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[2026] NSWCA 7
appellant. Appeal allowed with costs. Leave to cross-appeal refused with costs. The primary orders were set aside; Ceramics was ordered to pay Weston $664,983.42 with interest under cl 7.3(b) of the GSA, and...
The agreement promised Ceramics a cap on the spot price of gas. The Court of Appeal read 'price insurance' in cl 1.8 as the mechanism by which Weston itself provided that cap, not as a promise that Weston would buy a separate insurance policy from a third party. The surrounding tender, emails and accepted phone-call evidence did not change that meaning. The Court also considered it wrong to rely on alleged deliberate ambiguity where intent was not the legal test and had not been put to Weston's witnesses. It allowed Weston's appeal, restored the unpaid invoice and refused Ceramics leave to appeal the separate, small restitution claim.
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8 cited instruments linked from this judgment.
2,271 words · generated 08/10/2026
Weston Energy supplied gas to National Ceramic Industries Australia, which used natural gas to fire its kilns. The parties had an earlier supply relationship, and in February 2022 Ceramics ran a tender for new gas supply arrangements. It asked retailers for fixed-price and spot-price offers, including spot offers capped at $12/GJ and $15/GJ. The judgment records that the tender did not seek third-party insurance [26]-[27].
Weston made three offers. The first included a price cap described as “price insurance”, without a premium. The second proposed a cap for one elected month. After two calls on 2 March 2022, Weston sent a third offer. Ceramics accepted it, and the parties entered the Internal Meter Gas Supply Agreement on 4 March 2022 [28]-[48].
The key commercial feature was a capped spot-price model. Ceramics would pay the spot price up to $15/GJ, and Weston would charge a premium of $0.15/GJ. Clause 1.8, headed “Price Cap”, said Weston “will provide price insurance for the gas commodity price”. It set out the premium, a term from 1 April 2022 to 30 March 2023, annual renewal, and a calculation method for the cap [46]. The Cover Email referred to a “12 months price cap” and said Weston was happy to let “the insurance start 1/Apr” [44].
Gas prices rose sharply. AEMO suspended Weston from the Short-Term Trading Market, effective 24 May 2022. Weston terminated the agreement under cl 15.1(c), and Ceramics had to obtain gas elsewhere at a much higher price [5]-[7]. Weston invoiced Ceramics $664,983.42 for gas supplied before the suspension. Ceramics did not dispute the invoice amount except for the premium component [8]-[9].
Ceramics alleged that Weston’s words and conduct represented that it would obtain third-party “Price Capping Insurance” to protect Weston against rising wholesale prices and safeguard its ability to honour the cap. The primary judge accepted the misleading-conduct case, finding that the contract wording was calculatedly ambiguous and that Weston’s representatives reinforced or exploited that ambiguity. The judge awarded Ceramics damages after setting off Weston’s invoice claim [11], [17]-[18], [58]-[59].
Weston appealed. Ceramics sought leave to cross-appeal the dismissal of its separate claim for restitution of $13,339.62 in premiums paid under earlier invoices. Bell CJ delivered the reasons, with McHugh JA and Free JA agreeing [1], [98]-[101]. The Court allowed Weston’s appeal, refused leave to cross-appeal and ordered Ceramics to pay the invoice, with interest under the GSA [99].
The Court treated the central task as deciding what the conduct objectively conveyed when viewed as a whole and in context. It adopted the four-step framework from Self Care: identify the conduct, consider whether it was in trade or commerce, identify its meaning, and determine whether it was misleading or deceptive [67]. In this appeal, the dispute centred on the third and fourth steps. The meaning could not be derived by isolating the word “insurance” from the rest of the clause or the surrounding negotiations [68].
The commercial setting mattered. Ceramics’ tender asked for capped pricing, and the parties’ negotiations focused on whether the cap would last one month or twelve months [26]-[27], [36]-[43]. A cap on an otherwise variable spot price transfers the risk of prices above the cap from the customer to the supplier. The Court considered that, functionally, this arrangement itself provided Ceramics with protection against price volatility [77].
The wording of cl 1.8 reinforced that reading. The clause was headed “Price Cap” and said Weston “will provide” price insurance. It did not say that Weston would obtain insurance, name a third-party insurer, or describe protection against Weston’s insolvency or suspension from the market [78]. The terms of the cap were specified in the clause. In the Court’s view, Ceramics paid the premium in exchange for the price cap, not for a separate third-party policy [82]-[85].
The Cover Email did not alter that conclusion. Its reference to “the insurance” starting on 1 April had to be read with the attached cl 1.8, which explained the price insurance Weston was offering [84]. The accepted findings about the second call were also limited. The discussion concerned the length of the cap and Weston’s exposure to losses against its own “book”; it did not establish a discussion about third-party insurance [41]-[43], [81].
The Court also rejected the significance the primary judge attached to Weston’s failure to volunteer that no third-party insurance existed. The evidence did not show that Weston understood Ceramics or its adviser to be under that misapprehension, and neither side had raised third-party insurance [79]-[81]. Drawing on Miller, the Court treated silence as something to assess in the full circumstances, rather than as an automatic breach of the ACL. It also noted that the statutory prohibition does not impose a general obligation in commercial bargaining to volunteer information useful to the other party [69]-[72].
Finally, the Court criticised the “calculated ambiguity” reasoning. Whether conduct is misleading or deceptive is an objective question; intent to mislead is not an element of that characterisation [74]. If the primary judge meant that Weston deliberately set out to mislead Ceramics, that allegation had not been put to Weston's witnesses, raising a fairness problem [75]. The Court therefore concluded that Weston had not engaged in misleading or deceptive conduct [86]. It did not decide Weston's separate causation argument because that conclusion made causation unnecessary [19], [86].
The judgment applied established principles rather than announcing a new statutory test. It relied on Self Care for the method of identifying and assessing the conduct under ACL s 18 [67]-[68]. The objective assessment considers all the words and communications, how they were conveyed, and the broader circumstances. The Court’s practical point was that the alleged representation must be described sufficiently fully to expose the complaint, but the legal characterisation applies to the conduct as a whole [68].
The judgment also applied Miller and Wormald to commercial non-disclosure. Context can include the parties’ commercial experience, what each knew, industry assumptions and practices, and whether reasonable inquiries were made. The significance of silence remains objective. The Court cautioned against converting a commercial party’s failure to volunteer helpful information into a statutory duty to disclose [69]-[72].
On the appellate standard, the Court followed Wormald in applying a correctness standard to the characterisation of conduct as misleading or deceptive where the relevant facts were undisputed or established by the primary judge [66]. It said the more deferential approach suggested by CCP Australian Airships had been overtaken, at least in New South Wales, by Wormald [66].
For contract construction, the Court endorsed reading the provisions harmoniously and congruently. It found the contrast between cl 1.5, which expressly referred to a “Trade Credit Insurance Policy”, and cl 1.8, which referred to “price insurance”, supported the conclusion that they addressed different things [54]-[55], [95]-[96]. The court’s application did not add a general rule that the word “insurance” can only have one meaning. It depended on this agreement’s language, structure and commercial context.
The practical result was that the trial finding of misleading conduct was set aside, the invoice claim was restored, and the separate restitution claim did not proceed on appeal because leave was refused [98]-[99].
At [66], Bell CJ said misleading or deceptive conduct is assessed “objectively” and “by reference to context”. In plain English, the court asks what the words and actions would convey in the circumstances, not simply what one party says it understood them to mean.
At [68], the Court emphasised that the conduct must be viewed as a whole, including all the words in a document or communication, rather than a single phrase in isolation. Applied here, “insurance” in the Cover Email could not be separated from the attached clause, which was headed “Price Cap” and set out the price-protection mechanism.
At [74], Bell CJ stated that liability did not depend on the speaker’s subjective intention. In other words, an honest intention does not by itself prevent conduct from being misleading, and a dishonest intention is not itself the test. Intention may affect how a court evaluates evidence, but the statutory characterisation remains objective.
At [78], the Court said that cl 1.8 identified Weston as the provider and did not suggest that a third party would provide insurance, or that Weston would obtain it. This was the core textual reason for rejecting Ceramics’ pleaded representation.
At [79]-[81], the Court explained why silence did not change the result. Third-party insurance was not the subject of the negotiations, and the evidence did not show Weston knew the other side thought such a policy was being contemplated. The parties discussed whether the cap would run for one month or twelve months, which the Court viewed as a discussion about the price cap itself.
At [85], the Court distinguished “price insurance” from Ceramics’ pleaded concept of “Price Capping Insurance”. It reasoned that a policy protecting Weston’s solvency would be obtained for Weston’s own benefit, whereas cl 1.8 promised price insurance provided to Ceramics. That distinction was central to the Court’s view of what the clause meant.
The reasoning is most relevant where a commercial customer alleges that a supplier’s contract wording, tender communications or negotiations conveyed a promise beyond the express commercial arrangement. The judgment indicates that the court will identify the precise alleged conduct, then read the contract, emails and oral statements together in their commercial setting [67]-[68].
It is particularly relevant where a claim turns on the word “insurance” appearing in a commercial contract. The decision shows the importance of checking who the clause says will provide the protection, what risk the clause addresses, and whether it describes an external policy or a contractual price mechanism. Here, the cap shifted the price risk above $15/GJ to Weston, while the alleged third-party policy would have protected Weston against its own exposure or failure [77]-[85].
