Bullion Minerals Ltd v Fewster - [2007] WASC 100

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: BULLION MINERALS LTD -v- FEWSTER & ORS [2007] WASC 100

CORAM: LE MIERE J

HEARD: 5-8, 11-15, 18-22, 27 & 28 SEPTEMBER 2006

DELIVERED : 4 MAY 2007

FILE NO/S: CIV 2041 of 2005

BETWEEN: BULLION MINERALS LTD
Plaintiff
AND
MICHAEL EDWARD FEWSTER
First Defendant
SUZANNE THERESA FEWSTER
Second Defendant
EAGLEFIELD HOLDINGS PTY LTD (ACN 009 327 093)
Third Defendant
NARNOO MINING PTY LTD (ACN 084 713 100)
Fourth Defendant
(BY ORIGINAL ACTION)
MICHAEL EDWARD FEWSTER
First Plaintiff by Counterclaim
EAGLEFIELD HOLDINGS PTY LTD (ACN 009 327 093)
Second Plaintiff by Counterclaim
NARNOO MINING PTY LTD (ACN 084 713 100)
Third Plaintiff by Counterclaim
AND
BULLION MINERALS LTD
First Defendant by Counterclaim
GE RESOURCES PTY LTD (ACN 096 473 737)
Second Defendant by Counterclaim
(BY COUNTERCLAIM)

Catchwords:

Contract law - Alleged breach of contract - Whether oral agreement amounted to legally binding contract - Extent of agreement on essential terms - Whether parties intended to be legally bound - Whether agreement so uncertain or incomplete as to be void

Equity - Remedies - Specific performance - Lack of certainty

Mining Act 1978 (WA) - Section 119(2) - Whether alleged agreement enforceable

Legislation:

Mining Act 1978 (WA), s 119(2)

Result:

Claim dismissed
Counterclaim allowed
Declarations made

Category: B

Representation:

Original Action

Counsel:

Plaintiff:     Mr M L Bennett, Mr T O Coyle & Mr R Brierley
First Defendant             :     Mr D R Williams QC, Mr S Ellis & Mr S J Penrose
Second Defendant         :     Mr D R Williams QC, Mr S Ellis & Mr S J Penrose
Third Defendant           :     Mr D R Williams QC, Mr S Ellis & Mr S J Penrose
Fourth Defendant          :     Mr D R Williams QC, Mr S Ellis & Mr S J Penrose

Solicitors:

Plaintiff:     Lavan Legal
First Defendant             :     Tottle Partners
Second Defendant         :     Tottle Partners
Third Defendant           :     Tottle Partners
Fourth Defendant          :     Tottle Partners

Counterclaim

Counsel:

First Plaintiff by Counterclaim     :        Mr D R Williams QC & Mr S Ellis
Second Plaintiff by Counterclaim   :        Mr D R Williams QC & Mr S Ellis
Third Plaintiff by Counterclaim     :        Mr D R Williams QC & Mr S Ellis
First Defendant by Counterclaim    :        Mr M L Bennett & Mr T O Coyle
Second Defendant by Counterclaim :        Mr M L Bennett & Mr T O Coyle

Solicitors:

First Plaintiff by Counterclaim     :        Tottle Partners
Second Plaintiff by Counterclaim   :        Tottle Partners
Third Plaintiff by Counterclaim     :        Tottle Partners
First Defendant by Counterclaim    :        Lavan Legal
Second Defendant by Counterclaim :        Lavan Legal

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

Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) NSWLR 622
Commonwealth of Australia v Riley (1984) 5 FCR 8
Co‑operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1
Geebung Investments Pty Ltd v Varga…

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: [2007] WASC 100
Decision Date: 4 MAY 2007

CaseChat Overview and Summary

Bullion Minerals Ltd brought an action against Fewster and others, claiming a breach of an oral agreement and seeking specific performance. The Federal Court of Australia considered the arguments, focusing on whether an oral agreement existed that was legally binding and whether the parties had intended to be legally bound. Additionally, the court assessed if the agreement was uncertain or incomplete, rendering it void.

