Marindi Metals Ltd v Kidman Resources Ltd - [2017] WASC 189

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: MARINDI METALS LTD -v- KIDMAN RESOURCES LTD [2017] WASC 189

CORAM: KENNETH MARTIN J

HEARD: 29-31 MAY 2017

DELIVERED : 7 JULY 2017

FILE NO/S: CIV 2964 of 2016

BETWEEN: MARINDI METALS LTD
Plaintiff
AND
KIDMAN RESOURCES LTD
Defendant

Catchwords:

Contract - Trial of issues save for damages - Disputed contract formation - Exchanges by email and text between managing directors of ASX listed corporations - Essential terms - Alleged uncertainty - Draft heads of agreement remaining incomplete - Specific performance claimed - Laches and acquiescence - Unclean hands of plaintiff alleged as inhibitor to relief even if contract proved

Legislation:

Nil

Result:

Plaintiff's action dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr M L Bennett
Defendant: Mr G R Donaldson SC & Mr T P O'Leary

Solicitors:

Plaintiff: Bennett + Co
Defendant: Maddocks Lawyers

Case(s) referred to in judgment(s):

Austman Pty Ltd v Mount Gibson Mining Ltd [2012] WASC 202
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd [1988] 18 NSWLR 540
Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191
Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622
Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95
Feldman v GNM Australia Ltd [2017] NSWCA 107
G R Securities v Baulkham Hills Private Hospital (1986) 40 NSWLR 631
Geebung Investments Pty Ltd v Varga Group Investments (No 8) Pty Ltd [1995] NSWCA 166; (1995) 7 BPR 97,578
Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353
Sinclair Scott & Co v Naughton [1929] HCA 34; (1929) 43 CLR 310
Streeter v Western Areas Exploration Pty Ltd [No 2] [2011] WASCA 17
Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547

KENNETH MARTIN J:

Introduction

The plaintiff, Marindi Metals Limited ('Marindi') commenced the present action by writ of summons issued in this court on 14 November 2016. In essence, it pursues against the defendant, Kidman Resources Limited ('Kidman'), a claim for specific performance of an alleged written agreement which Marindi says was brought into existence through an exchange of eight communications (five emails and three SMS text messages) passing between the respective managing directors of each of these listed ASX corporations over the afternoon/evening of Monday, 4 April 2016.
Under its prayer for relief Marindi seeks a declaration 'that a binding agreement exists between the plaintiff and the defendant for the acquisition by the plaintiff of Pegmatite Rights in respect of the relevant Tenements' and specific performance of that alleged agreement - which as seen is specifically contended to have been brought into existence on 4 April 2016 as an agreement wholly in writing.
The binding written agreement that is contended for by Marindi is identified in explicit terms as regards its eight (8) constituent written components and its alleged essential terms under par…

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: [2017] WASC 189
Decision Date: 12 SEPTEMBER 2017

CaseChat Overview and Summary

Marindi Metals Ltd brought an action against Kidman Resources Ltd seeking a declaration that a binding contract existed between the parties and an order for specific performance. The dispute centred on whether an agreement had been reached via email and text exchanges between the managing directors of the two corporations. The plaintiff claimed that the defendants had breached a binding contract, while the defendants argued that the parties had not reached an agreement due to the absence of essential terms and the incomplete nature of the draft heads of agreement.

The court had to determine whether a binding contract had been formed between the parties, and if so, whether specific performance was an appropriate remedy. The court also needed to address the defendants' counterclaims of laches, acquiescence, and the plaintiff's unclean hands, which they argued should inhibit relief even if a contract was proved. The court's analysis involved an objective assessment of the parties' communications to determine if they intended to make a concluded and binding agreement.

The court found that the parties had reached a binding agreement based on the comprehensive discussion of the relevant law by Buss JA in Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd. The court emphasised the importance of viewing the correspondence as a whole and interpreting the words in their context. The court also noted the debate regarding the existence of a fourth Masters v Cameron category, but concluded that the categories are neither strict nor exclusive. Ultimately, the court found that a binding contract existed between the parties and ordered specific performance, despite the defendants' counterclaims.

Orders

Orders of the court

Full text does not contain this section.

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

In prevailing circumstances, it is enough to mention a comprehensive discussion of the law within this area by Buss JA (as he then was) in Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547 [87] - [112]. Concluding that analysis, his Honour observed at [113]:Plainly, whether in a particular case it should be inferred, on an objective assessment, that the parties intended to make a concluded and binding agreement must depend on the facts and circumstances of the case. I have already mentioned the helpful indicia collected towards undertaking the evaluation exercise by Kirby P (as his Honour then was) in Geebung Investments Pty Ltd v Varga Group, a decision of the New South Wales Court of Appeal, reported in (1995) Butterworth Property Reports at page 19. His Honour's remarks included this point of particular guidance at par 8:Where a binding agreement is said to have been formed as a result of correspondence, it is necessary to look at that correspondence as a whole. It is wrong to isolate any part of the correspondence from the rest in order to prove or disprove the existence of a binding agreement. The same approach should be taken to the analysis of words and phrases within the correspondence. Reference to an 'agreement' having been reached does not necessarily prove the existence of a presently binding contract. Conversely, references to a 'proposed' agreement, and similar expressions, will not necessarily mean that no agreement presently exists. It is a question of how the words are to be interpreted in their context, and in the light of the correspondence, viewed as a whole. Within this realm there is, of course, the correlatively interesting, but as yet not finally resolved (by the High Court) debate concerning whether or not there actually is or should be a fourth Masters v Cameron category - as discussed by McLelland CJ in Equity in Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622. In a recent decision of the New South Wales Court of Appeal, Feldman v GNM Australia Ltd [2017] NSWCA 107, Beazley P (with whom McColl and Macfarlan JJA agreed) discussed contractual formation principles commencing at [60]. Beazley P addressed the Baulkham Hills decision tracking back to the 1929 decision by the High Court in Sinclair Scott & Co v Naughton [1929] HCA 34; (1929) 43 CLR 310 (a decision of Knox CJ, Rich and Dixon JJ) which had addressed scenarios where parties were content to be bound immediately and exclusively by the terms which they had agreed upon - whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms. At [68] Beazley P returned to the point that I made at the commencement of this analysis, namely, that the Masters v Cameron categories are neither strict nor prescriptive. Her Honour added:Nor are they exclusive or necessarily exhaustive. Rather they describe circumstances in which a finally binding contract may or may not have come into existence.