The judgment also matters where the alleged representation is said to arise from silence. The Court considered whether the topic had been raised, what each party knew, and whether the supplier understood that the customer was proceeding on a mistaken assumption [79]-[81]. It did not treat silence as irrelevant, but rejected the inference on the evidence in this case.
The decision is not a blanket rule that a customer’s sophistication or failure to ask questions defeats an ACL claim. The reasons refer to the relevance of knowledge and reasonable inquiries, while also stating that a failure to inquire does not automatically defeat a claim [70]-[71]. The outcome turned on the complete set of circumstances, including the tender scope, the clause’s wording, the limited evidence of the calls, and the absence of evidence that Weston knew Ceramics misunderstood the offer.
The supplied judgment contains no decisions that post-date Weston Energy and therefore provides no account of later judicial treatment of this decision. It would not be possible, from this source alone, to say whether later courts have followed, distinguished or questioned it.
The judgment itself identifies the authorities it applied or discussed. It followed Wormald on the appellate standard and the commercial-context principles drawn from Miller [66], [71]. It applied the framework in Self Care for analysing ACL s 18 [67]-[68]. It distinguished CCP Australian Airships on the appropriate appellate approach in New South Wales [66]. It also referred to Cheng on the considerations relevant to leave to appeal where the monetary amount is small [93]-[94].
Those relationships describe how Bell CJ used earlier authorities. They do not establish how subsequent courts have treated Weston Energy. Any later-treatment account would require later judgments not included in the supplied material.
The Court expressly left the causation issue undecided. Weston argued that AEMO’s suspension was a supervening cause breaking the chain between its conduct and Ceramics’ loss, but the Court did not determine that argument after finding no misleading conduct [19], [60], [86]. The judgment therefore does not decide how that argument would have applied if the alleged conduct had been misleading.
Nor did the Court decide whether Ceramics’ failure to make inquiries would independently have defeated a claim. The relevant principles say that such a failure is not automatically determinative, though it can be relevant to whether silence is properly characterised as misleading [70]-[71]. The Court did not need to resolve the issue separately because it found no relevant representation or misleading omission.
The judgment’s treatment of silence is fact-dependent. It relied on the absence of evidence that Weston knew of an assumed third-party policy, and on the fact that neither party raised the subject [79]-[81]. It does not decide how the analysis would change if a supplier knew that a customer was relying on a particular, clearly expressed misunderstanding, or if earlier communications had created a need to correct information. The judgment cites Lam for the possibility that prior communications can give rise to a duty to add to or correct earlier information [72], but does not apply that possibility to a different factual scenario.
Finally, the decision does not determine the meaning of “price insurance” in other contracts. Its construction depended on this GSA’s heading, operative words, detailed calculation terms, surrounding tender and separate treatment of “Trade Credit Insurance” in cl 1.5 [45]-[46], [78], [95]-[97]. The judgment’s reasoning is therefore best read as an application of contract and ACL principles to this particular commercial record, not as a universal definition of insurance terminology.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on or relying on this analysis, have a qualified Australian lawyer check it.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Weston Energy Pty Ltd v National Ceramic Industries Australia Pty Ltd [2026] NSWCA 7
Hearing dates: 01 December 2025
Date of orders: 09 February 2026
Decision date: 09 February 2026
Before: Bell CJ at [1];
McHugh JA at [100];
Free JA at [101].
Decision: (1) Appeal allowed with costs.
(2) Refuse leave to cross appeal with costs.
(3) Set aside the orders of the primary judge and in lieu thereof, order that the Respondent pay the sum of $664,983.42 to the Appellant together with interest on that amount calculated in accordance with clause 7.3(b) of the Internal Meter Gas Supply Agreement dated 4 March 2022.
(4) The Respondent to pay the Appellant’s costs of the proceedings at first instance.
Catchwords: CONSUMER LAW — misleading or deceptive conduct — contractual interpretation — price-capped gas contract — whether gas supplier represented that it would obtain third-party insurance — pre-contractual negotiations — cover email — two phone calls — whether “calculated ambiguity” in terms of contract — whether any ambiguity was exploited — significance of silence or non-disclosure.
Legislation Cited: Competition and Consumer Act 2010 (Cth), sch 2 – Australian Consumer Law ss 18, 236
National Energy Retail Law (NSW) pt 5
Supreme Court Act 1970 (NSW) s 101(2)(r)
Cases Cited: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25
CCP Australian Airships Ltd v Primus Telecommunications Pty Ltd [2004] VSCA 232
Cheng v Motor Yacht Sales Australia Pty Ltd t/a Boutique Boat Company (2022) 108 NSWLR 342; [2022] NSWCA 118
Coles Supermarkets Australia Pty Ltd v FKP Limited [2008] FCA 1915
Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75
Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11
Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458
Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited (2010) 241 CLR 357; [2010] HCA 31
Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) 277 CLR 186; [2023] HCA 8
Wormald v Maradaca Pty Ltd [2020] NSWCA 289
Weston Energy Pty Ltd v National Ceramic Industries Pty Ltd (No 2) [2025] NSWSC 864
Texts Cited: S Christensen and W Duncan, The Construction and Performance of Commercial Contracts (3rd ed, 2023, The Federation Press)
Category: Principal judgment
Parties: Weston Energy Pty Ltd (Appellant)
National Ceramic Industries Australia Pty Ltd (Respondent)
Representation: Counsel:
Mr J C Giles SC with Mr R Harvey (Appellant)
Mr M S White SC with Ms E ten Kate (Respondent)
Solicitors:
Bartier Perry Lawyers (Appellant)
Hall & Wilcox (Respondent)
File Number(s): 2025/00319746
Publication restriction: Nil
[This headnote is not to be read as part of the judgment]
The Appellant, Weston Energy Pty Ltd (Weston), was an authorised gas retailer under Part 5 of the National Energy Retail Law (NSW) between September 2016 and May 2022. The Respondent, National Ceramic Industries Australia (Ceramics), is a tile manufacturer located in the Hunter Valley, NSW, and requires natural gas to fire its kilns. Ceramics purchased natural gas from Weston between January 2018 and May 2022.
The present appeal arose out of a contract titled the “Internal Meter Gas Supply Agreement” (the GSA) between Ceramics and Weston. The GSA was entered into on 4 March 2022 following a tender process conducted by Ceramics, during which Weston made three offers for the sale of gas to Ceramics, the third of which was accepted. The third and final offer was sent to Ceramics alongside a covering email (the Cover Email) and was preceded by two phone calls between the parties which each took place on 2 March 2022 (the First Phone Call and the Second Phone Call).
Under the GSA, Ceramics purchased natural gas from Weston under a “capped spot price” model, pursuant to which gas was charged at a spot price, up to a maximum of $15.00/GJ (the Price Cap). Clause 1.8 was headed “Price Cap” and provided that “Weston Energy will provide price insurance for the gas commodity price…” and that a premium of $0.15/GJ would be charged by Weston (the Premium).
On 23 May 2022, following a sharp increase in the price of natural gas, and because Weston was no longer able to meet its prudential obligations, the Australian Energy Market Operator issued a suspension notice to Weston, suspending it from the Short-Term Trading Market (STTM). That suspension entitled Weston to terminate the GSA under cl 15.1(c), which it did in writing on 23 May 2023. As a result, Ceramics was compelled to source its natural gas from a different supplier at a greatly increased price. On the day of termination, Weston issued Ceramics with an invoice for the sum of $664,983.42 for the gas supplied prior to the termination of the GSA (the Unpaid Invoice).
At trial, Weston sought the balance of the Unpaid Invoice plus interest calculated under the GSA. Ceramics sought an equitable set-off for an amount exceeding Weston’s claim on account of what were ultimately two cross claims: (i) damages for misleading or deceptive conduct contrary to s 18 of the Competition and Consumer Act 2010 (Cth), sch 2 – Australian Consumer Law (the ACL); and (ii) payment of $13,339.62 in restitution for the value of the Premium paid pursuant to two earlier invoices.
Central to each of Ceramics’ cross claims was the notion that Weston had failed to obtain third-party “Price Capping Insurance”, a term which did not appear in the GSA or any of the documents but which Ceramics used to refer to a form of solvency insurance which would operate to protect Weston against the risk of rising gas commodity prices on the spot market.
In relation to the misleading or deceptive conduct claim, Ceramics claimed that Weston represented that it would, and presently intended to, obtain third-party “Price Capping Insurance” by way of the following conduct; (a) the terms of the offer of the GSA; (b) the two phone calls between the parties on 2 March 2022; (c) the Cover Email; and (d) invoices sent by Weston to Ceramics in respect of the Premium. The restitution claim asserted that Ceramics paid the Premium in two early invoices on the shared understanding that Weston would obtain “Price Capping Insurance”, which Weston never did.
The primary judge dismissed the restitution claim on the basis that a reasonable businessperson would not have understood cl 1.8 to oblige Weston to obtain Price Capping Insurance. The misleading or deceptive conduct claim, however, succeeded, as the primary judge found that Weston did make the pleaded misleading or deceptive representations and that such conduct was causative of the loss suffered by Ceramics. Central to the primary judge’s conclusion was the finding that cl 1.8 was one of “calculated ambiguity” and that the “loose” and “imprecise” language of cl 1.8 was “reinforced” or “exploited” by Weston in the Cover Email and the Second Phone Call, and by its failure to disabuse Ceramics of that ambiguity.
