Moss v Contracoin Pty Ltd

Case [2023] FCA 976

FEDERAL COURT OF AUSTRALIA

Moss v Contracoin Pty Ltd [2023] FCA 976  

File number(s): NSD 676 of 2022
Judgment of: CHEESEMAN J
Date of judgment: 17 August 2023
Catchwords:  CONTRACT — interlocutory application – whether parties entered into a binding contract to settle the proceedings on certain terms – whether payment obligation in Calderbank offer intended by the parties to be immediately binding upon acceptance or subject to entry into deed of settlement. Held: application successful.    
Cases cited:

Archer Capital 4A Ltd as Trustee for the Archer Capital Trust 4A v Sage Group PLC [2015] FCA 960; 108 ACSR 218

Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622

Calderbank v Calderbank [1976] Fam 93, [1975] 3 All ER 333

Hamod v New South Wales [2002] FCAFC 97; 188 ALR 659

Masters v Cameron [1954] HCA 72; 91 CLR 353

Mermaids Café & Bar Pty Ltd v Elsafty Enterprises Pty Ltd [2010] QCA 271

Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 56
Date of hearing: 17 August 2023
Counsel for the Applicants Mr J Wheeldon
Solicitors for the Applicants Solve Legal
Solicitors for the Respondents Respondents did not appear  

ORDERS

NSD 676 of 2022
BETWEEN:

STEPHEN JAMES MOSS

First Applicant

DANIEL MURRAY HARDEN

Second Applicant

CHRISTOPHER DUTTON (and others named in the Schedule)

Third Applicant
AND:

CONTRACOIN PTY LTD ACN 626 613 812

First Respondent

BARRY STEPHEN LIPSCOMBE

Second Respondent

ORDER MADE BY:

CHEESEMAN J

DATE OF ORDER:

17 AUGUST 2023

THE COURT ORDERS THAT:

1.The First Respondent and Second Respondent jointly and severally pay the Applicants the sum of $183,191.50, together with interest at the post-judgment rate from 29 June 2023.

2.The First Respondent and Second Respondent jointly and severally pay the Applicants’ costs fixed by way of lump sum at $18,000 inclusive of GST.

3.The Applicants have leave to discontinue these proceedings and the proceedings be and hereby are discontinued with no orders as to costs (save for the costs, the subject of Order 2 and the extant costs order in favour of the Third Respondent).

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

CHEESEMAN J

INTRODUCTION

  1. The applicants seek to enforce the terms of a settlement of the substantive proceedings which they contend was agreed on or around 31 March 2023 pursuant to which payment of the settlement sum was required by 29 June 2023.

  2. The applicants, Stephen James Moss, Daniel Murray Harden, Christopher John Dutton, Christopher Ashman and Julio De Laffitte e Freitas, acquired certain cryptocurrency tokens known as CTCN Tokens from the first respondent, Contracoin Pty Ltd. The second respondent, Mr Lipscombe, is a director of Contracoin. The aggregate purchase price paid by the applicants for the CTCN Tokens is alleged to have been $183,191.50. In the substantive proceedings, the applicants seek relief in relation to alleged misleading…

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AGLC
Moss v Contracoin Pty Ltd [2023] FCA 976
Case
[2023] FCA 976
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Moss v Contracoin Pty Ltd involved a dispute between the applicants and the respondents regarding the terms of a settlement offer made in the context of ongoing litigation. The primary issue before the Court was whether the parties had entered into a binding contract when the respondents made a Calderbank offer to settle the proceedings, and if the payment obligation in that offer was intended to be immediately binding upon acceptance or contingent on the execution of a subsequent deed of settlement.

The Court determined that the parties had indeed entered into a binding contract upon acceptance of the Calderbank offer. The offer, dated 16 March 2023, specified clear and definite terms, including a payment obligation to be fulfilled in three equal monthly instalments. The Court found that the offer's language and the context in which it was made demonstrated an intention to be immediately bound upon acceptance. The reference to a Deed of Settlement was intended to formally record the method of escrow and the confidentiality provisions, but did not condition the enforceability of the payment obligation on the execution of such a deed. The Court thus concluded that the payment obligation was immediately binding and enforceable upon acceptance, distinguishing it from the obligation to enter into a Deed of Settlement, which was a separate term.

Consequently, the Court ordered the respondents to pay the applicants the sum of $183,191.50 plus interest from 29 June 2023, and to cover the applicants' costs of $18,000 inclusive of GST. Additionally, the applicants were granted leave to discontinue the proceedings, which were then discontinued with no further orders as to costs, except for those specified in the Court's orders.

Orders

Orders of the court

1. The First Respondent and Second Respondent jointly and severally pay the Applicants the sum of $183,191.50, together with interest at the post-judgment rate from 29 June 2023.

2. The First Respondent and Second Respondent jointly and severally pay the Applicants’ costs fixed by way of lump sum at $18,000 inclusive of GST.

3. The Applicants have leave to discontinue these proceedings and the proceedings be and hereby are discontinued with no orders as to costs (save for the costs, the subject of Order 2 and the extant costs order in favour of the Third Respondent).

