New South Wales Supreme Court CITATION : Huntsman v Qenos & Anor [2005] NSWSC 494 HEARING DATE(S) : 2, 3, 4 and 5 May 2005 JUDGMENT DATE : 3 June 2005 JURISDICTION : Commercial List JUDGMENT OF : McDougall J at 1 DECISION : See paras [154] and [155] of judgment CATCHWORDS : CONTRACT - where contract between parties set price by reference to pricing index - where index claimed to reflect the US Gulf Coast contract price for ethylene - where methodology by which index derived changes - whether change in methodology changed the index - whether any change in methodology changed the index in a material way - whether the index ceased to reflect the US Gulf Coast contract price for ethylene - no question of principle - EXPERT EVIDENCE - where court expert appointed - where opinions of court expert conflict with opinions of other experts - whether Court should prefer views of court expert Jones v Dunkel (1959) 101 CLR 298 CASES CITED : Minnesota Mining and Manufacturing Company v Beiersdorf (Australia ) Ltd (1980) 144 CLR 253 Non-Drip Measure Co Ltd v Strangers Ltd (1942) 59 RPC 1 Huntsman Corporation Australia Pty Ltd (Plaintiff) PARTIES : Qenos Pty Ltd (First Defendant) Olefines Pty Ltd (Second Defendant) FILE NUMBER(S) : SC 50057/04 R J Weber SC/A Ivantsoff (Plaintiff) COUNSEL : J T Gleeson SC/R Francois (Defendants) Minter Ellison (Plaintiff) SOLICITORS : Cornwall Stodart Melbourne (Defendants) - by its Sydney Agents, Hicksons LOWER COURT JURISDICTION : HUNTSMAN v QENOS & ANOR [2005] NSWSC 494 INDEX TO JUDGMENT Para The issues 2 The supply agreement 6 The novation deed 12 The Gulf Coast ethylene market 13 NTCP and average acquisition price 19 The change in the method for deriving the NTCP 27 Mr Eramo's evidence 33 Ms Hubbard's evidence 41 The other evidence 43 Conclusion 44 Did the change in methodology mean that the NTCP changed? 46 Mr Eramo's evidence 47 Other relevant circumstances 59 Ms Hubbard's evidence 64 Statement of opinion or statement of fact? 72 Conclusion 91 Was any change material? 93 The concept of materiality 94 Characterisation of the change 96 Effect of the change 97 Ms Hubbard's evidence 102 Mr McElliott's evidence 107 Other evidence of price correlations 112 Huntsman Australia's alleged failure to provide pricing data 114 Analysis 119 Conclusion 124 "No longer reflects the US Gulf Coast contract price for ethylene" 125 The US Gulf Coast contract price for ethylene 128 "Reflects" 139 Analysis 144 Conclusion 150 Postscript: a Browne v Dunne submission 151 Conclusion overall 154 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST McDOUGALL J Friday 3 June 2005 50057/04 HUNTSMAN CORPORATION AUSTRALIA PTY LTD v QENOS PTY LTD & ANOR JUDGMENT 1 HIS HONOUR: The first defendant (Qenos) agreed to supply ethylene to the plaintiff (Huntsman Australia) on the terms of an ethylene supply agreement dated 23 December 1998. The price payable was "the US Gulf Coast Contract Price", with a rebate for ethylene manufactured into products and sold outside Australia. The Purchase Price (as I shall call it) was fixed by reference to the "net transaction contract price" (NTCP) published monthly by an organisation called Chemical Marketing Associates Inc (CMAI). By cl 6.4 of the supply agreement, if the NTCP changed in a material way, or ceased to reflect the US Gulf Coast contract price for ethylene, then a substitute value or index was to be agreed or fixed by expert determination. The central question for resolution in these proceedings is whether the NTCP changed in a material way, or ceased to reflect the US Gulf Coast contract price for ethylene, by February 2001. The issues 2 On 3 December 2004, Bergin J ordered pursuant to SCR Pt 31 r 2 that the issues raised by para 10 of Huntsman Australia's contentions in its second further amended summons and paras 7, 23 and 24 of Qenos' defence be decided separately and before all other issues in the proceedings. 3 The paragraphs read as follows: "10. By on or about February 2001, the US Gulf Contract Price, as defined in the ES Agreement ('US Gulf Contract Price') had: (a) changed in a material way; and/or (b) no longer reflected the US Gulf Coast contract price for ethylene. PARTICULARS (a) The 'net transaction contract price' (as published by CMAI) no longer represented the weighted average discount price payable by the top 10 volume US Gulf purchasers of ethylene; (b) the US Gulf Contract Price no longer reflected the US Gulf Coast contract price for ethylene (being the price payable by the top 10 volume US Gulf purchasers of ethylene); (c) the US Gulf Contract Prince [sic] no longer reflected discounts provided to the top 10 volume US Gulf purchasers of ethylene; As was the case when the ES Agreement was entered into". "7 The Defendants deny paragraph 10 and state that the US Gulf Contract Price:- (a) by on or about February 2001 had not changed in a material way; (b) as at 23 December 1998 "reflected" the US Gulf Coast contract price for ethylene, in that it was CMAI's opinion as to the weighted average discounted price for ethylene paid by the top 10 volume US Gulf purchasers (being the price for pure contract volume and excluding volume purchased at spot or non-contract or export support or tolled prices); (c) between December 1998 and about February 2001 continued to reflect the US Gulf Coast contract price for ethylene in that it was still CMAI's opinion as to the weighted average discounted price for ethylene paid by the top 10 volume US Gulf purchasers (understood as per (b) above). (d) alternatively, between December 1998 and about February 2001, continued to reflect the US Gulf Coast contract price for ethylene in that it continued to bear a relationship to the US Gulf Coast contract price for ethylene and to the weighted average discounted price for ethylene paid by the top 10 volume US Gulf purchasers (however understood) substantially the same as the relationship that obtained on 23 December 1998. … 23. Further, the parties, by the ES Agreement, assumed that the Index reflected the US Gulf Coast contract price for ethylene referred to in clause 6.4 of the ES Agreement in or around December 1998. Particulars Clause 6.4 of the ES Agreement 24. In the premises, the Plaintiff is estopped by convention from disputing that the Index reflected the US Gulf Coast contract price for ethylene referred to in clause 6.4 of the ES Agreement in or around December 1998." 4 The reference to an "Index" in paras 23 and 24 of Qenos' defence is in substance a reference to the NTCP as from time to time fixed by CMAI. The parties and the witnesses used the expressions "NTCP" and "index" (and, as a variant of the former, "NTP") interchangeably. 5 At all times (at least up until February 2001) the NTCP represented not what might be called a "real world" price, but, rather, CMAI's opinion of what the (or a) relevant real world price might be from month to month. It will be necessary to look in some detail at the method of derivation of the NTCP and the way in which it changed. There is no doubt that the way in which the NTCP was derived changed in about January 2001. The central question thus enquires: · whether that change was, or resulted in, a change to or in the NTCP; and · if it was, or did, whether that change was "in a material way"; or · whether, as a result, the NTCP ceased to reflect the US Gulf Coast contract price for ethylene. The supply agreement 6 The supply agreement was made between Orica Australia Pty Ltd as supplier, or vendor, and Huntsman Australia as purchaser. By cl 2, Orica agreed to supply and Huntsman Australia agreed to purchase "Ethylene for the Purchase Price … until at least 30 June 2011". There were obligations to provide maximum quantities and to take minimum quantities; nothing turns on these. 7 The expression "Purchase Price" was defined in cl 1.1 to mean "the purchase price set in accordance with clause 6". 8 Clauses 6.1 and 6.4 are central to the dispute. By the former, the purchase price was fixed as "the US Gulf Contract Price less any applicable rebate calculated in accordance with cl 6.7". By the latter, as I have said, the value or index used to calculate the Purchase Price was to be refixed if certain contingencies occurred. Those clauses read as follows: " 6 Price and payment Price 6.1 The Purchase Price (for Ethylene delivered to HCA under this Agreement or required to be paid for by HCA under this Agreement) up to 30 June 2011 shall be the US Gulf Contract Price less any applicable rebate calculated in accordance with clause 6.7, unless the parties agree in writing to the contrary. … 6.4 If any published value or index (including the US Gulf Contract Price) used to calculate the Purchase Price changes in a material way, no longer reflects the US Gulf Coast contract price for ethylene, is discontinued or is otherwise unavailable, HCA and Orica must determine a substitute value or index. If the parties cannot agree on a substitute value or index, the parties agree to appoint an independent expert to determine the substitute value or index. The dispute resolution procedure set out in clause 16 will apply to the appointment." 9 It will be noted that in cl 6.1 there appears the expression "US Gulf Contract Price" (the initial capital letters indicating a defined term), whereas in cl 6.4 there appears the expression "US Gulf Coast contract price". No one submitted that the change in initial capitalisation was accidental. 10 By cl 1, the expression "US Gulf Contract Price" was defined to mean: " … the US Gulf Coast Contract ethylene "net transaction contract price" per tonne for ethylene sales on the US Gulf Coast as published by CMAI at the end of each Month for the penultimate Month prior to the Month of delivery, converted into A$ using the daily average of the Hedge Settlement Rate for the penultimate Month prior to the Month of delivery". 11 Clause 6.7 provided for a rebate on the US Gulf Contract Price in certain circumstances. Relevantly, it reads as follows: " Export Rebate 6.7 During the period from the Commencement Time to 30 June 2011 HCA will receive a rebate on the US Gulf Contract Price for the quantity of Ethylene purchased by HCA from Orica during the previous Month to the month of invoice equal to the lesser of: (a) the quantity of Ethylene purchased from Orica that is manufactured into products and sold outside Australia by HCA in that previous Month; and (b) 25% of the total Ethylene supplied to HCA by Orica in accordance with this agreement in that previous Month, calculated on the following basis: … The rebate is only payable in each full Calendar Year in respect of the first 42,000 tonnes of Ethylene delivered in that Calendar Year to HCA under this agreement, (which for the avoidance of doubt means that the rebate cannot be paid on more than 25% of 42,000 tonnes of Ethylene delivered in that Calendar Year). The maximum amount of Ethylene to which the rebate could apply for Ethylene delivered during the period between 31 December 2010 and 30 June 2011 is 21,000 tonnes." The novation deed 12 By deed made on 30 June 1999, the rights and obligations of Orica under the supply agreement were novated to Qenos (then known as Kemcor Australia Pty Ltd). It is apparent from the novation deed that this was done in consequence of Orica's selling to Qenos and the second defendant (Olefines) the Botany Ethylene Plant referred to in the supply agreement and the business of supplying ethylene manufactured at that plant. The recitals show that the plant was sold to Olefines, and the business to Qenos. In consideration for Huntsman Australia's agreeing to the novation of Orica's obligations to Qenos, Olefines agreed to guarantee Qenos' obligations to Huntsman Australia. Having thus explained Olefines' presence in these proceedings, there is no need to return to it. The Gulf Coast ethylene market 13 The Gulf Coast ethylene market was described in general terms by Mr Richard McElliott, as follows (affidavit sworn 6 April 2005, paras 7-9): "7. The US Gulf Coast ethylene market is notable for its pipeline infrastructure and interconnections between producers and consumers of ethylene. This feature is unique to the US Gulf Coast and is in contrast to the more normal direct interdependence of ethylene producing sites and host complexes of downstream ethylene consumers which I have observed in Europe, Asia/Pacific, Africa and Middle East and Latin and South America. 