Weston appealed from the misleading or deceptive conduct finding and Ceramics sought leave to cross-appeal from the restitution finding.
The Court (Bell CJ, McHugh JA and Free JA agreeing) held, allowing the appeal and refusing leave to cross-appeal:
The appeal:
Wormald v Maradaca Pty Ltd [2020] NSWCA 289*;* Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) 277 CLR 186; [2023] HCA 8; Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited (2010) 241 CLR 357; [2010] HCA 31; Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458, cited.
CCP Australian Airships Ltd v Primus Telecommunications Pty Ltd [2004] VSCA 232, distinguished.
Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11, cited.
Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75; Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54, distinguished.
Coles Supermarkets Australia Pty Ltd v FKP Limited [2008] FCA 1915, referred to.
The cross appeal:
Cheng v Motor Yacht Sales Australia Pty Ltd t/a Boutique Boat Company (2022) 108 NSWLR 342; [2022] NSWCA 118, cited.
BELL CJ: This is an appeal and an application for leave to cross appeal from a decision of Harrison AsJ (the primary judge) sitting in the Common Law Division of this Court: Weston Energy Pty Ltd v National Ceramic Industries Pty Ltd [2025] NSWSC 747 (PJ or primary judgment).
The Appellant, Weston Energy Pty Ltd (Weston), was an authorised gas retailer under Part 5 of the National Energy Retail Law (NSW) (NERL) between September 2016 and May 2022 and, in that period, supplied gas on the wholesale gas market.
The Respondent, National Ceramic Industries Australia Pty Ltd (Ceramic****s), is a tile manufacturer located in the Hunter Valley, NSW, and requires natural gas to fire its kilns**.** Ceramics purchased retail gas from Weston between January 2018 and May 2022.
On 4 March 2022, following a tender process, Weston and Ceramics entered into the “Internal Meter Gas Supply Agreement” (the GSA) for the retail supply of natural gas. Under the GSA, Ceramics purchased gas from Weston under what was termed a “capped spot price” model, pursuant to which gas was charged at a spot price, up to a maximum of $15.00/GJ (the Price Cap). A ‘premium’ of $0.15/GJ was charged by Weston (the Premium).
Less than two weeks after the GSA was executed, Russia invaded Ukraine. That event, combined with weather-related disruptions to Australia’s domestic coal supply, caused natural gas prices to soar, increasing by over 200% from 20 March 2022 to 17 May 2022. Weston was no longer able to meet its prudential obligations (tied to the value of the gas supplied) to the Australian Energy Market Operator (AEMO).
On 23 May 2022, the AEMO issued a suspension notice to Weston suspending it from the Short-Term Trading Market (STTM), effective from the following day, 24 May 2022, at 6am AEST. Accordingly, on 23 May 2022, Weston wrote to Ceramics terminating the GSA under cl 15.1(c) of the GSA which provided:
“Weston Energy may terminate this Agreement with immediate effect by giving written notice to the Customer if:
(i) Weston Energy’s registration in respect of the STTM hub to which the registration relates is suspended by AEMO for any reason; or if we are no longer permitted to sell Gas under a regulatory requirement for any reason.”
There was no dispute that cl 15.1(c) entitled Weston to terminate the GSA if it was suspended, as it was, from the STTM. On 24 May 2022, the Australian Energy Regulator revoked Weston’s gas retailer authorisation under s 142 of the NERL.
As a result of the termination of the GSA, Ceramics was compelled to source its natural gas from different suppliers, and to do so at a “greatly increased price”.
On 23 May 2022, the same day as the termination of the GSA, Weston issued Ceramics with an invoice numbered NCIA230522 for the sum of $664,983.42 (the Unpaid Invoice) for the gas supplied to Ceramics prior to Weston’s suspension, which was due for payment on 3 June 2022. Some $5,425.62 plus GST of that sum was made up of the Premium payable as part of the GSA (see [4] above).
Ceramics did not dispute the amount of the invoice owed under the GSA, save for the inclusion of the Premium. By way of a Statement of Claim filed on 1 September 2022, Weston commenced proceedings alleging that Ceramics owed Weston the value of the Unpaid Invoice plus interest as calculated under the GSA.
By way of an Amended Statement of Cross Claim (ASOCC) filed on 19 September 2024, along with an Amended Defence filed on the same day, Ceramics sought an equitable set-off for an amount exceeding that claimed by Weston on account of the following three cross-claims: (i) damages for breach of the GSA; (ii) damages for misleading or deceptive conduct contrary to s 18 of the Competition and Consumer Act 2010 (Cth), sch 2 – Australian Consumer Law (the ACL); and (iii) payment of $13,339.62 in restitution for the value of the Premium charged in two earlier invoices which were paid on 20 April 2022 and 12 May 2022. The breach of contract claim was abandoned in closing submissions at first instance, leaving only the misleading or deceptive conduct claim (which succeeded) and the restitution claim (which was dismissed and is the subject of the application for leave to cross appeal, leave being required by reason of the exiguous financial value of the claim).
The misleading or deceptive conduct claim succeeded before the primary judge and led to the award of damages of $7,048,728.27 plus interest in the sum of $611,404.76, after setting off Weston’s claim in respect of the Unpaid Invoice: Weston Energy Pty Ltd v National Ceramic Industries Pty Ltd (No 2) [2025] NSWSC 864. The primary judge’s finding that Weston engaged in misleading or deceptive conduct lies at the heart of the present appeal.
In [18] of the ASOCC, Ceramics alleged that, on 2 March 2022, Weston represented by way of an email of that date that it would, and presently intended, as a term of the then proposed GSA, to obtain third-party insurance as a means of ensuring the capped price could be maintained by Weston (Price Capping Insurance), with such insurance commencing from 1 April 2022.
In [19] of the ASOCC, Ceramics alleged that, by the wording of cl 1.8 of sch 1 of what became the GSA, Weston represented to Ceramics that:
“it would, and presently intended, to obtain Price Capping Insurance on the following terms:
(a) the term of the Price Capping Insurance was from 1 April 2022 to 30 March 2023;
(b) a premium of $0.15/GJ was payable by the cross-claimant for the Price Capping Insurance obtained by the cross-defendant;
(c) the Price Capping Insurance would operate by being triggered according to price movements so as to maintain the Capped Price; and
(d) the Price Capping Insurance was to be renewed on an annual basis.”
“(a) there existed and was available in March 2022 a Price Capping Insurance product in the terms stated in the proposed Agreement (the First Representation);
(b) [Weston] had the ability and capacity to obtain the Price Capping Insurance on the terms stated in the proposed Agreement (the Second Representation);
(c) [Weston] intended as at about 2 March 2022 to obtain the Price Capping Insurance in performance of the Agreement (the Third Representation); and
(d) Weston would comply with the Agreement and obtain Price Capping Insurance for the benefit of itself and [Ceramics] (the Fourth Representation).”
A fifth representation alleged that in passing on the Premium for the Price Capping Insurance to Ceramics by charging for it in its invoices at the rate of $0.15/GJ, Weston represented to Ceramics that it had taken out Price Capping Insurance to protect itself against gas commodity price rises on the spot market and was charging Ceramics the agreed Premium.
The failure to obtain Price Capping Insurance was said to have left Weston vulnerable to an increase in the spot price of gas beyond the Price Cap such that it could not maintain its gas retailer authorisation.
Parenthetically, in the course of resolving Ceramics’ cross claim for restitution, the primary judge held that a reasonable businessperson would not have understood cl 1.8 to relate to an insurance policy with a third-party insurer and that, “taking the ordinary and natural meaning of the words”, cl 1.8 addressed how the P**rice C**ap was to operate and not how Price Capping Insurance was proposed to operate: PJ [123]-[124]. There was a degree of tension between this construction and her Honour’s reasoning on the misleading or deceptive conduct claim.
Notwithstanding what her Honour had held in relation to the proper construction of cl 1.8 (and conscious of the tension this finding created: see PJ [164]), the primary judge accepted that the representations pleaded in the context of the misleading or deceptive conduct claim had been made and that that conduct caused, in the sense of “materially contributed” to, Ceramics’ decision to choose to buy gas from Weston under the GSA rather than to enter into a contract with another supplier, namely Shell Energy, which had tendered to supply Ceramics at the same time as Ceramics accepted Weston’s offer. This entailed an acceptance of the evidence of Ceramics’ managing director, Mr Christopher Paul Schneider, that he was in fact misled by the representations said to have arisen.
That finding of factual causation is not challenged on appeal. Rather what is challenged is the finding that the impugned conduct was in fact misleading or deceptive or gave rise to the pleaded representations. Weston also sought to contend that its suspension from the STTM by the AEMO effective from 24 May 2022 broke any chain of causation between its conduct and the loss said to have been suffered by Ceramics. Weston accepted that it had not run this argument at first instance in the context of the misleading or deceptive conduct claim (although it had done so in response to the ultimately abandoned contract claim) but argued that, as it was a pure legal argument, the Court should still entertain it.
Both to understand the primary judge’s reasons and to put the impugned conduct into its proper context, it is necessary to set out the largely uncontroversial background to the entry into the GSA.
