respondent until November 2017. Nor did the affidavit explain why he would have used the later title on only one email, which was found between two emails on the same evening within a few minutes of each other using the corporate account manager title.
8. The possibility of all records of the two disputed emails having been lost from the appellant's electronic records was rendered more curious by his evidence that an order from a client would have been forwarded by him to a TMA customer service representative to print the order and place it in the job bag. There should therefore have been records of the forwarded email in the customer service representative part of the company's electronic records; the printed copy should have contained a "forwarded" notation. The disputed emails did not.
9. Mr Mouawad's affidavit as to the source of the disputed emails was supported by a second affidavit of 9 June 2023, affirmed by Mr Walsh, the group IT manager of the appellant. That affidavit was sworn after two days of the trial, and after Mr Mouawad's evidence had been commenced, though not completed.
10. Another aspect of the disputed emails was that they contained what were described as "Symantec banners" between the two disputed emails. The banner stated that "[t]his email has been scanned by Symantec Email Security. cloud service". However, the run of emails contained in the evidence demonstrated that the Symantec banner only appeared at the end of a chain, and may have appeared twice at the end of the chain if there were more than one email. Mr Walsh stated that the default setting was for the banner to appear at the bottom of an email chain. He also said that from experience with another employer, he was aware that Symantec software allowed for customised user settings to cause the banner to appear after each email. [27]
11. His cross-examination included the following exchanges: [28] "Q. I now want to ask you about Symantec. TMA uses Symantec, doesn't it? A. No. Q. Are you sure about that? A. Yep. [The witness was shown an example.] Q. As I understand your evidence, Symantec banner is put on the email by the outgoing server, so that's the person who sends the email? They're responsible for the Symantec banner and its position? A. Yep. Q. So … that's an email from Mr Mouawad to Mr Crewdson and at the bottom is the Symantec banner? A. Yes. Q. So how would get there? A. I don't know. Q. If the Symantec banner is the product of the outgoing sender, and the outgoing sender and the only sender of this email is Mr Mouawad, it's a fair and reasonable assumption, or it's a fair and reasonable position, isn't it, that Mr Mouawad's email server has added the Symantec banner? A. By the appearance of that, it looks like we were using Symantec back in 2015 that I wasn't aware of."
12. There was no evidence from Mr Mouawad that he had customised the placement of the Symantec banner, nor that he had used the default setting, customised it and returned to the default setting in the course of the evening of 23 September 2015. Accordingly, the placement of the Symantec banner between the two emails which Mr Mouawad claimed were part of a chain, support the inference that the chain had been fabricated.

The respondent's email records

1. Mr Crewdson and Mr Shaw both gave evidence that they had looked but found no records of the disputed emails. That evidence was not challenged. However, the respondent went one step further and obtained a report of a search of its server operated by Telstra. The audit carried out by a Telstra officer did not disclose the existence of the disputed emails.
2. On 29 March 2023, the appellant instructed an IT professional, Andrew Sim, to conduct an inspection of the respondent's email servers to determine whether any copies exist of the disputed emails. Mr Sim reported that the "mailbox presented for inspection did not contain the alleged email excerpts". He further stated, "there is no certainty that the mailbox had not been prepared for forensic review prior to the event". This gratuitous statement was not relevant: there was no suggestion that the mailbox had been tampered with in any way by the respondent's officers. Such a suggestion would have had to be put to the officers in cross-examination: it was not, understandably.
3. In the course of cross-examination, Mr Sim noted that in 2017 the records had been "migrated" from a Microsoft exchange server previously used by the respondent to the Telstra system, so that "whatever is there at the time gets transferred across from the exchange server, one server to another, on premise to cloud premise". [29]
4. He agreed however that unless it had been deleted before the transfer in 2017 it would exist on the Telstra server. That was because, if it were deleted thereafter, there would be a record of it. [30] It followed that, unless someone at 100% Bottling had deleted the email prior to the transfer in 2017, its absence from the records when the search was undertaken in 2021 provided strong evidence that it had never existed.