8. In my experience this high level of interconnection between market participants provides multiple sources of easily available ethylene, especially for large consumers to meet their requirements. In my opinion, the availability of multiple sources of supply, and conversely of multiple consumers, has generally led to a highly dynamic and competitive market environment on the US Gulf Coast. In my experience, the entry/exit barriers to switching either sources of supply or consumption are relatively low as the major transportation infrastructure has been in place for several decades and product quality is relatively consistent from producer to producer. I have observed that this, when coupled with what has been a significant, although diminishing, pure non-integrated merchant market in the US has led to a "leapfrogging" effect on ethylene pricing. By "pure non-integrated merchant market" I mean those consumers who purchase the entirety of their ethylene requirements rather than those who also have production facilities which are used to meet some of their requirements. Consumers seeking to improve cost based competitiveness (or producers seeking to improve product line profitability) have the ability to use total volume in relatively short time increments to leverage price position. 9. The interconnectivity through the pipeline thus, in my view, permits the market to have the relatively short-term focus. In particular, in my experience, ethylene pricing is usually determined on a month to month basis and supply contract duration is predominantly in the 3 to 5 year range or shorter. I understand from other market participants and industry consultants that this experience is standard on the US Gulf Coast. Contracts in other ethylene markets tend to have a much longer timeframe." 14 In the 1970s, the Gulf Coast ethylene market was, according to Mr McElliott, very "structured" and "transparent". The actual ethylene transaction prices were "determined by a fixed price discount level off a defined supplier announced market price" (affidavit, para 11). Mr McElliott said that this began to change in the 1980s, when there was increasing competition among suppliers and an oversupply of ethylene. In those conditions, he said, "consumers began to successfully leverage the market price basis from supplier to supplier and, using the fixed discount structure, spiral the actual transaction price to lower and lower levels on a monthly basis": what he called the "death spiral" effect of fixed discounting (affidavit, para 12). 15 Accordingly, Mr McElliott said, the market changed in the mid to late 1980s through to the early 1990s. The major suppliers and consumers began to negotiate on a monthly basis, resulting in what he called "monthly negotiated settlement contracts" (affidavit, para 13). These negotiations were private, so that the prices negotiated were not publicly available. Mr McElliott said that this process of negotiation often worked with the supplier sending out list or benchmark prices to the buyer, and with discounts from those prices then being negotiated between the supplier and the buyer (affidavit, para 16). 16 Because the market became less transparent, those involved in buying and selling ethylene could not determine whether their prices were, or were not, in line with prices generally charged in the industry. To fill this gap, Mr McElliott said, organisations such as CMAI began to publish reports to fill the information void (affidavit, para 19). The publishers of such reports (CMAI's report was called the Monomers Market Report) sought to use their knowledge of the industry, and information gleaned by them from buyers and sellers, to estimate the actual prices being paid from month to month by large buyers. Thus, price measures such as the NTCP were developed and published. 17 The ethylene market changed again during the 1990s. One change was that large buyers sought to improve the overall prices paid by incorporating a number of alternative pricing mechanisms into their contracts with suppliers. Thus, it might be agreed that some portion of ethylene supplied would be supplied at a price discounted from the settlement price, and some other portion at a spot market price. Alternatively, if the ethylene was to be used outside the United States of America, it might be priced at a lower rate per pound because of the export support subsidy that would be attracted. Further, a buyer with access to ethane (used as the feedstock to make ethylene) might send its ethane to the supplier for processing into ethylene and pay only for the processing costs. This resulted in what is called a "tolled" price. 18 Later again, yet further pricing mechanisms were developed, including concepts such as "cost plus margin", "capacity reservation" and "virtual cracker" (or V cracker). It is not necessary to go into the detail of these pricing mechanisms. NTCP and average acquisition price 19 The net transaction ethylene contract price, or NTCP, was a term used by CMAI in its reports. CMAI defined the term in a number of ways. One definition (used repeatedly in the tables of product prices) was "delivered, discounted, weighted average January [or other relevant month] contract, ten largest buyers, under negotiation". Another definition, given in report No. 470 for 30 June 2000, was "a weighted average of the net contract price for the top 10 ethylene buyers on the U.S. Gulf Coast" (said to be derived from "arm's length freely negotiated prices on a monthly basis"). 20 Another definition, given in report No. 474 for 31 August 2000, was "a weighted average calculation of net contract prices (after discounts) that CMAI assumed the top 10 buyers in the industry are paying" for "pure contract" ethylene requirements. The prices used in the calculation are "CMAI's opinion of the level at which top buyers are able to purchase ethylene within the terms of a contract that requires monthly "arms-length" negotiations to determine the contract price" (emphasis in original). 21 Yet another definition, similar to that given in June 2000, was given in report No. 494 for 29 June 2001: "the net transaction price is intended to represent a weighted average of the "arms-length negotiated" contract price "for the ten largest buyers in the industry" (emphasis in original). 22 CMAI's reports showed that ethylene producers would release, usually on a monthly basis, the prices that they hoped to achieve for selling their product. Thereafter, they would negotiate with the major buyers. Usually, there was an agreement reached, leading to what was often called the "settlement price" or "contract settlement price". However, this did not lead to one overall contract settlement price, but, rather, to a number of contract settlement prices. Thus, one large producer and one large buyer might agree on a contract price of US$0.25 per pound for a particular month; a second large producer and a second large buyer might agree on a price of US$0.2525 for the same month; and a third large producer and a third large buyer might agree on a price of US$0.2475 for the same month. 23 Contracts for the supply of ethylene typically imposed minimum and maximum requirements. Usually, the negotiated monthly settlement price would relate to some portion of the minimum monthly requirement. Once the contract settlement price was negotiated, the buyer and seller would negotiate for a discount off that price. By this means, they fixed the price at which, for the month in question, the supplier would sell and the purchaser would buy some portion of the minimum monthly contract requirement. Another portion of that requirement might be priced at the prevailing spot rate; or might be priced at an export support rate; or, depending on the terms of the contract, might be priced at a tolled rate. 24 Industry participants did not report to CMAI the actual prices that were agreed from month to month. What they reported to CMAI was the movement in the contract settlement price from the previous month. CMAI's task, using its expertise, was to seek to determine firstly an overall contract settlement price (which it frequently called the "Benchmark Contract" price, and which was so described in tables in its reports) and the overall level of discount therefrom being achieved by the top 10 buyers. That led to an opinion of the NTCP. 25 However, because the large 10 buyers did not buy all their ethylene requirements at the discounted settlement prices negotiated from month to month with their suppliers, the NTCP did not estimate, nor did it claim to estimate, the actual overall cost per pound at which a large buyer would acquire its supplies for a particular month. To estimate this actual cost, it would be necessary to calculate a weighted average of all the prices per pound paid for a particular month – whether by way of discount from the monthly settlement price, at the spot price, with the benefit of the export support subsidy, or the tolled price. A price so calculated, taking into account all those pricing mechanisms, is referred to as the average acquisition price (AAP). 26 CMAI never intended the NTCP to include what are in effect (although not perhaps in form) discounts, or reductions in the overall price paid, achieved by the mechanisms of spot pricing, export support and tolled pricing. That was the function of the AAP. The NTCP was intended to capture only the discounts from the monthly contract settlement price negotiated between large sellers and large buyers. It is referable only to those quantities of ethylene that are supplied, for any given month, at the price so calculated. The AAP is not a new concept. It appears in CMAI's reports from at least May 1998. Thus, the AAP has existed, and been referred to alongside the NTCP in CMAI's reports, for a number of years. The change in the method for deriving the NTCP 27 Four witnesses gave evidence going to the question of whether, and if so in what way, the NTCP changed prior to February 2001. They were Mr Mark Eramo, Ms Marlene Hubbard, Mr Doug Culpon and Mr McElliott. 28 Mr Eramo is the Vice President, Olefines and Elastomers, of CMAI. He is, and for a number of years has been, responsible for the preparation of the "ethylene" section of CMAI's monthly reports. 29 Ms Hubbard was the Olefines Purchasing Manager for Union Carbide Corporation (a "top ten" buyer) from June 1998 to February 2001, when that corporation merged with Dow Chemical Company. Thereafter, Ms Hubbard became Vice President, Purchasing and Supply Chain Management, of Sasol Olefines and Surfactants GmbH. She had firsthand experience of negotiating ethylene supply contracts over the relevant time. Ms Hubbard was appointed as court expert pursuant to SCR Pt 39, r 1. 30 Mr Culpon is the Vice President, Six Sigma Improvements of Huntsman LLC, a related company of Huntsman Australia. He has worked in the Huntsman group of companies for 10 years. He has been involved in the pricing of ethylene and in the negotiation of contracts for the sale of ethylene. 31 Mr McElliott was employed by another top ten buyer from 1989 until 2004. His responsibilities included the negotiation of ethylene supply contracts, and, in latter years, the overall leadership of Olefines and other procurement activities for his employer's businesses in North America and Asia. Mr McElliott was retrenched from that employment in August 2004 and is now employed by BP Olefines and Derivatives as a Commodity Manager. 32 It is apparent that each person is well qualified to speak of the Gulf Coast ethylene market at the crucial time. That time includes not just February 2001 (by when, Huntsman Australia says, the manner of calculation of the NTCP had changed) but thereafter. Qenos submitted that the period following the alleged change was relevant either because it showed that in fact there was no change, or that the change was not material; or that it did not follow from the fact of change that, after the change, the NTCP no longer reflected the US Gulf Coast contract price for ethylene. The relevant period also includes the calendar year 1998 (because it was in December 1998 that the supply agreement was made) and the period thereafter until February 2001. Mr Eramo's evidence 33 Mr Eramo defined the NTCP "as a weighted average calculation of net contract prices (after discounts) that CMAI assumed the top ten buyers in the industry were paying for "pure contract" ethylene requirements." He said that those prices "were strictly CMAI's opinion at the level at which top ten buyers were able to purchase ethylene within the terms of the contract that required monthly "arms-length" negotiations to determine the contract price." (In each case, the emphasis is Mr Eramo's.) It will be seen that this definition is substantially similar to that referred to in para [20] above, taken from report No. 474. 