Huntsman Corporation Australia Pty Ltd v Qenos Pty Ltd [2007] NSWCA 97

New South Wales Court of Appeal

CITATION: Huntsman Corporation Australia Pty Ltd v Qenos Pty Ltd [2007] NSWCA 97

HEARING DATE(S): 29, 30 January 2007

JUDGMENT DATE: 30 April 2007

JUDGMENT OF: Mason P at 1; Hodgson JA at 2; Santow JA at 3

DECISION: Appeal dismissed. Appellant to pay the first respondent's costs.

CATCHWORDS: CONTRACT – Construction – Whether basis for setting price had changed such as to constitute a "change" that was "material" in terms of the relevant provision of the contract.

CASES CITED: Browne v Dunn (1893) 6 R 67 Jones v Dunkel (1959) 101 CLR 298

HUNTSMAN CORPORATION AUSTRALIA PTY LTD ACN 083 984 187 (Appellant) PARTIES: QENOS PTY LTD ACN 054 196 771 (First Respondent) OLEFINES PTY LTD ACN 005 625 276 (Second Respondent)

FILE NUMBER(S): CA 40568/05

COUNSEL: F M DOUGLAS QC/ D VILLA (Appellant) J GLEESON SC/R FRANCOIS (Respondents)

SOLICITORS: Minter Ellison (Appellant) Cornwall Stodart (by its agents Hicksons) (Respondents)

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): SC 50057/04

LOWER COURT JUDICIAL OFFICER: McDougall J

LOWER COURT DATE OF DECISION: 3 June 2005

LOWER COURT MEDIUM NEUTRAL CITATION: [2005] NSWSC 494

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40568/05 SC 50057/04

MASON P HODGSON JA SANTOW JA

30 APRIL 2007 HUNTSMAN CORPORATION AUSTRALIA PTY LTD v QENOS PTY LTD Judgment 1 MASON P: I agree with Santow JA. 2 HODGSON JA: I agree with Santow JA. 3 SANTOW JA: INTRODUCTION The appellant, Huntsman Corporation Australia Pty Ltd ("Huntsman") is the purchaser of ethylene from Qenos Pty Ltd ("Qenos") the first respondent, pursuant to an Ethylene Supply Agreement dated 23 December 1998 ("the Agreement") (Blue, 1, 103ff). The Agreement was originally made between Huntsman as purchaser and Orica Australia Pty Ltd as supplier. The obligations of Orica under the Agreement were novated to Qenos (then known as Kemcor Australia Pty Ltd) by deed made on 30 June 1999 (Red, 33T-34E). The second respondent, Olefines Pty Ltd, is the owner of the Botany ethylene plant, and the guarantor of Qenos' obligations to Huntsman. 4 Pursuant to the Agreement, Orica agreed to supply and Huntsman agreed to purchase "Ethylene for the Purchase Price … until at least 30 June 2011" (cl 2), the latter being based on a particular published index selected for that purpose. However, if that index used to calculate the Purchase Price "changes in a material way", the Agreement in that event requires substitution of another index by a particular procedure. This appeal challenges the decision of McDougall J, the trial judge, that such event had not occurred, that is to say there was no such change to the chosen index, but if there was it was not material. To succeed the appellant must establish both that there had been such a change and that it was material.