Devos v Fayolle
[2010] QDC 340
•3 September 2010
DISTRICT COURT OF QUEENSLAND
CITATION:
Devos v Fayolle & Anor [2010] QDC 340
PARTIES:
YVES MAURICE CLEMENT PIERRE DEVOS
Plaintiff
v
LORNA FAYOLLE AND JOSEPH JACQUES FAYOLLE
Defendants
AND
PACIFIC IMMOBILIER PTY LTD ACN 123 022 560
Plaintiff
v
YVES DEVOS
Defendant
FILE NOS:
136 of 2009 and 316 of 2009
DIVISION:
Civil
PROCEEDING:
Trial
ORIGINATING COURT:
District Court at Maroochydore
DELIVERED ON:
3 September 2010
DELIVERED AT:
Maroochydore
HEARING DATE:
28 and 29 April 2010, and 12 August 2010
JUDGE:
K S Dodds, DCJ
ORDER:
In proceeding 136 of 2009 the plaintiff’s claim is dismissed. I give judgment for the defendants.
In proceeding 316 of 2009 the plaintiff’s claim is dismissed. I give judgment for the defendant.
CATCHWORDS:
CONTRACTS – whether in negotiating terms of contract entered into husband acting on his own behalf and as agent for his wife – whether contract between parties as individuals or between individual and a company
CONTRACTS – whether oral agreement made – whether enforceable
Cases cited:
Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154
Smith v Hughes (1861) LR 6 QB 597
Taylor v Johnson (1983) 151 CLR 422COUNSEL:
L Nevison for the plaintiff in matter 136 of 2009, and defendant in matter 316 of 2009
C Crawford the defendants in matter 136 of 2009, and plaintiff in matter 316 of 2009
SOLICITORS:
Ferguson Cannon Lawyers for the plaintiff in matter 136 of 2009, and defendant in matter 316 of 2009
Schultz Toomey O’Brien Lawyers for the defendants in matter 136 of 2009, and plaintiff in matter 316 of 2009
These two actions were heard together. They arise out of the same circumstances.
In proceeding 136 of 2009 commenced by claim filed 18 May 2009, the plaintiff (Yves) sued the defendants (Jacques and Lorna) for $88,000 pursuant to an alleged oral agreement between Yves and Jacques on his own behalf and as agent for Lorna. The defendant’s denied the existence of any oral agreement as pleaded.
Yves is a resident of New Caledonia. He is an experienced business man. Jacques and Lorna are husband and wife of 30 years duration and are residents of Australia. They were in Vanuatu from about 2000 to 2004. Jacques was working for the ANZ bank. He also is an experienced businessman. On return to Australia in about 2004 Jacques or Jacques and Lorna purchased the licence for ANZ mobile lending on the Sunshine Coast. Jacques and Yves have had contact about business matters on a number of occasions since.
In proceeding 316 of 2009 commenced by claim filed 9 November 2009, the plaintiff (Pacific) sued Yves for $65,000 alleged due under a contract between the plaintiff and Yves. It was alleged it was a term of the contract Yves pay $180,000 for 36 shares in a company Buro Francais Pty Ltd (Buro) to be paid in three instalments - $50,000, $65,000 and $65,000. Yves denied the contract as pleaded, asserting rather that he entered into an agreement with Jacques to pay $180,000 for 36 shares in Buro, that he had paid $50,000 and one payment of $65,000 but that in or about April 2008, Jacques in his own right and as agent for Lorna, agreed that he would not be required to contribute any further monies to Buro including the final instalment of $65,000 and in consideration of his transferring his 36 shares as directed by Jacques, Jacques would pay him $88,000 and transfer a Toyota Kluger motor vehicle to him.
Background
Pacific Immobilier Pty Ltd (Pacific) is the company of Jacques and Lorna. Each are directors. Jacques is secretary and sole shareholder. It was registered on 6 December 2006.
