DISTRICT COURT OF QUEENSLAND
CITATION:
Mr Green Pty Ltd v Broadbeach Bowls & Community Club Inc. [2018] QDC 34
PARTIES:
MR GREEN PTY LTD
(plaintiff)V
BROADBEACH BOWLS & COMMUNITY CLUB INC
(defendant)FILE NO/S:
D4166/2016; S2791/2010.
DIVISION:
PROCEEDING:
Civil Trial
ORIGINATING COURT:
Supreme Court at Brisbane
DELIVERED ON:
9 March 2018
DELIVERED AT:
Brisbane
HEARING DATE:
21 – 24 August, 19 September 2017
JUDGE:
McGill SC DCJ
ORDER:
Judgment that the defendant pay the plaintiff $111,284.60, including $45,346.60 by way of interest.
CATCHWORDS:
CONTRACT – Termination – contractual provision for termination – whether complied with – whether right to terminate for repudiation – whether contract breached as alleged – significance of breaches.
CONTRACT – Damages for wrongful termination – loss of profits – whether enforceable option to renew contract – whether reduced payment to employee who was sole shareholder and director to be treated as expense saved.
Australian Energy Limited v Lennard Oil NL [1986] 2 Qd R 216 – applied.
Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600 – applied.
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 – cited.
Cardwell Shire Council v Calabrese (1975) 49 ALJR 164 – applied.
Chappell v TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153 – considered.
Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404 – applied.
CMF Projects Pty Ltd v Masic Pty Ltd [2014] QSC 209 – applied.
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 – applied.
Devpro v Seamark Pty Ltd [2007] QCA 241 – considered.
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 – applied.
Dymocks Holdings Pty Ltd v Top Ryde Booksellers Pty Ltd [2000] NSWSC 795 – applied.
FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 – considered.
Grant Thornton (Qld) Pty Ltd v Green Global Technologies Ltd [2009] QSC 262 – followed.
Greenridge Botanicals (Aust) Pty Ltd v Nevin [2000] QCA 498 – applied.
Hadoplane Pty Ltd v Edward Rushton Pty Ltd [1996] 1 Qd R 156 – applied.
Highmist Pty Ltd v Tricare Ltd [2005] QCA 357 – cited.
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 – applied.
Malec v Hutton Ltd (1990) 169 CLR 638 – cited.
Nosic v Zurich Australia Life Insurance Ltd [1997] 1 Qd R 67 – cited.
Principal Properties Pty Ltd v Brisbane Broncos Leagues Club Ltd [2017] QCA 254 – cited.
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 – applied.
Randazzo v Golding [1968] Qd R 433 – applied.
Relwood Pty Ltd v Manning Homes Pty Ltd [1990] 1 Qd R 481 – cited.
Robinson v Harman (1848) 1 Ex 850; 154 ER 363 – followed.
Santos Ltd v Fluor Australia Pty Ltd [2016] QSC 129 – distinguished.
Shevill v Builders Licensing Board (1982) 149 CLR 620 – applied.
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 – cited.
Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 – cited.
St George Bank Ltd v Perpetual Nominees Ltd [2011] 1 Qd R 389 – followed.
Wallace-Smith v Thiess Infraco (Swanston) Pty Ltd [2005] FCAFC 49 – applied.
Wash Investments Pty Ltd v SCK Properties Pty Ltd [2016] QCA 258 – applied.
Winks v W H Heck & Sons Pty Ltd [1986] 1 Qd R 226 – applied.
Zeke Services Pty Ltd v Traffic Technologies Ltd [2005] 2 Qd R 563 – distinguished.
Zucal v Harper (2005) 29 WAR 563 – considered.COUNSEL:
P L Somers for the plaintiff
M Steele for the defendant
SOLICITORS:
Cronin Litigation Lawyers for the plaintiff
Gilberts Legal for the defendant
The defendant (the club) operates the Broadbeach Bowls Club which is located in the northern part of Broadbeach Park, between Broadbeach Boulevarde and Surf Parade. It has a clubhouse and four bowling greens, three of which face Armarick Avenue, while the fourth lies at an angle to the east of the clubhouse, which is located to the south of the other three greens. In March 2007 the club entered into a contract with the plaintiff for it to provide greenkeeping services for three years commencing on 1 March 2007. In August 2008 the club decided to terminate the plaintiff’s contract, and locked the plaintiff’s employees out of a shed it had previously used on the property. The plaintiff accepts that this put an end to the contract, and claims damages for breach of contract. The club denies that it is liable to the plaintiff for such damages, and further disputes the plaintiff’s calculation of damages.
Background
Mr Wilson is the director of the plaintiff. From 1990 to 1998 he was employed by the club as a greenkeeper: p 17. By a contract in writing made 1 July 1998 he agreed with the club to provide greenkeeping services for a term of three years, for $105,000 per annum.[1] From this amount he was to be responsible for wages of his employees, the cost of insurance and the cost of supplying necessary fertilizers, chemicals, soils and other consumables required to perform his duties. On 1 May 2001 there was a further agreement entered into with the club, for Mr Wilson to provide such services for a term of three years from the execution of that agreement.[2]
[1]Exhibit 1 tab 2.
[2]Exhibit 1 tab 3. The agreement is expressed to be with Mr Wilson personally, although the common seal of the plaintiff was applied to it.
On 29 April 2004, there was a similar contract entered into between the club and the plaintiff for a period of one year from 1 July 2004 to 30 June 2005 for a remuneration of $115,500 plus GST, but with an option to renew the agreement for a further term of three years.[3] If the option were exercised the remuneration for the option period was to be the GST exclusive rate plus seven and a half percent, together with GST: Clause 5, Schedule B, which showed the total inclusive of GST for the option period of $136,578.75.[4] In the event the option was exercised,[5] but before that agreement had expired it was superseded by a new agreement made 1 March 2007, by which the club engaged the plaintiff for a term of three years from that date.[6] Clause 10 fixed the remuneration at $133,476.00 plus GST for the first year, payable by 12 monthly instalments, with the contract amount to be adjusted at 1 March each year “to allow for inflation or CPI increase of the past year.” Clause 3 purported to grant an option to renew for a further term of three years, but Clause 5 provided that:
[3]Exhibit 1 tab 4.
[4]Although a literal reading of Clause 5 suggests that this was the remuneration for the whole of the 3 year period, plainly that was not the true interpretation of the clause; it provided an annual remuneration for each of the 3 years of the option period. Neither party contended to the contrary.
[5]Exhibit 1 tab 5; Wilson p 19.
[6]Exhibit 1 tab 7.
“the remuneration for the option period will be:
a.at a fee to be negotiated;
by way of twelve (12) equal monthly instalments.”
