AMVAQ Pty Ltd & Qld Milk Distributors' Organisation Inc v Queensland Dairy Industry Authority [1993] QSC 287

( TRANSCRIPT OF PROCEEDINGS (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold w~:~~out the written authority of the Director, State ~eporting Bureau.) SUPREME COURT OF QU~ENSLAND CIVIL~JURISDI~TION de JERSEY J No 1216 OF 1993 AMVAQ PTY LTD and QUEENSLAND MILK DISTRIBUTORS' ORGANISATION INC and QUEENSLAND DAIRY INDUSTRY AUTHORITY BRISBANE . . DATE 2 2 I 0 9 I 9 3 .. JUDGMENT 1 REVISED CCPi!:.:S'ISSUED State. r:opo:"tlng Bureau Date .2 ~I q I '7 ~ First Plaintiff Second Plaintiff Defendant -- 1 of 10 -- r-- 220993 MAR/LH (de Jersey J) HIS HONOUR: Delaying my judgment will not mature it, so I will express it now. The defendant, Queensland Dairy Industry Authority, is a statutory corporation constituted prior to the recent Dairy 10 Industry Act 1993. That Act is directed towards the restructuring of the dairy industry in Queensland. As recognised by section 115, the Authority survived that new Act. The Authority has power because of section 13 to enter into contracts and appoint agents and under section 14 to 20 delegate its powers to a committee or to a member. At relevant times Mr Baden Cameron was Chairman of the Authority and Mr Raoul Nieper was Deputy Chairman. Exhibit 2 is a collection of minutes of meetings of the Authority and 30 its relevant committee called the Distribution Advisory Committee (Restructuring Scheme). Mr Edwin Lucas was Chairman of that committee. He was also the Executive Officer of the second plaintiff, Queensland Milk Distributors' Organisation Inc., an incorporated association of milk vendors. That association owns the first plaintiff, AMVAQ Pty Ltd. The minutes show that throughout the first half of this year the defendant Authority sought to sell a large number of milk run licences as part of a broad restructuring of the industry. The action concerns the Authority's apparent sale of 14 of tffose milk runs to the first plaintiff on about 26 July 1993. On that date the second plaintiff wrote to the Chairman of the Authority exercising an option to acquire those 14 runs JUDGMENT 2 40 50 60 \'.'"" -- 2 of 10 -- r ( _, ,-/ . _ _/ 220993 MAR/LH (de Jersey J) through the first plaintiff for $1,123,546. See Exhibit 10. On 28 July the Authority responded by a letter signed by its quality assurance manager, Mr Smith, Exhibit 11, enclosing draft contracts. The first plaintiff executed those contracts, but the Authority did not. On 2 August the 10 Authority wrote to the second plaintiff in a letter signed by its secretary denying that it had-entered into any legally binding contracts. The plaintiffs now sue for specific performance of the alleged 20 agreement. They contend that the Chairman of the Authority, Mr Cameron, committed the Authority to the agreement orally in conversations with Mr Lucas preceding the correspondence, Exhibits 10 and 11. It is common ground that Mr Cameron did then purport to commit the Authority to those contracts. I accept the evidence of Mr Lucas about that contact with Mr Cameron. The sole issue before me is whether Mr Cameron had authority to do that. The plaintiffs contend that he had express authority to bind the Authority, and~ although faintly, at least ostensible authority. The defendant's position is that the relevant express authority necessitated the joint action of Mr Cameron and the Deputy Chairman, Mr Nieper, not the unilateral action of the Chairman. T~e minutes, Exhibit 2, contain many references to the authority of the Chairman and the deputy Chairman to negotiate sale of the runs. They have been highlighted in the exhibit. The immediately relevant one is in the minutes of the meeting JUDGMENT 3 30 40 50 60 -- 3 of 10 -- 220993 MAR/LH (de Jersey J) of the Authority on 21 July 1993. The Authority was then contemplating a further auction of the then unsold runs, but continuing negotiations in the meantime in the hope of concluding sales. The authority to negotiate was given to "the Chairman and Deputy Chairman" in these terms at page 4: "It was further agreed that the Chairman and Deputy Chairman continue to negotiate the sale of any unsold lots prior to the auction and consider offers made on unsold lots and negotiate sale by private treaty where appropriate." 10 The question at the trial has been whether that was a joint or 20 several form of authority, whether it required both to negotiate and agree with the prospective purchaser or whether either could act, as it were, unilaterally. In my opinion the written terms of that resolution at page 4 30 do not themselves definitively clearly answer that question. I know that often a grant to two people may be presumed to be joint, but the subject matter of this authority which included negotiation as well as consideration and decision does not readily practically lend itself to a fully joint operation. 