FEDERAL COURT OF AUSTRALIA
Farrell v Super Retail Group Limited (Specific Performance Claim) [2024] FCA 1515
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- AGLC
- Farrell v Super Retail Group Limited (Specific Performance Claim) [2024] FCA 1515
- Case
- [2024] FCA 1515
- Decision Date
CaseChat Overview and Summary
The court found that the parties, being highly sophisticated and experienced in commercial matters, had consistently indicated that any final resolution of their dispute would be subject to the execution of a formal deed. This was evident from their prior negotiations, the terms of the mediation agreement, and post-contractual conduct, which consistently pointed towards the need for a formal agreement. The court held that the alleged agreement was not binding and enforceable until a formal deed was executed. Given the nature of the parties and the context of their negotiations, a reasonable person would understand that the phrase "subject to deed" meant that the terms agreed upon were to be finalised in a formal document, not that a binding agreement had already been formed. Consequently, Ms Farrell's claim for specific performance was dismissed.
In conclusion, the court dismissed Ms Farrell's claim for specific performance, finding that the parties had not reached a binding agreement but had instead agreed on an "in-principle" resolution subject to the execution of a formal deed. The court further ordered that the proceeding be adjourned to address any confidentiality orders necessary for the publication of the reasons and related orders.
Orders
Orders of the court
1. The applicant’s prayer for relief in the nature of specific performance be dismissed.
2. The proceeding be adjourned until 2:15pm today for the making of any confidentiality orders in relation to the publication of these reasons and any related orders.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
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
Ratio Decidendi
Legal Principle Established
Fourthly, in the light of the above, Mr Farrell submits that a reasonable person would conclude that the outward manifestation of Ms Millen’s intention on 5 and 6 May was to put and maintain the terms of the Alleged 5 May Final Offer and that Mr Harmer (after trying but failing to vary those terms) accepted the Alleged 5 May Final Offer on 6 May on instructions. It is said the terms were simple to understand and the acceptance was “clear and unqualified”. F CONSIDERATION This is not a case at the margins. The contention of Ms Farrell that an oral contract came into being cannot be accepted. The short and decisive point is that although it may be accepted the parties were able to narrow down the terms in dispute between them to the point where Ms Farrell correctly recognised SRG would not budge and a consensus was reached on an “in-principle” agreement, it remained just that. It was subject to the execution of an instrument the drafting of which would serve to iron out all necessary further details. Although the parties apparently subjectively anticipated those details would be resolved in the proposed deed, no binding or enforceable agreement was to come into being until execution. This conclusion is hardly surprising, and the starting point is to recognise that this is not a “run-of-the-mill” dispute. SRG is a publicly listed company with a market capitalisation (as of the date of this judgment) of $3.38 billion. Ms Farrell (the former Chief Legal Officer and Company Secretary of SRG) and Ms Berczelly (the former General Manager, Group Secretariat and Corporate Legal & Company Secretary of SRG), as I noted in the cross-claim judgment, are highly accomplished, experienced and sophisticated commercial solicitors. The parties are represented by experienced and commercially astute lawyers who are alive to the complex and highly sensitive nature of the controversy. The commercial sophistication of the parties (and their legal representatives) is not an insignificant contextual matter: it is a pointer suggesting it is far from unlikely that the parties wished any accord struck be embodied in an agreed and exchanged formal document. Consistently with the nature of the parties and the underlying dispute, and as noted above (at [26]–[28]), this was reflected in the Mediation Agreement; a term of which was that if the parties resolved their dispute at mediation, the terms of the resolution must be written down in a document that the parties signed before they left the mediation (cl 6). Mr Harmer gave evidence that the framework or structure for settlement discussed on 5 May emerged from the 17 April mediation, which was predicated on the understanding between the parties that any settlement would necessarily be reflected in a deed (T59). Viewed in the broader context (including the nature of the dispute; the sophistication of all involved; how the parties had previously turned their mind to the necessity of a formal agreement; and no one ever indicating a departure from this approach), it is difficult to understand why a reasonable person would not have readily understood that the parties and their legal representatives expected that any formal and final resolution was subject to embodiment in a formal deed. Most notably, this understanding is borne out by Mr Harmer expressly identifying in his email of 6:12pm and text message of 6:14pm on 6 May to Ms Millen that the agreement allegedly struck at that time was “subject to deed” (above (at [71]–[72])). There is no reason why the common understanding which applies to those time-honoured words (being an overriding condition that what has been agreed must be regarded as the basis for a future contract, rather than a contract itself) should be displaced. Indeed, one is asked by those acting for Ms Farrell to accept the unlikely scenario that the words “subject to deed”, chosen by an experienced solicitor in these short but critical messages, were somehow redundant (T82.13–29).