Ormwave Pty Ltd v Smith - [2007] NSWCA 210

NEW SOUTH WALES COURT OF APPEAL

CITATION: Ormwave Pty Limited & Anor v Smith [2007] NSWCA 210

FILE NUMBER(S):
40295/06

HEARING DATE(S): 25 July 2007

JUDGMENT DATE: 22 August 2007

PARTIES:
Ormwave Pty Limited (First Appellant)
QH Cruises Pty Limited t/as Captain Cook Barrier Reef (Second Appellant)
Ronald William George Smith (Respondent)

JUDGMENT OF: Beazley JA Santow JA Ipp JA

LOWER COURT JURISDICTION: Workers Compensation Commission

LOWER COURT FILE NUMBER(S): WCC 14404/04

LOWER COURT JUDICIAL OFFICER: Acting Deputy President Handley

LOWER COURT DATE OF DECISION: 23 February 2006

LOWER COURT MEDIUM NEUTRAL CITATION:
Ormwave Pty Ltd & QH Cruises Pty Ltd, t/as Captain Cook Barrier Reef v Smith and others [2006] NSWWCCPD 26

COUNSEL:
PJ Deakin QC; HJ Halligan (Appellants)
MJ Cranitch SC; AC Casselden (Respondent)

SOLICITORS:
Abbott Tout (Appellants)
AWM Dickinson & Son (Respondent)

CATCHWORDS:
APPEAL – appeal confined to a point of law – whether there was any evidence of a particular fact is a question of law - whether no evidence to support decision-maker’s finding that the parties had entered into a contract in New South Wales
CONTRACT – offer and acceptance – in determining existence of a contract it is not necessary to identify precise offer or precise acceptance nor a precise time at which an offer or acceptance could be identified – whether decision-maker erred in finding offer made by appellants and accepted by respondent in New South Wales
CONTRACT – terms of contract – contract may be entered into notwithstanding that all terms have not been agreed to provided there has been a manifestation of mutual assent – whether decision-maker erred in finding contract formed between parties in New South Wales
WORKERS COMPENSATION – Workers Compensation Act 1987 (NSW) s 13 – jurisdiction of Workers Compensation Commission to hear application – whether contract of employment formed in New South Wales so as to allow Commission to determine application for compensation

LEGISLATION CITED:
Supreme Court Act 1970 (NSW) s 101
Workers Compensation Act 1987 (NSW) s 13
Workplace Injury Management and Workers Compensation Act 1998 (NSW) ss 352, 353

CASES CITED:
Anson’s Law of Contract (27th ed, 1998)
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33
Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139
Brambles Holdings Limited v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61
Brogden v Metropolitan Railway Co (1877) 2 App Cas 666
Brooker v Friend & Brooker Pty Ltd & Anor [2006] NSWCA 385
Bruce v Cole (1998) 45 NSWLR 163
Frank R Wolstenhome Pty Limited v Davis (Court of Appeal, 28 July 1995, unreported)
Haider v JP Morgan Holdings Aust Ltd t/as JP Morgan Operations Australia Ltd [2007] NSWCA 158
Helmers v Coppins (1961) 106 CLR 156; [1961] HCA 88
Industrial Rollformers Pty Ltd & Anor v Ingersoll-Rand (Australia) Ltd [2001] NSWCA 111
Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110
MacRobertson Miller Airline Services v Commissioner of State Taxation (Western Australia) (1975) 133 CLR 125; [1975] HCA 55
Magill v Magill (2006) 226 CLR 551; [2006] HCA 51
McPhee v S Bennett Ltd (1934) 52 WN (NSW) 8
Meates v Attorney-General [1983] NZLR 308
Noahs Limited (t/as The Lakeside Hotel) and Anor v Glover (Court of Appeal, 20 September 1995, unreported)
Roads and Traffic Authority of New South Wales v Mosca (2006) 146 LGERA 335; [2006] NSWCA 159
Sinclair v Maryborough Mining Warden (1975) 132 CLR 473; [1975] HCA 17
Skiwing Pty Ltd v Trust Company of Australia (Trading as Stockland Property Management) [2006] NSWCA 276
Starr v Douglas (1994) 35 NSWLR 133
The Australian Gas Light Co v The Valuer-General (1940) 40 SR (NSW) 126
Thompson v White & Ors (2007) NSW ConvR 56-171; [2006] NSWCA 350
Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106
Vetter v Lake Macquarie City Council (2001) 202 CLR 439; [2001] HCA 12
Vroon BV v Foster’s Brewing Group Ltd [1994] 2 VR 32

DECISION:
Appeal dismissed, the appellants to pay the respondent’s costs.

JUDGMENT:

- 33 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40295/06
BEAZLEY JA
SANTOW JA
IPP JA
22 August 2007

Ormwave Pty Limited & Anor v Ronald William George Smith

Headnote

Facts
The respondent (Mr Smith) commenced employment with Captain Cook Cruises (NSW) Pty Limited (Captain Cook Cruises) on 7 March 1987. He was seriously injured in an assault in March 1991 whilst on the way home from work. He was off work until December 1991. In early January 1992, Captain Cook Cruises refitted and renamed its vessel the MV Lady Hawkesbury for the purposes of it being chartered to the appellants and operated out of Cairns by them under the new name, MV Reef Escape. The new operation was conducted by Captain Cook Cruises pursuant to a Management Agreement between it and the appellants.

Mr Smith crewed the vessel to Cairns. The Management Agreement provided that Captain Cook Cruises would engage employees as agent for the appellants for the new operation. There was evidence that Captain Haworth, the principal of Captain Cook Cruises, had told Mr Smith that if he sailed with the vessel up to Cairns he would be employed in Cairns on the renamed vessel.

On 15 September 2004, Mr Smith lodged a claim for workers compensation with the Workers Compensation Commission (the Commission) against Captain Cook Cruises and the appellants for a variety of physical and psychological problems that he alleged he sustained due to the nature and conditions of his work on the vessel MV Lady Hawkesbury and as renamed, the MV Reef Escape, between 1988 and 1 May 1996. The Commission had jurisdiction to hear claims where the contract of employment between the parties was entered into in New South Wales: Workers Compensation Act 1987 (NSW) s 13(1).

