Re Sparkling Beverages Pty Ltd (No 2) - [2023] VSC 419

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

COMMERCIAL LIST

S ECI 2021 02630

IN THE MATTER OF SPARKLING BEVERAGES PTY LTD (ACN 140 635 347)
AND JET CO (AUST) PTY LTD (ACN 139 724 235)

STEVEN JAMES (and another according to the Schedule)	Plaintiffs
v
MATTHEW LINAS TENDER (and others according to the Schedule)	Defendants

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JUDGE:	Connock J
WHERE HELD:	Melbourne
DATE OF HEARING:	11 & 12 July 2023
DATE OF JUDGMENT:	24 July 2023
CASE MAY BE CITED AS:	Re Sparkling Beverages Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2023] VSC 419

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CONTRACTS — Authority to bind — Solicitor’s authority to compromise litigation —Binding agreement — Agency — Actual authority — Implied authority — Ostensible authority — Authority of solicitors — Offer and acceptance — Counter-offer or enquiry — Construction of alleged counter-offer document — Characterisation of communications — General principles regarding formation of contracts — Masters v Cameron (1954) 91 CLR 353 — Surrounding circumstances — Objective intention — Intention to be immediately bound — Whether exchange of emails created a binding settlement agreement — No binding agreement.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr A Ounapuu	Baker McKenzie
For the Defendants	Mr T Gorton	Bastian Hancock Stynes

TABLE OF CONTENTS:

Introduction and summary.............................................................................................................. 1

Evidence.............................................................................................................................................. 3

Witnesses........................................................................................................................................... 23

..... Mr Hancock................................................................................................................................. 24

..... Mr Kaintatsis............................................................................................................................... 25

Submissions...................................................................................................................................... 29

Defendants’ submissions........................................................................................................... 29

..... Plaintiffs’ submissions............................................................................................................... 36

Some factual matters....................................................................................................................... 42

Principles and observations.......................................................................................................... 45

Offer and acceptance.................................................................................................................. 46

..... Intention to make an immediately binding agreement........................................................ 50

..... Actual and ostensible authority of solicitors.......................................................................... 56

Agreed list of issues........................................................................................................................ 61

Consideration and disposition..................................................................................................... 62

Authority of Mr Kaintatsis to enter into the alleged Release Agreement on behalf of the plaintiffs.............................................................................................................................................. 62
Did the parties enter into a binding settlement agreement?................................................ 67
Did the alleged Release Agreement contain the terms referred to in the Terms Questions? 82
By virtue of the alleged Release Agreement did the plaintiffs release the defendants from the substantive claims made in the proceeding such that the proceeding against the defendants ought to be dismissed?..................................................................................................... 82

Other matters.................................................................................................................................... 82

Conclusion and proposed orders.................................................................................................. 84

SCHEDULE OF PARTIES.............................................................................................................. 85

HIS HONOUR:

Introduction and summary

In this proceeding the plaintiffs seek a broad range of relief based upon alleged oppressive conduct of the first and second defendants in connection with business dealings and relevant shareholdings in the third and fourth defendants. For present purposes the details of the oppression related allegations made in the claim and the defences raised in response need not be addressed.

In paragraph 35A of the defendants’ further amended defence (Amended Defence) it is alleged that a settlement agreement was reached between the parties on 8 December 2022 pursuant to which the parties agreed that the claims made by the plaintiffs against the defendants would be dismissed by consent with no order as to costs, with the plaintiffs and the defendants agreeing to mutual release terms as referred to in paragraph 4(b)(ii) and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] VSC 419
Decision Date: 24 July 2023

CaseChat Overview and Summary

Sparkling Beverages Pty Ltd was involved in a legal dispute that reached the court, where the central issue was whether a binding settlement agreement had been reached between the parties. The court was tasked with determining the nature of the authority held by the solicitor to enter into such agreements, and whether any such authority existed. Additionally, the court needed to examine whether the communications between the parties constituted an offer, acceptance, counter-offer, or merely an enquiry, and to interpret the content of the alleged counter-offer document in the context of the overall communications.

The court delved into the principles of authority, particularly distinguishing between actual, implied, and ostensible authority. It examined whether the solicitor had actual authority, either expressly or impliedly granted by the client, to enter into binding settlement agreements. The court also considered whether the solicitor had ostensible authority, meaning whether third parties could reasonably believe that the solicitor had the authority to act on behalf of the client. Furthermore, the court assessed the nature of the communications exchanged via email, determining whether they constituted an offer that was capable of being accepted to form a binding contract. The court applied objective principles, focusing on the intention of the parties as it would have appeared to a reasonable person in the position of the recipient of the communications.

In its decision, the court concluded that there was no binding settlement agreement between the parties. It found that the solicitor lacked actual or implied authority to bind the client to such an agreement. The court also determined that the communications did not amount to an offer that was capable of being accepted. The characterisation of the counter-offer document as a genuine attempt to settle the dispute was rejected, as it was viewed as an enquiry rather than a definitive offer. Consequently, no binding contract was formed through the exchange of emails.

The court's final orders reflected its findings, affirming that no binding settlement agreement existed and that the parties remained free to pursue their respective legal claims and defences. The decision underscored the importance of clear authority and precise communication in the context of legal settlements.

Orders