Pirt Biotechnologies Pty Ltd v Pirtferm Ltd

[2001] WASCA 96

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE FULL COURT (WA)

CITATION:   PIRT BIOTECHNOLOGIES PTY LTD -v- PIRTFERM LIMITED & ORS [2001] WASCA 96

CORAM:   IPP J

MURRAY J
OWEN J

HEARD:   11 DECEMBER 2000

DELIVERED          :   2 APRIL 2001

FILE NO/S:   FUL 29 of 2000

BETWEEN:   PIRT BIOTECHNOLOGIES PTY LTD

Appellant

AND

PIRTFERM LIMITED
First Respondent

STANLEY JOHN PIRT
Second Respondent

MARGARET WATTS PIRT
Third Respondent

Catchwords:

Contract - Whether concluded oral agreement established - Intention to create legal relations - Whether there was agreement upon essential terms - Certainty - Turns on own facts

Legislation:

Nil

Result:

Appeal dismissed

Representation:

Counsel:

Appellant:     Mr M J McCusker QC & Mr G J Archer

First Respondent           :     Mr R L Hooker

Second Respondent      :     Mr R L Hooker

Third Respondent          :     Mr R L Hooker

Solicitors:

Appellant:     Eley Palmer Archer

First Respondent           :     Blake Dawson Waldron

Second Respondent      :     Blake Dawson Waldron

Third Respondent          :     Blake Dawson Waldron

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

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

Devries v Australian National Railways Commission (1993) 177 CLR 472

Edwards v Skyways Ltd [1964] 1 WLR 349

State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In Liq) (1999) 160 ALR 588

Toyota Motor Corp Aust Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106

Warren v Coombes (1979) 142 CLR 531

Case(s) also cited:

Abalos v Australian Postal Commission (1990) 171 CLR 167

Australian and New Zealand Banking Group Ltd v Frost Holdings Pty Ltd [1989] VR 695

Australian Capital Territory v Badcock (2000) 169 ALR 585

JC Williamson Ltd v Lukey (1931) 45 CLR 282

Maddison v Alderson (1883) 8 App Cases 467

McBride v Sandland (1918) 25 CLR 69

Ogier v Booth (1889) 9 VLR (E) 160

Taylor v Johnson (1983) 151 CLR 422

Woodside Offshore Petroleum Pty Ltd v Atwood Oceanics Inc [1986] WAR 253

1. IPP J:  I have read the reasons of the Hon Justice Murray.  I am in agreement with those reasons and have nothing further to add.

2. MURRAY J:  This is an appeal from a judgment of Wheeler J dismissing the appellant's claim against the respondents.

3. The first respondent is a company of which the directors are the second respondent, Professor Pirt, a retired Professor of microbiology, and the third respondent, his wife, Dr Pirt.  It is the owner of the intellectual property in a waste disposal process invented by Professor Pirt.  It holds, or has applied for, patents in respect of this property in a number of countries.  A company called Glaxo Operations UK Ltd ("Glaxo") is the grantee of a non‑exclusive licence to use the process in return for the payment of a royalty.  Glaxo has not yet made use of the process so as to incur a liability to pay the royalty, but it is conceded by all parties that the process is potentially one of considerable value to its owner and to a licensee or assignee of the right to use it.

4. For present purposes it is sufficient to know that the respondents assert that the process offers a capacity to dispose of sewage sludge and organic waste.  It is described as a total biocombustion process, initially conceived by Professor Pirt and developed by Professor Pirt and Dr Pirt, who is also a microbiologist.  The result of the process is a colourless aqueous solution which may readily be disposed of.  No solid waste would remain.

5. The Pirts were interested in the commercial exploitation of the technology in which a number of third parties had expressed an interest.  Professor Pirt met a Mr Eley, an accountant and merchant banker, and through him was introduced to a Mr Castledine, a businessman with experience in the hospitality and chemical industries.  They expressed an interest in the technology and various meetings and discussions were held between the Pirts on behalf of Pirtferm and Eley and Castledine on their own account.  The Pirts were prepared to assign the technology to, or to licence, a corporate vehicle to develop and market the technology upon the agreement of suitable terms as to their involvement in the development and marketing of the process, their retention of an interest in it, and their adequate remuneration.  They saw it as being necessary that when potential consumers expressed an interest in the product, it should be possible to set up a pilot plant capable of demonstrating the commercial viability of the process so as to promote its sale.