A business name, Bureau Francais (Bureau), was registered on 27 July 2007. An extract from the register shows the commencement date of business to be 1 July 2007. It shows, initially the person carrying on the business was Jacques. He ceased on 2 August 2007 and was replaced by Pacific Immobilier Pty Ltd as trustee for the Fayolle No.2 Family Trust; it ceased on 8 February 2008 to be replaced by Buro.
Buro was registered on 31 October 2007. Its directors then were Jacques, Lorna and Yves. Lorna was secretary. Its shareholders were Pacific (64 shares) and Yves (36 shares). Yves is no longer a director.
In September 2007 Jacques sent a proposal to Yves received by him on 11 September 2007 under letterhead “Bureau Francais”. The proposal was described as a “business opportunity” “to purchase a share in this innovative entrepreneurial young company”. No company is mentioned. All reference is to the business of Bureau. After some negotiations the price was to be $180,000 representing 36 percent of the company. Payment was to be, by a first payment on signing of the agreement, $50,000, a second payment of $65,000 on 15 March 2008 and a final payment of $65,000 on 15 March 2009. On 12 September 2007 Yves agreed. He faxed his agreement and then wrote to Jacques as follows (letter dated Noumea 12 September 2007):
“Dear Jacques,
I have just faxed you my agreement to the new sales form you sent me yesterday morning.
I will immediately take care of things with my bank so that you should receive the funds by next week at the latest.
I put my complete trust in you to have our agreements copied to your accountant and lawyer so that our association may be made official under the agreed terms and for the agreed sums.
One important thing is the deed must specify that in the event of my death, my shares (36%) will go entirely to my son Laurent.
For the sake of good form whilst we wait for this to be made official, I would ask you to fax me a copy of the present letter bearing your signature proceeded by the ‘read and approved good for agreement’.
Thanking you in advance.
In friendship”.
Jacques complied with the request in the letter on 13 September 2007 by writing the words ‘read and approved good for agreement’ over his signature and the date, 13 September 2007.
On 20 September 2007, on Jacques instructions, Yves paid $50,000 by transfer to the bank account of Pacific as trustee for the Fayolle No 2 Family Trust trading as Bureau Francais. Buro was later incorporated and registered to carry on the business of Bureau. According to Jacques and Lorna that followed legal advice that Yves could not hold shares in the trustee of the family trust.
The dispute about this agreement is about the parties to it. Yves said it was between Jacques and Jacques as agent for Lorna, and himself. Jacques said it was between Pacific and Yves (the September 2007 agreement).
Also in dispute is whether Jacques, as Yves contended, was acting as agent for Lorna.
Another matter in dispute is the existence of an enforceable oral agreement contended for by Yves about disposal of his shareholding in Buro (the April 2008 agreement).
Yves has paid the first two payments pursuant to the September 2007 agreement. The first is set out above. The second payment was credited to that same bank account on 28 February 2008. That is after Pacific had ceased to carry on the business of Bureau.
Oral evidence in the trial of both proceedings came from Yves and his son Laurent on the one side, and from Jacques, Lorna, Benjamin Ball (Mr Ball), Emmanuel Tarpin (Dr Tarpin) and Cleis Goxe (Ms Goxe), on the other. There were a number of documentary exhibits.
At material times was Jacques acting on his own behalf and as agent for Lorna?
In his evidence Jacques denied he acted as agent for Lorna in entering into the September 2007 agreement. He denied the April 2008 agreement entirely.
Jacques gave evidence that the decision to sell a share in Bureau was a significant financial decision. He said that throughout 30 years of marriage to Lorna, anything to do with their finance, a decision as husband and wife and family has always been joint. A decision such as agreeing to repurchase shares from Yves was not one that could be made without discussing it with Lorna.
Yves in evidence, in effect, said he was of the view Jacques was also speaking for Lorna in making the September 2007 agreement because the money transfer was made in the name of a company belonging to both of them; Lorna was also a director/manager.
