Reported Decision : 53 NSWLR 153 New South Wales Court of Appeal CITATION : Brambles Holdings Limited v Bathurst City Council [2001] NSWCA 61 FILE NUMBER(S) : CA 40972/99 HEARING DATE(S) : 16 February 2001 JUDGMENT DATE : 23 March 2001 PARTIES : Brambles Holdings Limited (Appellant) Bathurst City Council (Respondent) JUDGMENT OF : Mason P at 1; Heydon JA at 4; Ipp AJA at 95 LOWER COURT JURISDICTION : Supreme Court LOWER COURT SC 50187/96 FILE NUMBER(S) : LOWER COURT Hodgson CJ in Eq JUDICIAL OFFICER : COUNSEL : Mr S J Rushton SC/Mr P R Whitford/Ms N Obrart (Appellant) Mr W R Davison SC/Mr P R Clay (Respondent) SOLICITORS : Corrs Chambers Westgarth (Appellant) McIntosh McPhillamy & Co (Respondent) CATCHWORDS : Contract - Offer and acceptance - Whether letter constituted contractual offer to vary existing contract and create new contract between parties - Where language of offer ambiguous - Assessment of mutually known facts re contractual background and shared beliefs of parties - Whether conduct partially conforming to letter of offer constituted implied acceptance - Mutually understood purpose of offer - Whether response to offer was rejection of it - Whether response to offer merely constituted posturing and negotiation - Contract - Consideration - No immediate or guaranteed increase in earnings - likelihood of future increases in earnings - Contract - Construction of terms - Meaning of "General commercial refuse" - In context of agreement with local Council to operate waste depot - Meaning of "additional income" - In context of moneys required to be remitted to local Council from fees charged for receipt of liquid waste at waste depot - Remedies - Restitution - Doctrine of unjust enrichment - Discussion about controversy and debate in Australia surrounding development of doctrine and its applicability to claims in contract - D Bank of New Zealand v Simpson [1900] AC 182 Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647 B & B Constructions (Aust) Pty Limited v Brian A Cheeseman & Associates Pty Limited (1994) 35 NSWLR 227 Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 Carlton & United Breweries Ltd v Tooth & Co Ltd (1986) 7 IPR 581 Clarke v Earl of Dunraven (The 'Satanita') [1897] AC 59 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR [97023] Gibson v Manchester City Council [1979] 1 All ER 972 Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68 Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR [97326] CASES CITED: MacRobertson Miller Airline Services v Commissioner of State Taxation (Western Australia) (1975) 133 CLR 125 Manufacturers Mutual Insurance Limited v Withers (1988) 5 ANZ Insurance Cases para 60 - 853 New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd [1975] AC 154 Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd's Rep 601 Pobjie Agencies Pty Ltd v Vinidex Tubemakers Pty Ltd [2000] NSWCA 105 Quadling v Robinson & Anor (1976) 137 CLR 192 Raguz v Sullivan [2000] NSWCA 240 Reardon Smith Line Limited v Hansen-Tangen (1976) 1 WLR 989 Ryan v Textile Clothing & Footwear Union of Australia [1996] 2 VR 235 B Seppelt & Sons Ltd v Commissioner for Main Roads (1975) 1 BPR [97011] Stevenson, Jacques & Company v McLean (1880) 5 QBD 346 Sullivan v Constable (1932) 48 TLR 369 The Administration of Territory of Papua and New Guinea v Leahy (1961) 105 CLR 6 Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 Vroon BV v Foster's Brewing Group [1994] 2 VR 32 Way & Waller Ltd v Ryde [1944] 1 All ER 9 DECISION : Appeal dismissed. The appellant is to pay the respondent's costs of the appeal. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40972/99 SC 50187/96 MASON P HEYDON JA IPP AJA 23 March 2001 BRAMBLES HOLDINGS LIMITED v BATHURST CITY COUNCIL Contract - Offer and acceptance - Whether letter constituted contractual offer to vary existing contract and create new contract between parties - Where language of offer ambiguous - Assessment of mutually known facts re contractual background and shared beliefs of parties - Whether conduct partially conforming to letter of offer constituted implied acceptance - Mutually understood purpose of offer - Whether response to offer was rejection of it - Whether response to offer merely constituted posturing and negotiation Contract - Consideration - No immediate or guaranteed increase in earnings - likelihood of future increases in earnings Contract - Construction of terms - Meaning of "General commercial refuse" - In context of agreement with local Council to operate waste depot - Meaning of "additional income" - In context of moneys required to be remitted to local Council from fees charged for receipt of liquid waste at waste depot Remedies - Restitution - Doctrine of unjust enrichment - Discussion about controversy and debate in Australia surrounding development of doctrine and its applicability to claims in contract The appellant agreed by deed dated 23 November 1982 to manage the respondent Council's Solid Waste Disposal Depot (the first contract). In about 1985 the appellant started to receive liquid waste at the Depot, and to charge for its acceptance. The appellant retained this money. Before the first contract between the parties expired, the appellant tendered for a new contract and the respondent Council accepted the tender. However, after the expiration of the first contract on 1 November 1989, the parties continued to undertake negotiations in relation to the terms of the second contract. On 20 February 1990 the respondent Council wrote to the appellant stating that it was "appropriate" for the appellant to increase liquid waste fees to a certain level (1.1 cents/litre) upon completion of a liquid waste disposal area. The parties entered into the second contract on 12 July 1990. Clauses 21 and 22 of the second contract specified the fee to be charged for "general commercial waste" and required a portion of that fee to be remitted to the respondent Council. On 19 September 1991 the respondent Council wrote to the appellant stating that it had resolved to increase liquid waste fees and that "additional income" should be placed in a fund for the establishment of a Liquid Waste Treatment Plant. The appellant responded in a letter dated 3 October 1991, by denying that the contract between the parties covered liquid waste. The appellant proceeded to charge liquid waste fees at the rate set out in the respondent's mid-September 1991 letter, but continued to retain the moneys. In 1996 the respondent Council sued the appellant in relation to the retained liquid waste fees. The trial judge entered judgment in favour of the respondent Council, and ordered the appellant to pay $797,104.88 to the respondent Council. The amount awarded signifies (after interest) the difference between the amount collected by the appellant in liquid waste fees and the amount that it should have remitted to the respondent Council. This is an appeal against the orders of the trial judge. Held by Mason P, Heydon JA and Ipp AJA, dismissing the appeal: 1. The trial judge did not err in finding that the second contract governed the charging of fees for the acceptance of liquid waste at the Depot, and the obligations of the parties to each other in relation to such fees. In making this finding the trial judge did not fail to apply accepted principles of the law of contract. Per curiam: (a) The trial judge did not imply a term to give business efficacy. Therefore, the trial judge could not have incorrectly applied the accepted principles of the law of contract in relation to the implication of terms to give business efficacy. (b) The trial judge's construction of the contract did not strain the language of the contact. The trial judge's finding that term "general commercial waste" includes "liquid waste" was supported by the language of the contract and by the ordinary meaning of the words "general commercial waste". (c) The fact that the contractually specified charge for "general commercial waste" was expressed in cubic metres did not mean that the parties intended to exclude liquid waste from the concept of "general commercial waste" and the prescribed charges. Simple calculations can convert the cubic metre rate into litres. The forms of measurement used in a pre-contractual letter from the respondent Council to the appellant before the second contract, are not admissible since they do not demonstrate the genesis of the second contract nor identify the "meaning of a descriptive term". Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 applied. In addition, neither post-contractual letters containing reference to particular units of measurement, nor post-contractual conduct of the parties are admissible in relation to the construction of "general commercial waste". (d) The parties' own opinions about the meaning of contractual terms are not relevant to the construction of those terms, although they may be relevant to the question of whether the parties intend to create legal relations. Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309, referred. Since there is no argument for rectification or for estoppel by convention in this case, the subjective beliefs of the parties are irrelevant. 2. The trial judge did not err in finding that the respondent Council's letter of 19 September 1991 to the appellant was a contractual offer, and that this offer was accepted by the appellant's conduct. Nor did the trial judge err in finding that a third contract was thereby concluded between the parties. Per Ipp AJA, with whom Mason P agreed, Heydon JA disagreeing in part but not in the conclusion: (a) The letter was treated as an offer at trial and it is too late now for the appellant to deny that the respondent Council had contractual intent. (b) There was no rejection by the appellant of the letter of offer. The appellant's reply in its letter dated 3 October 1991 that the parties did not have a contract for liquid disposal, did not constitute a rejection of the letter of offer to create such a contract for liquid disposal. The 3 October letter contained posturing which is common in contractual negotiations. Stevenson, Jacques & Co v McLean (1880) 5 QBD 346 discussed. (c) In assessing whether the letter of offer was accepted, it is necessary to determine precisely the terms of the offer. Quadling v Robinson (1976) 137 CLR 192 applied. Since the contractual language in the letter of offer is ambiguous, mutually known facts relating to the contractual background are admissible, as are the shared beliefs of the parties as to their rights. Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 and Reardon Smith Line Ltd v Hansen-Tangen (1976)1 WLR 989 applied. Bank of New Zealand v Simpson [1900] AC 182, referred to. (d) The parties did not believe that the second contract applied to liquid waste, and they did not intend in the third contract to invoke a clause of the second contract to cover fees for liquid waste. The "additional income" to be remitted to the respondent Council, referred to in the letter of offer, means income in addition to the fee that the appellant was already entitled to retain. The fee that the appellant was already entitled to retain was that agreed to in previous correspondence. (e) Having regard to the contractual background and extrinsic material (including shared beliefs and the contemporary problems caused by increased liquid waste), the respondent Council did possess the contractual intent when it sent the letter, that (if accepted) it would create a contract dealing with fees for liquid wastes, and the remission of part thereof to the respondent Council. (f) To be an implied acceptance of an offer, conduct must be "of such a character as necessarily to lead to the inference on the part of the defendants that the agreement had been accepted on the part of the plaintiffs and was to be acted upon by them". Brogden v Metropolitan Railway Co (1877) 2 App Cas 666, referred to. This is a question of fact, to be examined in context. Empirnall Holdings v Machon Paull Partners (1988) 14 NSWLR 523 applied. An important part of this context was the mutually understood purpose of the letter of offer, which was to resolve the problems of increased liquid waste by creating a liquid waste plant. By its conduct (charging for receipt of liquid waste at the rate specified in the letter of offer), the appellant was taking the proposed benefits from the respondent Council's land. Viewed in this context, the appellant unequivocally accepted the letter of offer by its conduct. 3. The trial judge did not err in finding that there was consideration for the third contract. Per curiam: (a) Although the appellant was not entitled to retain more moneys from liquid waste fees, it still received adequate consideration for the third contract. The third contract was the basis of the establishment of a liquid waste treatment plant. This would benefit the appellant by enabling more liquid waste to be received at the Depot in the future and by alleviating handling and on-site environmental problems. Thus, the appellant would be likely to increase its earnings, and the likelihood of the respondent Council imposing a limit on the receipt of liquid waste was reduced. 4. It is not necessary to decide whether the trial judge erred in finding that if the respondent Council's letter of offer to enter the third contract had not been accepted by the appellant, then the appellant's use of the respondent Council's land to make profits (by charging liquid waste fees at the level set out in the letter of offer and retaining the money) would constitute unjust enrichment entitling the respondent Council to restitutionary relief. Discussion by Mason P and Heydon JA about the current level of disagreement and controversy surrounding the doctrine of unjust enrichment in Australia and whether restitutionary remedies should be available for breaches of contract. ORDERS: 1. Appeal dismissed. 2. Appellant to pay respondent's costs of the appeal. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40972/99 SC 50187/96 MASON P HEYDON JA IPP AJA Friday, 23 March 2001 BRAMBLES HOLDINGS LIMITED v BATHURST CITY COUNCIL JUDGMENT 1 MASON P: I agree with Ipp AJA's reasons as to the disposition of the contractual claim. As Heydon JA demonstrates, this case shows the difficulties of pressing too far classical theory of contract formation based upon offer and acceptance (see also Pobjie Agencies Pty Ltd v Vinidex Tubemakers Pty Ltd [2000] NSWCA 105). 2 I agree that this is not a suitable vehicle for addressing the claim for contractual damages according to a restitutionary measure. There is widespread disagreement on the topic within what Heydon JA aptly describes as the restitution industry (academic division). Indeed, disagreement about the very structure of the law of restitution and its interrelationship with other branches of the law seems to be a badge of membership. Such attitudes to the unjust enrichment concept are also hallmarks of other academic divisions, some of whose members struggle to preserve the boundaries of their jumbled inheritance rather than strive for conceptual order within (cf Review of Snell's Equity 13th ed in (2001) 117 LQR 150). 3 In these circumstances, it is hardly surprising that consensus is lacking as to whether restitutionary damages in contract are an unwelcome invader or a legitimate development of the unjust enrichment concept. It is therefore best that judges keep silent until the necessity arises. 4 HEYDON JA: Background This is an appeal by the defendant from orders of Hodgson CJ in Eq made on 16 November 1999. The primary order was a verdict and judgment for the plaintiff in the sum of $797,104.88. That represented, after calculation of interest, the difference between what the defendant charged for the disposal of liquid waste in the course of managing the plaintiff's Solid Waste Disposal Depot and what it ought to have passed onto the plaintiff. 5 By deed dated 23 November 1982, which expired on 1 November 1989, the defendant, which operated under the business name "Cleanaway", agreed to manage the plaintiff Council's Solid Waste Disposal Depot. The material parts of clauses 2(b), (c), (d), 6, 8, 21 and 23 were as follows: "2. Definitions For the purpose of this Contract:- … (b) 'Trade Refuse' - shall mean and shall be deemed to include any matter or thing whether solid, gaseous or liquid or a combination of any solids, gases and liquids, which is refuse from any industrial, chemical, trade or business process or operation, including any building or demolition works. (c) 'Garbage' - shall mean and shall be deemed to include all refuse, rubbish, manure and ashes, particularly:- (i) domestic refuse and household waste; (ii) garden refuse including grass clippings, shrubs and tree cuttings; (iii) waste fruit. (d) 'Other Wastes' - shall mean any matter or thing, whether solid or liquid or a combination of any solids or liquids and includes the carcass of any small or large animal, but does not include any solid or liquid waste from any septic tank, septic closet or chemical closet or from any holding tank or other container forming part of or used in connection with a septic tank, septic closet or chemical closet. 6. Hours of Operation The Contractor shall keep the Depot open at all times during the following hours: 8.30 a.m. to 5.30 a.m. seven days per week. For the depositing thereat of rubbish, refuse, garbage and trade refuse by any person … 8. Equipment The Contractor shall keep in good working order all equipment and provide and operate such equipment at his own expense. The Contractor shall ensure that the necessary equipment is available at all times for the proper performance of this Contract. … 21. Payments The Contractor shall be entitled to receive and shall be paid by the Council regular progress payments each month of $6,691.67 in full satisfaction of Council's liability under this contract, or such other amount as may be mutually agreed upon between the Contractor and the Council, the first of such progress payments to be made one month after the commencement of this Agreement. … 23. Collection of Fees The Contractor shall be responsible for the collection of all fees and charges levied by the Council for refuse taken to the Depot, not being garbage, trade refuse or other wastes deposited at the depot for or on behalf of the Council in accordance with the following charges. The Contractor shall issue receipts on Council's behalf and may retain 100% of the monies collected. Council may vary the charges from time to time. Receipt books to be returned to Council when completed. …" 6 The trial judge made the following findings (Red 20J-X): "The Depot was a dry sanitary landfill tip. However, it appears that in about 1985 the defendant began accepting liquid waste at the Depot, for which it charged $5.60 per load of 500 gallons. According to evidence given by Mr Ian Grundy, the defendant's manager for the Western Region, this rate was set by Council officers. This fee was retained by the defendant. On 8th June 1989, the defendant tendered for a new contract for the period 1989 to 1996. This was accepted by a letter from the Council dated 31st August 1989. The tender and acceptance contemplated terms similar to those of the earlier contract, apart from the tender price. However, there followed negotiations which resulted in some variation of the terms. While those negotiations were proceeding, on 15th December 1989, the defendant increased the fee for accepting liquid waste at the Depot to $25.00 per load. According to Mr Grundy, this was his decision, reached because during 1989 the quantity of liquid waste being dumped had increased significantly, causing problems in managing the Depot. The increase led to a complaint to the Council, and then to the defendant, by a liquid waste contractor, Mr Les Lander." 