1. By 10 October 1996 negotiations between these parties had proceeded to the point of their execution of a "letter of intent".  The document recited the development of the process, the assignment of the patents and the intellectual property to Pirtferm, the grant of certain licences, including to Glaxo, and the desire of the parties "to enter into a business relationship…to commercially exploit the process technology throughout the world subject to the licences granted as above."  The document recites the parties' desire to enter into the letter of intent to set out their commitment towards the establishment of a joint venture company to commercially exploit the technology. 

2. Among the Articles or clauses of the letter of intent were clauses specifying the intent to incorporate a company in WA (which was in fact done and which became the appellant) of which the initial directors and shareholders were to be the four persons who were parties to the letter of intent.  The shareholding of each person was to be negotiated.  Eley and Castledine agreed to endeavour to raise A$500,000 for a 25 per cent equity interest in the appellant.  $150,000 of that sum was to be paid to Professor Pirt as reimbursement for bringing the process to its present state, and the balance of the funds was to be utilised by the appellant in the further development of the process and its commercialisation. 

3. It was agreed that Mr Eley was to attempt to arrange for the technology to be presented to the Water Corporation of WA or other interested parties.  The appellant was to pay the expenses of the Pirts for them to come from the UK, where they lived, to Perth to make that presentation, following which Eley and Castledine were said to intend to raise about $3M from a water authority or waste disposal operator to establish the first demonstration plant.  There were other provisions about the efforts being, or to be made, to attract the interest of potential investors in the process and about the means by which the appellant would derive income from it. 

4. I should set out Article 17 which is in the following terms:

   "Subject to the appropriate level of financial and administrative support for [the appellant], [the respondents] will enter into a licence arrangement with [the appellant] to commercially exploit the process technology."

   Article 23 provides:

   "The parties at this stage do not seek a contractual obligation but require for the time being a clear indication as to their respective interests and intentions with respect to the development and commercialisation of the process technology.  This letter of intent contains such an indication."

   It was signed by Professor and Dr Pirt on behalf of Pirtferm and by Messrs Eley and Castledine on their own account.

5. It is not surprising in view of the terms of the letter of intent that the appellant did not rely upon it as constituting a contract, but pursuant to the letter the appellant, then a shelf company, was purchased and named.  The Pirts, Eley and Castledine were appointed as its directors and 15 shares in the company were issued to each of them.  During the period February to March 1997 the Pirts were here in Perth.  A number of meetings were held and on about 12 March 1997 the appellant claims that against the background of the letter of intent, what is effectively an oral agreement was made between Messrs Eley and Castledine (but not the Pirts) acting for the appellant, and the Pirts acting for Pirtferm.  It was pleaded that the agreement was made at Rydges Hotel at a meeting between the Pirts, Eley and Castledine. 

6. The appellant's pleading contends that it was agreed that there would be 12,000 issued shares in the appellant of which each of the four persons present would have 15 per cent.  That would give them 60 per cent and majority control while still allowing shares to be issued to investors.  The Pirts would cause Pirtferm to assign the technology and the patents to the appellant for the consideration in part of the 30 per cent of the shares to be issued to the Pirts and in addition, the payment to them of the sum of $150,000 from funds to be raised by the appellant.  It was planned that of the 4,800 shares not issued to the four persons present, 1,800 would be issued to investors to raise the initial seed capital for the appellant, and a major investor or investors would be sought to take up the remaining 3,000 shares at the price of $1.25M to $1.5M so as to provide capital for the construction of the planned demonstration plant.

