Mildura Office Equipment v Canon Finance [2006] VSC 42

What the court decided

The plaintiff was a Canon Australia business products dealer for the Mildura, Swan Hill and Horsham area from 1978 until the dealership was terminated in February 2003 [7]. It claimed that, in a five minute comic skit at a dealers' conference in February 1998, representatives of the defendant finance company offered to sell dealers ex-rental Canon photocopiers for $1, whether or not they were still dealers, in consideration for procuring customers to enter rental agreements with the defendant [2]. It said that it accepted that offer by procuring a customer to enter a rental agreement in April 1998, concluding a unilateral contract of the Carlill v Carbolic class [2]. After the dealership ended, the defendant refused to sell it equipment for $1 at the end of the rental agreements [2].

Her Honour said that an offer of the Carlill v Carbolic class requires sufficient certainty and precision, including a sufficiently precise statement of the act required to accept it [156]. A statement lacking the requisite certainty is not an offer even where language of unequivocal commitment is used [157]. A convention address may contain an offer, but where it is comic and very brief relative to a potentially complicated long-term arrangement, its tone and the impossibility of developing matters of substance may weigh against one [158].

Her Honour found the evidence of Mr Janssen, for the plaintiff, unreliable and preferred that of Mr Blancato, the defendant's manager who performed the skit [32], [35], [173]. Even accepting all of Mr Janssen's evidence, no act was specified in the address as the consideration [174]. The alleged additional terms were no substitute for certainty at the date of the alleged acceptance [175]. Mr Blancato said the address was very general: he stated several conditions and excluded classes of copier, but did not identify the excluded models or all the conditions [176], [177]. As in Mobil Oil, the benefit would be delayed until rental agreements expired (typically after three or four years) or later [178]. The implicit extension of the entitlement to former dealers aggravated the uncertainties of that postponement [180]. Her Honour concluded that the presentation lacked the requisite certainty [182].

The more fundamental defect was that the evidence did not show the announcement was offered as consideration for the doing of an act [183]. A statement that the $1 purchase applied only to copiers sold through dealers was not a stipulation that the dealer must procure rental agreements as quid pro quo [184]. Post-contractual conduct and communications were not admissible to establish the existence of a contract, and in any event were more consistent with a programme of incentives to dealers [185]. To the extent it was admissible, little weight could be given to Mr Lagos, the defendant's general manager, calling the speech a promise or guarantee [15], [186]. For completeness, her Honour found that the later conduct did not show the parties acting on the basis that a contract existed [191].

Although it was unnecessary to decide, her Honour considered that any offer was limited to current dealers [192]. The plaintiff, having put its case solely in contract, had failed to establish the alleged unilateral contract and its claim was dismissed [193]. Her Honour found no basis for the injunctive or declaratory relief sought by the defendant's counterclaim [194], [195].

Why it matters

On the single offer pleaded, the decision shows that a brief promotional announcement will not found a unilateral contract unless its fundamental terms, and the act required in exchange, are stated with sufficient certainty. The Court of Appeal dismissed an appeal in Mildura Office Equipment and Supplies Pty Ltd v Canon Finance Australia Ltd (2007) VSCA 112, Ashley JA saying the outcome was dictated by the "particular, and confined, case" pleaded and argued. Kellam AJA, giving the leading judgment, accepted that the presentation in isolation lacked sufficient certainty, but thought the offer far less tentative than in Mobil Oil, was less convinced that no act was sought in exchange and suggested that a series of separate contracts might have been inferred. Buchanan JA said such a case might not have been so easy to dismiss. Kellam AJA also said, citing Brambles Holdings Limited v Bathurst City Council, that post-contractual conduct is admissible on whether a contract was formed, and read her Honour as not referring to formation. It shows the risk of pleading one offer for dealings spanning years.

Numbers in square brackets are paragraph numbers of the judgment. This note summarises a decided case for education and is not legal advice. See how the notes are written.