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

When the application was called for hearing, including by the Court officer outside the Court room, there was no appearance for the respondents.EVIDENCE In this application the applicants rely on two affidavits of Mr Kutasi, the first affirmed on 30 June 2023 accompanied by exhibit KK2 and the second affirmed on 15 August 2023 (Kutasi 2) and on written submissions lodged in support of the application. A consent timetable was entered which provided for the respondents to file evidence and or submissions in opposition to this application. The time for the respondents to put on any material has come and gone without any material being filed or served.PROCEDURAL HISTORY On 9 February 2023, I made orders, inter alia, that the parties and their legal representatives participate in an informal settlement conference by no later than 15 March 2023. The informal settlement conference took place on 8 March 2023. On 14 March 2023, the parties informed the Court that the informal settlement conference did not resolve the proceedings but that they remained in discussion and sought to have the next case management hearing moved to enable further settlement discussion. Accordingly, the case management hearing due to have been on 16 March 2023 was listed for 6 April 2023. During the period leading up to 6 April 2023, settlement discussions between the parties continued. The communications were via the solicitors then acting for the parties. The relevant communications do not attract settlement negotiation privilege under s 131(1) of the Evidence Act 1995 (Cth) because in the present circumstances the exclusion in s 131(2)(f) is engaged. By letter dated 16 March 2023 the respondents made a Calderbank offer to the applicants to resolve the proceedings in the following terms:(1)The respondents pay to the applicants the sum of $183,191.50 (being the aggregate purchase price for the CTCN Tokens) by way of three equal monthly instalments as follows:(a)$61,063.83 on the day thirty (30) days from the date of acceptance of this offer;(b)$61,063.83 on the day thirty (60) days from the date of acceptance of this offer; and(c)$61,063.84 on the day thirty (90) days from the date of acceptance of this offer;(2)the CTCN Tokens purchased by the applicants be held in escrow pending full payment of the settlement monies (method to be discussed and agreed);(3)upon full and final payment of the settlement monies the applicants authorise the transfer the CTCN Tokens to the respondents and the parties file consent orders to discontinue the proceedings;(4)the parties enter into a suitably worded Deed of Settlement, which includes, inter alia, confidentiality and non-disparagement provisions; and(5)each party bear their own legal costs. On 17 March 2023, the applicants made a counter-offer to the respondents. By email on 29 March 2023, the respondents rejected the applicant’s counter-offer and re‑opened the respondents’ offer of 16 March 2023 on the basis that it would be open for acceptance until 4pm on 31 March 2023.

Decision

Reasons for decision

Noting the history of the settlement and not wanting to put the applicants to further costs I have applied a broad-brush approach in awarding costs by way of lump sum of $18,000 inclusive of GST. This amount includes an allowance for the costs of preparing for and appearing at the interlocutory hearing. CONCLUSION For these reasons, I made the orders at the conclusion of the hearing in the form recorded above.

Ratio Decidendi

Legal Principle Established

The authorities have subsequently recognised an additional category of agreements to contract which is where the parties intend to be bound immediately and exclusively by the terms which they had agreed upon while expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms: Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628. For convenience, I will refer to this as the fourth category.CONSIDERATION There are a number of factors that lead me to the conclusion that the objective intention of the parties was that upon acceptance of the Calderbank offer dated 16 March 2023, the parties were contractually bound to the terms of that offer. I am satisfied in the present circumstances, the agreement reached falls within the first category identified by the High Court in Masters v Cameron — the parties have reached finality in arranging the terms of their bargain and intend immediately to be bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise, but not different in effect. Alternatively, it may be that the agreement falls into the fourth category. In either case, the parties are bound by the agreement embodied in the acceptance on 31 March 2023 of the offer of 16 March 2023, there being no subsequent Deed of Settlement agreed between them whether by way of restatement or in substitution for the agreement struck. The essential elements of the agreement included the payment obligation and the escrow and transfer of the CTCN Tokens from the applicants to the respondents upon discharge of the payment obligation. The respondents’ agreement to pay the settlement sum in full by three equal monthly instalments at 30-day intervals from the date of acceptance of the offer was immediately legally binding and enforceable on acceptance of the offer. In reaching this conclusion, I have taken into account the following matters. First, the plain language of the 16 March 2023 offer indicates an intention on the part of the respondents to be immediately bound upon acceptance by the applicants. Secondly, the terms setting out the payment obligations were clear, definite, unambiguous and capable of being given immediate effect. The timetable for the payment obligations is calculated by reference to the date of acceptance of the offer, and not by reference to the date on which “a suitably worded Deed of Settlement” might be executed. This feature supports an inference that the parties intended to be immediately bound: Mermaids Café & Bar Pty Ltd v Elsafty Enterprises Pty Ltd [2010] QCA 271 at [16]. Similarly, the trigger for the CTCN Tokens to be released from escrow and transferred to the respondents is clear. It is defined by reference to the discharge of the payment obligation. It is not expressed to be conditional on entry in a deed of settlement. Thirdly, read in context, the reference to the parties entering a “suitably worded Deed of Settlement” is to formally record the method of effecting the escrow of the CTCN Tokens (which escrow was agreed to be put in place) and the wording of the confidentiality and non‑disparagement provisions (which were also agreed to be put in place). None of these matters detract from the objective intention of the offerors to be bound upon acceptance. Similarly, the offerees’ acceptance of that offer is not expressed to be conditional on the deed, rather the offerees acknowledge that the deed is to be prepared “in accordance with those terms” – that is, the terms in the offer itself. The fact that the fourth term of the 16 March 2023 settlement offer requires the parties to enter into a suitably worded Deed of Settlement containing inter alia confidentiality and non-disparagement provisions does not alter the conclusion that the payment obligation set out in the first term of the offer was immediately binding upon acceptance. The obligation to agree and enter into a Deed of Settlement was a distinct term, separate to the respondents’ payment obligation. The respondents’ obligation to make payment was in no way expressed to be conditional upon entry into a deed.