The agreement of 1 March 2007 was signed on behalf of the club by Mr Bayliss, the then chairman of the board, and Mr Woolrich. Evidently later in 2007 Mr Bayliss ceased to be chairman, and was replaced by Mr Foreshore, who in turn resigned along with the rest of the board when the 2007 annual general meeting was finally held in March 2008: p 4–29. Mr Foreshore said frankly that the outgoing board members did not feel they were doing as well as they would have liked to have done, and Mr Gilbert who replaced him as chairman said that, when he took over, the club was in a poor financial position, and the club grounds had not been properly cleaned and maintained for some time: p 4-4. He was critical of the club surrounds, the gardens and lawns (as distinct from the greens) which he said did not have a presentable appearance which would tend to attract passing trade into the club as a hospitality venue: p 4–4.[7] Mr Gilbert and some other volunteers put in some time tidying up the physical premises, and some other work was done to freshen up the clubhouse, and make it more attractive. In addition new catering contractors were engaged.[8] As a result the income of the club, particularly from the bar and gaming machines, has greatly increased.[9]
[7]This was the sort of thing which probably would not have troubled those members who simply went to the club in order to bowl. Mr Gilbert said that when he was just coming there as a bowler he was not concerned by them: p 4–4 line 39.
[8]Mrs Gilbert p 3-97: the previous caterers had given notice to the outgoing board.
[9]Mrs Gilbert p 3-92; Gilbert p 4-70. This began in the 2008 year: Exhibit 21.
The contract of 1 March 2007 referred to tender specifications for contract greenkeeper which were supposed to be annexed to it, but there was no such document actually annexed to the executed contract. That the contract in its executed form incorporated specifications is apparent from Clause 8, and was common ground before me. The plaintiff’s case, which the defendant admitted in its pleading and supported in submissions, was that the contract specifications which were part of the April 2004 contract were the specifications which were incorporated into the March 2007 contract, and I am content to proceed on that basis.
It appears that Mr Wilson was on good terms with the people who were running the club prior to March 2008: p 33. To the extent that there were any complaints about his work, and on the evidence there were few, they did not have the support of the members of the board of the club.[10] My impression is that during this period Mr Wilson was generally left to do things in his own way, and his performance, particularly in those matters of concern to the bowlers, was at least good enough to prevent any significant threat to his position arising.[11] After Mr Gilbert took over however he rapidly become dissatisfied with the performance of the plaintiff, initially it seems mainly about a failure to maintain the surroundings of the club to the sort of the standard that he wanted in order to attract casual customers.[12]
[10]Koorey p 3-56.
[11]There were some pre-existing animosities: he did not get on with Mr McCloskey, and criticised him to Mr Gilbert after he took over the club, as he admitted: Wilson p 2-16; McCloskey was on the new board in 2008. He did not give evidence of any animosity on his part.
[12]Mr Gilbert had a career as a publican: p 4-53. His concern was about how the club presented as a hospitality venue: p 4-71.
Mr Gilbert complained in his evidence about the failure of the plaintiff to empty rubbish bins and litter pots, and to clean up cigarette butts around the club premises. I shall deal with these matters in more detail later. Mr Wilson said that the first contact he had with Mr Gilbert was when he complained about Mr Gilbert’s using a derogatory term to refer to an apprentice employed by the plaintiff.[13] He complained to the Board, which investigated, but Mr Gilbert denied using that term,[14] as he did in court: p 4-28, p 4-44.
[13]Wilson p 35. He made a diary note of the incident on 8 April 2008; Exhibit 1, tab 8. He also wrote an incident report, tab 10.
[14]Wilson p 36; Exhibit 1 tab 11.
There was a later incident when Mr Gilbert was using a leaf-blower to clean the concrete walkway to the north of the clubhouse, moving in an easterly direction, to and then around the eastern end of the club: p 4-28. This took him to the area outside the greenkeeper’s shed where Mr Wilson and his assistant were attending to a ride-on mower. Mr Wilson claimed that the effect of what Mr Gilbert was doing was to blow dirt and grit over them, and the mower.[15] He admitted that as a result of this he lost his temper with Mr Gilbert and yelled at him. For a few days he did not personally attend the club, though other workers of the plaintiff did what was required on those days. That such a thing occurred was supported by the evidence of his assistant, Mr Grimley (p 95), of Mr Jerinic,[16] and perhaps of the Men’s Club President, Mr Archer, who said he came on a scene when Mr Gilbert was swearing at Mr Wilson.[17] Mr Gilbert said that there was an occasion when he was using a leaf-blower in such a fashion, but nothing of consequence happened to anybody as a result: p 4-88.[18]
[15]Wilson p 47; p 2-18.
[16]Jerinic p 2-89: he criticised Mr Wilson for his behaviour, and gave him two infringement notices as a result: Exhibit 1 tabs 23, 24, which date the incident to 16 August 2008. The argument started before he got there: p 2-110; but see p 2-114.
[17]Archer p 64. The next day he resigned from the Club because Mr Gilbert also swore at him: p 65. He put this on 9 August 2008. He had no prior difficulties with Mr Gilbert: p 66. If he is correct about the date, he saw a separate earlier incident when Mr Gilbert swore at Mr Wilson.
[18]He also put the date at 9 August 2008: p 4-26. He denied that he argued with Mr Wilson: p 4-88, contra Jerinic p 2-110, p 2-114.
Mr Gilbert said that the financial position at the time he took over the club was very tight:[19] he had to make special arrangements with suppliers so as to prevent supplies to the club being cut off, and the club had already changed the arrangement under the contract from paying the plaintiff monthly in advance to fortnightly in advance, to ease the cash flow difficulties of the club: p 4–5. Mr Gilbert conceded that he was concerned about the cost of greenkeeping to the club, and that he thought that the plaintiff was being paid too much for its services: p 4-34.[20] He explored ways to reduce this cost by excluding green 4 from the contract,[21] and after the plaintiff’s contract was terminated a replacement was arranged on different terms.[22] In any event, it does seem clear that the relationship between Mr Wilson and Mr Gilbert rapidly became hostile.[23]
[19]See also Jerinic p 2-94: the club was flat broke.
[20]See also Exhibit 14; Jerinic p 3-3.
[21]Gilbert p 4-32, 33. Exhibits 13, 16, 41. See also Wilson p 2-30: there were negotiations which fell through when he discovered green 4 was not to be closed. (It has not been closed: Gilbert p 4-62.)
[22]He is an employee of the club: Gilbert p 4-36, He and his offsider are paid hourly, and presumably the club pays for the consumables: Gibbs p 3-74. Gilbert said the total cost was higher: p 4-35.
[23]Wilson p 36, p 2-20.
Credibility
I was not impressed by Mr Gilbert as a witness. I thought him prone to exaggerate, not consistent in his evidence, tending to talk around an issue, and deviating from the question. Under cross-examination he seemed defensive, and at times seemed to disagree with propositions put in cross-examination even when what was put was consistent with his earlier evidence.
