Shaw and Partners Ltd v Netlinkz Ltd

[2025] NSWDC 26

District Court

New South Wales

Medium Neutral Citation:

Shaw and Partners Ltd v Netlinkz Ltd [2025] NSWDC 26

Hearing dates:

11 November 2024

Date of orders:

14 February 2025

Decision date:

14 February 2025

Jurisdiction:

Civil

Before:

Andronos SC DCJ

Decision:

(1)   Judgment for the plaintiff against the defendant in the sum of $577,500 including GST.

(2)   Dismiss the cross-claim.

(3)   Direct the parties to liaise as to appropriate interest and costs orders. In the event that the parties have not reached agreement on orders with respect to interest and costs, and notified my Associate of such agreement by 5pm on 28 February 2025, list the question of interest and costs for hearing on 14 March 2025 at 10am before Andronos SC DCJ.

Catchwords:

CONTRACTS — Construction and interpretation

ESTOPPEL — Promissory estoppel — Representation

Cases Cited:

Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99

Legione v Hateley (1983) 152 CLR 406

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37

Category:

Principal judgment

Parties:

Shaw and Partners Ltd (plaintiff/cross-defendant)
Netlinkz Ltd (defendant/cross-claimant)

Representation:

Counsel:
Mr S Gray (plaintiff/cross-defendant)
Mr R Notley (defendant/cross-claimant)

Solicitors:
HWL Ebsworth Lawyers (plaintiff/cross-defendant)
Gillis Delaney (defendant/cross-claimant)

File Number(s):

2023/00201876

Publication restriction:

Nil

JUDGMENT

1. The plaintiff, Shaw and Partners Ltd, is a provider of corporate advisory services and the defendant, Netlinkz Ltd, is a publicly listed company. On 24 June 2022, they agreed on the provision, by the plaintiff to the defendant, of lead management and book runner services in respect of a capital raising on the defendant’s behalf (“the Mandate”). In due course, capital was raised by way of a private share placement pursuant to an Equity Finance Agreement (“EFA”) between the defendant and Regal Funds Management Pty Ltd as trustee for Regal Emerging Companies Opportunities Fund (“Regal”) in August 2022.

2. The maximum sum that could be raised under the EFA was $20.5 million, capable of being drawn down in increments of $1,000,000 over a period of 36 months. Regal was prohibited by ASX Listing Rule 7.1 from acquiring more than 440,000,000 shares if doing so would cause it to hold more than 15% of the issued share capital of the defendant. Accordingly, the market price of the shares at the time of each drawdown affected the amount that could be drawn down under the EFA during the three-year term.

3. Although the EFA specified that the maximum amount that could be drawn down was $20.5 million, the sum drawn down pursuant to the EFA in two tranches in November 2022 and February 2023 was only $7 million. No more funds could be drawn down because more than 440,000,000 shares were issued to Regal pursuant to those drawdown requests.

4. The plaintiff has invoiced $1.025 million (+ GST) under the Mandate on the basis that the Proceeds (as defined) of the equity raising were $20.5 million, being the sum committed by Regal under the EFA. The defendant says that the amount payable is only $350,000 or $250,000 (+ GST in each case), depending on the true construction of the Mandate and a variation to the Mandate (the 29 July letter), which the plaintiff accepts, for the purpose of these proceedings, ought be treated as binding on the parties.

5. The defendant has paid the plaintiff’s first invoice, in the sum of $550,000 (inclusive of GST). In its cross-claim, it says that it did so mistakenly and that it is entitled to recover the difference between what it has paid and what it was obliged to pay.

6. The defendant also alleged in its cross claim that the 29 July letter gives rise to a promissory estoppel, precluding the plaintiff from relying on the original terms of the Mandate, if the variation is not found to be binding. In light of the concession made by the plaintiff as to the operation of the 29 July letter, there appears to be no further work for the estoppel claim to do as it will likely abide the determination of the construction argument. Nevertheless, I do consider it separately below.

7. Neither party relied on any affidavit evidence, although correspondence between the parties and other contemporaneous documentary material was admitted without objection.

