ACI Plastics Packaging v SK Networks Australia Pty Ltd [2008] NSWSC 89

New South Wales Supreme Court

CITATION : ACI Plastics Packaging v SK Networks Australia Pty Ltd [2008] NSWSC 89

HEARING DATE(S) : 14 February 2008

JUDGMENT DATE : 21 February 2008

JUDGMENT OF : Malpass AsJ

DECISION : Summons dismissed; plaintiff to pay the costs of the Summons.

CATCHWORDS : COMMON LAW - construction of contract - meaning of "month of shipment"

CATEGORY : Principal judgment

PARTIES : ACI Plastic Packaging (Plaintiff) SK Networks Australia Pty Limited (Defendant)

FILE NUMBER(S) : SC 2007/13932

COUNSEL : ST Chrysanthou (Plaintiff) B Lum (sol) (Defendant

SOLICITORS : Edwin Davey Commercial and Litigation Lawyers (Plaintiff) de Mestre & Co (Defendant)

LOWER COURT JURISDICTION : Local Court

LOWER COURT FILE NUMBER(S) : 5630/06

LOWER COURT JUDICIAL OFFICER : Lulham LCM

LOWER COURT DATE OF DECISION : 6 July 2007

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Associate Justice Malpass

Thursday 21 February 2008

2007/13932 ACI Plastics Packaging v SK Networks Australia Pty Ltd

JUDGMENT 1 HIS HONOUR: These proceedings arise out of a dispute between the parties concerning the price to be paid in respect of the sale and delivery of a product known as PET Resin. 2 There had been an earlier contractual arrangement between the parties. A new written contract ("the contract") was made (dated 11 March 2007). It is common ground that it was a document prepared by the defendant. The contract contained provisions concerning the calculation of the price for the product (the contract required payment of a price plus a rebate). The rebate was to be calculated by reference to "the month of shipment". 3 The contract was headed "Basic Agreement". It was expressed to have application to any and all sales and purchase between the parties. The contract contained nine paragraphs. The paragraphs were respectively headed "General Terms and Conditions", "Quantity", "Effective Period", "Delivery", "Price", "Payment", "Amendments", "Entire Agreement" and "Governing Law and Arbitration". 4 The paragraphs include the following:- "4. Delivery. CRF Melbourne in Sea Bulk 5. Price. Price of the Products for each month shall be determined by Average of Far East Exports (Approved) Price (hereinafter 'PCI Price') posted by 'PCI monthly Business Report' issued on the month of shipment, by following formula. *'PCI Price' + USD 200/mt = CRF Melbourne … 6. Payment ACI shall make a full payment by telegraphic transfer within 30 days from B/L date. Provided that, the outstanding balance to be paid under this Agreement and/or the Individual Purchase Order shall be subject to credit availability set by QBE Insurance." 5 For purposes of paragraph 6, it is common ground that the "B/L date" was 1 May 2005. 6 The earlier contractual arrangements did not use the phrase "month of shipment". 7 A shipment of the product was delivered by the defendant to the shipping company's yard in Korea on 26 April 2005. It was loaded onto the ship (MSC Alabama 0509) on 30 April 2005. The ship departed port on 1 May 2005. 8 Dispute arose as to the calculation of the rebate. The defendant calculated the amount of the rebate on the basis that the month of shipment was April 2005. The plaintiff has contended that the rebate should have been calculated on the basis that the month of shipment was May 2005. If that contention be correct, it is common ground that the plaintiff does not owe any money to the defendant. 9 Proceedings were brought in the Local Court. The sum claimed was the amount of $36,158.94 together with interest and costs. The proceedings were defended. There were no issues of fact. The Court had agreed facts and issues. A hearing took place before Lulham LCM. The Magistrate found in favour of the defendant. 10 The plaintiff has brought an appeal to this Court. The Summons was filed on 2 August 2007. The hearing took place on 14 February 2008. 11 It was expressed to be common ground between the parties that the issue was a matter of construction of the phrase "month of shipment" and that these words should be given their ordinary and natural meaning. The Magistrate purportedly approached his task by seeking that meaning. Despite this, he was influenced in the reaching of his decision by submissions made on behalf of the defendant relying upon legal definition and custom. 12 He did not have any evidence before him concerning custom. All that he had on such a matter was what was said in submissions from the defendant. 13 He did have before him various documents which had been prepared by the defendant. The documents contained language such as "shipped on board", "shipping date" and "ship by". The relevant date for each of these pieces of language was 1 May 2005. 14 In his judgment, the Magistrate canvassed the submissions made by the parties and concluded it with the following:- "The decisions referred to in the extract support my finding that ' shipment ' does include the loading of the goods onto the ship. They support that definition of the word given its natural and ordinary meaning. For all of those reasons, I am satisfied that the plaintiff's claim must succeed." 15 The plaintiff stresses that the onus is borne by the defendant to make out its construction argument and that because it prepared the contract any ambiguity should be construed against it. 16 The Court was informed that a PCI price is issued each month. Accordingly, the task for the Court is to identify the applicable month. 17 In some respects, the dictionary meanings are unhelpful. However, one theme seems to emerge from them. A distinction is drawn between "shipping" and "transportation". The latter concerns the carrying, conveying or removing from one place to another. The word "shipment" may contemplate either the consignment of goods for transportation or the act of shipping them for transportation ("shipping" having the meaning of to put on board). 18 In my view, "shipment" in the contract has the meaning of the delivery of the goods to the ship for transportation. This process is completed when the goods are placed on board the ship. 19 My perusal of dictionary meanings has found no support for the contention that "shipment" means the departure date of the transportation. 20 It does not seem to me that the phrase "monthly shipment" has any ambiguity. I consider that the defendant discharged the onus had by it before the Magistrate. 21 In the circumstances it seems to me that the "month of shipment" is the month during which the product was placed on board the MSC Alabama (30 April 2005). 22 Accordingly, I have come to the view that the Magistrate reached the right result. This means that the appeal must fail. 23 The Summons is dismissed. The plaintiff is to pay the costs of the Summons. The exhibit may be returned. **********