40 The other thing is that we know from the evidence of Mr Smith and Mr Nieper that the Chairman had to that point often dealt in these matters largely independently of Mr Nieper and other Board members should be taken to have been aware of that. Apart from other matters," see the evidence at page 134, line 50 10, . and the Primae matter towards the top of page 4 of the minutes of 21 July to which I will shortly return. It might, -- therefore, be felt that to authorise them on 21 July to "continue" to negotiate, which invites one to take account of what has occurred, so tying, in a sense, what they may do to 60 JUDGMENT 4 ···,··. -- 4 of 10 -- rI 220993 MAR/LH (de Jersey J) what has been done in the past, raises the question whether the members indeed intended them to act jointly as they may otherwise be presumed to do. It is, therefore, necessary to look at other surrounding circumstances known to the members of the Authority at relevant times to determine precisely what 10 they intended. I turn now to some of those surrounding circumstances. Ms Scott, the general secretary of the second plaintiff, attended some of the relevant meetings of the defendant's 20 committee as an observer. She said, and I accept, that at a meeting in early to mid May 1993 when the Authority's general manager, Mr Cooper, raised the question whether the Deputy Chairman could be involved in the negotiations, the Deputy Chairman, Mr Nieper, said that subject to his Minister's 30 agreement, which was forthcoming, he would do it wherever possible but that there would be times when he would not be in Brisbane. See page 58. Because of that practical consideration, Ms Scott reached the view that "either•• the Chairman or the Deputy Chairman must be permitted to 40 negotiate. She also recalled the Chairman walking into a committee meeting after 8 July, the general manager and other Authority members being present, and saying, "I've just moved another one.••; see page 59, meaning sold another run, and that there was no demur on the basis that he was only permitted to 50 act jointly with the Deputy Chairman. Mr Keevers and Ms Irwin ,a~so had some recollection of that incident. Ms Scott's '~ evidence, which I accept, provides some basis for thinking that the members of the Authority when conferring the relevant authority on the Chairman and Deputy Chairman on 21 July, may 60 JUDGMENT 5 -- 5 of 10 -- 220993 MAR/LH (de Jersey J) have intended a several rather than a joint authority. In similar vein is Mr Nieper's evidence that at that meeting on 21 July the Chairman came into the room and said, "I have just sold another run.'', again, without demur. Some entries in the notes on which the minutes of the committee contained in Exhibit 2 were based also suggest an intention that the authority be several. Ms Irwin prepared those notes, which are Exhibit 15. I refer particularly to the questions by Mr Keevers, a member of the Authority, as to the person with whom an unsuccessful auction bidder should thereafter seek to negotiate. He first raises the issue at the foot of page 11 and repeats it at the top of page 12, the foot of page 12 and the top of page 13. The suggestion made is that such further negotiations should be taken up with the Chairman (of the Authority). One obviously should not read too much into those shorthand references, but Mr Keevers did give oral evidence before me that by the time of the 21 July meeting his view was that prospective purchasers of unsold 10 20 30 runs should at least make their contact with the Chairman. As 40 I interpreted his evidence, it may well have gone beyond that initial contact. He was, of course, only one member of the Authority, but other members were present at that meeting of 30 June to which those entries relate and should, therefore, probably be taken to have heard his references to taking up 50 further negotiation, as it was put, with the Chairman. Those others present included the Chairman himself, the Deputy ~ Chairman, Mr Lucas, Mr Hollingdale, and Mr Vonhoff. There is the other reference mentioned earlier to the 60 JUDGMENT 6 -- 6 of 10 -- 220993 MAR/LH (de Jersey J) Chairman's probably having acted independently, at least to some extent, with relation to the possible sale of runs. At page 4 of the minutes of the critical meeting of 21 July he is recorded as having advised "that he offered Primae the opportunity to sell some unsold lots ... "on a certain basis. There is no recorded objection on the basis that the Chairman should not have been acting apparently