CITATION: Macquarie Generation v CNA Resources Ltd [2001] NSWSC 1040 CURRENT JURISDICTION: Equity Division
Commercial ListFILE NUMBER(S): SC 50057/01 HEARING DATE(S): 13 & 14 November, 2001 JUDGMENT DATE:
15 November 2001PARTIES :
Macquarie Generation [Plaintiff]
CNA Resources Ltd (formerly Peabody Resources Ltd) [Defendant]JUDGMENT OF: Palmer J
COUNSEL : B.W. Walker SC, I.M. Jackman, M. Leeming [Plaintiff]
N. Young QC, P.W. Collinson [Defendant]SOLICITORS: Speed & Stracey [Plaintiff]
Allens Arthur Robinson [Defendant]CATCHWORDS: CONTRACTS - OFFER AND ACCEPTANCE - CONDITIONAL OFFER - Whether an offer expressed to be subject to a condition can be accepted - whether a condition to an offer was "spent" by reason of subsequent events and the offer then became capable of immediate acceptance - INVITATION TO TENDER - CONTRACT - Whether submission of tender which did not comply with the requirements of the Invitation to Tender brought into existence a contract to conform to the tender requirements of the Invitation - whether the terms of the tender submitted could be ignored - CONTRACT - WRONGFUL REPUDIATION - Alleged agreement requiring formal contract to be executed subsequently - Plaintiff proposes formal contract containing terms materially inconsistent with earlier contract - Plaintiff requires Defendant to execute formal contract - whether Plaintiff demonstrates intention not to be bound by terms of earlier contract. CASES CITED: - Buhrer v Tweedie [1973] 1 NZLR 517
- Dickinson v Dodds (1876) 2 ChD 463
- Shevill v Builders Licensing Board (1982) 149 CLR 620DECISION: No contract as alleged came into existence; Summons dismissed with costs.
Introduction
1 By Summons filed on 21 April 2001 the Plaintiff seeks a declaration that the Defendant has wrongfully repudiated an agreement for the supply of coal which, the Plaintiff says, came into existence in March 2001. The Plaintiff claims damages for the alleged wrongful repudiation.
2 On 17 August 2001 the Court ordered, pursuant to Part 31 of the Supreme Court Rules, that the question of liability be separately determined. That is the only issue which I have to decide.
3 The evidence in the case is entirely documentary and the issues to be resolved depend upon the way in which a relatively small number of documents are to be construed.
4 At the heart of the controversy is the issue whether any contract for the supply of coal came into existence between the parties at all.
Facts
5 The relevant facts may be stated very briefly.6 Some time about mid-2000 the Plaintiff, by Specification 47/2000, invited tenders for the supply of crushed coal, in accordance with quality requirements defined in the specification, in the range of 10 to 40 million Gigajoules per annum for a period up to ten years (“the Invitation to Tender”). The time within which tenders were to be lodged was extended to noon on 3 October 2000.
7 It was a term of the Invitation to Tender that all tenders submitted were to be irrevocable, open for 180 days after the close of the tender period…
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- AGLC
- Macquarie Generation v CNA Resources Ltd [2001] NSWSC 1040
- Case
- [2001] NSWSC 1040
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the court were whether the submission of a tender that did not strictly adhere to the Invitation to Tender could still form the basis of a binding contract and whether the terms of the Invitation to Tender could be disregarded. Additionally, the court had to determine if the plaintiff's subsequent demand for the defendant to sign a formal contract that contained materially different terms constituted a repudiation of the earlier contract.
The court found that the tender, despite its non-compliance, was accepted by Macquarie Generation and thus constituted an offer which could be accepted by CNA Resources Ltd. The court reasoned that the condition imposed in the Invitation to Tender had been rendered "spent" by Macquarie Generation's actions in engaging with CNA Resources Ltd on the basis of the tender. Therefore, the tender could be considered as the basis for a binding contract. Furthermore, the court held that the terms of the Invitation to Tender could not be ignored and were incorporated into the contract. Finally, the court found that the plaintiff's insistence that the defendant sign a formal contract with materially inconsistent terms demonstrated an intention not to be bound by the terms of the earlier contract, thereby constituting a wrongful repudiation.
In conclusion, the court held that the contract based on the non-compliant tender was valid and enforceable. The terms of the Invitation to Tender were incorporated into the contract, and the plaintiff's subsequent actions amounted to a wrongful repudiation of the contract. Macquarie Generation was ordered to adhere to the terms of the contract based on the tender, and CNA Resources Ltd was entitled to seek damages for the wrongful repudiation.
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
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