8. For the reasons set out below, I consider the plaintiff is entitled to succeed on its claim.

The Mandate and the letter of 29 July 2022

9. Sometime prior to 23 June 2022, the defendant approached the plaintiff to arrange funding. A term sheet was signed by the parties on 23 June 2022. An earlier draft of the term sheet contemplated financing of up to $10.5 million, subject to drawdown requests at the defendant’s discretion. The term sheet that was executed on 23 June 2023 increased the facility size to $20.5 million.

10. On 24 June 2022, the parties entered into the Mandate. The Mandate was a contract for the plaintiff to act as lead manager and bookrunner (“Lead Manager”) in respect of a capital raising of new fully paid ordinary shares in the defendant (“the Offer”). The Mandate took the form of an Engagement Letter and an attached schedule of terms and conditions of engagement (“Schedule”). Relevantly, it provided as follows:

1. The proposed issue size was $20.5 million, with the structure to be determined, but expected to be issued as an unconditional placement under ASX Listing Rule 7.1 and 7.1A [cl 1, Engagement Letter].

2. The plaintiff’s role as Lead Manager was to provide the defendant with such assistance in undertaking the Offer as was customary and appropriate for this type of transaction, including several enumerated tasks, including advising on the structuring of the Offer [cl 2(c), Engagement Letter].

3. The plaintiff’s role was set out in more detail in cl 1 of the Schedule. It included, in sub-cl 1.2, that the final structure, timing and terms and conditions of the Offer would be determined after further consultation between the plaintiff and the defendant and would be dependent on market conditions which may change over time.

4. Fees in consideration of the services provided were payable by the defendant on Completion of the Issue by way of a Management and Selling Fee of 5% of the Proceeds of the Offer (excluding GST) [cl 4, Engagement Letter].

5. The defendant agreed to pay the plaintiff the Fee on the Completion of the Offer. “Completion” was defined as “the earlier of the date the [defendant] received the Proceeds raised under the Offer, or the date the [defendant] receives a signed binding agreement for Proceeds from investors or an investor under the Offer” [cl 7.3, Schedule].

6. “Proceeds” were defined as the gross amount raised or committed under the Offer:

1. regardless of which investors those funds or binding commitments were received from; and

2. regardless of whether the funds were received or arranged by the defendant, the plaintiff or a third party [cl 7.1, Schedule].

7. The defendant was required to “pay all fees and expenses under [the] Agreement without any deduction or set-off or counterclaim”. The plaintiff’s fees and expenses were not reduced or otherwise affected by any payments made by the defendant to a third party [cl 7.5, Schedule].

11. Work then commenced on an equity purchase agreement. External lawyers, Minter Ellison, were retained to draft that document. A draft was provided to the ASX and to Regal, the putative investor, on or about 4 July 2022.

12. Over the following weeks, the terms of the draft EFA and a proposed announcement to the ASX were negotiated between Minter Ellison and Regal. Robert Hallam, Director of Corporate Finance of the plaintiff, appears to have been the primary source of instructions to Minter Ellison. Guy Robertson and James Tsiolis of the defendant were copied into the email correspondence and from time to time instructed on matters of detail.

13. On 21 July 2022, Mr Robertson emailed Mr Hallam, stating:

“Rob, can you confirm that Shaw’s fee on execution of this facility will be limited to 5% of new share issues as and when they are executed.”

14. That same day, Mr Hallam responded:

“Our fee is just a one off up front for the facility amount.”

15. It is likely that a conversation or conversations then took place regarding the plaintiff’s fees, although there is no evidence as to who took part or what was said. On 26 July 2022, Mr Hallam of the plaintiff sent another email to Messrs Tsiolis and Robertson of the defendant under the subject line “Fee terms”. The email relevantly provided:

“We propose the following fee structure:

- Facility fee of 2.5% of facility amount ($20.5m) invoiced on signing and paid within 30 days

- Capital markets advisory fee of 2.5% of facility amount, invoiced and paid once NET [the defendant] draws down a total of $4m or more from the facility”.

16. On 29 July 2022, Mr Robertson sent an email to Mr Hallam, copied to Mr Tsiolis, under the subject line “Facility Agreement”. It relevantly provided:

“Rob, I left a message for you yesterday to call.

I understand that there will be a variation to the Shaw mandate to provide that the 2.5% on the facility fee will be paid from the first drawdown.

