mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: United Group Rail Services Ltd v Rail Corporation New South Wales [2009] NSWCA 177
Outcome: cited
do not consider that it was. Though it appeared in clause 8 and by so doing emphasised that the minimum purchases regime would run in tandem with extensions granted under the rolling 5 year term, cl 8.1's function lay in its relationship with cl 10. That dealt with making best efforts to meet the requirements of Sched 4, and the consequences of failure to make the purchases specified in that schedule. It was a contingent condition to the performance and enforcement of the rights and obligations created under cl 10.2, cl 10.4 and cl 10.5. The non-fulfilment of the condition excused AMC further performance of its contractual obligations under cl 10.2 and cl 10.4 for the year of the extension: cf Maynard v Goode [1926] HCA 4 ; (1926) 37 CLR 529 at 540; University of Western Australia v Gray [2009] FCAFC 116 at [117] ; Cheshire and Fifoot's Law of Contract , [20.1]-[20.2] (9 th Aust ed). The failure to agree as required by cl 8.2 would not of itself constitute a breach of contract by either party, although one can envisage circumstances in which one party so conducts itself in relation to the entry into a cl 8.2 agreement as to be in breach of the Agreement or of an implied term necessary to give cl 8.2 business efficacy (eg to enter into "genuine and good faith negotiations for such an agreement": cf United Group Rail Services Ltd v Rail Corporation New South Wales [2009] NSWCA 177. There is no evidence before me to suggest such was the case as at 1 July 2002.
Case: Beatty v Guggenheim Exploration Co 122 NE 378 (1919)
Outcome: applied
have earlier indicated that AMC has not pleaded that the Distribution Agreement was amended after its execution so as to vary cl 8.2. I need not enter upon the matter of variation or of the possible significance of the agreement apparently made at the 23 March 2005 meeting to continue automatically to extend the Distribution Agreement each year for a further 12 months "thereby ensuring a rolling 5 year term at all times". However I would make the following observations. Neither the entire agreement clause (cl 45) nor the writing requirement of cl 50.2 provided an impediment to an oral variation of the Distribution Agreement if such an agreement was in fact reached. I considered the efficacy of "no oral modification" clauses at length in GEC Marconi Systems Pty Ltd , at [214]-[222]. The rule to be applied to such clauses reflects the observation made by Cardozo J in Beatty v Guggenheim Exploration Co 122 NE 378 (1919): "Whenever two men contract, no limitation self imposed can destroy their power to contract again". I would add, as I said in GEC Marconi (at [220]): (5) The usual objection raised to depriving a no oral modification clause of legal effect is that it involves a failure to give effect to what the parties have agreed. In the present case GEC Marconi has raised just this objection. The vice in it, though, is that a later oral or implied contract is itself an agreement. As a US commentator recently observed (Snyder, "The Law of Contract and the Concept of Change: Public and Private Attempts to Regulate Modification, Waiver and Estoppel" (1999) Wis L Rev 607 at p 640): The question for the court is not whether to honour the parties' original agreement, but rather which of their agreements should be effective. To say that contract law should enforce the parties' agreement, therefore, does not resolve the issue. The question is whether to enforce the first agreement or the second. The common-law courts addressing [no oral modification] issues chose the second. This choice makes a fair amount of sense; the later agreement probably reflects what the parties want better than their earlier agreement does. I would add that the opinion expressed in the second quoted paragraph is particularly appropriate to relational contracts which, as in the present instance, may be evolutionary in character.
