Marek v Australasian Conference Association

[1991] HCATrans 170

..

•

• ~

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B2 of 1991

B e t w e e n -

EUGENE MAREK

Applicant

and

AUSTRALASIAN CONFERENCE

ASSOCIATION

Respondent

Application for special leave

to appeal

BRENNAN J

TOOHEY J

GAUDRON J

Marek 1 27/6/91

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON THURSDAY, 27 JUNE 1991, AT 3.17 PM

Copyright in the High Court of Australia

MR K. FLEMING, OC: If Your Honour pleases, I appear with my

learned junior, MR S.R.D. BLAXLAND, for the

applicant. (instructed by P.W. Skewes & Dempster)

MR W.J. ROBERTS:  Your Honours, I appear for the respondent.

(instructed by McCarthy Palethorpe & Blanch)

MR FLEMING:  Your Honours, I hand up a folder that has a

synopsis as the first document, and then there are

a couple of cases that I wish to refer to. There

is a chronology in there as well.

BRENNAN J: Yes, Mr Fleming.

MR FLEMING:  Thank you, Your Honour. It is the seventh

paragraph obviously that we say raises the point of

law. It is the application, in effect, of

Masters v Cameron to a tripartite agreement.

The problem that arose in this case is that after a considerable period of time of arguing

between three separate parties, an agreement was

struck which was, in effect, a tripartite

agreement, if I can call it that. The analysis of that obviously causes some concern. It perhaps is

an agreement between three parties, each with

obligations to the other and perhaps interdependent

obligations as conditions subsequent; or perhaps

it is a series of independent obligations or

interdependent contracts.

Now, we submit that, in fact, it was a

tripartite agreement given the nature of it.	When
it came to be analysed by the judge at first

instance and then by the Full Court, each of those

courts referred to the fact that it was a

tripartite agreement and then analysed but one

aspect of that as between two parties to the

tripartite agreement.	We submit that is where the
error lay.	It was not capable of having Masters v

Cameron applied simply to those facts.

Your Honours, it is necessary for me to spend

but a few moments on the facts, and they are these:

it goes back to 1977, and surprisingly there was

evidence, in fact, called going back that far and

thi~ trial did not come on until many years later.

But Beckett, who does not figure in this

litigation, was the owner of 140-odd acres of land.

He was quite an old man. His wife died and he gave

the land to the Seventh Day Adventist Church.	The
deed by which he gifted the land - in fact, it

probably was not a gift. There was a consideration

of one dollar, and in addition there was the

obligation for the church to house him in his later

Marek 2 27/6/91

years in one of their nursing homes if ever he

needed nursing care.

Mareks came on to the scene and they

befriended Mr Beckett, and Mr Beckett decided that

he wanted to sell his land, in fact, to Mareks.	He
was told he could not do that because he had

already given it away, but then some disputation
occurred between the parties. It was decided
firstly that Mr Marek would be able to take a lease

of the land with an option to purchase it for

$120,000. That ended in dispute and litigation.

Subsequent to that, Mr Beckett then commenced his

own supreme court action to have the conveyance set

aside on the grounds of duress, undue influence,

fraud and so on. He lodged a caveat over the land

for that purpose as well.

Now, when that occurred, negotiations were opened again between Mr Beckett and the church, and

as a result of a compromise, or at least

negotiations towards a compromise, the church said
that they would be prepared to sell the land for

$50,000, but they would not sell it to Mr Beckett.

They would sell it to somebody that he nominated.

So Mr Beckett then nominated Mr Marek. So there

was then, as Their Honours found, and I can take of the trial judge firstly - page 16 of the record

at line 20:

I am satisfied that an arrangement was

made between the parties, that the property
would be sold to Marek for $50,000.00 payable

by five equal annual instalments of $10,000.00

each. This was part of a wider agreement

related to the settlement of the action

initiated by Beckett.

Then His Honour sets out the findings. As it

happens, there is no dispute about that, and

indeed, the Full Court at page 43, line 25: His Honour found that the parties and

Beckett had negotiated an arrangement

involving (i) a sale of the land for $50,000

to be paid in five equal instalments; (ii) a

mortgage to secure the instalments;

(iii) that the litigation instituted by

Beckett be discontinued; and (iv) an

agreement in terms of the deed of covenant.

Before us, the respondent did not contest

these conclusions. Rather the respondent's
case is that the parties did not propose to be

contractually bound before an exchange of

executed counterparts of a formal contract of

sale.

Marek 27/6/91

Interestingly, the only parties who would be bound

by that contract of sale would be the church and

Marek because Mr Beckett was not a party to that

arrangement at all.

