Al Hayat Publishing Co Ltd v Sokarno, Ahmed
[1998] FCA 1016
•20 AUGUST 1998
FEDERAL COURT OF AUSTRALIA
CONTRACT – offer and acceptance - whether legally binding agreement – no written contract – construction of oral and written communications – whether parties reached consensus - whether parties intended to enter into binding legal relations – whether intention implemented by consensus on ascertainable terms and conditions – whether any confirmation of a proper “agreement”.
Masters v Cameron (1954) 91 CLR 353; followed
Australian Broadcasting Corporation v XIVTH Commonwealth Games Ltd (1988) 18 NSWLR 540; applied
Barrier Wharfs Ltd v W Scott Fell & Co (1908) 5 CLR 647 at 669; cited
B Seppelt & Sons Ltd v The Commissioner for Main Roads (1975) 1 BPR 9147; cited
Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251; cited
AL HAYAT PUBISHING COMPANY LIMITED v
AHMED SOKARNO, EMAN MOHAMED AND RAYMOND CARNABY
NG 202 OF 1996
TAMBERLIN J
SYDNEY
20 AUGUST 1998
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 202 of 1996
BETWEEN:
AL HAYAT PUBLISHING COMPANY LIMITED
APPLICANTAND:
AHMED SOKARNO
FIRST RESPONDENTEMAN MOHAMED
SECOND RESPONDENTRAYMOND CARNABY
THIRD RESPONDENTJUDGE:
TAMBERLIN J
DATE OF ORDER:
20 AUGUST 1998
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
The cross-claim is dismissed with costs.
The applicant bring in Short Minutes within fourteen days. A copy of the proposed Minutes to be served on the respondent within seven days from this date.
The respondents pay the applicant’s cost of the application.
Liberty to apply on two days notice to settle the Short Minutes in the event of disagreement between the parties.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 202 of 1996
BETWEEN:
AL HAYAT PUBLISHING COMPANY LIMITED
APPLICANTAND:
AHMED SOKARNO
FIRST RESPONDENTEMAN MOHAMED
SECOND RESPONDENTRAYMOND CARNABY
THIRD RESPONDENT
JUDGE:
TAMBERLIN J
DATE:
20 AUGUST 1998
PLACE:
SYDNEY
REASONS FOR JUDGMENT
Introduction
The matter was previously before the Court on an interlocutory basis: see Al Hayat Publishing Co Ltd v Sokarno (1996) 34 IPR 214. That judgment was mainly concerned with the sufficiency of the awareness and reputation of the Al Hayat name and newspaper in Australia. The decision in that case was that a sufficient awareness had been demonstrated to warrant the grant of interlocutory relief.
After discussions between the parties in relation to this final hearing, it was agreed that the only live issue for determination was whether there was an agreement reached between the applicant and the respondents as to the use of the logo and name “Al Hayat” with respect to the publication of material in an Arabic newspaper in Australia, and if so, what were the terms of that agreement. This allegation was raised by a cross-claim filed by the first respondent, Mr Sokarno.
At the outset of the hearing, counsel for the respondents confirmed a number of important concessions in relation to the application, including the existence of a threat to use the name and logo; the existence of copyright; and the reputation of the Al Hayat name and logo in Australia.
The consequence of these concessions is that it is common ground that the applicant has copyright in the name and logo and that, subject to the outcome of the cross-claim for breach of contract brought by Mr Sokarno, the respondents agree their actions were misleading or deceptive. Mr Sokarno contends that the Arab Australia Media Group (“Australian Group”) was entitled to use the Al Hayat name and logo pursuant to the alleged contract between the parties.
Contract as pleaded
In his cross-claim Mr Sokarno alleges the contract was in these terms:
“4.In about May 1995, the cross-claimant and the cross-respondent agreed that the cross-respondent would, in consideration for a fee calculated on the basis of 500 pounds per day to be paid to the cross-defendant by the cross-claimant,
(a)supply to the cross-claimant by means, including electronic means or by satellite transmission, the whole of the cross-respondent’s newspaper each Monday to Friday over a period of two years (“the Agreement to Supply”);
(b)grant an exclusive licence for the period of two years to the cross-claimant (“the Licence”) to:
(i)publish a newspaper in Australia under the name “Al Hayat” and in connection with the logo, a depiction of which is Schedule 1 to the Amended Application, such newspaper to contain the entirety of the cross-respondent’s newspaper and a component of approximately 4 pages of local Australian news and material not published by or with the authority of the cross-respondent; and
(ii)reproduce in material form and publish the cross-respondent’s newspapers in Australia.