As already noted, Mr Schneider was the managing director of Ceramics. He had held this position since 2012, and before then, was employed at Ceramics in the role of finance manager since 2009. He and Ceramics were advised by Mr Ralph Willy of NUS Consulting Group (NUS). NUS was a firm of energy consultants which had previously assisted Weston with an electricity tender and contract. Ceramics acted through Mr Willy in the course of the 2022 tender for the gas supply contracts. Mr Schneider’s evidence was that he was “relying on Ralph [Willy] as an expert energy broker” and that Mr Willy interacted with the retailers and would feed information back to Mr Schneider that was important.
Mr Willy primarily dealt with Mr Schneider from Ceramics, and Dr Amin Gholami from Weston. Dr Gholami was the Executive Manager of Customer Operations at Weston. Other key figures working at Weston were James Simonian (James), a company director, and his father, Garbis Simonian (Garbis), the Managing Director of the company.
The first agreement between the parties was entered into in January 2018 for the 2018 and 2019 calendar years. The primary judge observed that Ceramics was first attracted to Weston in late 2017 “because it provided gas at spot price, which was at that time more favourable to the more widely offered fixed price offerings”.
On 19 December 2019, the parties executed a new agreement for the 2020 and 2021 calendar years. That agreement was renegotiated in December 2020 and extended to cover the 2021 and 2022 calendar years (the 2020 Contract).
Under the 2020 Contract, Weston charged Ceramics at the wholesale market price, or “spot price”, of natural gas, plus a 10% retail margin charge. The relevant parts of the 2020 Contract are extracted below:
1.5. Key Contract Details
Gas cost components:
| Gas Cost | Wholesale Market Price | | Retail Margin Charge | 10% of the Gas Commodity Charge | | Gas delivery costs | Passed through at cost |
Other key contract details:
| Contract Dates | Start Date: 01/Nov/2020 I End Date: 31/Dec/2022 | | Credit Support | Covered by Trade Credit Insurance Policy - Premium is paid by Weston Energy | | Billing Period | Monthly | | Payment Terms | 7 days after the end of the Billing Period | | Contract Version | V4.1 |
“Dear retailer,
Please provide a fixed price and spot price gas quote for NCIA gas supply (Letter of Authority is attached).
Offers should be emailed by 3pm on Wednesday 23rd February 2022…
As mentioned above we are asking for two different kinds of gas offers. One offer…should provide the fixed pricing and the other offer should be based on spot pricing. The spot market offer should include a cap of $12/GJ and $15/GJ.”
The tender did not seek any form of third-party insurance as part of the offers being sought.
As events transpired, Weston made three differing offers for the sale of gas to Ceramics, the third of which resulted in the GSA.
“Hi Ralph,
I’m pleased to submit our offering based on the wholesale gas price supported by a fixed block hedge to improve the certainty of this pricing model.
We’d like to offer a fixed retail margin of $0.80/GJ instead of the current percentage-based arrangement. Please let me elaborate more.
The purchasing of gas remains the same as the past 4 years since they’ve been with Weston. Therefore, they will take advantage of full volume flexibility with no Take or Pay penalty. The fixed price block of 1,370/GJ at $12.25/GJ for FY22-23 (and $12.75/GJ for CY23-24) will be sold back to the market on their behalf as the ex-Ante prices and the difference (either as a cost or credit) will be added to their daily costs. This fixed-price block is available for 7 days.
This is a smart and sophisticated pricing model that provides the full flexibility of purchasing from the spot market and also safeguards them against spot price volatility. I have provided a spreadsheet that explains this pricing model. Please see attached.
We’d like to offer a fixed retail margin of $0.80/GJ instead of the current percentage-based arrangement. We could offer a price cap of $15/GJ on their effective monthly price that we will charge them at the billing time. This is complimentary with no additional premium.
We’d like to offer a fixed retail margin of $0.80/GJ instead of the current percentage-based arrangement. In addition, the NUS commission will be blended into the effective price.
I hope you find this offering compelling. I’m prepared for an in-person meeting (we’re also located in Chatswood) or an online meeting to discuss our offering in more detail.
Please feel free to contact me on my mobile number below.
Kind regards,
Amin Gholami.” (emphasis added).
1.5. Key Contract Details
Gas cost components:
| Gas Cost | Effective Price based on the Ex-Ante Price in Sydney STTM Hub adjusted against the CFD as per Schedule 2: “Fixed Price Gas blocks” | | Retail Margin Charge | $0.80/GJ | | Gas delivery costs | Passed through at cost |
Other key contract details:
| Contract Dates | Start Date: 01/Jul/2022 I End Date: 30/Jun/2024 | | Credit Support | Covered by Trade Credit Insurance Policy - Premium is paid by Weston Energy | | Billing Period | Monthly | | Payment Terms | 7 days after the end of the Billing Period | | Contract Version | V4.1 |
…
1.8. Price Cap:
Weston Energy will provide price insurance for the Effective Price Monthly price. The terms are outlined below:
• Premium: $0.00/GJ
• Term: 01/07/2022 - 30/06/2023
• Renewal: The price insurance is to be renewed on an annual basis.
• Calculation: Price insurance will be triggered on a monthly value of the effective price (i.e. Ex Ante price adjusted by the fixed price and cap it at $15.00/GJ.
It may be noted that cl 1.8 of the First Offer corresponded to the italicised portion of the fourth last paragraph of Dr Gholami’s email set out at [29] above. The price cap was described in cl 1.8 as a form of “price insurance” which, in the context of an otherwise uncapped spot price contract, it undoubtedly was.
Four days after Dr Gholami sent through the First Offer, on 28 February 2024, Mr Willy forwarded it as an attachment to a covering email to Mr Schneider with the subject line “Gas tender analysis”. That email contained a comparison of the “five spot market offers” received in response to the tender, one of which was the First Offer, which Mr Willy described as the “best” of the five spot price offers. The covering email read as follows:
“Please find attached our cost calculation for your large market gas account. I’ve attached also our latest gas market report, Shell’s fixed price contract and Weston Energy spot market contract.
The gas market report should give you a better understanding what’s happening on the gas market at the moment and what the future could bring. The war in Ukraine has already a huge impact on the gas market and no one knows how long this will continue.
We’ve got five spot market offers and 4 fixed price offers as Weston Energy can’t provide a real fixed price offer. Their fixed price offer is a kind of a hybrid (mixture of fixed price and spot market).
The first page is showing you the cost calculation of the five spot market offers. All these offers have a cap/ceiling of $15/GJ which was the lowest cap the retailers were willing to provide (your current Weston Energy contract has no cap included). Based on the historical last 12 months spot prices Weston Energy has provided the best offer.
The second page is showing you the spot market cost calculation as a worth [sic] case scenario by getting charged the $15/GJ for the period of 12 months. Weston Energy would be still providing the best price offer.
The third page is showing you the comparison of the fixed price offers. Shell Energy is providing by far the best offer in this case. Their fixed price offer is around $2/GJ more cost intensive as Weston Energy’s spot market offer but would be also around $3.72/GJ less cost intensive as Weston Energy’s $15/GJ cap offer.
If you are looking for a more conservative variant then you should sign the attached Shell Energy which gives you a budget security over the next 1, 2 or 3 years. This offer is avlid (sic) until 12pm on Wednesday, 2nd March. Therefor (sic) you have to terminate the Weston Energy contract effective to 30/06/2022.
If you wanna continue with a spot market contract then you should sign the attached Weston Energy contract which would be for a period of 2 years. This contract including the $15/GJ cap will be effectived (sic) from 01/07/2022.
Please feel free to conatct (sic) me if you have any further questions.
Regards,
Ralph Willy.”
“Hi Ralph,
Please see attached the amended offer based on the pure spot model supported by a $15/GJ cap for an elected month of the year and a capped retail margin of $1/GJ for this year. We reduce the margin cap to $0.60/GJ for CY23 and keep them on 10% just in case.
Your commission is also mentioned as a special condition and will be blended into the effective rate we charge on their monthly bill.
I believe that you understand that not many suppliers are open to negotiating their existing contracts during the term. We’d like to meet their satisfaction and also have the pleasure of working with you on this account going forward.”
1.5. Key Contract Details
Gas cost components:
| Gas Cost | Wholesale Market Price | | Retail Margin Charge | 10% of the Gas Commodity Charge capped at: • $1/GJ in CY2022 • $0.60/GJ in CY2023 | | Gas delivery costs | Passed through at cost |
Other key contract details:
| Contract Dates | Start Date: 01/Mar/2022 I End Date: 31/Dec/2023 | | Credit Support | Covered by Trade Credit Insurance Policy - Premium is paid by Weston Energy | | Billing Period | Monthly | | Payment Terms | 7 days after the end of the Billing Period | | Contract Version | V4.1 |
…
1.8. Price Cap:
Weston Energy will provide price insurance for the Effective Price Monthly price. The terms are outlined below:
• Premium: $0.00/GJ
• Term: 01/03/2022 - 28/02/2023
• Renewal: The price insurance is to be renewed on an annual basis.
• Calculation: Price insurance will be triggered on a monthly value of the effective price (i.e. Ex Ante price adjusted by the fixed price and cap it at $15.00/GJ.
• The price cap could be applied once a year on your elected month. The month has to be determined before the invoice is issued.
On the morning of 2 March 2022, Dr Gholami called Mr Schneider to obtain feedback on the Second Offer (the First Phone Call). Dr Gholami’s phone records indicated that the call lasted for seven minutes. The content of the First Phone Call was uncontroversial, and the primary judge accepted the evidence of all the witnesses in relation to it.