Case: Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57 ; (2008) 251 ALR 322
Outcome: cited
in its reply pleaded that, if compliance with cl 8.2 was necessary to effect an extension under cl 8.1, Hamilton was estopped from relying upon cl 8.2 or else it elected not to rely upon it. I need not consider either of these responses: on election see generally Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57 ; (2008) 251 ALR 322 at [56] - [67] ; other than to say that the doctrine of election between inconsistent rights seems inapt to circumstances where cl 8, on the assumption being made, is self executing in its consequence. A claim based on estoppel, on the other hand, if it is not simply oral variation in disguise, has real prospects. The circumstances do demonstrate that from 1 July 2000 the parties conducted themselves in a way not envisaged by cl 8.2; that the contractual effect of their so doing was realised on 1 July 2004; but notwithstanding there were no longer agreed minimum purchases, the parties treated the Agreement as remaining on foot with its rolling 5 year term. Even if I am wrong both in the view I have taken both about the consequence of non-compliance with cl 8.2 and about estoppel, my ultimate conclusion would still stand. If the Term expired on 30 June 2004, the parties then continued in a relationship that clearly was contractual in character. No term having been agreed at that time (though this may have been varied by the 23 March 2005 agreement) the licence was terminable on the giving of reasonable notice (which I find 60 days to be in the circumstances), if it was not in fact ended under cl 41.1.6 (on the assumption that the provisions of the old Distribution Agreement were understood to remain applicable to the parties' business relationship insofar as they could continue to apply to it). Conclusion I find, in the circumstances, that the 1999 Distribution Agreement was terminated under cl 41.1.6 on the expiration of 60 days written notice which notice was given to AMC on 13 July 2006.
Case: Sheffield District Railway Co v Great Central Railway Co (1911) 27 TLR 451
Outcome: cited
aspects of cl 6.2 should be emphasised at the outset. The first is that cl 6.2 imposed reciprocal and, at least in the case of parallel importation, potentially interdependent obligations on AMC and Hamilton. Those obligations could operate upon the same subject matter for the reason that each could relate, as in the present case, to genuine Hamilton products finding their way into the Hong Kong market outside of the Distribution Agreement. Further, when considered together with cl 34, one party's best efforts obligation could require it to do everything reasonable to help the other carry out its best efforts obligation. Secondly , the subclause did not impose a duty on either party to achieve a specific result, rather it was to use best efforts to secure that result: on the difference see Unidroit Principles of International Commercial Contracts : 2004, Art 5.1.4, Comment 1. The content of "best efforts" is considered below. Thirdly , the best efforts obligation was directed at preventing the occurrence of an undesired event, ie the sale "in the Territory" by third parties of products the subject of the Distribution Agreement. In this it was a less common form of the obligation, the more usual form being directed at procuring the occurrence of a desired result, eg the sale or promotion of a product: Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64 ; (1984) 156 CLR 41 at 63-64; the exploitation of an invention: Terrell v Mabie Todd &amp; Co Ltd (1952) 69 RPC 234 ; or the advancement of a business: Sheffield District Railway Co v Great Central Railway Co (1911) 27 TLR 451 at 452.
Case: Transfield Pty Ltd v Arlo Internation Ltd [1980] HCA 15 ; (1980) 144 CLR 83
Outcome: cited
"standard of endeavour" prescribed by a best efforts clause is characteristically measured by what is reasonable in the circumstances having regard to the particular contract in its business setting and to what could reasonably be expected of the party subject to the obligation: see Transfield Pty Ltd v Arlo Internation Ltd [1980] HCA 15 ; (1980) 144 CLR 83 at 101; see also Farnsworth, Contracts , &#167;7.17. Or to put it shortly, the party's obligation is "to do what [it] reasonably could do in the circumstances": Terrel , at 237. It is nonetheless important in this setting to emphasise the importance of context in giving practical substance to the prescribed standard of endeavour. As Gibbs CJ said of a best efforts obligation in Hospital Products Ltd (at 64): ... it is trite to say that the meaning of particular words in a contract must be determined in the light of the context provided by the contract as a whole and the circumstances in which it was made, and that decisions on the effect of the same words in a different context must be viewed with caution. Today this probably does no more than emphasise the contemporary significance of context in contractual interpretation: see Toll (FGCT) Pty Ltd at [40]; and, relevantly for present purposes, that a commercial contract is to be given "a businesslike interpretation": International Air Transport Association at [8]; or as Lord Steyn put it ( Mannai Investment Co Ltd at 771): "a commercially sensible construction". Factual Setting