Challenges to findings at trial

1. Grounds 1-3 in the notice of appeal challenged factual findings in relation to the disputed emails.
2. Ground 5 of the notice of appeal stated that the trial judge erred in finding that Mr Mouawad was an unreliable witness; ground 6 stated that the judge erred in finding it "implausible" that Mr Mouawad would have any memory of sending and receiving the email exchange; ground 7 alleged error in a finding that Mr Mouawad's 2017 search for hard copies of the emails was inconsistent with him having an actual recollection of the emails; ground 10 alleged that the judge erred in finding that Mr Mouawad's evidence of business practices in relation to the job bags was unreliable; ground 11 said that the judge erred in drawing an adverse inference from the absence of evidence from the person who discovered the emails in the job bags. No ground challenged the findings as to the reliability of Mr Crewdson and Mr Shaw.
3. Grounds 4 and 12-14 challenged the manner in which the judge dealt with the appellant's business practices; they were closely related to the dismissal of Mr Mouawad's evidence and the supposed disregard of Mr Walsh's evidence. Ground 8 alleged that the unreliability of Mr Mouawad's evidence was immaterial to the genuineness of the disputed emails. How it was said that Mr Mouawad's initial claim to have discovered the disputed emails, a claim later withdrawn without being able to say who did find them, was immaterial to an assessment of their genuineness was not explained.
4. Ground 15 alleged that the judge ought to have found that, apart from the disputed emails there was no evidence of agreement as to price, and therefore the emails were genuine. In fact, Mr Crewdson said he had accepted the prices in the April 2015 spreadsheet. Indeed, subsequent conduct based on those prices demonstrated agreement as to price. Ground 15 had an air of the rhetorical and is rejected.
5. It is convenient to deal first with the challenge to the judge's dismissal of Mr Mouawad's evidence, and then deal with the focus of the appellant's oral submissions on the appeal relating to business practices and commerciality.

