Rehau Pte Ltd v AAP Industries Pty Ltd [2018] NSWCA 96

Rehau Pte Ltd v AAP Industries Pty Ltd [2018] NSWCA 96

The Supply Agreement, read as a whole and against its commercial purpose, incorporated an implied exclusivity term requiring Rehau during the currency of the agreement to purchase all its requirements for the nine specified articles exclusively from AAP. That construction was supported by the fixed price provisions, the obligation that Rehau shall purchase from AAP, AAP's obligations to reserve production capacity and maintain buffer stock, the tooling provisions, and the provisions allowing covering purchases or withdrawal in specified circumstances. The Further Supply Agreements did not incorporate the exclusivity term because the orders and dealings did not refer to the Supply...

Jurisdiction
Australia
Judgment Date
10 May 2018
Procedural Posture
Appeal and Cross Appeal in Contract and Costs Proceedings / Court of Appeal of the Supreme Court of New South Wales; Appeal From the Supreme Court of New South Wales, Common Law Division, [2017] NSWSC 390 and AAP Industries Pty Ltd V Rehau Pte Ltd (no 2) [2017] NSWSC 1136
Outcome
Appeal dismissed; cross-appeal dismissed.
Legal Topics
['implied Terms' 'construction of Commercial Contracts' 'exclusivity Term' 'breach of Contract' 'repudiation' 'calderbank Offer' 'indemnity Costs' 'proportionate Costs Orders' 'ucpr R 42.34']
['contract Law' 'civil Procedure' 'costs'] ['implied Terms' 'construction of Commercial Contracts' 'exclusivity Term' 'breach of Contract' 'repudiation' 'calderbank Offer' 'indemnity Costs' 'proportionate Costs Orders' 'ucpr R 42.34']

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Procedural Posture

Appeal and Cross Appeal in Contract and Costs Proceedings / Court of Appeal of the Supreme Court of New South Wales; Appeal From the Supreme Court of New South Wales, Common Law Division, [2017] NSWSC 390 and AAP Industries Pty Ltd V Rehau Pte Ltd (no 2) [2017] NSWSC 1136

Legal Issues

  1. 1 ['Whether an exclusivity term should be implied into the Supply Agreement requiring Rehau to purchase all its requirements for nine specified articles exclusively from AAP.' 'Whether Rehau repudiated the Supply Agreement by failing to place orders with AAP after July 2013.' 'Whether an exclusivity term should be implied into the Further Supply Agreements.' "Whether AAP acted unreasonably in rejecting Rehau's Calderbank offer of 5 November 2015." 'Whether the primary Judge erred in declining to make a proportionate costs order.' 'Whether UCPR r 42.34 precluded AAP from obtaining a costs order because the proceedings could have been commenced or continued in the District Court.']

Ratio Decidendi

The Supply Agreement, read as a whole and against its commercial purpose, incorporated an implied exclusivity term requiring Rehau during the currency of the agreement to purchase all its requirements for the nine specified articles exclusively from AAP. That construction was supported by the fixed price provisions, the obligation that Rehau shall purchase from AAP, AAP's obligations to reserve production capacity and maintain buffer stock, the tooling provisions, and the provisions allowing covering purchases or withdrawal in specified circumstances. The Further Supply Agreements did not incorporate the exclusivity term because the orders and dealings did not refer to the Supply...

Court Disposition

Appeal dismissed; cross-appeal dismissed.

Orders

  • ['Dismiss the appeal.' 'Dismiss the cross-appeal.' "The appellant pay the respondent's costs of the appeal." "The cross-appellant pay the cross-respondent's costs of the cross-appeal."]