Particulars
(a)Telephone conversation in about May 1995 between Mr Ahmed Sokarno and Mr Juriedini on behalf of the cross-respondent.
5.On about 12 or 14 December 1995 a meeting took place in Cairo (“the Cairo Meeting”) between the cross-claimant, then trading as “Australian Arab Media Group”, and representatives of the cross-respondent to discuss the Agreement to Supply and the Licence.
Particulars
(a)The Cairo meeting took place at the Samirami Hotel in Cairo. Mr Sokarno was present as well as, on behalf of the cross-respondent, Mr Jureidini.
6.At the Cairo meeting Mr Sokarno and Mr Jureidini discussed a proposed variation to the terms of the Agreement to Supply and the Licence.
Particulars
(a)The variation discussed was in the terms set out in the follow-up letter of Mr Carnaby to the cross-respondent dated 19 December 1995 which is Ex. JT4 to the Affidavit of Jamal Tassabehji sworn 11 March 1996 in the proceedings.
7.The proposed variation to the Agreement to Supply and to the Licence referred to in paragraph 6 was not ultimately agreed and on about 7 January 1996 the Agreement to supply and the Licence in the terms as set out in paragraph 4 were confirmed, with publication of the Cross-Claimant’s Newspaper to commence on 19 February 1996.
Particulars
(a)Letter dated 7 January 1996 from Raymond Carnaby on behalf of Australia Arab Media Group to the cross-respondent.” (Emphasis added)
The affidavit and oral evidence as to the terms of the May ‘contract” bear little resemblance to the contract alleged above.
Background
The first respondent, Mr Sokarno, says that during January 1993 to May 1995 he was the editor-in-chief of a newspaper known as the “Arab World”, which was the only full colour newspaper published in Australia in both the Arabic and English languages at the time. Since 1994, he has also been the publisher of a monthly magazine entitled “Alfarasha”.
Mr Sokarno gave evidence that in about March 1994, he was interested in publishing articles from the Al Hayat in Australia. He considered that there would be interest by the Arab community in Australia in such a venture. The first conversation said to have taken place with Mr Jureidini was expressed in broad generalised terms without specifying the necessary equipment to install and receive transmissions by satellite of reports from Al Hayat, as well as the transmission fee per page. At that time it was decided by the Arab World proprietors not to proceed with the publishing of news transmitted from Al Hayat. The matter was, thereafter, left in abeyance, according to Mr Sokarno, for about fourteen months.
In about May 1995, Mr Sokarno says that Mr Jureidini contacted him to discuss the closure of the Arab World newspaper. This conversation is of central importance to the respondent’s case. Mr Sokarno’s version, as set out in his affidavit, is as follows:
“Mr Juriedini said:
‘That is disappointing. I thought the Arab World was a good newspaper, bot (sic) editorially and in the quality of the print.’I said
‘I am thinking of starting an Arabic newspaper myself, possibly with the use of material from Al Hayat.’(We discussed in general terms the possibility of Al Hayat publishing in Sydney.)
He said:
‘I think it would be too expensive for Al Hayat to publish in Sydney and would not be warranted yet. However, London [by which I understood he referred to the office of Al Hayat in London] could transmit the pages of Al Hayat to you and you could print the pages of Al Hayat in the regular and accepted format for a fee per page.’(We discussed in general terms various proposals)
I said:
‘I want to publish the paper daily from Monday to Friday’He said:
‘For the cost of transmission and the price of the rights to publish about 20 to 24 pages per day Al Hayat will charge a fee of 500 pounds per issue. You must also ensure that you do not alter or add to any of the pages which we transmit to you.’I said:
‘I would agree to the proposal(s) and provided there could be included in my paper about 4 pages of material, including news and social information with local content, in order to satisfy the requirements of the Australian readership and in order to secure local advertisers.’He said:
‘That is fine as long as the additions are inserts only. That part of the paper should also not carry the logo or name of the Al Hayat but could be called something like “Australian Al Hayat”…’”
The applicant submits that the above conversation should be construed in the light of the conversation said to have taken place in about March 1994, in order to fill out the terms of the agreement. I cannot see how the generalised terms of this exploratory conversation can be used to amplify the contract alleged in May 1995.
