JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: HUGHES -v- ST BARBARA LTD [2011] WASCA 234
CORAM: MARTIN CJ
PULLIN JA
MURPHY JA
HEARD: 17 & 18 AUGUST 2011
DELIVERED : 1 NOVEMBER 2011
FILE NO/S: CACV 79 of 2010
BETWEEN: BRYAN KEVIN HUGHES (As Trustee of the Kingstream Steel Creditors' Trust)
Appellant
AND
ST BARBARA LTD
First RespondentZYGOT LTD
Second Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :KENNETH MARTIN J
Citation :HUGHES -v- ST BARBARA MINES LTD [No 4] [2010] WASC 160
File No :CIV 1913 of 2002
Catchwords:
Contract - Option - Nature of option - Whether irrevocable offer or conditional contract - Whether separate contract necessary to amend irrevocable offer
Damages - Breach of contract - Whether breach caused loss - Whether events after breach could be taken into account
Legislation:
Nil
Result:
Appeal allowed in part
Category: A
Representation:
Counsel:
Appellant: Mr R M Smith SC & Mr T O Coyle
First Respondent : Mr C R C Newlinds SC & Mr I Pike
Second Respondent : Mr C R C Newlinds SC & Mr I Pike
Solicitors:
Appellant: Lavan Legal
First Respondent : Tottle Partners
Second Respondent : Tottle Partners
Case(s) referred to in judgment(s):
Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424
Ballas v Theophilos [1958] VR 576
Barrier Wharfs Limited v W Scott Fell & Co Limited [1908] HCA 88; (1908) 5 CLR 647
Beaton v McDivitt (1987) 13 NSWLR 162
Bell Group Limited v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1
Braham v Walker (1961) 104 CLR 366
Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153
Brikom Investments Ltd v Carr [1979] QB 467
Butt v M'Donald (1896) 7 QLJ 68
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
Carter v Hyde (1923) 33 CLR 115
Commissioner of Taxes (Queensland) v Camphin (1937) 57 CLR 127
Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1
DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423
Goldsborough Mort & Co Ltd v Quinn (1910) 10 CLR 674
Howard Smith & Co Ltd v Varawa [1907] HCA 38; (1907) 5 CLR 68
HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; (2004) 217 CLR 640
Johnson v Perez (1988) 166 CLR 351
Karaguleski v Vasil Bros & Co Pty Ltd [1981] 1 NSWLR 267
Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57
Metwally (No 2) v University of Wollongong [1985] HCA 28; (1985) 59 ALJR 481
Pantorno v The Queen (1989) 166 CLR 466
Paule v Far Horizons Pty Ltd (1998) Aust Torts Reports 81‑486
Peters (WA) Ltd v Petersville Ltd [2001] HCA 45; (2001) 205 CLR 126
R v Clarke (1927) 40 CLR 227
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- AGLC
- Hughes v St Barbara Ltd [2011] WASCA 234
- Case
- [2011] WASCA 234
- Decision Date
CaseChat Overview and Summary
The court had to decide whether the Option Deed and the Letter Agreement formed a binding contract between the parties. The court held that the conduct of the parties at settlement was consistent with the appellant's contention that St Barbara was 'contractually bound' either by the cl 4 contract in the Option Deed or by the Letter Agreement to procure the transfer of the Zygot AMLs. The court also held that the Letter Agreement was a separate enforceable contract and that the 29 January 1999 letters resulted in 'contractual obligations' being 'imposed upon St Barbara'.
The court further held that the duty contained in cl 9 of the contract or implied by law, or implied in this contract required, at the very least, that St Barbara procure Zygot to not withdraw the Zygot AMLs. This obligation existed for as long as the Zygot AMLs remained on foot. Such a term was not unreasonable just because no time was specified. Therefore, ground 4 of the appeal should be upheld.
The final orders of the court were that ground 2 of the appeal should be upheld, in the alternative, ground 1 should also be upheld, and ground 3 should also be upheld. Ground 4 should also be upheld.
Orders
Orders of the court
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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
Both Kingstream and St Barbara acted after 8 February on the basis there was a contract in existence. Although post-contractual conduct is not admissible on the question of what a contract means, evidence of events after a contract was entered into is admissible for determining the question about whether a binding contract was formed: see Bell Group Limited v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1 [2672]; Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153, 164 (Heydon JA); Howard Smith & Co Ltd v Varawa [1907] HCA 38; (1907) 5 CLR 68, 77; Barrier Wharfs Limited v W Scott Fell & Co Limited [1908] HCA 88; (1908) 5 CLR 647. The conduct of the parties at settlement was consistent with the appellant's contention that St Barbara was 'contractually bound' either by the cl 4 contract in the Option Deed or by the Letter Agreement to procure the transfer of the Zygot AMLs. In view of the reasons above, ground 2 should be upheld. In the alternative, the Letter Agreement was a separate enforceable contract and ground 1 should also be upheld. As a result, ground 3 should also be upheld because the 29 January 1999 letters did result in 'contractual obligations' being 'imposed upon St Barbara'. In every contract there is implied a term by law, that each party agrees to do all such things as are necessary on his part to enable the other party to have the benefit of the contract: Butt v M'Donald (1896) 7 QLJ 68, 70 ‑ 71 (Griffith CJ). This imposes a duty on the parties to a contract to cooperate in the doing of acts which are necessary for performance of fundamental obligations under the contract: Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596, 607 (Mason J). Clause 9 of the contract is an express term reflecting the term which would have been implied as a matter of law if cl 9 had not existed. This obliged St Barbara to do all acts and things necessary to give effect to the contract created if Kingstream exercised the option. The option was exercised; the contract was created; the Zygot AMLs were included in the list of 'Tenements' and, as a result, St Barbara was obliged to procure Zygot to keep the Zygot AMLs on foot. Whether the term is that expressly set out in cl 9, or in the form implied by law, or implied in this contract as pleaded in par 20, the same result would follow. Zygot's withdrawal of the Zygot AMLs was a breach of contract by St Barbara, which had failed to procure Zygot not to do so. There was a side issue raised during the appeal as to whether Kingstream or Zygot had the obligation to negotiate with native title holders (ts 59). That question does not have to be answered because Zygot withdrew the Zygot AMLs before that point arose. The trial judge found that there were 'insurmountable problems' for Kingstream establishing that any term of the contract obliged St Barbara to procure Zygot not to withdraw the Zygot AMLs to prevent the mining leases being granted as a result of the Zygot AMLs [J659]. The trial judge also considered that there could be no such term because it was unreasonable as it was not temporally limited [J664, 671]. The trial judge erred in reaching those conclusions. The duty contained in cl 9 of the contract or implied by law, or implied in this contract required, at the very least, that St Barbara procure Zygot to not withdraw the Zygot AMLs. This obligation existed for as long as the Zygot AMLs remained on foot. Such a term was not unreasonable just because no time was specified. As a result ground 4 should be upheld.