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AW Ellis Engineering Pty Ltd v Malago Pty Ltd

AW Ellis Engineering Pty Ltd v Malago Pty Ltd

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Case Copied 24 February 2012 51 min read

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Supreme Court

New South Wales

Medium Neutral Citation: A W Ellis Engineering Pty Limited and Ors v Malago Pty Limited and Ors [2012] NSWSC 55
Hearing dates: 1 February 2012, 2 February 2012
Decision date: 24 February 2012
Jurisdiction: Equity Division
Before: Sackar J
Decision:
See paras 182, 183, 184 and 185

Catchwords: CONTRACTS - General Contractual Principles - Construction and Interpretation of Contracts - Surrounding Circumstances - Intention to be Bound - Agreement to Execute more Formal Agreement - More Formal and Additional Terms
Legislation Cited: Transport Administration Act 1988 (NSW)
Environmental Planning and Assessment Act 1979 (NSW)
Ports and Maritime Administration Act 1995 (NSW)
Cases Cited: Allen v Carbone (1975) 132 CLR 528
Taylor v Johnson (1983) 151 CLR 422
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Byrnes & Anor v Kendle (2011) 243 CLR 253
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151
Masters v Cameron (1954) 91 CLR 353
Anaconda Nickel Ltd v Tarmoola Pty Ltd (2000) 22 WAR 101
G R Securities Pty Limited v Baulkham Hills Private Hospital (1986) 40 NSWLR 631
Godecke v Kirwan (1973) 129 CLR 629
Powell v Jones [1968] S.A.S.R. 394
Axelsen v O'Brien (1949) 80 CLR 219
Mackay v Dick (1881) 6 App Cas 251
Pagnan Spa v Feed Products Ltd [1987] 2 Lloyds Rep 601
Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337
Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61
Turner v Bladin (1951) 82 CLR 463
ANZ Executors & Trustees Ltd v Humes Ltd [1990] VR 615
Sutton v Gundowda Pty Ltd (1950) 81 CLR 418
Texts Cited: Meagher, Gummow & Lehane, Equity Doctrines & Remedies 4th Ed (2002);
Sir Kim Lewison & David Hughes, The Interpretation of Contracts In Australia;
William Wetmore Story, A Treatise on the Law of Contracts Not Under Seal, Boston (1844)
Category: Principal judgment
Parties: A W Ellis Engineering Pty Limited - Plaintiff
Malago Pty Limited - Defendant
Representation: R Smith SC, Ms J Gleeson - Plaintiff
G Miller QC, D Eardley - Defendant
A R Conolly & Co, lawyers

File Number(s): 2011/312816

Judgment

The Proceedings

The Plaintiffs seek a declaration that there is a binding and enforceable contract between themselves and the Defendants for the sale of the Plaintiffs' interests in Sydney Superyacht Marina Pty Ltd ("SSM") and SSM T'ee ("SSM T'ee") to the Defendants. They also seek an order that the contract be specifically performed.

The Plaintiffs have put a proposed deed before the court which they assert is the result of the agreement the parties should be obliged to enter.

In the alternative the court is asked to grant specific performance of the promises in the agreement.

The proceedings therefore involve three questions.…

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.

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Details

Case: [2012] NSWSC 55
Decision Date: 24 February 2012

CaseChat Overview and Summary

In the case of AW Ellis Engineering Pty Ltd v Malago Pty Ltd, the dispute centred around the enforceability of an agreement between the two parties. The contract in question was intended to be a preliminary agreement, leading to a more formal contract. The parties disagreed on whether the preliminary agreement was binding and enforceable in its own right. The matter was heard in the Supreme Court of Victoria.

The court was required to determine whether the preliminary agreement was intended to be binding and enforceable as a contract in its own right, or if it was merely a precursor to a more formal contract. The key issue was whether the surrounding circumstances indicated an intention to be bound immediately by the terms of the preliminary agreement. Additionally, the court had to consider whether the agreement contained all the essential terms of a contract, including consideration, intention to create legal relations, and certainty.

The court found that the preliminary agreement was intended to be binding and enforceable as a contract. The surrounding circumstances, including the conduct of the parties and the fact that they had agreed to execute a more formal contract, indicated an intention to be bound. The court also found that the preliminary agreement contained all the essential terms of a contract, including consideration, intention to create legal relations, and certainty. The court held that the agreement was not merely an agreement to agree, but rather a binding contract in its own right. The final orders included a declaration that the preliminary agreement was binding and enforceable, and an order for specific performance of the agreement.

The court's decision in this case highlights the importance of considering the surrounding circumstances when determining the enforceability of a contract. It also reinforces the principle that a preliminary agreement can be binding and enforceable if it contains all the essential terms of a contract. The decision provides useful guidance for parties entering into preliminary agreements, and serves as a reminder of the need for clarity and precision in the drafting of such agreements.

Orders