Captain Cook Cruises and the appellants brought interlocutory proceedings in the Commission to challenge the Commission’s jurisdiction to determine Mr Smith’s claim for compensation in respect of the period 17 February 1992 to 27 February 1996. The appellants argued that the Commission had no jurisdiction to determine the matter as the contract of employment between the appellants and Mr Smith came into existence in Queensland. The matter was first heard by an Arbitrator who found Mr Smith was employed by the appellants during the period 17 February 1992 to 27 February 1996, pursuant to a contract entered into with the appellants in New South Wales and that the Commission thereby had jurisdiction to hear Mr Smith’s claim for workers compensation.

On appeal to the Commission the Acting Deputy President confirmed the Arbitrator’s decision: s 352 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW). That appeal was by way of review: s 352(5).

This appeal was brought pursuant to leave from the Acting Deputy President: Supreme Court Act 1970 (NSW) s 101(2). The appeal was limited to an appeal in point of law: Workplace Injury Management and Workers Compensation Act 1998 (NSW) s 353(1). The appellants contended that there was no evidence upon which the finding of the New South Wales contract could be made.

Held: Per Beazley JA (Santow and Ipp JJA agreeing):

The question whether there was any evidence of a particular fact is a question of law: [12]-[16]
The Australian Gas Light Co v The Valuer-General (1940) 40 SR (NSW) 126; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33 (cited); Bruce v Cole (1998) 45 NSWLR 163; Haider v JP Morgan Holdings Aust Ltd t/as JP Morgan Operations Australia Ltd [2007] NSWCA 158 (considered)
It is not necessary, in determining whether a contract has been formed, to identify either a precise offer or a precise acceptance, nor a precise time at which an offer or acceptance could be identified: [68]-[75]
MacRobertson Miller Airline Services v Commissioner of State Taxation (Western Australia) (1975) 133 CLR 125; [1975] HCA 55; Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110; Brambles Holdings Limited v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61; Magill v Magill (2006) 226 CLR 551; [2006] HCA 51 (cited)
The Management Agreement was evidence that Captain Cook Cruises, through Captain Haworth, was acting as agent for the appellants when engaging in the process of offering employment for the Barrier Reef cruise operation to be conducted by the appellants: [60]
There was evidence capable of supporting a finding that an offer of employment had been made by Captain Haworth, acting as the appellants agent, to Mr Smith in Sydney and was accepted in Sydney by Mr Smith, either orally or by conduct: [78]-[82]
The fact that a court, differently constituted, may have found facts differently or reached a different conclusion, does not establish error in point of law as was required for the appeal in this case to succeed: [84]
A valid contract may be entered into notwithstanding that all terms have not been agreed. Provided there has been a manifestation of mutual assent a concluded agreement may be found to exist. The terms of the agreement reached between Captain Haworth and Mr Smith were sufficiently certain for a finding that a contract had come into existence. [87]-[89]
Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106; Thompson v White & Ors (2007) NSW ConvR 56-171; [2006] NSWCA 350 (cited)
The appellants have not established that there was no evidence from which it could be concluded that a contract was formed on behalf of the appellants in Sydney with Mr Smith: [91]

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40295/06
BEAZLEY JA
SANTOW JA
IPP JA
22 August 2007