Case: Australian Competition and Consumer Commission v Radio Rentals [2005] FCA 1133 ; (2005) 146 FCR 292
Outcome: cited
second of AMC's propositions in support of its case seeks to fix Hamilton with liability for breach of cl 6.2 on the basis that, because of what Hamilton is alleged to have known, it ought to have been aware that the Products were destined for AMC's Territory yet it failed to do what it reasonably could in the circumstances to have prevented this. It is this version of the case as put in submissions to which Hamilton takes objection. I have considerable difficulties with how AMC ascribes knowledge to Hamilton as such and with how it purports to aggregate that knowledge: cf Australian Competition and Consumer Commission v Radio Rentals [2005] FCA 1133 ; (2005) 146 FCR 292 at [177] - [183] . The information to which it refers and which I earlier listed was not, at all relevant times, shown to have been possessed by any one corporate officer. Nor was it all relevantly possessed at the times the initial supplies were made. Mr Blake, for example, only became aware of the sales to Crafers in March 2002, some months after the first sales. Some, but not all of the listed matters may have been known to Mr Stafford. The basis upon which information (held by various corporate officers over time) was to be aggregated to produce the information base for the allegation that Hamilton ought to have been aware that the products were destined for Hong Kong has not been addressed: cf Radio Rentals . Nor is it said at what time Hamilton had that information base. Some of it, for example, was only acquired after the last supply had been made: eg (8) above. I agree with Hamilton's submission that some number of the pieces of knowledge propounded are, as put, unsupported by the evidence or, in my view, are misleading: eg paras (5), (6) and (8). The evidence falls far short of establishing that Hamilton actually knew that the product sold to Crafers was destined for Hong Kong. It equally does not establish that the relevant proper officers of Hamilton were at any time recklessly indifferent to how Crafers dealt with the Product. Nor did it demonstrate Nelsonian blindness to the Product's likely destination. For reasons I give below, it may properly be said that the circumstances known to Mr Stafford may have called for greater vigilance than was demonstrated. What I do not understand, though, is why a concept akin to constructive notice for such is what seems to be being advanced should in the manner proposed be sufficient to provide the knowledge platform to establish liability in the way sought. This is not to say that the knowledge actually possessed by a person subject to a best efforts clause may not be such as to require further inquiry to be made if the person is to do all that he or she reasonably can in the circumstances to secure the covenanted result. I should note in passing that a consequence of the view I have expressed on Hamilton's state of knowledge necessitates the conclusion that it was not guilty of selling its Products into Hong Kong "directly or indirectly" in breach of cl 9.1.
Case: Cohen &amp; Co v Ockerby &amp; Co Ltd [1917] HCA 58 ; (1917) 24 CLR 288
Outcome: applied
AMC was in breach of its obligation under cl 6.2. This disentitled it from recovering damages from Hamilton for breach of cl 6.2. The reason for this, it is said, is that being ready, willing and able to perform at the appropriate time is a condition precedent to a cause of action in contract, whether for damages or otherwise. Reliance in this is placed upon Cohen &amp; Co v Ockerby &amp; Co Ltd [1917] HCA 58 ; (1917) 24 CLR 288 esp at 298 and upon some number of well known specific performance decisions. Secondly, by its failure to inform Hamilton of its knowledge, AMC caused the sales that occurred after "31 January 2002" (sic). Thirdly, "the applicant is not able to take advantage of its own wrong". As I understand this in light of Hamilton's pleading and submissions, this defence, in essence, is one of failure to mitigate. None of these defences were enlarged upon significantly in submissions. In light of my findings as to when AMC became aware of the reality of parallel importation but then failed, unreasonably to notify Hamilton thereof (ie in December 2001), its breach of cl 6.2 post-dated that of Hamilton's first sale to Crafers (which was on 12 or 13 November 2001). There is nothing to suggest that, as at the time of Hamilton's breach of cl 6.2, AMC was not ready, willing and able to perform its reciprocal obligation assuming it was relevantly a "concurrent obligation": cf Cohen &amp; Co at 298. As put in its submissions, Hamilton's first defence is that, contrary to my findings, AMC became aware of the parallel importation and failed to notify this, in October 2001, ie prior to Hamilton's breach. It is unnecessary for me to consider the defence further although I would add that I express no view on the question whether it is an available defence for breaches of a provision such as is presently in question.