34 Mr Eramo said that, from the late 1990s up until the year 2000, the NTCP was written into many ethylene supply agreements, in North America and elsewhere. However, the price to be paid was "the absolute net transaction contract ethylene price as published in the Monomers Market Report less a discount". Thus, if that price were adjusted by CMAI's opinion of that negotiated by the top ten buyers in the market, there would be a vicious regress – what Mr Eramo described as a "death spiral" – in prices. Mr Eramo explained the result as follows: "Therefore, if CMAI attempted to have the net transaction contract ethylene price equal the discounted price (based on the original intent), we could no longer achieve this because many agreements were discounting from this price. Hence, as of January 2001, CMAI stopped adjusting the net transaction contract ethylene price based on our opinion of discounts in the market and began only to move this price in line with agreed to contract price settlements between major ethylene buyers and sellers each month." 35 The reference to "original intent" is to be understood as a reference to "the original intent of the net transaction cost contract ethylene price was to estimate the range of recognised discounts in the market". The reference to "discounts in the market" is to be understood as a reference to discounts from the contract price. 36 The passages that I have quoted are taken from a letter of 2 March 2004, written by Mr Eramo, which was exhibit PX 3 in the proceedings. Mr Eramo gave oral evidence by audiovisual link. He expanded on his description of the change. He said: "HIS HONOUR: Q. I just wonder if you could help me, looking at pages 5 of your issue number 484, am I right in thinking that the net transaction contract price shown for January 2001 represents CMAI's opinion of the settlement between major buyers and sellers based on the market information available to CMAI? A. I would state it that it represents the price movement that occurred as a result of the agreed to settlement in that it was maintained - it arrived at 31.75 - I guess the best way to say it, we arrived at 31.75 based on the agreed to settlement as opposed to in the past basing it on some weighted average calculation of net contract values. As a result of the adjustments we made in the Fall we realised that we can no longer adjust NTP based on our opinion because we were then setting the market price because so many clients had written NTP into their contract and were discounting from NTP both Ethylene agreements and ethylene derivative agreements that if we were to continue to move NTP based on our opinion, then we would be in a position of setting the market price which is what we did not want to do. So at that point when we went from December to January 1 and then forward from January 1 we would only move and we have only moved NTP in alignment with the agreed to settlement increment either up, down or flat. Q. But it remains a figure based on the real world data available to you, does it? A. It remains a figure that is now being adjusted, yes, based on real world in point on whether the agreements were to - an agreement to either increase or decrease the number. It no longer remains my opinion of how well the large buyer could buy under a certain type of contract mechanism. … Q. What it has sought to do is measure what is happening on the monthly settlements as the price goes up, down or stays steady; true? A. Are you talking in today's terms or in the past because there is a distinct difference in the methodology that I employ. You see in today's terms it measures the delta and only the delta, because what we know, what we learn - and this is to the point, what we know today is that there are many agreements in the market place that say take NTP and blend it with a spot number to achieve a discounted number. It has got nothing to do with export support, it has got nothing to do with tolls, it is the primary contract mechanism where they say NTP blend it with a spot number is going to give you a contract price applied to the committed volume and I could no longer try to make NTP equal that number or we end up in a death spiral in the industry, we end up driving the industry into the ground, so we made the decision we could no longer do that? " (T 99.3-100.13). 37 Mr Eramo confirmed that the NTCP remained based on information from buyers and sellers: "Q. Today you still have a number of buyers and sellers in the market who give you information that you feed into NTP; correct? A. Today I have buyers and sellers who report the results of their negotiations on the monthly price increase announcements. It is the results of those negotiations that are reflected in the movement of NTP." (T 102.21-.273). 38 Most people, Mr Eramo confirmed, "were still using traditional monthly settlements" and those who were included some of "the largest top ten buyers" (T 107.29-.47). 39 Mr Eramo restated the current function of the NTCP: "NTP is now nothing more than a reference price" (T 105.20). 40 Mr Eramo's evidence of the change in methodology (as opposed to the effects, or significance, of that change) was not really challenged. It was certainly not shaken, and has not been controverted. I have no hesitation in accepting it, particularly since (as will become apparent) it is supported by Ms Hubbard. I emphasise that this conclusion relates only to the change in methodology, and says nothing as to its significance. In particular, the evidence to which I have referred says nothing as to whether, as a result of the change in methodology, the NTCP changed (let alone whether that change was "in a material way"). Ms Hubbard's evidence 41 Ms Hubbard provided two revised reports to the Court, dated 22 and 27 April 2005. In the first of those reports, she concluded that "the index identified as the "net transaction contract price" per tonne for ethylene sales on the US Gulf Coast had changed since December 1998". She referred to the evidence of Mr Eramo and Mr Culpon, and to the former's decision "to discontinue any further adjustments to the Index around January 2001." As I understand it, the reference to discontinuing adjustments was a reference to discontinuing the practice of calculating the NTCP by estimating the discounts off the settlement price that were achieved by the top ten buyers. 42 Again, on the limited point whether there had been a change in methodology, Ms Hubbard's evidence was not really challenged, and I accept it. The other evidence 43 Mr Culpon agreed that the method of calculation of the NTCP had changed. Mr McElliott did not suggest otherwise; his evidence was directed to showing that the change had no significance. Conclusion 44 I conclude that the method by which CMAI derived, or calculated, the NTCP changed after January 2001, substantially for the reason given by Mr Eramo: because CMAI ceased to attempt to calculate discounts from contract settlement prices and from February 2001 moved the index only by reference to reported movements in the contract settlement price. 45 In substance, CMAI assumed the level of discounting from February 2001. Mr Eramo explained this as a fixed US$0.04 discount to the contract settlement, or benchmark, ethylene price. Instead of focusing on the settlement price and the reported level of discounting, CMAI focussed on movements from the previous month's prices: what Mr Eramo called the "delta". It adjusted the previous month's NTCP by reference to its understanding, or opinion, of the average movement over the top ten buyers from their previous monthly contract price. Did the change in methodology mean that the NTCP changed? 46 On the evidence, the NTCP sought to perform the same role after February 2001 as it had performed before that month. As indicated in paras [19] and [21] above, the definition given in CMAI's report No. 494 for 29 June 2001 was in substance the same as that given in its report No. 470 for 30 June 2000. Mr Eramo confirmed that some top ten buyers still used forms of contract that required the price for some portion of the monthly ethylene bought to be negotiated from month to month. He said that the NTCP was still designed to measure that price, and movements in it (see his evidence set out in para [37] above). Mr McElliott's evidence was to similar effect (see para 24 of his affidavit). Mr Eramo's evidence 47 These considerations suggest that the change in the methodology used to derive the NTCP did not lead to a change in the NTCP. However, Mr Eramo said, having referred to changes in the ethylene market that led to the introduction of the NTCP in the late 1980s/early 1990s: "Therefore, as a means of continuing to track CMAI's opinion of a discounted contract ethylene price, we developed the average acquisition contract ethylene price concept. Similar to the original intent of the net transaction contract ethylene price, this price represents CMAI's opinion of a discounted ethylene price being paid by large buyers on the US Gulf Coast. The price is arrived at using a hypothetical contract mechanism that assumes at ratio of a reference contract price (the net transaction contract price) and average spot pricing in the industry. It is important for clients to note that the average acquisition price represents CMAI's opinion of a discounted contract price for a hypothetical large volume ethylene buyer utilising a negotiated contract price mechanism in a purchase agreement. Indexed to production costs or raw material prices, which could be resulting in ethylene prices that are higher or lower than the average acquisition price estimate." (Mr Eramo's emphasis). 48 This might be thought to suggest that the concept of the NTCP has changed over the years. However, the question of change (and of the materiality of any change) needs to be considered having regard to the fact that the supply agreement, using the NTCP as a determinant of price, was made on 23 December 1998. In referring to the NTCP, the parties (Huntsman Australia and Orica) must be taken to have had in mind, and therefore to have intended to adopt as their price determinant, the concept of NTCP as it then stood. Mr Eramo's evidence was that the concept of the AAP, in its present form, had been developed by May 1998. As I have said, it has coexisted alongside the NTCP in CMAI's reports since then. 49 Further, Mr Eramo's evidence was that the NTCP was only intended to measure the "pure contract" ethylene price, and that it was never intended to capture "discounts", or overall effective prices, achieved by the use of mechanisms such as spot pricing, export subsidy pricing and tolled pricing. That, he said, is and since May 1998 has been the function of the AAP. Again, that is something that the parties must be taken to have had in mind in December 1998. 50 There was a change, separate from the usual monthly movements, in the NTCP in the second half of the calendar year 2000. This occurred because a number of large ethylene buyers (including Ms Hubbard) told Mr Eramo that the NTCP stated in CMAI's reports had moved out of line with pure contract ethylene prices. Mr Eramo determined that a special adjustment, not related to discounts from monthly settlements being achieved by the top ten buyers, was necessary to ensure that the NTCP moved back into line with the pure contract ethylene prices that it was intended to reflect. The amount of the adjustment was US$0.0075 per pound. This was introduced by three monthly increments each of US$0.0025 in September, October and November 2000. 51 Similar special adjustments had been made in 1993 and 1995, when CMAI ascertained, or decided, that the NTCP had become misaligned with pure contract ethylene prices. 52 Mr Eramo suggested that, after February 2001, he would not make any further adjustment. This was relied upon to found a submission that there had been a change, and of a material kind, in the NTCP. However, I do not accept that evidence. Firstly, Mr Eramo's oral evidence that he would not make such a change (T 102.21-103.26) is difficult to understand and hardly conclusive. Secondly, it is inconsistent with earlier oral evidence given by him. "If we came across – came upon a reason to – for some reason adjustment [sic] NTCP that we discover a reason to do it, then, yeah, we probably would." (T 102.12-.15) 53 Thirdly, and most importantly, it is inconsistent with CMAI's stated position in its report No. 510 dated 28 February 2002: "Over the years, as the net transaction contract price was assimilated into contract and transfer price mechanisms, it has left CMAI in a position whereby adjusting the net transaction price by any amount other than the agreed to market settlement is difficult and would result in unintended market price movements. As a result, CMAI is basically using the net transaction contract price to reflect market price movements, until a time when an additional adjustment would be warranted. We will continue to adjust and track an average acquisition price in order to assess current market economics as well as for forecasting purposes." (emphasis supplied). 