Could you please provide this – together with an amended fee terms so we can get the board to approve this today.”

17. There is no evidence of the terms of any further conversation between the representatives of the parties at around this time concerning the plaintiff’s fees, although it is likely that one did take place in light of the difference in the parties’ understanding of the timing of the first tranche according to the respective emails.

18. On 29 July 2022, the plaintiff executed a letter headed, “Variation to Letter of Engagement Dated 24 June 2024 – Lead Manager Fees” (“the 29 July letter”). It referred to the Engagement Letter in relation to the proposed equity raising and set out a new fee structure as agreed between the plaintiff and the defendant. It provided that:

“In consideration for the provision of services, upon Completion of the issue the [defendant] shall pay to [the plaintiff] the following fees:

• A Facility Fee of 2.5% payable on completion of the first drawdown; and

• A capital markets advisory fee (Advisory Fee) of 2.5% payable on completion of the drawdown whereby the [defendant] has drawn down, in aggregate, $4m or more from the Facility.”

There were no further changes to the Letter of Engagement.

19. The 29 July letter was only executed by the plaintiff and was not executed by the defendant at the time, although the defendant did purport to execute it on about 2 September 2024, well after when these proceedings were commenced.

20. On 1 August 2022, the defendant entered into the EFA with Regal. Under the EFA, Regal “may provide the [defendant] with up to A$20,500,000 of equity capital via share placements over the course of thirty six months” from the date of the agreement on the terms set out therein. It relevantly provided that:

1. The defendant may, from time to time during the 36-month Term, notify Regal that it requests funds (Drawdown Request), each such request being for a Drawdown Amount as specified in the Request [cll 2.1(a) and 1.1 (Definitions)];

2. The Drawdown Amount must not specify an amount that resulted in Regal paying an amount exceeding the Total, defined as $A20,500,000 [cll 2.2(b) and 1.1 (Definitions)];

3. The Drawdown Amount also must not specify an aggregate number of Drawdown Shares which, in aggregate pursuant to all Drawdown requests, exceeded 440,000,000 fully paid ordinary shares in the defendant [cll 2.2(a) and 1.1 (Definitions)]; and

4. The Price for which the shares were to be acquired by Regal was a function of the market price per share calculated over the period prior to settlement of the particular drawdown, less a discount [cl 1.1 (Definitions)].

21. There was no mechanism for Regal to refuse to acquire the shares in response to a compliant Drawdown Request. The EFA also noted that 440,000,000 shares was the defendant’s available placement capacity under ASX Listing Rule 7.1 as at the date of the EFA. There was no requirement that Regal execute any document at the Drawdown stage that comprised a signed binding agreement to provide any funds.

22. Also on 1 August 2022, the defendant issued an announcement to the ASX under the title, “Netlinkz Limited secures A$20.5 million via equity placement facility”. On the same day, it separately announced to the market the details of the financing arrangement, including the plaintiff’s fee being the “Facility Fee” and “advisory Fee” as described in the 29 July letter.

Drawdowns and Invoices

23. On 23 November 2022, the defendant issued its first Drawdown Request to Regal for funding. Initially, the defendant sought $6 million, however, following advice from Regal as to the number of shares that would need to be sold to fund the $6 million payment, the defendant amended its Drawdown Request to seek $3 million.

24. On about 24 November 2022, pursuant to the amended Drawdown Request, Regal provided $3,000,000 to the defendant. On 13 December 2022, 107,400,000 shares in the defendant were issued to Regal. A further 88,678,431 shares were issued on 30 December 2022.

25. The plaintiff issued an invoice to the defendant on 24 November 2022 in the sum of $550,000 (inclusive of GST). That invoice was paid on 29 November 2022 without demur. Indeed, on 28 November 2022, Mr Robertson emailed Mr Hallam stating, “fee will be processed today”.

26. On 21 February 2023, the defendant issued a further Drawdown Request to Regal for funding. Earlier that month, a new mandate for a separate convertible note issue was the subject of communications between the parties. In the context of those communications, Mr Robertson stated in his email to Mr Hallam of 10 February 2023 (at 2:38 pm).

“The second draw down under the existing facility as I understand it will have an additional free [sic – fee] of $0.5m.”