unilaterally even to that extent. On the other hand, and arguably favouring the defendant's contention as to the need for joint action, is Mr Vonnoff's assertion at the committee meeting on 11/12 May 1993 to the effect that post auction negotiation was too big a job for one person or too great a responsibility for one person because of the amounts involved. I accept Mr Keevers' evidence about that, but'as he also made clear that particular discussion concerned negotiation on the day of the auction when a large number of prospective purchasers might have to be followed up. The likely situation being dealt with at the 21 July meeting would probably have been seen as potentially rather less hectic. A point which I considered arguably helpful to the defendant's position arose from the reference to negotiation "by the Chairman and Deputy Chairman of the Authority" in relation to the Magnetic Island run at the end of the minutes of the 09mmittee meeting of 24 May. It might be felt that reference to negotiation by the two officers with respect to only one run might more readily imply joint negotiation and that that being so the recurrent references to "the Chairman and Deputy JUDGMENT 7 10 20 30 40 50 60 -- 7 of 10 -- 220993 MAR/LH (de Jersey J) Chairman" ultimately in the minutes of 21. July should be interpreted in the same way. That argument is open for the defendant, although obviously one does not necessarily interpret such minutes precisely as if a contract or a statute. I was referred to other interesting entries in Exhibit 2 where the possible respective involvement of individuals within a specified group is made clear; see, for example, the resolutions numbered 20 and 21 on page 8 of the minutes of 21 July. Those resolutions did, however, deal with very particular matters, the operation of bank accounts and the execution of contractual instruments where great _ specificity is ordinarily required. The Chairman and Deputy Chairman were designated as the negotiators because they were apparently the only members of the Authority who would not possibly be interested themselves in purchasing a run. It was considered that the process of negotiation might involve a lot of work. There were a large number of unsold runs worth a substantial amount of money. I think it unlikely that the members of the Authority expected that the Chairman and Deputy Chairman would act jointly in all respects in all details of the transactions. Such, of course, would be impracticable and, in fact, Mr Cameron often acted largely alone, as confirmed by the evidence of Mr Smith and Mr Nieper. The question then remains, did they expect them to act jointly in negotiation generally and certainly say in any u~timate decision whether or not to sell? As I have said, the terms of the resolution conferring authority do not themselves provide a clear answer. Looking, JUDGMENT 8 10 30 40 50 60 -- 8 of 10 -- 1'--./ I (~ 'r .\ ___ // 220993 MAR/LH (de Jersey J) however, to the surrounding circumstances, which I would take to have been known to the members of the Authority present at the meeting of 21 July, I conclude that in what they resolved upon they intended to authorise the Chairman and the Deputy Chairman severally; that is, giving each individual authority 10 to conduct the relevant negotiations and to sell and that that is the proper interpretation of tfie terms of the authority then given. I have mentioned the circumstances which tend to favour that view. I have also mentioned circumstances tending the other way. None of these matters individually has 20 compelling force, but weighing them all together, I consider that the net aggregate effect of those considerations tending to favour the plaintiffs' contention is sufficient to sustain that contention. The Chairman did, therefore, have express authority to enter into these contracts on behalf of the 30 Authority. Mr Fraser for the plaintiff made a separate submission based on International Paper Company v. Spicer (1906) 4 CLR 739 at 750 and 761, but I need not go into that, neither need I deal 40 with his submission based on Turguand. There will, therefore, be a decree for the specific performance of the agreement referred to in paragraph 4 of the plaintiff's statement of claim. 50 HIS HONOUR: I will make orders for the detailed implementation of that decree in accordance with draft minutes to be 60 JUDGMENT 9 -- 9 of 10 -- 220993 MAR/LH (de Jersey J) submitted and initialled by counsel. There will be no need for any further attendance in relation to that. HIS HONOUR: The defendant is to pay the plaintiffs' taxed costs of and incidental to the action including reserved costs. Liberty to apply. JUDGMENT 10 10 20 30 40 50 60 -- 10 of 10 --