Ormwave Pty Limited & Anor v Ronald William George Smith

Judgment

BEAZLEY JA:
Introduction
The question on this appeal is whether there was evidence to support a finding made by the Workers Compensation Commission (the Commission) constituted by Acting Deputy President Handley, that the respondent (Mr Smith) was employed by the appellants during the period 17 February 1992 to 27 February 1996, pursuant to a contract of employment entered into with the appellants in New South Wales (the NSW contract).
Background to proceedings
The finding of the NSW contract founded the Commission’s jurisdiction to determine Mr Smith’s claim for workers compensation for the period 17 February 1992 to 27 February 1996: see s 13(1) of the Workers Compensation Act 1987 (NSW) (the Workers Compensation Act) which provided:
“13 Injuries received outside New South Wales
(1) If:
(a)an employer has a place of employment in New South Wales, or is for the time being present in New South Wales, and there employs a worker, and
(b)any such worker while outside New South Wales receives an injury under circumstances which, had the injury been received in New South Wales, would entitle the worker to compensation in accordance with this Act,
the injury is an injury to which this Act applies, and compensation is payable accordingly.”
On 15 September 2004, Mr Smith lodged claims for workers compensation against Captain Cook Cruises (NSW) Pty Limited (Captain Cook Cruises) and the appellants for a variety of physical and psychological problems that he alleged he sustained due to the nature and conditions of his work on the vessel MV Lady Hawkesbury and as renamed, the MV Reef Escape, between 1988 and 1 May 1996. There is no dispute that Mr Smith, when first engaged in 1988, was employed by Captain Cook Cruises.
The question in issue was his employment status between 17 February 1992 and 27 February 1996. Captain Cook Cruises and the appellants contended that they did not employ Mr Smith in New South Wales in that period. They thus brought interlocutory proceedings in the Commission to challenge the Commission’s jurisdiction to determine Mr Smith’s claim for compensation. The matter was first heard by an Arbitrator who found that in respect of that period, Mr Smith was employed pursuant to a contract of employment that had been entered into in New South Wales between the appellants and Mr Smith. She held, therefore, that the Commission had jurisdiction to determine Mr Smith’s claim.
The appellants appealed to the Commission constituted by Acting Deputy President Handley, pursuant to s 352 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the Workplace Injury Management and Workers Compensation Act). An appeal from an Arbitrator pursuant to s 352 is by way of review: s 352(5). An appeal by way of review extends to a review of the primary decision on both fact and law. The appeal to the Acting Deputy President proceeded on the papers and was based upon the evidence that was before the Arbitrator.
Acting Deputy President Handley confirmed the Arbitrator’s decision.
This appeal, which is brought pursuant to leave: see s 101(2) of the Supreme Court Act 1970 (NSW); granted on 10 November 2006, is from the decision of the Acting Deputy President. The appeal is limited to an appeal in point of law: s 353(1) of the Workplace Injury Management and Workers Compensation Act.
Whilst the strict issue in dispute in the Commission was whether it had jurisdiction to entertain Mr Smith’s application for compensation for his alleged injuries in the period 17 February 1992 to 27 February 1996, the determination of that question depended upon the identity of his employer and more particularly, where his contract of employment during that period was entered into.
The appellants contend that there was no evidence upon which the finding of the New South Wales contract could be made in respect of Mr Smith’s employment with the appellants during the period 17 February 1992 to 27 February 1996. Their contention was that they had entered into a contract of employment with the respondent in Queensland on 17 February 1992.
Having regard to the nature of the appeal to this Court, namely, that there was no evidence to support the Acting Deputy President’s determination of an offer of employment made in Sydney, it is necessary to review the evidence to determine whether, as alleged, there was no evidence upon which the finding of the NSW contract could be made.
No evidence as a question of law
In this case, the principal basis of error advanced on the appeal was that there was no evidence to support the finding of entry into the NSW contract. In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33; Mason CJ stated at 355-56:
“The question whether there is any evidence of a particular fact is a question of law. Likewise, the question whether a particular inference can be drawn from facts found or agreed is a question of law … So, in the context of judicial review, it has been accepted that the making of findings and the drawing of inferences in the absence of evidence is an error of law.” (Citations omitted)
His Honour continued at 359:
“A finding of fact will then be reviewable on the ground that there is no probative evidence to support it and an inference will be reviewable on the ground that it was not reasonably open on the facts …”
Mason CJ, in dealing with the decided cases in this area, referred to The Australian Gas Light Co v The Valuer-General (1940) 40 SR (NSW) 126 at 138, where Jordan CJ said:
“…
(3)A finding of fact by a tribunal of fact cannot be disturbed if the facts inferred by the tribunal, upon which the finding is based, are capable of supporting its finding, and there is evidence capable of supporting its inferences
(4)Such a finding can be disturbed only (a) if there is no evidence to support its inferences …”
See also McPhee v S Bennett Ltd (1934) 52 WN (NSW) 8; Sinclair v Maryborough Mining Warden (1975) 132 CLR 473 at 481, 483; [1975] HCA 17; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 151 per Kirby P and at 155-56 per Glass JA (Samuels JA agreeing); Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 467; [2001] HCA 12 per Kirby J; Roads and Traffic Authority of New South Wales v Mosca (2006) 146 LGERA 335; [2006] NSWCA 159 at [69] per Handley JA (Mason P and Bryson JA agreeing).
There has been a long jurisprudential history in this State based on this Court’s decision in Azzopardi that even perverse findings of fact do not give rise to an error of law. That proposition remains good law. However, a decision-maker who acts without probative evidence may be seen as acting without evidence: see Bruce v Cole (1998) 45 NSWLR 163 per Spigelman CJ (Mason P agreeing), where his Honour, in considering the decision of this Court in Azzopardi, stated at 188-89:
“… a decision-maker who acts without probative evidence … does not make a valid decision. It is the equivalent of acting without evidence.”
See also Skiwing Pty Ltd v Trust Company of Australia (Trading as Stockland Property Management) [2006] NSWCA 276 per Spigelman CJ (Bryson JA agreeing) at [52]-[53].
In Haider v JP Morgan Holdings Aust Ltd t/as JP Morgan Operations Australia Ltd [2007] NSWCA 158, Basten JA (McColl JA agreeing), explained at [33]:
“… Broadly speaking, error of law will arise in circumstances where a fact is found where there is in truth no relevant and probative material capable of supporting it, or an inference is drawn form a particular fact, which is not reasonably capable of supporting the inference: see Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 367 (Deane J), referred to by Gleeson CJ in Minister for Immigration and Multicultural Affairs v Rajamanikkam (2002) 210 CLR 222 at [25]; and see Bruce v Cole (1998) 45 NSWLR 163 at 187-189 (Spigelman CJ).”
It is not clear how the principle stated in Azzopardi will continue to operate within the modern statement of the ‘no evidence’ rule. However, that question does not rise for consideration here. It was not said the factual finding was perverse. Rather, it was said there was no evidence to support the finding of the NSW contract.
The evidence
The evidence comprised a number of written statements and business records, together with oral evidence given by Mr Smith and Captain Trevor Haworth, a director of Captain Cook Cruises and of each of the appellants. Evidence was also given by Iman El-Ajouz, Payroll Manager, Captain Cook Cruises, although it will not be necessary to refer to her evidence for the purposes of this appeal.
Mr Smith gave evidence that he commenced employment with Captain Cook Cruises on 7 March 1987. Captain Cook Cruises was a leisure cruise operator in waters in and around New South Wales, including the Hawkesbury River. He had a number of different “jobs” with Captain Cook Cruises, including as chef, ship steward and entertainment officer. In March 1991, he was assaulted on the way home from work and sustained significant injuries. He was off work for many months recuperating.
Mr Smith returned to work for Captain Cook Cruises in December 1991. In particular, he served on cruises on the MV Lady Hawkesbury around Christmas and New Year. In about early January 1992, the MV Lady Hawkesbury underwent a refit for the purposes of it being taken to Cairns under the new name, MV Reef Escape. The renamed vessel operated out of Cairns doing Barrier Reef cruises. The Barrier Reef cruises were operated by the appellants trading as Captain Cook Barrier Reef, under the management of Captain Cook Cruises.
On 27 April 1996, Mr Smith’s employment on the MV Reef Escape was terminated, after the vessel had been sailed to Fiji. There was no dispute that from 28 February 1996 until his termination, Mr Smith was employed under a contract made in Queensland.
Mr Smith’s evidence
In his statement made on 1 August 2004, Mr Smith stated that in or about 1989, Captain Haworth called him into his Circular Quay office. Mr Smith said that there were plans of a brand new ship on Captain Haworth’s desk and they had a conversation to the following effect:
“[Haworth]:‘I’m planning to sail this ship out of Cairns … What would make the galley and the storerooms that you’re working in now work better?’
…
[Haworth]:‘I don’t know when this ship will be ready. Would you want to work on it out of Cairns?’
[Smith]:‘Yes, of course. It would be an honour to start up and help get the cruising going with the same high standard.’” (Emphasis added)