Mr Schneider gave the following evidence of what was said in the First Phone Call:
“During this call Amin outlined their current offer and discussed the gas market generally. He expressed the view that gas prices would go down. In relation [to] the current offer, he said words to the following effect:
Amin: ‘Weston will bring forward the start date of the contract and provide price cap insurance from April instead of July.’
Me: ‘Okay, let me speak to Ralph and we will come back to you.’”
“On 2 March 2022, I called [Mr Schneider] to obtain feedback on the 1 March Offer. During the call, words to the following effect were said:
Me*:* *‘*Chris, this offer includes a complimentary 1 month price cap. It is a valuable offer.**’
Chris*:* *‘We would prefer a 12 month price cap at $15 per GJ. I’*m not sure [Ceramics] will go with a 1 month price cap.**’
Me*:* *‘*I will have to get approval from my superiors before making any other offers.**’”
“The content of the first conversation on 2 March 2022 is uncontroversial. Mr Schneider told Dr Gholami that a one-month price cap was insufficient and pushed Dr Gholami to offer a 12-month price cap. Dr Gholami said that he would seek guidance from his superiors. This phone call was of 7 minutes’ duration. In cross-examination, Dr Gholami said that in such negotiations it was his practice to inform clients that gas prices might fall (T186 [45] – 187 [3]):
‘Q. In that conversation do you recall you were going through the 1 March offer with Mr Schneider and you discussed that with him?
A. The intention of the call was to just clarify the, the latest offer that we made, and the one month for - price cap for an elected month and the value that it adds to our offering, and see if what - you know, getting his input and feedback on that directly firsthand from Mr Schneider.
Q. During that conversation, do you recall you expressed to him a view that gas prices would be likely to go down?
A. I cannot recall those exact words, but to that effect we always said that it’s a variable price and there is a chance that prices go down.’”
Following the First Phone Call, and on the same morning, Dr Gholami called James to discuss the possibility of a 12-month price cap (the Second Phone Call or the Three-Way Phone Call). Dr Gholami’s phone records indicated that the Second Phone Call lasted 17 minutes.
The evidence of the parties at trial differed significantly in respect of the Second Phone Call. Mr Schneider had no recollection at all of the Second Phone Call. No contemporaneous notes were taken of the call. Dr Gholami and James both gave detailed evidence of the Second Phone Call, which began between James and Dr Gholami and turned into a three-way conversation between James, Dr Gholami, and Mr Schneider. Dr Gholami’s and James’ recollections of what was said during the Second Phone Call were largely rejected by the primary judge although her Honour did accept that the call took place and that, during the call, certain statements were made. Thus, her Honour held at PJ [91]-[93] that:
“[91] I accept that James said the words, ‘The best I can do against my book is for a 12-month price cap’ during the three-way telephone conversation; and that Dr Gholami recalled James saying, ‘[W]e are writing off any losses against our own profit book’. While their recollections are slightly different, I accept that either of those statements were said but whichever it was, the most that was said to Mr Schneider was that the best Weston could do was a 12-month price cap and that Weston was writing any losses off against its own profit book.
[92] Neither James nor Dr Gholami mentioned that there was no third-party insurance.
[93] I accept that on 2 March 2022, the three-way phone call took place between Mr Schneider, Dr Gholami and James. I accept that the following was said ‘We definitely can’t offer a cap for [a] 24-month retail contract. The best I can do against my book is for a 12-month price cap’. However, I accept that neither James nor Dr Gholami explained to Mr Schneider that there was no third-party policy insurance. Both James and Dr Gholami wanted to secure the contract, so Mr Schneider was asked to pay a premium and the reason given to him was that it was difficult to offer such a long price cap because Weston was writing off any losses against its own profit book; and given the risk with a 12-month price cap, Weston would require a fee of $0.15/GJ. The natural and ordinary meaning of this statement is that for Weston to provide such a long price cap, it would have to charge an extra fee of $0.15/GJ. There was no reference to cl 1.8 of the proposed offer that refers to a price cap insurance.”
“I find Dr Gholami’s and James’ evidence as to the three-way phone conversation unreliable. It is difficult to determine exactly what was said in this phone conversation, but it is my view that, after carefully observing them giving evidence and being cross-examined, they had tailored their evidence to bolster Weston’s case. Starting with the email, it is my view that Dr Gholami and James exploited the loose and imprecise language of cl 1.8 to secure Ceramics’ business. Regarding the text of their email, it appears that ‘insurance’ was discussed.”
It appears from the context of this paragraph of the primary judgment that the email her Honour was referring to was that sent immediately after the Three-Way Phone Call and which is set out at [44] below.
“I accept that on 2 March 2022, the three-way phone call took place between Mr Schneider, Dr Gholami and James. I accept that during the three-way telephone conversation that James said something to the effect of ‘[w]e definitely can’t offer a cap for a 24-month retail contract. The best I can do against my book is for a 12-month price cap.’ It is common ground that neither James nor Dr Gholami explained to Mr Schneider that there was no third-party insurance policy.”
“Good morning Ralph and Chris,
Thank you very much for taking the time this morning to help us improve our offer such that we could meet your expectations.
Please see attached the updated contract with 12 months price cap of $15/GJ. We’re happy to start the capped retail margin from 1/Mar but let the insurance start 1/Apr so you’ll have one extra month coverage in 2023.
I hope this helps to get this deal over the line and continue our long-term relationship with you.
Please feel free to contact me on my mobile if you have any questions.” (emphasis added).
1.5. Key Contract Details
Gas cost components:
| Gas Cost | Wholesale Market Price | | Retail Margin Charge | 10% of the Gas Commodity Charge capped at: • $1/GJ in CY2022 • $0.60/GJ in CY2023 | | Gas delivery costs | Passed through at cost |
Other key contract details:
| Contract Dates | Start Date: 01/Mar/2022 I End Date: 31/Dec/2023 | | Credit Support | Covered by Trade Credit Insurance Policy - Premium is paid by Weston Energy | | Billing Period | Monthly | | Payment Terms | 7 days after the end of the Billing Period | | Contract Version | V4.1 |
1.8. Price Cap:
Weston Energy will provide price insurance for the gas commodity price. The terms are outlined below:
• Premium: $0.15/GJ
• Term: 01/04/2022 - 30/03/2023
• Renewal: The price insurance is to be renewed on an annual basis.
• Calculation: Price insurance will be triggered on a monthly weighted average of the Ex Ante price and cap it at $15.00/GJ.
The five differences between cl 1.8 of the Third Offer and cl 1.8 of the Second Offer were that (i) “gas commodity price” replaced “Effective Price Monthly price”; (ii) the premium rose from the complimentary $0.00/GJ in the Second Offer to $0.15/GJ in the Third Offer, reflecting the fact that (iii) the cap was to be for a 12 month period rather than a one month period at Ceramics’ election; (iv) in the Third Offer, the trigger of the price insurance was calculated on a “monthly weighted average of the Ex Ante price” rather than the “effective price” which was the Ex Ante price adjusted by the fixed price; and (v) the term of the insurance (in the sense of the price capping arrangement governed by cl 1.8) commenced (and concluded) one month later in the Third Offer, reflecting what Dr Gholami had said in his cover email.
The Third Offer was accepted and the GSA was entered into on or about 4 March 2022. The primary judge provided the following explanation of how the cost capping mechanism provided for in cl 1.8 of the GSA operated at PJ [30]-[31]:
“In the third and final offer of Weston’s which Ceramics accepted, natural gas was charged on a ‘capped spot price’ model — that cap was set at $15/GJ. This means that Ceramics would pay for natural gas at the spot price up to and including $15/GJ. For example, if the price was $9/GJ, Ceramics would pay $9/GJ. However, if the price were to exceed $15/GJ (as it in fact did), for example, if the price were $20/GJ, Ceramics would nonetheless pay $15/GJ. A ‘premium’ of $0.15/GJ was paid by Ceramics to Weston for this ‘price cap’. An additional retail margin ranging around $1/GJ would also be paid. This is uncontested.
As I understand it, any ‘price capping insurance’ if Weston had in fact obtained it would operate to secure Weston against gas price fluctuations above $15/GJ. Were the wholesale gas price so to increase, the policy would be engaged to reimburse Weston. The increased stability of its gas supplier would thereby benefit Ceramics.”
Before turning to the grounds of appeal and cross appeal, it is convenient to summarise the primary judge’s reasoning in relation to Ceramics’ restitution and misleading or deceptive conduct claims.
At trial (and by way of the cross appeal), Ceramics claimed that it was entitled to $13,339.62 in restitution because, during the short lifespan of the GSA, it paid the Premium (see [4] above) to Weston on the shared understanding that Weston would obtain Price Capping Insurance to protect itself against rising gas commodity prices on the spot market, which, of course, Weston never did. Ceramics relied for that claim on the wording of cl 1.8 of the GSA, specifically the requirement in the chapeau that “Weston Energy will provide price insurance for the gas commodity price”, combined with what the primary judge described as the collection of “characteristically insurance-related terms” in that clause including “price insurance”, “premium”, “term”, “renewal” and “trigger”: PJ [104].