The credit findings

1. The appellant sought to distance itself from much of Mr Mouawad's evidence that did not relate to the practices of the appellant's business operations, and the consequences of the finding that his evidence was unreliable.
2. When the trial commenced on 6 June 2023, the judge was informed that the first witness for the plaintiff, Mr Mouawad, was feeling unwell. However, counsel elected to proceed and Mr Mouawad was called and cross-examined for about 30 minutes. The judge noted at [11]: "That cross-examination focussed on the usual practice evidence referred to in paragraph 8 of Mr Mouawad's affidavit together with questions … as to why, if that usual practice had been followed, the relevant emails had not been found in the job bag until some time in late 2021. He was unable to provide any explanation in response to this cross-examination and indeed, I formed the view that he did not really understand the point that was being made."
3. The judge's concerns as to his state of health led him to invite counsel for the plaintiff to consider if he wished to proceed. The matter was adjourned before lunch to the follow day. The matter did not proceed on the following day, but was stood over until 20 June.
4. In many respects, and so far as one can tell from the printed transcript, when the cross-examination recommenced matters did not improve. Mr Mouawad was cross-examined in relation to the spreadsheet of April 2015. He was asked about the entries under the heading "estimated quantity" which contained a series of Black & Gold oil products with numbers in the order of one million. The cross-examination continued: [31] "Q. It's headed 'Estimate quantity', isn't it, because that is what TMA was hoping and what you were hoping you would ultimately print and provide to 100% Bottling, is that what estimated quantities means? A. I don't have an answer because I don't look after that. Q. You prepared this spreadsheet. A. I didn't prepare this spreadsheet. That comes from our estimating team. Q. Had you read this spreadsheet before sending it to-- A. In regards to estimates, estimates is a million fronts and a million backs. That's - could be anything estimates. It could be-- … A. Not my doing. This is what estimating send me. I don't remember what they sent me but this is what estimating put together for me. … Q. You agree with me that in that column, that's not a commitment to purchase one million labels, is it, it's just an estimate of how many labels may be printed over the course of the business relationship? A. I don't have an answer for you for that. Q. You don't know? A. I don't know."
5. His attention was then directed to the annual volumes and he said, "I don't remember it". [32]
6. He then gave evidence that he did not authorise the printing but it went through an approval process. He was asked: [33] "Q. And how would those sign offs and approvals be recorded? A. That's - that goes back to customer service. I don't, I don't get involved. … A. I can't answer that question. Q. If somebody sent you a request to print labels, would you email that order to customer service? A. They look after everything. Q. But how? A. It would be emailed. It would be corresponded."
7. He was taken to a passage in this affidavit in which he said his practice was to "forward the emails to customer service" and agreed that "it's what it says here". The cross-examiner continued: [34] "Q. I'm not asking you what your affidavit says, I'm asking you what was your practice? A. It all depends. It all depends. Q. Where's that in your affidavit? A. Well. Q. Where does it say it all depends? A. Actually I don't remember and I don't know. Sorry. Everyone's different … Q. Do you remember what your practice was back in 2015? A. No it's - thousands of things have changed from 2015 in our practice. … Q. But you say in paragraph 8 what your practice was. A. That's correct. Q. So you do remember what your practice was in 2015? A. No. I just - I, I don't have an answer for that. Q. What do you mean you don't have an answer for that? A. I don't remember. … Q. You agree with me that if you forwarded the email to customer service there'd be a record of you sending or forwarding that email to customer service, wouldn't there? A. I don't know."
8. The cross-examiner then asked about the finding of the disputed emails: [35] "Q. And there's a process is there by which customer service keeps a record of orders placed? A. I think so. Q. Did you go looking for those records when you were preparing your evidence? A. Customer service did. I didn't go. Q. Who in customer service? A. There's many people. … Q. So give me the name of one. A. A lot of them have left, a lot of them are still there. Q. But when you were preparing your evidence … did you speak to customer service? A. I, I got my, I first - IT was involved because of emails were so far, so far back and then that's when IT had to look in, into the system and then customer service got involved. Well it wasn't really customer service it was more of the people who look after the, well sorry, I apologise. Customer service got involved with the bag area to go looking or these old bags, and there's a few people in, in customer service that are, a lot of them have left, your Honour. Q. When did they go looking in the bags? A. I don't remember. Q. Was it last year, was it 2015, 2016? A. No, I can't, I can't remember."
9. Leaving to one side the contradiction of his evidence that he was the one who found the disputed emails in the job bags, it was impossible for the appellant to construct from this evidence a basis for concluding that the trial judge was in error in rejecting Mr Mouawad's evidence as to practices in 2015. There was a large chasm between the records of activities and the conduct of Mr Mouawad in 2015 and in subsequent years up to 2018, and his evidence in the witness box.
10. The cross-examiner also took Mr Mouawad to paragraphs 27 and 28 of his first affidavit in which he set out in some detail the contents of the disputed emails and his understanding of what they meant. He was taken first to the email from Mr Shaw said to have been sent on 23 November 2015 at 7:27:11pm. When taken to it first, he said, "I don't remember this document". [36] When taken back to it after it was put in some context in relation to his affidavit he repeated, "I don't remember it". [37]
11. To take what is but another example, he was taken to the email from Mr Heagney of 31 August 2016 expressing surprise at the size of the label holdings and asking if they had been placed against a purchase order or made against a supplied forecast? He said he did not remember the document and did not remember responding to it. However, in his affidavit he had said: [38] "I responded to Mr Heagney by telephone and email. We first had a telephone conversation in which I said words to the effect of 'these quantities are as per the attached stock on hand report that I sent you. This is what David Crewdson ordered and we produced the stock'." He confirmed that that was what happened after the email was sent.
12. The cross-examiner continued: [39] "Q. … So you don't recall the email, but you recall the telephone conversation you had afterwards, and in that conversation you said that Mr Crewdson had ordered the labels? A. That's correct. Q. Not Mr Shaw? A. That's correct. Q. And this is in August 2016? A. Yes. … Q. In August 2016 your position was that Mr Crewdson had ordered these labels? A. I don't, I don't recall. I can't recall."
13. It may have been open to the trial judge to reject Mr Mouawad's affirmation of his affidavit evidence, although he was asked to confirm his affirmation on several occasions. Nevertheless, that left the evidence in the affidavit, namely that he ascribed the placement of the order to instructions given by Mr Crewdson. In fact, it is clear from the evidence of the respondent that such a decision would have been made by Mr Crewdson, if it had been made. However, the appellant's case was that the order was placed by Mr Shaw by the disputed email.
14. The judge's findings as to the unreliability of Mr Mouawad were beyond challenge: they may have been generous. None of the grounds challenging his findings in this respect was maintainable.