Mr Jureidini, the General Manager of the holding company of Al Hayat, has no recollection of any telephone conversation with the Arab World newspaper in March 1994 or at any time in relation to securing rights to publish articles from the Al Hayat newspaper. He denies that he contacted Mr Sokarno in May 1995 or at any other time and says that he did not enter into any agreement to supply the Al Hayat newspaper to Mr Sokarno for publication or distribution in Australia.
Mr Sokarno says that as a result of the above conversation in March 1994, he began to make arrangements for publication of Al Hayat in Australia. These included making inquiries of local businesses as to whether they would place advertising with the newspaper. It seems odd that he should make these inquiries after he had entered into a binding contract. Some earlier research on this matter might have been expected. In July 1995, he arranged for an application to be lodged for registration of a trademark in order to ensure that the name and logo were registered in Australia. There is no mention of trademark registration in the May conversation.
In September 1995, Mr Sokarno started placing advertisements in the Arabic media that Al Hayat would commence publishing in Australia in the near future. In October 1995, he said that he had experienced financial difficulties in setting up Al Hayat and made arrangements to borrow $60,000 to finance operations. Since then he says he incurred approximately $20,000 in debts in relation to the newspaper.
On 24 November 1995, Mr Sokarno engaged the third respondent, Mr Carnaby, to work on the Al Hayat newspaper for a period of two years commencing on 22 February 1996.
Mr Carnaby says that in November 1995, Mr Sokarno explained his plans to him and asked for his assistance. He was told that Mr Sokarno had a deal with Al Hayat in London to publish the Al Hayat newspaper in Sydney. The arrangement was said to be that Al Hayat would send the pages of the newspaper in the order of about 20 to 24 pages each day. It was proposed to publish the newspapers as they were sent together with four pages of local material. Mr Carnaby said that Mr Sokarno indicated that the costs was 500 pounds per day.
On 7 December 1995, Mr Carnaby said that he spoke with Mr Jureidini in order to discuss the arrangements to publish Al Hayat in Sydney. He says that he told Mr Jureidini that the deal “at the moment” was that London would transmit 20 to 24 pages of print each day via a satellite receiver, which would be installed by Al Hayat in London and that the fee involved would be 500 pounds per day for the service. It was proposed at that time that the newspaper should be reproduced in the exact format in which it was transmitted together with a four page insert of local material. He says that Mr Jureidini concurred in this proposal but stipulated that the insert was not to have the Al Hayat logo on it and must be called something different. Mr Carnaby says that he stated that the deal was for two years. Mr Jureidini did not agree with this and sought five years so that Al Hayat London could get their money back in relation to the expense of installing the satellite equipment. Eventually, on Mr Carnaby’s version, he relented and agreed to a two year period.
Mr Carnaby then foreshadowed to Mr Jureidini that he had a further proposal. Upon Mr Jureidini indicating that he would not be available to meet to discuss this deal until after the Christmas holidays, Mr Carnaby indicated that an earlier meeting might be arranged in Cairo between Mr Sokarno and Mr Jureidini in December 1995.
It should be noted at this point that Mr Jureidini’s version is that he first spoke with Mr Carnaby in early December 1995, and before that he had not heard of the Australian Arab Media Group. He says that in his discussion with Mr Carnaby he may have suggested that one solution might be for Al Hayat to transmit pages to Australia and charge the Australian Group for them. He says that it is possible he quoted 25 pounds per page as an estimate of what this might cost but this was not a commitment to supply. This is consistent with a figure of 500 pounds for 20 pages. He said they only discussed possible options and there was no agreement reached.
Arrangements were then made for a meeting to take place in Cairo on 11 December 1995, between Mr Jureidini and Mr Sokarno.
The parties in attendance at the Cairo meeting were Mr Tassabehji, who was the Operations Manger of the applicant; Mr Rene Schehade, on behalf of the applicant and Mr Sokarno on behalf of the Australian Group. It is common ground that the meeting took place around 11 or 12 December 1995, in the coffee shop of a hotel in Cairo. The parties differ as to the duration and contents of the discussion. Mr Sokarno recalls that it was in the order of 45 minutes whereas Messrs Tassabehji and Jureidini say that it was only about 10 to 15 minutes. Mr Tassabehji and Mr Schehade joined the meeting shortly after discussions had already commenced between Mr Jureidini and Mr Sokarno. Again, there is a difference as to time but these differences are not of great importance.