Weston submitted that a reasonable businessperson would have understood “price insurance” in cl 1.8 to be a reference to the Price Cap itself, which acted as a kind of insurance for Ceramics against gas commodity price rises on the spot market. In support of that position, Weston submitted that it used the terms “price cap” and “price insurance” interchangeably. The primary judge rejected that submission at PJ [159], with reference to the following excerpt from the Cover Email to the Third Offer (see [44] above), which her Honour considered “contemplates that they [‘price cap’ and ‘price insurance’] are separate things”:
“Please see attached the updated contract with 12 months price cap of $15/GJ. We’re happy to start the capped retail margin from 1/Mar but let the insurance start 1/Apr so you’ll have one extra month coverage in 2023.”
“[123] However, when ultimately interpreting this agreement, cl 1.8 is headed by the words ‘price cap’ and not ‘price cap insurance’ therefore, by taking the ordinary and natural meaning of the words, the Court must infer, that this section will address how the ‘price cap’ is to operate, and not how the ‘price cap insurance’ is proposed to operate. In the second line of cl 1.8 the contract stipulates ‘Weston Energy will provide price insurance for the effective…’ alluding to the fact that, a price cap will be achieved by the mechanism of Weston providing a ‘price insurance’ and not by Weston ‘obtaining’ a price cap insurance policy. The mechanism ‘price insurance’ operates with respect to the terms listed in cl 1.8, being the ‘premium’ charged for the service, the ‘term’ for which it will operate, ‘the renewal process’ and finally how the mechanism will be triggered. Alternatively, the calculation needed to give effect to the ‘price insurance mechanism’ which, in turn, works to cap the price at $15/GJ.
[124] Although under the heading ‘price cap’ the words ‘price insurance’ appear three times where it stipulated, ‘Weston Energy will provide price insurance for the gas commodity price’, ‘[t]he price insurance is to be renewed on an annual basis’, ‘[p]rice insurance will be triggered on a monthly weighted average…’, there is no reference to the actual term ‘price insurance policy’ nor to the term ‘price cap insurance policy’. After examining the ordinary and natural meaning of the words in the agreement, paying particular attention to the construction of cl 1.8 (although it is not entirely clear per se), it is my view that a reasonable businessperson would not have understood cl 1.8 to mean that Weston had an insurance policy in place with a third-party insurer.”
“A court will have regard to all the words used ‘so as to render them all harmonious with one another’ (Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99, 109) and in construing the contract will prefer a construction that is ‘congruent’ (Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522, 529) with the various components of the whole.”
Thus, her Honour concluded that “[t]he fact that a third-party insurance policy is clearly contemplated by cl 1.5 weighs against the conclusion that the same is contemplated by cl 1.8”: PJ [118].
Turning to the misleading or deceptive conduct claim, the five representations relied on by Ceramics as constituting misleading or deceptive conduct under s 18 of the ACL were outlined at [13]-[15] above. Those pleaded representations were said to have arisen from the following four categories of Weston’s pre and post contractual conduct: PJ [142]
the terms of the Third Offer (i.e. what became cll 1.5 and 1.8 of the GSA);
the First Phone Call and the Second Phone Call made on 2 March 2022;
the Cover Email sent from Dr Gholami to Mr Willy and Mr Schneider on 2 March 2022 with the Third Offer attached; and
invoices sent by Weston to Ceramics in respect of the Premium.
The primary judge concluded that those four categories of conduct gave rise to all five of the pleaded representations so as to amount to misleading or deceptive contrary to s 18 of the ACL: PJ [163]. Her Honour appeared to treat Weston’s conduct as being directed to a class of persons, namely purchasers of wholesale gas under a price cap contract, making reference to Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [24]-[26] in this context: PJ [149]–[150]. Whether this was correct may be doubted but nothing ultimately turns on that.
The primary judge concluded that cl 1.8 was one of “calculated ambiguity” (PJ [189]), and held that the “loose” and “imprecise” language of cl 1.8 was then “exploited” (PJ [158], [189]) by Dr Gholami and James, both in the Cover Email and the Second Phone Call, and by their failure to disabuse Ceramics of that ambiguity. The primary judge summarised her findings at PJ [163] as follows:
“I am satisfied that the conduct was misleading or deceptive and that it gave rise to the five pleaded representations. Namely, that:
(1) there existed and was available in March 2022 a price capping insurance product in the terms stated in third offer;
(2) Weston had the ability and capacity to obtain the price capping insurance on the terms stated in the third offer;
(3) Weston intended as at about 2 March 2022 to obtain the price capping insurance in performance of the third offer;
(4) Weston would comply with the third offer and obtain price capping insurance for the benefit of itself and Ceramics; and
(5) Weston had taken out price capping insurance to protect itself against gas commodity price rises on the spot market.”
“I am reasonably satisfied that this misleading or deceptive conduct materially contributed to Mr Schneider’s decision to choose Weston’s contract over Shell’s, which is the key act causing loss. In other words, I am actually persuaded that Weston’s misleading or deceptive conduct materially contributed to Ceramics’ decision to choose Weston over Shell. In the event, Weston became unable to fulfil its contractual obligations and Ceramics lost the benefit of its contract. This would not have happened if Ceramics chose Shell — Ceramics chose Weston and not Shell because of Weston’s misleading or deceptive conduct.”
“1. The primary judge:
(a) erred in finding that the Appellant’s conduct as found was misleading or deceptive and gave rise to the five pleaded representations,
(b) otherwise erred in failing to find that Paul Schneider and Ralph Willy did not make reasonable enquiries of the price cap in [the] proposed cl 1.8, and therefore the primary judge erred in finding that the pleaded conduct was misleading or deceptive.
2. The primary judge erred in finding that:
(a) cl 1.8 of Schedule 1 to the Internal Meter Gas Supply Agreement dated 4 March 2022 was a contractual clause of calculated ambiguity:
(b) which was exploited by Dr Amin Gholami and James Simonian in the three-way telephone conversation on 2 March 2022 and an email sent at 10:42am on 2 March 2022 by Dr Gholami to Ralph Willy and Paul Schneider,
because there was insufficient evidence for those findings and they were not put to Dr Amin Gholami and James Simonian in cross-examination.
- The primary judge:
(b) erred in not finding that, subsequent to the impugned conduct, the decision taken on 24 May 2022 by the Australian Energy Market Operator to suspend the Appellant’s trading licence was an independent, external or supervening cause which broke the necessary chain of causation;
(c) otherwise erred in finding that, because of the Appellant’s misleading or deceptive conduct, the Respondent suffered loss or damage for the purposes of s 236 of the Australian Consumer Law in Schedule 2 to the Competition and Consumer Act 2010 (Cth).”
As Senior Counsel submitted during the hearing of the appeal, these three grounds in fact raised two distinct issues:
whether Weston’s conduct was misleading or deceptive (Grounds 1 and 2); and
whether Weston’s conduct, if misleading or deceptive, caused loss to Ceramics within the meaning of s 236 of the ACL (Ground 3).
Weston sought the following four orders from this Court:
“1. Appeal allowed.
2. The Respondent pay the sum of $664,983.42 to the Appellant.
3. Interest on that amount calculated in accordance with clause 7.3(b) of the Internal Meter Gas Supply Agreement dated 4 March 2022.
4. The Respondent pay the Appellant’s costs.”
At the heart of the primary judge’s reasoning were the references to “insurance” in cl 1.8 of the Third Offer, in the Cover Email and in what her Honour inferred had been discussed in the Three-Way Phone Call. Allied to the references to “insurance” was the use of terminology commonly associated with insurance in cl 1.8, namely the words “premium” and “trigger” coupled with the concept of a “renewal”.
The primary judge characterised the use of this language as giving rise to a “calculated ambiguity” which was “reinforced” or “exploited” by the use of the word “insurance” in the Cover Email and the Three-Way Phone Call. Her Honour also emphasised that in the Three-Way Phone Call, neither James nor Dr Gholami mentioned that there was no third-party insurance: see, for example, at PJ [92].
Whether conduct is misleading or deceptive is to be assessed objectively, having regard to the words spoken and actions taken but also, and very importantly, by reference to context. The relevant standard of review on an appeal of this kind is the “correctness standard” and, in the absence of a challenge to findings or controversy as to what may have been said between the parties, this Court is in as good a position as the primary judge to decide upon the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the primary judge’s findings: Wormald v Maradaca Pty Ltd [2020] NSWCA 289 at [120]-[121] (Wormald). To the extent that Ceramics relied upon CCP Australian Airships Ltd v Primus Telecommunications Pty Ltd [2004] VSCA 232 at [27] to suggest that a more deferential approach should be taken to a finding of misleading or deceptive conduct, requiring the demonstration of glaring error or that a finding was “not open”, such an approach has been overtaken at least in this State by Wormald. Senior counsel for Ceramics accepted in the course of argument that the “correctness” standard applied to Weston’s challenge to the primary judge’s characterisation of Weston’s conduct as misleading or deceptive.
In Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) 277 CLR 186; [2023] HCA 8 at [80], Kiefel CJ, Gageler, Gordon, Edelman, and Gleeson JJ summarised the well-established four steps required to determine whether a person has breached s 18 of the ACL as follows:
“The principles are well established. Determining whether a person has breached s 18 of the ACL involves four steps: first, identifying with precision the ‘conduct’ said to contravene s 18; second, considering whether the identified conduct was conduct ‘in trade or commerce’; third, considering what meaning that conduct conveyed; and fourth, determining whether that conduct in light of that meaning was ‘misleading or deceptive or … likely to mislead or deceive’.”