Case: Mallesons Stephen Jacques v Trenorth Ltd [1998] VSCA 58 ; [1999] 1 VR 727
Outcome: cited
second and third defences, in substance, raise issues of causation and of mitigation. There have been no submissions made on the applicable legal principles, but neither are they controversial for present purposes. It is well accepted that (i) the party claiming compensation for loss has the onus of showing the loss was caused by the breach relied upon; (ii) the criteria of causation applied is a common sense one; and (iii) "the act [or conduct] of the claimant may be considered so unreasonable that it operates to break the chain of causation with the consequence that the claimant recovers nothing" for loss thereafter: Furmston (ed), The Law of Contract , 8.86 (3 rd ed, 2007); see also Mallesons Stephen Jacques v Trenorth Ltd [1998] VSCA 58 ; [1999] 1 VR 727 ; Cheshire and Fifoot's Law of Contract , [23.34]-[23.35], [28.38] (9 th Aust ed). As for mitigation, damages are not recoverable for any loss which could have been prevented by the reasonable mitigating action of the injured party: Cheshire &amp; Fifoot , at [23.41]; Carter on Contract [41-340]; see also Farnsworth, Contracts , &#167;12.12. It is for the party in breach to show the claimant has failed to mitigate its damage: TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd [1963] HCA 57 ; (1963) 180 CLR 130 at 138. The claimant is not required to take all possible steps to mitigate its loss, but only those which are reasonable: Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd [1998] HCA 38 ; (1998) 192 CLR 603 at [134] .
Case: TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd [1963] HCA 57 ; (1963) 180 CLR 130
Outcome: applied
second and third defences, in substance, raise issues of causation and of mitigation. There have been no submissions made on the applicable legal principles, but neither are they controversial for present purposes. It is well accepted that (i) the party claiming compensation for loss has the onus of showing the loss was caused by the breach relied upon; (ii) the criteria of causation applied is a common sense one; and (iii) "the act [or conduct] of the claimant may be considered so unreasonable that it operates to break the chain of causation with the consequence that the claimant recovers nothing" for loss thereafter: Furmston (ed), The Law of Contract , 8.86 (3 rd ed, 2007); see also Mallesons Stephen Jacques v Trenorth Ltd [1998] VSCA 58 ; [1999] 1 VR 727 ; Cheshire and Fifoot's Law of Contract , [23.34]-[23.35], [28.38] (9 th Aust ed). As for mitigation, damages are not recoverable for any loss which could have been prevented by the reasonable mitigating action of the injured party: Cheshire &amp; Fifoot , at [23.41]; Carter on Contract [41-340]; see also Farnsworth, Contracts , &#167;12.12. It is for the party in breach to show the claimant has failed to mitigate its damage: TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd [1963] HCA 57 ; (1963) 180 CLR 130 at 138. The claimant is not required to take all possible steps to mitigate its loss, but only those which are reasonable: Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd [1998] HCA 38 ; (1998) 192 CLR 603 at [134] .