54 This passage shows two things. The first is that, as at February 2002 (a year after the supposed change in the NTCP had occurred) NTCP and AAP were still being used for their pre-existing, although different, purposes. The second is that, if circumstances arose (such as had arisen in the second half of the calendar year 2000) that necessitated a movement in the NTCP other than one required to reflect monthly market settlements, CMAI would make it. 55 Thus, I conclude, CMAI remained prepared after February 2001 to make special adjustments to the amount of the NTCP, as it had done in 1993, 1995 and 2000. Historically, those adjustments had been made to ensure that the NTCP remained in line with the pure contract ethylene price. There is no basis to think that any such special adjustment made after February 2001 would have been made for any different purpose. 56 Further, although (as I conclude the better view of the evidence is) CMAI remained prepared after November 2000 to adjust the NTCP if necessary to bring it into line with the market, there has been no market feedback or market conditions, known to CMAI, that have required such an adjustment to be made. Mr Eramo agreed (as I have noted in paras [37] and [38] above) that some of the largest top ten buyers were still using traditional monthly settlements, and still giving him information as to monthly price changes that were reflected in the movement of the NTCP. He agreed that those people had not come to him over the last four years and said to him "Mr Eramo, NTCP is totally out of whack. You must adjust it in the same way that you did in 2000" (T 103.33-.37). 57 My analysis of Mr Eramo's evidence leads to the following conclusions: (1) Prior to February 2001, the NTCP was CMAI's opinion of the "pure contract" ethylene price paid by the ten largest buyers in the US Gulf Coast market. (2) Both before and after February 2001, the NTCP was adjusted to reflect movements in monthly contract settlement prices. (3) The NTCP was not intended before or after February 2001 to capture prices achieved other than by monthly negotiated settlements, or overall prices (or "discounts") achieved by the use of spot, export support or tolled prices. (4) A special adjustment was needed in the second half of 2000 (as it had been needed in 1993 and 1995) to ensure that the NTCP remained in line with prices actually being paid by those top ten buyers for their pure contract ethylene requirements; and that adjustment was made. (5) As at January and February 2001, the NTCP remained CMAI's opinion of the price paid by the top ten ethylene buyers for their pure contract requirements. (6) Some of the largest top ten buyers continued after February 2001 and to the present day to use the monthly settlement negotiations to determine part of their overall ethylene pricing, and continued to report the results of those negotiations to Mr Eramo. (7) From February 2001 on, the NTCP tracked movements in monthly settlement prices as reported by those buyers (and their sellers) to Mr Eramo, at a fixed discount of 4 cents per pound to Mr Eramo's opinion or understanding of those monthly settlement prices. (8) CMAI remained willing to make further special adjustments if market evidence required this to be done, to ensure that the NTCP remained in alignment with those prices. (9) No top ten buyer has suggested to Mr Eramo after November 2000 that a further, special, or one off, adjustment was necessary to bring the NTCP into line with market prices. (Nor, lest it be thought that Mr Eramo did not sufficiently have his ear to the ground, is there any evidence to suggest that any other market participant thought after November 2000 that any such adjustment was necessary.) 58 None of this suggests that the change in the methodology whereby the NTCP was derived resulted in a change to the NTCP. Other relevant circumstances 59 There are three other circumstances that reinforce the view that the change in derivation of the NTCP from February 2001 did not lead to a change in, or of, the NTCP. The first is that CMAI continued to retain the NTCP in its reports. CMAI saw the NTCP as continuing to be of commercial significance because it had been "ingrained in many commercial agreements … that involved the buying and selling of ethylene". If the NTCP was maintained after February 2001 because, before then, it had become "ingrained" in commercial agreements, this again suggests that there had been no change to the concept. See Mr Eramo's evidence at T 77.27-.46: "Q. When you took the decision that you will no longer take into account discounts in arriving at your NTP in January 2001, why didn't you thereafter simply delete the whole concept of NTP from your report? A. As we were exploring this whole issue and as we were, you know, looking into all of the market impacts surrounding the net transaction price and changes that we had made subsequently in the fall of 2000, with what we learned and came to truly understand was to the full extent to which the net transaction price had been ingrained in many commercial agreements, commercial agreements that involved the buying and selling of ethylene, the buying and selling of ethylene derivatives and consumers and buyers who were not only located in north America or the United States but in Canada and in other places around the world. So we felt at that point obligation to maintain the net transaction price market as a service to the clients, otherwise it would have been much too disruptive to the client base if we were to just discontinue it altogether." 60 The second, and related, point is that from to time after February 2001, CMAI's reports contained graphs comparing the NTCP with other data over a range of years (often, a period of years up until the date of the report). For example, in report No. 490 dated 30 April 2001, there is a graph comparing the weighted average cash cost (of manufacturing ethylene) with the spot price and the NTCP from the first quarter of 1990 to the date of the report, and forecasting movements thereafter. In report No. 494 dated 29 June 2001, there is a similar graph, tracking the cash cost of ethane, the average spot price of ethylene and the NTCP from 1998 to the date of the report and forecasting movements thereafter. The same report contains a graph comparing the average spot price of ethylene with the NTCP, and yet another graph comparing NTCP, average spot price and average acquisition price. In report No. 510 (to which I have referred on another point in para [53] above), there is a graph comparing NTCP, average spot price and AAP, and the "delta" (or change) in the relationship between NTCP and AAP. That covers the period from the beginning of 1998 to the date of the report and (as a forecast) to the end of 2002. 61 In other words, all those graphs present the NTCP from a date preceding to a date succeeding February 2001, with no indication that the "NTCP" line (or that which it tracks) had changed, substantially or otherwise, as at February 2001. It may be assumed that CMAI intended such graphs to be meaningful to its clients. They could only be meaningful if the comparisons were of like with like, or if (to the extent that they were not) the difference was explained and its impact identified. Indeed, if there had been a change of significance in the NTCP as at February 2001, such graphs, without any explanation, might be misleading. 62 There is no suggestion in the reports that the change in methodology that occurred after January 2001 renders the comparisons shown by those graphic representations invalid. This suggests that CMAI did not regard the change in methodology as leading to a change in or of the NTCP. 63 The third, and again related, point is that (obviously enough) the NTCP was at all times an element in the derivation of the AAP. That is because the AAP sought to capture the actual overall acquisition price achieved by the range of pricing mechanisms that included monthly contract settlements (and discounts therefrom), spot, export support and tolled prices. If there had been a change in the nature of, or of a material kind in, the NTCP then, necessarily, there would have been a corresponding change in the AAP. CMAI continued after Febraury 2001, as it had done before, to report the AAP to its clients, and to prepare graphs comparing the AAP with other data. As with the NTCP, those comparisons often covered periods both before and after February 2001. At no time did CMAI indicate to its clients that there had been a change in the AAP of such a kind that the graphs no longer (after February 2001) compared like with like. Again, this suggests that CMAI did not regard the change in methodology as leading to a change in or of the NTCP. Ms Hubbard's evidence 64 Ms Hubbard expressed the view that the change in the methodology that I have described meant that there was a change in the NTCP. In her first supplementary report dated 22 April 2005, she described the change as a "decision to discontinue any further adjustments to the Index around January 2001." (The reference to "Index" is, as I have said, to be read as a reference to the NTCP.) 65 Ms Hubbard referred to the history of events leading up to the change, including the special adjustment made in the second half of 2000, which she described as "the last revision CMAI made to the Index" and as one made "in response to market changes prior to the date the revision was announced." She referred to the fixing of the difference between the benchmark or contract price and the NTCP at US$0.04 per pound and concluded: "Because of this decision by CMAI, the Index no longer represents the market it was intended to represent, constituting a change in the Index as of January 2001. Contracts with negotiated monthly prices do not depend on outside indices to set prices, and are not affected by the discrepancy between the monthly price and the Index." 66 I have difficulty in accepting this evidence as evidence of a change in the NTCP, rather than as evidence of a change in the methodology whereby the NTCP was derived. Huntsman Australia relied on an observation of Aickin J in Minnesota Mining and Manufacturing Company v Beiersdorf (Australia) Ltd (1980) 144 CLR 253 at 270. His Honour was discussing the weight to be given to the evidence of a court expert. He said, of the case where a court expert gave evidence of the accepted technical meaning, in a particular branch of science, of words used in a specification: "The extent to which the views of a court expert on matters such as that could prevail over expert evidence given on oath is a matter which does not appear ever to have arisen. It would however seem that the court should prefer the evidence given on a matter which requires expert evidence, so long as there was no sound reason for rejecting such evidence." 67 Huntsman Australia submitted that, by this observation, Aickin J had indicated that the court should prefer the views of a court expert over the views of other expert witnesses called in the case where there is a conflict. I am not sure that this is how his Honour's observation should be understood: particularly since, on the preceding page, his Honour had cited with apparent approval the observation of Lord Greene MR in Non-Drip Measure Co Ltd v Strangers Ltd (1942) 59 RPC 1 at 24 to the effect that the court was not bound to accept a report from a court expert. In any event, I think, his Honour's observation, even if it should be so understood, could not have been intended to apply to a situation, such as the present, where the evidence of the court expert has been tested in cross-examination. Again, I think, his Honour's citation of the words of Lord Greene MR in Non-Drip Measure makes this clear. 68 In a case such as this, where there has been cross-examination of the court expert, it is necessary to assess the evidence-in-chief of that expert in the light of, at least, the cross-examination. Further, I think, the evidence should be assessed against other relevant evidence. I do not think the fact that an expert is a court expert, rather than an expert called by a party, relieves the court of its usual obligation to assess and weigh that evidence as best it can. I do not understand Aickin J's observations to mean that (to take an extreme example which I do not intend to be referable to the present facts) the court is obliged to accept even illogical or unfounded evidence, simply because it is given by a court expert. 