According to Mr Sokarno, Mr Jureidini said to Mr Sokarno before Mr Tassabehji arrived, words to the effect that although they already reached agreement and that such agreement would be adhered to, he had another proposal. At this point Mr Tassabehji entered the room accompanied by Mr Schehade. Mr Sokarno says that he then outlined a proposal, which was, in substance, the same as that set out in a letter claimed to have been sent by Mr Carnaby on 19 December 1995. The applicant’s case is that this letter was not received by Al Hayat until 29 January 1996. That letter is in evidence and is on the letterhead of the Australian Arab Media Group. It bears the logo and name Al Hayat, which is the subject of these proceedings.
The letter is marked for the attention of “Mr Robert Griedine (sic – Jureidini), General Manager of Al Hayat in London” and reads:
“…
Dear Robert,
Further to Ahmed’s [Mr Sokarno] visit and my subsequent conversations, I am pleased to submit the proposal we discussed over the telephone.
·Al Hayat (London) will pay for the supply and commissioning of the Satellite in Sydney, Australia
·Al Hayat (London) will cover the cost of transmission over the Satellite daily at the rate of approximately 20 (twenty) pages per day
·Al Hayat (London) will pay for the publication of the Al Hayat Newspaper here in Sydney (5000 issues per day, at $ 1,600.00)
·Al Hayat (Sydney) will take care of all distribution matters and will return 50% of its revenue to Al Hayat (London)
·Al Hayat (Sydney) will arrange for local advertising and will return 50% of its revenue to Al Hayat (London)
·Al Hayat (Sydney) will add 4 (four) pages to the newspaper to cover only local, and social events in order to secure good advertisers
·Al Hayat (Sydney) will correspond with London and transmit Australian current affairs news for London to process and re-transmit for publications.
·Al Hayat (Sydney) will take only 25% of advertising appearing in the international issue that is secured by Sydney and the 75% will be returned to Al Hayat (London).
From all of the above, I can assure you that Al Hayat (London) by accepting this proposal would have secured not only the publication of Al Hayat in Sydney and its distribution throughout Australia, but a very profitable and lucrative business, as the Lebanese/Arabic Australians in Sydney alone exceeds 500,000.
Yours sincerely,
RAYMOND CARNABY
[Signed]
General Manager” (Emphasis added)
There is no reference to any earlier binding agreement between the parties.
Mr Jureidini says that at the meeting on 12 December 1995, he told Mr Sokarno that the only basis on which Al Hayat would be prepared to do business would be on the basis that the Al Hayat newspaper is transmitted electronically by the London company to Australia where it would be reproduced exactly as published elsewhere in the world. He agrees that Mr Sokarno raised the possibility of an insert in the newspaper containing some local material. He replied that an insert must be separate and not identified as part of the Al Hayat newspaper. Mr Jureidini says he made it clear that if Al Hayat was to do business with the Australian Group they would have to pay for each page of the newspaper as transmitted and would be responsible for printing and distribution in Australia. He said that if Mr Sokarno had any other proposals he wished to put to them he could contact him after the Christmas break.
It is common ground that during or shortly after the meeting Mr Sokarno gave his business card to Mr Jureidini. It is also common ground that the card is in all relevant respects similar to the business cards used by Al Hayat in London. It bears the Al Hayat name in both English and Arabic and it reproduces the Al Hayat logo. It is also accepted by the parties that the Al Hayat representatives did not raise any objection at the meeting to the reference in the business card to the Al Hayat name or logo.
Mr Tassabehji’s evidence was that he later spoke to Mr Carnaby on about 31 January 1995 and asked him about the proposal that Mr Sokarno had proffered at the Cairo meeting. By that date Mr Tassabehji had learned that an application had been made without the consent of Al Hayat London for registration of the Al Hayat name and logo as a trade mark in Australia. He says that he indicated to Mr Carnaby that he would not do business with the Australian Group in such circumstances. Mr Tassabehji asked Mr Carnaby to withdraw the application, whereupon, according to Mr Tassabehji, Mr Carnaby indicated that if Al Hayat agreed to do business with the Australian Group he would withdraw the application.