Mr Smith said that whilst he was recuperating from the assault in March 1991, Captain Haworth rang him and they had a conversation to the following effect:
“[Haworth]:‘Are you fit enough to work on the Lady Hawkesbury at Christmas? It will be its farewell cruise before it goes to Cairns.
…
[Haworth]:‘How do you feel about working out of Cairns next year?’
[Smith]: ‘I still wish to accept the offer.’
[Haworth]:‘Could you oversee the refit of the ship’s [Lady Hawkesbury] galley and storage at Groom Brothers [shipyard]?’
[Smith]: ‘Yes, certainly.’
[Haworth]:‘And can you be part of the delivery crew that sail it up to Cairns?’
[Smith]:‘It would be my pleasure.’” (Emphasis added)
In his oral evidence, Mr Smith said that he knew that the MV Lady Hawkesbury was to operate out of Cairns
“… from the information … from Captain Haworth … that all crew were going to be … resigned except for us key people who were retained to sail the ship. Everyone else resigned and they were to be re-employed if they wanted to work in Cairns, and they had to go through the same process of being re-employed, but I was already still with the ship because we went – took it then from the Hawkesbury River after its final cruise [for refitting].”
Mr Smith returned in December to work on the last cruise on the Hawkesbury River. At that time, he agreed to a wage that was worked out at the rate of a third-year apprentice’s wage. He said that before the MV Lady Hawkesbury did the last cruise, he knew that it was to be refitted and taken to Cairns. He said that at the time of the refit, he was “put back on the books” of Captain Cook Cruises. He said he knew he was to be involved in the refit and he went with the vessel when it sailed to Cairns. Mr Smith described himself as a “vital part of the new venture going to Cairns”.
The vessel set sail from Sydney on about 26 January 1992 and took approximately six days to reach Cairns. Mr Smith agreed that during the course of conversations that he had with Captain Haworth between March and December 1991, Captain Haworth had made an offer for him to work on the project of decommissioning the vessel, dry docking it and then sailing it up to Queensland. Mr Smith added, however, that he was “to continue on with my position”. He reiterated this under further questioning, when he said “I just followed through with the ship”.
He was asked:
“Q.And in Cairns is it the situation that you agreed to remain on the ship and work as a cruise director?
A.No, that’s incorrect. I was employed as the executive chef, and I sailed with the ship up there and employed my own staff, my own. They didn’t go through the applications of people applying for the jobs.”
Mr Smith denied that he was paid by a different company in Cairns and maintained that he was employed by Captain Cook Cruises. He denied that he had ever signed a contract in relation to his employment. He was questioned about his group certificate, which specified the appellants as his employer. He accepted there was some confusion arising from the information on his group certificate, but that “no person other than the original people right from the very start were ever involved”.
Captain Haworth’s evidence
Captain Haworth, in his statement of evidence, said that in early 1992, all Captain Cook Cruises’ employees who worked on the MV Lady Hawkesbury had their employment terminated with that corporation and any employment benefits paid out. He said Captain Cook Cruises had carried the risk of the transfer of the ship from Sydney to Cairns and employed “a run crew” specifically for the voyage. Further crew were engaged in Cairns for the purposes of the Captain Cook Barrier Reef cruise operations.
Captain Haworth said that once the crew for Captain Cook Barrier Reef was selected, each crew member was given a copy of an employment contract. Captain Haworth also said that prior to employing any crew members, the partnership had negotiated the relevant award with the Maritime Union, the first such award negotiated for “the Maritime accommodated cruise ship industry for the Inner Barrier Reef Waterways”.
He also stated that when the vessel arrived in Cairns the Captain Cook Cruises’ employees were “paid off and their employment terminated”. He said that crew members who were interested in working on the renamed vessel, the MV Reef Escape, were requested to apply for a position on the vessel and interviews were held by him in Cairns on or about 16 February 1992. He also said that no offer of employment could be made until the terms of that award had been finalised and to the best of his knowledge and belief, that had occurred in January 1992. He denied that any contract of employment with the partnership was entered into with Mr Smith prior to “negotiation of his employment”, which he said took place on or about 16 February 1992.
There was no written contract of employment in evidence between the appellants and Mr Smith. However, an employment contract between a Michael Aston and the appellants was produced, which, Captain Haworth said, was in the form entered into by all employees on 17 February 1992.
In his oral evidence, Captain Haworth said the entire crew collected on the MV Reef Escape on 17 February 1992 to sign a contract and that they all did so at the same time. He said that searches had been carried out to find the specific contract signed by Mr Smith, but it had not been located. However, he did produce an ‘employment declaration’ signed by Mr Smith on 17 February 1992 for taxation purposes. That document identified “Captain Cook Barrier Reef” as the employer and nominated its address as “C/o No 6 Jetty Circular Quay”.
Captain Haworth annexed to his statement of evidence a copy of a document that was said to evidence the calculations of termination benefits for employees of Captain Cook Cruises at the time their employment was brought to an end on or about 16 February 1992. It also contained a list of staff who had been engaged on the MV Lady Hawkesbury and who had been terminated as at 5 January 1992. The document was a three page handwritten document. It is not apparent when the document was brought into existence. It appears, however, that it was a business record, recording payments of wages and salary to staff.
The entry in relation to Mr Smith stated his various rates of pay up until 16 February 1992 and then recorded “$158.00 Reef Escape rate”. It also stated that annual leave was owed from 17 February 1992 only. Mr Smith’s name was not on the list of staff who were terminated on 5 January, nor was there any indication in the document that he had been terminated and re-employed. Nor was there any such indication in respect of any of the other employees whose wage rates and entitlements were recorded for the period leading up to and from 16 February 1992.
In cross-examination, Captain Haworth clarified that not all persons who were engaged on the MV Reef Escape had been interviewed in Cairns. Rather, he said that the crew members who had gone up from Sydney on the delivery voyage had already indicated their interest to work in Cairns, so that it was not necessary for them to be interviewed, as he was fully aware of their capabilities. He said that the crew had been told what was happening in relation to the decision to relocate the MV Lady Hawkesbury to Cairns. He said that at that time, the crew were asked whether any of them were interested in employment in Cairns. He said:
“If they were, then they could go on the run trip to Cairns. That’s what happened. And then we had to employ – interview and employ further crew in Cairns to make up the complement.”
Captain Haworth was cross-examined as to what the Sydney crew, who had crewed the vessel to Cairns, had been told. He said:
“These staff members had been employed on the Lady Hawkesbury and then we ceased operations on the Lady Hawkesbury … we explained what was happening and the vessel was going to Cairns, and any of those people that showed interest in that stayed employed --
… normally with New South Wales Captain Cook, and then they served on the delivery voyage, and then they were paid off from Captain Cook (NSW) in Cairns.” (Emphases added)
He was again questioned as to whether he could recollect whether there were any meetings to discuss what the employment arrangements would have been once they got to Queensland. Captain Haworth responded:
“All the crew were fully aware of the arrangement in Queensland.
…
We had to have a reason for the closure of Lady Hawkesbury on the river.
…
We’d been running an operation for many years, and we came along and told the crew what was happening, that we’d entered into this joint venture with Qantas and we were going to move the vessel to Cairns, and people then, of course, got pretty excited. People asked could they go to the reef, ‘We’d like to go and we’d like to be part of setting up the new project.’ [Mr Smith] particularly was very keen about that. And that’s what happened. So those members who were interested and enthusiastic, who we knew were sound employees, we said, ‘Well, okay, you can go up on the run job, and then you’ll be employed in Cairns.’
…
And that’s exactly what happened.” (Emphasis added)
Captain Haworth clarified that he was the person who conveyed that information to the crew.
The Management Agreement
The basis upon which the cruise operations were to be conducted in Cairns was governed by the terms of a Management Agreement dated 21 May 1990 between Captain Cook Barrier Reef (a partnership) and Captain Cook Cruises. It was common ground that the appellants were the parties to the partnership.
The recitals in the Management Agreement stated that the partnership intended “to bareboat charter a passenger cruise boat” with a right to operate that vessel and support facilities on land: recital A. Recital B stated that the manager had “experience and expertise in the operation and management of cruise boats within Australia”. Recital C stated that the partnership desired that the manager provide “operating, management, marketing and administrative services for the cruise boat and support facilities”. Clause 2.3 provided for the appointment of the manager as operator. It stated:
“The Partnership appoints the Manager to be the Operator of the Vessel for the Operating Term and the Manager accepts that appointment. Subject to compliance by the Manager with its obligations in this Agreement the Partnership will allow the Manager as its agent to operate the Vessel during the Operating Term …”
Clause 3 made provision for “opening matters”. This clause governed the obligations and responsibilities of the parties prior to the cruise boat operation commencing. For example, it provided for the establishment of a fund for training, pre-opening and operating expenses: cl 3.2; for the payment of pre-opening expenses: cl 3.3; and for the preparation of an estimate of pre-opening expenses: cl 3.4. Clause 3.5 provided that the pre-opening budget may include an item relating to recruitment and training of staff. Clause 4 governed the operation of the vessel. Relevantly, cl 4.9 provided:
“The Manager will engage, supervise, terminate and determine the compensation, other benefits and terms and conditions of employment of staff and employees of the Vessel as agent for the Partnership and it is acknowledged that such persons are staff and employees of the Partnership.” (Emphasis added)
Although the terms of the Management Agreement were not entirely consistent with the usual terms found in a bareboat charter, it was not contended that the express terms of the Management Agreement were qualified by the reference to “bareboat charter” in the recitals.
Findings of the Arbitrator
Because the Acting Deputy President referred to certain findings of the Arbitrator, it is necessary to consider those findings, to the extent that they form the basis of the Acting Deputy President’s reasoning.
The Arbitrator at [37] found that the objective evidence made it clear that Mr Smith was employed by the appellants from about 17 February 1992 to 27 February 1996. She made that finding based upon Captain Haworth’s evidence that Mr Smith’s employment with Captain Cook Cruises ceased on about 16 February 1992 and that this was disclosed to Mr Smith. She considered that Captain Haworth’s evidence was supported by the documentary evidence, in particular, Mr Smith’s tax return and the employment declaration signed by him. The Arbitrator accepted that although Mr Smith genuinely believed that he was employed by Captain Cook Cruises from first to last, this was not in fact the case.
The Arbitrator next found that the contract was formed in New South Wales. She held that upon its proper construction, the phrase “there employs a worker” in s 13 of the Workers Compensation Act meant the place where the person was engaged and not the place where the work was performed: see Noahs Limited (t/as The Lakeside Hotel) and Anor v Glover (Court of Appeal, 20 September 1995, unreported); Helmers v Coppins (1961) 106 CLR 156 at 164; [1961] HCA 88; Frank R Wolstenhome Pty Limited v Davis (Court of Appeal, 28 July 1995, unreported, per Kirby ACJ at 3); and Starr v Douglas (1994) 35 NSWLR 133. The authorities upon which she relied support this proposition.
The Arbitrator accepted Mr Smith’s evidence that, in about 1991, Captain Haworth offered him the position of executive chef on the MV Reef Escape the following year, provided he was well. She found that this was a conditional offer but, by the time the run crew had left for Cairns, Mr Smith had satisfied the condition because he had been working on a casual basis on the MV Lady Hawkesbury at about Christmas and had been certified fit for work.
The Arbitrator next referred to Captain Haworth’s duties under the Management Agreement with the partnership pursuant to cl 4.9 to engage staff “as agent for the Partnership”. She found that all Captain Haworth had to do in relation to the existing crew members was make them an offer, it being unnecessary to undertake a selection process in respect of them, because, by selecting them for the run crew, that selection had, in effect, already taken place. The Arbitrator considered that it was implausible that Captain Haworth delayed making that offer until they arrived in Cairns. She considered that the fact that contractual relationships had been formed in Sydney was demonstrated inferentially by Captain Haworth’s evidence that all the run crew stayed on and signed the new contract. By this, I understand the Arbitrator to mean that that was her finding inferred from the primary facts that she had found.
The Arbitrator also found that the terms of the contract were sufficiently settled. In brief, those terms were: the Sydney crew would be members of their old ship in its renamed form; they would operate out of Cairns and answer directly to Captain Haworth as before; the conditions of employment such as salary and benefits would be automatically governed by the relevant State or Federal awards if no specific provision for salary and benefits was made; and in Mr Smith’s case, he knew exactly the position to which he had been appointed and its basic duties.
The Arbitrator concluded that by boarding the MV Reef Escape on Australia Day 1992, Mr Smith committed himself to working on that ship and had accepted the offer made by Captain Haworth acting as agent for the partnership and that that contract was formed in New South Wales.
Reasons of Acting Deputy President Handley
The Acting Deputy President confirmed the Arbitrator’s finding that the Commission had jurisdiction to determine the appellants’ claim. He identified the issue in dispute in the appeal in the terms set out above at [9]. The Acting Deputy President then identified the specific findings made by the Arbitrator in reaching her conclusion that the Commission had jurisdiction to entertain Mr Smith’s application for compensation for the period 17 February 1992 to 27 February 1996 as being:
“(1)From 17 February 1992 to 27 February 1996, Mr Smith was employed by the partnership, which traded under the name ‘Captain Cook Barrier Reef’, between Snowglobe Pty Ltd (a wholly owned subsidiary of QH Cruises) and Ormwave Pty Ltd.
(2)Mr Smith’s contract of employment with the partnership was formed in Sydney.
(3)Mr Haworth acted as agent for the partnership and was present in NSW at the time the contract was entered into.
(4)…”
(The finding in (4) is irrelevant to the issue on the appeal.)
The Acting Deputy President’s essential reasoning for his determination is to be found at [43]-[45] of his decision.
At [43], the Acting Deputy President dealt with a finding by the Arbitrator that there had been a conversation between Mr Smith and Captain Haworth in mid-1991 in terms that there was a job for Mr Smith on the MV Lady Hawkesbury as executive chef when the vessel went to Queensland, provided he was well. The Acting Deputy President found that the evidence did not support a finding that there had been such a conversation. Notwithstanding that, he found that the Arbitrator’s principal findings could be supported on the evidence.
At [44], the Acting Deputy President held there was evidence to support a finding that there had been an offer of employment to work on the Barrier Reef cruise operations out of Cairns made to the crew who agreed to sail the vessel to Queensland. He found that Mr Smith had accepted that offer by committing himself to sail the vessel to Cairns.
He found that there was evidence to support the finding that the offer of employment on the MV Reef Escape operating out of Cairns was made by Captain Haworth in Sydney as the appellants’ agent. He referred, by way of example, to Captain Haworth’s evidence that he had recited in [33] of his reasons, in support of this conclusion. At [33] the Acting Deputy President referred to Captain Haworth’s position as the main manager with whom the crew of the MV Lady Hawkesbury dealt with in Sydney; as the person who managed all the initial arrangements for the operation of the MV Reef Escape out of Cairns and that although thereafter a local manager was employed in Cairns to take over the day to day running of the vessel, Captain Haworth retained overall responsibility.
The Acting Deputy President, having referred to the evidence of agency, then referred in general terms to the discussions between Captain Haworth and Mr Smith. Although in this part of his reasons he did not refer to the specific discussions, he had at [34] of his reasons referred to Captain Haworth’s evidence that he probably would have told the crew of the MV Lady Hawkesbury in Sydney who wanted to go to Cairns that, “you can go up on the run job and then you’ll be employed in Cairns”.
The Acting Deputy President concluded that the discussions produced a situation in which Captain Haworth had offered Mr Smith, provided that he was fit, employment on the vessel once it started operating in Cairns. He found that the offer was accepted either verbally or, as had been found by the Arbitrator, by his conduct in boarding the vessel as part of the run crew for the voyage to Cairns.
The appellants’ case
The appellants’ primary argument was that there was no evidence that the NSW contract had been entered into. In advancing that case, the appellants submitted that the Acting Deputy President’s reasoning at [44] did not permit the conclusion that there had been an offer of employment by the appellants. First, it was submitted that Captain Haworth had no authority to do so on behalf of the appellants prior to negotiating an award with the Maritime Union. Secondly, it was submitted that the Acting Deputy President erred in law in finding at [44] that there had been an invitation to treat that had matured into a firm offer of employment. It was submitted that an offeree cannot improve or mature an invitation to treat into a firm offer. Only an offeror could make an offer by responding to the invitation.