7. Events appear to have proceeded only a little further.  Certainly shares in the appellant were issued to the Pirts and to Eley and Castledine's respective family trusts, but when in August 1997 a meeting was to be held at which an agreement to assign the patents from Pirtferm to the appellant was to be executed, the Pirts telephoned to advise that they could not attend.  They later refused to sign the deed of assignment which had been prepared and, as the appellant would have it, sought to vary the terms of the contract by offering to grant only a licence to the appellant for the use of the technology, for which licence a fee of $250,000 was to be charged in lieu of what the appellant regards as the agreed fee of $150,000. 

8. The appellant pleads that a second oral agreement was made which varied the contract originally made only to the extent that it was agreed that the appellant would pay the respondents an additional $100,000 as consideration for the assignment of the patents.  The appellant asserts that some payments were in fact made to the Pirts as advances for the transfer of the patents.  These payments were returned to a substantial extent and by October Professor Pirt, it is pleaded, said there would be no assignment of the patents to the appellant and denied any agreement to do so, thereby, the appellant asserts, repudiating the contract and exposing the respondents to an order for specific performance of the contract, or the contract as varied.

9. In essence the defence was simply that although there were discussions and negotiations, no concluded agreement was ever made.  The respondents say they could not deal with or assign the patents without the written consent of Glaxo which was never obtained.  The respondents agree that they did not attend the meeting in August 1997.  They plead that they had no sufficient notice and could not do so.  While they agree that they received various monies, they say those monies were paid to the Pirts as part payment of expenses incurred by them while in Australia.  In short, they say there were negotiations which never came to the point of agreement.

10. As I have indicated, that was the conclusion of Wheeler J who gave judgment for the respondents.  The appeal is simply grounded on the proposition that her Honour erred in finding that no enforceable agreement was concluded on about 12 March 1997, a conclusion which the appellants say was not based on issues of credibility or demeanour, but on the wrongly formed view that it was inherently unlikely that the Pirts would have been prepared to conclude an agreement in the circumstances pleaded.  Upon all the evidence and the findings of primary fact made by her Honour, the appellant contends that there was no support for that conclusion, but all the evidence demanded the inference or conclusion that an agreement had been formed in the terms pleaded.  There is a notice of contention by the respondents which effectively asserts that if it should be the proper conclusion on appeal that there was a concluded agreement formed on about 12 March 1997, then it was void for uncertainty.

11. As to the fact that Wheeler J declined to infer that the parties had made a concluded agreement binding on the respondents it will be the duty of this Court, giving due respect and weight to the conclusion of the trial Judge, to consider whether upon the findings of the trial Judge and such other primary facts as may be undisputed, the proper inference to be drawn was that the parties did not enter into a concluded contract on about 12 March 1997.  If the contrary should be the conclusion of this Court, it will be obliged to give effect to it upon the basis that in that respect it is in as good a position to determine the proper inference from the primary facts as was the trial Judge: Warren v Coombes (1979) 142 CLR 531.

12. On the other hand, this Court will only take that approach to the consideration of the inference to be drawn, upon the basis of facts which are undisputed or established by the findings of the trial Judge.  To the extent that the facts upon which the appellant relies are in dispute, the findings of the trial Judge will be critical, based, as they are in this case, upon her Honour's view of the credibility of the various witnesses who appeared before her.  In this case, as I understand the grounds of appeal, the appellant does not embark upon the difficult task of asking this Court to revisit the decisions made by Wheeler J in respect of credibility issues, as to which task see generally Devries v Australian National Railways Commission (1993) 177 CLR 472 and State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In Liq) (1999) 160 ALR 588.

13. As the case was pleaded and fought below, the question resolved itself into one essentially concerning the meeting held on about 12 March 1997.  Was there a contract between the parties, effectively the appellant and Pirtferm, which embodied an agreement as to its essential terms, supported by consideration and accompanied by an intention at that time to create legal relations?  Apart from the argument about the fact of agreement and the consideration therefor, the question of the intention to create legal relations was central to the decision of the case.