The court examined the nature of the agreement and whether the parties intended to be legally bound. It considered the requirement for certainty in contracts and whether the parties reached an agreement on terms legally necessary for a contract. The court found that the parties did not intend to make a legally binding agreement on the specified dates and that the parties' conduct and negotiations indicated no intention to bind themselves to a legally binding contract. The court also determined that the agreement was not unworkable and did not omit essential terms, although it did leave some matters unresolved for future determination.

In conclusion, the court found that there was no binding agreement between the plaintiff and the defendants. Consequently, the court dismissed the claim for breach of contract and specific performance. The court also allowed the counterclaim, ruling that Fewster was entitled to the payment of $5,000 and that Bullion Minerals Ltd had failed to pay it. Fewster is entitled to judgment for $5,000 on that account. Declarations were made accordingly.

Orders

Orders of the court

Claim dismissed - there was no binding agreement made between the plaintiff and the defendants or any of them.

Counterclaim allowed - Fewster was entitled to the payment of $5,000 and the plaintiff has failed to pay it. Fewster is entitled to judgment for $5,000 on that account.

Declarations made.

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 found that the parties did not intend to make a legally binding agreement on 6 or 8 August. It is strictly not necessary to consider the second, although closely related, question of whether the parties reached agreement upon such terms as are, in the circumstances, legally necessary to constitute a contract: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (supra) per Gleeson CJ at 548. The plaintiff says, in essence, that the parties had reached agreement on the matters required for a legally effective agreement and the other matters related to inessential or collateral matters. The plaintiff further says that some of the matters not agreed upon were not necessary for the formation of a legally binding agreement because they were to be decided at a later stage of the parties' relationship, in particular, after the making of a decision to mine. The requirement of certainty or the sufficiency of agreement was considered by the Full Court in Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101. The respondent was a registered owner of a number of mining tenements in the goldfields of Western Australia. The appellant wished to explore the respondent's tenements for nickel with a view to mining. In September 1994 the parties began negotiating. In April 1996 the appellant wrote to the respondent proposing five terms as heads of agreement. The letter concluded:"The above forms a heads of agreement which constitutes an agreement in itself intended to be replaced by a fuller agreement not different in substance or form."The respondent signed the letter confirming its agreement to the terms and conditions set out in it. The parties then entered into negotiations for the fuller agreement but those negotiations were unsuccessful. The appellant sought a declaration that the heads of agreement was a valid and binding contract. The respondent submitted that the parties had omitted so many important matters, and described so many other matters in such uncertain terms that, objectively speaking, the appropriate inference was that the parties had not intended to bind themselves to a legally binding contract. The respondent also submitted that the agreement was unclear and unworkable, including in situations where concurrent exploration might occur. The Full Court allowed the appeal and found that the terms of the heads of agreement, the pre‑contractual negotiations and the parties' subsequent conduct indicated that the parties intended the heads of agreement to have binding contractual effect. The Full Court found that the agreement did not omit essential terms, and nor was it unworkable in the sense of it being objectively impossible to perform. Ipp J, with whom Pidgeon J agreed, said at [25]:"It is well recognised that parties may enter into a valid contract containing a limited number of terms comprising those terms essential to the bargain that they wished to conclude, in the expectation that at a later date a further contract will be arrived at containing additional terms that would facilitate and clarify the initial contract. That is to say, a binding contract may be arrived at even though it leaves unresolved many matters which might arise in the future. As Kennedy J said in Terrex Resources NL v Magnet Petroleum Pty Ltd (1988) 1 WAR 144 at 159:'An agreement does not have to be worked out in meticulous detail. A bargain can be made containing certain terms, regarded as essentials, whilst the parties recognise that a formal document will eventually be drawn up in the full expectation that a number of additional terms will, by consent, be included in that document.'"