It was next submitted that the Acting Deputy President’s reasoning process at [44] exposed error in that the conclusion that there was a contract entered into NSW was based on the drawing of inferences in a way that contradicted the facts in the case that were established by the objective evidence. The basic premise of this submission was that there was no true offer of employment made in NSW. It was submitted that the effect of Captain Haworth’s evidence was that he was not in a position to make an offer of employment until the terms of an award had been finally negotiated. That did not occur until January 1992, in Queensland. This submission relates back to the first of the appellants’ submissions.
Captain Haworth’s authority
The appellants contended that even if a contract of employment was entered into in New South Wales as a result of conversations between Captain Haworth and Mr Smith, that contract was not with the appellants. However, this submission ignored the existence, operation and effect of the Management Agreement.
The Management Agreement specifically appointed Captain Cook Cruises as the appellants’ agent, including for the purposes of appointing staff. The agency commenced prior to the commencement of Captain Cook Barrier Reef operations. There was evidence that Captain Haworth had been conducting interviews in Queensland with prospective crew in late 1991. The terms of the Management Agreement was specific evidence that, acting on behalf of Captain Cook Cruises, he had authority to do so. There was no suggestion in the evidence that, in so doing, he was acting without authority.
Accordingly, the Management Agreement was evidence that Captain Cook Cruises, through Captain Haworth, was acting as agent for the appellants when engaging in the process of offering employment for the Barrier Reef cruise operation to be conducted by the appellants.
However, the agency relationship between Captain Cook Cruises and the appellants does not resolve the question whether there was evidence to support an offer of employment being made in New South Wales and an acceptance of that offer so as to constitute a contract made in New South Wales.
Was there an offer of employment made in New South Wales?
This submission, in part, focussed on the finding of the Arbitrator that an offer had been made in about June 1991 based on a conversation that Mr Smith alleged he had with Captain Haworth. It was said that there was no evidence to support an offer made at that time. It was also said, as I understand it, that the contract alleged by the appellants was based on and confined to an offer made in June 1991.
The first thing to note about this submission is that this is an appeal from the decision of the Acting Deputy President and not the decision of the Arbitrator. The appeal to this Court is an appeal in point of law from the decision of the Commission constituted by the Acting Deputy President. Except to the extent that the Acting Deputy President expressly or impliedly adopted findings of fact or other conclusions of the Arbitrator, the Arbitrator’s findings are irrelevant.
Insofar as this particular finding of the Arbitrator is concerned, the Acting Deputy President found that the Arbitrator erred in finding that there was a conversation to the effect alleged by Mr Smith. He nonetheless found there was evidence to support a finding of a concluded contract. This finding was not a finding based upon an offer made in about June 1991. Rather, it was a finding made on the whole of the evidence, including discussions between Mr Smith and Captain Haworth that commenced in about June 1991.
The appellants’ submission also encompassed the proposition that the Acting Deputy President misunderstood basic principles of contract law in his exposition of the dealings between the parties and his finding of a contract at [44].
The Acting Deputy President categorised the early discussions between Captain Haworth and Mr Smith as being akin to “an invitation to treat”. This categorisation is not really accurate. An invitation to treat, in the language of traditional contract theory, occurs where one party, usually a seller of goods, has requested others to make offers or to engage in negotiations with a view to an ultimate contract being entered into. Where a communication or series of communications is properly categorised as an invitation to treat, the response to it is properly categorised as an offer to the invitor, who may accept the offer. The analogy to invitation to treat in this situation is inappropriate for the simple reason that it would not be a usual situation for an employee to make an offer of his services following an invitation to treat by an employer. If anything, the position is usually the reverse.
Having said that, I do not consider that the Acting Deputy President made a finding that the early discussions constituted an invitation to treat as understood in traditional terms. Rather, as I read his reasons, he was using that concept to explain that at the early stages of discussion, no contract had been formed, but that the discussions developed and crystallised into a contract. That is a more accurate understanding of the Acting Deputy President’s reasons.
The appellants then submitted that there was no identifiable offer of employment in the discussions between the parties that constituted an offer of employment. It is not necessary, in determining whether a contract has been formed, to identify either a precise offer or a precise acceptance, nor a precise time at which an offer or acceptance could be identified. As Stephen J explained in MacRobertson Miller Airline Services v Commissioner of State Taxation (Western Australia) (1975) 133 CLR 125 at 136; [1975] HCA 55:
“This doctrine, of the formation of contracts by offer and acceptance, encounters difficulties when sought to be applied, outside the realms of commerce and conveyancing, to the everyday contractual situations which are a feature of life in modern urban communities.”
In Brambles Holdings Limited v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 Heydon JA (as his Honour then was) also observed that “[o]ffer and acceptance analysis does not work well in various circumstances”. He referred to the decision of MacRobertson Miller Airline Services v Commissioner of State Taxation (Western Australia) at 136-140 by way of example. Heydon JA then undertook a detailed analysis of the authorities: see [71]-[80] of his Honour’s judgment.
It is not necessary for present purposes to review all the authorities to which his Honour referred. However, the comments of McHugh JA (Hope and Mahoney JJA concurring) in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117-11,118, are particularly apt. His Honour said:
“It is often difficult to fit a commercial arrangement into the common lawyers’ analysis of a contractual arrangement. Commercial discussions are often too unrefined to fit easily into the slots of ‘offer’, ‘acceptance’, ‘consideration’ and ‘intention to create a legal relationship’ which are the benchmarks of the contract of classical theory. In classical theory, the typical contract is a bilateral one and consists of an exchange of promises by means of an offer and its acceptance together with an intention to create a binding legal relationship … it is an error ‘to suppose that merely because something has been done then there is therefore some contract in existence which has thereby been executed’. Nevertheless, a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words. The question in this class of case is whether the conduct of the parties viewed in the light of the surrounding circumstances shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an express contract.
…
Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled. Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties’ subsequent conduct become sufficiently specific to give rise to legal rights and duties. In a dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed.” (Citations omitted)
This approach to the formation of contract is not new. Heydon JA also referred to Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 at 682 where it was recognised that:
“… although there has been no formal recognition of the agreement in terms by the one side, yet the course of dealing and conduct of the party to whom the agreement was propounded has been such as legitimately to lead to the inference that those with whom they were dealing were made aware by that course of dealing, [and] that the contract which they had propounded had been in fact accepted by the persons who so dealt with them.”
See also Thompson v White & Ors (2007) NSW ConvR 56-171; [2006] NSWCA 350 at [99]; Brooker v Friend & Brooker Pty Ltd & Anor [2006] NSWCA 385 per McColl JA at [135]ff; Industrial Rollformers Pty Ltd & Anor v Ingersoll-Rand (Australia) Ltd [2001] NSWCA 111 at [137] per Giles JA.
The sometimes artificiality of precise analysis of contract formation in terms of offer and acceptance was recognised by Heydon J in Magill v Magill (2006) 226 CLR 551; [2006] HCA 51, where his Honour again observed at [210] that
“The law often develops doctrines which are useful tools of analysis in standard instances, even though they are difficult to employ in other instances. An illustration is the doctrine of offer and acceptance in relation to contract formation. That works in many factual circumstances. The fact that it does not work well, and can only be applied with some artificiality, in other sets of circumstances, has not been seen as a reason for its wholesale abandonment.”