Lorna in her evidence said she and Jacques were looking for funding for Bureau. They prepared a business opportunity document, the document which was presented to Yves. She went with Jacques to the Gold Coast to present a copy of the document to Yves. After Yves had entered into the agreement, advice was received Yves could not be a shareholder in their trustee company and they should set up another company to “run the trading company Bureau Francais”. They set up another company (Buro). She said it was a significant financial decision to have Yves come into the Bureau Francais business. She discussed it with Jacques. Over their 30 years of marriage, whenever significant financial decisions were to be made, she and Jacques would always discuss the matter. They worked as a team. She was happy for Jacques to communicate with Yves on her behalf.
A relationship of agency arises when one party (a principal) consents or agrees to another party (an agent) acting on their behalf and that other party consents or agrees to do so. The principal is bound by an agreement made by the agent on the principal’s behalf within the scope of the agent’s actual authority.
The evidence of both Jacques and Lorna supports a view that seeking an investor in Bureau’s business and accepting Yves as an investor was a joint decision. It seems to me that any negotiations between Yves and Jacques outside Lorna’s presence were conducted by Jacques on behalf of both he and Lorna, as was the agreement which was entered into.
The September 2007 Agreement
Subject to what I have said above about Lorna’s involvement, so far as the evidence shows, discussions about the “business opportunity” were between Yves and Jacques. The presentation by Jacques about the “business opportunity” was on Bureau letterhead accompanying a letter from Jacques. It was that presentation of the business opportunity with negotiated alterations to which Yves agreed in writing on the document itself on 12 September 2007 and on the same date by letter addressed to Jacques requesting the agreements “to be copied to your accountant and lawyer so that our association may be made official under the agreed terms and for the agreed sums.” The agreement was to buy 36 of 100 shares in a company.
At the time this was taking place Bureau was a registered business name. According to the register, the person carrying on the business was Pacific Immobilier Pty Ltd as trustee for the Fayolle No. 2 Family Trust.[1] Jacques is the sole shareholder.
[1] This is prima facie evidence of that fact. Business Names Act 1962 section 24.
On 20 September 2007, after the agreement had been entered into, Jacques advised Yves by facsimile the first payment for the shares was to be made to Pacific Immobilier Pty Ltd as trustee for the Fayole No. 2 Family Trust into its bank account. Buro was later incorporated and the shares issued in Buro.
Who were parties to an agreement falls to be decided by the court “in accordance with the objective theory of contract”.[2] Yves was dealing with Jacques, a director, and shareholder of Pacific, the company then carrying on the business of Bureau. It may be inferred that Yves understood the shares would be in a company carrying on the business of Bureau. However there is no evidence about any discussion between Jacques or Jacques and Lorna and Yves about any company. Although at a time subsequent to the agreement, Yves was instructed to pay the first instalment of the purchase price for the shares to a bank account of Pacific as trustee for the Fayolle No. 2 Family Trust, the shares which issued were shares in a company, Buro, not in existence at the time of the agreement and the first payment, but in existence at the time of payment of the second instalment of purchase price to Pacific as trustee for the Fayolle No. 2 family trust.
[2] Per Campbell JA with whom Beazley and Basten JJA agreed in Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154.
It seems to me that this agreement was an agreement entered into between Yves and Jacques, both on his own behalf and as agent for Lorna, not between Yves and Pacific. It was an agreement to purchase 36 shares out of 100 shares in a company carrying on the business of Bureau. That ultimately was Buro when it came into existence.
The April 2008 Agreeement
The essential question is did an enforceable oral agreement as pleaded by Yves come into existence as a result of discussions between them on 14 April 2008.
Underlying Yves purchase of the shares was the desire to provide opportunity in Australia for his son Laurent. Laurent was studying and also was doing some work in the business of Bureau. His partner Ondine Labrissiere also worked in the business of Bureau.