69 I have difficulty in accepting the basis upon which Ms Hubbard predicates her observations. That view was, as I have said, that CMAI decided "to discontinue any further adjustments to the Index around January 2001." On Mr Eramo's evidence, CMAI did no such thing. It continued to adjust the NTCP, but changed the method by which it did so. 70 Indeed, and somewhat inconsistently, Ms Hubbard agreed that after January 2001, CMAI continued to adjust the NTCP "up or down in accordance with the feedback [Mr Eramo] obtained on settlement occurring involving large buyers on the monthly negotiations" (T 60.44). However, she said, she had carried out no analysis to see how the NTCP related to the pure contract ethylene market price for the years 2000 or afterwards (T 58.34-.41; T 59.27-.30). Further, Ms Hubbard's evidence suggests that, to the extent that she did have information on the point, the NTCP continued to reflect movements in the market (T 68.7-69.16). 71 Another problem that I have with Ms Hubbard's opinion is that it appears to assume that after November 2000, Mr Eramo (or CMAI) made a decision not to adjust the NTCP again if it fell out of alignment with prices in the market (T 60.46-61.4). This appears to be either consistent with, or a corollary of, Ms Hubbard's understanding that CMAI had made a decision "to discontinue any further adjustments to the Index around January 2001". However, as I have concluded, the better view of the evidence is that CMAI made no such decision; on the contrary, as its report No. 510 shows, it remained prepared at least up until February 2002 to make such an adjustment if circumstances (ie, information reported to it) required. Ms Hubbard's erroneous understanding to the contrary is material to her analysis, and in my view casts doubt upon it. Statement of opinion or statement of fact? 72 Huntsman Australia submitted that there had been a change of a material kind, because prior to February 2001, the NTCP was a statement of opinion, whereas thereafter it was a statement of fact. 73 The starting point for this submission was that, prior to January or February 2001, the NTCP was derived by assessing the discount that the top ten buyers achieved, in their approximately monthly negotiations with sellers, from the benchmark or contract price. The monthly settlement or benchmark price was said to be a fact, not an opinion; by contrast, the level of discount was said to be an opinion, and not a fact. 74 The submission appears to assume that there is one monthly settlement or benchmark price. The evidence on this point is less than clear. Ms Hubbard certainly spoke in terms that might be thought to suggest that there was one benchmark or settlement price for the relevant market (ie, the US Gulf Coast market). However, it became apparent both from her evidence and, certainly, from Mr Eramo's evidence that there were a number of monthly settlement or benchmark prices. In essence, at least from the mid 1990s, each top ten buyer would negotiate both a monthly price and a discount with its supplier. (As I have noted, the earlier practice was that the supplier would notify the buyer of a "benchmark" price and the discount would then be negotiated from that price.) Mr Eramo's evidence, and CMAI's reports, makes it clear that the settlement price was itself a matter of negotiation, and that different settlement prices might be agreed. 75 A possible resolution of the apparent discrepancy between the views of Mr Eramo and those of Ms Hubbard may be that, as Ms Hubbard said (T 66.57-67.6): "In this particular case he is using the word "opinion" because the price settlement has not occurred. In the middle of the box is says, "Two major buyers already agreed to 1 half cent increase for December. Other major buyers were unwilling to accept it." What happens in the market is if somebody else comes up with a better decrease, the buyers with the half a cent who have already agreed to half a cent will get the better number." The reference to "he" was to Mr Eramo, in report No. 494, to which I have referred, in a different context, in para [21] above. 76 This may be compared with Mr Eramo's evidence as to what he meant by contract price settlements: "Q. Mr Eramo, what do you mean to convey by the expression only move this price in line with the agreed to contract price settlements between major ethylene buyers and sellers each month? A. Okay. That takes a little bit of explanation as to how the process works in the US ethylene market. If I am a seller and I have a sales agreement to sell ethylene to the buyer I am required by most of these contracts to provide a nomination. If I plan to change that price to increase the price in the upcoming month, and so I typically do that by e-mail, I may do that by letter, by some form of notification to my buyer that I intend to, for example, increase the price next month by one cent per point, or whatever the increment might be. There is then a period of negotiation to where the buyer and the seller agree to either the proposed increase, or they may agree to leave the price unchanged, or in some cases they actually agree to decrease the price, but in my letter when I talk about the change in that increment it is referring to the results of those negotiations based on the nomination given by the sellers as to how they plan to change the price for the upcoming month. And so when that ends, when that negotiation is over, there is typically a common agreement amongst all the major players and it is then by that increment, if you will, that we decided to start changing the pricing." (T 76.44 to 77.14) 77 Thus, it seems, although there are individual contract settlements, the effect of market practice seems to be that buyers – at least, the top ten buyers – may be given the benefit of the lowest settlement price negotiated. However, the discounts achieved from those settlement prices remained a matter for individual negotiation. The inference is clearly open from the evidence that those (as opposed to the settlement prices) were regarded as confidential, and that buyers were not given the benefit of discounts negotiated by others. 78 Further, confidential pricing data relating to Mr McElliott's employer for the 1998 and 1999 calendar years shows that whilst its contract price moved identically with the NTCP for most of 1998, the differential between the NTCP and the actual pure contract price paid increased during 1999. This occurred, Mr McElliott said, because the price negotiated did not increase as much as the reported monthly settlement. This is not entirely consistent with Ms Hubbard's evidence; and it suggests strongly that there is an element of opinion in CMAI's statement of the net contract, or settlement, price. As the reports also show, there is an element of judgment involved as to whether Mr Eramo had sufficient data available to enable him to report a settlement price. In some months, when the market was unsettled, Mr Eramo would hold the price at the previous month's level; and on some occasions, in the following month, he would revise it on the basis of settlements that had been achieved. 79 Before February 2001, CMAI derived the NTCP by applying its opinion of the discounts achieved (ie, I assume, some overall or average discount gleaned from information given to it by buyers and sellers) to what it believed was the monthly contract settlement price (which itself was derived in the way that I have just outlined). Thus, on the face of CMAI's methodology, the margin might vary according to its opinion of the level of discounts. From February 2001, the margin remained fixed at US$0.04 per pound, and the NTCP moved in accordance with, and at a level of US$0.04 below, the monthly settlement price. 80 This may mean that Mr Eramo formed the opinion that the level of discounting from the monthly settlement price had become fixed, so that it was the monthly negotiations that were the "driver" of the NTCP. But whether or not this is correct, it is plain that Mr Eramo's definition of NTCP, quoted in para [33] above, was as applicable in March 2001 as it had been in December 2000. The NTCP is still calculated "after discounts"; the difference is that the level of discount has been fixed at US$0.04 per pound rather than (perhaps) changing from month to month. It is still a price that CMAI "assumes" the top ten buyers are paying for pure contract ethylene requirements. It is still an "opinion" as to the level of those prices. It is an assumption, or opinion, because it remains based on CMAI's analysis of market feedback. 81 Further insight into the characterisation of Mr Eramo's conclusions can be gleaned from the reports. They contain what was called a "text box" in which CMAI (ie, Mr Eramo) reported on the derivation of the NTCP. For example, the first report proved, No. 412 dated 30 January 1998, contained the following statement: " DECEMBER ETHYLENE SETTLEMENTS Ethylene buyers and sellets in the U.S. reached agreements mid-January regarding contract ethylene prices covering December shipments. These settlements resulted in a 0.75 cents per pound contract reference price reduction. Therefore, the contract benchmark price range equals 25.50 – 25.75 cents per pound in December, on a delivered basis. In our opinion, the net transaction contract ethylene price for December was around 22.67 cents per pound for large buyers (over 400 million pounds per year)." (report emphasis). 82 Report No. 434, dated 31 December 1998, contained a text box to similar effect: " NOVEMBER/DECEMBER ETHYLENE CONTRACT PRICE SETTLEMENTS Discussions between major buyers ad sellers in the U.S. regarding contract ethylene prices covering deliveries for the months of November and December have been concluded. Agreements have been reached which will remain the benchmark contract ethylene price within the range of 19.00-19.25 cents per pound for November and December deliveries. In our opinion, the net transaction contract ethylene price for the months of November and December has remained unchanged at 15.95 cents per pound". 83 Mr Eramo was questioned about this material. He agreed that what he was doing was recording movements in the monthly settlement which were then reflected in the NTCP: "Q. Have a look if you need to at any of the subsequent reports through to December 1998, but what I wanted to suggest is that when we read your text boxes at the time, you do not make any reference to some extra check for discounting of NTP over and above doing your very best to ascertain what is happening on the monthly settlements. Take your time if you need to look at your other reports, but that is what I suggest you get from the text box for the rest of the year? A. No, I - I really don't need to look at the rest of them. You are absolutely correct. The text box is designed to provide our clients with an assessment of the monthly negotiations surrounding the contract reference prices and - and then our opinion, of course, as it is being expressed in there through the net transaction price. The - the piece that you are missing here is in order to assess the reality in the market place, we also have all kinds of discussions, lots of them confidential, with our clients and if we start publishing those in our reports then we won't be in business very long but the idea is to try to represent what is happening in the market place, what is a reasonable assessment, after the negotiations have completed, after the reference prices have moved, what is a reasonable assessment of where those net discount prices wound up. That's what we were trying to do and you will find going backwards from 98 from the time the net transaction price started, that there was lots of movement in that number which was as a result of those discussions with - with buyers and sellers to try to understand the reality in the market place. Q. Would you agree that in 1998, what is recorded in the text box as to the movement in the monthly settlement up or down by a cent or so then gets faithfully reflected in the box or the table showing the NTP price each month? A. That's correct. Q. And would you also agree that nowhere in the 1998 reports can we find any discussion of discounts other than the monthly settlement which you are bringing into account in NTP? A. That is correct. Q. So that a reader of your reports would conclude that you are doing your best to measure the movement on the monthly settlement between the large buyers and the sellers and when you formed a view that the market has settled, you then adjust NTP by that amount? OBJECTION. A. That's correct." (T 89.7-.58) 84 The answer given was allowed to stand, but is to be read as setting out Mr Eramo's understanding of what he was doing, or attempting to do, rather than his interpretation of the impact that his words would have on a reader of the reports. 