14. By "intention" in this context the law is concerned with an objective intention, imputed to the parties who are said to have contracted, from a consideration of what was said and done in the course of their dealings.  It is not a subjective intention of the parties individually, and so it will be irrelevant for any party giving evidence to say that he or she either did or did not mean to form a binding agreement.  Relevant evidence will be concerned with the terms of their agreement and what inference may be drawn therefrom.  In that context, if it should be the case that there is uncertainty about important aspects of the proposed transaction, ambiguity or the omission of important terms, that may aid the drawing of a conclusion that there was to that point no intention to create a binding legal agreement.  In that way, the question of factual uncertainty may relate to the question of the formation of the agreement as well as the enforceability of a contract which has been made.  But however that may be, it remains the objective intention imputed to the parties collectively with which the court is concerned: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 per Gleeson CJ, with whom Hope and Mahoney JJA agreed, at 548 ‑ 550.

15. Of course it may be the case that the parties have expressed their collective intention one way or the other and to such an expression of intention, the court will ordinarily give effect.  The letter of intent dated 10 October 1996 and its reference to the understanding and commitment of the parties "towards the establishment of a joint venture company to commercially exploit the process technology" together with the inclusion of Article 23, to which I have referred above, would be a clear example of such a situation.  There was no intention to create legal relations by the execution of that document, despite the quite detailed terms of agreement between the parties as to how they proposed to proceed.  It does not necessarily follow that because there is detailed agreement, it will be appropriate to infer the existence of a binding contract expressing an intention to create legal relations in that way.

16. In a commercial case such as this, it is often said, relying upon Megaw J in Edwards v Skyways Ltd [1964] 1 WLR 349, 355, that "the onus is on the party who asserts that no legal effect was intended, and the onus is a heavy one." Thus it is sometimes said that the intention to create legal relations in such a situation will be presumed, but the presumption is rebuttable. For myself, I prefer the view that the legal onus to establish the existence of the contract and the intention to create legal relations remains upon the party asserting it, in this case, the appellant. I accept that the onus may be readily discharged in the case of commercial negotiations where agreement on important matters might readily persuade the court that a contract was made. It may be said then that an evidentiary onus will shift to the defendant to rebut that conclusion, but that is only a matter of evidence and in my opinion if the inference of an intention to create legal relations is to be drawn, it will be because the party asserting that it is so has discharged the onus of persuading the court: Toyota Motor Corp Aust Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106, particularly per Tadgell J at 177.

17. Before going to the facts and the findings of Wheeler J, I remind myself that the pleaded contract said to have been orally made at the meeting at Rydges Hotel on about 12 March 1997 was that Pirtferm would "transfer" by assignment the patent rights in the process to the appellant in consideration for the payment of $150,000 to the Pirts and the issue of 15 per cent of the issued shares in the appellant to each of them.  I note also that the further and better particulars of the relevant portion of the statement of claim say that:

    "Eley stated to Mr and Mrs Pirt that they would need to agree to assign to the [appellant] the TBP technology and the TBP patents in order to enable the fund raising to proceed, otherwise there would be no assets in the [appellant] for the investors to invest in."

18. In January 1997, before the meeting said by the appellant to be that at which the contract was made, Wheeler J accepted that an associate of Mr Castledine, a Mr Douglas, arranged a meeting with the Premier.  Her Honour accepted, contrary to the evidence given by the Pirts, that they did not dissent from the statement made by Eley that the appellant would have the patent rights to the technology and would grant licences for its use.  Her Honour thought that the making of such statements indicated no more than that negotiations were continuing and success was anticipated.

19. Her Honour was not dissuaded from that view by Douglas' evidence, which she accepted, that after the meeting with the Premier there was a further discussion between himself, Eley, Castledine and the Pirts at the Pirts' hotel room in which Mr Douglas made it clear that for effective fund raising to be undertaken, the appellant "would have to have ownership of the patent rights" to the technology.  He said that the Pirts confirmed that the appellant "would own the technology".  There was discussion about the shares which those interested in the project would hold in the appellant and the proposed offer to investors to subscribe for equity capital.  Mr Douglas' evidence was that the Pirts "confirmed to me that this was the agreement that had been struck." 