After the shares had been purchased Bureau acquired a Toyota Kluger motor vehicle. Jacques and Lorna did not consider such a vehicle was necessary for the business, a smaller cheaper motor vehicle would have sufficed. However Laurent wanted the larger 4WD vehicle. Yves provided $16,000 to the business against its purchase. The balance of the price was financed by Esanda. Conditions of use were printed by the business and signed by all.
Within a short time, Laurent damaged the engine of the vehicle by driving it at speed through water and taking water into the engine. Repairs cost in the vicinity of $14,000 and were covered by insurance. The incident causing the damage led to a letter from Jacques and Lorna to Laurent dated 14 February 2008 restricting his use of the vehicle. Laurent acknowledged under his signature, reading and understanding the additional conditions of use of the vehicle.
Disagreement had surfaced between Laurent on the one hand and Jacques and Lorna on the other hand about how development of the business should proceed and about employees’ responsibilities. On 2 March 2008 there was an exchange of emails between Jacques and Laurent. The upshot was that Laurent’s authority to negotiate arrangements on behalf of the business was restricted.
On 18 March 2008 there was a directors meeting of Buro. Yves had come to Australia to attend. A draft shareholders agreement was tabled and amendments were agreed. Yves tabled a document prepared by Laurent and Ondine setting out desired changes to the way the business was operating referred to as a “convention”. Laurent and Ondine had presented it to Yves indicating their unhappiness with the current working relationship, distribution of responsibilities, the structure and leadership arrangements of the business. Jacques and Lorna did not agree with the proposals in the convention. However they agreed to reconsider Laurent’s employment contract description and role in the business, and present a new employment contract for his consideration.
Jacques subsequently met with Laurent to discuss the requests for changes in the convention. On 7 April 2008 Jacques wrote to Yves responding to the convention changes proposed. Attached was a new employment contract for Laurent reflecting changes he and Lorna were prepared to make. Yves responded, writing to Jacques on 9 April 2008. The letter began by referring to the deterioration of the “climate of trust” between he and Laurent. It urged, in the interests of the business, a strong reconciliation between them. It referred to aspects of the proposed new employment contract which Yves considered unsatisfactory. It concluded:
“In terms of the initial value of your business, I don’t contest it---. But there still remains a little less than a year to really prove it to me.
With all my sincerity and friendship
and a BIT OF EXPERIENCE”.
Some alteration was made to the proposed new contract of employment by Jacques and Lorna in response to Yves’ letter of 9 April 2008. Despite that, Laurent rejected it. On 14 April 2008 he advised Jacques he did not wish to continue with Bureau.
According to Yves, on 14 April 2008 he phoned Jacques after Laurent had told him he was no longer going to work in Bureau. He did so to tell him he wished to withdraw from the business. Telephone records show the duration of the call was 11 minutes, 43 seconds. He said that the agreement reached between them was summed up in six points, which he said were “so the first point is that I had invested $130,000, yes, $131,000 in the company and I’m --- $115,000. And $16,000 on current accounts. Okay then the second point was that Jacques would only have to pay me $88,000 because we were deducting $43,000 for the car which had to remain with my son. Okay. The value of the car was fixed at $43,000 basing ourselves on the invoice. So Jacques had to take the required steps to put the car in my son’s name. ---I was dispensed from making the third payment. And at that stage I would give the shares to Jacques or sell them back.” Later in his evidence:
Question: “Subsequent to that conversation did you do something?”
Answer: “No, Jacques told me that he would take necessary steps to –
make this agreement – you know to come through with this agreement--- so on the same day I informed my son of the final agreement and I told him that he could keep the car.”
He said that subsequently he spoke to Jacques and reminded him of their agreement. He was asked whether a document was produced evidencing the agreement and he said no, the reason being “because I trusted him”. He said that in the discussion of 14 April 2008 there was no discussion about how Jacques was to pay the money, regarding that he said “he told me that he would take care of that.” When asked why he did not raise with Jacques how he proposed to make the payment he said “because it was his problem, not mine.”