Case: Metalcorp Recyclers Pty Ltd v Metal Manufacturers Ltd [2003] NSWCA 213
Outcome: cited
no cross-claim has been made by Hamilton in respect of AMC's failure to disclose its knowledge of the parallel importation once it became aware of it, it is unnecessary for me to consider whether that non-disclosure itself was in the circumstances independently actionable as, for example, under s 52 of the Trade Practices Act : cf Metalcorp Recyclers Pty Ltd v Metal Manufacturers Ltd [2003] NSWCA 213. I should make the additional observation that while Hamilton had advanced a positive case of breach of cl 6.2 by AMC, this was for the purpose of establishing that AMC should have given it explicit notice, as of the end of December 2001, of its knowledge of the reality of parallel importation. Hamilton, though, did not go on to show that, having the knowledge it did, AMC otherwise failed to use its best efforts as required by cl 6.2. Of this latter matter all I will say is this. AMC devised a strategy in October 2001 to use leaflets in, and holographic labels on, Urederm boxes to differentiate its product from parallel imported product. Notwithstanding the knowledge it acquired in December, it did not implement the leaflet strategy until April 2002, and the holographic strategy until September 2002. Equally, when Dr Keung conducted his market investigations in August 2002, parallel importation was quickly detected leading to proceedings against Forward Co in October 2002. Before turning to the question of AMC's entitlement to recover damages for loss resulting from Hamilton's breaches prior to the end of December 2001, there is one further matter raised by Hamilton's to which I should refer. It is alleged that AMC had ulterior purposes, and acted in bad faith from August 2002 in asserting Hamilton was involved in the parallel importation. While I accept that Dr Keung knowingly made unsubstantiated and occasionally knowingly false assertions and representations which do him little credit, I do not accept that such subsequent conduct and the climate in which it occurred, have any real bearing on the questions I have to determine in light of my findings. Damages for breach of cl 6.2
Case: Sellars v Adelaide Petroleum NL [1994] HCA 4 ; (1994) 179 CLR 332
Outcome: applied
starting point in considering whether, and if so in what amount AMC, is entitled to damages for the claimed lost opportunity is, as it was put in Sellars v Adelaide Petroleum NL [1994] HCA 4 ; (1994) 179 CLR 332 (at 355): ... the general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage. Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage. However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities. It is no answer to that way of viewing an applicant's case to say that the commercial opportunity was valueless on the balance of probabilities because to say that is to value the commercial opportunity by reference to a standard of proof which is inapplicable.
Case: Price Higgins &amp; Fidge v Drysdale [1996] 1 VR 346
Outcome: cited
AMC nor Hamilton have sought to differentiate the questions (a) whether AMC could and would have purchased and resold the U50g tubes sold to Crafers at or around the time the sales were made to Crafers? And (b) whether and in what amount, if at all, it would have made profits from such sales and resales? Authority binding upon me would suggest that such differentiation is necessary in a case such as the present for the reason that the realisation of the chance to make the lost profit would have depended on AMC's own decision to have purchased and resold the product. Proof on the balance of probabilities that it could and would have done so was necessary if AMC was to show that Hamilton's conduct "has caused a valuable loss of opportunity" see Price Higgins &amp; Fidge v Drysdale [1996] 1 VR 346 at 355 (Full Court of Victoria); G W Sinclair &amp; Co Pty Ltd v Cocks [2001] VSCA 47 ; see also Cheshire and Fifoot , [23.16] (9 th Aust ed).
Case: G W Sinclair &amp; Co Pty Ltd v Cocks [2001] VSCA 47
Outcome: cited
AMC nor Hamilton have sought to differentiate the questions (a) whether AMC could and would have purchased and resold the U50g tubes sold to Crafers at or around the time the sales were made to Crafers? And (b) whether and in what amount, if at all, it would have made profits from such sales and resales? Authority binding upon me would suggest that such differentiation is necessary in a case such as the present for the reason that the realisation of the chance to make the lost profit would have depended on AMC's own decision to have purchased and resold the product. Proof on the balance of probabilities that it could and would have done so was necessary if AMC was to show that Hamilton's conduct "has caused a valuable loss of opportunity" see Price Higgins &amp; Fidge v Drysdale [1996] 1 VR 346 at 355 (Full Court of Victoria); G W Sinclair &amp; Co Pty Ltd v Cocks [2001] VSCA 47 ; see also Cheshire and Fifoot , [23.16] (9 th Aust ed).