7 By the time of Mr Lander's complaint in December 1989, the deed of 23 November 1982 had come to an end on 1 November 1989. However, the parties appeared to be operating on the basis that they would continue to perform their obligations under the deed pending agreement on a new contract. Correspondence ensued between the Council and the defendant about Mr Lander's complaint. This concluded with a letter of 9 January 1990 from the defendant and a letter of 20 February 1990 from the Council. The 9 January 1990 letter concluded (Red 22N-Q): "… we advise of our revised price to Mr Lander for disposal of liquid generated in the Bathurst City area. We propose to amend the charge to $15.00 per 500 gallons or 2273 litres as from 1st January 1990. This will be increased to $25.00 per 500 gallons or 2273 litres from 1st July 1990." The Council said in its 20 February 1990 letter (Red 22U-W): "The proposal to amend the charge for liquid waste disposal to $15.00 per 500 gallons or 2,273 litres as from the 1st January, 1990 is agreeable. The increase in charge to $25.00 per 500 gallons or 2,273 litres from the 1st July, 1990 is difficult to substantiate. It would appear appropriate that the charge be increased to $25.00 per 500 gallons or 2,273 litres upon completion of an appropriate liquid waste disposal area. Your consideration of this proposal is requested." The $15 figure corresponds to about 0.7 cents per litre and the $25 figure corresponds to 1.1 cents per litre. There appears to have been no oral or written response. The trial judge held that these letters did not create a contract (Red 52B-D), though the parties acted in accordance with their understanding of those letters until October 1991. 8 On 12 July 1990 the Council and the defendant entered a further contract. It had four parts. The first was a two page document. The second was Annexure A, a "Specification". The third was Annexure B, comprising certain letters from the defendant. The fourth was Annexure C, comprising certain letters from the Council. The two page document in effect created mutual obligations to carry out the "Agreements" found in Annexures A, B and C. The principal detailed statement of rights and obligations is to be found in the Specification in Annexure A. Clauses 2(b), (c), (d), 3, 6 and 8 of Annexure A were similar to those in the 1982 deed. Clause 19 provided: " 19. Payments The Contractor shall be entitled to receive and shall be paid by the Council regular progress payments each month of $8,525.00, in full consideration of Council's liability under this contract, or such other amount as may be mutually agreed upon between the Contractor and Council, the first of such progress payments to be made one month after the commencement of this Agreement." Clause 21 provided: " 21. Collection of Fees and Indexing The Contractor shall be responsible for the collection of all fees and charges levied by the Council for refuse taken to the Depot, not being garbage, trade refuse or other wastes deposited at the depot for or on behalf of the Council in accordance with the following fees and charges. These fees and charges shall be varied as from the 1st January, 1991 and each succeeding year in accordance with the Consumer Price Index for the twelve months immediately preceding the 30th September in the year immediately preceding the date on which the review shall take effect. The Contractor shall be entitled to retain the fees and charges collected by him, other than the disposal fees specified in Clause 22. The contractor shall issue receipts on behalf of Council for fees and charges collected and all used receipt books are to be delivered to Council not later than one calendar month after the end of the quarter in which the book was completed and for this purpose the quarters shall be deemed to end on 31 March, 30 June, 30 September and 31 December in each year. Commercial and Industrial Waste · Small box trailers, station wagons, panel vans and utilities $ 3.00 per load · General commercial waste $ 3.00 per m3 · Car Tyres .50 per tyre · Truck Tyres $ 1.50 per tyre · Tractor Tyres $ 3.00 per tyre · Large animals (cows, horses) $18.00 per carcass · Small animals (goats, sheep, calves) $10.50 per carcass · Compacted Waste $ 3.00 per m3 Residents of Bathurst Domestic Garbage and Other Refuse Domestic garbage and other refuse arising from the normal activities of a single dwelling delivered to the Depot in a car, station wagon, utility or a box trailer, shall not attract a charge or fee, but Council reserves the right to vary this clause from time to time. Truck, utility, station wagon and sedan bodies delivered to the Solid Waste Disposal Depot shall not attract a charge or fee." On the assumption the liquid waste fell within the expression "General commercial waste", the charge stipulated was equivalent to 0.003 cents per litre. One significant difference in the new clause 21 compared with clause 23 of the 1982 deed was that the Council's power to vary charges was removed. Clause 22(a) provided: " 22. Payment of fees to Council by Contractor (a) Within one calendar month of the end of each quarter (and for this purpose the quarters end 31 March, 30 June, 30 September and 31 December in each year) the contractor shall pay to council fees for disposal of compacted and uncompacted waste delivered to the Solid Waste Disposal Depot (hereinafter called 'the disposal fees'). The disposal fees payable shall be: - One dollar ($1.00) for each cubic metre of compacted waste, and - fifty cents ($0.50) for each cubic metre of uncompacted waste, provided that the minimum annual payment (hereinafter called 'the initial minimum annual payment') to Council shall be $14,300.00 and all monies payable pursuant to this Clause shall be varied in accordance with the formula for review of fees set out in Clause 22b hereunder as and from 1 January 1991 and thereafter reviewed on 1 January in each year on the basis of the change in the Consumer Price Index for the twelve months to 30 September in that year immediately preceding the review date." 9 The next material event was that on 25 June 1991 the Council wrote to the defendant, referred to its letter of 20 February 1990, and said that the letter "incorrectly stated the quantity". It said that the true charge for liquid waste disposal was $15.00 per 1,000 gallons or 4,500 litres. That corresponded to a charge of 0.3 cents per litre. 10 The trial judge then said (Red 25E-H): "According to a note on the Council's copy of this letter, on 1st August 1991, Ross Anderson, the defendant's Site Manager at the Depot from mid-1991 to January 1993, telephoned the Council, and advised that the defendant was charging $15.00 per 1,000 gallons." That is, Mr Anderson did not protest at the change or deny the Council's right to make it. 11 In the period July-September 1991 the Council gave consideration to increasing liquid waste disposal charges with a view to creating a reserve for the purpose of establishing a Liquid Waste Treatment Plant. On 19 September 1991 the Council wrote to the defendant in the following terms: "At its meeting on 11 September 1991, Council resolved that: (a) 'Liquid waste disposal costs be increased to 1.3 cents per litre from 1 October, 1991, and then quarterly by 1.0 cents per litre, up to a figure of 6.0 cents per litre and that the additional income be placed in reserve for the establishment of a Liquid Waste Treatment Plant.' You are requested to charge these fees to Cleanaway, Mr Les Landers and all other depositors of liquid wastes at the Depot. Records could be kept, and dockets issued by you to Council each week, in a similar manner to the Disposal Fees being paid to Council for Solid Waste disposal. Mr Les Landers has been informed of the increase in fees. Payment of all liquid waste disposal fees should be made to Council by Cleanaway each quarter in accordance with clause 22 of the Contract." As that letter indicated, a letter had been sent (on the same day) advising Mr Landers of the fee increase. The figure of 1.3 cents per litre (and the other figures rising to 6 cents per litre) compared to the figure of 0.003 cents per litre in the 12 July 1990 agreement, 0.7 and 1.1 cents per litre in the 20 February 1990 letter, and 0.3 cents per litre in the 25 June 1991 letter. 12 On 3 October 1991 the defendant sent a letter to the Council in the following terms (Red 30Q-31N): "Reference is made to your letter dated 19th September 1991. Cleanaway wishes to raise a number of issues of concern with liquid waste disposal at the Bathurst landfill depot. Our understanding is that the Bathurst Landfill Depot is presently licensed as a solid waste disposal depot, and as such, there is no licence for the disposal of liquid waste at the depot. Cleanaway recognises that the best place for liquid waste disposal is the current landfill depot, especially to stop illegal disposal and to minimise pollution. Nonetheless, Cleanaway is very concerned that there are leachate ponds at the depot which are not used. Council dug a trench by-passing the ponds some 18 months ago. Having said that, liquid waste disposal must be made economically viable for Cleanaway to perform the work required to dispose of the liquid in the best possible manner. Cleanaway must be adequately compensated for the work involved in digging and covering trenches. In February 1990, Council agreed to an increase in tip fees, but subsequently changed their mind in June 1991 and reduced the tip fees back to the old rates. The present rates do not make it viable to continue providing a liquid disposal service. Cleanaway has no contract with Council for liquid disposal. The present contract is for the management of a solid waste disposal depot. In regard to the collection of a liquid waste levy on Council's behalf, Cleanaway would make the point that this is not covered by the present contract. In summary, Cleanaway seeks: 1. Protection (in writing) from prosecution under legislation that would preclude the disposal of liquid waste at a solid waste disposal depot. 2. Adequate tip fees for the work involved in providing for liquid disposal. We would be appreciative if the above could be provided by Tuesday 15th October 1991 or we will need to review our options as regards acceptance of liquid into the landfill depot. While such a review was under way, we would request Council suspend the disposal of liquid waste until the matters are clarified. Cleanaway would be prepared to work very closely with Council and the licensing authorities in the planning, construction and operation of a suitable liquid waste treatment plant which could be installed on the site at the landfill depot. I believe the issues raised in this letter [are] of a serious nature, and your urgent attention is requested to address the problems. I would appreciate your acknowledgment of this letter and an opportunity to meet and resolve the issues." 13 From some date in October 1991, the defendant collected the fees for liquid waste at the rate of 1.3 cents per litre as set out in the letter of 19 September 1991, and retained the whole of them. The fact that it was doing so came to the attention of the Council on 15 October 1991 when, according to a file note made by a Council officer, Mr Landers informed that officer that the defendant was "now charging 1.3 cents per litre". Mr Grundy admitted in his first affidavit that thereafter the fees rose approximately each quarter by 1 cent per litre (Blue 6/1165C-G). 14 The trial judge found (Red 32Q-U): "It had been the practice of Mr Fulton since prior to the September 1991 letter to attend the Depot on a weekly basis, review the defendant's records, and sign for an amount to be paid to the Council. This practice continued until at least about the middle of 1992. However, no request or demand was made on behalf of the Council for payment of any part of the fees charged for liquid waste." 15 In 1995 the defendant admitted to the Council that it had been retaining all the fees. The Council complained about that fact, and these proceedings commenced on 25 September 1996. The Trial Judge's Reasoning 16 The trial judge's reasoning, so far as it remains controversial, turned on three points. 17 First, he held that the 12 July 1990 agreement, in establishing fees for general commercial waste under clause 21, established fees for liquid waste, and prohibited the defendant from charging any other fees. That meant that the defendant was in breach of contract from 1 October 1991 on, but the Council could not point to any loss stemming solely from breach of the 12 July 1990 contract. The trial judge found that the loss could be recovered by reason of the second stage in his reasoning. 18 The second stage turned on a conclusion that the letter of 19 September 1991 was an offer which, though it was not accepted by the defendant's letter of 3 October 1991, was accepted by the defendant's conduct in charging the rates specified. This entitled the defendant to charge 6 cents, but only retain 1.1 cents. He held it was entitled to retain 1.1 cents because that was the figure permitted by the Council's letter of 20 February 1990 once the condition stipulated - "completion of an appropriate liquid waste disposal area" - was satisfied, which he held was the case (Red 23B and 50T). He treated the 25 June 1991 letter setting a figure, in effect, of 0.3 cents per litre, as applying only in the period before the condition was satisfied. He treated the defendant's decision to charge only 0.3 cents per litre even though the condition had been satisfied as proceeding on a mistake, shared by the defendant's letter of 3 October 1991 (Red 50W-51E). 19 Thirdly, the trial judge said that if there were no contract formed through the defendant's acceptance by conduct of the 19 September 1991 letter, the defendant would be unjustly enriched, and obliged to return the 6 cents charged less a reasonable remuneration for its work and expense in receiving liquid waste. The 12 July 1990 Contract 20 The defendant's first line of attack on the trial judge's reasoning related to his findings about the 12 July 1990 contract. Grounds 3 and 4 of the Amended Notice of Appeal were: "3. The trial judge erred in holding that the agreement between the Appellant and the Respondent dated 12 July 1990, and specifically clauses 3, 8, 19 and 21 of that agreement, prohibited the Appellant from charging any fees for the acceptance of liquid waste (J28.8.98, pp.32-33). 4. The trial judge erred in holding that liquid waste was commercial and industrial waste within the meaning of clause 21 of the agreement between the Appellant and the Respondent dated 12 July 1990 (J28.8.98, p.32)." 21 The trial judge's reasoning was as follows (Red 46Q-49C): "I note that the contract by cl.6 required the defendant to keep the Depot open between specified hours for the depositing of trade refuse (defined to include liquid refuse) by any person; and by cl.3 and cl.8 to provide and operate at its own expense all labour, materials, and plant. For its management services, it was entitled to receive the payments set out in cl.19. Under cl.21, it was made responsible to collect fees levied by Council as set out in cl.21, and authorised to retain them (subject to the remittances to the Council required by cl.22). The question is, could the defendant charge fees to persons for depositing liquid waste, without authorisation from the Council; and if not, why not? In effect, the defendant says it was conducting a business, and incurring expense, so it was free to require payment for its own benefit for items received at the Depot; a fortiori, if such items were not covered by the fees specified in cl.22. However, the contract must be construed against the background that the Depot is the Council's property, used for the provision of a service to the community, and that the defendant was managing this property for the Council for a fee. Leaving aside any considerations arising from the pre-existing practice of charging for liquid waste, I would in those circumstances readily interpret cl.21 as providing that the defendant could charge, for the categories of waste specified in cl.21, the fees specified in cl.21 and no more. There is some force in Mr McDougall's contention that measurement by the cubic metre is not appropriate for liquid waste; but that measurement is certainly applicable and can readily be translated into gallons or litres, and no other reason has been advanced why liquid waste would not fall generally within the category of general commercial waste. In my opinion, cls.3, 8, 19 and 21 in fact impliedly prohibit the defendant from charging any fees for the receipt of any waste, other than the fees specified in cl.21; and a fortiori prohibit the defendant charging other fees for general commercial waste, including liquid waste. In any event, in my opinion to charge for liquid waste a fee not authorised by cl.21 would be inconsistent with the defendant's obligations under cl.6. It may be that under cl.6 the defendant is not obliged to receive liquid waste of a nature or quantity incompatible with the proper management of a solid waste depot in accordance with other provisions of the contract; but if such waste was brought to the Depot, the defendant's proper response would be to refuse to accept it, not to charge for it for its own benefit. On this approach, the contract on its true construction does not prohibit the defendant from charging for liquid waste for its own benefit. This is not an implication of a term by operation of law or on the basis of business efficacy; but rather the drawing out of what is implied by the language of the contract itself. Part of the background circumstances against which the contract must be construed is the on-going practice, which pre-existed the tender and continued during negotiations and after the contract, whereby the defendant did in fact charge for liquid waste and retain the fees collected. In my opinion, if one construes the contract having regard to this practice, one reaches the same result. Mr. Grundy accepted in his evidence that the fee for liquid waste was set and authorised by the Council: the defendant attempted to increase it in December 1989, but complied with the Council's direction to the contrary early in 1990. My construction of the contract would make it inconsistent with the practice, and the contract purports to cover the field; but in my opinion, the Council having a contractual right against the defendant could waive it. If the Council were to claim that the defendant could not rely on this waiver because of lack of consideration, it would have been open to the defendant to contend that consideration was provided by its bona fide belief in its right to refuse liquid waste: see Wigan v Edwards (1973) 47 ALJR 586. In any event, by reason of estoppel, the Council could probably not have taken away the permission to the defendant to charge and retain fees authorised by the Council, without first giving reasonable notice." 