Bushtown Holdings Pty Ltd v Conlan - [2000] WASCA 334

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: BUSHTOWN HOLDINGS PTY LTD & ANOR -v- CONLAN [2000] WASCA 334

CORAM: STEYTLER J
PARKER J

HEARD: 23 OCTOBER 2000

DELIVERED : 7 NOVEMBER 2000

FILE NO/S: FUL 103 of 2000

BETWEEN: BUSHTOWN HOLDINGS PTY LTD
First Applicant
JULIE MAREE CARTER
Second Applicant
AND
JOHN JAMES JOSEPH CONLAN
Respondent

Catchwords:

Appeal - Application for leave to appeal - Contract - Offer and acceptance - Offer purportedly accepted subject to imposition of new condition - Purported acceptance in reality a counter offer - Counter offer not accepted - No contract came into being - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Representation:

Counsel:

First Applicant              :     Mr P A Kyle
Second Applicant          :     Mr P A Kyle
Respondent:     Mr D L Jones

Solicitors:

First Applicant              :     Kyle & Company
Second Applicant          :     Kyle & Company
Respondent:     Kusevich & Associates

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

Davies v Smith (1938) 12 ALJR 260
Grainger v Vindin (1865) 4 SCR (NSW) 32
Turner Kempson & Co Pty Ltd v Camm [1922] VLR 498
Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40

Case(s) also cited:

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Clifton v Palumbo [1994] 2 All ER 497
McGellin v Mount King Mining NL (1998) 144 FLR 288
Wilson v Lim [1989] WAR 285
Wing Luck Foods v Lim [1989] WAR 358

JUDGMENT OF THE COURT: This is an application for leave to appeal against the decision of a Judge of this Court.
In July 1994 the respondent, Mr John Conlan, purchased two businesses engaged in the manufacture and sale of shearing and other rural clothing. In July 1995 he transferred those businesses to the first appellant, Bushtown Holdings Pty Ltd. The directors of that company were himself and the second appellant, Ms Julie Carter.
Differences arose between Mr Conlan and Ms Carter. In about December 1997 Ms Carter took over the management of the company. On 5 March 1998, the company brought an action against Mr Conlan. It claimed damages from him for alleged conversion. It also claimed, in the alternative, that he had had and received company moneys. He defended the action and brought a counterclaim against Ms Carter claiming ownership of all issued shares in the company.
Attempts were made to settle the proceedings in September 1999.
On 8 September 1999 the solicitors for the appellants wrote to the solicitors for the respondent enclosing the company's balance sheet as at 31 August 1999 and its profit and loss statements for the years ended 30 June 1998 and 30 June 1999 respectively. The apparent purpose of the letter was to demonstrate that the company had no value as its business had not been profitable. The balance sheet disclosed that the company's assets were worth $35,448.56 and that it had total liabilities of $55,992.34. One of those liabilities was said to be…

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: [2000] WASCA 334
Decision Date: 7 NOVEMBER 2000

CaseChat Overview and Summary

The case of Bushtown Holdings Pty Ltd v Conlan involves an application for leave to appeal against a decision made by a Judge of the court. The dispute arose after Mr John Conlan purchased two businesses and subsequently transferred them to Bushtown Holdings Pty Ltd. Differences between Mr Conlan and Ms Julie Carter, the other director of the company, led to the company bringing an action against Mr Conlan. Mr Conlan defended the action and brought a counterclaim against Ms Carter. The case turned on the interpretation of communications between the parties' solicitors regarding a potential settlement.

The primary legal issue before the court was whether a contract was formed between the parties based on the communications between their solicitors. The court had to determine whether the communication from Mr Conlan's solicitors constituted an offer that was accepted by the appellants' solicitors or if it was a counter-offer that was never accepted. Additionally, the court had to consider whether the purported acceptance of the offer was conditional, thus making it a counter-offer.

