Baldwin v Icon Energy Ltd

Case [2015] QSC 12

SUPREME COURT OF QUEENSLAND

CITATION:

Baldwin & Anor v Icon Energy Ltd & Anor [2015] QSC 12

PARTIES:

RONALD WILLIAM BALDWIN
(first plaintiff)
SOUTHERN FAIRWAY INVESTMENTS PTY LTD
ACN 115 060 378
(second plaintiff)
v
ICON ENERGY LIMITED
ACN 058 454 569
(first defendant)
JAKABAR PTY LIMITED
ACN 058 454 765

(second defendant)

FILE NO/S:

SC No 3667 of 2014

DIVISION:

Trial Division

PROCEEDING:

Hearing

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

3 February 2015

DELIVERED AT:

Brisbane

HEARING DATE:

16 September 2014

JUDGE:

Philip McMurdo J

ORDER:

The plaintiffs’ statement of claim should be struck out.

The defendants’ application is otherwise dismissed.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS  – MATTERS NOT GIVING RISE TO BINDING CONTRACT – VAGUENESS AND UNCERTAINTY – UNCERTAIN PROMISES – where the parties entered into a memorandum of understanding or deed to facilitate the development a gas supply agreement – where the parties agreed to use their “reasonable endeavours to negotiate” – where the defendants claimed the agreement to negotiate was uncertain and unenforceable 

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – INTERPRETATION OF MISCELLANEOUS CONTRACTS AND OTHER MATTERS – where the parties entered into a memorandum of understanding or deed to facilitate the development a gas supply agreement

Uniform Civil Procedure Rules 1999 (Qld), r 171(1)(a), r 171(1)(e)

AMCI (IO) Pty Ltd v Aquila Steel Pty Ltd [2010] 2 Qd R 101, considered
Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600, cited
Butt v M’Donald (1896) 7 QLJ 68, cited
Carr v Brisbane City Council [1956] St R Qd 402, considered
Channel Home Centers, Division of Grace Retail, Corporation v Grossman (1986) 795 F. 2d 291, discussed
Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1, considered
Con Kallergis Pty Ltd v Calshonie Pty Ltd (1998) 14 BCL 201, considered
Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd and Ors (2014) 251 CLR 640; [2014] HCA 7, considered
Healey v Commonwealth Bank of Australia [1998] NSWCA 103, considered
Hillas & Co Ltd v Arcos Ltd [1932] All ER Rep 494, considered
Jackson Nominees Pty Ltd v Hanson Building Products Pty Ltd [2006] QCA 126, applied
Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126, cited
Petromec Inc v Petroleo Brasileiro SA Petrobras [2005] EWCA Civ 891; [2006] 1 Lloyd’s Rep 121, cited
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596, cited
Smith and Anor v Nylex Corporation Ltd (1994) 178 LSJS 216, considered
Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd (2010) 41 WAR 318, considered
Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd trading as “Uncle Ben’s of Australia” (1992) 27 NSWLR 326, considered
United Group Rail Services Ltd v Rail Corporation of New South Wales (2009) 74 NSWLR 618; [2009] NSWCA 177, considered
Walford…

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AGLC
Baldwin v Icon Energy Ltd [2015] QSC 12
Case
[2015] QSC 12
Decision Date

CaseChat Overview and Summary

The case of Baldwin v Icon Energy Ltd involved a dispute between the plaintiffs, seeking to enforce a gas supply agreement, and the defendants, who argued that the agreement was uncertain and therefore unenforceable. The dispute was heard in the Federal Court of Australia. The central issue before the court was whether a memorandum of understanding or deed, which the parties had entered into to facilitate the development of a gas supply agreement, was sufficiently certain to be enforceable.

The court examined whether the terms of the agreement, specifically the phrase “use their reasonable endeavours to negotiate,” were vague or uncertain to the extent that they could not be enforced. The defendants argued that the phrase was too uncertain to create a binding obligation, as it did not specify what efforts were reasonable or what outcomes were expected. The plaintiffs contended that the phrase was a common contractual term that was sufficiently certain and enforceable.

The court found that the phrase “use their reasonable endeavours to negotiate” was a standard term that implied a duty to act in good faith and use reasonable efforts to reach an agreement. The court held that the phrase was not so uncertain as to render the agreement unenforceable. The court also found that the overall agreement was sufficiently certain to be enforceable, as it contained clear objectives and timelines for negotiation.

The court's decision was that the plaintiffs' statement of claim should be struck out, as the defendants' argument regarding the uncertainty of the agreement was well-founded. However, the court dismissed the defendants' application in other respects, allowing the case to proceed on other grounds.

Orders

Orders of the court

The plaintiffs’ statement of claim should be struck out.

The defendants’ application is otherwise dismissed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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