There is a dispute about the date of receipt by Al Hayat London of the letter of 19 December 1995 from the Australian Group. Mr Tassabehji says that the letter was only received in London on 31 January 1996. I will refer to this later in these reasons. He agreed that Al Hayat never responded to the proposal. His reason was that the proposal effectively imposed all the costs on Al Hayat with the Australian Group benefiting from the profits. At that time he understood that the Australian Group was intending to publish on 4 March 1996. He says that he never had any discussion with Mr Sokarno or the Australian Group after that telephone conversation on 31 January 1996.
There is also another dispute in relation to the receipt by Al Hayat of another letter dated 7 January 1996, which is said to have been sent by the Australian Group to Mr Jureidini at the offices of Al Hayat London. That letter is important. It is on the letterhead of the Australian Group and bears the logo and name of Al Hayat. The letter reads:
“07 January,1996
Al Hayat Newspaper
London.
ENGLANDAttn: Mr Robert Griedine (sic)
General ManagerDear Robert,
Further to our last telephone conversation, and as requested, I am pleased to confirm our agreement:-
As we have both agreed that the AL HAYAT London will take full responsibility for the delivery, installation, set up, and training on the Satellite/Receptor.
Al Hayat Sydney will pay only for duty or tax if applicable.
Al hayat (sic) Sydney will pay Al Hayat London for the sum of 500. 00 UK Pounds for the transmission of the 20/24 pages, in exchange for the exclusive rights to publish the Al Hayat Newspaper in Australia, whereby. We will undertake not to alter any of its appearance, in any shape or form.
Al Hayat Sydney will reserve the right to add approx. 4 pages of local/social pages to be inserted in the main newspaper as insert, and carry the name of the Australian Al Hayat.
This agreement is to last for a period of Two years providing that we keep our undertaking to not to misuse the good name and reputation of Al Hayat.We will be commencing publications of the Al Hayat international newspaper (Sydney Issue) on the 19th February, 1996 (as agreed with our Mr Sokarno in Egypt.)
Once more, hoping for a very long and mutually beneficial relationship.
Regards,
Raymond Cranaby (sic)
[Signature]
GENERAL MANAGER”
Mr Jureidini says that this letter was never received by Al Hayat in London. The respondent has tendered a fax transmission sheet and a Telstra Account which indicated that a fax was sent on 7 January 1996 to the fax number of Al Hayat London but neither of these documents discloses the content of the communication.
On 5 March 1996, solicitors for Al Hayat London wrote to the Australian solicitors for the Australian Group threatening legal action in relation to the use of the trademark and for misleading and deceptive conduct and passing off.
Mr Sokarno states that he understood at all relevant times that Al Hayat London was allowing him to use the name and logo of Al Hayat in connection with the Australian newspaper. In support of this he relies on the absence of any protest by either Mr Jureidini or Mr Tassabehji in relation to the business card showing the Al Hayat logo and name handed across on 11 December 1995.
Legal principles
Consideration of the evidence as to the existence of a legally binding agreement in the present case calls for a close but not restrictive examination of the oral and written communications between the parties and their conduct, considered in the context of the surrounding circumstances. The exercise is to determine whether they had an intention to enter into legal relations and whether this intention was implemented by achieving a consensus on ascertainable terms and conditions. The contractual intention in question is to be determined on an objective basis but subjective intent may be relevant.
In the present case, the communications and conduct extended over many months, if one accepts the evidence of the applicant. It is important to bear in mind that the negotiations took place between experienced commercial negotiators with considerable experience in the publication of newspapers which catered to the needs of Arabic speaking communities . No narrow or unduly technical approach is appropriate in these circumstances. Nevertheless, it is important to determine whether the essential ingredients of a binding agreement have been made out.
The exercise in the present case differs from that in the well known decision in Masters v Cameron (1954) 91 CLR 353 at 360-362, because that case is concerned with a situation where parties, who have been in negotiation, reach agreement on terms of a contractual nature but contemplate that the subject matter of their negotiations shall be dealt with by a formal contract. In such circumstances they have achieved a consensus on the essential terms. Therefore, the exercise is to determine whether the parties have manifested a common intention to be bound by the agreed terms.
In the present case, there is a threshold question; whether the parties, who have been engaged in negotiations, have reached agreement on terms of a contractual nature? This is the consensus question. The next question is whether the parties intended to make a concluded bargain until execution of a formal contract? In Masters v Cameron, (supra) the Court found that a binding contract existed where the parties reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, notwithstanding that they proposed to have the terms restated in a fuller or more precise form, but not different in effect. Stated another way, the Court considers that there is a binding contract where the parties have completely agreed upon on all the terms of their bargain and intend no departure from or addition to those terms, express or implied, but have made performance conditional on the execution of a formal document: see Masters v Cameron (supra) at 360.