The best example of this is probably his evidence about weeds in the gardens. He spoke about removing weeds from the gardens after he took over as chairman, and said the gardens were rock hard and just had in them shrubs which had not been attended to, or clipped so they looked respectable: p 4-4. This work was supposed to have occurred just after he took over,[24] but he later said that nothing was ever done about the gardens, and they ended up doing it themselves: p 4-9. At p 4-16 he said that he was doing all the gardening, but elsewhere he spoke of other people doing it, or its being handled by volunteers. When he was asked about a photograph of part of the garden, Exhibit 40, he said the reason why there were no weeds shown was because they had all died as the gardens were never watered: p 4-39. He said that nothing would grow in the gardens because the soil was so hard: p 4-99, but two answers later he said that in August 2008 the gardens were overgrown, untidy and unkempt because “there was weeds up all around the shrubs and everywhere.” The propositions that the gardens were full of weeds, that the gardens were being maintained by himself or other persons apart from the greenkeeper, and that the gardens were so neglected that even weeds would not grow in them[25] are inconsistent.
[24]See also Mrs Gilbert p 3–86.
[25]In the light of over 50 years’ experience of gardening, I find this very difficult to accept.
My impression was also that he was being too critical of the standard of the gardens. The photographs in evidence which reveal gardens do show low maintenance gardens, as one would expect in this context, but in my opinion the photographs show gardens in reasonable shape, at least for a bowling club. They do not reveal any large weeds which have not been spot sprayed, or indeed any significant growth of weeds.
Mr Gilbert’s tendency to exaggerate was also manifested in the formulation of paragraph 14 of the defence, and the particulars. He conceded that he gave instructions to the solicitors (p 4-40) and that he gave instructions for the particulars to which I have referred: p 4-98. When cross-examined about the particulars he conceded that the assertion that various things were not done “each and every day” was a “long bow” (p 4-97), but then seemed to suggest that it was not true only to the extent that on occasions things the plaintiff should have done were done by other people. He did not concede that in most cases such particularisation was obviously ridiculous, as it was, nor that there were allegations in paragraph 14 which were either exaggerated or completely unfounded, even on his evidence.[26]
[26]For example paragraphs 14(e), (h), (m) and (n).
He gave evidence about speaking to Mr Wilson in May 2008 in which he complained about a lot of matters (p 4-23), but seemed to have difficulty recalling another meeting in May with Mr Wilson when Mr Jerinic was also present, which Mr Jerinic gave evidence about, which was confirmed by the letter to the plaintiff[27] that among other things complimented Mr Wilson on the “very distinct visual improvement in the appearance of the gardens surrounding the greens”. Eventually he asserted that this must have been a different meeting: p 4-51. He claimed that the club did not need green 4 (p 4-33), but several witnesses spoke of the fact that the club was a busy one which did use all four greens, particularly during the winter season when there were visiting bowlers. He claimed at p 4-37 that “in those early days”, presumably soon after he took over, they had people leaving the club because the greens were not up to standard. Given the length of time Mr Wilson had been the greenkeeper of the club, it seems surprising that people who were dissatisfied with what he was producing would wait until 2008 to move elsewhere.
[27]Exhibit 1 tab 12.
Another example of exaggeration was his statement at p 4-34 that “every section of his contract wasn’t being fulfilled. Nothing was done in accordance with that properly… .” There was also the claim at p 4-53 that there were about 50 times more people through the club now. There would obviously not be 50 times the number of bowlers attending the club now compared with 2008. At p 4-75 he spoke of infringement notices as though they were being given as much as possible, yet most of the breaches alleged in paragraph 14 were not the subject of any infringement notices during August 2008. At p 4-99 he said that greens were rotated and rinks moved occasionally, though at p 4-100 this became “every two or three days”, but all the other evidence was that the greens were rotated[28] between morning and afternoon play routinely. There was one infringement notice given, on 29 August, for failing to do this: Exhibit 1 tab 26.[29] At p 4-104, he was asked about whether he was aware in August 2008 that a green had an annual cycle to it. He denied that, but after further questioning on p 4-105 he conceded that at that time he knew that greens changed over a period, and “they had a cycle …”. Overall it seemed to me that he was quite hostile to Mr Wilson personally, and keen to criticise him as much as possible, and I do not regard him as a reliable witness.
[28]That is, play was changed from east west to north south: Wilson p 27.
[29]Mr Wilson said that this was because Friday 29 August was a public holiday: p 45 (Gold Coast show day: Gov’t Gazette 7 December 2007 p 1971.) There was only one game that day: Jerinic p 2–115.
Mr Wilson also struck me as quite emotionally committed to his side of the story, and somewhat defensive under cross-examination, which lent support to the evidence that he reacted badly to any criticism of his work as a greenkeeper.[30] When he was asked in cross-examination about dealings with Mr Gilbert in May 2008 and in August 2008, his answers did not always seem to be consistent and to reflect what he actually recalled, though he was in some of them fairly frank about having manifested hostility to Mr Gilbert in August 2008. He admitted that in March 2008 he had told Mr Gilbert that he could not stand Mr McCloskey, but denied that he had said he disliked Mr Watkins: p 2-16. The former admission was at least frank, though it strikes me as an odd thing for him to have said at the time. He also made some frank admissions about the leaf blower incident: p 2-18. At p 2-19 when asked if he could tolerate criticism of his greenkeeping abilities, he said he could handle constructive criticism. At times he was quick to deny allegations completely, when I suspected there may have been some truth to them. Overall I am cautious about his reliability, but in general prefer his evidence to that of Mr Gilbert.
[30]Jerinic p 2–98; McCloskey p 3-64, although he may not be an unbiased witness: Wilson p 2-16.
The various bowlers who gave evidence for the plaintiff did so in a way which was generally straightforward and apparently reliable, though I did notice that Mr Robertson, when asked whether ash pots were emptied by Mr Wilson, was disposed to assume that they were even though this was something he did not actually know: p 2-54. No doubt Mr Wilson had been there for a long time and would have his supporters within the club, and they would be the people who would give evidence for him. By contrast, apart from the people who formed part of the new board with Mr Gilbert, and his wife, the only bowler called was Mr Koorey, who had left the club as early as 1999 because he did not consider that Mr Wilson was maintaining the greens properly: 3-56. He thought them too slow, a view rejected by the then hierarchy of the club. This evidence is too remote from 2008 to be relevant to the issues in the proceeding, but the fact that the defendant was reduced to calling such evidence suggests that it had difficulty in securing ordinary members who would speak about the situation in 2008 in a way which would support the defendant’s case.