22 The defendant submitted that the trial judge "failed to apply conventional and accepted principles of the law of contract". He was said to have done so in three respects: failure to apply the principles as to the implication of terms; straining the contractual language; and failing to have proper regard to the factual matrix. An evaluation of these criticisms depends in part on bearing in mind what are the conventional and accepted principles of the law of contract relating to the problems in this case. These will be noted before the three criticisms are discussed. 23 To some extent the defendant's arguments turned on appeals to the conduct of the parties before the contract was made on 12 July 1990, to their conduct after the contract was made on that date, to their subjective beliefs and to submissions about the implication of terms. 24 The first relevant principle of law is that pre-contractual conduct is only admissible on questions of construction if the contract is ambiguous and if the pre-contractual conduct casts light on the genesis of the contract, its objective aim, or the meaning of any descriptive term: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 347-352. 25 The second relevant principle is that post-contractual conduct is admissible on the question of whether a contract was formed: Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68 at 77; Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647 at 668, 669 and 672; B Seppelt & Sons Ltd v Commissioner for Main Roads (1975) 1 BPR [97011] at 9149 and 9154-9156; Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR [97023] at 9255. 26 The third relevant principle is that post-contractual conduct is not admissible on the question of what a contract means as distinct from the question of whether it was formed. As explained by Priestley JA (Meagher JA agreeing) in Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 326-330, the status of the relevant High Court authorities is unclear: hence unless it is demonstrated that the later decisions of the Victorian Full Court and Court of Appeal against admissibility, Ryan v Textile Clothing & Footwear Union of Australia [1996] 2 VR 235 and FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343, are clearly wrong or they are overruled, they should be followed in New South Wales. No attempt was made to demonstrate that they are clearly wrong. 27 The fourth relevant principle is that the construction of a contract is an objective question for the court, and the subjective beliefs of the parties are generally irrelevant in the absence of any argument that a decree of rectification should be ordered or an estoppel by convention found. No argument of these kinds was advanced in this case. 28 The fifth relevant principle is that terms may be implied in one of four ways. The trial judge set out this orthodox classification in his unreported interlocutory judgment in Carlton & United Breweries Ltd v Tooth & Co Ltd, which was quoted by Young J, the trial judge in that case ((1986) 7 IPR 581 at 605-6): "A more precise classification of the different types of implied terms was given by Hodgson J in his first interlocutory judgment in the current proceedings. His Honour set out four classes of implied terms, the first two of which are in the class of terms implied in law, the second two the implied terms in fact. His Honour said: 'There is a spectrum of different types of implied terms covering, inter alia, the following: (i) Implications contained in the express words of the contract: see Marcus Clarke (Vic) Ltd v Brown (1928) 40 CLR 540 at 553-4. (ii) Implications from the 'nature of the contract itself' as expressed in the words of the contract: see Liverpool City Council v Irwin [1977] AC 239. (iii) Implications from usage (for example, mercantile contracts). (iv) Implications from considerations of business efficacy: see BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20 at 26; Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337.'" 29 The reasoning of the trial judge conformed to these principles. The submissions of the defendant did not. (a) Implication of terms to give business efficacy 30 The criticism based on failure to apply the principles as to the implication of terms fastened on the fact that the trial judge described what he did as a "drawing out of what is implied by the language of the contract itself" (Red 48J). The defendant cited the leading cases about implying terms to give business efficacy and developed arguments designed to show that the terms found by the trial judge were not reasonable, equitable, necessary or obvious. This criticism is entirely baseless. The trial judge made it plain that he was not implying a term to give business efficacy. He said (Red 48H-J): "This is not an implication of a term by operation of law or on the basis of business efficacy; but rather the drawing out of what is implied by the language of the contract itself." 31 At Red 48H-J the trial judge was indicating that, of the four implications he had referred to in Carlton & United Breweries Ltd v Tooth & Co Ltd, he was not making implication (ii) or (iv), but (i). Despite the number of occasions on which the defendant said that what the trial judge "was really doing was implying a term and on a basis that didn't comply with the usual rules", the processes he employed were processes of construction. (b) Straining the contractual language? 32 The second criticism was that the trial judge's construction strains the language of the contract. 33 The first substantive argument advanced by the defendant in support of this criticism was put thus (written submissions para 30): "To suggest, as his Honour does, that liquid waste is ' general commercial waste ' within the meaning of clause 21 is to strain the language of the Contract. The term ' general commercial waste ' is not defined by the Contract. It is a descriptive term and seemingly is a sub-species of ' trade refuse ' a term which is defined to include liquid waste. This suggests that the term ' general commercial waste ' was not intended to include liquid waste." 34 The following matters support the trial judge's view that "general commercial waste" includes "liquid waste". Clause 21 deals with "refuse", and contemplates "refuse" as falling into two categories - "commercial and industrial waste" and "domestic garbage and other refuse". Clause 2(b) defines "trade refuse" as including liquid refuse, and hence liquid waste, from any industrial, chemical, trade or business process or operation. Clause 2(d) defines "other wastes" as including liquids. If "trade refuse" includes liquid waste, it would seem that the word "refuse" in clause 21 also includes liquid waste. And if the expression "other wastes" includes liquid waste, it would seem that "general commercial waste" includes liquid waste. Clause 6 obliged the defendant to accept "rubbish, refuse … and trade refuse": it was common ground that that expression included liquid waste. It would be strange if clause 21 would contemplate the Council levying fees and charges for some categories of "refuse" delivered pursuant to clause 6, but not others (i.e. liquid waste). Further, the defendant was obliged by clause 21 to collect fees and charges levied for "refuse", but not refuse which was "garbage, trade refuse or other wastes deposited at the depot for or on behalf of the Council". Since "trade refuse" and "other wastes" are expressions which include "liquid waste", and since those types of refuse when delivered for or on behalf of the Council are excluded from the general category of "refuse", the drafting seems to contemplate that "refuse" delivered otherwise than for or on behalf of the Council includes "trade refuse" and "other wastes", and hence liquid waste. Finally, the words "general commercial waste" in their ordinary meaning can include liquid waste, and nothing in the context in which they are used points against the application of that meaning. 35 The next argument which the defendant put was that the charge for "general commercial waste" was a rate per cubic metre, "and the adoption of that unit of measurement highlights that the parties did not intend liquid waste to be included within the concept of 'general commercial waste'. When rates were set in relation to liquid waste by the parties, units of liquid measurement were used (see, e.g. 2/334; 3/528 and 3/604)." One cubic metre is a measure of volume. So is one gallon or one litre. Only elementary calculations are needed to convert one into another. Of the three evidentiary references given, the second does not state any unit of measurement. The first, which is a reference to the letter of 20 February 1990, uses gallons or litres as an alternative, which scarcely points decisively against cubic metres being regarded as a measurement for liquids; in any event the admissibility of that letter on the issue of construing the 12 July 1990 contract, even if it can be regarded as part of the "surrounding circumstances", appears to be forbidden by the principles stated in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 347-352. The letter does not evidence the genesis or objective aim of the 12 July 1990 contract. Nor does it point clearly towards any identification of "the meaning of a descriptive term", as discussed at 349 and 351. On the defendant's case, the 20 February 1990 letter has nothing to do with the 12 July 1990 contract. Further, surrounding circumstances are not to be examined unless the contractual words to be construed are ambiguous. Counsel for the defendant denied any material ambiguity in the 12 July 1990 contract: he said orally that it was "very clearly drafted" and "clear in its terms to the extent that it is primarily concerned at least in relation to the charging and retention of fees [for] dry waste". Counsel for the defendant also said in writing: "There was no ambiguity resting either in the construction or interpretation of the contract or the words used." 36 The third evidence reference given by the defendant is to the letter of 19 September 1991 from the Council to Mr Landers, which spoke of rates per litre. A better reference would have been to the corresponding part of the letter sent on the same day to the defendant. The problem is that post-contractual events are not admissible on questions of construction. 37 The defendant then argued (para 31): "It is also significant that a particular rate is specified in relation to ' general commercial waste , namely, $3.00/m3 which does not appear to bear any relationship to the amount charged by Brambles from time to time in relation to liquid waste." So far as the higher charges postdate 12 July 1990, they are inadmissible on the question of construing the 12 July 1990 contract. So far as they predate it, they are inadmissible because they do not appear to be part of the background circumstances of which account can be taken on the question of construing the contract, which is in any event not ambiguous. The terms of the 12 July 1990 contract were subject to negotiation from 8 June 1989 until 12 July 1990 (Red 20P-S). 38 The defendant then submitted (para 31): "His Honour's construction of the Contract is also inconsistent with what the parties subjectively believed the Contract covered: Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309, 330. A memorandum of 20 December 1989 (2/317) demonstrates that Council was of the view that the Contract did not cover fees for liquid waste. The letter of 3 October 1991 (3/614) suggests that Brambles was of the view that the Contract did not concern liquid waste disposal at all." First, the passage referred to in the case cited is not authority for using the parties' subjective beliefs about the construction of the contract as a guide to its construction. The passage rather deals with the different topic of the parties' intention to effect legal relations, and the very limited role which a subjective intention not to contract has. Secondly, the memorandum of 20 December 1989 at most shows what the Council thought the predecessor to the 12 July 1990 contract, namely the 1982 deed, covered; it says nothing at all about what the 12 July 1990 contract would cover. Thirdly, the letter of 3 October 1991 is post-contractual conduct, and not admissible on question of construction. 39 The defendant submitted that the conclusion that the 12 July 1990 contract did not deal with charges for liquid waste was supported by the fact that an agreement on those charges had already been arrived at in the correspondence of 9 January and 20 February 1990. Those letters are part of the surrounding circumstances which are inadmissible on the question - a question of construction - of what the words "general commercial waste" in clause 21 of the 12 July 1990 contract mean. The effect of the construction of these words as determined by the trial judge would simply have been to bring the 9 January-20 February 1990 agreement to an end if it had been a contract. In fact the trial judge implicitly held (Red 52B-D) that it was not contractual in character, which weakens its weight on the question of construction even if it were relevant to that question. 40 Finally, the defendant attacked the trial judge's reasoning in relation to clause 6 as follows (para 32): "His Honour was wrong in holding that for Brambles to charge for liquid waste a fee which was not authorised by clause 21 would be in some way inconsistent with its obligations under clause 6. Clause 6 of the Contract imposes an obligation upon Brambles to keep the depot open within certain hours and receive waste including liquid waste. That the Contract might permit Brambles to charge for the deposit of liquid waste is not inconsistent with an obligation to keep the depot open. Brambles' right to charge may be subject to a limitation preventing it from charging a fee which was so high as to effectively permit it to avoid its obligations under clause 6. However, there is no evidence that charging 6c per litre had, or was likely to have, that effect." The Council responded thus: "The Appellant is wrong in paragraph 32 of its Outline. All the trial judge is saying at RB 47V and following is that clause 6 is no warrant for Brambles to charge fees unauthorised by clause 21 and retain the proceeds. An unexceptional proposition." If that is all the trial judge was saying then he was not advancing any additional ground based on clause 6 for his conclusion about clause 21. If he was advancing any additional argument based on clause 6, it is not necessary to consider the merits of the defendant's attack on it, which was not the subject of specific attention in the Amended Notice of Appeal, because his conclusions at Red 47G-T based on the construction of clause 21 can stand independently of it. (c) Failure to attend to the factual matrix? 41 The third argument which the defendant propounded in criticism of the trial judge's reasoning was described as a "factual matrix" argument. It was put as follows (paras 33-35): "33. The parties negotiated the Contract in circumstances where it was accepted that the proposed contract was silent as to fees for liquid waste (2/317). For whatever reason, no provision was made in the Contract as finally concluded for the charging and retention of fees for liquid waste. Nonetheless the Council expressly authorised Brambles to charge 1.1c per litre for liquid waste and retain that amount to itself (2/234; 3/587). 34. This 'arrangement' might be characterised as a licence, either contractual or otherwise. However characterised, it existed outside and is separate in its operation from the Contract. In the absence of any express provision it is terminable on reasonable notice by either party. 35. Construed against that background, it cannot reasonably be said that the Contract by implication prohibited Brambles from charging and retaining fees for liquid waste." 42 The first sentence in para 33 is wrong. Blue 2/317 is an internal Council memorandum which includes the sentence: "Investigation of the contract has revealed that no charges in respect of this liquid deposit at the tip has [sic] been set." Thus it is not talking of "the proposed contract", but of the 1982 deed which the parties were continuing to perform despite its termination date having passed on 1 November 1989. 43 The second sentence in para 33 begs the question which is to be answered. 44 The evidence references in the third sentence of para 33 do not support the submission, and appear to be mistaken. It is certainly true that the letters of 9 January and 20 February 1990 authorised the defendant to charge 1.1 cents for liquid waste (upon completion of an appropriate liquid waste disposal area) and did not forbid the defendant to retain it. On the trial judge's construction of the 12 July 1990 contract, that contract was strictly inconsistent with the authority conferred by the letters of 9 January and 20 February 1990. The conduct of the parties was consistent with it after 12 July 1990, but it was not and never had been contractually based (Red 52B-D). This answers the submission in para 34. Paragraph 35 proceeds on the false premise that the trial judge was implying a term to give business efficacy. In any event, whatever might flow from the factual matrix, it cannot be resorted to unless the 12 July 1990 contract is ambiguous: it is not. 45 The defendant also argued orally that at no stage before 12 July 1990 did the Council challenge the right of the defendant to charge a fee for liquid waste and keep it, even though the matter had been forcibly brought to the attention of Council officers by Mr Lander's complaint of 18 December 1989. This does not affect the construction of the 12 July 1990 contract. 46 For the above reasons the trial judge's conclusions about the 12 July 1990 contract are correct. It should be noted that there is some evidence that in 1990 and 1991 both the Council and the defendant did not share his conclusions, but in the absence of any argument for a decree of rectification or for an estoppel by convention the actual opinions of the parties are irrelevant. Acceptance of the 19 September 1991 Offer By Conduct 47 Ground 2 of the Amended Notice of Appeal was: "The trial judge erred in holding that there was a contract between the Appellant and the Respondent on the terms of the Respondent's letter of 19 September 1991 which permitted the Appellant to charge fees for the acceptance of liquid waste in excess of 1.1c per litre on the condition that any fees received in excess of 1.1c per litre be paid by the Appellant to the Respondent (J28.8.88, pp.36-37)." 