“The third and fourth steps require the court to characterise, as an objective matter, the conduct viewed as a whole and its notional effects, judged by reference to its context, on the state of mind of the relevant person or class of persons. That context includes the immediate context — relevantly, all the words in the document or other communication and the manner in which those words are conveyed, not just a word or phrase in isolation — and the broader context of the relevant surrounding facts and circumstances. It has been said that ‘[m]uch more often than not, the simpler the description of the conduct that is said to be misleading or deceptive or likely to be so, the easier it will be to focus upon whether that conduct has the requisite character’. That said, the description of the conduct alleged and identified at the first step should be sufficiently comprehensive to expose the complaint, because it is that conduct that will ultimately, as a whole, be determined to be or not to be misleading or deceptive.”
“[20] In commercial dealings between individuals or individual entities, characterisation of conduct will be undertaken by reference to its circumstances and context. Silence may be a circumstance to be considered. The knowledge of the person to whom the conduct is directed may be relevant. Also relevant, as in the present case, may be the existence of common assumptions and practices established between the parties or prevailing in the particular profession, trade or industry in which they carry on business. The judgment which looks to a reasonable expectation of disclosure as an aid to characterising non-disclosure as misleading or deceptive is objective. It is a practical approach to the application of the prohibition in s 52.
[21] To invoke the existence of a reasonable expectation that if a fact exists it will be disclosed is to do no more than direct attention to the effect or likely effect of non-disclosure unmediated by antecedent erroneous assumptions or beliefs or high moral expectations held by one person of another which exceed the requirements of the general law and the prohibition imposed by the statute. In that connection, Robson AJA in the Court of Appeal spoke of s 52 as making parties ‘strictly responsible to ensure they did not mislead or deceive their customer or trading partners’. Such language, while no doubt intended to distinguish the necessary elements of misleading or deceptive conduct from those of torts such as deceit, negligence and passing off, may take on a life of its own. It may lead to the imposition of a requirement to volunteer information which travels beyond the statutory duty ‘to act in a way which does not mislead or deceive’. Cicero, in his famous essay On Duties, seems to have contemplated such a standard when he wrote:
‘Holding things back does not always amount to concealment; but it does when you want people, for your own profit, to be kept in the dark about something which you know and would be useful for them to know.’
It would no doubt be regarded as an unrealistic expectation, inconsistent with the protection of that ‘superior smartness in dealing’ of which Barton J wrote in W Scott, Fell & Co Ltd v Lloyd, that people who hold things back for their own profit are to be regarded as engaging in misleading or deceptive conduct. As Burchett J observed in Poseidon Ltd v Adelaide Petroleum NL, s 52 does not strike at the traditional secretiveness and obliquity of the bargaining process. But his Honour went on to remark that the bargaining process is not to be seen as a licence to deceive, and gave the example of a bargainer who had no intention of contracting on the terms discussed and whose silence was to achieve some undisclosed and ulterior purpose harmful to a competitor.” (footnotes omitted).
“Was Miller’s conduct in failing to inform BMW, in terms, that the policy to be funded was not cancellable, or that the policy in the bundle was the policy to be funded, misleading? That question requires close analysis of all of the circumstances of the transaction. The parties were commercially sophisticated. They were experienced in their respective fields. The transaction involved the assessment by BMW of an application to lend Miller’s client $3.975 million. The only document that Miller supplied in support of the application which appeared to relate to the policy to be funded did not disclose the nature of the risks insured. But it did put BMW on notice that the underlying policy may be an unusual one. BMW made no further inquiry. BMW’s failure to make reasonable inquiries would not automatically defeat its statutory claim for damages for misleading conduct. However, given the history of this transaction, it is a circumstance that is relevant to whether Miller’s conduct in failing to disclose its knowledge of the policy is correctly characterised as misleading.”
“• the language of reasonable expectation [found in cases such as Demagogue] is not statutory: at [19];
• in commercial dealings between individuals or individual entities, characterisation of conduct will be undertaken by reference to its circumstances and context: at [20];
• close analysis of all of the circumstances of a transaction embraces a consideration of the sophistication of the parties and their experience in their fields: at [91];
• the knowledge of the person to whom the conduct is directed may be relevant: at [20]. See also Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 319; [2009] HCA 25 at [26];
• the existence of common assumptions and practices established between the parties or prevailing in the particular profession, trade or industry in which they carry on business may also be relevant: at [20];
• the analysis is objective: at [20];
• the analysis is to be ‘unmediated by’ high moral expectations exceeding the requirements of the general law: at [21];
• the statutory prohibition on misleading or deceptive conduct does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party: at [22]; and
• the failure to make reasonable inquiries, whilst not automatically defeating a statutory claim for damages for misleading or deceptive conduct, is a circumstance that is relevant to a consideration as to whether a failure to make disclosure is correctly characterised as misleading: at [91].”
“…Where parties are dealing at arm’s length in a commercial situation in which they have conflicting interests it will often be the case that one party will be aware of information which, if known to the other, would or might cause that other party to take a different negotiating stance. This does not of itself impose any obligation on the first party to bring the information to the attention of the other party, and failure to do so would not, without more, ordinarily be regarded as dishonesty or even sharp practice. It would normally only be if there were an obligation of full disclosure that a different result would follow. That would occur, for example, by reason of some feature of the relationship between the parties, or because previous communications between them gave rise to a duty to add to or correct earlier information.”
An application of these principles has led me to conclude that the primary judge erred in her conclusion that Weston engaged in misleading or deceptive conduct. Viewed in its full context, Weston’s conduct was neither misleading nor deceptive.
The first point that may be noted was the inappropriateness of the primary judge’s characterisation of the impugned conduct as comprising “calculated ambiguity”. Whether conduct is misleading or deceptive is an objective consideration and liability is not dependent on the subjective intent of the party whose conduct is under consideration. True it is that, if intention be established, a conclusion that the person to whom the conduct was directed was in fact misled may be more readily reached (Gould v Vaggelas (1985) 157 CLR 215 at 236; [1985] HCA 75; Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 at [55]) but the presence or absence of intention to mislead is not germane to the objective exercise of characterisation.
Further (and as a matter of fairness to Dr Gholami and Weston), it was not put to Weston’s witnesses that they sought intentionally to mislead or deceive Ceramics. If this is what the primary judge meant by her use of the expression “calculated ambiguity”, such a finding should not have been made: Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 at [72].
Turning to the context of the parties’ dealings, this was a classic commercial dealing between commercial parties. Ceramics, moreover, had the benefit of an expert external advisor in NUS through the medium of Mr Willy (who was not called to give evidence).
Another important surrounding circumstance was that the concept of insurance was introduced into the parties’ dealings in the explicit context of Ceramics wishing to secure a cap for pricing that would otherwise be a function of the spot market for wholesale gas. From a commercial and functional perspective, a price cap would provide insurance against price volatility in that market. The effect of the Price Cap would be to transfer the risk of price movement above $15.00/GJ from Ceramics to Weston. As noted at [27] above, the tender issued by Ceramics did not seek any form of third-party insurance as part of the offers. Weston’s response to the tender included a component of what was being sought, namely a price cap. That was proffered in the various emanations of cl 1.8 in each of the three offers.
That price capping in this context was a form of insurance being supplied by Weston to Ceramics was supported by the terms of cl 1.8 of the GSA. The heading of the clause was “Price Cap” and it was Weston that “will provide price insurance for the gas commodity price”. There was no ambiguity as to the identity of the provider of the insurance – it was to be Weston – and no part of cl 1.8 suggested that the insurance would be provided by a third-party insurer or that Weston would obtain (as opposed to provide) such insurance. The primary judge did not explain how cl 1.8 suggested that third-party insurance would be obtained and the problematic observation in PJ [31] has already been remarked upon in this regard: see [49] above.
“In Mander Forklift, Cole J stated the rule regarding representations by silence or implication as bearing on the interpretation or performance of a contract:
‘Silence concerning a view of the proper interpretation of a contract, or that a mutually known term of a contract will be enforced can rarely, if ever, constitute conduct within s 4(2) of the Trade Practices Act 197[4] (generally see Rhone-Poulenc Agrochimie SA v IUM Chemical Services Pty Ltd (1986) 12 FCR 477; Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd [1988] FCA 40; (1988) 79 ALR 83. To construe s 52 as imposing an obligation upon a party to a contract to advise the other party both of its interpretation of clauses in the contract, and that the clauses in the contract will be enforced or adhered to destroys the very basis of objective interpretation of contracts to which Mason J referred in Codelfa [Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337], 352).’
This view has been consistently followed over the years, most recently in Golden Sands Pty Ltd v Excel Quarries Pty Ltd [2008] VSC 276 at [302] n 41. Again, however, even if it were not a matter of settled authority, I would apply such a rule as a matter of logic and basic principle.”
Nor was there any evidence of questions being raised about the insurance being referred to in cl 1.8. The only evidence of any discussion was as to whether the Price Cap would be available for one month or more. This was answered, on the primary judge’s findings, by James saying in the Three-Way Phone Call “‘[w]e definitely can’t offer a cap for a 24-month retail contract. The best I can do against my book is for a 12-month price cap”: see [43] above. Far from assisting Ceramics’ case, this evidence undermined it. It emphasised that the subject of negotiations was the length of a cap, and that it was Weston that was assuming the risk against movement in the wholesale gas market.