27. Pursuant to the Drawdown Request made in February 2023, $4,000,000 was provided by Regal to the defendant and, on 22 February 2022, a further 261,437,909 shares in the defendant were issued to Regal. Regal had now been issued 457,516,340 shares in the defendant. As more than the maximum number of shares allowable under ASX Rule 7.1 had now been issued to Regal under the EFA, no more funding was available to the defendant under it after the second Drawdown.

28. The plaintiff issued an invoice to the defendant on the same day in the sum of $550,000 (inclusive of GST). That invoice was not paid.

29. On 16 May 2023, the plaintiff issued a further invoice in the sum of $27,500 (inclusive of GST) for “Remaining Facility Fee and Advisory Fee”. The plaintiff says that this was to remedy an oversight in its calculation of the fee which, it asserts, is due to it. This appears to be uncontroversial as the plaintiff’s claim for 5% of $20.5 million would be $1.025 million (ex GST) or $1,127,500 (inclusive). That invoice has also not been paid and the defendant denies that it is liable to do so.

Relevant principles: construction

30. As indicated above, in the course of argument, the plaintiff accepted that the terms of the 29 July letter, whether or not it was counter-signed by the defendant at the time, applied as between the parties to vary the terms of the Mandate. This was a sensible concession because the subsequent conduct of the parties demonstrated that they each considered the timetable, according to which the plaintiff was entitled to invoice and be paid for its services, was governed by the terms of that letter. The plaintiff invoiced the defendant in November 2022, following the first drawdown, and in February 2023, following the drawdown that increased the sums drawn down to over $4 million. This followed the scheme set out in the 29 July letter, not cl 7.3 of the Schedule.

31. Accordingly, both the Mandate and the 29 July letter must be construed to determine the relevant respective rights of the parties.

32. The Mandate and the 29 July letter are each commercial documents and, as such, are to be construed in a businesslike manner. Construction is determined objectively, and the parties’ subjective understanding is irrelevant to the Court’s objective determination of the meaning of the language used in the contract.

33. In Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37, French CJ, Nettle and Gordon JJ stated at [46] to [51] (footnotes omitted):

“[46] The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.

[47] In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.

[48] Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.

[49] However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding ‘of the genesis of the transaction, the background, the context [and] the market in which the parties are operating’. It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals.

[50] Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties’ statements and actions reflecting their actual intentions and expectations.

[51] Other principles are relevant in the construction of commercial contracts. Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption ‘that the parties ... intended to produce a commercial result’. Put another way, a commercial contract should be construed so as to avoid it ‘making commercial nonsense or working commercial inconvenience’.”

34. Further, a clause must not be considered in isolation but in the context of the whole document: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109.

Application

35. The principal issues on the plaintiff’s claim, as defended by the defendant, are:

1. Whether, on the true construction of the Mandate, the plaintiff is entitled to recover 5% of the proposed issue of $20,500,000, being the “Total” as defined in the EFA, or whether the plaintiff is only entitled to recover 5% of the sums actually received pursuant to Drawdowns under the EFA.

2. Whether, on the true construction of the 29 July letter, the plaintiff is entitled to recover:

1. 5% of the proposed issue of $20,500,000, being the Total as defined in the EFA;

2. 5% of the sums actually received pursuant to the EFA; or

1. 2.5% of the sums actually received pursuant to the EFA.

3. Whether the defendant entitled to restitution of any of the moneys already paid to the plaintiff.

36. In my view, the plaintiff’s construction is preferable and the defendant is liable to pay the whole of the fee as invoiced in November 2022, February 2023 and May 2023. I set out below my reasons for reaching this view.

37. Looking first at the text of the documents, I consider that the preferable view is that the text of each of the Mandate and the 29 July letter supports the plaintiff’s construction and the Fee payable, by the defendant, is 5% of the Total amount as defined in the EFA.

38. In my view, the definition of “Proceeds” as “the gross amount raised or committed under the Offer” in cl 7.1 refers to the sum raised or committed pursuant to the Offer and not pursuant to each Drawdown under the EFA. “Raised” and “committed” are, depending on the context, different concepts and are used disjunctively in cl 7.1. In my view, they are used in the Mandate to apply to fund raising by different mechanisms, which include, but are not limited to, facility agreements like the EFA.

