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John R Keith Pty Ltd v Multiplex Constructions (NSW) Pty Ltd

John R Keith Pty Ltd v Multiplex Constructions (NSW) Pty Ltd

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Case Copied 14 February 2002 72 min read

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CITATION: John R Keith Pty Limited v Multiplex Constructions (NSW) Pty Limited & Anor [2002] NSWSC 43 revised - 3/12/2002

FILE NUMBER(S): SC 3387/00

HEARING DATE(S): 30/01/02, 31/01/02, 1/02/02, 5/02/02, 6/02/02, 7/02/02, 8/02/02

JUDGMENT DATE: 14 February 2002

PARTIES :

John R Keith Pty Limited (Plaintiff)
Multiplex Constructions (NSW) Pty Limited (First Defendant)
Multiplex Constructions Pty Limited (Second Defendant)

JUDGMENT OF: Einstein J

COUNSEL : Mr V Gray (Plaintiff)
Mr F Corsaro SC, Ms R Rana (Defendants)

SOLICITORS: Gye & Associates Lawyers (Plaintiff)
Minter Ellison (Defendants)

CATCHWORDS: Contract - Formation of contract - Ongoing negotiations - Intention to contract - Masters v Cameron classes - Whether binding and enforceable subcontract formed between the plaintiff and second defendant - If a contract is found, an arbitration clause requires proceedings to be stayed pursuant to s53 (1) of the Commercial Arbitration Act 1984 (NSW) - Invitation made by defendant to plaintiff to tender for the design and construction of hydraulics services for the Stadium Australia project - Request to tender contained documents including standard subcontract agreement - Plaintiff submitted tender proposal based on tender documents - Plaintiff issued series of revised proposals modifying both tender price and scope of work - Plaintiff notified as being preferred tenderer - Plaintiff commenced work - Plaintiff sent letter outlining total tender price and scope of work which letter was negotiated, amended and resent by consensus - Plaintiff sent subsequent letter referring to total contract price - Second subcontract agreement sent to plaintiff in terms different from original standard subcontract agreement - Subsequent negotiations ensued between parties over terms of second subcontract agreement - Whether binding contract was formed at any time during ongoing negotiations between parties - No formal signed agreement entered into by parties - Fourth class of Masters v Cameron - Existence of informal contract with further terms to be negotiated and included in a formal document - Relevance of prior negotiation and subsequent conduct - Objective determination of the intention of the parties - Classical theory of contract formation - Relevance of the subjective intention of the parties - Admissibility of post-contractual conduct - Whether parties arrived at a consensus capable of forming a contract - Whether alternative proposal put forth by plaintiff constituted an abandonment of the terms of the original subcontract - Whether second subcontract negotiations supports or mandates inference that parties did not intend to make concluded bargain

LEGISLATION CITED: Commercial Arbitration Act 1984
Evidence Act 1995 ss60,70
Supreme Court Rules

CASES CITED: Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309
Allen v Carbone (1975) 132 CLR 528
Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647
Baulkham Hills Private Hospital Pty Ltd v G R. Securities Pty Ltd (1986) 40 NSWLR 622
Brambles Holdings Ltd v Bathurst City Council (Unreported, 2001, NSWCA,…

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: [2002] NSWSC 43
Decision Date: 14 February 2002

CaseChat Overview and Summary

The case of John R Keith Pty Ltd v Multiplex Constructions (NSW) Pty Ltd concerned the formation of a contract for the design and construction of hydraulics services for the Stadium Australia project. The plaintiff, John R Keith Pty Ltd, was invited by the defendant, Multiplex Constructions (NSW) Pty Ltd, to tender for the project. The tender documents included a standard subcontract agreement, which the plaintiff used as a basis for its tender proposal. The plaintiff submitted a series of revised proposals, and after being notified as the preferred tenderer, it commenced work. However, no formal signed agreement was entered into by the parties. The central issue in the case was whether a binding and enforceable subcontract was formed between the plaintiff and the defendant during the ongoing negotiations, and if so, whether the arbitration clause in the subcontract required the proceedings to be stayed.

The court examined the nature of the negotiations and the intention of the parties to determine if a binding contract was formed. The court considered the Masters v Cameron classes and the classical theory of contract formation, which focuses on the objective determination of the parties' intentions. The court also evaluated the relevance of prior negotiations and subsequent conduct, as well as the admissibility of post-contractual conduct in determining the existence of a contract. The court held that the parties had reached a consensus capable of forming a contract and that the subsequent negotiations over the terms of the subcontract did not negate the existence of a binding agreement. The court found that the alternative proposal put forth by the plaintiff did not constitute an abandonment of the terms of the original subcontract.

Ultimately, the court held that a binding and enforceable subcontract was formed between the plaintiff and the defendant. The court determined that the arbitration clause in the subcontract required the proceedings to be stayed pursuant to section 53(1) of the Commercial Arbitration Act 1984 (NSW). The court's decision was based on the objective determination of the parties' intentions and the consensus reached during the negotiations. The court also considered the relevance of the prior negotiations and subsequent conduct in determining the existence of a binding agreement. The court's decision resulted in the stay of the proceedings and the referral of the dispute to arbitration in accordance with the terms of the subcontract.

Orders