Abigroup Contractors Pty Ltd v ABB Service Pty Ltd

Abigroup Contractors Pty Ltd (the appellant) and ABB Service Pty Ltd (the respondent) were involved in a dispute arising from a construction project. The appellant issued a letter of intent to the respondent, anticipating the commencement of work before a formal contract was finalised. The respondent commenced work while negotiations continued. The core of the dispute concerned whether a binding contract, specifically a "fourth class" Masters v Cameron contract, had come into existence upon the commencement of work.

The court was required to determine whether, on the construction of the letter of intent and considering the parties' conduct, a contract had been formed at the time work commenced. A further issue arose regarding the appellant's case in a reference, specifically whether it had included the existence of such a contract. The appellant had, in submissions, abandoned contractual claims in favour of a quantum meruit claim, but this abandonment was conditional on leave to amend. The court also considered whether judgment should have been given on the contractual claims against the abandoning party and whether the evidence relevant to the abandoned claims remained relevant for other purposes, impacting costs.

The court's reasoning focused on the appellant's pleadings and submissions concerning the formation of a contract. The appellant's initial case alleged that the letter of intent was an offer accepted by the commencement of work. However, the referee noted that the appellant's submissions evolved, with the final position appearing to rely on the letter of intent as formalising an agreement already reached, and commencement of work evincing acceptance of terms of a contract already made, rather than concluding an offer and acceptance process. This shift meant the clause stating commencement was deemed acceptance no longer functioned to conclude a contract but rather as evidence of acceptance of an existing agreement.

The appeal was dismissed with costs. The cross-claim in the proceedings below was also dismissed.