20. Bearing in mind that it is not asserted that at this stage any agreement had in fact been made in the sense that the agreement in terms of the letter of intent had been converted into a binding contract, in my view there is clear support in the evidence for her Honour's view that these statements simply reflected what the parties regarded as the desired outcome of their negotiations which were continuing.  Her Honour found that at least Professor Pirt had the view that the appropriate way to proceed was to assign the patent rights to the appellant so that it might licence the application of the process in return for the payment of royalties and other remuneration.

1. It seems also that at about this time, other potential investors were approached and a meeting was held with executives of the Water Corporation to seek their cooperation in participating in the establishment of a demonstration plant.  Indeed, it appears that these efforts continued after March 1997.  Her Honour discussed the evidence in respect of a meeting held on 22 July 1997 between senior executives of the Water Corporation, Eley, Castledine and the Pirts.  There was evidence given by a Ms McDaniel, who was present at the meeting and whose evidence Wheeler J accepted.  Her evidence supported the account given by Mr Eley and Mr Castledine, which evidence was denied by the Pirts.  Wheeler J accepted that at the meeting a Mr Watson, a Water Corporation executive, asked the question, "Who are we dealing with and who owns the technology?  Is it you or Pirtferm or who?"  Ms McDaniel said that Professor Pirt answered that the appellant "owns the technology." 

2. As her Honour observed, that was clearly factually inaccurate because under the terms of the Patents Act 1990 (Cth), s 14(1) "an assignment of a patent must be in writing signed by or on behalf of the assignor and assignee."

3. The point being made by her Honour was that the language being used was loose and she was not prepared to hold that the statements she found had been made by Professor Pirt were in effect an admission on behalf of Pirtferm that a binding contract had been entered into for the assignment of the technology to the appellant.  Her Honour said that the evidence of Professor Pirt, which she accepted on this point:

   "…was that he was at all times contemplating that assignment of the intellectual property in the TBP process might be made to the plaintiff.  His evidence was essentially that he would have been happy for such assignment to take place, provided that the plaintiff had attracted an investor which would enable the plaintiff to fund such an acquisition, and that satisfactory terms could be agreed.  As Professor Pirt put it in his evidence, he was of the view that commercialisation of the technology would proceed by the plaintiff getting some money in first, and then 'we would negotiate an agreement over either the assignment of patents or licensing of patents'.  When asked about the order in which the investment and the assignment/licensing would occur he replied 'Why not simultaneously?'.  His evidence was that he always had an intention that he would come to an agreement with Eley and Castledine on the assignment or licensing of the patents.  Statements that the plaintiff owned or would own 'the technology' are as likely to be a reflection of this intention as they are to be a reflection of an existing contract."

   In my opinion that view was fairly open to her Honour, having regard to the circumstances in which the statements were made.

4. That brings me to her Honour's findings about the meeting which was held on about 12 March 1997.  The persons present were Eley, Castledine and the Pirts.  So far as issues of credibility, including matters concerning the demeanour of witnesses, were concerned, her Honour did find, for reasons she gave and which seem to me to sensibly bear upon the question of belief of a witness, that, "If it were necessary to decide between the witnesses in relation to their accounts of discussions on or about 12 ‑ 14 March 1997, I would prefer the evidence of Professor and Dr Pirt."  Her Honour took that view, as it was open to her to do, based on a consideration of the evidence with respect to those events which included and surrounded the crucial meeting upon which the appellant relies. 

5. She arrived at that view, again as was open to her, despite the fact that in relation to the meetings following that with the Premier and later with the executives of the Water Corporation, her Honour did not accept the evidence of Professor and Dr Pirt, but preferred that given by other witnesses.  It is, of course, open to a trial Judge to accept a witness's evidence as truthful and accurate upon one issue while rejecting it upon another and that is what appears to have occurred here.  However, in relation to the contest of credibility in respect of the crucial meeting, her Honour advanced what were, with respect, sensible reasons for preferring the one body of evidence to the other, although, as she said, she was, "not able to form an overall view that the evidence of one or other of the witnesses is always to be considered more credible and to be preferred."  (My emphasis)

6. In the final analysis, however, her Honour did not decide the case in that way.  She considered the evidence given principally by Mr Eley, supported as to its accuracy by the evidence of Mr Castledine, and concluded that even accepting that evidence to be a factually accurate account of the exchange that had occurred, there was no concluded contract and no intention at that time to make one, but rather a review of the elements of an agreement which the parties hoped to make and formalise by their continued future negotiations.