The court found that the communication from Mr Conlan's solicitors was an offer that was not accepted by the appellants' solicitors. Instead, the response from the appellants' solicitors was a counter-offer, which was never accepted. The court held that because the appellants could not establish either of the agreements they contended for, no substantial injustice would result from leaving the decision of the trial judge unreversed. Consequently, the application for leave to appeal was dismissed.

The court dismissed the application for leave to appeal and upheld the decision of the trial judge. The court found that no contract was formed between the parties based on the communications between their solicitors, as the purported acceptance by the appellants' solicitors was in reality a counter-offer that was never accepted.

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

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Decision

Reasons for decision

JUDGMENT OF THE COURT: This is an application for leave to appeal against the decision of a Judge of this Court. In July 1994 the respondent, Mr John Conlan, purchased two businesses engaged in the manufacture and sale of shearing and other rural clothing. In July 1995 he transferred those businesses to the first appellant, Bushtown Holdings Pty Ltd. The directors of that company were himself and the second appellant, Ms Julie Carter. Differences arose between Mr Conlan and Ms Carter. In about December 1997 Ms Carter took over the management of the company. On 5 March 1998, the company brought an action against Mr Conlan. It claimed damages from him for alleged conversion. It also claimed, in the alternative, that he had had and received company moneys. He defended the action and brought a counterclaim against Ms Carter claiming ownership of all issued shares in the company. Attempts were made to settle the proceedings in September 1999. On 8 September 1999 the solicitors for the appellants wrote to the solicitors for the respondent enclosing the company's balance sheet as at 31 August 1999 and its profit and loss statements for the years ended 30 June 1998 and 30 June 1999 respectively. The apparent purpose of the letter was to demonstrate that the company had no value as its business had not been profitable. The balance sheet disclosed that the company's assets were worth $35,448.56 and that it had total liabilities of $55,992.34. One of those liabilities was said to be a loan by Ms Carter to the company of $41,000. The letter of 8 September 1999 said, in that respect, that the loan was comprised almost entirely of outstanding wages calculated by reference to a wage of $1,000 per week. The solicitors for the appellant responded by letter dated 10 September 1999. They asked for copies of the company's taxation returns and said that the balance sheet as presented was "particularly unsatisfactory and ... of little value". They said that there were, in the 1999 profit and loss statement for the company, a number of items which were "out of kilter" with previous years. The letter went on as follows:"Having regard to Ms Carter paying herself $50,000.00, which seems excessive on any objective examination (remembering she queried wages to Mr Conlan of $500.00 per week), it seems strange that the Company with a much reduced turnover should require a Bookkeeper in addition to $3,080.00 of accounting assistance. [The company's accounts had shown bookkeeping fees of $3,245 as well as accounting fees.] A comparison of the 1999 figures with earlier years highlights many unusually high expenses, which conveniently reduce the nett profit of the Company....If one accepts Ms Carter's reasonable wage as $30,000.00 and adding back the excessive or 'one off' deductions compared to previous years, the Company probably should have had a profit of $45,000.00 plus.Having regard to the Company having a profit of somewhere near $50,000.00 and having regard to the fact that Mr Conlan is very likely to get at least a half share in the Company back again (even at the risk of both parties being subject to an unwanted audit) our client repeats his earlier offers (Without Prejudice if not accepted). Mr Conlan will surrender any rights he has whatsoever with regard to the Company and Ms Carter for $15,000.00 and return of his personal belongings (shearing gear, etc) OR alternatively Mr Conlan will take over the Company for $10,000.00 (provided the situation is roughly as you have outlined it to be), which you allege is worthless, and get a release of Ms Carter's guarantees and any liability she has to the Company and she takes her Toyota (if not already sold). In both instances each party pays their own legal costs.If this offer is not acceptable or similar settlement not negotiated, Mr Conlan wants to have his day in Court.... "

Ratio Decidendi

Legal Principle Established

These conclusions are enough to dispose of the application. Because the appellants are unable to make out either of the agreements for which they contend, it follows, in our opinion, that no substantial injustice will be done by leaving the decision of the learned trial Judge unreversed (see Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40 at 54 ‑ 55). We consequently propose to dismiss the application for leave to appeal.