I also felt the lack of any independent, objective expert evidence at the trial, particularly because I had some difficulty in reconciling the various complaints that the defendant’s witnesses had about the greens. Mr McCloskey’s criticism, that the edges of the greens slopped down to the ditches, sounded a significant problem, but no other witness mentioned it. The idea that if the rinks are not moved from side to side there would be uneven wear across the greens makes sense, though the suggestion that rinks need to be moved every day to prevent this strikes me as a bit farfetched. This seemed to be the cause of the problem described by Mr Gibbs, but Mr Watkins for example rejected the notion that that was the problem he was complaining about, and it also seems inconsistent with the complaint of Mr Jerinic, that unevenness in the greens prevented him from driving accurately: p 2–86, 87.
A drive is a fast bowl which therefore follows a relatively straight line, and would ordinarily be delivered close to the centre line of the rink, where on this theory there would be the most wear.[31] It seemed more as though Mr Jerenic was speaking about a green which was not properly levelled during the annual restoration, and that appeared to be the issue raised by Mr McCloskey when he spoke of bumps in the green.[32] But I would expect that if this were the problem it would have been apparent from soon after the last restoration had been completed, and it was not the problem described by Mr Gibbs.
[31]That would not be the case if the jack had already been displaced to the side, but an attempt to draw to a displaced jack could put a bowl further off the centre line of a rink, depending on the hand.
[32]He said that they still get the odd bump, and that people will still complain, mainly when they lose: p 3-64. Others spoke of bowlers always complaining: Wilson p 2-15; Gilbert p 4-48.
Mr Jerenic fell into this category: he seemed to be trying to criticise Mr Wilson, rather than giving an objective account of what he had seen and heard. He said that while he was a member of the board of the club several members left because of the greens, one of whom was Mr Koorey: p 2-90. But Mr Koorey left in 1999, before Mr Jerenic joined the club in 2000: p 2-85. I was also unimpressed by his attempt to explain away some of the language in the letter he sent to Mr Wilson, Exhibit 1 tab 12. Overall, I did not regard him as reliable. Mr McCloskey obviously disliked Mr Wilson, and was critical of his work, but he and Mr Watkins were more even handed in theie evidence, and in that way more plausible, though I remain wary of it.
Mrs Gilbert’s evidence, so far as it went, was consistent with her husband’s. She had little contact with Mr Wilson, but clearly disliked him and did not get on with him, probably as a result of the poor relationship between him and her husband. Much of her evidence was uncontroversial. She said she had looked in his office for a chemical register one day when he was not there,[33] conduct unlikely to have endeared her to him. There was one direct conflict, as to whether Mr Wilson offered her a list of chemicals Exhibit 1 tab 20.[34] This is not in issue on the pleadings, but if I had to resolve it, I would prefer the evidence of Mr Wilson.[35]
[33]Mrs Gilbert p 3-87. Mr Wilson was not happy about this: p 2-28.
[34]Wilson p 45, 46; Mrs Gilbert p 3-86, 98.
[35]On its face the tab 20 list was not what the club had asked for, and Mrs Gilbert could have rejected it for this, and then thought nothing more about it.
Termination of the contract – Clause 11
A contract may be terminated pursuant to an express provision, or in accordance with the ordinary law. An express provision may validly stipulate that any breach major or minor shall entitle the other party to terminate, and where there is a specific provision in the contract effect will be given to that right, although clauses giving a right to terminate for breach are in general construed strictly.[36] In general, the existence of a contractual provision conferring a specific right to terminate will not exclude the existence of a right to terminate under the general law.[37]
[36]Wallace-Smith v Thiess Infraco (Swanston) Pty Ltd [2005] FCAFC 49 at [131].
[37]Seddon & Ellinghouse, Cheshire & Fifoot’s Law of Contract (9th Australian Ed. 2008) para [21.3].
The contract between the parties contained in Clause 11 an express provision for termination of the contract, which so far as is relevant provided:
“The parties hereto acknowledge and agree that this agreement and the respective rights of the parties hereunder may be terminated by the party not in default in any of the following events:
a.If default shall occur with respect to any of the provisions hereunder, and the defaulting party shall fail to remedy such default within 30 days of receiving written notice of such default from the non-defaulting party; …
provided that disputes between the Greenkeeper and the Club are first dealt with in accordance with the tender documents.”
The tender documents, that is the specifications in the 2004 contract, deal with disputes in Part 13, although section 13.1 refers to a procedure in Part 8, section 8.7, which ought to be a reference to section 8.6. That paragraph provides:
“Disputes between the Greenkeeper and the Club must first be resolved with the Greens Director. If the dispute is not resolved, the problem will be brought to the Club’s Committee of Management. If this process fails, an independent arbitrator will be engaged.”
Section 13.2 then provided the mechanism for selecting the arbitrator, while section 13.3 said somewhat unhelpfully that “refusal to accept arbitration could terminate this contract.” Section 13.4 dealt with a national disaster causing loss of greens, machinery and building, which was not relevant.
In my opinion the effect of these provisions is that, if the plaintiff were in default under the contract, notice in writing had to be given of such default, and, if the plaintiff failed to remedy such default within 30 days of receiving such notice, the club could terminate the contract. If there were a dispute as to whether the plaintiff was in default under the contract, that dispute was first to be resolved by the process set out in the tender documents, that is by the Greens Director, or failing that by the Committee of Management, or failing that by arbitration. If the default was not disputed of course there was no need for that mechanism to be followed. In the present case, there was no evidence that any relevant dispute had been brought for resolution before the Greens Director or the Committee of Management, or that there had been any arbitration. Nevertheless, the defendant alleged that the contract had been validly terminated pursuant to Clause 11 on the basis that written notice of default had been given to the plaintiff and 30 days had elapsed without such default being remedied.
Counsel for the defendant submitted that the provision for referral to arbitration did not necessarily prevent the defendant from terminating the contract, but merely conferred a discretionary factor in refusing relief, albeit a strong one, citing for this proposition Zeke Services Pty Ltd v Traffic TechnologiesLtd [2005] 2 Qd R 563 and Santos Ltd v Fluor AustraliaPty Ltd [2016] QSC 129. These cases however are talking about something different from the matter in issue here. They are concerned with a situation where a proceeding is commenced in a court where by contract the parties have agreed that the matter is to be submitted to arbitration, and acknowledge that the court has a discretion as to whether or not to stay the proceeding to enable the matter to proceed to arbitration, though the terms of the contract between the parties will be a strong factor in that decision. But the issue here is not whether this proceeding should be stayed pending a referral of this current dispute to arbitration; the issue is whether the defendant was entitled to terminate the contract under the specific provision for termination in Clause 11, without having followed the mechanism of referral of the dispute to arbitration.
