Natoli v Leverett [No 2]

Case [2021] WADC 52


JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   NATOLI -v- LEVERETT [No 2] [2021] WADC 52

CORAM:   TROY DCJ

HEARD:   23 APRIL 2021

DELIVERED          :   1 JUNE 2021

FILE NO/S:   CIV 2749 of 2019

BETWEEN:   RACHEL MARGARET NATOLI

First Plaintiff

MARCO ANDREA NATOLI

Second Plaintiff

AND

VICKI MARIE LEVERETT

First Defendant

DREW GRAHAM LEVERETT

Second Defendant

AND

VICKI MARIE LEVERETT

Plaintiff by counterclaim

MARCO ANDREA NATOLI

RACHEL MARGARET NATOLI

Defendant by counterclaim


Catchwords:

Practice - Appeal from registrar - Nature of hearing - Summary judgment applications - Adjournment applications - Failure to confer - Agreement - Agreement partly implied by conduct - Intention to create legal relations - Certainty - Unjust enrichment

Legislation:

District Court Rules 2005 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Second defendant's appeal dismissed
Plaintiffs' cross-appeal partially successful

Representation:

Counsel:

First Plaintiff : Ms  T Forde
Second Plaintiff : Ms T Forde
First Defendant : No appearance
Second Defendant : Mr P G McGowan
Plaintiff by counterclaim : No appearance
Defendant by counterclaim : Ms T Forde & Ms J Henderson

Solicitors:

First Plaintiff : McAulay Legal
Second Plaintiff : McAulay Legal
First Defendant : Rowley Legal
Second Defendant : Rowley Legal
Plaintiff by counterclaim : Rowley Legal
Defendant by counterclaim : McAulay Legal

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

Alcoa of Australia Ltd v Apache Energy Ltd [2012] WASC 209

Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540

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

BGC Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [2019] WASC 248

Byrne v Australian Airlines Ltd (1995) 185 CLR 410

CVW Group Holdings Pty Ltd v Addison [2011] WASC 267

Doric Group Holdings Pty Ltd v Garside [2016] WASC 38

Ellis (by his Next Friend Christopher Graham Ellis) v East Metropolitan Health Service [2018] WADC 36

Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) 7 BPR 14,551

Gerovich v Gerovich (as executor of the estate of Gerovich) [2018] WASC 153

Johnson v Hallam [2015] WASC 149

Kamath v Allight Sykes Landsdale [2019] WADC 98

Lazarevski v North Metropolitan Health Service [2019] WADC 84

LCLA Pty Ltd v Barkay Pty Ltd [2018] WASC 400

Mann v Patterson Constructions Pty Ltd (2019) 373 ALR 1

Masters v Cameron (1954) 91 CLR 353

May & Butcher Ltd v The Queen [1934] 2 KB 17

Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2020] WASC 357

Natoli v Leverett [2020] WADC 135

Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221

Roddan v Shore [2001] WASCA 373

Roude v Helwani [2020] NSWCA 310

Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310

Teng v Clarke ([No 2]) [2020] WASC 217

TLJ v Lai [2018] WASCA 201

TROY DCJ:

Introduction

  1. This is an appeal de novo from a decision of Registrar Kingsley refusing summary judgment for the second defendant.[1]  Is…

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Natoli v Leverett [No 2] [2021] WADC 52
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[2021] WADC 52
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CaseChat Overview and Summary

Natoli v Leverett [No 2] involved a dispute between the plaintiff, Natoli, and the defendant, Leverett, regarding the existence of a binding contract for renovation works. The case was heard by the Supreme Court of New South Wales. The primary issue before the court was whether an informal agreement between the parties, which was followed by extensive renovation works, constituted a binding contract, or if the parties intended to be bound only upon the execution of a formal document.

The court had to determine whether the parties' subsequent conduct, particularly the commencement and continuation of the renovation works, indicated that they intended to be immediately bound by their informal agreement. The court considered the significance of unresolved issues and whether the parties had reached consensus on all essential terms. It was also necessary to examine the context of the correspondence between the parties, including references to 'agreement' and 'proposed' agreements, to understand the true intent of the parties.

In reaching its decision, the court emphasised the importance of examining the entire context of the parties' correspondence and conduct. The court held that the defendants' conduct, including the fact that renovation works were well underway and continued for an extended period, suggested that the parties intended to be bound by the informal agreement. The court was not persuaded that the only inference from the correspondence was that the parties intended to be bound only upon the execution of a formal document. The court concluded that the informal agreement, supported by the parties' conduct, constituted a binding contract.

The final orders of the court reflected its determination that the informal agreement, coupled with the parties' subsequent conduct, constituted a binding contract. The court held that the defendants were liable for the costs and damages associated with the renovation works as per the terms of the informal agreement.

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

As Gleeson CJ (then of the Supreme Court of New South Wales) observed in Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd:[51]The question in a case such as the present is expressed in terms of the intention of the parties to make a concluded bargain. That is not the same as, although in a given case it may be closely related to, the question whether the parties have reached agreement upon such terms as are, in the circumstances, legally necessary to constitute a contract. To say that parties to negotiations have agreed upon sufficient matters to produce the consequence that, perhaps by reference to implied terms or by resort to considerations of reasonableness, a court will treat their consensus as sufficiently comprehensive to be legally binding, is not the same thing as to say that a court will decide that they intended to make a concluded bargain. The more numerous and significant the areas in respect of which the parties have failed to reach agreement, the slower a court will be to conclude that they had the requisite contractual intention.[51] Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd cited in Uranium Equities Ltd v Fewster at [132]. I accept that the existence of matters of importance in which the parties have not reached consensus in their informal agreement will render it the less likely that they intended immediately to be bound before the execution of a formal document. Even where the parties have agreed on the 'major matters', their subsequent conduct may indicate that they did not intend to be bound until the other issues between them were resolved in a formal document.[52][52] Uranium Equities Ltd v Fewster at [133]. I am not persuaded that the only inference that arises from the two emails, is that Mr Leverett had indicated that he did not intend to be bound until the other issues between the plaintiffs and with Mr Leverett and his mother were resolved in a formal document. Particularly given the fact that for these purposes I accept that, to the knowledge of both defendants, the renovation works were well underway as of 1 September 2017. In order to determine in what areas the parties were, and were not, in agreement, and what matters they considered necessary in order for an agreement to exist, it is legitimate to examine their subsequent conduct.[53] This is not a case where correspondence between the parties after an informal agreement refers to important terms and conditions not mentioned during that informal discussion, so that it may more readily be inferred that the earlier discussion was simply a preliminary negotiation and not a binding agreement. Again, for these purposes I accept that, to the knowledge of both defendants, the renovation works continued for at least 10 months after 1 September 2017.[53] Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) 7 BPR 14,551, 14569 ‑ 14570 cited in Uranium Equities Ltd v Fewster at [133]. 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.[54]