85 This evidence is inconsistent with the proposition that CMAI, prior to February 2001, was reporting the monthly settlement as a fact and only the discounted price as an opinion. It confirms that the reported monthly settlement was as much (or as little) a matter of opinion as the NTCP; and secondly, and perhaps more significantly, that it was the movements in the monthly settlements that were "faithfully reflected in the NTCP each month". Throughout 1998 (and specifically, as at December 1998 when the supply agreement was made), Mr Eramo was seeking to adjust the NTCP monthly by the measure of the movement in the monthly settlement between large buyers and sellers. In substance, this is precisely what Mr Eramo continued to do in February 2001 and thereafter. 86 Although the evidence to which I have referred was limited to the calendar year 1998 (being the year when the supply agreement was made), text boxes in similar format, and capable of the same analysis, appeared in most monthly reports during 1999, 2000 and 2001. In some months, where negotiations between large buyers and sellers had not concluded, Mr Eramo was unable to express a view on movements in the net contract supply price. However, when negotiations had concluded, or when Mr Eramo was satisfied that he had sufficient information from a sufficient number of market participants, he would set out his views in terms similar to those that I have already quoted. 87 December 2000 was one of those months where the market had not settled. The text box for January 2001 reported that there had been a settlement. It was in the following terms: " DECEMBER/JANUARY ETHYLENE CONTRACT PRICE SETTLEMENT Negotiations between major buyers and sellers concerning contract pricing for December 2000 and January 2001 ethylene deliveries have been concluded. Buyers and sellers have agreed to a multi-month settlement calling for a 0.5 cents increase for December and a 2.0 cents per pound increase for January. There are a number of major buyers and sellers that have also confirmed a three-month agreement, which includes an additional contract price increase of 1.0 cent per pound for February ethylene deliveries as well. Not all parties have concluded negotiations regarding February contract pricing, therefore, CMAI will consider February pricing to remain unsettled . With the conclusion of negotiations for December and January, in CMAI's opinion, the corresponding net transaction contract prices are 29.75 cents for December and 31.75 cents for January." (report emphasis). 88 The text box for February 2001 (the month of the alleged change) read as follows: " ETHYLENE CONTRACT PRICE SETTLEMENT UPDATE Negotiations concerning contract pricing for February ethylene deliveries have been completed by a majority of the major buyers and sellers in the market. The agreement to increase contract prices by 1.0 cent per pound for the month of February was part of a multi-month settlement calling for a total increase of 3.5 cents per pound distributed over the months of December, January and February. December contract prices were increased by 0.5 cents per pound and January by 2.0 cents per pound. In CMAI's opinion, the net transaction contract price for February is 32.75 cents per pound. There were no announcements regarding contract prices for March." 89 Again, the wording of the text box does not suggest that there had been any change from the substance of the methodology during 1998, as explained by Mr Eramo in his evidence at T 89 that I have set out above. 90 Thus, I do not accept the submission (summarised in para [72] above) as justifying the conclusion that there has been a change (let alone a material change) other than a change in the methodology whereby it was derived. Conclusion 91 I therefore conclude that the change in and from February 2001 of the methodology by which the NTCP was derived was not a change in or of the NTCP as it stood in December 1998. I have not overlooked that, on three occasions, Mr Eramo said explicitly that the nature of the NTCP had changed (at T 92.56-93.6, 99.29-.36 and 105.20). On each occasion, Mr Eramo was talking about the NTCP as it now is. Nothing in those passages of his evidence requires a conclusion that the situation of which he was speaking obtained in February 2001 (which, on Huntsman Australia's pleaded case is the date when the change occurred). Even if I were to accept those statements – and I am not sure that I should, when they are considered against all the evidence that has been put on this issue - they would not be decisive of the issue, whether the NTCP changed in or by February 2001. I conclude that it did not. 92 Against the possibility that my conclusion may be wrong, I will consider the question, whether any change that occurred was material in terms of cl 6.4. Although I have not referred, in this section of my reasons, to the evidence on that question, there is some degree of overlap. For present purposes, it is sufficient to say that nothing in the evidence that I now move to consider causes me to question the conclusion that I have expressed. Was any change material? 93 For the purpose of considering this issue, I shall assume, contrary to the conclusion that I have just expressed, that the change of methodology that occurred in January/February 2001 was a change in or of the NTCP. This issue therefore enquires whether, assuming such a change, it can be said that the NTCP changed in a material way. The concept of materiality 94 This issue directs attention to the necessity for any change to be "material". It is not enough that the NTCP has changed; it must have changed "in a material way". In this context, I think, a change would be material if: (1) As a result, the NTCP no longer represented that which, before the change, it had represented or purported to represent; or (2) As a result of the change, and compared to some external and objective or quantifiable reference point, the pricing obligations imposed by adoption of the NTCP became materially different, or imposed materially different benefits and obligations, on the parties. 95 The first limb of the test focuses attention on the characterisation of the NTCP: what it was intended to represent and what, after the change, it did represent. The second formulation directs attention to the consequences to the present parties of the change. Characterisation of the change 96 In substance, the first formulation of this issue is no more than a refinement of the question, whether there had been a change at all. For the reasons that I have given in concluding that there was no change to the NTCP, I think that the first formulation does not indicate that any change that did occur (on my conclusions, the change in the methodology of derivation of the NTCP) meant that NTCP as a result no longer represented what, before the change, it had represented or purported to represent. For the avoidance of doubt, I stress that this conclusion relates to the pleaded date of the change, namely February 2001. Effect of the change 97 The second way of looking at the question of materiality is somewhat more difficult of analysis. 98 I do not think that the question of materiality is directed only to the method of derivation of the NTCP. It is directed to the effect or impact (or consequences) of the change. That is because, in the context of the supply agreement, materiality should be assessed by reference to the effect or impact of the change on the parties. In the present case, it is Huntsman Australia that is asserting materiality; but the question of materiality is to be considered not just by taking into account the impact on Huntsman Australia but also by considering its impact on Qenos. 99 As I have already said, the NTCP is not a real world price, in that it does not necessarily reflect what the top ten buyers (or any of them) paid at any given time for their pure contract ethylene requirements. Indeed, Mr McElliott's evidence (which was unchallenged and which I accept) shows that he, as the buyer for a top ten buyer, expected to achieve, and did achieve, a monthly price for his "pure contract" ethylene that was regularly and significantly lower than the NTCP published by CMAI. NTCP was, however, a real world price for Huntsman Australia and Qenos, because it was chosen by them as the determinant (subject to export support subsidies under cl 6.7 of the supply agreement) of the Purchase Price. Thus, if it could be shown that the change in the method of derivation of the NTCP in January/February 2001 meant that the price so derived changed in some substantial or consequential way, then the change would be material. Thus, I think, it is not possible to assess the materiality of the change simply by looking at the change in some a priori fashion. 100 The NTCP is not inherently capable of measurement against some objective standard or external point of reference. Assessing the effect or impact of the change is difficult because, as the evidence shows, the price for ethylene in the Gulf Coast market is negotiated month by month, and fluctuates constantly. The price will typically change from month to month, although the overall trend, or direction, of changes is usually maintained for periods of at least several months. 101 However, the evidence does permit some comparison to be made between the NTCP over a period of time and other objectively determined prices or indices. One such body of evidence relates to the relationship between the NTCP and the price paid by buyers large and small for their "pure contract" ethylene requirements over a period of years. Another body of evidence relates to the relationship between NTCP and the weighted average price of ethylene over a period of years. Before I deal with that evidence, I will look once more at the evidence of Ms Hubbard, (Mr Eramo did not in terms deal with this aspect of materiality) and Mr McElliott. Ms Hubbard's evidence 102 In her first supplementary report, one of the questions with which Ms Hubbard dealt (having concluded that there was a change in what she called the "Index" – ie, the NTCP) was: "What has been the impact of that change, if any on the Purchase Price set by reference to the Index?" 103 She said: "Since the basis of the Index is no longer adjusted, a calculation of a purchase price using the Index as a measure to reflect the US Gulf Coast contract price may result in a price higher than the actual US Gulf Coast Contract Price. Qenos submits "that the US Gulf Coast Contract Price is 15% to 20% lower than the Index … ". The conclusion that the Index has not changed can be tested by observing the relationship between the Index and the amount paid by top 10 buyers … My opinion is that this test would fail. In regard to the Index, the correct relationship to be observed in such a test would be between the Index and the negotiated monthly contract price. Pricing information is privileged. Qenos' US shareholder as well as Huntsman Corporation [the parent of Huntsman Australia], may have file evidence that would demonstrate the monthly negotiated price contained in contracts or contained in proposed contracts decreased by US 2.5 cents per pound between mid 1999 and late 2000, with at least one "top 10" buyer." 104 Firstly, the opinion is difficult to understand; indeed, if it is read literally, it is wrong. A purchase price using the Index will always be the US Gulf Coast Contract Price, because that is what the Index is. See paras [8] to [10] above. Ms Hubbard's proposition that the Purchase Price calculated using the NTCP may be "higher than the actual US Gulf Coast Contract Price" cannot be correct; and it would appear that Ms Hubbard was alive to the significance of the capitalised initial letters in "US Gulf Contract Price" because, when she used that phrase in the preceding line of her opinion, the initial letters of "contract price" were not capitalised. 105 Further, that portion of Ms Hubbard's opinion appears to conflate two separate questions under cl 6.4 – namely, whether there is a change in a material way or whether the index ceases to reflect the US Gulf Coast contract price for ethylene. 