Of more direct relevance to the present circumstances is the decision of the New South Wales Court of Appeal in Australian Broadcasting Corporation v XIVTH Commonwealth Games Ltd (1988) 18 NSWLR 540, where Gleeson CJ (with whom Hope and Mahoney JJA agreed) said at 548:
“… In a case where a Court is required to make a judgment concerning the intention of the parties in relation to what might broadly be described as a Master v Cameron (1954) 91 CLR 353 dispute, it will be normally be of importance that the court have an understanding of the commercial context in which the dispute arose, and, a most significant feature of that context will relate to the subject matter which the parties regard, or would ordinarily be expected to regard, as matters to be covered by their contract. …In this case the best evidence on that subject is to be found in the actual communications between the parties and, in particular, in the issues which they in fact addressed when they set about drafting their detailed contract.” (Emphasis added)
As his Honour points out (at 547), in order to determine whether the parties expressed an intention to make a concluded bargain, it is permissible to have regard to the correspondence and other communications. In the present circumstances this would include the conduct and correspondence between the parties subsequent to May 1995: see Barrier Wharfs Ltd v W Scott Fell & Co (1908) 5 CLR 647 at 669; B Seppelt & Sons Ltd v The Commissioner for Main Roads (1975) 1 BPR 9147 and Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251. The subsequent communications and conduct of the parties may bear on their interpretation and understanding of the arrangement because they demonstrate what were considered as appropriate or necessary steps to implement the transaction. In this respect the contents of the letter of 7 January 1996 are significant in that they indicate the Australian Group considered that a number of important additional matters had to be covered in order to give legal effect to the intentions of the parties.
The present case
Essentially, the case propounded for the Australian Group is that the binding agreement for publication relied on was formed as a result of the May 1995 conversation. Although there were subsequent different proposals considered and advanced, these fell to be considered against the background of an existing binding agreement. The discussions before, at and after the Cairo meeting, were essentially directed to a variation of what was alleged to have been the existing agreement.
For the purposes of analysis, I accept the evidence of the applicant except where otherwise indicated and then I will consider the legal consequences.
One important consideration is that there are no notes, letters, records or any express confirmation by or on behalf of Al Hayat in relation to the alleged May 1995 conversation. This, in itself, is significant because one would expect in a contract of the nature alleged that there would be provision for formal documentation which fully sets out the applicable terms and conditions. There is no such documentation in the present case. Nor is there any written acknowledgment by Al Hayat of that arrangement.
The March 1994 conversation is said to be relevant background against which to consider the May 1995 conversations for the purpose of amplifying what was intended by the parties in the May conversations. It is conceded that the alleged March 1994 conversation was not directly relevant. If it has any relevance at all it is only of a general peripheral nature. In the terms set out in Mr Sokarno’s affidavit, the March 1994 conversation refers in vague terms to a conversation with Mr Jureidini about necessary equipment to procure satellite transmissions of Al Hayat and some mention is made of the transmission fee. The arrangements discussed in this conversation were then abandoned.
Assuming that the May 1995 conversation, which is said to constitute the contract, occurred, a number of observations can be made about the terms of that discussion as recounted by Mr Sokarno in his affidavit.
First, it appears to have started out on a tentative basis. There is nothing unusual about this. Mr Sokarno says that he was “thinking” of starting a newspaper, “possibly” with the use of material from “Al Hayat”. The affidavit also refers to the discussion in general terms with respect to the possibility of Al Hayat publishing in Sydney. Then there is said to be a discussion of various proposals again in general terms. The wording tends to indicate that the parties were, at least at the outset of the discussion, in an exploratory mode.
