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[2024] NSWCA 124
Court of Appeal (NSW)
2024-04-17
Bell CJ, Payne JA
Original judgment source is linked above.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
HEADNOTE [This headnote is not to be read as part of the judgment] On 9 October 2017, the Appellant, Western Freight Management Pty Ltd (WFM) and the Respondent, Toll Transport Pty Ltd (Toll), entered into the Australian Road Freight Subcontractor Agreement (the Contract), pursuant to which WFM was to provide return road freight line haul services between Sydney and Melbourne (the Trips) for 36 months, commencing on 5 December 2017 and expiring on 4 December 2020. The Contract included two Schedules as well as attachments and appendixes to those Schedules. Attachment 2 to "Schedule 2 - Statement of Engagement" to the Contract (the Statement of Engagement) provided, under the heading "Fees", that Toll would pay WFM $3,200 per Trip with "minimum quarterly committed volumes" of 120 Trips per quarter. Attachment 2 also stipulated that "in the event that minimum committed quarterly volumes are not achieved, these will be rolled into the next quarter with agreement from [WFM]." On WFM's case, Attachment 2 represented a promise to pay a guaranteed amount of money over the term of the Contract, being 120 [return Melbourne-Sydney Trips, the "minimum committed quarterly volumes"] multiplied by 12 [quarters i.e. three years] multiplied by $3,200. The parties agreed that across the term of the Contract, the total number of Trips performed was 1,396 (or 2,792 single runs) such that there was a cumulated shortfall of 44 Trips. That shortfall did not include "Cut Runs" which were single direction runs whereby a truck returned empty to a WFM departure depot and in relation to which the parties had reached a separate informal agreement. WFM thus argued that it was owed 44 multiplied by $3,200, amounting to $140,800. On 20 February 2020, WFM emailed Toll complaining that Toll was 70 Trips short of what it was obliged to have offered WFM across the term of the Contract. This complaint was predicated on a view of the Contract that any shortfall rolled into the next quarterly period continued to do so from quarter to quarter, as opposed to one time only. Toll replied on 5 June 2020. Although it took issue with WFM's construction of the Contract, it nonetheless offered to provide WFM with "70 additional round trip runs at a rate of $3,200" and "[f]or the avoidance of doubt, in the event that the additional round trip runs are not provided prior to the expiry of the [Contract] on 4 December 2020", to "extend the term of the [Contract] and enter into a new Statement of Engagement in respect of the additional round trip runs." The Court held (Bell CJ, Payne JA and Griffiths AJA agreeing), dismissing the appeal: 1. The primary judge did not err in concluding that WFM had no claim against Toll in debt separate from its claim in damages: [59] (Bell CJ). 2. The Contract cannot be construed as entailing a promise to pay a guaranteed amount at the end of the Contract represented by the multiplication of 1,440 Trips by $3,200. Rollover of any shortfall volume into the next quarter was not automatic; rather, it required the agreement of WFM. If WFM did not agree, there would be no cumulation of the shortfall of Trips. Any failure to achieve minimum committed quarterly volumes which were not rolled into the next quarter would, at most, sound in an action for damages for breach of contract constituted not by a failure to pay, but by the non-provision of Trips: [64] (Bell CJ). 3. This construction of Attachment 2 to the Statement of Engagement is consistent with several other provisions of the Contract: [65]-[68] (Bell CJ). 4. Pre-contractual material relied upon by WFM as supporting its contention that WFM would never have agreed to the Contract unless a guaranteed amount of money would be paid over three years simply did not do so: [71] (Bell CJ). 5. There was no breach of contract. Even if any shortfall could be rolled continually from quarter to quarter, as opposed to one time only, Toll offered to provide WFM with 70 Trips. The primary judge's finding that this offer was not accepted was not challenged. Any unachieved volumes did not rollover into the final two quarters because WFM did not agree for that to happen: [74] (Bell CJ).
JUDGMENT
Factual Background
Please note the following: 1. There is no loss of any existing work. You will continue to be engaged by Toll performing your current tasks at the current rates for the foreseeable future. In other words, business as usual. … Toll has simply chosen not to formally commit volumes based on your RFQ submissions for this other existing work. 2. The committed quarterly volumes in the above table includes all volumes, whether it be current or additional work. This is the minimum amount Toll is committing to quarterly for the lane/configuration combination. 3. Toll reserves the right to apply the above rates if volume increases. In the event that minimum committed quarterly volumes are not achieved, the outstanding volumes will be rolled into the next quarter with agreement from WESTERN FREIGHT MANAGEMENT PTY LTD. … Please note this email does not constitute a contract. No contractual or legal relationship or commitment in relation to the above-referred lanes will exist, unless and until both the Agreement and the SOE have been signed and returned to Toll." (Emphasis in original.)
The Contract
The primary judgment
Grounds of Appeal and Notice of Contention
Grounds 1, 2, 4 and 5 and Notice of Contention grounds 1 and 2
Ground 6
Conclusion
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: 24 May 2024
Western Freight Management Pty Ltd
Toll Transport Pty Ltd
[2015] HCA 37
(1982) 149 CLR 337
(2004) 219 CLR 165
(2015) 256 CLR 104
(1974) 131 CLR 634
[2004] HCA 52