48 The findings of the trial judge were (Red 50R-52G): "In my opinion, prior to the letter of 19th September 1991, the defendant had been authorised by the Council to charge 1.1c per litre and to retain that charge. I accept Mr Grundy's evidence that the defendant complied with the conditions laid down in the Council's letter of 20th February 1990, and thus was authorised to charge 1.1c per litre. (This is confirmed by Mr Fulton's memorandum of 6th August 1991.) The subsequent letter of 25th June 1991 from the Council purported only to deal with the amount which could be charged prior to the defendant complying with those conditions, and thus was ineffectual. Accordingly, it seems to me that Mr Anderson's advice to the Council that the defendant had reverted to charging $15.00 per 1,000 gallons indicates that he was mistaken as to the true effect of the two letters. A similar mistake is reflected in the defendant's letter of 3rd October 1991. In the light of that view, it seems to me that 'additional income' referred to in the letter of 19th September 1991 must mean income in excess of what was then authorised, namely 1.1c per litre. The subsequent reference to payment of 'all' liquid waste disposal fees to Council seems inconsistent with the earlier reference to 'additional income': in so far as there is inconsistency, it seems to me that what is provided by the resolution of the Council and conveyed to the defendant as the resolution of the Council would have more authority than the later reference to 'all' fees, and would prevail to the extent of the inconsistency. The reference to cl.22 means, I think, that the remittance should be, like the remittances contemplated by cl.22, 'within one calendar month after the end of each quarter'. The terms of that letter were not accepted by the defendant's reply of 3rd October 1991, and the Council's letter of 15th October 1991 took that aspect no further. However, the defendant's charging for liquid waste at the rates specified in the letter of 19th September 1991 must be taken either as a breach of contract by the defendant, or the manifestation of acceptance of the terms of the letter of 15th September. On balance, I think that, considered objectively, it manifested acceptance of the terms, giving rise to a contract, provided there was consideration on both sides. In my opinion, there was consideration provided by the Council to the defendant. The pre-existing authorisation of 1.1c was put on a firmer footing, under an arrangement in which there was plainly consideration going to the Council. Furthermore, it was dealing with a problem which was imposing burdens on the defendant, and thus assisting the defendant by providing some deterrent to excessive depositing of liquid waste." 49 The defendant submitted (written submissions paras 38-42): "38. The Council's letter of 19 September 1991 cannot properly be construed as containing any 'offer'. However, if Council's letter does contain an 'offer', the better view of Brambles' letter of 3 October 1991 (and its subsequent conduct) is that it was a rejection of that 'offer'. 39. Contrary to the finding, Brambles' conduct in collecting and retaining liquid waste fees at the rates specified in Council's letter of 19 September 1991 cannot be referable to any extant offer. In any event, Brambles' conduct in charging the stipulated fees but keeping them for itself can only constitute a rejection of any offer, not acceptance by conduct. 40. If (contrary to the submissions above) the Contract impliedly prohibited Brambles from charging fees for liquid waste, then at best its conduct in charging and retaining those fees would be a breach of that Contract. However, Council never framed its cause of action on the basis of such an alleged breach and accordingly there would be no proper basis for entering judgment in favour of Council. In addition, there is no basis on the evidence for holding that Council's damages are in effect the amount of fees collected. Its damages, had that cause of action been pursued, would have been nominal at best. 41. Even if his Honour was correct in finding a new agreement as a consequence of the letter of 19 September 1991 and Brambles' conduct, that agreement was not supported by any real consideration and was therefore not enforceable as a contract. There was no real consideration because the letter of 19 September 1991 only permitted Brambles to keep what it was already entitled to keep. His Honour does not make clear what benefit is said to flow from ' putting on a firmer footing' , in pre-existing authorisation of 1.1c per litre. Further, to the extent that a higher fee would deter excessive depositing of liquid waste, it is hard to see how that was consideration moving from the Council. 42. His Honour erred in concluding, on a contractual basis, that the Council had an entitlement to recover as damages the fees received by Brambles. The judgment cannot be sustained on any proper contractual analysis." 50 These submissions boil down to three propositions. First, the 19 September 1991 letter was not an offer. Secondly, if it was, it was rejected on 3 October 1991 and was not thereafter available for acceptance by conduct; and, even if it was available for acceptance, the conduct did not result in a completed agreement. Thirdly, even if there was a completed agreement, there was no consideration. (a) Was the 19 September 1991 letter an offer? 51 This appears to be a point taken, though with little supporting argument, for the first time on appeal. The trial judge adopted the technique, in relation to each issue argued, of setting out the competing submissions of the parties before stating his decision on the issue. The trial judge's account of the defendant's submissions on the present point is as follows (Red 50A-K): "Mr McDougall submitted that there could not conceivably be a contract unless the contract of July 1990 prohibited the defendant from charging for liquid waste. Even if the contract did have that effect, there was no contract constituted by the Council's letter of 19th September 1991 and the defendant's proceeding to charge for liquid waste in accordance with its terms. There was no explicit acceptance. In any event, there was no consideration provided to the defendant because, at best, the terms of the letter of 19th September 1991 only entitled the defendant to keep what it was already entitled to keep. The Council's subsequent letter of 15th October 1991 recognised there was no contract, and this was confirmed by the Council's conduct over the following three or four years. The relevant Council officers, Messrs Fulton and Deeley, were not called to give evidence." These submissions take a point about non-acceptance and a point about consideration, but not a point about the non-existence of any offer. Further, the trial judge contemplated the possibility that there was no contract based on the 19 September 1991 letter by reason of uncertainty, an absence of acceptance or a lack of consideration, but not that there was no contract because the letter was not an offer (Red 56D-E). 52 There is much to be said for the view that the 19 September 1991 letter was not an offer, or cannot have been intended to affect legal relations by contract. That is because to some extent the letter does not take the form of proposing a particular course for examination by the defendant with a view to the defendant choosing between acceptance or rejection in the light of that examination. Rather it sets out a resolution permitting fees to rise, and then peremptorily requests the defendant to charge those fees. To that extent the letter uses the language of command. On the other hand, the letter is less peremptory in relation to the keeping of records and the issuing of dockets, and its concluding statement that payment should be made in accordance with clause 22 is suggestive of contractual dealing. This is because clause 22 did not permit an increase in fees beyond the indexation formula provided for, so that if the higher fees were to be payable under clause 22, the defendant's consent to a variation would be necessary. 53 Not only does the present point not appear to have been argued below, it was not pleaded: para 4 of the Amended Defence is a bare denial of the relevant paragraphs of the Council's Summary of Contentions. The point is one which, even though the former Commercial Division may not have been a court of strict pleading, might have taken the Council by surprise, and hence ought to have been pleaded either under Pt 15 r 13(2)(b) of the Supreme Court Rules or by reason of conventional practice in that Division. It is a point on which evidence might have been called. In the circumstances it should not be entertained in this Court. (b) Was the 19 September 1991 offer rejected by the 3 October 1991 letter so as to render it incapable of acceptance and, if it was, does that prevent it from forming the basis of a contract as a result of the sending of the 19 September 1991 offer and the defendant's conduct in charging higher fees? 54 The defendant said that the trial judge "acknowledged that the terms of the Council's letter of 19 September 1991 were rejected by Brambles' letter of 3 October 1991 …". That is not so. The trial judge did not say that the 3 October 1991 letter rejected the terms of the 19 September 1991 letter; he said only that they "were not accepted". However, as has been seen, the defendant contended that in truth the 19 September 1991 terms were rejected by the 3 October 1991 letter. It submitted that read as a whole the 3 October 1991 letter said "what you have put forward is not acceptable to us". 55 What did the Council mean in its 19 September 1991 letter? Before answering that question, a background matter must be examined. The defendant argued that the "fees and charges" collected under clause 21 ($3 per m3 for general commercial waste) were something different from the "disposal fees" referred to in clause 22. The defendant pointed out that under the 1982 deed the defendant was entitled to "retain 100% of the monies collected", but this was not so under the 12 July 1990 contract. At transcript page 11 lines 30-42 the defendant submitted: "there was a reason … why council decided to require us to hand over fees at all and it was this, that it recognised that the contractor was going out and picking up loads of rubbish … and dumping it at the site for in effect no cost. They said because you're doing that and because we think you're doing so many loads per year, you can guarantee us a return on that … there's an amount of $14,300 which is there designed not really to pick up a return on what the contractor is otherwise dealing with at the dump but is designed to pick up the fact that Cleanaway was dumping its own rubbish there free of charge." At transcript page 16 lines 18-24 the defendant submitted: "[In clause 22] there was an obligation to pay so-called disposal fees and there was a guaranteed amount of $14,300. What council had in mind in relation to the disposal fees was a situation where Cleanaway was collecting waste through its own collection service and disposing of it at the tip." 56 The defendant drew attention to a letter of 18 July 1989, which forms part of Annexure B to the 12 July 1990 contract. It said (Blue 2/494G-P): "In the covering letter to Council accompanying our tender we indicated our wish to discuss various options regarding trade waste tip fees. No allowance was made in our price for trade and commercial waste tip fees however we would like to propose the following for consideration - A trade and commercial waste tip fee of $1.00 per compacted cubic metre to be paid to Council from the commencement of the new contract. Based on Cleanaway's existing operations this will yield $14,300 p.a. to Council and would be derived as follows - Compactor loads collected by Cleanaway: Mon-Fri 2 per day Saturday 1 load Compactor body capacity: 25m3 11 loads per week @ $25 per load = $275 per week or $14300 p.a. Note that this is similar to charges levied by other provincial Councils for trade waste tip fees. We would also be happy to discuss rates for bulk loads of trade waste collected by Cleanaway." 57 By letter of 31 August 1989, which forms part of Annexure C, the Council said (Blue 3/500P-W): "(b) You have agreed to pay Council $1.00 per cubic metre for depositing your compacted waste at the Solid Waste Disposal Depot and to negotiate a price for depositing uncompacted waste. This has been set at a minimum of $14,300. It will be necessary for you to provide Council with details of your recycling proposal as soon as possible so that this aspect can be discussed prior to signing the Contract. Council will also need to know the method by which Council's share of this income will be determined. Your letter of the 18th July, 1989 indicated that Council's minimum income from your Company depositing compacted waste will be $14,300 per annum. Council will require a guarantee that this sum will be paid to Council. For this reason, a clause will be included in the contract regarding this matter. It will also be necessary for you to regularly inform Council of the quantities of waste deposited by your Company at the Depot each month." After some negotiation (e.g. Blue 3/501-502), clause 22 was agreed. 58 These materials appear to support the defendant's contention that the clause 21 fees related to what parties other than the defendant deposited at the depot while clause 22 "disposal fees" related to what the defendant itself brought to the depot. 59 In the light of that background, what is the meaning of the 19 September 1991 letter, construed in the light of the true contractual position as found by the trial judge and in the light of what both parties knew (as distinct from what legal conclusions they erroneously believed)? 60 The letter of 19 September 1991 in referring to an increase in liquid waste disposal costs to 1.3 cents per litre was referring at least to the clause 21 fees. The amount being paid by 19 September 1991 was not the clause 21 amount of 0.003 cents per litre, but rather the amount agreed on 9 January and 20 February 1990 as amended by the 25 June 1991 letter (Red 25E-G). The trial judge held that that amendment did not adjust the 1.1 cents per litre, but only the lower figure to be paid pending the completion of an appropriate liquid waste disposal area (Red 50W-51B). No party complained of this finding. However, even though the liquid waste disposal area had been completed, in truth the defendant was only charging at the rate stipulated in the 25 June 1991 letter at the time of the 19 September 1991 letter, namely 0.3 cents per litre (Red 25E-H). The extent to which the fees were "increased" was not from 0.003 to 1.3 cents per litre, or from 0.3 to 1.1 cents per litre, but from 1.1 cents to 1.3 cents per litre, though at the time the parties would have thought the increase was from 0.3 to 1.1 cents per litre. And the "additional income" to be placed in reserve corresponded to the increase from 1.1 to 1.3 cents per litre, and to corresponding increases as time passed. 61 The 19 September 1991 letter said that those fees were to be charged to Cleanaway, Mr Landers and all other depositors of liquid wastes. So far as the fees were to be charged to Mr Landers and all depositors other than Cleanaway, a change was being proposed to the legal position as established by clause 21 and the de facto increase permitted by the letters of 9 January and 20 February 1990 (as amended, immaterially for present purposes as the trial judge held, by the 25 June 1991 letter). But so far as the fees were to be charged to Cleanaway, a change was being proposed to the legal position as established by clause 22. 62 The 19 September 1991 letter then proposed that the system of records and dockets to be employed for liquid waste would be that employed for "Solid Waste Disposal". This proposal rested on a misunderstanding of the legal position under the 12 July 1990 contract: on the trial judge's construction clause 21 already mandated that system for both solid waste and liquid waste. 63 The 19 September 1991 letter concluded with a proposal that the new liquid waste fees (presumably the increased part, i.e. net of what the defendant was able to retain) be paid in accordance with the clause 22 regime which had hitherto only applied to waste deposited by the defendant. 64 What on an objective construction was the reaction of the 3 October 1991 letter to the 19 September 1991 offer? 65 The 3 October 1991 letter did not purport to terminate all negotiations with the Council and it invited further communications. But, in two respects, it rejected the assumptions or proposals contained in the 19 September 1991 letter. 66 First, the 3 October 1991 letter, the author of which was probably operating on the subjective assumption that the defendant could retain only the rate stipulated in the 25 June 1991 letter, which was the rate which the defendant was receiving at that time, made the point that the defendant could not continue to provide the service at that rate, because that rate did not make the service "viable". When the 3 October 1991 letter said that the defendant was seeking "Adequate tip fees for the work involved in providing for liquid disposal", it was rejecting what it was probably taking the Council to be offering - 0.3 cents per litre. But, even when the letter is read through the eyes of a reasonable bystander, who must be taken to have knowledge of the fact that, as the trial judge found, on the true construction of the 9 January-20 February 1990 and 25 June 1991 letters, the Council was willing to let the defendant charge 1.1 cents per litre, the 3 October 1991 letter is a rejection of the Council's offer to let it retain only 1.1 cents per litre. 67 Secondly, the 3 October 1991 letter also made it plain that it did not accept that there was any contractual regime in place so far as liquid waste was concerned. It made this point in two places. It said (Red 31C): "Cleanaway has no contract with Council for liquid disposal. The present contract is for the management of a solid waste disposal depot. In regard to the collection of a liquid waste levy on Council's behalf, Cleanaway would make the point that this is not covered by the present contract." And after seeking an indemnity from prosecution and adequate tip fees, it said (Red 31G-H): "We would be appreciative if the above could be provided by Tuesday 16th October 1991 or we will need to review our options as regards acceptance of liquid into the landfill depot. While such a review was under way, we would request Council suspend the disposal of liquid waste until the matters are clarified." This assumption of a right to prevent the disposal of liquid waste ignores clause 6 of the 12 July 1990 contract, which compelled the acceptance of liquid waste. But whether the defendant was right or wrong in asserting a power to request the suspension of the disposal of liquid waste, it was certainly not expressing any agreement with the idea that the contract governed fees for liquid waste. This assumption that no contract existed for liquid waste was in part shared by the 19 September 1991 letter, which assumed that the records and dockets requirements of clause 21 did not apply to liquid waste; and in part the assumption was contradicted by the 19 September 1991 letter, since its last sentence assumed that clause 22 applied to liquid waste, and said that the higher fees should be paid under clause 22. To the extent that the 3 October 1991 letter expressed a different view as to the applicability of clause 22, it was inconsistent with the 19 September 1991 offer, and was a rejection of it. (The characterisation of the 3 October 1991 letter as a rejection on this basis turns on construing the last sentence of the 19 September 1991 letter as expressing the assumption that Clause 22 applied to liquid waste. If it did not express that assumption, the 3 October 1991 letter is not inconsistent with it; but the 3 October 1991 letter would remain a rejection because it indicated a desire to retain more than 1.1 cents per litre.) 