39. The Mandate expressly contemplates that Proceeds can be received or arranged by a number of parties [cl 7.1(b)]. At the time it was executed, it expressly left open the question of the structure of the Offer, on which the plaintiff was to advise [cl2.1(c)]. In circumstances where funds might be raised by issuing equity pursuant to a subscription in which an equity investor subscribes for shares other than through a drawdown regime, there would not necessarily be any separate commitment and receipt of funds.

40. Accordingly, in my view, “raised” and “committed” each have work to do in that they each apply to different methods of fund raising that are contemplated by the Mandate.

41. This is supported by the ordinary English meaning of “committed”. A commitment to perform an act is different to its actual performance; it is an expression of intention. By the interaction of cll 7.1 and 7.3 of the Mandate, it is clear that when the defendant receives a signed binding agreement for an amount to be raised under the Offer, it has received a commitment in that respect. The commitment is independent of the actual provision of funds.

42. The Fee is payable on “Completion”, which is defined in cl 7.3 as “the earlier of the date the [defendant] received the Proceeds raised under the Offer, or the date the [defendant] receives a signed binding agreement for Proceeds from investors or an investor under the Offer”. In circumstances where the commitment may predate the receipt of funds, Completion occurs on the execution of the document which comprises the binding commitment, which, in this case, was the EFA.

43. The defendant points out that the different triggers for payment are offered as alternatives and the Mandate does not specify that the Fee is calculated on the basis of whichever is higher. While this is correct, I consider the better view is that the different triggers address the timing of the liability to pay the Fee, not the amount. In this case, there was a binding commitment in respect of the entire Offer of $20.5 million when the EFA was executed. Had the commitment been for a lesser sum, Completion would only have occurred in respect of that lesser sum and the Fee would be reduced accordingly.

44. Similarly, I do not accept the defendant’s contention that Proceeds are only committed once a Drawdown Request has issued. The commitment is made in the EFA because Regal did not have a discretion to refuse a compliant Drawdown Request.

45. Further, when the question is considered from the standpoint of which construction is most likely to produce a commercial result, I consider the reference to a “signed binding commitment” is most sensibly construed to refer to a facility agreement, rather than the process of drawing down funds. Plainly, the entry into the EFA was a significant event, which the defendant acknowledged by announcing it to the market. It marked the securing of a potentially substantial amount of funding. It was, in lay terms, a commitment.

46. Accordingly, I consider the Mandate, itself, supports the plaintiff’s construction and the fee payable by the defendant is 5% of the Total amount of $20.5 million, as defined in the EFA.

47. As was agreed, however, the 29 July letter ought be treated as at least varying the timing of payment of the Fee. It must, however, be construed together with and, in the context of, the Mandate, which it purported to amend. The starting point, therefore, in my view is that the Fee to which the plaintiff was entitled was 5% of $20.5 million.

48. The language of the 29 July letter, in my view, does no more than vary the timing of payment. It brings the defendant’s liability to pay the fee into line with its cashflow. It is predicated on Completion, the definition of which is not amended, and divides payment into two tranches of 2.5% each, payable respectively on the first drawdown and once the defendant has drawn down an aggregate of $4 million or more from the EFA. It does not say, for example, “on the receipt of Proceeds” even though that term had been defined in the Mandate. For reasons set out below, I do not accept it was a commercially sensible construction of the amendment to the Mandate to construe it as reducing the Fee from 5% to 2.5%.

49. It follows that if the Fee is not reduced from 5% to 2.5%, the Facility Fee, as the first tranche has been renamed, must be calculated as the first tranche of a Fee of 5% of some other known principal. In my view, it can only be calculated by reference to the amount committed in the EFA, as no other principal amount could have been known and form the basis of the calculation.

50. Finally, I note that the language of the 29 July letter, itself, suggests that the first tranche is payable as a Facility Fee, that is, a payment for the plaintiff’s role in procuring the EFA. It is wholly consistent with my conclusion that remuneration for procuring a facility agreement should be proportionate to the facility agreement itself.

51. In my view, the most sensible commercial construction of the 29 July letter, in the context of the Mandate which it amended, is that the defendant’s liability to pay any Fee ought be calculated with reference to the amount of the EFA. It was strongly submitted for the defendant that the opposite was the case and the most sensible commercial construction was that it be commensurate with the moneys actually raised pursuant to the EFA, rather than the maximum amount that could be raised under it.