106 Finally, although Ms Hubbard expresses doubt about the Qenos submission to which she refers, she does not identify anything that has been proved in evidence that would support her ground for rejecting it. Thus, I do not regard Ms Hubbard's expression of opinion as conclusive on the point. Mr McElliott's evidence 107 As I have said, Mr McElliott was employed by a top ten buyer of ethylene in various roles between 1989 and 2004. In the course of his employment, he negotiated ethylene supply contracts on behalf of his employer with a supplier whom he identified as Huntsman US (either the parent, or a related company in the United States, of Huntsman Australia). Mr McElliott noted that for the period when Huntsman US was a supplier to his employer, from the mid 1980s through to the early 1990s, the monthly price settlements negotiated were (once CMAI began to publish the NTCP) "usually about 5 to 15 percent below" the NTCP (affidavit, para 30). This information is somewhat limited, although (to anticipate) one of the criticisms made by Qenos of Huntsman Australia's case was that Huntsman Australia had not produced pricing data from its parent or related corporations, covering the period before and after February 2001. I deal with this point below. 108 Of more immediate relevance, Mr McElliott referred to price data comparing the NTCP with prices negotiated by him on behalf of his employer from one supplier in the period January 1998 to December 2002. The actual information on this is confidential. For that reason I will not refer to the detail. However, the material shows (in tabular rather than graphic form) firstly that the prices negotiated were consistently below the NTCP for the period in question (with the exception of May 2002, when the price negotiated with the large supplier was not available); and secondly, that the relationship between the two remained remarkably constant. In other words, the movements in the NTCP tracked with substantial accuracy and consistency the movements in the actual negotiated price, notwithstanding that the actual negotiated price was lower than the NTCP. 109 Further, Mr McElliott prepared and exhibited a graph "comparing the weighted average monthly prices I negotiated under all my supply contracts and NTP" for the period from January 1995 until September 2003. Again, the source data is confidential. 110 Mr McElliott noted that the prices were "the actual prices paid to each supplier for volume subject to contract minimum volume commitments, "weighted" by the percentage supply from that supplier, to the total volume purchased from all suppliers for that month." (affidavit, para 34). The graph displayed the "pure contract" ethylene purchases from all suppliers for the period in question. Mr McElliott noted that the prices "do not contain any effects of spot purchases or incremental purchases outside of minimum contract volume commitments." (ibid) 111 The graph shows a consistent relationship between what Mr McElliott called the "CMAI Contract Net Transaction" (ie, the NTCP) and the weighted average "Actual Transaction Price". The latter was consistently below the former. For the period from about January 1998 until about September 1999, the average discount to the NTCP was 16%; and from about September 2001 to about September 2003, 17%. The graph also shows, as well as the price levels, the percentage discount from month to month. Although (as one might expect) the relationship changes from month to month, it is, as with the other material identified by Mr McElliott, substantially consistent. The actual contract price is always lower than the NTCP, and they move in unison. The negotiated price tracks with substantial accuracy the movements in the NTCP. Other evidence of price correlations 112 A substantial volume of pricing data was provided or obtained by the parties. Qenos submitted the pricing data to close analysis. I have referred already to some of those analyses. However, I think, the most significant analysis was that made of a comparison between the NTCP over the period January 1998 to December 2004 with the total weighted average price obtained from all the data available for that period. That analysis showed a consistent relationship between the two. The total weighted average price was always lower than the NTCP. But it moved (up or down) consistently with the NTCP, and for much of the time the relationship between the two, although not constant, was consistent. Although it is correct to say that the relationship was more closely consistent up until about mid 2001 than it was thereafter, the two lines move in the same way thereafter although there is more fluctuation in the interval between them. 113 The submissions for Huntsman Australia did not really take issue with Qenos' analysis of the pricing data. In reply (both oral and written), Huntsman Australia emphasised that its case was based on the evidence of Mr Eramo, supported by the evidence of the court expert, Ms Hubbard. Huntsman Australia's alleged failure to provide pricing data 114 Qenos sought the production of pricing data from Huntsman Australia: specifically, records relating to the "Pricing Data" provided by Huntsman Australia in submissions to Ms Hubbard, including records recording the pricing of certain monthly transactions identified in that Pricing Data. 115 Huntsman Australia's response was that it "is not in possession of any of the documents referred to in the notice to produce". The documents in question were the documents of its parent or related company, Huntsman Petrochemical Corporation. That company's attitude was that the documents were "extremely commercially sensitive", that disclosure of them to a competitor "would put HPC at a competitive disadvantage and would likely cause HPC substantial detriment", and that it would be "difficult, time-consuming and costly" to locate the documents. 116 It is clear, both from the correspondence relating to the notice to produce and from other circumstances (for example, the need for Huntsman Australia to obtain instructions from the United States in relation to a request made by a third party to have access to the "pleadings" in this matter) that significant commercial decisions of Huntsman Australia are taken either by, or in consultation with, Huntsman Petrochemical Corporation or other related companies in the United States. I infer that, if those companies thought it in their interests to do so, pricing data could have been produced. 117 With limited exceptions (which do not relate to the period immediately before and after February 2001), neither Huntsman Australia or its United States relatives produced any pricing data. Specifically, they produced no pricing data to show that there was a change, material or otherwise, in the relationship between NTCP and other indices (such as the AAP) or external objective data (such as prices charged for pure contract supplies to large purchasers from Huntsman Petrochemical Corporation). Thus, Huntsman Australia adduced no evidence in support of its claim that the change was material; or (to jump ahead) its claim that the NTCP after February 2001 ceased to reflect US Gulf Coast contract prices for ethylene. 118 Qenos submitted that Huntsman Australia had thus failed to prove an essential element of its case. It submitted that I could draw an adverse inference, and that the inference would be consistent with Mr Eramo's evidence, to which I have already referred, that no one after February 2001 told him that the NTCP was "out of whack" with monthly settlement prices. As will be seen, I agree in substance with the submission of Qenos on the principal issue. It is accordingly unnecessary to consider whether an inference of the kind authorised by Jones v Dunkel (1959) 101 CLR 298 should be drawn. Analysis 119 The conclusion to be drawn from such pricing data as has been proved is that there was no significant shift in the relationship between NTCP and such other indicia of price as may be derived from that information. Neither side submitted the data to statistical analysis, and I have not attempted to do so. Thus, my observations of consistency or inconsistency are based on a visual comparison of (for example) lines on a graph. 120 It is perhaps not surprising that Huntsman Australia did not really seek to deal with this aspect of the case. As I have said, its case was based on the evidence of Mr Eramo and Ms Hubbard, not on evidence of prices or observations of relationships between different kinds of prices. 121 I do not think that this approach can succeed. Firstly, Mr Eramo did not give evidence that deals directly with the question of materiality. Secondly, as I have said, I do not accept Ms Hubbard's evidence on this point. Thirdly, I think, it is instructive to look at such pricing information as is available. 122 It is certainly correct to say that the variation between the NTCP and other indicia of price appears to be (or to become) more volatile after February 2001 than it appears to have been before. But this does not, of itself, indicate that the increased volatility relates to the change in the methodology used to calculate the NTCP. It may (for example) be a result of the increasing use of pricing mechanisms other than those intended to be measured by NTCP. 123 In this context too, I think, CMAI's continued references to the NTCP in its monthly reports, and its continued comparisons of the NTCP with other data (see paras [59] to [63] above) is relevant to the question of materiality (assuming that there had been a change) as it was to the question, whether there had been a change at all. I think it suggests strongly that, in CMAI's opinion, the change in the method of derivation of the NTCP did not lead to a change, material or otherwise, in the NTCP itself. Conclusion 124 Thus, if it were necessary to do so, I would conclude that any change in the NTCP was not material. "No longer reflects the US Gulf Coast contract price for ethylene" 125 If (contrary to my conclusion) there has been a change, or a material change, in the NTCP, then it is not necessary to consider this question. If, however, my conclusion is correct then this question does require analysis. 126 By the relevant part of cl 6.4, the parties are to determine another value or index if the NTCP "no longer reflects the US Gulf Coast contract price for ethylene". Huntsman Australia's case, put very much in an alternative and subsidiary way, was that the circumstances that led to the change in the method of derivation of the NTCP meant that after January 2001 the NTCP no longer reflected the US Gulf Coast contract price for ethylene. 127 This raises two questions of construction. The first is: what is meant by "reflects"? The second is: what is the "US Gulf Coast contract price for ethylene"? However, those questions cannot be considered independently of each other, because the meaning to be given to the verb "reflects" will depend on what is to be reflected: ie, on the meaning to be given to "the US Gulf Coast contract price for ethylene". I therefore turn first to the second question of construction. The US Gulf Coast contract price for ethylene 128 Clause 6.4 uses the defined words "US Gulf Contract Price" before it uses the words "US Gulf Coast contract price for ethylene". The former is a defined expression (see para [10] above). The latter is not. 129 The effect of the definition of US Gulf Contract Price is to equate it to the NTCP. Clearly, that was not what was meant later on in cl 6.4 by reference to the "US Gulf Coast contract price for ethylene": if that were what was intended, there would be an obvious absurdity ("if … the US Gulf Contract Price … no longer reflects the US Gulf Contract Price … "). 130 The parties (and the point is the same whether the parties are regarded as Huntsman Australia and Orica, or Huntsman Australia and Qenos) must be taken to have been familiar with the US Gulf Coast ethylene market. They must be taken to have been familiar with the variety of pricing mechanisms employed in that market when the agreement was made in December 1998. They must, therefore, be taken to have been familiar with the concepts of monthly settlement prices, negotiated monthly contract prices, spot pricing and all the other pricing mechanisms to which I have referred. Further, they must be taken to have been familiar with the relative volatility of that market; and, in particular, with the frequent (usually monthly) changes in prices. 131 Thus, I think, the parties must be taken to have understood that there was no one price for ethylene in the US Gulf Coast market. A price that might be paid in that market would depend on a number of factors: for example, whether the buyer was a large (including top ten) or small buyer; and the pricing mechanisms negotiated by the buyer with its supplier or suppliers (including not just the different kinds of mechanisms but their relative weighting in the overall monthly purchase). 132 At the same time, the parties must have known that an agreement using the NTCP as the sole determinant of the price to be paid for ethylene would not necessarily lead to the same price as one that incorporated a variety of pricing mechanisms. However, whether for reasons of certainty or otherwise, they agreed to use it as the sole determinant (subject, of course, to change under cl 6.4) of their "Purchase Price". 