This is not a discretionary matter; if the defendant wants to take advantage of an express provision in the contract to terminate it, it is necessary for the defendant to comply with the requirements for termination set out in that express provision. If there is a dispute between the parties, relevantly as to whether or not a party is in default under the contract, the terms of this clause require that dispute to be resolved, if necessary by independent arbitration, before the contract is terminated under this clause. There is nothing in these cases which suggest that the court has a discretion to find in some way that the contract is been validly terminated under this clause without that step having been taken.
It is not to the point that the plaintiff made no attempt to refer the dispute to arbitration. The plaintiff’s explanation was simply that it denied having ever received the letter dated 31 July 2008 relied upon by the defendant as the notice in writing pursuant to clause 11 of the contract.[38] A copy of the letter became Exhibit 37. The body of the letter was in the following terms:
[38]Wilson p 2-21.
“In respect to the requirements in your contract dated 1 March 2007 which you duly signed, the Board would like to make you aware of matters which continue to breach your agreement. We believe that this is in no way a form of intimidation or harassment but a continuance of improvement so that you overcome issues that are considered contractual. Continued proven breaches will mean the nullification of your contract.
Joe Jerinic will monitor performance on a daily basis as the Board’s representative and will liaise with you on a regular basis.
Matters which have been on going with no visible sign of improvement are:
2.3 The surrounds – please make sure they are continually free from litter.
2.6 Rolling – it is noted how and when you roll the greens. This is a daily event and / or as arranged with the games director.
2.7 Rink-marking – this is definitely not up to any standard. Every day – please mark the rinks, jacks and mats to be positioned, clear ditches of debris, return all the pots etc to the greens, simply removing them because you don’t wish to empty them is not satisfactory, please empty them daily.
2.8 Fertiliser – please advise the games director of the diary inserts regarding all pesticides, fertilisers etc as requested in your contract. This should also make mention of expired dates etc.
2.11Pots – again we ask that all pots be cleared daily.
2.12 Walkways – we ask that the requirements under the contract be met daily. The concrete paths are covered with litter and butts.
2.15 Scoreboard – we ask that the requirement under the contract be met daily. The scoreboard are not changed from morning to afternoon play because staff are not available or on premises.
3.3 Pruning and weeding – we ask that the requirements under the contract be met. It has been some time since hedges have been clipped back.
7.1 Main building – we ask that the requirements under the contract be met daily. You should be mindful that your contract does specify that all seats be wiped down daily. Paths hosed down and surrounds litter free.
8.5 Hours – green staff MUST be on duty, until after PM games or event starting times. You are a contractor, not an employee and therefore your Award issues do not affect the Club or your contract. As a contractor you should nominate someone to make sure you have not breached your contractual obligations. We ask that the requirements under the contract be met daily.
8.10 Subcontracting – we ask that the requirements under the contract be met daily. Removal of any equipment from our premises will definitely breach your contract.
As the equipment in your storage area belongs to the club we require access to your security code to be kept in our safe as well as a separate set of keys for access at your expense. Any issues with the alarm should be pursued if there is a breach of security. As a member of the club and a business man you would think that best practice would come into play here.
Let’s hope that you correct these issues so we can all work together to achieve better outcomes.”
The basic function of a notice of default is to enable the recipient to understand with reasonable certainty what it is required to do in response in order to avoid the consequences of default.[39] Parts of this notice did not clearly identify what default was alleged against the plaintiff, or what was to be done to remedy such default, but those matters need not be considered further, because there are more fundamental problems with an alleged termination under clause 11.
[39]St George Bank Ltd v Perpetual Nominees Ltd [2011] 1 Qd R 389 at [58]; Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404 at 413.
The defendant’s case was the notice had been given by post, and also handed to Mr Wilson at the club premises. Mr Gilbert said that on 31 July 2008 he and others put together the letter which became Exhibit 37: p 4-30. He said he was advised to post the letter to Mr Wilson’s home address and to deliver it to him by hand. He gave it to the office girls to post, but did not see them actually post it with the rest of the mail. He gave a copy in an envelope to his wife to hand to Mr Wilson, but could not say of his own knowledge that she did so: p 4-30. Mrs Gilbert however gave no evidence of having given Mr Wilson such an envelope on 31 July 2008, or at all.
For reasons given elsewhere, I am not prepared to rely on Mr Gilbert’s evidence of these matters. Apart from this, with regard to posting, the evidence is insufficient to prove posting properly.[40] Despite Mr Gilbert’s evidence about the advice he had received, the letter on its face was addressed to the plaintiff at “PO Box 330 Broadbeach”. There was some evidence that the plaintiff or Mr Wilson had that post office box: Exhibit 1 document 33 is a contract between the plaintiff and the Gold Coast City Council, and included in that document is a page headed “Tender Form” which appears to have been signed on 20 May 2008 by Mr Wilson on behalf of the plaintiff, and which has as an address for service of notices “PO Box 330 Broadbeach”. Also included in the bundle is a copy of a letter issued on 28 April 2008 to the plaintiff, addressed to the plaintiff at “PO Box 330 Broadbeach,” from the Australian Taxation Office, which presumably the plaintiff received otherwise it would not have been in a position to provide it to the Gold Coast City Council for inclusion in the contract.
[40]Grant Thornton (Qld) Pty Ltd v Green Global Technologies Ltd [2009] QSC 262.
The evidence fell short of proving that the letter was given or posted to the plaintiff on 31 July, and in the circumstances there is no reason not to accept Mr Wilson’s evidence that he never received the original of Exhibit 37: p 2-21. If posted on 31 July it would not have been received by the plaintiff that day. It might have been received in the ordinary course of post on the following day, 1 August 2008, depending on when it was posted and the efficiency of the mail service on the Gold Coast. If not delivered that day, it would not have been delivered before the following Monday, 4 August. In the circumstances there is no evidence that Exhibit 37 was actually received by the plaintiff on any particular day.
Under clause 11 of the contract the defaulting party had 30 days to remedy the default following receipt of the written notice,[41] and even apart from any question of the mechanism in the tender documents for resolving a dispute, the right to terminate only arose after a failure to remedy within 30 days of receiving notice. Even if the notice had been received on 31 July, the plaintiff then had 30 days to remedy the default, that is, the first 30 days of August, and accordingly a right to terminate arose only on 31 August 2008. The defendant purported to terminate the contract at a meeting held on 29 August 2008: Exhibit 15.[42] Such purported termination was premature, even if the notice had been received on 31 July, which was not proved. In this situation, apart from any question of the mechanism for resolving a dispute, the defendant has not terminated the contract in accordance with the provisions of Clause 11 of the contract.
[41]For “receive” see CMF Projects Pty Ltd v Masic Pty Ltd [2014] QSC 209 at [25].
[42]Gilbert p 4-34. The club changed the locks on the greenkeeper’s shed on 31 August 2008: p 4-101.
Termination of the contract – at law.