Second, even at its highest, the conversation was generalised, vague, and incomplete. Essentially, the conversation can be condensed to this: Mr Jureidini suggested it was possible that Al Hayat could transmit pages of the Al Hayat newspaper for printing by the Australian Group in regular and accepted format. The fee would be calculated per page. There was some mention made by Mr Sokarno of publication during Monday to Friday. Mr Jureidini referred to the cost of transmission of about 22 to 24 pages per day at a fee of 500 pounds per issue, although the number of pages was not fixed. Assuming the arrangement was for two years, this means that the parties are discussing a commitment of 260,000 pounds. Mr Sokarno emphasised that it was essential that there be no alteration or addition to the pages as transmitted from London. Mr Sokarno agrees but refers to the possibility that there could be included in the Australian publication an insert of about four pages, including legal content, whereupon Mr Jureidini then indicated he approved of an insert, which would not carry the logo or name Al Hayat but could be called something like Australian Al Hayat.
The alleged May 1995 conversation does not refer to a number of important matters which one would normally expect to have been discussed in detail and to be included in a binding agreement of the type asserted, having regard to the financial importance and subject matter of the arrangement. For example, this would include considerations such as duration of the agreement; termination; quality control and monitoring; time and manner of payment; transmission costs; guarantees, and perhaps most importantly whether the arrangement was to be exclusive or non-exclusive. These matters are largely left at large in the communications between the parties.
A similar point can be made about the June 1995 communication where Mr Sokarno says that he made inquiries with local businesses as to whether they would place advertising with the newspaper. One would normally have expected that such inquiries would have been made before entering into a binding contractual agreement.
In the present case, when deciding upon what one would expect to be included in a contract, the Court has the advantage of the letter of 7 January 1996, claimed to have been transmitted on that date by the Australian Group. That letter, which is said to “confirm our agreement”, provides for several important matters which were not adverted to in the May conversation as recounted by Mr Sokarno.
There is no reference in the May conversation, for example, to the manner of transmission nor to who should train on the satellite/receptor. There is no reference to who should pay any duty or tax. There is no mention as to whether the rights are to be exclusive. By contrast, the January letter provides for exclusivity. The duration in the January letter is specified as two years, whereas there is no reference at all to any period in the May 1995 discussion. Finally, the letter refers to the commencement of publication on 19 February 1996 “as agreed with Mr Sokarno in Egypt”. There is no reference in Mr Sokarno’s affidavit account of that conversation as to the publication date. Nor is there any reference in the letter of 19 December 1995 to this date. There is no reference in the affidavit evidence of Mr Carnaby as to the publication date being 19 February 1996. Furthermore, there is no indication that prior to that conversation, Mr Jureidini had any idea of the likely size of the readership or its composition or distribution in Australia, which would enable him assess the prospects of any publication being successful. This information would be an important consideration before formally committing to a binding two year contract for the publication of a reputable international Arabic newspaper.
When looking at the surrounding commercial context of the communication, it is necessary to consider the evidence as to proposed local advertising. In the letter of 7 January 1996 Mr Carnaby asserts that it was a consideration of the “agreement” that the paper was not to be altered in appearance in any shape or form and that Al Hayat Sydney reserved the right to add about four pages of local material as an insert. When Mr Sokarno was cross-examined he agreed that eight pages of advertising were needed to make the publication commercially viable. If it is accepted that the proposed local insert was in the order of four pages then a further four pages of advertising was necessary. Mr Sokarno’s evidence was that there was room for the balance of any local advertising because it could replace the advertising in the London publication. In order to use the English advertising space, however, it would be necessary to delete it and substitute local material. Mr Sokarno sought to explain this by saying that the condition as to non-alteration only related to the non-advertising material in the English publication. This explanation is not satisfactory. The language in the letter of 7 January 1996 is clear and specific as to the requirements that there shall be no alteration in any shape or form. The evidence for the applicant therefore discloses an important inconsistency which lends further support to the case advanced by Al Hayat London on the cross-claim.
Consequently, assuming as I have for present purposes, that the May 1955 conversation occurred, it cannot support the submission that there was any agreement in the terms alleged. Nor does the evidence support the submission that an agreement in such terms was ever subsequently confirmed or acknowledged on the part of Al Hayat London. I am satisfied that the actions of the Australian Group and the ensuing discussions later in 1995 or January 1996 do not confirm any earlier legally binding agreement or evidence any new binding agreement. In particular, the conversation alleged between Mr Carnaby and Mr Jureidini on 7 December 1996, purporting to confirm the written agreement, does not set out in any detail the conditions of the alleged contract. In terms, it refers to the deal at the moment. There is also reference in that conversation to “another” proposal, which Mr Carnaby had in mind for Mr Jureidini at that time. These matters then in force indicate, at least, that the arrangements were considered to be negotiable and it is evident from the terms of this conversation that the proposal had not been fully formulated even at that late stage.