Jacques denied there was any agreement as Yves had said. He said that after the meeting of 18 March 2008 had concluded Laurent and Ondine had been invited to attend to discuss the requests for change. When informed the changes asked for had not been agreed, Laurent became upset and indicated he no longer wished to work in the business. Yves said to Jacques and Lorna “if Laurent is out, I’m out”. Jacques said “I’m not able to buy you out, we don’t have the money, you look for somebody who is suitable to buy your shares and I will try and do the same”. I accept that an exchange to that effect occurred. Later that day Yves phoned and asked “what do we do with the car?” He responded by saying that he understood Laurent didn’t have a car and he could continue to use the car for a short time until he got a new car. He did not deny he had a conversation with Yves on 14 April 2008. He said regarding that conversation it was about Laurent seeing him that morning and saying he did not want to continue and about what to do about staffing with Laurent going. The conversation Yves said occurred, did not occur.
I do not accept Jacques evidence about the phone conversation on 14 April 2008. I am satisfied the matters which are contained in Yves’ six points were discussed. I find on the balance of probabilities that a conversation about the disposal of Yves’ interest in Bureau did take place on 14 April 2008 during that phone call. I find the tenor of that conversation was:
§Yves would withdraw from his interest in the business. To that end his shareholding would be disposed of.
§He had to that point paid $115,000 towards purchase of 36 shares in Bureau plus $16,000 on current account toward purchase of the Toyota Kluger.
§He wished Laurent to have the Toyota Kluger. It was agreed a value to be assigned to the vehicle would be $43,000 (its purchase price had been a little over $43,000).
§Taking into account the money Yves had paid to that time and the assigned value of the motor vehicle, for disposing of his shares, Yves wished to be paid $88,000.
§Yves would not make the third payment of $65,000 under the 11 September 20008 agreement.
What occurred subsequent to 14 April 2008
It is useful to look at what occurred subsequent to 14 April 2008. Apart from anything else, the deterioration of the relationship is plain. The goodwill which had attended the relationship between Yves and Jacques dissipated.
On 15 April 2008 at 10:26am, Jacques sent an email to Laurent attaching a letter of authority for him to continue to use the Toyota motor vehicle “until further notice”. It was copied to the insurance agent. The letter read: “Good morning Laurent. Further to our telephone conversation I confirm that though you no longer work for Bureau Francais, until further notice you may continue to use the business vehicle (Toyota Kluger) under the same terms and conditions of use as what you had previously signed.”
On 2 May 2008, Jacques wrote to Yves. The business had received a bill from solicitors regarding work done on the shareholder agreement. The letter referred to the bill and other expenses the business faced. It included the following:
“But I understand that given Laurent’s departure, you are not proposing to keep your share in the company. For myself, I am trying to find other shareholders to take your share. I will keep you informed.
Yves, as the office’s treasury is very low I must turn to you to lend us a hand.
---
I ask if you could make a transfer of $10,000 (as a shareholder’s loan) to the company to cover the treasury.”
Yves responded with a handwritten note on a copy of the letter to the following effect:
“Sorry Jacques, but I won’t be able to do anything to help in the present situation.
The selling at a loss of the ‘Shores’ and the repayments for ‘Axis’ are still weighing me down this year--- not mentioning Laurent who is now unemployed, as is Ondine--- sorry I can’t help this time, Yves”.
Dr Tarpin and Ms Goxe both gave evidence of Jacques raising with them that Yves shares were for sale and he was looking for someone to buy them; with Ms Goxe in May 2008 and Dr Tarpin in June 2008.
On 18 June 2008 Jacques sent Yves a further letter from the solicitors who had been engaged to prepare the shareholders agreement – enclosing their account for work performed. Non payment of the account had resulted in loss of discount with the result the amount due had increased. He wrote on the letter: “We need to fix this account. I will call you tomorrow.”