7. This evidence was that Eley reiterated what was described as the corporate structure of the appellant, the number of shares that were to be issued and the proportion of those shares which would be held by each of the individuals at the meeting.  There was a reference to the payment of the $150,000, "part of" which was to be a reimbursement for bringing the technology up to the stage of development that it presently enjoyed.  There was a reference to the future assignment of patent rights in the technology to the appellant.  The Pirts were asked "if they understood the corporate structure".  Both said they did and were happy with such an arrangement.  There was a reference to fund raising and to the establishment of a demonstration plant and the Pirts again expressed their satisfaction with that programme.

8. Mr Castledine then again said that the appellant "would own the technology" and would issue licences, the purpose of the corporate structure envisaged being to ensure that the persons present at the meeting did not lose control of the company.  The Pirts said they were "very happy" with that.  Her Honour noted that although Mr Eley described the meeting as in effect formalising what had previously been agreed, no documentation to carry the matter forward beyond the letter of intent, as envisaged in that document, was then or later generated, as her Honour put it, to record any of the essential terms of the alleged agreement.  That her Honour thought to be an important factor in view of the execution of the letter of intent and what she considered to be the view of all parties, including particularly the Pirts, that proper documentation recording the making of a contract would be created to embody the final terms of the agreement eventually made. 

9. It is to be noted also that the plaintiff did not plead that the discussion on about 12 March 1997 was effectively to formalise what had already been agreed at some time between the execution of the letter of intent and that date.  Her Honour noted confusion and uncertainty as to whether Pirtferm would licence the appellant to commercially exploit the process, or whether there would be an assignment and, if so, whether that would be of all the patent rights worldwide or only of specific patents, and upon what terms and when any such transfer of all or any parts of the ownership of the intellectual property would occur.  These aspects were to be viewed, her Honour considered, in the context of her finding that the intellectual property in question "was regarded by all parties as potentially extremely valuable." 

10. Her Honour continued:

    "Getting the technology into a form where it could be commercially exploited could be expected to be a complex process, and the discussions of how that might be achieved had been, until then, conducted in only very broad terms.  Although Eley and Castledine had mentioned a number of potential investors, there was, at that stage, no identified potential major investor which appeared reasonably likely to invest the very large sum necessary to take the technology to a commercial stage.

    Patents were held by Pirtferm or applied for in a number of jurisdictions, and it must have been obvious that, 'commercialisation' could be achieved in any number of ways, ranging from a commitment to use and develop the technology by one institution, or in one country, or a larger scale development by a major investor which was prepared to launch the technology world‑wide."

    Her Honour thought it was extremely improbable that a limited form of agreement such as that advanced for the appellant would have been made in the absence of any developed or detailed proposals for such commercialisation, and I note that in the content of the discussion said by the appellant's witnesses to have occurred on about 12 March 1997, there was no substantive advance upon the recital in the letter of intent which recorded the parties' "understanding and commitment towards the establishment of a joint venture company to commercially exploit the process technology."

11. Wheeler J mentioned the lack of certainty as to even what the $150,000 was payable for.  It will be recalled that the letter of intent, Article 8, expressed the agreement that $150,000 would be paid to Professor Pirt "as reimbursement for bringing the process to its present status."  But Mr Eley's evidence was that on 12 March it was agreed that that would be so in part and that some other unspecified portion of the money (and possibly the placement of shares with the Pirts) would be the consideration for the assignment of patents by Pirtferm to the appellant, there being no particularisation of what portion of the money or which patents would be involved.  Nor did it appear with any clarity when the sum would be payable in whole or in part, Mr Eley's evidence being that the appellant would be liable to make the payment "once sufficient funds were available."  In any event, her Honour remarked, no consideration appeared to have been given to whether any proposed arrangements would be consistent or inconsistent with the agreement which Pirtferm had concluded with Glaxo and, if inconsistent, what was to be done about that.

