Avopiling (WA) Pty Ltd v Central Systems Pty Ltd - [2015] WASC 82

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: AVOPILING (WA) PTY LTD -v- CENTRAL SYSTEMS PTY LTD [2015] WASC 82

CORAM: ALLANSON J

HEARD: 25 FEBRUARY 2015

DELIVERED : 11 MARCH 2015

FILE NO/S: CIV 2512 of 2014

BETWEEN: AVOPILING (WA) PTY LTD
Plaintiff
AND
CENTRAL SYSTEMS PTY LTD
Defendant

Catchwords:

Contract - Intention of parties - Settlement of existing dispute - Whether full and final settlement - Whether enforceable agreement - Turns on own facts

Legislation:

Nil

Result:

Judgment for plaintiff
Declarations made

Category: B

Representation:

Counsel:

Plaintiff: Mr W C J Zappia
Defendant: Mr A P Hershowitz

Solicitors:

Plaintiff: Jackson McDonald
Defendant: Minc Group

Case(s) referred to in judgment(s):

Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Blair v Curran [1939] HCA 23; (1939) 62 CLR 464
Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95
Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) 7 BPR 14,551
GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631
Howard Smith and Co Ltd v Varawa [1907] HCA 38; (1907) 5 CLR 68
Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; 218 CLR 451
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21

ALLANSON J: The plaintiff and the defendant were in dispute over amounts owing under a construction contract. The plaintiff had issued a writ. In an exchange of phone text messages, the defendant offered and the plaintiff accepted an amount 'in full and final settlement'. The issue in the present action is whether the parties formed an enforceable agreement to settle their dispute, and, if so, whether it included the settlement of a foreshadowed counterclaim by the defendant.
The plaintiff, Avopiling (WA) Pty Ltd, is engaged in the business of carrying out piling, foundation and other construction work in Western Australia. The defendant, Central Systems Pty Ltd, is a civil construction company.
On or about 18 December 2013, Avopiling and Central entered into a written agreement titled 'Subcontract Agreement Roy Hill Package 2 ‑ Bridge Construction Avopiling ‑ Piling Works Revision 4 Subcontract Agreement No 004413-CON-SCA-002' (the Contract). Pursuant to this agreement, Avopiling provided to Central two bank guarantees with the National Australia Bank as security. Each guarantee was for $167,195.37.
It is not necessary for the purpose of these reasons to consider the terms of the Contract in any detail.

The Tripartite Agreement

Eureka Personnel Pty Ltd entered into a subcontract with Avopiling.
On 24 June 2014, Avopiling, Central, and Eureka Personnel executed an agreement (the Tripartite Agreement), under which Central was to pay Eureka Personnel a subcontract payment of $526,935.01 that was owed to Eureka Personnel by Avopiling. By cl 2(e), Avopiling agreed that this payment by…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Avopiling (WA) Pty Ltd v Central Systems Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2015] WASC 82
Decision Date: 11 MARCH 2015

CaseChat Overview and Summary

In Avopiling (WA) Pty Ltd v Central Systems Pty Ltd, the court was called upon to determine whether the parties had reached a full and final settlement agreement in relation to their ongoing dispute. The case involved a complex web of contractual obligations, payment disputes, and legal proceedings between the two companies. The primary focus of the court was to ascertain the true nature and intent of the communications between the parties, particularly an email correspondence dated 25 September 2014, to determine if a binding settlement agreement had been reached.

The central legal issue was whether the parties had indeed formed a binding settlement agreement through their correspondence, specifically an email exchange on 25 September 2014, which suggested a settlement had been reached. The court had to consider whether the language used in the emails, particularly the terms "settlement agreement" and "full and final settlement," indicated an intention to create a legally binding contract. Additionally, the court needed to examine the subsequent conduct of the parties, including an email sent on 27 September 2014, to ascertain whether this conduct supported or contradicted the existence of a binding agreement.

The court's analysis hinged on an objective assessment of the parties' intentions, informed by their subsequent conduct and the context of their communications. The court held that the language used in the 25 September 2014 email, where both parties' solicitors indicated that a settlement had been reached, was probative of a binding agreement. The court further found that the subsequent discussion about a draft deed of settlement did not negate the existence of a binding agreement. The court noted that the email from 27 September 2014, which raised questions about the payment to Eureka Personnel, did not necessarily undermine the existence of a binding settlement agreement but rather suggested a potential disagreement about its scope. Ultimately, the court concluded that the parties had indeed reached a full and final settlement agreement on the terms communicated in their correspondence.

The court's final orders were to affirm the existence of the settlement agreement, recognising it as a binding contract between the parties. This decision underscored the importance of clear and unequivocal language in settlement communications and the need for an objective assessment of the parties' intentions, taking into account all relevant communications and subsequent conduct.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

I have had regard to the subsequent conduct of the parties in determining, objectively, whether they intended to form the agreement alleged: see Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21 [110] ‑ [111]. Statements or conduct inconsistent with the existence of a contract may be relevant. In particular, statements or conduct showing a common understanding that the parties are not legally bound until a formal contract is executed will be probative of the non-existence of a contract: Howard Smith and Co Ltd v Varawa [1907] HCA 38; (1907) 5 CLR 68. On 25 September 2014, Mr Mancini sent an email to Jackson McDonald, advising:I am instructed by my client that the parties reached a settlement agreement last night. Can you please call me as soon as possible to arrange for a deed of settlement to be prepared and executed this morning.Mr Giorgio of Jackson McDonald replied:We also have been instructed that the matter has settled a $520k + GST in full and final settlement and handing back of bank guarantees. I will check whether the defects liability period survives. In the meantime I would appreciate it if you would do a draft deed.We agree that tomorrow's hearing can be adjourned, costs reserved. It is, in my opinion, probative of the existence of a contract that each party had instructed solicitors that settlement was reached. The fact that the solicitors discussed a draft deed of settlement is not inconsistent with a binding agreement having already been made. The fact that Mr Giorgio identified the issue of the defects liability period, which had not been referred to by Mr Tevanian and Mr Ellison, does not make their agreement incomplete or unenforceable. It is not a matter which was legally essential to the settlement of the dispute defined in the correspondence and the writ. On 27 September 2014, Mr Ellison sent an email to Mr Tevanian in which he said that they needed to discuss how Central was to be paid or repaid the payment made to Eureka Personnel. That email is not probative of whether there was a legally binding agreement, although it may show disagreement about its scope upon a proper construction. The offer made on behalf of Central, and accepted on behalf of Avopiling, was stated to be in full and final settlement. The court should have regard to the context known to both parties to understand what a reasonable person in the position of the parties would understand they were intending to fully and finally settle. The use of words of settlement must, in context, have been in reference to the existing dispute. That dispute had reached the stage of the issue of proceedings. To identify what was intended to be settled, the first thing to consider is the writ. There is, in my opinion, a direct inclusion of this amount. Under subcl 2(e) of the Tripartite Agreement, the payment to Eureka Personnel is to be deducted from the final payment due to Avopiling under its contract with Central. The claim in the writ for all outstanding amounts owing under the Contract, in itself, requires the payment to Eureka Personnel to be taken into account.