The last reference in this passage from Magill was to the comments of Ormiston J in Vroon BV v Foster’s Brewing Group Ltd [1994] 2 VR 32 at 82-83. In that case, Ormiston J cited with approval the comments of McHugh JA in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd. He also cited with approval the statement of Cooke J in Meates v Attorney-General [1983] NZLR 308 at 377:
“… I would not treat difficulties in analysing the dealings into a strict classification of offer and acceptance as necessarily decisive in this field, although any difficulty on that head is a factor telling against a contract. The acid test in the case like the present is whether, viewed as a whole and objectively from the point of view of reasonable persons on both sides, the dealings show a concluded bargain.”
Ormiston J then said at 81:
“… I am prepared to accept … that agreement and thus a contract can be extracted from circumstances where no acceptance of an offer can be established or inferred and where the most that can be said is that a manifestation of mutual assent must be implied from the circumstances. In the language of para. 22(2) of the Second Re-statement on Contracts: ‘A manifestation of mutual assent may be made even though neither offer nor acceptance can be identified and even though the moment of formation cannot be determined’.”
The effect of these and similar authorities was summarised in Anson’s Law of Contract (27th ed, 1998, at 28) (referred to by Heydon JA in Brambles Holdings Limited v Bathurst City Council at [73]):
“… It would be a mistake to think that all contracts can thus be analysed into the form of offer and acceptance or that, in determining whether an exchange does give rise to a contract, the sole issue is whether the communications match and are identical. The analysis is, however, a working method which, more often than not, enables us, in a doubtful case, to ascertain whether a contract has in truth been concluded, and as such may usefully be retained.”
The question presently under consideration is whether there was evidence to support the finding that an offer of employment had been made. The relevant evidence is set out above at [17]-[37]. The overall effect of Mr Smith’s evidence was that if he was well, he could work on the vessel out of Cairns. Captain Haworth explained in his evidence that the selection of crew for the Captain Cook Barrier Reef operation took place in two stages. First, in Sydney, he made enquiries of the existing crew whether they wished to be employed in Cairns. He said that if they were, “then they could go on the run trip to Cairns. That's what happened”. He explained that additional crew had to be interviewed and employed in Cairns. As to the crew from New South Wales who were interested in being employed, he said “any of those people that showed interest ... stayed employed”. He confirmed this in his later evidence when he said that he had told those crew members, “Okay, you can go up on the run job and then you will be employed in Cairns”. He explained that the crew from Sydney did not have to be interviewed in Cairns.
In my opinion, this was evidence capable of supporting a finding that an offer of employment had been made by Captain Haworth to Mr Smith in Sydney and was accepted in Sydney, either orally or by conduct.
The appellants contended that even if a contract had been entered into in Sydney for Mr Smith to work on the Barrier Reef cruise operation, it had not been entered into by them. This submission raises the question whether Captain Haworth was the appellants’ agent for the purposes of entering into a contract of employment with Mr Smith. This, in turn, raises the question of authority to which I have already referred.
Before turning to the reasons of the Acting Deputy President on this question, I should comment on one other matter that caused some distraction in the course of the hearing of the appeal. The appellants sought to draw comfort from the ‘finding’ of the Arbitrator at [49] that Mr Smith had accepted the offer made by Captain Haworth “acting as agent” for Captain Cook Cruises. They submitted therefore that the Acting Deputy President was in error in making a contrary finding.
The reference by the Arbitrator at [49] to “the first respondent” which in those proceedings was Captain Cook Cruises, must be a clerical error, as the ultimate finding was that a contract had been entered into in New South Wales with the appellants and the Arbitrator’s reasoning throughout was to that effect. Further, as already explained, this Court is not dealing with an appeal from the Arbitrator.
The Acting Deputy President resolved the question of agency in Mr Smith’s favour by way of an internal reference to [33] of his reasons. He did this as an example of the evidence that supported such a finding. That reference is sufficient to demonstrate that there was evidence to support the finding.
However, the Management Agreement itself provided the essential evidence that Captain Haworth, for Captain Cook Cruises, had authority to engage crew for the new venture. Indeed, the effect of the terms of the Management Agreement was that the only basis upon which Captain Haworth could offer employment on the Barrier Reef cruise operation was on behalf of the appellants. He could not offer that employment on behalf of Captain Cook Cruises because it was not the entity that was conducting the Barrier Reef operation. It follows that there was evidence to support a finding that the contract was entered into on behalf of the appellants.
Inferential fact finding contrary to the established evidence
The appellants submitted that the proper approach for the drawing of inferences was to draw inferences from established facts. Conversely, it was impermissible to rely on inferences to find the existence of a contract contrary to established facts. It was submitted that the ‘established facts’ were the contract document and the contemporaneous documents such as the Taxation Employee Declaration Form that the Arbitrator had referred to in establishing that a written contract of employment was entered into on or about 16 February 1992. It was said that there was no other evidence of any other contractual arrangement.
This submission underscores the basic theory of the appellants’ case, namely, that it had entered into one contract only with Mr Smith and that was in Queensland on 17 February 1992 when he signed the written contract of employment. Whilst the documentary evidence makes this submission understandable, the appellants’ case fails to deal with two matters. The first is the authorised dealings between Captain Haworth and Mr Smith in Sydney. The second is the nature of the appeal to this Court. On an appeal to the Court by way of rehearing, a different conclusion might have been reached. However, the fact that a court, differently constituted, may have found facts differently or reached a different conclusion, does not establish error in point of law as is required for the appeal in this case to succeed.
For the reasons I have given I consider that there was evidence of an offer made in Sydney on behalf of the appellants.
Certainty of the terms of the contract
It was next submitted that the terms of the contract were not certain.
It is well settled that a valid contract may be entered into notwithstanding that all terms have not been agreed. Provided that there has been a manifestation of mutual assent, a concluded agreement may be found to exist: Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 178 per Tadgell J; Thompson v White & Ors.
In Thompson v White, Tobias JA (Ipp and McColl JJA agreeing) reviewed at [99]-[100] the principles governing the question as to when a concluded agreement had been reached. So far as is presently relevant, his Honour said:
“[99]The general principles relating to intention to contract, uncertainty and incompleteness have been expounded in a number of judgments of this court. Some recognition has now been given to the proposition that a contract may exist even where offer and acceptance cannot be readily located … [Citations omitted]
[100]I note that the question was also given particular consideration by Ipp J (as he then was), with whom Pidgeon J agreed, in Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101. The following propositions can, I think, be distilled from his Honour’s discussion of those principles and the other relevant authorities:
…
(c)It is well recognised that parties may enter into a valid contract containing a limited number of terms comprising those terms essential to the bargain that they wish to conclude, in the expectation that at a later date a further contract will be arrived at containing additional terms to facilitate and clarify the initial contract. That is to say, a binding contract may be arrived at even though it leaves unresolved many matters which might arise in the future: Anaconda Nickel at 110 [25]; [Emphasis added]
…
(f)It does not follow that any omission will make a contract incomplete or uncertain in the sense of rendering it invalid. It is true that the omission of an essential term will have that effect; and that all the essential elements of an express contract must be present: Integrated Computer Services at 11,117. However, in this context the meaning of ‘essential’ is ambiguous. If it means a term without which the contract cannot be enforced, then the statement that the parties must agree on the essential terms of the contract is true. However, it is not for the court to determine which terms are ‘essential’ in the sense that it regards them as important as opposed to a term which it regards as less important or a matter of detail. It is for the parties to decide whether they wish to be bound and, if so, by what terms, whether they are important or unimportant. They are ‘the masters of their contractual fate’: Anaconda Nickel at 112 [29] …”