Business practices

1. The trial judge relied on eight matters which led him to a failure to be satisfied on the balance of probabilities that the disputed email exchange occurred. That conclusion should be upheld, as should the additional matter relied on by the respondent by way of a notice of contention. However, in my view the case for the respondent is somewhat stronger than the conclusion reached by the trial judge, and I would place greater emphasis on a number of considerations.
2. First, the absence of any record of the email exchange on the respondent's servers is at least prima facie evidence that the disputed emails were not sent. Searches were conducted by Mr Crewdson, by an officer of Telstra and by Mr Sim on behalf of the appellant. Not only were the disputed emails not located, but according to Mr Sim's oral testimony, the only explanation for their absence (other than that they did not ever exist) was that they had been deleted from the respondent's system prior to 2017 when the migration to cloud storage occurred. At [82] the judge stated: "They are not on the Telstra server. I find in the circumstances, it to be very unlikely they would have been deliberately deleted prior to 2017. There was no dispute until 2018. Indeed, this was not put to any of the defendant's witnesses."
3. The fact that deliberate deletion had not been put to Mr Shaw or Mr Crewdson, and was not relied upon by the appellant, renders the absence from the respondent's server by itself sufficient to warrant a finding that the emails were not genuine. In other words, the statements at [82] (and [104]) that this material was merely a "reason to doubt" that the emails were genuine, significantly understated the significance of the evidence and the manner of running the appellant's case.
4. Secondly, the fact that they were not on the appellant's server was also significant. That there had been episodic loss of material from the appellant's records may be accepted: there was, however, no evidence which explained how two emails could have been lost in a series of five emails which occurred within a single period of thirty minutes. There was no evidence that such selective losses had occurred on any other occasion. The loss of material in 2020 cannot explain searches which should have been made in 2016 in response to Mr Heagney's inquiry, and probably were made in 2018 in relation to Mr Crewdson's more persistent queries. The absence from both servers is damning.
5. Thirdly, the late reference to and production of the disputed emails was, as the trial judge held, telling. [40] The genesis of the dispute appears to have been the email of 28 November 2017 from Mr Malin on behalf of the respondent to Ms Sindoni (who appears to have partly taken over Mr Mouawad's role as corporate account manager) asking if they had "any B&G labels in stock". When given the report, he immediately emailed back saying "why so many labels?" Ms Sindoni replied that "David Crewdson and Christian Shaw placed a large production order which you have been drawing from". Forty-five minutes later, Mr Malin said "can you please send a copy of PO". No purchase order was identified in 2017, and further requests were made in 2018. If Mr Mouawad was unable to locate a purchase order and if, as he later claimed, hardcopies of purchase orders were routinely kept in the job bags for particular print runs, it is almost incomprehensible that, in the absence of any other record, no search was made of the job bags between 30 November 2017 and mid-July 2018.
6. By mid-July 2018 it was clear that no further purchase orders were being received and the appellant sent a tax invoice for the outstanding balance of the stock on hand. In 2020 the appellant pursued the claim for payment by commencing the first proceedings in the District Court. It is clear from the pleading that by then no purchase order of relevance had been identified. This chronology, combined with the absence of electronic records, would justify an affirmative finding at no lower level than the balance of probabilities that the disputed emails did not then exist.