The Cairo discussion relates to a new proposal which was never accepted by Al Hayat. It takes the matter no further. Although Mr Sokarno alleges that he said to Mr Jureidini that they have already “agreed”, there is no response from Mr Jureidini expressed in the discussion confirming any agreement. Nor do the terms of that conversation amplify in any significant respect the matters mentioned in the May 1995 discussion.
The letter of 19 December 1995, is not concerned with the terms of the May agreement. That letter is clearly concerned with the proposal which was never accepted. I do not accept the evidence of Mr Carnaby that after the 19 December 1995 letter was sent, Mr Jureidini agreed to proceed on the original contract. I prefer the evidence of Mr Jureidini that this conversation never took place. It seems inherently unlikely that after a proposal has been firmly rejected, a business plan would be undertaken by the Australian Media Group simply to demonstrate that Mr Jureidini may have been better off if the rejected proposal had been implemented. In any event, the conversation does not spell out any further terms of the alleged original agreement.
As indicated earlier, there is a live issue between the parties as to whether the letter of 7 January 1996 was ever received by Al Hayat, London. I am not satisfied that the facsimile was ever received. There is no doubt that on 7 January 1996 some communication took place but the evidence falls far short of identifying the contents of that communication. However, even on the assumption that the letter was received by Al Hayat London, there is no evidence of any consent on the part of Al Hayat to the alleged confirmation of the terms and conditions set out therein. Moreover, a mere unilaterally expressed confirmation by the Australian Group as to the existence of a contract cannot itself constitute an agreement, unless there is some affirmation or acceptance of this association by the other party. In the present case, there is no evidence of any such affirmation or acceptance. There has been no satisfactory explanation as to why it was considered necessary to send the letter if a binding agreement had already been received.
Reliance is placed by Mr Sokarno on the conduct of the respondents after the alleged conversation of May 1995 and the ensuing correspondence. This reliance is based, to a considerable extent, on what is said to have been the inaction of the respondents in failing to refute the assertion in the letters sent by the Australian Group. In part, it is also based on the failure to take any action in respect of the logo and Al Hayat name, which appeared on the letter heads and also on the business card handed over in Cairo by Mr Sokarno to Messes Jureidini and Tassabehji.
In my view, this aspect of the conduct of Al Hayat London does not disclose any intention to accept that there was ever any agreement between the parties. The parties remained in negotiations during December 1995 and January 1996. This clearly explains the lack of protest in respect of the business card and the letterhead. There is no suggestion that the negotiations during December and January were not serious. It was, no doubt, considered to be inappropriate to register a formal protest in circumstances where there was a prospect of a mutually advantageous business arrangement being entered into as a result of the ongoing negotiations.
It appears that English and Australian solicitors were instructed shortly after the end of February and searches were made at the Trade Marks Office. A letter was sent by the Australian solicitors for Al Hayat on 5 March 1996. There is nothing in these circumstances which could be taken as an assent to the unauthorised actions of the Australian Group.
This is not a case where important omissions in the alleged contractual discussions can be resolved by resort to principles concerning implied terms and conditions. In the present case, the additional conditions set out in the letter of 7 January 1996 are not sufficiently obvious as not to require expression. If the communications between the parties make it clear that they have not agreed on subject matter, which would usually be considered important, it can be inferred that they have not reached contractual consensus.
In the end result, therefore, I am not satisfied that the parties ever reached a stage in their communications and negotiations where a binding contractual arrangement was made. I, therefore, dismiss the cross-claim with costs.
In view of the concessions which have been made, I propose to order that the respondents pay the applicant’s costs of the application. A number of detailed orders were sought in the application. I think it appropriate that both parties should have the opportunity to consider these reasons before orders are made on the application. Accordingly, I direct the applicant to bring in Short Minutes of what it considers to be appropriate orders within fourteen days. A copy of those Short Minutes should be served on the respondents within seven days from today to enable them to consider the form of orders proposed.
I certify that this and the preceding eighteen (18) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin
Associate:
Dated: 20 August 1998
Counsel for the Applicant: A J L Bannon SC and
S BurleySolicitor for the Applicant: Freehill Hollingdale & Page Solicitor for the Respondent: Ghaith Krayem & Associates Date of Hearing: 25 and 26 May 1998 Date of Judgment: 20 August 1998