68 According to the defendant, the effect of the rejection of the 19 September 1991 offer was that it ceased to have operative effect unless it was later revived in some way, and it was not. Hence it was not capable of being accepted by conduct. 69 The dealings between the parties after 3 October 1991 were as follows. On 14 October 1991 Mr Staley of the defendant asked Mr Fulton of the Council what the Council was doing about the 3 October 1991 letter. Mr Fulton noted that he said: "Council was accepting a firm proposal from Cleanaway for a treatment plant at no cost to Council" (Red 31R-S). No doubt the reason why "Council" expected this was that Mr Fulton on 27 September 1991 recorded that he had been told to contact the defendant to submit a proposal to Council to: "instal and operate a waste water treatment plant at depot on the basis of no cost to Council and no charges being made by Council to Cleanaway. they will need to increase the charges to make a plant viable. We will police the cleaning out of grease traps etc" (Blue 3/607F-H). Mr Fulton's note continues: "Spoke to Ian Grundy. He will submit a proposal next week for the provision of a treatment plant." 70 On 15 October 1991 the Council wrote the following letter to the defendant (Red 31W-32K): "Reference is made to your letter of 3 October 1991. The above Depot is primarily for the disposal of solid waste. Your attention is drawn to the definitions of 'Trade Refuse' and 'Other Wastes' in the contract. These definitions include liquid waste. Council was prepared to accept small quantities of nontoxic (sic) liquid waste. The amount of liquid waste carted to the depot has now increased to non-manageable quantities. Mr L Landers has been interviewed and will decrease the quantity of liquid waste which he carts to the depot by 2/3. He will do this by removing only the grease from the top of the grease traps. You are also requested to severely decrease the volume of liquid waste carted to the Depot by removing only semi-liquid wastes from the various plants that you service. You are requested to dig adequate trenches for these semi-liquid wastes to provide adequate disposal. The leachate pond at the Depot is to collect leachate only. The trench you mention is a stormwater trench to divert stormwater away from the leachate pond. This trench was redug approximately 18 months ago. Reference is made to Mr D Fulton's telephone conversation with you on 27 September 1991. It was understood that you would submit to Council, during the following week, a definite and specific proposal to establish a liquid waste treatment plant at the Depot at no cost to Council. It would be appreciated if you could make your submission to Council at your earliest convenience so that the liquid waste problem can be solved." The trial judge then said (Red 32M-P): "Thereafter, there was no proposal submitted to the Council by the defendant, as contemplated by the letter. The defendant proceeded to collect the fees for liquid waste as set out in the letter of 19th September 1991, and it retained the whole of those fees." What was in contemplation in the Council's mind from 27 September 1991 appears to have been the installation of a waste water treatment plant with increased charges to the public but no charges made by the Council to the defendant. It appears to be correct to say that the 19 September 1991 offer was not expressly revived by the Council. 71 The defendant's contention that the rejection of the Council's offer meant that it was no longer capable of acceptance by conduct, and its related contention that its conduct did not constitute acceptance, depend heavily on the view that offer and acceptance analysis must invariably be employed in reaching decisions about the formation of contracts. While the process by which many contracts are arrived at is reducible to an analysis turning on the making of an offer, the rejection of the offer by a counter-offer and so on until the last counter-offer is accepted, that analysis is neither sufficient to explain all cases nor necessary to explain all cases. Offer and acceptance analysis does not work well in various circumstances. One example is a contract for the transportation of passengers on mass public transport (MacRobertson Miller Airline Services v Commissioner of State Taxation (Western Australia) (1975) 133 CLR 125 at 136-140). Another is the contract between competitors in a regatta: though they did not communicate with each other but only with the organiser of the regatta, they are bound by their conduct in "entering for the race, and undertaking to be bound by [the] rules to the knowledge of each other" (Clarke v Earl of Dunraven (The 'Satanita') [1897] AC 59 at 63). That case was applied in Raguz v Sullivan [2000] NSWCA 240 at [65]-[67]. Another example concerns the exchanges of contracts to sell land, which are hard to analyse in offer and acceptance terms; despite that Lord Greene MR observed of the practice: "Parties become bound by contract when, and in the manner in which, they intend and contemplate becoming bound. It is a question of the facts of each case …" ( Eccles v Bryant [1948] 1 Ch 93 at 104). Another example concerns simultaneous manifestations of consent (Horst K Lucke "Striking A Bargain" (1962) 1 Adel LR 293 at 295-299). Another example concerns contracts between numerous parties, or even two parties, negotiated at meetings but not assented to until each party executes counterparts. Another is where the contract is made through a single broker acting for both parties. Another is where the parties are deadlocked and they agree to submit to a solution reached by a third party. 72 In New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd [1975] AC 154 at 167, Lord Wilberforce, in delivering the majority advice of the Privy Council about a bargain evidenced by a bill of lading between a shipper and a stevedore made through a carrier as agent, said: "It is only the precise analysis of this complex of relations into the classical offer and acceptance, with identifiable consideration, that seems to present difficulty, but this same difficulty exists in many situations of daily life, e.g. sales at auction; supermarket purchases; boarding an omnibus; purchasing a train ticket; tenders for the supply of goods; offers of rewards; acceptance by post; warranties of authority by agents; manufacturers' guarantees; gratuitous bailments; bankers' commercial credits. These are all examples which show that English law, having committed itself to a rather technical and schematic doctrine of contract, in application takes a practical approach, often at the cost of forcing the facts to fit uneasily into the marked slots of offer, acceptance and consideration." 73 Anson's Law of Contract (27th ed, 1998) concludes: "It would be a mistake to think that all contracts can thus be analysed into the form of offer and acceptance or that, in determining whether an exchange does give rise to a contract, the sole issue is whether the communications match and are identical. The analysis is, however, a working method which, more often than not, enables us, in a doubtful case, to ascertain whether a contract has in truth been concluded, and as such may usefully be retained." 74 Thus offer and acceptance analysis is a useful tool in most circumstances, and indeed is "normal" and "conventional" (Gibson v Manchester City Council [1979] 1 All ER 972 at 974 per Lord Diplock). But limited recognition has been given to the possibility of finding that contracts exist even though it is not easy to locate an offer or acceptance. In Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR [97326] at 11,117-11,118 McHugh JA (Hope and Mahoney JJA concurring) said: "It is often difficult to fit a commercial arrangement into the common lawyers' analysis of a contractual arrangement. Commercial discussions are often too unrefined to fit easily into the slots of 'offer', 'acceptance', 'consideration' and 'intention to create a legal relationship' which are the benchmarks of the contract of classical theory. In classical theory, the typical contract is a bilateral one and consists of an exchange of promises by means of an offer and its acceptance together with an intention to create a binding legal relationship … Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled. Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties' subsequent conduct become sufficiently specific to give rise to legal rights and duties. In a dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed." 75 Those passages were cited with approval by Ormiston J in Vroon BV v Foster's Brewing Group [1994] 2 VR 32 at 82-3. He also approved the following statement of Cooke J in Meates v Attorney-General [1983] NZLR 308 at 377: "I would not treat difficulties in analysing the dealings into a strict classification of offer and acceptance as necessarily decisive in this field, although any difficulty on that head is a factor telling against a contract. The acid test in the case like the present is whether, viewed as a whole and objectively from the point of view of reasonable persons on both sides, the dealings show a concluded bargain." Ormiston J said at 81: "… I am prepared to accept … that agreement and thus a contract can be extracted from circumstances where no acceptance of an offer can be established or inferred and where the most that can be said is that a manifestation of mutual assent must be implied from the circumstances. In the language of para. 22(2) of the Second Re-statement on Contracts: 'A manifestation of mutual assent may be made even though neither offer or acceptance could be identified and even though the moment of formation cannot be determined'." He concluded at 83: "there is now sufficient authority to justify the court inquiring as to the existence of an agreement evidenced otherwise than by offer and acceptance." 76 In Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 555 McHugh JA (with whom Samuels JA concurred) said: "where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that the offer was accepted according to its terms." 77 One further observation of McHugh JA in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd is relevant: "it is an error 'to suppose that merely because something has been done then there is therefore some contract in existence which has thereby been executed'. Nevertheless, a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words. The question in this class of case is whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an express contract." See also, to the same effect, Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd's Rep 601 at 611 (affirmed on appeal at 615). 78 A similar principle was enunciated in Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 at 682, where Lord Hatherley adopted the language of a concession by Mr Herschell QC as sound: "he says that he will not contend that this agreement is not to be held to be a binding and firm agreement between the parties, if it should be found that, although there has been no formal recognition of the agreement in terms by the one side, yet the course of dealing and conduct of the party to whom the agreement was propounded has been such as legitimately to lead to the inference that those with whom they were dealing were made aware by that course of dealing, that the contract which they had propounded had been in fact accepted by the persons who so dealt with them." Thus if a vendor of property, having been informed of its real estate agent's scale of fees, permits the real estate agent to continue endeavouring to sell the property, the vendor will be taken to have agreed to that sale by conduct ( Way & Waller Ltd v Ryde [1944] 1 All ER 9 at 10). 79 While in Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 178 Tadgell J exhibited some caution about the finding of a contract merely on the basis of a manifestation of mutual assent, he did quote Williston on Contracts, Vol I, para 4:3, p 258, to the following effect: "It is not necessary to insist that assent must always be manifested by means of offer and acceptance, but cases where offer and acceptance are lacking are so rare that for purposes of general discussion they may be disregarded. When they arise, they can be easily reduced to fundamental principles, particularly in the light of the modern view, adopted by both the Uniform Commercial Code and Re-statement (Second), that so long as a manifestation of mutual assent is present, a contract can be found to exist though no offer or acceptance can be identified and though the precise moment that the contract thereby comes into being cannot be determined." He continued: "If a contract is to be discerned in the absence of offer and acceptance I venture the suggestion that … it is to be discovered by inferring from the relevant facts the conclusion that the parties have agreed to incur reciprocal promissory obligations … As Williston suggests, the necessity or opportunity so to infer in the absence of offer and acceptance is likely to be rare … ." 80 If offer and acceptance analysis is not always necessary or sufficient, principles such as the general principle that a rejection of an offer brings it to an end cannot be universal. A rejected offer could remain operative if it were repeated, or otherwise revived, or if in the circumstances it should for some other reason be treated, despite its rejection, as remaining on foot, available for acceptance, or for adoption as the basis of mutual assent manifested by conduct. 81 In the light of the above cases, it is relevant to ask: in all the circumstances can an agreement be inferred? Has mutual assent been manifested? What would a reasonable person in the position of the Council and a reasonable person in the position of the defendant think as to whether there was a concluded bargain? 82 Applying the test stated by McHugh JA in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd, the 19 September 1991 letter offered "services" in the sense of a commercial benefit. The commercial benefit was a contractual right, which had not existed before, to charge up to 6 cents per litre and retain 1.1 of that 6 cents. (While the defendant and the Council may at the time have regarded the figure to be retained as only 0.3 cents, as Hodgson J construed the letter of 25 June 1991, they were in error, and it is the reaction of reasonable parties, not the actual parties, which must be analysed.) The parties had treated the 9 January and 20 February 1990 letters as having conferred that benefit in a practical sense, but the conferral of the benefit lacked contractual backing (Red 52B-D). The defendant, as offeree, had a reasonable opportunity to reject the offer: indeed, initially it did reject the offer. However, it soon took advantage of the benefit offered. It knew that the only basis on which the Council was prepared to permit the higher prices to be charged and the 1.1 cents retained as a matter of contractual right was the basis stated in the 19 September 1991 letter. The charging of the higher prices by the defendant could convey one of two possibilities, that it was acting in breach of the condition on which the benefit was being conferred, or that the defendant was accepting that condition. A reasonable bystander, and in particular a reasonable bystander in the position of the Council, would prefer the latter possibility. Once the Council came to learn that the defendant was charging the higher fees from October it would reasonably have thought that a contract existed between the parties on the terms of the 19 September 1991 letter. Breach of the condition on which the benefit was being conferred did not take place when the higher fees were charged; it only took place when that part of the higher fees which had to be passed over to the Council was not passed over pursuant to the 18 September 1991 letter and clause 22 of the 12 July 1990 agreement, namely within "one calendar month of the end of each quarter". The first breach of that condition took place on 31 January 1992, well after the fees increased. The first breach of the duty to keep records and issue dockets to Council also took place after the increased fees began to be charged. 83 There is some evidence that Mr Pitkin of the Council and Mr Grundy of the defendant believed that there was no contractual regime for liquid waste fees but that the Council had some other power to fix them. That does not matter. Reasonable persons in the position of the Council and the defendant would construe the 19 September 1991 letter and the defendant's later conduct as henceforth putting the regime for liquid waste fees on a contractual basis, whatever the position had been before. 