Classical Analysis of Brambles Holdings

The case in question is Brambles Holdings v Bathurst City Council (2001) 53 NSWLR 153.

The key facts of the case were:

Brambles managed a waste disposal depot for the Council. Brambles would dispose of liquid waste for 1.1c/L. The council instructed Brambles to increase its fees to 1.3c, then an additional cent every quarter, up to a limit of 6c. Brambles was unwilling to do so, without further remuneration beyond their 1c share. However, Brambles adopted the pricing approach. The Bathurst City Council claimed against Brambles for the extra income.1

The textbook states that:

"

Heydon JA said that it is … relevant to ask whether an agreement can be inferred, whether mutual assent has been manifested and whether a reasonable person in the position of each of the parties would think there was a concluded bargain.2

"

The citation given for that idea is: (2001) 53 NSWLR 153, 179. To me, it seemed it would be a stretch of the imagination - to say the least - that Brambles would have entered into this price change if they knew all extra profit would go to the council. (Moreover, I think the Paterson textbook makes it clear that Brambles did not wish to share so much profit with the council, and the documentation referred to therein confirms this.)

The crucial concepts from this page of the case:

  • Since the Council owned the facility, the prices which were able to be charged were governed by the Council, not Brambles.3
  • Consequently, failing a successful negotiation between Brambles and the Council, Brambles would not be authorised to raise its prices.4
  • Hence, by raising its prices in accordance with the Council's conditions, Brambles had, by its conduct, accepted the offer of the Council to pay the extra income.5

Thus, in this sense, Brambles merely acts as contemporaneous confirmation for the principles laid down in Empirnall.6

I believe that the problem with this case is its eagerness to throw caution to the wind, and with it, years of established contract theory.

Consider the distinguishing factors between Brambles and Empirnall. The stark difference should be obvious; in the case of Empirnall there is no explicit rejection of the offer, only a lack of acceptance by a recognised method. Conversely, in Brambles there is a letter sent by Brambles on October 3 stating such rates would not be viable if they retain only 1c of the total charge per litre. This document has been classed by Ipp JA, not as a counter-offer, but "merely part of the posturing that often accompanies negotiation".7 Whereas in most cases, this piece of evidence would be identified as counter-offer, resulting in the initial offer being extinguished. Of course, this doesn't leave the Council without recourse, they would assumedly still have an action against Brambles for breach of an earlier contract which stipulates the price setting mechanism.

Some of the best judges Australia has appointed (cough, Dixon) warned against hasty development of the law. The reason this judgement concerns me is that it departs from established principle in a manner which is twofold.

  1. it fails to recognise an extinguishing counter-offer
  2. it, subsequently, allows for the acceptance of an offer which under classical theory wouldn't be taken to even exist.

Certainly, from a consequentialist outlook, it would seem that the Bathurst City Council ought to be compensated in some way, but that claim, in my opinion, should lay in breach of their existing contract for management, not breach of this "contract" - when in reality, there was nothing but disagreement between the parties.