So we say that the error that crept into this

case is that then there was an analysis of the

relationship between but two parties to the

tripartite agreement.

BRENNAN J: But was there a tripartite agreement?

MR FLEMING:  The court found that there was, Your Honour.

BRENNAN J: But it found it sub modo. It found the

tripartite agreement and that one of the "terms" of

the agreement was that there was to be writing

which would reduce it into a documentary form.

MR FLEMING:  Yes.

BRENNAN J: Well now, if you have a tripartite agreement

which contains such a term it is an illusory

agreement, is it not?

MR FLEMING:  It can be, Your Honour. I must concede that,

but when one looks at the agreement that was

actually made in this case, it was a series of

interconnecting obligations. For example, Marek

had nothing to do with the discontinuing of the

action, the removal of the caveat. That was

between the church and Beckett. Beckett had

nothing to do with the arrangement between the

church and Marek. The church had nothing to do

with the arrangement between Beckett and Marek

because there were obligations there as well

created by the deed.	It might be appropriate, if I
may, to take - - -

TOOHEY J: But you cannot fragment the rights and

obligations in that way in this situation can you,

Mr Fleming? The question is whether in the end

there was a concluded contract.

MR FLEMING: Yes, Your Honour, that remains always the

question. I concede that. But when one comes to

see how then individuals can affect the

arrangements as between three parties, that is the

problem that we say this case raises.

TOOHEY J:  I suspect that may be to misunderstand the issue,

may it not? If the question is whether there was a

concluded contract and the finding is that there

was not, how is that answered by saying, "Well, one

of the parties might have been satisfied as to his

or its position in the negotiations, and therefore

as against that party, that party should be held to

Marek 4 27/6/91

that part of the non-concluded agreement which

relates only to that party's obligations."

MR FLEMING:  Yes, I understand entirely what Your Honour is

putting to me. I can only answer it by saying that

when one looks at the sorts of obligations that

were raised here, instead of allowing the

inferences to be drawn that there was not a

concluded contract because of one transaction out

of the many, rather the court should have looked at

the totality of the arrangements between the three

parties and concluded rather that the agreement was

made at an earlier time, but all that was, in fact,

happening was that it was being implemented. And

none of those parties, we would submit, had the

right, as one looks at the agreement that was

concluded, to change the agreement as between the

three parties.

It was upon that basis, for example, when one

party added a clause which, by the way, we submit,

really does not alter anything at all because all

they added to the contract was, "You can, in

effect, pay the mortgage out early", which is

always the right, of course, of the mortgagor.	So
it did not change anything, we would submit, at
all. But it was upon that basis and others - I
obviously have to concede that - that the court reached the conclusion that the contract was not
concluded until it had all been documented.

Your Honours, the deed itself provides

TOOHEY J:  I am sorry to interrupt you again, but if that is

the issue, it would appear to depend upon findings

of fact as to what the intention was of the parties

and what took place thereafter, and in that respect
you have a finding against you of the trial judge,

and concurrent findings adverse to you by the

Full Court.	Where then is the special leave
question?

MR FLEMING:  The only way I can meet such an argument is to

say that as a matter of law they ought to have

looked at the tripartite arrangement rather than

the individual arrangements. It does not become

apparent from the material that they looked at that

tripartite arrangement other than at the contract

for sale. Of course, the problem with it was that

they were the only two parties to this litigation

as well.

You see, the deed was an interesting one in

that, for example, Mr Beckett, the moment he signed

the deed, was saying, for example clause 2:

Marek 5 27/6/91

The life tenant transferred of his own

free will by way of gift the land to the

vendor -

which was the very fabric of his supreme court

action. So when that deed came into existence and

when he signed it, we would submit that that is
when the arrangement was concluded now that the

other things that flowed from that were but an

implementing of it.

At that point in time, when that deed was

presented in that form and Mr Beckett signed it, he

had, in fact, done the very thing that he was

required to do, that is, give up his rights under

the - - -

TOOHEY J: Yes, but when you put it that way, do you not

fall into the same trc again? You isolate one

party from the negotiacions which, on the view of

four judges below, was not to result in a concluded

agreement between the three parties until a formal

contract for the sale of the property was in

existence.

MR FLEMING:  I do if that is but all I can point to,

Your Honour, but what I must point to is the whole

fabric of the arrangements between all three

parties.

BRENNAN J:  What you wish to say is that once it is

concluded with respect to one party and that

party's obligations are defined and accepted by

that party, at that point it is set in concrete in

relation to all three.