133 Huntsman Australia did not articulate a definition of the phrase "US Gulf Coast contract ethylene price". However, I take from its closing submissions that it would contend that the phrase refers to "the price which the large buyers in the US Gulf Coast were actually paying" (T 128.7). It is not clear whether this referred to the "pure contract" prices (ie, those on which the NTCP was intended to report) or actual weighted average prices (ie, those on which the AAP was intended to report). However, reading that submission in context (including the reference to "Ms Hubbard's evidence" that immediately follows it), and bearing in mind also Huntsman Australia's opening at T 12.45 (again referring to Ms Hubbard's evidence), I think that Huntsman Australia's position was that the reference to "US Gulf Coast contract price for ethylene" should be read as a reference to the "pure contract" price. 134 Qenos' primary position, articulated consistently in submissions, was that the expression referred to the "pure contract" price. However, Qenos put a number of alternatives. 135 In my view, the primary position for which Qenos contended, and the position for which (as I understand it) Huntsman Australia contended, is correct. In substance, I think, the expression "US Gulf Coast contract price" is shorthand for "the US Gulf Coast Contract ethylene "net transaction contract price" per tonne for ethylene sales on the US Gulf Coast": the words taken from the definition in cl 1 of the expression "US Gulf Coast Contract Price". 136 There are circumstantial and textual reasons why this is so. The long expression taken from the definition in cl 1 is the statement of the referent or index, measured by CMAI (namely the NTCP), that the parties chose as their price. Their understanding, at the time they entered into the supply agreement, was that the NTCP, whilst it might not be a price at which a, or any, top ten buyer bought for a particular month, was nonetheless a proxy for, or approximation of, such a price (or the average of such prices for the top ten buyers). It was because the parties tied their price to that referent (as measured, or approximated by the NTCP) that they sought to guard against the possibility that the NTCP might cease to be a proxy for that referent. Equally, it is because the parties tied their price to that referent that the words in cl 6.4 "the US Gulf Coast contract price for ethylene" should be taken to connote their referent. Any other connotation would have the rather strange result that the parties would be required to determine a substitute value or index if the NTCP ceased to reflect some other index or measure which was not the one chosen by the parties as their price determinant, but nonetheless continued to reflect the referent that was the chosen price determinant. 137 Further, cl 6.7 of the supply agreement entitled Huntsman Australia to the benefit of export support prices in certain circumstances. As I have said, what are in effect discounts, or lower prices, obtained through export support pricing are not measured in the NTCP; they (along with effective discounts achieved by the use of other mechanisms such as spot or tolled pricing) are measured in the AAP. If the reference to the US Gulf Coast contract price for ethylene were intended to be a reference to the AAP, Huntsman Australia would receive a double benefit. Firstly, to the extent that cl 6.7 applied, it would receive the benefit of the lower, export support, prices. Secondly, to the extent that export support prices in the US Gulf Coast market overall were incorporated into the AAP, it would receive that benefit again. This would lead, although on a smaller scale and over a longer time frame, to the death spiral to which both Mr Eramo and Mr McElliott referred. I do not think that the parties intended such consequences. 138 Accordingly, I conclude, the parties used the expression "US Gulf Coast contract price for ethylene" to refer to, or connote, the NTCP. "Reflects" 139 Huntsman Australia submitted that the verb "to reflect" should have its dictionary meaning of "to appear imaged or mirrored". Thus, it submitted, the second limb of cl 6.4 would be engaged "if the Index no longer mirrors the US Gulf Coast contract price for ethylene." Presumably, by that submission, Huntsman Australia intended to convey that the relationship between the NTCP and the US Gulf Coast contract price for ethylene must be mirror perfect (perhaps, without the side to side image reversal that is characteristic of mirror imaging). 140 Qenos submitted that the verb "reflects" must be construed having regard to the extent to which, when the supply agreement was made in December 1998, the NTCP actually did reflect, or approximate to, the US Gulf Coast contract price for ethylene. Further, it submitted, "that reflection was never one of absolute replication". 141 In substance, I think, Qenos' submissions are correct. The parties must have known that the NTCP was not a real world price. Indeed, as I have pointed out in para [136] above, they must have understood that it was not necessarily a price at which a, or any, buyer might pay for its pure contract requirements in any particular month (or the average of those prices for a number of buyers); but, instead, a proxy for or approximation of such price or prices. 142 Further, the parties must be taken to have been familiar with the relationship between the NTCP and other indicators of price to which I have referred in paras [108] to [112] above. (Even if the parties did not know the actual pricing information that was the subject of the analyses referred to in those paragraphs, I have no doubt that they well understood the trends, or relationships, displayed by those analyses.) 143 Thus, the parties having chosen as their price determinant something that was not a precise, or mirror, image of US Gulf Coast contract prices for ethylene, they cannot be taken to have intended that they should change their price determinant if at any time after the making of the agreement it ceased to reflect precisely, or mirrorlike, that price. Such a construction would necessarily mean that the parties intended, or understood, that the mechanism of the second limb of cl 6.4 would almost inevitably be engaged within a month or so after their contract was made. I cannot accept that this is what the parties thought. Rather, I think, they must be taken to have intended that the second limb of cl 6.4 would be engaged if at any time in the future the NTCP ceased to reflect the US Gulf Coast contract price for ethylene to the same extent, or with the same degree of approximation, as it had done in (and up to) December 1998. Analysis 144 On that construction of the second limb of cl 6.4, Huntsman Australia's case based on it must fail. There is no pricing evidence that shows that the NTCP from February 2001 ceased to reflect the US Gulf Coast contract price for ethylene to the extent, or with the degree of approximation, that it had done either immediately before then or (the proper test) as at and before December 1998. There is no evidence of the pure contract ethylene prices paid by the top ten buyers (or any of them) in the US Gulf Coast contract market after February 2001. Thus, there is no basis to compare and analyse the relationship between the NTCP and those prices from February 2001, for the purpose of comparing it with the relationship between NTCP and equivalent prices in and before December 1998. 145 Again, however, Huntsman Australia relied on Ms Hubbard's evidence. But her evidence did not supplement the deficiency to which I have referred. She had not tested the effect of the change on pure contract prices for ethylene (T 58.34-.38). She did have some pricing data for 2001, which she compared to the NTCP for some although not all months. However, the result of that comparison was not set forth in her reports (T 60.1-.29). As she said (in relation to the 2001 calendar year), she had "no way of knowing what happened with buyers in the marketplace" (T 68.26), and "it would be dependent on [CMAI's] report or a report coming from one or two other consultants" if she wanted to know how prices had moved over 2001 (T 68.32) and over 2002, 2003 and 2004 (T 68.56-69.5). 146 Ms Hubbard's evidence on "no longer reflects" (in her first supplementary report dated 22 April 2005) referred to structural changes in the US ethylene industry from 1995 to 2000, which together "resulted in observed downward price pressure on ethylene contract price structures around the end of 2000". That has nothing to do with the change in the method of derivation of the NTCP that took effect in February 2001. Further, it is apparent that this aspect of Ms Hubbard's opinion was based on the increasing use of "spot prices in the minimum contract price calculation", and "the extent of blending spot and contract pricing". Thus, it appears, Ms Hubbard was taking into account pricing mechanisms that were never intended to be measured by the NTCP. I have difficulty in seeing how this could demonstrate a change in the NTCP, let alone how it could have the result that the NTCP ceased to "reflect" that which it was intended to reflect. In truth, I think, Ms Hubbard was saying that as a result of the changes to which she referred, the NTCP ceased to reflect the actual overall prices being achieved by large buyers through use of the full panoply of pricing mechanisms to which I have referred: something that NTCP was never intended to measure or reflect. 147 That this is so is confirmed by some pricing data on which Ms Hubbard relied: an ethylene supply agreement between a large seller and a large buyer involving something called the weighted average sales price (T 73.42). That was a contract under which (as Ms Hubbard acknowledged) there was no requirement for monthly negotiation, so that it was not a contract that would be tracked by the NTCP in any event (T 74.1-.13). 148 Ms Hubbard also relied on proposals that did not mature into a contract. I do not think that any weight can be attributed to these, where the inquiry is focussed on the relationship between certain kinds of contract prices and the NTCP. 149 Thus, I do not regard Ms Hubbard's opinion as determinative. Conclusion 150 I therefore conclude that Huntsman Australia has not made out its alternative case that, on and from February 2001, the NTCP ceased to reflect the US Gulf Coast contract price for ethylene. Postscript: a Browne v Dunn submission 151 I have referred above to pricing data and to graphs and other material, and submissions, based on it. Qenos relied on that material – more extensively than these reasons indicate – to support its submissions that, in various respects, I should not accept the evidence of Ms Hubbard or Mr Eramo. Huntsman Australia submitted that Qenos had not adequately put that material, and the conclusions said to flow from it, to Ms Hubbard and Mr Eramo. Qenos maintained that it had done so. 152 I do not need to resolve this dispute. The conclusions to which I have come on the principal disputes – the existence of change, and the materiality of any change, in the NTCP – do not depend in a critical way on, although to an extent they are reinforced by, that material. I am satisfied that the reasons that I have given for not accepting Ms Hubbard's evidence on both points and Mr Eramo's on the first (as I have said, he did not really deal with the question of materiality) were sufficiently explored in cross-examination. Likewise, in relation to the remaining issue – ceased to reflect – the conclusion to which I have come does not depend critically on, although again it is to some extent reinforced by, the pricing material. 153 In my judgment, there is no relevant unfairness that would require me to set aside or reconsider the conclusions to which I have come on those issues. Conclusion overall 154 I conclude that Huntsman Australia has not made out the case propounded in para 10 of its statement of contentions (see para [3] above). It is therefore unnecessary for me to consider the conventional estoppel defence propounded by Qenos in paras 23 and 24 of its defence (again, see para [3] above). 155 It would seem to follow that the proceedings should be dismissed with costs. However, I will stand the matter over to enable the parties to consider these reasons and either to bring in orders to reflect them or to put such submissions as they wish on the form of orders to be made and on the question of costs. That is to be done within 14 days from today. ****** 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.