12. Her Honour noted that in the evidence of Mr Eley and Mr Castledine there were many expressions of apparent ambiguity.  At one time they would talk about what would happen in the future whereas at another time they would talk about what had been agreed at some previous time, and in the context of general expressions about future events, eg, that there would be an assignment of patents.  The Pirts would be asked if they agreed or if they were happy with such proposals and they would confirm that they were, by which the Pirts said in evidence they meant to convey that they were content and indeed, eager, to see negotiations continue to achieve acceptable terms for the commercial development of the process.

13. In the light of the matters to which her Honour had regard, in my respectful opinion her final conclusion is unassailable.  Her Honour said:

    "Whatever the subjective understanding of Eley and Castledine, in my view the background against which the alleged agreement was said to have been reached, its subject matter, the circumstances in which the relevant meeting took place, and the words used by the parties, are inconsistent with an intention to reach a concluded agreement.  Even if I accept the evidence given on behalf of the [appellant], the [appellant's] claim must fail."

14. That being the case, I need give no consideration to the question whether, an oral agreement having been made, it was void for uncertainty.  I have had regard to the matters raised in the respondents' notice of contention, as did the trial Judge, in considering whether her Honour's decision that she was not persuaded that there was a concluded agreement is appellable.

15. In the grounds of appeal the appellant raises a number of matters which it is asserted the trial Judge failed to consider at all or to accord sufficient weight to, in reaching her decision.  I have had regard to the matters raised.  Included among them were the fact that in May 1997, Pirtferm sent the appellant a copy of an agreement which Glaxo wanted "to cover the transfer of technology on TBP (total biocombustion process) to you".  That event seems to me to be neutral as to whether or not and, if so, the terms of an agreement between the appellant and Pirtferm, as is the fact that the appellant was asked to, and did, pay the cost of maintaining the patents for a time. 

16. Much of the correspondence to which the ground refers seems to me, as it seemed to her Honour, to be as consistent with the existence of a concluded agreement as it is with the fact that the various parties were pursuing avenues to interest potential consumers of the product and to advance its commercialisation.  Some of the correspondence certainly suggests that Eley and Castledine subjectively, on behalf of the appellant, held the view that they had a concluded agreement with the Pirts on behalf of Pirtferm, but that is not to the point.  Her Honour did not see, and with respect I do not see, that sort of material as being not only consistent with there having been a concluded agreement, but also, as the ground of appeal has it, "inconsistent with the proposition that the parties were merely in a state of negotiation."  That, of course, is the crucial point.

17. I include in that observation the matter raised in ground 2(b) that at a meeting at the Sheraton Hotel on 25 August 1997 attended by a number of investors and potential investors, Professor Pirt thanked those who had taken up shares in the plaintiff "for having had enough courage to invest in the plaintiff and in the technology".  There was a conflict of evidence about this function and the Pirts did not accept that it had been put to them that they were to thank shareholders.  They thought the people had undertaken to invest in the technology and they were prepared to concede that they were aware that Eley and Castledine were seeking investors.  Her Honour thought it unlikely that any of those present were able to accurately recall the event and what had been said and she thought it was "at least plausible that Professor and Dr Pirt could have regarded the function as a social one for well‑wishers and supporters of the technology, rather than as a function for 'shareholders' properly so understood."  That her Honour took that view deprived that event of whatever evidentiary value it might otherwise have had from the point of the appellant.

18. It was after all the case that as her Honour concluded, the Pirts knew that investors were being sought, they were keen to bring an agreement with the appellant to fruition, they expected that that agreement would involve a transfer of the technology to the appellant in some form and upon suitable terms, and it was not until October 1997 that the efforts of all involved to progress the matter broke down.

19. In my opinion for those reasons the appeal should be dismissed.

1. OWEN J:  I have had the benefit of reading the reasons of the Hon Justice Murray.  I am in agreement with those reasons and have nothing further to add.