Mackay Sugar and Qube logistics can now get back to moving cane.
Mackay Sugar and Qube logistics can now get back to moving cane. Zach Hogg BUN300414CNE3

Mackay Sugar challenged to pay up $790K to trucking co.

FOR a year and a half Mackay Sugar would receive invoices from one of the trucking companies that moved its cane - and pay the company a little bit less than what it was asking.

By the end, the trucking company's books were almost $800,000 worse off so it rallied its lawyers.

Chasing what it believed it was owed, Qube Logistics filed in the Supreme Court of Queensland against Mackay Sugar on July 1, 2016.

Court documents revealed the reason Mackay Sugar wasn't paying the full invoice amount was because Qube logistics was charging the millers for every bin of cane it transported, and not the weight of the cane inside the bins. The two companies signed a contract on October 11, 2013 for Qube to transport cane from the Tablelands to Mossman Mill.

Depending where the cane was from, Qube would be paid a different rate, and it would change depending on how it was transported.

For example, Qube would be paid $4.70 a tonne in a trailer and $3.15 a tonne in a B-Double for carrying the cane 20km from Mowbray to the mills.

But at the top of the matrix, Qube had written "Per tonne delivered (based on 13 tonnes per bin per trip)".

It was the words in brackets that caused the alleged 'mispayments' of almost $800,000 and the legal case.

According to Qube's claim, on July 6, 2014 it invoiced Mackay Sugar $301,644, Mackay Sugar paid two payments totalling $274, 960, $26,684 less than the invoice.

Qube had invoiced Mackay Sugar for at least 13 tonnes of cane per bin even though some bins only carried 11 tonnes - and it would charge more if it was more than 13 tonnes.

MSL paid Qube for the weight of the cane it received, something MSL claimed was normal practice.

The next invoice was for $577,932.86 and Mackay Sugar paid $540,781 - Qube down a further $37,151.

This continued until December 11, 2015, when Qube invoiced Mackay Sugar a total of $11.733 million from the start of the contract but had only been paid $10.949 million, a difference of $784,413.

 

The variable fee for transporting cane.
The variable fee for transporting cane. Court Documents

"Qube's submission rests on the meaning of the words in brackets... (based on 13 tonnes minimum per bin per trip)," Mackay Sugar's counsel Michael Hodge claimed.

"They are simply an explanation of how Qube has purported to arrive at the rate per tonne delivered at which it has tendered."

But Qube's counsels Declan Kelly QC claimed that MSL's suggestion to ignore the words in brackets was not something a reasonable businessperson would do.

"The commercial purpose of the contract was the provision of transport services sufficient to meet the hourly crushing rates at the Mossman Mill," he wrote. "The use of minimum 13 tonne bin per trip facilitated that purpose and that purpose was objectively known to both parties."

But four days after Mr Hodge filed his outline of submissions and six days after Mr Kelly filed his, the case was settled out of court.

A confidentiality clause stopped either party from revealing the terms of the settlement but Qube director of corporate affairs Paul White said "the multi-year contract with Mackay Sugar will continue".

"Unfortunately, (the company would) not be able to disclose anything further in relation to the settlement," Mackay Sugar CEO Jason Lowry said.

If you have any thoughts or opinions on the settlement contact campbell.gellie@dailymercury.com.au



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