Conspicuously, Ceramics’ pleaded case made reference to “Price Capping Insurance”: see [13]-[15] above. So, too, did the primary judge’s conclusions at PJ [163]: see [58] above. “Price Capping Insurance” was not, however, an expression which appeared in any iteration of cl 1.8 in the three offers that were made either in terms or conceptually; rather, “pricing insurance” was what was referred to, and cl 1.8 expressly set out “the terms” upon which that price insurance would be provided by Weston. The use of the definite article in the expression “the terms” conventionally defined and confined the ambit of the contractual term, and experienced commercial parties would have understood that.
What was described as “pricing insurance” was the means by which price capping would be provided, and the terms of that aspect of the bargain were set out in tolerably clear language: as a quid pro quo for the capping at $15.00/GJ, Ceramics was to pay a fee of $0.15/GJ for a 12 month period commencing on 1 April 2022. The triggering of the price insurance would be when the monthly weighted average of the Ex ante price exceeded $15.00/GJ.
The statement in the Cover Email that “We’re happy to start the capped retail margin from 1/Mar but let the insurance start 1/Apr so you’ll have one extra month coverage in 2023” does not change the analysis. It obviously needs to be read in the context of the proposed cl 1.8 in the Third Offer. The “insurance” being referred to was the pricing insurance being offered on the terms stated in that clause. So, also, any reference to insurance in the Three-way Phone Call did not alter the picture. As noted above, if anything, the very limited finding by the primary judge as to what was said in that call undermined Ceramics’ case.
Ceramics’ contention, upon being tested in oral argument on appeal, disclosed that what it was said was being represented as to be provided was some form of solvency insurance, but such a contention finds no support in the text of cl 1.8 or any of the emails that passed between the parties. Clause 1.8 was not directed towards Weston’s solvency or against the possibility that some time during the term of the GSA it may be suspended from the trading market by the AEMO so that the Price Cap being offered was rendered ineffective. That was not the subject of any consideration or discussion on the evidence before the primary judge and a misleading or deceptive representation that that is what cl 1.8 would deliver to Ceramics cannot be spelt out of that clause, the Cover Email, or the Three-way Phone Call on any objective analysis. Moreover, if “price insurance” referred to something that was in effect a form of solvency insurance which Weston was obliged to obtain from a third party, Weston would be that policy for its own benefit. It would not be something that was being Ceramics. The notion of “Price Capping Insurance” as opposed to “pricing insurance” originated with the pleader of the Cross Claim and not in any conduct of Weston.
As noted earlier in these reasons, Ceramics filed an application for leave to cross appeal from the primary judge’s rejection of its claim for restitution based upon a total failure of consideration, Ceramics’ argument being that the amounts of Premium it had paid prior to contractual termination of the GSA (amounting to $13,339.62) related to a third party insurance policy which Weston never obtained. The primary judge found that, on the proper construction of the GSA, Weston was not obliged to obtain a third-party insurance policy, and that the premium charged was the quid pro quo for the provision of 12 months of pricing insurance in the form of the $15.00/GJ Price Cap.
Ceramics’ sole proposed ground of cross appeal was as follows:
“The primary judge erred in finding that the agreement between the cross-respondent and cross-appellant entered into on 4 March 2022 did not require the cross-respondent to obtain a third party insurance policy to support the price cap on gas supplied under the agreement by incorrectly applying the relevant principles of contractual interpretation.”
“1. Cross-appeal allowed.
- Order 1 of the court below be set aside.
- An order for payment of $13,339.62 for restitution of an unjust enrichment.
- An order for interest in accordance with the relevant rate at UCPR 36.7(1), payable pursuant to section 101 of the Civil Procedure Act 2005 (NSW).
5. The cross-respondent pay the cross-appellant’s costs.”
The amount at issue in the cross appeal being less than $100,000.00, leave to appeal is required by s 101(2)(r) of the Supreme Court Act 1970 (NSW).
The crux of Ceramics’ complaint was that the primary judge erred at PJ [118] by finding that the express contemplation of a third-party “Insurance Policy” in cl 1.5 militated against the conclusion that the same was also contemplated by the reference to “price insurance” in cl 1.8. Ceramics raised two subsidiary arguments, namely that the primary judge erred in her Honour’s construction of cl 1.8 by failing to have regard to (i) the ordinary meaning of the word “insurance” and (ii) the contracting parties’ subjective states of mind.
In favour of the grant of leave, Ceramics argued that such a complaint raised a question of public importance relating to “the correct application of the principles of contractual interpretation”.
“[15] As has regularly been pointed out in decisions of this Court, a grant of leave to appeal generally requires the identification of an issue of principle, a question of public importance or a reasonably clear injustice going beyond something that is merely arguable…
[16] In Carolan v AMF Bowling Pty Ltd (t/as Bennetts Green Bowl) [1995] NSWCA 69 (Carolan), Cole JA noted the desirability that, where small claims are involved, there be ‘early finality and determination of litigation otherwise the costs which will be involved are likely to swamp the money sum involved in the dispute’. In Gurr v Robinson (Court of Appeal (NSW), 10 February 1986, unrep) (Gurr), Kirby P (as he then was) articulated the following justifications for the requirement of leave to appeal where small sums are involved:
‘One justification is that, where the amount in issue in a case is small, the parties have a special interest in finality. Protracted litigation necessarily involves costs and inconvenience. If the stake is small, the costs may soon become disproportionate to the amount in issue. Secondly, the provision reflects a number of public interests which must be protected by the Court. They include the discouragement of litigation, the principal purpose of which is to recover an order for costs, and the efficient and cost-effective use of court time, which necessarily involves large public costs.’” (footnotes omitted).
Given the small amount of the cross claim, because I do not think that the proposed cross appeal raises a question of public importance either in relation to the correct application of principles of contractual interpretation or indeed the application of any other principle, and because the proposed ground of cross appeal lacks any prospect of success, I would refuse leave to cross appeal.
The impugned finding at PJ [118] applied an established principle of construction, namely the importance of construing commercial contracts with multiple clauses in a congruent and harmonious way. No challenge was raised as to the validity of that approach nor could it have been in view of a wealth of authority. Plainly it is correct. Whether that principle was correctly applied in construing the GSA in the present case was not a question of public importance.
In any event, the principle was in my view correctly applied, and the cross appeal has no merit. The primary judge was correct to observe the difference in phraseology as between cl 1.8 compared to cl 1.5. The former referred to a (capitalised) “Trade Credit Insurance Policy”. The latter referred to (lowercase) “price insurance”. That the words “price insurance” in cl 1.8 were in fact a reference to a third-party Price Capping Insurance Policy was made less likely by the fact that cl 1.5 referred in terms to an “Insurance Policy” for which Weston was to pay a premium. In addition to this, as discussed in the analysis of cl 1.8 set out earlier in these reasons, cl 1.8 did not impose a contractual obligation on Weston to procure third party insurance at all; rather, the expression “pricing insurance” was functionally equivalent to a price cap in the context of an otherwise uncapped spot price contract.
Furthermore, I agree with the primary judge’s ultimate conclusion that a reasonable businessperson would not have understood cl 1.8 of the GSA to oblige Weston to obtain Price Capping Insurance.
The appeal should be allowed. Leave to cross appeal should be refused.
I propose the following orders:
Appeal allowed with costs.
Refuse leave to cross appeal with costs.
Set aside the orders of the primary judge and in lieu thereof, order that the Respondent pay the sum of $664,983.42 to the Appellant together with interest on that amount calculated in accordance with clause 7.3(b) of the Internal Meter Gas Supply Agreement dated 4 March 2022.
The Respondent to pay the Appellant’s costs of the proceedings at first instance.
McHUGH JA: I agree with the Chief Justice.
FREE JA: I agree with Bell CJ.
Weston Energy Pty Ltd
National Ceramic Industries Australia Pty Ltd [2026] NSWCA 7
(2013) 250 CLR 640
(2009) 238 CLR 304
(2022) 108 NSWLR 342
(1985) 157 CLR 215
(2011) 243 CLR 361
(1989) 97 FLR 458
(2010) 241 CLR 357
(2023) 277 CLR 186
(1973) 129 CLR 99
(2005) 221 CLR 522
(1986) 12 FCR 477
(1988) 79 ALR 83
(1982) 149 CLR 337
Appeal allowed with costs. Leave to cross-appeal refused with costs. The primary orders were set aside; Ceramics was ordered to pay Weston $664,983.42 with interest under cl 7.3(b) of the GSA, and to pay Weston's first-instance costs: [99].
Related to this, no significance should have been ascribed, as the primary judge did, to the failure by Dr Gholami and James in the Three-Way Phone Call to raise the topic of third-party insurance. That was not what was being discussed nor was it the subject of any of the offers made at that time. Moreover, there was no evidence to the effect that Weston or Dr Gholami understood that Mr Willy or Ceramics were under some misapprehension that a form of third-party insurance was contemplated, such that their conduct should be considered in that context. The topic of third-party insurance was not raised either by Weston or Ceramics.
In this context, Weston drew attention to the judgment of Gordon J in Coles Supermarkets Australia Pty Ltd v FKP Limited [2008] FCA 1915. At [72]-[73] of that decision, her Honour observed that:
For all of the above reasons, I would uphold Weston’s appeal. Weston did not engage in conduct that could be described as misleading or deceptive. That conclusion renders it unnecessary to deal with the second aspect of the appeal, relating to causation.