84 Another justification for the conclusion that a contract existed on the terms of the 19 September 1991 letter is that even though the defendant on 3 October 1991 rejected the 19 September 1991 offer, there was an element of permanence in it. At its core was a Council resolution that the disposal costs were increased from 1 October, with the additional income being placed in a reserve. An offer based on a Council resolution has a much less evanescent and fleeting character than the range of differing offers conventionally made in contractual negotiations, many of which are not seriously expected to be accepted. There is no evidence that the Council either rescinded the resolution before the defendant began to take advantage of it, or communicated to the defendant any suggestion that there had been a rescission or any desire to depart from it: the letter of 15 October 1991 indicated adherence to the posture adopted in the 19 September 1991 letter so far as it alleged that the 12 July 1990 contract applied to liquid waste, though it did put up for consideration an alternative approach to the liquid waste problem. The defendant must have assumed that the resolution was still operative because it began to increase fees after 15 October 1991 (Red 32N-P). On no view was it entitled to do that without Council's sanction: if the 12 July 1990 contract, as construed by the trial judge, applied in unamended form, it permitted only the clause 21 fees; if the 9 January-20 February 1990 letters applied in unamended form, they permitted only 1.1 cents per litre; and if, as the parties apparently thought just before 19 September 1991, the 9 January-20 February 1990 letters applied as amended by the 25 June 1991 letter, they permitted only 0.3 cents per litre to be charged. The defendant did not protest at the 25 June 1991 letter when it arrived, but rather complied with it (Red 25E-H). In this appeal the defendant argued that it could charge what it liked in relation to accepting liquid waste, but that was not a point of view it ever communicated to the Council in September 1991 or at any other relevant time. Nor is it a point of view any of its officers held at that time. The trial judge rejected their evidence that they believed, on the strength of conversations with Mr Pitkin of the Council, that they were entitled to charge and retain the whole 6 cents per litre (see Red 39H-41B and 42E-44Q). The letter of 3 October 1991 itself is not written in the language which would be used by a corporation conceiving itself to have total autonomy as to the fees to be charged for liquid waste: it is written in the language of supplicancy showing a desire to keep negotiations open- language which an aggressive supplicant prepared to keep talking would use, but a supplicant nonetheless. It follows that reasonable persons in the position of the officers of the defendant must have realised that the Council was not consenting to any charge greater than that which was, or ought to have been, in place up to 19 September 1991 unless the conditions stated in that letter were satisfied. And reasonable persons in the position of officers of the Council must have assumed that once the defendant began charging the increased fees they were doing so on the basis of agreeing to the Council's terms. 85 One way of putting the applicable test is the way that Scrutton LJ put it in Sullivan v Constable (1932) 48 TLR 369 at 370: "If the [defendant] had so acted that the plaintiff was reasonably entitled to believe that [the defendant] was assenting to the position which had been asserted by the plaintiff, the [defendant] was bound." A similar test was stated by Chitty on Contracts (28th ed, 1999) Vol 1, para 2-027: "conduct will only amount to acceptance if it is clear that the offeree did the act with the intention (actual or apparent ) of accepting the offer" (emphasis added). A reasonable person in the Council's shoes would, in the light of the defendant's decision to charge the higher fees of which the Council speedily learned, have been reasonably entitled to believe that the defendant was assenting to the position asserted in the 19 September 1991 letter despite its initial rejection. That was the apparent intention underlying its conduct. 86 The fact that the defendant did not communicate its move to the new fee levels directly to the Council does not matter. Speaking of the general rule that an acceptance must be communicated to the offeror, Chitty on Contracts (28th ed, 1999), Vol 1, para 2-041 states: "The main reason for the rule is that it could cause hardship to the offeror to be bound without knowing that his offer had been accepted. It follows that, so long as the offeror knows of the acceptance, there can be a contract even though the acceptance was not brought to his notice by the offeree ." Had the defendant wished to reserve to itself the right to retain the whole of the higher fees despite the position which Council had communicated in the letter of 19 September 1991, it was incumbent on it to inform the Council that it considered it had a right to charge the higher fees and retain the whole of them and proposed to act on that view. It did not communicate that view in its letter of 3 October 1991. And it did not communicate that view at any other time. Its failure to do so meant that the Council was reasonably entitled to believe that the defendant was acting in conformity with the letter of 19 September 1991 and entering a contract on its terms. 87 If, a few months after 19 September 1991, the Council had demanded that all fees received above those stipulated for in clauses 21 and 22 be paid to it, and the defendant alleged that it was contractually entitled to retain the fees up to 1.1 cents, what would have prevented that contention from succeeding? On the trial judge's findings, that contention could not have been met by appeal to the 9 January-20 February 1990 letters. But why could it not have been met by reference to the 19 September 1991 letter and the defendant's actions in conformity with it? The defendant's submissions to this Court offered no satisfactory answer to that question. 88 It was submitted that the defendant's conduct amounted to taking advantage of the beneficial parts of the 19 September 1991 proposal but not submitting to its disadvantageous aspects, and hence that the conduct did not establish consent to them. In all the circumstances it was for the defendant to make plain that its conduct amounted only to taking advantage of the proposal but not to submitting to the disadvantages if that was its position. It did not express that position until some years had passed. (c) Even if the 19 September 1991 letter was accepted by conduct or otherwise stated contractual terms, was there consideration? 89 The trial judge found consideration in the fact that while the letters of 9 January-20 February 1990 authorised the defendant to retain 1.1 cents per litre, he did not find that this created any contractual entitlement. The effect of accepting the 19 September 1991 offer was to give a contractual entitlement. That is a benefit capable of amounting to consideration and moving from the Council as promisee. It is crucial to this reasoning that the 9 January-20 February 1990 letters did not create a contract. The trial judge's failure to find that the 9 January and 20 February 1990 letters created a contract, and his implicit finding that they did not (in his use of the words "The pre-existing authorisation of 1.1c was put on a firmer footing"), is supported by the fact that when the Council purported to amend the rate by its letter of 25 June 1991, the defendant did not protest, as it could have if its rights were contractual. This subsequent conduct of the parties is admissible on the issue of whether there was a contract at all, and points strongly against it. The fact that there was no response to the 20 February 1990 letter, in which the Council put a proposal to the defendant different from that which the defendant had put to the Council on 9 January 1990, also indicates that there was no contract formed by the letters. 90 A further benefit to the defendant was, as the trial judge said, that the problem of excessive depositing of liquid waste was burdensome to the defendant, and the higher charges, in operating as a deterrent to the excessive depositing of liquid waste, benefited the defendant intending to reduce those burdens. There was also a benefit to the Council as promisor, namely the creation of a fund which by creating a reserve to establish a liquid waste treatment plant, would enable liquid waste to be disposed of more efficiently and in a more environmentally friendly manner. That in turn would have advantages for the defendant in increasing the capacity of the site to carry waste. (d) Remaining argument 91 The defendant also argued that the 19 September 1991 letter had been rejected by Mr Grundy on behalf of the defendant in terms which prevented the later conduct causing a contract to arise. The defendant referred to the following passage in the trial judge's reasons for judgment (Red 40I): "Mr Grundy also gave evidence that, after receiving the letter of 19th September 1991, he contacted the Council and said that the letter did not represent the deal that had been made; that the defendant did not agree to what was in the letter; and that it would not take liquid waste except on the basis that it could charge and keep 6c per litre." The defendant submitted that the trial judge had not rejected this evidence. If the trial judge had accepted that evidence, it would have been probable that the trial judge would have dealt with it in discussing whether or not the offer in the 19 September 1991 letter was accepted. He did not. Rather he spoke quite generally at Red 43H-J: "The evidence given by Mr Grundy … was I think mistaken. I considered Mr Grundy's recollection was poor, and that he was willing to guess at answers. …" Unjust Enrichment 92 Ground 8 of the Amended Notice of Appeal was: "The trial judge erred in finding that the Appellant's use of the Respondent's property and its charging of fees specified in the letter of 19 September 1991 in breach of the agreement of 12 July 1990, would mean that the Appellant was unjustly enriched if it could retain more than a reasonable remuneration for its work and expense in relation to liquid waste." 93 Since the above reasoning leads to the result that the trial judge's conclusions about the 12 July 1990 contract and the 19 September 1991 letter are correct, it is not necessary to examine the validity of his opinion that restitutionary damages were recoverable. A further reason for not examining it is that the way in which the unjust enrichment claim is pleaded is different from the position as found by the trial judge. That pleading alleged that the 12 July 1990 agreement "did not provide for the collection of liquid waste nor for the charging of fees therefor" (Red 9G). That pleading also did not allege that contractual relations arose out of the 19 September 1991 letter. The award of restitutionary damages for breach of contract is largely if not totally unknown to the law. The restitution industry (academic division) has made clamant demands for change in this respect. However, not all agree (see I M Jackman, The Varieties of Restitution (The Federation Press, 1998), pp 127-131). Further, it is highly questionable whether alteration to the law in this respect is a matter for an intermediate appellate court. Certainly the present case does not afford a satisfactory vehicle for considering such a change in the law in view of the disconformity between the way the claim was pleaded and the way the facts have been found. Orders 94 I favour the following orders: 1. Appeal dismissed. 2. The appellant is to pay the respondent's costs of the appeal. 95 IPP AJA: The dispute about fees for collecting and depositing liquid waste 96 For many years since 1982, pursuant to successive agreements between the appellant and the respondent Council, the appellant managed the Council's garbage disposal depot at Bathurst. 97 Although the depot was known as a "solid waste disposal depot", it was also used for the depositing of liquid waste. In the course of managing the depot, the appellant charged, collected and retained fees for collecting and depositing liquid waste. It did not give the Council any part of those fees. 98 In 1995, the Council asserted that the appellant was obliged to pay to it part of the fees for liquid waste it had collected since 1 October 1991. According to the Council, this obligation stemmed from a contract entered into between the parties in July 1990 ("the July 1990 contract") whereby the appellant managed the depot for the Council. 99 In 1996 the Council instituted action against the appellant, based on this assertion. It claimed payment of monies collected by the appellant for liquid waste. In the alternative, it claimed damages for breach of contract and, in the further alternative, relief based on unjust enrichment. 100 Hodgson CJ in Eq found that the fees for "general commercial waste" under cl 21 of the July 1990 contract covered fees for liquid waste. His Honour held that cl 21 impliedly prohibited the appellant from charging any fees for liquid waste other than those set out for general commercial waste. The appellant had, indeed, charged fees at a substantially higher rate and had kept those fees for itself. 101 Hodgson CJ in Eq further held that a letter dated 19 September 1991, written to the appellant by the Council, was an offer which, in October 1991, the appellant, by its conduct, accepted. He held that the contract so constituted ("the October 1991 contract") varied the July 1990 contract by permitting (or requiring) the appellant to charge the higher fees in question and requiring it to pay to the Council a portion of those fees. This meant that his Honour, in effect, upheld the Council's primary argument. 102 Pursuant to the October 1991 contract, the appellant was entitled to charge fees of 1.3 cents per litre from 1 October 1991, increasing quarterly by 1 cent per litre up to 6 cents per litre. By that contract, the appellant was required to pay "additional income" to the Council each quarter in accordance with cl 22 of the July 1990 contract. The learned judge held that the "additional income" was to be calculated by determining the income in fact earned by the appellant by charging the fees for liquid waste stipulated by the October 1991 contract and by deducting from that sum the income the appellant would have earned had it charged 1.1 cents per litre (that being the upper figure the appellant was permitted to charge by a letter written by the Council to the appellant on 20 February 1990). 103 Hodgson CJ in Eq held that the appellant was required to pay to the Council the "additional income" it had collected. His Honour granted a verdict and judgment for the Council in the sum of $797,104.88. As Heydon JA has pointed out that sum represented, after calculation of interest, the difference between what the appellant charged for the disposal of liquid waste, in the course of managing the depot, and what it ought to have passed on to the Council pursuant to the October 1991 contract. 104 Hodgson CJ in Eq also held that, if the letter of 19 September 1991 had not been accepted, the appellant's use of the Council's property (that is, the depot), and its charging of the fees specified in that letter resulted in the appellant having been unjustly enriched at the Council's expense (provided the appellant had retained more than a reasonable remuneration for its work and expense in relation to the liquid waste). His Honour said in this regard: "Accordingly, if I had reached a different decision in relation to contract, I would have ordered a further inquiry as to what would amount to reasonable remuneration to the [appellant] for its work and expense in receiving liquid waste". 105 The appellant appeals against the orders made by Hodgson CJ in Eq and contends that his Honour erred in finding that the July 1990 contract governed the charging of fees for liquid waste. Further, the appellant contends that his Honour erred in finding that the October 1991 contract was concluded. The appellant also argues that the learned judge erred in finding that there was consideration for that contract. Finally, the appellant asserts that his Honour erred in concluding that, on the basis postulated, the Council had a claim based on unjust enrichment against it. 106 For the reasons set out by Heydon JA, I agree that the July 1990 contract governed the charging of liquid waste and regulated the fees that the appellant was entitled to charge and the parties' obligations to each other in respect of the liquid waste fees collected. It is, accordingly, unnecessary for me to say anything more in this respect. 107 I also agree with Heydon JA for the reasons set out by him that the letter of 19 September 1991 has to be treated as a contractual offer, this being how the case was conducted at trial. It is now too late for the appellant to argue that, in writing that letter, the Council had no contractual intent. This was not an issue raised or investigated at the trial. 108 I, too, have come to the conclusion that the offer contained in the letter of 19 September 1991 was accepted and the October 1991 contract was concluded. I have, however, done so by a route different to that followed by Heydon JA and the learned trial judge. In order to explain how I have arrived at this conclusion it is necessary for me to set out the background facts. The events leading to the letter of 19 September 1991 109 The appellant commenced managing the depot pursuant to a deed dated 23 November 1982 (the "1982 contract"). By the 1982 contract, the appellant undertook to keep the depot open from 8.30 am to 5.30 pm seven days per week so as to allow "any person" to deposit "rubbish, refuse, garbage and trade refuse" there. "Trade refuse" was defined by cl 2 of the 1982 contract to include "any matter or thing whether solid, gaseous or liquid … which is refuse from any industrial, chemical, trade or business process or operation, including any building or demolition works". It was not in dispute that liquid waste was trade refuse as defined. 110 Clause 23 of the 1982 contract provided that the appellant was responsible for "the collection of all fees and charges levied by the Council for refuse taken to the depot, not being garbage, trade refuse or other wastes deposited at the depot for or on behalf of the Council in accordance with the following charges". The charges that "followed" included charges for commercial and industrial waste. Clause 23 went on to provide: "The [appellant] shall issue receipts on Council's behalf and may retain 100% of the moneys collected. Council may vary the charges from time to time. Receipt books to be returned to Council when completed." There then followed, as part of cl 23 under the heading "Commercial and Industrial Waste", details of charges per load or per cubic metre (that depended upon the type of vehicle used for delivery) and various charges for specified kinds of waste, none of which was liquid waste. 111 At the time the 1982 contract was entered into, the parties expected that the volume of liquid waste would be small. In about 1985 the appellant first began accepting liquid waste at the depot. It charged $5.60 per load of 500 gallons, this rate having been set by Council officers. All the fees collected in consequence were retained by the appellant. The Council appears to have been content with this. 112 The 1982 contract expired on 1 November 1989. In June 1989 the appellant tendered for a new contract for the period 1989 to 1996. Negotiations ensued as to the terms of the proposed new contract and the parties continued to operate as if the 1982 contract remained in force. 113 On 15 December 1989, whilst negotiations for a new contract were proceeding, the appellant increased the fee for liquid waste deposited at the depot to $25 per load. This led to a complaint by Mr Les Landers, a liquid waste contractor, and discussions ensued between the appellant and the Council. 114 On 9 January 1990, the appellant wrote to the Council advising that it proposed to amend its charges for the disposal of liquid waste to $15 per 500 gallons or 2273 litres as from 1 January 1990 and this would be increased to $25 per 500 gallons or 2273 litres as from 1 July 1990. 