I accept that the defendant was still entitled to terminate the contract if it had been repudiated by the plaintiff, a proposition relied on in the pleadings by the defendant. If in fact there was a right to terminate at law, the purported termination under Clause 11 would be still legally effective to bring the contract to an end. A right to termination arising at law has been analysed by reference to concepts of repudiation, a breach of an essential term, and a breach causing a substantial loss of benefit of the contract to the other party.[43] The second analysis is helpful in a situation where a party relies on the terms of the contract to determine whether the term which has been breached is an essential term, since a contract will often say something to this effect expressly. In the present case however there was no express provision in the contract which made any particular term essential, and the defendant’s case was not that an entitlement to terminate arose from a breach of a particular term of the contract which was essential, so this aspect of the matter need not be considered further.
[43]See also the analysis in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115, especially at [44] which used “renunciation” for repudiation in this sense.
The defendant’s case was that the plaintiff’s performance of the contract was in a number of respects unsatisfactory, so that the cumulative effect of this manifested the plaintiff’s unwillingness or inability to perform the contract properly in accordance with its terms, which amounted to repudiation. To the extent that such conduct also had the effect of depriving the defendant of the substantial benefit of the contract that was really just another way of presenting the same argument. In substance therefore the issue here was whether the plaintiff was in breach of the contract and whether the cumulative effect of the defective performance by the plaintiff was sufficiently serious to constitute repudiation of the contract.
Not every breach amounts to repudiation of a contract, particularly if the breach is not of a more significant term. The test for repudiation is objective.[44] There is authority that repudiation of a contract is a serious matter and not to be lightly found.[45] For example, bona fide insistence on an incorrect but arguable interpretation of an ambiguous term in the contract would not ordinarily amount to repudiation, at least as long as the party in error is willing to accept an authoritative exposition of the correct interpretation of the contract.[46] In order to assess this submission, it is necessary to have regard to the defendant’s detailed case in relation to breaches of contract by the plaintiff.
[44]DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 431.
[45]Shevill v Builders Licensing Board (1982) 149 CLR 620 at 633-4; Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 32-3; Wash Investments Pty Ltd v SCK Properties Pty Ltd [2016] QCA 258 at [32]. In that case it was held that there was repudiation of a lease by a tenant who had written asserting that unless the landlord would agree to a reduction in rent of the order of 30 per cent the tenant would cease trading in the premises and declare bankruptcy: [33].
[46]DTR Nominees v Mona Homes (supra) at 432-3, Highmist Pty Ltd v Tricare Ltd [2005] QCA 357 at [58].
The pleadings in this matter are wrong, because the statement of claim alleged unnecessarily that certain infringement notices from the defendant to the plaintiff were unjustified, and that the plaintiff was not in breach of the contract (paragraphs 5,6), when the plaintiff ought to have alleged that it had a contract, the defendant terminated the contract, the termination was in breach of contract, and as a result of that breach the plaintiff had suffered damages. It was then a matter for the defendant to plead that it was entitled to terminate the contract, and for that purpose to plead any and all breaches of contract on the part of the plaintiff relied on. For practical purposes however, the defendant’s pleading in paragraph 14 fulfils that function, where it was alleged that there were breaches of contract by the plaintiff in no fewer than 20 respects.[47]
[47]Particulars were given of these alleged breaches by letter on 26 June 2014, but the particulars were drafted in such sweeping terms that they were largely useless as particulars, and certainly failed to give any proper notice of the case the defendant actually ran at trial in relation to these matters.
Alleged breaches of contract
Para 14 (a) alleged that the plaintiff did not provide all necessary maintenance and upkeep to greens, lawns, garden and machinery of the defendant as required by paragraph 1 of the greenkeeping agreement.[48] This is a reference to the contract Exhibit 1 tab 7, which in Clause 1 engaged the plaintiff to perform that general work. This clause is a very general statement of the obligation to the plaintiff, and was enlarged on in Clause 8, which added the qualification that it be done “as set out in the tender documents [that is the specifications from the 2004 contract] … in a proper and workmanlike manner.” In these circumstances, it is not helpful to be attempting to analyse the obligations of the plaintiff and whether they were breached by reference to the general wording in Clause 1 of the agreement.
[48]Particularised as the greens being patchy, lumpy, not level and tracking, and gardens and lawns overgrown, untidy, and unkempt. I deal with all of these below.
Para 14(b) then alleged a breach of clause 8 (a) of the agreement, again in very general terms. In circumstances where that obligation is qualified by the requirements of the specifications, breaches of which are themselves the subject of the bulk of the balance of the paragraph, it is sufficient in my view to consider those allegations, and it is not helpful, and indeed in practical terms not really possible, to analyse the defendants case by reference to a very general allegation of a failure to comply with the requirements of Clause 8(a). That allegation was particularised as failing to mark and peg rinks so as to move them to spread wear, failing to set out mats and jacks, failing to clear ditches and failing to empty ash pots. Apart from moving the rinks, these are covered by paras (g) and (i). I will deal separately with the condition of the greens.
Condition of the greens
Mr Gilbert said that the greens were not true, that is, that irregularities in the surface would make bowls deviate: p 4-6. He said the rinks were not moved from side to side, and spoke of the greens tracking: p 4-23. Mr Jerinic complained that the greens were not flat, so that bowls deviated: p 2-86, 87. For reasons given elsewhere, I did not regard these as reliable witnesses, and do not give this evidence any weight.
Mr Watkins was critical of the greens at the club, and said that he did not think they were flat; if a kitty was rolled from one end of the green to the other it would shudder or bounce rather than roll smoothly: p 2-76. He said this affected the turning of the bowls, and that the problem was that the surface was not totally smooth: p 2-80. He said that this was not a problem when the greens were renovated each year, but became a problem probably from March or April onward. He did not accept that this was due to the natural deterioration of the greens in the winter months (p 2-79), which is something which could possible produce the effect he described, or that it was caused by wear and tear due to some games being played in one direction and others at 90 degrees to that direction: p 2-81.[49] His opinion was that the problem had to do with the standard of the renovation that was done at the start of the year: p 2-79, p 2-82. As a result the problem would not be fixed by rolling; the effect of his evidence seemed to be that the greens were rolled. He conceded that he had no greenkeeping credentials, that he was just a bowler.
[49]The effect of this was that rolling a kitty in either direction would mean rolling it across areas of wear caused by play in the other direction, if the rinks were always laid out in the same place rather than being moved from side to side so as to spread the wear.
Mr Watkins did concede that the greens were not unplayable, they just could have been a lot better than they were, and the new board were looking to lift standards at the club. He described what he was talking about as only a small problem: p 2-81. Later he said the greens were kept in reasonable condition, it was just that they were not totally true: p 2-82. His impression was that greens generally on the Gold Coast were of a very high standard because the weather were particularly good for them. Overall his evidence does not support the proposition that there was anything seriously wrong with the plaintiff’s maintenance of the greens.