In September 2008 Laurent was detected speeding in the Toyota (149 kilometres per hour in a 100 kilometre per hour zone). The fine was $3500. That led to a letter from Jacques and Lorna as directors, dated 17 September 2008 to Yves in the following terms:
“Further to our telephone conversation yesterday regarding the speeding fine that Laurent has incurred in the Bureau Francais business vehicle, Laurent has this morning advised he has the money to pay for this fine.
Bureau Francais has allowed Laurent to use the vehicle until he can arrange a car for himself. He was to use the vehicle in a respectful and responsible manner---.
The company director’s of Bureau Francais Pty Ltd and the company itself continues to be put at risk by Laurent’s continuing misdemeanours. ---This unacceptable risk cannot continue.
Yves, the status of the company car now needs to be resolved.
Options as we see it are:
§the vehicle is sold
§subject to the finance company approval, the vehicle and the lease over the vehicle be transferred to your and Laurent’s name
§Laurent pays out the car lease in full (current payout fee of $27,916.98) and the vehicle transfers to his name.
Yves, can you please give consideration to these options and advise.”
In early September 2008, Yves wrote a letter to Jacques dated 4 September 2008 authorising Laurent to act on his “behalf within the directorship of the company Buro Francais Pty Ltd “to provide instructions to you at all times”. The letter concluded:
“I trust you to honour my instructions.”
By letter dated 24 September 2008, Laurent wrote to Jacques and Lorna advising that he had recently contacted a solicitor in relation to Buro and had been advised inter alia:
“1. As I have written authority to act as my father’s--- legal representative I have the right to attend to matters on his behalf as a shareholder and director in the company.
2. I have the right to request and be provided with the financial statements outlined in my email of 19 September 2008.
3. My father and I have the right to use any of the company’s assets including the company car currently in my possession.
4. You do not have the right to take possession of and sell the company car---.
5. Under the Corporations Act 2000 as directors and the majority shareholders you have a duty at law to act bona fides in the interests of the company as a whole. The act of taking the car would be a breach of this duty.
6. The act of taking the car would be oppressive to, unfairly prejudicial to and unfairly discriminatory against my father and me. Such an act is illegal at law under the Corporate Law Economic Reform Program Act 1999.
My father and I are committed to recovering all monies owing to my father by the company (my underlining).
I look forward to meeting with you at the upcoming director’s meeting as outlined in your email of 19 September 2008 to resolve the above and any additional issues with you---.”
On 6 October 2008 a director’s meeting of Buro took place. Present were Jacques, Lorna, Laurent and Mr Ball who was the minute taker. The evidence of Laurent differed from that of others at the meeting. I prefer the evidence of the others at the meeting to that of Laurent.
The letter from Yves appointing Laurent in his place was tabled. Laurent put forward a proposal that he be reinstated as a staff member on the basis of his convention and his terms and conditions, and that he would personally take over the responsibility of the monthly payments of the company motor vehicle. That was rejected by Jacques and Lorna. Laurent advised that if his proposal was not accepted, he would take legal action against the company. He then refused to take any further part in the meeting. Amongst other things it was then resolved the company vehicle, the Toyota Kluger, be sold as soon as possible to the highest bidder and that the vehicle be immediately returned to the business address. A notice was prepared to be served on Laurent to return the vehicle with immediate effect.
By letter dated 6 October 2008 from Laurent addressed to Jacques, Laurent wrote:
“Once again, my father and I are very surprised to receive this fax asking me to return the car. As you have agreed with my father you were going to deducted (sic) the amount of the car as a part of your reimbursement of the amount he invested in Buro Francais. In this regard have you done what is necessary to repay the participation of my father in Buro Francais. As you know the company has never had satisfactory figures and promises were not kept.”
On 9 October 2008 a letter on Bureau letterhead and signed by Jacques and Lorna was sent to Laurent. Amongst other matters it read:
“It was resolved at the director’s meeting that the company vehicle be sold. It is no longer being used for business purposes and the lease payments are an unnecessary liability to the company. We have previously served notice on you, but again demand the company vehicle be returned within the next 48 hours to the business premises at 139 Nicklin Way, Warana.