115 The Council replied by letter dated 20 February 1990 stating: "The proposal to amend the charge for liquid waste disposal to $15 per 500 gallons or 2273 litres as from the 1st January 1990 is agreeable. The increase in charge to $25 per 500 gallons or 2273 litres from the 1st July 1990 is difficult to substantiate. It would appear appropriate that the charge be increased to $25 per 500 gallons or 2273 litres upon completion of an appropriate liquid waste disposal area. Your consideration of this proposal is requested." 116 The appellant proceeded to charge the fees for liquid waste set out in the letter of 20 February 1990, retained the moneys so received by it, and the Council made no demur. The trial judge regarded the state of consensus so arrived at as a non-contractual arrangement. For my part, I think that the letter was a contractual offer and was accepted by conduct. In proposing the fees to be charged, the Council was not merely performing an administrative function or some service relative to its statutory duties (see The Administration of Territory of Papua and New Guinea v Leahy (1961) 105 CLR 6 at 10 -11). In my view, it was altering arrangements that had been the subject of contract and did so with contractual intent. 117 On 12 July 1990, the new contract for the management of the depot was entered into (that is, the July 1990 contract). Clause 6 of the July 1990 contract was in the same terms as cl 6 of the 1982 deed and trade refuse was defined in the same way. Clauses 21 and 22 (a) were, however, altered. They were in the following terms: "21. Collection of Fees and Indexing The Contractor shall be responsible for the collection of all fees and charges levied by the Council for refuse taken to the Depot, not being garbage, trade refuse or other wastes deposited at the depot for or on behalf of the Council in accordance with the following fees and charges. These fees and charges shall be varied as from 1st January, 1991 and each succeeding year in accordance with the Consumer Price Index for the twelve months immediately preceding the 30th September in the year immediately preceding the date on which the review shall take effect. The Contractor shall be entitled to retain the fees and charges collected by him, other than the disposal fees specified in Clause 22. The contractor shall issue receipts on behalf of Council for fees and charges collected and all used receipt books are to be delivered to Council not later than one calendar month after the end of the quarter in which the book was completed and for this purpose the quarters shall be deemed to end on 31 March, 30 June, 30 September and 31 December in each year. Commercial and Industrial Waste * Small box trailers, station wagons panel vans and utilities $3.00 per load * General commercial waste $3.00 per m3 * Car Tyres .50 per tyre * Truck Tyres $1.50 per tyre * Tractor Tyres $3.00 per tyre * Large animals (cows, horses) $18.00 per carcass * Small animals (goats, sheep, calves) $10.50 per carcass * Compacted Waste $3.00 per m3 22. Payment of fees to Council by Contractor (a) Within one calendar month of the end of each quarter (and for this purpose the quarters end 31 March, 30 June, 30 September and 31 December in each year) the contractor shall pay to council fees for disposal of compacted and uncompacted waste delivered to the Solid Waste Disposal Depot (hereinafter called "the disposal fees"). The disposal fees payable shall be: - One dollar ($1.00) for each cubic metre of compacted waste, and - fifty cents ($0.50)for each cubic metre of uncompacted waste, provided that the minimum annual payment (hereinafter called "the initial minimum annual payment") to the Council shall be $14,300.00 and all monies payable pursuant to this Clause shall be varied in accordance with the formula for review of fees set out in Clause 22b hereunder as and from 1 January 1991 and thereafter reviewed on 1 January in each year on the basis of the change in the Consumer Price Index for the twelve months to 30 September in that year immediately preceding the review date." 118 I agree with Heydon JA, for the reasons set out by him, that the fees for general commercial waste under cl 21 were fees for liquid waste which the appellant was entitled to charge and retain, and I agree that the effect of cl 21 was to prohibit the appellant from charging any fees for liquid waste other than those set out for general commercial waste in that clause. As will be seen, however, this does not appear to have been the view of the July 1990 contract that was taken by the parties. 119 As Heydon JA points out, the appellant submitted that the fees under cl 21 of the July 1990 contract related to material deposited at the depot by parties other than the appellant itself, while cl 22 disposal fees related to what the appellant itself brought to the depot, and there is material that supports this submission. Whatever the position may be in this respect, liquid waste would fall under "uncompacted waste" and, by cl 22, the appellant was required to pay the Council 50 cents per cubic metre as "disposal fees" for uncompacted waste. The appellant did not make payment to the Council of disposal fees for liquid waste. 120 By letter of 25 June 1991 the Council advised the appellant that its letter of 20 February 1990 had "incorrectly stated the quantity". According to the 25 June letter, the correct charge "for liquid waste disposal" was $15 per 1000 gallons or 4500 litres. That corresponded to a charge of 0.3 cents per litre. As Heydon JA points out, on 1 August 1991 the appellant's site manager telephoned the Council and advised that the appellant was charging $15 per 1000 gallons and the appellant did not protest at the change or deny the Council's right to make it. 121 The references in the correspondence to the various charges for liquid waste are confusing. For the sake of convenience, I shall summarise these. The letter of 20 February 1990 proposed charges of $15 per 500 gallons or 2273 litres (which corresponds to 0.7 cents per litre) and $25 per 500 gallons or 2273 litres (which corresponds to 1.1 cents per litre). The charge under cl 21 of the 1990 contract for general commercial waste corresponds to 0.003 cents per litre. The charge under cl 22 (for uncompacted waste) was 50 cents per cubic metre. The charge referred to in the letter of 25 June 1991 of $15 per 1000 gallons or 4500 litres corresponds to a charge of 0.3 cents per litre. 122 From the receipt of the 25 June 1991 letter to the conclusion of the October 1991 contract, the appellant charged 0.3 cents per litre and retained all moneys so collected. The letter of 25 June 1991 either corrected a mutual error in the parties' agreement to the 20 February 1990 letter or sought to vary what had so been agreed. 123 In any event, the appellant, by its conduct in charging pursuant to what had been agreed according to the letters of 20 February 1991 and 25 June 1990, and the Council, in condoning such charges, must be taken to have varied the July 1990 contract. By that variation, the appellant was allowed to charge 0.3 cents per litre for liquid waste and, upon completion of an appropriate liquid waste disposal area, 1.1 cents per litre. In fact, by September 1991 the appellant had completed the liquid waste disposal area but had not increased its fees for liquid waste and was continuing to charge only 0.3 cents per litre. 124 The depot had been built as a dry land fill, primarily for solid waste. It was not equipped to cope with large volumes of liquid waste. By August 1991 the quantities of liquid waste deposited at the depot had increased to the stage where, as Mr Grundy, the officer of the appellant responsible for liquid waste, testified, "we had huge problems with the liquid". The increased volume caused waste to spread and Mr Grundy said that this resulted in "very wet, soaky areas, where you get machines bogged down". Overflows resulted from time to time and caused bad odours. There was a general disposal problem. 125 In a memorandum to the Deputy Town Clerk, the Deputy Chief Health Surveyor pointed out that "the area where it was considered satisfactory to dump the liquid waste is now full to overflowing". There was a need to devise a new system to dispose of the liquid waste. 126 In September 1991, the Council came to the conclusion that the fees for the disposal of liquid waste should be increased and the additional funds used to create a reserve for the purpose of establishing a liquid waste treatment plant. Accordingly, on 19 September 1991, the Council wrote to the appellant in the following terms: "At its meeting on 11 September 1991, Council resolved that: (a) 'Liquid waste disposal costs be increased to 1.3 cents per litre from 1 October, 1991, and then quarterly by 1.0 cents per litre, up to a figure of 6.0 cents per litre and that the additional income be placed in reserve for the establishment of a Liquid Waste Treatment Plant.' You are requested to charge these fees to Cleanaway [that is, a division of the appellant], Mr Les Landers and all other depositors of liquid wastes at the depot. Records could be kept, and dockets issued by you to Council each week, in a similar manner to the Disposal Fees being paid to Council for Solid Waste disposal. Mr Les Landers has been informed of the increase in fees. Payment of all liquid waste disposal fees should be made to Council by Cleanaway each quarter in accordance with clause 22 of the Contract." 127 As at 19 September 1991, both parties, erroneously, believed that the "additional income" referred to in para (a) of the Council resolution referred to in the letter of 11 September 1991 was income additional to 0.3 cents per litre. In fact, objectively construed, the income referred to was additional to 1.1 cents per litre. It is to be noted that, if the additional income were to be regarded as income additional to that provided by cl 21 of the July 1990 contract, it would be additional to 0.003 cents per litre. 128 On 3 October 1991 the appellant replied to the Council in the following terms: "Reference is made to your letter dated 19th September 1991. Cleanaway wishes to raise a number of issues of concern with liquid waste disposal at the Bathurst landfill depot. Our understanding is that the Bathurst Landfill Depot is presently licensed as a solid waste disposal depot, and as such, there is no licence for the disposal of liquid waste at the depot. Cleanaway recognises that the best place for liquid waste disposal is the current landfill depot, especially to stop illegal disposal and to minimise pollution. Nonetheless, Cleanaway is very concerned that there are leachate ponds at the depot which are not used. Council dug a trench by-passing the ponds some 18 months ago. Having said that, liquid waste disposal must be made economically viable for Cleanaway to perform the work required to dispose of the liquid in the best possible manner. Cleanaway must be adequately compensated for the work involved in digging and covering trenches. In February 1990, Council agreed to an increase in the tip fees, but subsequently changed their mind in June 1991 and reduced the tip fees back to the old rates. The present rates do not make it viable to continue providing a liquid disposal service. Cleanaway has no contract with Council for liquid disposal. The present contract is for the management of a solid waste disposal depot. In regard to the collection of a liquid waste levy on Council's behalf, Cleanaway would make the point that this is not covered by the present contract. In summary, Cleanaway seeks: 1. Protection (in writing) from prosecution under legislation that would preclude the disposal of liquid waste at a solid waste disposal depot. 2. Adequate tip fees for the work involved in providing for liquid disposal. We would be appreciative if the above could be provided by Tuesday 15th October 1991 or we will need to review our options as regards acceptance of liquid into the landfill depot. While such a review was under way, we would request Council suspend the disposal of liquid waste until the matters are clarified. Cleanaway would be prepared to work very closely with Council and the licensing authorities in the planning, construction and operation of a suitable liquid waste treatment plant which could be installed on the site at the landfill depot. I believe the issues raised in this letter of a serious nature, and your urgent attention is requested to address the problems. I would appreciate your acknowledgment of this letter and an opportunity to meet and resolve the issues." 129 On 15 October 1991 the Council wrote to the appellant in the following terms: "Reference is made to your letter of 3 October 1991. The above Depot is primarily for the disposal of solid waste. Your attention is drawn to the definitions of "Trade Refuse" and 'Other Wastes' in the contract. These definitions include liquid waste. Council was prepared to accept small quantities of nontoxic (sic) liquid waste. The amount of liquid waste carted to the depot has now increased to non-manageable quantities. Mr L Landers has been interviewed and will decrease the quantity of liquid waste which he carts to the depot by 2/3. He will do this by removing only the grease from the top of the grease traps. You are also requested to severely decrease the volume of liquid waste carted to the depot by removing only semi-liquid wastes from the various plants that you service. You are requested to dig adequate trenches for these semi-liquid wastes to provide adequate disposal. The leachate pond at the Depot is to collect leachate only. The trench you mention is a stormwater trench to divert stormwater away from the leachate pond. This trench was redug approximately 18 months ago. Reference is made to Mr D Fulton's telephone conversation with you on 27 September 1991. It was understood that you would submit to Council, during the following week, a definite and specific proposal to establish a liquid waste treatment plant at the Depot at no cost to Council. It would be appreciated if you could make your submission to Council at your earliest convenience so that the liquid waste problem can be solved." The appellant made no submission to the Council as contemplated by the letter of 15 October 1991. 130 As regards the various matters proposed by the Council in its letter of 19 September 1991, as from October 1991 the appellant charged fees as set out in that letter to Cleanaway, Mr Les Landers and all other depositors of liquid waste. The appellant, however, did not keep records and did not issue dockets to the Council each week. Moreover, the appellant did not pay liquid waste disposal fees to the Council each quarter in accordance with cl 22 of the July 1990 contract, or at all. The appellant collected the fees it so charged (in accordance with the letter of 19 September 1991) and retained all of them. 131 On 15 October 1991, the Council learnt that the appellant was charging in accordance with the letter of 19 September 1991. For some period prior to 19 September 1991, an officer of the Council had adopted the practice of attending on the depot on a weekly basis where he reviewed the appellant's records and signed for an amount to be paid by the appellant to the Council. This practice continued until at least about the middle of 1992. The officers concerned only reviewed the records and signed for amounts owing in respect of solid waste. 132 Despite knowing that the appellant was charging the increased fees for liquid waste, the Council did not request or demand payment of any part of the fees charged for liquid waste. 133 Mr Pitkin, who at the relevant time was the officer of the Council responsible for administering its affairs regarding the depot, said that the Council's officers did not investigate the appellant's liquid waste records prior to 1995 because the July 1990 contract "was separate to the liquid waste agreement that we had through our letter of 19 September". Mr Pitkin said that in his mind the letter of 19 September 1991 "constituted a separate agreement … in relation to liquid waste" and prior to 19 September 1991 the appellant had no contract with the Council for liquid waste disposal. He knew that at least from late 1989 that the appellant was receiving liquid waste at the depot and was charging fees for that. He assumed that these fees were being charged for and collected by the appellant on the basis of "an informal arrangement which Council condoned because it provided a service". 134 Mr Grundy gave similar testimony. He did not believe that the "cost of treatment of liquid waste" was "a matter which the [July 1990] contract covered". He believed that the fees were charged "outside that contract" and it was the appellant's view that that position continued after the July 1990 contract had been entered into. 135 Mr Grundy accepted, however, that the appellant was not entitled to charge a fee for collecting liquid waste except in accordance with a direction from the officers of the Council. 136 In 1995 the Council first asserted that the July 1990 contract governed the charging of fees for liquid waste and, on that basis, the appellant was not entitled to retain the fees that it had charged. The construction of the 19 September 1991 letter: the ambiguities 137 While the finding that the July 1990 contract governed the charging of fees for liquid waste inevitably results in the further finding that the appellant committed a breach of that contract by charging more for liquid waste than that contract allowed, it does not follow that the Council, in consequence, suffered any loss. For the Council, without more, to succeed in its claim for damages, it would have to establish a right to restitutionary damages, a proposition open to serious doubt. Whether the offer contained in the 19 September 1991 letter was accepted (and the October 1991 contract was thereby concluded), is therefore an issue of significant importance. 138 In considering whether the 19 September 1991 offer was accepted, it is necessary to determine, precisely, the terms of that offer: Quadling v Robinson & Anor (1976) 137 CLR 192 at 201. 139 It is nowadays a trite proposition that, if the language of a contract is ambiguous, evidence of surrounding circumstances is admissible for the purposes of construing the contract: Codelfa Construction Pty Limited v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352. Where ambiguities exist, mutually known facts establishing the commercial purpose of the contract, the genesis of the transaction, the background and the context in which the parties are operating will be admissible: Reardon Smith Line Limited v Hansen-Tangen (1976) 1 WLR 989 (at 995 to 996 per Lord Wilberforce). On this basis, the shared beliefs of the parties as to their respective rights as they existed immediately before the contract was entered into are admissible, such beliefs constituting common assumptions: Codelfa Construction Pty Limited v State Rail Authority of New South Wales at 353-354. 