I am not prepared to accept Mr Watkins’ evidence as evidence of a significant defect in the greens. His description of the jack bouncing or skipping is inconsistent with his statement that this was not something caused by play at right angles producing worn strips across the greens.[50] The jack would not bounce unless running across fairly pronounced ridges in the greens, which would not have survived rolling. If there were more subtle undulations in the greens as described by Mr Gibbs, the jack would just roll over them. If a green had not been laid quite level when renovated, this would cause the jack to deviate, not to bounce, and the problem would have been apparent from the beginning, not take time to emerge. I expect Mr Watkins was just being fussy about the greens during their period of winter deterioration.
[50]As supported by the evidence of Mr Gibbs (p 3-71) although he conceded this was not apparent on visual inspection: p 3-77.
Mr McCloskey gave evidence that the ditches were the worst part about the greens, because the plinths were bent, or mostly non-existent.[51] He said that as a result a bowl would just roll into the ditch if it came within a couple of feet of it: p 3-62. That sounds serious, but no other witness spoke of such a problem, even Mr Gibbs, who referred to a problem with the plinths which was cosmetic rather than functional. It was also not supported by any photos. Mr McCloskey said that at one time the greens were running fast in winter, even too fast, but Mr Wilson had slowed them down, perhaps so they did not get too quick: p 3-62, 63. Mr McCloskey said there was some unevenness in places, which he spoke of as bumps, particularly three rinks on one green which turned a lot in one direction, and were hard to play.[52] He said the surface of the greens now was 100 percent better than in 2008, although there was always the odd bump, and people would complain when they lost: p 3-64. The current greenkeeper had more grass on the greens in winter, and less deterioration, possibly because he was using more fertiliser: p 3-64, 65.[53] He did say however that the surface of the greens was as good as Mr Wilson could get it: p 3-63.
[51]McCloskey p 3-61. The plinth was what separated a green proper from the ditch that surrounded it.
[52]McCloskey p 3-63. He liked to play on them in competitions, as they gave the home team an advantage. That green was not too bad if played in the other direction: p 3-63.
[53]The plaintiff had to supply fertiliser under its contract, but Mr Gibbs can use fertiliser at the club’s expense.
There was evidence from other players called by the plaintiff that the greens were fine, and that they compared favourably with greens at other clubs on which those witnesses had played.[54] A favourable assessment of the greens in August 2008 by members of the Gold Coast Greenkeepers Association was excluded as expert evidence because it had not been exchanged as required by the rules.[55] There was no independent expert evidence called by the defendant that there was a problem with the greens as described by any of the defendant’s witnesses, or that this was due to some deficiency in the way the annual renovations were conducted or the greens were otherwise maintained.
[54]Foreshore p 2-42; Robinson p 2-54 (better than most); Gardner p 2-35, who went there from another club because of its good greens; see also the plaintiff’s then assistant greenkeeper, Mr Grimley: the greens were in excellent condition: p 94.
[55]UCPR r 429. The document is Exhibit 1 tab 32, my ruling is at p 54. But the fact that Mr Wilson was told this would have encouraged him to reject criticism of the condition of the greens: p 50.
The current greenkeeper, Mr Gibbs, who was engaged in September 2008 after the plaintiff’s contract was terminated, gave evidence that when he arrived the greens were in very poor condition, with some areas of deterioration in the grass, and with some undulations in the surface, which he attributed to the rinks not being moved from side to side, so that play was predominantly in the same place: p 3-71, 72. One of the greens which did not get much sun in the morning was in poor condition because of that. He said that the edges on two of the greens had a high level of mealybug infestation, which was common in summer but usually controlled by spraying. In addition the material used to hold the greens in, separating the green from the ditch, was more flexible than it ought to have been, so that the edges of the greens were not straight and were not properly supported: p 3-73. This was supposed to apply to greens 3 and 4, and he said that this was something a non-greenkeeper would notice. He said that in order to get the greens back into condition he renovated them after he started, which was at about the usual time for an annual renovation: p 3-79. He rejected the proposition that the condition of the greens at the time was just that of greens which were due for their annual renovation: p 3-77.
The difficulty with this evidence is that Mr Gibbs is still employed as the head greenkeeper by the club, so he is not an independent expert witness. It would be unsurprising for someone in his position to maintain that he was doing a better job than his predecessor.[56] His evidence may be true, but needs to be treated with a degree of caution. Another point that concerned me was his comment about the unsatisfactory green edging on green 3. In Exhibit 1 there are a number of photographs at tab eight, the first of which shows the edge of green 3. This may have been taken some years earlier, but there is no irregularity apparent to me in that photograph in the division between the green and the ditch. Apart from these matters, it is not clear to me that the problem described by Mr Watkins was the same as the problem described by Mr Gibbs. Overall I felt the want of independent expert evidence about the greens, and was left with the impression that the defendant’s witnesses who criticised them were looking for an excuse to criticise Mr Wilson, rather than describing significant deficiencies in the greens.
[56]The defendant’s witnesses spoke very highly of him. See Koorey p 3-58. He may be an exceptionally good greenkeeper.
On the whole, I prefer the evidence of Mr Wilson and the other witnesses called for the plaintiff to Mr Gilbert and the witnesses called for the defendant, and am not satisfied that there was as at August 2008 any significant problem with the greens at the club which demonstrated a failure on the part of the plaintiff properly to maintain the greens in accordance with the contract. This is significant, because I regard the task of keeping the greens as the most fundamental and important of the obligations of a greenkeeper at a bowls club. If this obligation was being performed adequately, it is going to be difficult to show that there was a sufficient failure on the part of the plaintiff properly to perform the contract so as to amount to repudiation of it.
Other alleged breaches
Para 14(c) alleged that there was a failure by the plaintiff to confer fully and freely with the greens director and any other duly authorised officer of the defendant as requested relevant to the performance of the greenkeeper’s duties and obligations as required by clause 8(c) of the contract. The particulars identified Mr Gilbert, Mr Watkins, Mr McCloskey and Mr Jerinic as the people concerned. Evidence was given by Mr Watkins that he was a member of the board in 2008 for a short time, and that he was greens director of the club in 2008, but he thought for probably only about a month at the most: p 2-75. I assume that he was elected to the board at the 2007 annual general meeting. He is currently a board member again. He said that on probably only two occasions while he was greens director he did speak to Mr Wilson about his belief that the greens were not flat, but that Mr Wilson’s response was that there was nothing wrong with the greens, and that Mr Watkins did not know what he was talking about, not being a professional.[57] The difficulty with this as evidence of a breach of clause 8(c) is that it depends on the proposition that there really was a problem of this nature with the greens, as Mr Watkins asserted, which I do not accept.