MR FLEMING: Yes, Your Honour, except that that is one step

beyond what actually happened here. The three

parties, we submit, agreed by way of the deed and

the arrangement as found by His Honour.

BRENNAN J:  The other way of looking at it is to say, "Well

now, what did they agree on, all three?" And if

you find that the terms of the agreement are such

as to be inconsistent with the concluded contract,

then none are bound.

MR FLEMING: ... I must concede that, Your Honour.

BRENNAN J: Here you have the finding against you that there

was a concluded contract.

MR FLEMING: Yes, Your Honour, but I can only come back and

say that our special leave point is that as a

matter of logic, as a matter of law, when there is

a tripartite arrangement you cannot then just look

at the two parties to that. Nor can· you say that

Marek 6 27/6/91

one party can unilaterally affect the rights of the

other two parties.

GAUDRON J: This seems to be a very different case from what

you put before in the court below.

MR FLEMING:  It was raised because each of the courts

addressed the question of the tripartite

arrangement, and indeed it is raised in the

material although there are many other factual

issues raised as well. But it does raise the

tripartite - - -

BRENNAN J: It raises fascinating problems. For example, if

your argument were right, what would be the terms

of a mortgage and what would be the repayment dates

of the instalments?

MR FLEMING: Yes, I think the contract itself deals with

some of that, and I think His Honour might

have found - - -

BRENNAN J:  It would if there was only a date on the

contract.

MR FLEMING:  I must also point this out at page 90, and this

will not help me but I must point Your Honours to

it. At page 90, clause 23 of the standard form

contract is:

Sale is subject to confirmation by the

Vendor -

the vendor being the church. The only way I can

answer any argument in respect of that is to say

that he already had confirmed the contract. He was

the one who drew its terms and those terms were

consistent with the agreement that had been struck

on about 16 March or so, and therefore he had

either already confirmed or had waived that

particular provision.

Your Honours, I could take you to the cases,

but the categories of Masters v Cameron are well

known. Perhaps the only passage that I could draw

Your Honours' attention to is the quote from

Rossiter v Daniel Miller, which is contained in

Masters v Cameron, at page 361, about the sixth

line down:

" ... as soon as the fact is established of the

final mutual assent of the parties so that

those who draw up the formal agreement have

not the power to vary the terms already

settled, I think the contract is completed."

Marek 7 27/6/91

My submission is simply this: that no two parties

then have some sort of bilateral right to draw up a

contract which is inconsistent with the original

tripartite agreement, and one can infer from that

then that the contract is complete.

TOOHEY J: That really begs the question, does it not?

Clearly, if there has been a final mutual assent it

may be possible to conclude that there is an

agreement notwithstanding the absence of a contract

which the parties intend formally to enter into.

But the findings here are findings that there was

no concluded contract until a formal contract had

been executed. And they are findings of fact

essentially, are they not?

MR FLEMING: Yes, I face that difficulty, but rather than

say it begs the question, may I say that I simply

approach it from the opposite end and reach a

different conclusion. But we then submit, of

course, that that is the correct end from which to

approach it because it is that tripartite

arrangement.

Your Honours, there is for some reason very

little work done on tripartite arrangements or

tripartite contracts. It seems that Carter in his

book on breach of contracts, for example, is one of

the few academics who has tackled it. All I can

say is in this case it is fairly raised and it is

not just a question of fact, but rather it is a

question of how one goes about even assessing the

facts. Must one see firstly that it is a

tripartite arrangement and that have an influence
upon the way in which the facts are then assessed?

We would say that is really the question that is involved in this.

Thank you, Your Honours.

BRENNAN J: Thank you, Mr Fleming. The Court will adjourn

briefly to consider the course it should take.

AT 3.39 PM SHORT ADJOURNMENT

UPON RESUMING AT 3.46 PM:

BRENNAN J:	we need not trouble you, Mr Roberts.
MR ROBERTS:	Yes, Your Honours.
Marek	27/6/91

BRENNAN J: In the light of the facts as found by the

learned trial judge and affirmed by the Full Court,

there is insufficient reason to doubt the

correctness of the decision of the Full Court to

warrant the grant of special leave to appeal.

Accordingly, special leave to appeal will be

refused.

MR ROBERTS:	I ask for costs, Your Honour.
BRENNAN J:	Do you have anything to say about costs,

Mr Fleming?

MR FLEMING:	No, Your Honour.
BRENNAN J:	It will .be refused with costs.

AT 3.47 PM THE MATTER WAS ADJOURNED SINE DIE

Marek 9 27/6/91