140 In B & B Constructions (Aust) Pty Limited v Brian A Cheeseman & Associates Pty Limited (1994) 35 NSWLR 227 Mahoney J (at 245) drew attention to the recent tendency to apply the parol evidence rule in a less restrictive way (see, for example, the statement of McHugh JA in Manufacturers Mutual Insurance Limited v Withers (1988) 5 ANZ Insurance Cases para 60 - 853 at 75, 343). Mahoney J went on to say: "The Court is not confined to the examination of the text of the document. It is entitled to know, by extrinsic evidence or otherwise, what was the context in which the document was executed and the problem or problems which were to be solved by it." As I understand his Honour's observations, he was referring to an unambiguous contract. With respect to his Honour, if the aim of construction is, by objective means, to arrive at the real intention of the parties, there is much to be said for this approach. Any exercise in objective construction that does not have regard to the context in which the contract was entered into must carry serious risks that the results will be distorted. 141 It is, however, unnecessary to rely on any extension of the established rule as, in my opinion, the letter of 19 September 1991 is ambiguous and does allow regard to be had to the context and the parties' common assumptions. 142 The first ambiguity stems from the phrase "the additional income" in resolution (a). This phrase cannot be understood without reference to the letters of 9 January 1990, 20 February 1990 and 25 June 1991 as it does not have a fixed meaning. Those letters, in turn, cannot properly be understood without reference to the parties' common beliefs as to their contractual effect. The issue is similar to that in Bank of New Zealand v Simpson [1900] AC 182 where the Privy Council considered that extrinsic evidence was admissible to determine the meaning of the phrase "the total cost of the works". 143 Secondly, it is not clear whether in the last paragraph of the letter of 19 September 1991 the Council was invoking cl 22 on the basis that the July 1990 contract, since its inception, governed the payment of fees for liquid waste, or whether the Council was seeking merely to incorporate that clause by reference in its offer (so that, upon acceptance, its provisions would, for the first time, apply to liquid waste). This ambiguity is exacerbated by the reference, in the letter of 19 September 1991, to the appellant being required to keep records and issue dockets "in a similar manner to the Disposal Fees being paid to Council for Solid Waste disposal". The July 1990 contract did not oblige the appellant to keep records and issue dockets save that cl 21 required it to issue receipts on behalf of the Council for fees and charges collected and to deliver to the Council all used receipt books "not later than one calendar month after the end of the quarter in which the book was completed". The reference to a "similar manner" is therefore erroneous, but the sentence in which this phrase appears suggests that the Council was proposing a term similar to one contained in the July 1990 contract and was seeking to incorporate that term by reference. 144 Accordingly, in my view, the offer being ambiguous in the respects indicated, the context and common assumptions are admissible, according to accepted principle, in the exercise of construction. I shall now detail the material that I consider to be relevant to construe the offer. The construction of the 19 September 1991 letter: the extrinsic material 145 The 1982 contract governed the receipt of liquid waste at the Depot. It is not necessary to decide whether that contract also governed the charging of fees for liquid waste. Suffice it to say the parties believed that it did not and the appellant was left to charge fees in its discretion and to retain whatever monies it so collected. 146 In time, after Mr Landers complained in December 1989 about the level of the appellant's charges, the Council's attitude changed. By February 1990, the parties had agreed as to the fees the appellant would charge for liquid waste and the Council impliedly had agreed to the appellant retaining the fees it collected pursuant to those charges. At that stage both parties, to each other's knowledge, believed that the agreement constituted by the letters of 9 January 1990 and 20 February 1990 constituted an agreement outside the 1982 contract. In other words, they believed that the 1982 contract, while governing the receipt of liquid waste at the depot, did not provide for the charging of fees for the liquid waste so collected and received. The latter aspect of their relationship, they believed, was governed solely by the January and February letters. 147 This belief continued after the conclusion of the July 1990 contract. In other words, the parties (wrongly, in my view) believed that the July 1990 contract, while governing the receipt of liquid waste, did not regulate the charging of fees for liquid wastes. The letter of 25 June 1991 which, in effect, altered the charge for liquid waste disposal as from 1 January 1990 to 0.3 cents a litre (from 0.7 cents per litre) evinced no change in this regard. The parties continued to behave as if the July 1990 contract had no application to the fees charged and collected by the appellant for liquid waste. 148 The appellant, however, accepted that the Council had the right to determine the fees to be charged for liquid waste. The appellant also accepted that it was not entitled to charge fees for liquid waste except in accordance with a Council direction. These beliefs were shared by the Council. It is not apparent from what source the parties thought the Council's powers in this respect were derived. It may have been the fact that the Council was the owner of the land on which the depot was situated or that the Council was vested with some statutory power to make the necessary charges. This aspect was not investigated at the trial and it is unnecessary to make any findings in that respect. 149 Therefore, at the time the letter of 11 September 1991 was sent, the appellant and the Council, in common, assumed the following: (a) The July 1990 contract governed the receipt of liquid waste but not the fees to be charged by the appellant for liquid waste. (b) The charging of fees for liquid waste was governed by the January and February 1990 letters as corrected or varied by the letter of 25 June 1991. (c) The appellant was not entitled to charge fees for collecting liquid waste otherwise than in accordance with the Council's agreement as to the fees charged. 150 By September 1991 the volume of liquid waste deposited had increased significantly and serious problems with its disposal had emerged. There was a mutual need to deal with those problems. The appellant was incurring additional handling costs by reason of the difficulties in disposal. The vast quantities of liquid waste were impinging on the capacity of the depot to receive solid waste. The difficulties in disposal were causing bad odours and other problems. There was a need for a different method of treating the disposal of liquid waste at the depot. The meaning of the letter of 19 September 1991 151 When the offer of 19 September 1991 is construed by reference to the context and the parties' common beliefs, it is apparent that it was written on the assumption that, upon acceptance, it would give rise to a contract that dealt separately and independently with the determination of fees for liquid waste and the payment of part of them by the appellant to the Council. The parties did not believe that the July 1990 contract applied to liquid waste and they did not intend to invoke any clause of that contract on the basis that it governed the determination of fees for liquid waste. 152 Accordingly, the last sentence of the letter of 19 September 1991 must be construed as seeking to incorporate cl 22 of the July 1990 contract by reference in the way I have explained. That being so, the Council was not thereby asserting that the July 1990 contract was, generally, of application to the charging of fees for liquid waste. 153 Moreover, the "additional income" referred to in the letter of 19 September 1991, objectively construed by reference to the relevant background facts, means income additional to 1.1 cents per litre, that being the fee the appellant was entitled to retain pursuant to the 20 February 1990 letter, read with the letter of 25 June 1991. Was the offer of 19 September 1991 rejected by the letter of 3 October 1991? 154 The question whether the letter of 3 October 1991 amounted to a rejection of the offer of 11 September 1991 involves a matter of construction: Quadling v Robinson at 201. 155 The effect of the appellant's letter of 3 October 1991 has to be considered in the light of the construction of the letter of 19 September 1991. On that basis, the appellant's statement in the letter of 3 October 1991 that it "has no contract with Council for liquid disposal" was not a rejection of the offer contained in the earlier letter. The Council had not asserted that such a contract existed. 156 Similarly, when the letter of 3 October 1991 is read in context and as a whole, the statement that "the present rates do not make it viable to continue providing a liquid disposal service" was not a rejection of the offer. This statement was in the same tenor as the request by the appellant for "adequate tip fees for the work involved in providing for liquid disposal". These remarks were merely part of the posturing that often accompanies negotiation. 157 The attitude displayed in the letter of 3 October 1991 is similar to that of the plaintiffs in Stevenson, Jacques & Company v McLean (1880) 5 QBD 346. In that case the defendant contemplated selling a quantity of iron to the plaintiffs. He wrote to the plaintiffs to the effect that he would sell for forty shillings nett cash per ton, the offer to remain open until Monday. On the Monday, the plaintiffs' telegraphed the defendant, "Please wire whether you would accept forty for delivery over two months or, if not, longest limit you would give." The plaintiffs sent a further telegraph message to the defendant informing him that, acting as his agents, they had secured a sale at the price he was asking. The question arose whether, by their first telegram, the plaintiffs had rejected the defendant's offer, thereby rendering it incapable of acceptance at a later date. Lush J held (at 350) that the plaintiffs' telegram was in the form of an inquiry, there was "nothing specific by way of offer or rejection". I regard the letter of 3 October 1991 in the same light. 158 In my view, the letter of 3 October 1991 expressed dissatisfaction with the offer of 11 September 1991 and set out the appellant's argument for higher fees, but did not amount to a rejection. The appellant was attempting thereby to create a platform for further negotiation while leaving the offer of 11 September 1991 open for acceptance. Did the appellant accept the offer of 19 September 1991: the appellant's argument 159 The Council pleaded that a contract was constituted by the letters of 19 September 1991, 3 October 1991 and 15 October 1991 together with "the consent of the [appellant] in accepting liquid waste and levying fees therefor". Of these, it is only the pleaded conduct of the appellant in charging the fees stipulated in the letter of 19 September 1991 that is capable of constituting an acceptance of the offer contained in that letter. 160 The conditions proposed by the letter of 11 September 1991 (properly construed) were as follows: (a) Liquid waste disposal costs were to be increased to 1.3 cents per litre from 1 October 1991 and then quarterly by 1 cent per litre up to a figure of 6 cents per litre. (b) The appellant was to charge those fees to Cleanaway, Mr Landers and all other depositors of liquid wastes at the depot. (c) The respondent was to keep records and issue dockets to the Council each week. (d) The appellant was to retain 1.1 cents per litre of the fees collected by it and pay the additional income to the Council "each quarter in accordance with cl 22 of the contract". 161 As mentioned, the appellant charged fees as contemplated by the letter of 11 September 1991 to itself, Mr Landers and all other depositors. It retained all the monies it so collected itself and did not comply with the other conditions. Accordingly, the appellant submitted, its conduct did not amount to an absolute and unqualified acceptance of the offer. Did the appellant accept the offer of 19 September 1991: the relevant surrounding circumstances 162 In Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 Lord Hatherley said (at 686) that, for conduct to amount to implied acceptance of an offer, it must be "of such a character as necessarily to lead to the inference on the part of the defendants that the agreement had been accepted on the part of the plaintiffs and was to be acted upon by them". The question is one of fact (Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 535 per McHugh JA) and its determination depends on an examination of the facts said to give rise to an acceptance, seen in their context. 163 A significant feature of the relevant context is the purpose of the offer, as mutually understood. One important purpose is manifest from the letter of 19 September 1991 itself, namely, the creation of a monetary reserve for the establishment of a liquid waste treatment plant. 164 I have referred to the problems that were being experienced because of the vast increase of liquid waste being deposited at the depot. This had caused difficult physical conditions on site, making handling expensive and hindering the disposal of solid waste. These difficulties tended, practically, to limit the quantity of liquid waste that could be deposited and limit the income that the appellant could earn from both liquid and solid waste. The Council, too, was being prejudiced as the services it wished to make available to the community at the depot were deteriorating. 165 The establishment of a liquid waste treatment plant would ameliorate these difficulties. It is true that the July 1990 contract was due to expire in 1996 and there was no evidence as to when such a plant would be constructed, but the relationship between the appellant and the Council in regard to the management of the depot had endured since 1982 and there was no evidence to suggest that it was likely to terminate on the expiry of the current contract. The construction of a treatment plant was likely to be to the mutual advantage of both. 166 Additionally, the increase in prices would act as a disincentive to the public to use the depot for the depositing of liquid waste. 167 Hence, the purpose of the offer of 19 September 1991 was to arrive at an agreement whereby funds for a liquid waste treatment plant could be obtained over a period when the quantities of liquid waste deposited at the depot would be reduced. This purpose was known to the appellant. 168 A further factor to be born in mind is that the offer involved the continued use by the appellant of the Council's land for the depositing of liquid waste. In other words, the Council was proposing to the appellant that it might continue to use the Council's land for that purpose and charge higher fees for the liquid waste deposited, on the basis suggested. 169 In reality, this proposal was a concession by the Council. True it is that cl 6 of the July 1990 contract required the appellant to keep the depot open for the receipt of trade refuse (which included liquid waste) from 8.30 am to 5.30 pm seven days a week, and it was implicit in this clause that the Council would allow its property to be used for the receipt of liquid waste during the periods stipulated. But the Council's obligations in this respect were impliedly conditioned by considerations of reasonableness. The appellant was not entitled to collect or accept liquid waste in excessive quantities that would damage the Council's land or otherwise prejudice the operation of the purpose of the depot (which was primarily to receive solid waste). 170 By September 1991, the site problems to which I have adverted were reaching the stage where the Council would have had to consider, on the grounds of reasonableness, limiting the depositing of liquid waste. Were the offer of 19 September to be accepted, the Council was unlikely to impose any such limit. Did the appellant accept the offer of 19 September 1991: conclusion 171 Both parties believed that fees for liquid waste could not be increased without the Council's assent. By the offer, the Council was proposing an increase in fees, but only on condition that the moneys received from that increase were to be retained by the appellant and paid to the Council to be used as a reserve for the establishment a liquid waste treatment plant. The establishment of such a plant was a matter of fundamental significance to the Council. 172 The letter of 19 September 1991 when read in context, reflects a scheme whereby the Council intended to finance the construction of a liquid waste treatment plant by the additional income to be derived from the increase in liquid waste disposal fees. This was the sole reason for the Council proposing the increase in fees. The two matters were dependent on each other and inextricably linked. They were not capable of being separated. 173 In these circumstances, in my view, the fact that the appellant charged the higher fees is conclusive evidence that it agreed to all the conditions contained in the offer of 19 September 1991. When regard is had to the indivisible nature of the offer, the appellant's conduct, objectively viewed, was an unequivocal acceptance of the offer. The appellant accepted the benefits proposed, namely, the charging of the higher fees while using the Council's land. Those benefits could not be severed from the obligations proposed. Accordingly, by accepting those benefits the appellant accepted the Council's offer in accordance with its terms (cf Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd at 535). Consideration 174 By the October 1991 contract the appellant was not allowed to retain any moneys additional to the 1.1 cents per litre to which it was entitled under the arrangement that, as at that date, was already in place. The appellant submitted that this meant that it received no consideration and, therefore, the contract was not binding. 175 The October 1991 contract laid the basis for the establishment of a liquid waste treatment plant that would enable more liquid waste to be deposited at the depot and alleviate problems with the handling of solid waste. This would enable the appellant, in consequence, to earn more. Moreover, the practical effect of the October 1991 contract was to enable the appellant to continue using the Council's land for the depositing of liquid waste without the real prospect of the Council imposing any limit on such depositing. 176 The benefits which I have outlined were adequate consideration for the October 1991 contract. Conclusion 177 Having found that the offer was accepted and that there was consideration, it follows that I consider that Hodgson CJ in Eq correctly found that the parties entered into the October 1991 contract and that contract was binding and enforceable. 178 It is therefore unnecessary for me to deal with the issues that arise out of the Council's alternative claims. 179 Accordingly, I would dismiss the appeal. I agree with the orders proposed by Heydon JA. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.