[57]Watkins p 2-77. Mr Wilson denied that this occurred: p 2-19.
After Mr Watkins resigned as greens director Mr Jerinic took over as greens director, briefly with Mr McCloskey, but his evidence was to the effect that the contact he had with Mr Wilson was just giving him written notices complaining about his conduct, which he described as infringement notices: p 2-86. He did not give evidence of any failure on the part of Mr Wilson in relation to conferring with him, indeed did not give evidence of his having made any attempt to confer with Mr Wilson.[58] Mr McCloskey gave evidence, but said that while greens director he only spoke to Mr Wilson on a couple of occasions about the greens, but could not recall the details: p 3-61. He said that Mr Wilson did not respond well to criticism of the greens, but when he was greens director he had not raised with Mr Wilson the issues he had with the greens: p 3-64. He gave no evidence of any breach of clause 8(c) of the contract.
[58]There was a meeting with Mr Wilson about his letter Exhibit 1 tab 12, when Mr Wilson said there was a discussion: p 36. Mr Jerinic spoke about the letter, but not any meeting.
The only duly authorised officer of the defendant referred to in the evidence was the chairman Mr Gilbert, who said that he spoke to Mr Wilson about the state of the greens, about their tracking and being slow and not regularly maintained: p 4-8. Mr Gilbert said that he did get much response from Mr Wilson, but the effect of his evidence seemed to be that Mr Wilson would not engage in any particular discussion about things but would simply agree briefly with what was said to him. Mr Wilson on the other hand said that he did respond to matters raised with him, for example by explaining that greens tended to become faster as growth slowed in the winter.[59] Mr Gilbert’s complaint in evidence was not really directed to a failure to confer, but to Mr Wilson’s not doing what he wanted Mr Wilson to do: p 4-9. Certainly the relationship between the two of them was not good, but on the whole of this evidence I am not persuaded that any breach clause 8(c) of the contract by the plaintiff has been proved.
[59]In summer grass will be denser, and will grow back faster after the morning cut, and the more grass on the green the more it will slow down the bowl.
Clause 8(d) of the contract required the plaintiff to “comply with all reasonable direction and instruction from the greens director (as defined in the tender document) in the performance of their duties and obligations….” Breach of this provision was presented as a sweeping allegation without proper particularisation,[60] and without a great deal of attention to exactly what the clause provides. It did not require the plaintiff to comply with any direction or instruction from the greens director, even if reasonable; it was concerned with directions and instructions “in the performance of [its] duties and obligations”. It was concerned therefore with the way in which particular duties and obligations covered by the specifications were to be performed, I suspect with a view to ensuring that the greenkeeper‘s work fitted in with the requirement of the club, such as not undertaking work on a particular green which took it out of use at a time when the club was organising some event which would require the availability of all greens. In so far as the defendant’s case was based on instructions to comply with other particular duties and obligations under the tender documents that is covered by the allegations in the balance of this paragraph.
[60]Particulars alleged directions “to rectify the problems with the greens”, to keep the whole area “free from debris and rubbish”, and to provide copies of records and documents “it was required to keep”.
It is possible that Mr Wilson would have taken on another bowling club in circumstances where the defendant’s contract was coming to an end, even if it proved inconvenient and relatively expensive to service, in the hope that this would enable him to maintain continuity in greenkeeping for lawn bowls. Apart from any inherent enthusiasm for this he may have, and he has obviously been a greenkeeper for a long time, it may be of assistance to him in obtaining more and better lawn bowls greenkeeping work in the future for the plaintiff.
An argument can however be made for the proposition that, had the contract with the defendant still been on foot, there was at least a real chance that the plaintiff would not have taken on another bowling club in early 2009. If this contract was replacement work in the sense of work that would not have been undertaken by the plaintiff if the defendant’s contract had remained on foot, the income from it should be deducted in assessing damages, except for an allowance for any costs specific to this contract or in an amount which would not have been incurred had the defendant’s contract been retained instead. If after the loss of a profitable contract a contractor obtains a replacement contract which is as remunerative, but where the contractor has to incur additional costs to earn the equivalent remuneration compared with the contract which was lost, the contractor’s damages include the additional costs, as expenses reasonably incurred in mitigating its loss by securing that other contract. The practical effect of this is that, if this were a replacement contract, the amount to be deducted would be the income received from the club, say $17,600 in 2009, less some allowance for the extra motor vehicle expenses associated with this, say $2,000.
In order to allow for this on Malec principles, it is necessary to assess the probabilities that this contract is one that would not have been entered into if the defendant’s contract were still in force. In all the circumstances, although there is a real possibility that the plaintiff would not have taken on this work had the defendant’s contract still been in place, I think I should assess that possibility at a relatively modest figure, and I adopt 25 per cent. Hence the allowance for replacement work should be 25 per cent of the income from that contract less $2,000, $3,900 in 2009.
In 2010, I expect the income from the Balmoral Bowls Club would have been $41,600 while from Lakeland it would have been $54,348. These two contracts produced about 75 per cent of the plaintiff’s income for the year. The income from the bowls club over the eight month period which is relevant however was $27,733. Again an allowance should be made for the increased motor vehicle expenses because of this contract, and I will deduct $3,733 for this eight month period, to produce a round figure of $24,000. 25 per cent of this is $6,000, which is the amount to be deducted on this basis for 2010. So the total to be deducted to allow for the possibility that this contract was replacement work is $9,900.
Conclusion
Hence the plaintiff’s damages for breach of contract are the loss of income, $209,244, less the expenses saved $133,406, less an allowance for the possibility that the contract with the Balmoral Bowls Club would not have been obtained if the plaintiff had still been doing the work required under the defendant’s contract, $9,900. Overall this leaves a balance of $65,938. This may be compared with the figure ultimately adopted by Mr Benjamin in his third report, Exhibit 19 for what he described as economic loss during the remainder of the contract term, $33,177.[128] It is much lower than the figure derived by Mr Otto, but that difference is largely due to the fact that his figure was based on a calculation which did not take into account the reduction in payments made to Mr Wilson after the termination of the contract and as a result of it, which on the authorities have to be taken into account.
[128]Exhibit 19 para 2.1. I have explained why I disagree with his approach to costs saved.
The plaintiff is also entitled to interest from the time when the loss was suffered. Essentially the loss accrued over the balance of the 18 months the contract had left to run when it was terminated by the defendant. Accordingly, and subject to any submissions which may be made on this point when I deliver these reasons, interest should run from the midpoint of that time to the date of judgment, 1 June 2009, at the rate allowed under the practice direction. The court calculator gives for this figure $45,346.60. Subject to any submissions to the contrary about interest, therefore, there will be judgment for the plaintiff for $111,284.60 including $45,346.60 by way of interest. I shall invite submissions in relation to costs when these reasons are delivered.