It is apparent from the principles just discussed that there was no error of law in the determination of this issue. For the reasons given by the Acting Deputy President at [45], the terms of the agreement reached between Captain Haworth and Mr Smith were sufficiently certain. The new contract would commence with the operation of the MV Reef Escape operating out of Cairns. Mr Smith was to be employed as executive chef. His rate of pay was, at the least, to be in accordance with the relevant award. His hours of work and precise duties would accord with his past experience.
The appellants further contended that the entry into a new contract on 17 February 1992 was clear evidence that any contract that had been formed came to an end on that date. The Acting Deputy President resolved that issue by finding that any later signing of a contract could be seen as evidencing the terms of a contract that had already been formed. There was no error of law in this finding. It accords with standard contractual principles: see cases cited above.
It follows, in my opinion, that the appellants have not established that there was no evidence upon which it could be concluded that a contract was formed on behalf of the appellants in Sydney with Mr Smith.
A question was raised during argument on the appeal as to whether there had been a novation of contract. That issue was not raised in the Commission and is not relevant to the questions in issue on the appeal, which were as I have discussed.
The appellants also contended that there had been a failure to give adequate reasons. It is not necessary to restate the well worn legal principles in this area. The Acting Deputy President’s reasons contain a statement of the issues he was required to consider; the evidence that he took into account; his reasons for finding a factual error in the Arbitrator’s findings; his reasons for finding that a contract existed, where it was entered into and what the terms of that contract were. There was no inadequacy of reasons. I would also dismiss this ground.
I propose the following Order:
Appeal dismissed, the appellants to pay the respondent’s costs.
SANTOW JA: I agree with Beazley JA.
IPP JA: I agree with Beazley JA.

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LAST UPDATED: 22 August 2007