If the vehicle is not returned within that time frame, we will commence legal action to retrieve the vehicle.
We put you on notice, you are currently retaining the company vehicle without authority of the company---.”
By letter dated 13 October 2008 solicitors for Buro wrote to Laurent regarding a number of matters. The letter included a demand on behalf of the company for the return of the motor vehicle. It advised that should that not be done, recovery proceedings would be recommended by them to their client.
By letter dated 15 October 2008 solicitors acting for Yves and Laurent replied. The letter included the following:
“Laurent Devos is currently in possession of a Toyota Kluger motor vehicle, registration number 879XVA (the car) which is owned by the company.
Laurent Devos loaned the company $16,000 for the purchase of the car.
It was agreed between your client and our clients that Laurent Devos can use the car indefinitely and the car may be given to Laurent Devos as part payment of outstanding monies owed by Jacques Fayolle to Yves Devoes. We are instructed to demand that your clients honour this agreement and desist in the demand for the return of the car.”
By facsimile dated 17 October 2008 Jacques wrote to Yves in the following terms:
“Dear Yves,
We have received legal advice informing us that we should begin legal proceedings to recuperate the company car and website. The server is the intellectual property of Buro Francais Pty Ltd .
Yves, in a bid to avoid the cost this lawsuit would entail is there a way to resolve this problem out of court.
I await your comments.”
By letter dated 16 December 2008 solicitors for Yves and Laurent wrote to solicitors for Buro. It included the following:
“3. Refund of Monies Paid by Yves Devos
As your client is aware Mr Yves Devos has paid an amount of $115,000 plus a further $16,000 to your client in relation to this business.
If this matter proceeds any further our client will be alleging misrepresentation, and misleading and deceptive conduct on the part of your client to support a claim that any agreement for the initial payment of monies to our client is void.
In addition, Jacques Fayolle agreed with Mr Yves Devos that the full amount of money paid by Mr Devos would be repaid to him. It was also agreed in that telephone conversation that the motor vehicle could be utilised as part payment of the monies payable back to Mr Devos.
To date Jacques Fayolle has failed to repay the monies back to Mr Yves Devos and we now formally demand repayment of the full amount of monies outstanding, being $115,000 initially paid plus the further $16,000 paid to assist the company purchase the motor vehicle.
4. Motor vehicle
It has previously been outlined to you in our correspondence, and above, that the vehicle was able to be used by our clients indefinitely as part payment of the outstanding monies owed by Jacques Fayolle to Yves Devos. The fact that our client has had possession of the motor vehicle for many months corroborates the verbal agreement. Any attempt by your client to arrange the return of the motor vehicle will be strenuously defended.
We are instructed to put your client on notice that should proceedings be commenced as threatened, they will be strenuously defended. We also put your client on notice that any proceedings in relation to the motor vehicle should be commenced only against Mr Yves Devos, as it is he who is beneficially entitled to use of the motor vehicle.
This letter will be relied upon when the issue of costs is raised”.
By letter dated 16 March 2009, Jacques wrote to Yves under the letterhead of Bureau. The letter read:
“Good morning Yves,
Further to your written acceptance dated 12 September 2007 for the purchase of 36% of Bureau Francais.
I remind you that the last payment of $65,000 was due yesterday (15/03/2009).
I would be grateful if you can make this payment without delay.
Yves, I thank you in advance.”
On 9 April 2009 the Toyota Kluger was sold for $29,000 by Buro. Jacques had retaken possession of it one night from where it had been parked.
On 14 May 2009 a shareholder’s meeting of Buro was held. The minutes reveal that a resolution was passed removing Yves as a director of the company.
Under cover of a letter dated 10 March 2010 solicitors for Buro forwarded a cheque for $16,000 to the solicitors acting for Yves. The letter referred to the money being in “payment of the judgment sum”. That appears to represent the $16,000 paid by Yves to Buro for acquisition of the Toyota motor vehicle.