Commerciality

1. The appellant placed weight on the appeal on the need to consider the commerciality of the arrangements. Why would the appellant go to the trouble to print several million labels unless instructed to do so? By its notice of contention the respondent also sought to rely on an inference based on commerciality, that militated against a finding that Mr Shaw would have written the disputed email.
2. Discussion of "commerciality" proceeded as if it defined an independent standard against which likelihoods could be measured. That is misleading: there is no standard of commerciality, but rather there may be business practices which may provide context against which to judge the plausibility of the asserted conduct on both sides of the record. To say that it is most unlikely that the appellant would have printed sets of 1,000,000 labels without written confirmation from the buyer is no doubt true, because it would involve a high commercial risk of loss. The fact is, however, that the labels were printed: the commercial consideration is merely one of a number of matters to be assessed in determining the circumstances in which the printing occurred. On the other hand, the commercial unlikelihood of the relevant officers of the respondent ordering labels in quantities many times in excess of their known needs and established practices carries a far greater weight, although, again, it will be one of a number of considerations in determining whether a written order was given.
3. The point at which these considerations bite is in relation to the content of the disputed emails.
4. First, in relation to Mr Mouawad's email at 7:22pm on 23 November 2015, the statement that, "I have booked this job on a press already", absent an approval, was inconsistent with the appellant's other evidence that a decision on a print run was made by the customer service department, based on a written order. Furthermore, there was no evidence as to what steps would have preceded a "booking". Presumably, to print 7,000,000 or so labels would have required the purchase of the necessary materials. When did that occur?
5. Secondly, there was no evidence of a "booking". Nor was there any evidence that Mr Shaw was in a hurry to obtain delivery prior to the email of 23 November 2015 at 7:19pm. It is most highly improbable, and almost physically impossible, that Mr Mouawad made a "booking" after 7pm, knowing that he did not have approval for any particular quantity and that the question of price was still at large, in the three minutes which elapsed before sending his email at 7:22pm. The "finished goods" job records tendered by the appellant gave as the source of the authority both Mr Mouawad and Monica Carter, a customer service representative. Ms Carter was not called. The dates on the "Production Approval Authority" forms extend from 4 December 2015 through to 19 December 2015. One job was not signed off by the supervisor until as late as 11 February 2016. On several forms a delivery date was recorded as 30 November 2015, but there is no evidence that any goods were delivered to the respondent until 2016. The level of urgency reflected in the disputed emails of the evening of 23 November 2015 appears to have been confected.
6. Having regard to the context of Mr Shaw's purported email of 23 November 2015 at 7:27pm, the following features are material. First, the instructions given at 7:19pm were for 50,000 sets of four labels (Black & Gold vegetable and canola oils in 1ltr and 2ltr bottles). A purchase order was promised for the following day. Why, eight minutes later, Mr Shaw would direct production of a million labels of all eight sets, with no indication that a purchase order would be sent for such numbers at any time, is without explanation.
7. Secondly, the email of 7:19pm was copied to Mr Vautin, Mr Crewdson and two other officers at 100% Bottling. Mr Shaw's genuine emails to the appellant were uniformly copied to others at 100% Bottling, and usually including Mr Crewdson. The email at 7:27pm was copied to no-one.
8. Thirdly, Mr Mouawad's email indicated that the prices for any lower numbers of labels would have to go up. That Mr Crewdson at least would not have been copied in to a response to that suggestion is implausible at the best of times. In circumstances where he was routinely copied with all the emails between the respondent and the appellant, the failure to do so when committing the respondent to a print run many times the company's annual usage of labels for every product under consideration, absent any explanation, is simply implausible. In that sense, the assessment of likely commercial considerations weighs heavily in favour of the view that the disputed emails were not genuine.
9. These matters, together with the differences from the surrounding emails identified by reference to Mr Mouawad's title on his email and the placement of the Symantec banner warnings, support the trial judge's ultimate conclusion that he was not satisfied that the exchange of the disputed emails occurred. Indeed, that conclusion tends to understate the strength of the respondent's case.

Orders

1. It follows that the appeal must be dismissed; the appellant must pay the respondent's costs in this Court.

Endnotes

1. TMA Australia Pty Limited v 100% Bottling Company [2023] NSWDC 231.
2. CA tcpt, 27/03/24, p 2(50)-3(15).
3. CA tcpt, p 43(3)-(15).
4. Tcpt, p 231(45).
5. Tcpt, p 231(23)-(32).
6. Tcpt, p 233(1)-(9).
7. Tcpt, pp 233(35)-244(40).
8. David Crewdson, affidavit, 2 December 2022, pars 18-21.
9. Tcpt, p 230(20)-(28).
10. Tcpt, p 236(43).
11. Tcpt, p 237(22)-(29).
12. Affidavit, 16 November 2022, par 19.
13. Affidavit, pars 19-24.
14. Tcpt p 209(45).
15. Tcpt, p 210(27).
16. Affidavit, 16 November 2022, pars 26, 27.
17. Tcpt, p 211(50).
18. Tcpt, p 213(20)-(25).
19. Tcpt, p 215(9).
20. Tcpt, p 216(1).
21. Affidavit, 2 December 2022, par 29.
22. Letter, 11 November 2021, Russell Kennedy Lawyers to Blackstone Waterhouse Lawyers, par 11.
23. Affidavit, pars 27, 28; Exh JM1, pp 55 and 56.
24. Affidavit, 17 February 2023, par 6.
25. Affidavit, par 8.
26. Affidavit, par 10.
27. Affidavit, par 11.
28. Tcpt, p 180(15), (43).
29. Tcpt, p 191(43).
30. Tcpt, p 193(13)-(23).
31. Tcpt, p 94.
32. Tcpt, p 95(33).
33. Tcpt, p 100(27).
34. Tcpt, p 103(31).
35. Tcpt, p 105(13).
36. Tcpt, p 112(15)-(23).
37. Tcpt, p 114(30).
38. Affidavit, 7 October 2022, par 66.
39. Tcpt, p 118(11).
40. Judgment at [105]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 April 2024