Discussion
Whether an enforceable agreement between parties arises from parties dealing with each other and the content thereof is an objective question for the court.[3] In a case such as this, whether parties have agreed and on what terms is to be determined by reference to the terms of the dealing, the circumstances surrounding the dealing, and business commonsense. What one or other of them believed or intended, in the final analysis is not a relevant consideration. In the words of Blackburn J in Smith v Hughes (1861) LR 6 QB 597 at 607: “If, whatever a man’s real intention may be he so conducts himself that a reasonable man would believe he was assenting to the terms proposed by the other party and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other parties terms.”
[3] Taylor v Johnson (1983) 151 CLR 422 at 429-30.
Yves’ evidence about the telephone discussion between he and Jacques on 14 April 2008 did not descend to the actual conversation which occurred. Rather it was about Yves’ interpretation of the discussion, what he said was agreed.
Counsel for Yves submitted that there was support in other evidence for Yves evidence about the agreement. To an extent that may be so. But the contrary is also true. The following are illustrative:
§Yves was an experienced businessman. His purchase of the shares was associated with the formality that may be expected of such a person. The agreement to exit he contends for was not. It is not referred to in any contemporaneous writing. Yves explained that by saying he trusted Jacques to do what was agreed. That may be so. The actions and outcomes he said were agreed were to occur in the future.
§The letter from Jacques seeking $10,000 as a shareholder’s loan does not sit well with the agreement Yves contends for. Nor on one view of it, does Yves’ response. There is no reference to an agreement Jacques was to pay him $88,000 for his shares. There is no reference to Jacques writing about trying to find other shareholders.
§The correspondence about the Toyota subsequent to 14 April 2008, whilst allowing Laurent who was then not employed by Bureau, to use the vehicle “until further notice”, has a level of consistency with Jacques evidence that he could use the vehicle until he acquired a car of his own. It is not consistent with Yves’ evidence about the agreement.
§The content of the letter from Jacques to Yves of 17 September 2008 appears to have been provoked by Laurent’s irresponsibility. However the evidence does not reveal any direct response from Yves, in particular, with reference to the agreement contended for.
§In October 2008 at a director’s meeting, acting as a director of Buro in Yves’ place, Laurent proposed he be reinstated as a staff member of Buro on the terms of his convention of March 2008, proposing also to take over payments for the motor vehicle.
§No mention in any correspondence of anything vaguely resembling the agreement contended for appears until the letter of 6 October 2008 from Laurent to Jacques set out above. It seems to have been in response to a demand dated 6 October 2008 consequent upon the resolution at the director’s meeting of 6 October 2008 for immediate return of the motor vehicle.
After considering all the evidence I am not satisfied that Jacques agreed to pay Yves $88,000, although that sum and how it was arrived at was the subject of discussion. What informed the discussion was that Yves intended to dispose of his interest in Buro. He wished to recover the cost to him of that interest. Jacques accepted that Yves would dispose of his interest in Buro. He raised no objection. An acceptable buyer of Yves’ interest would be found.
However, I am satisfied some matters were agreed between Yves and Jacques during the discussion on 14 April 2008. They were:
§Yves would cease to be a shareholder in Buro. He would dispose of his shareholding
§A buyer would be found for the shares.
§Yves would not make the third payment of $65,000 for the shares.
§Laurent could continue to use the business vehicle.
To date, so far as the evidence disclosed, no buyer has been found for Yves’ shares. Yves has not moved to divest himself of his shares. The vehicle has been sold and Yves has received the sum he contributed to its acquisition.
In the circumstances I make the following orders:
§In proceeding 136 of 2009 the plaintiff’s claim is dismissed. I give judgment for the defendants.
§In proceeding 316 of 2009 the plaintiff’s claim is dismissed. I give judgment for the defendant.
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