52. I do not agree. The plaintiff was to be remunerated for the provision of a service, and there was no dispute that it provided that service and did so competently. There is nothing in the nature of the relationship, the service or the language of the Mandate or 29 July letter which suggests that the plaintiff agreed to undertake any risk according to the ability of the defendant to raise funds, other than perhaps where the Offer failed to raise more than $4 million. The Mandate extended over a period of three years and the timing of any Drawdown was within the control of the defendant. The amount that could be drawn down, being a function of the share price, ultimately depended on the defendant’s assessment of market conditions and its share value from time to time. There was no evidence that $20.5 million was not a reasonable estimate, at the time of the Mandate, as to what could be raised on the issue of 440,000,000 shares. Indeed, the increase in the amount of the Offer between the first and second terms sheets suggests that the parties considered it might be. There is no commercial reason to construe the Mandate, as amended, as allocating to the plaintiff the risk of any share price movement in the calculation of its Fee once the $4 million threshold was crossed.

53. Further, as foreshadowed above, in considering what is the most commercially sensible construction of the 29 July letter, I do not consider there to be any commercial merit in reducing the effective rate of remuneration under cl 4 of the Mandate from 5% (of whatever the principal is determined to be) to 2.5%. This would be the effect of construing the letter as amending the Mandate to entitling the plaintiff to 2.5% of each drawdown, such that its total remuneration would be 2.5% of $3,000,000 ($75,000) together with 2.5% of $4,000,000 ($175,000), giving a total of $250,000 + GST. Given cl 4 of the Mandate was unequivocal in providing a 5% fee (whatever the principal is determined to be), there is no basis, in any evidence of the commercial context in which the 29 July letter was provided to the defendant, that supports any common intention to reduce the consideration to the plaintiff from 5% to 2.5%.

54. Accordingly, I consider the plaintiff is entitled to succeed in its contract claim on the unpaid invoices. Those invoices amount to $577,500, including GST.

Estoppel and restitution

55. In light of my findings on the question of construction of the 29 July letter, there does not appear to be any basis on which the cross-claims or defences of estoppel and restitution could succeed. The principal representation on which the defendant relies is the representation that the parties’ respective obligations as to payment would be governed by the 29 July letter. As this was effectively conceded by the plaintiff, and I have found that the 29 July letter, on its true construction, does not support the defendant’s position, there would appear to be no basis on which the plaintiff could be estopped from insisting on payment of the invoices raised in accordance with it.

56. In any event, for a representation to found an estoppel, it must be clear and unequivocal or unambiguous, whether in relation to a present fact or future intention or conduct: Legione v Hateley (1983) 152 CLR 406 at 436-7 per Mason and Deane JJ. In the present case, I do not consider the 29 July letter to comprise such a representation. The highest it might be put on the defendant’s behalf is that it was ambiguous. Ultimately, however, I do not consider that in its commercial context it was ambiguous at all.

57. I have not taken the emails of 21, 26 and 29 July 2022 into account in construing the 29 July letter as they constitute negotiations, which are inadmissible on the question of construction. Nevertheless, they are relevant and admissible on the question of whether any representation was made by the plaintiff on which the defendant reasonably relied. It is plain on the evidence, in my view, that the parties understood, at the time of the 29 July letter, that the total Fee payable by the defendant was 5% of the $20.5 million specified in the EFA. The email trail adverts to this specifically. There is no evidence that the defendant subjectively had a different understanding at the time or that such an understanding could be attributed to any conduct of the plaintiff.

58. In light of my findings on construction and estoppel, I do not consider the law of restitution has any application in this case.

Disposition

59. In my view, the plaintiff is entitled to succeed. As costs ordinarily follow the event, subject to any application for a special costs order, the plaintiff should have its costs as agreed or assessed on the ordinary basis. Similarly, the plaintiff is entitled to interest at court rates.

60. Finally, the plaintiff’s claim is expressed to be in the sum of $525,000 + GST. Assuming the whole GST is recoverable, this would result in an award of $577,500. In the absence of any submission to the contrary, I have proceeded on this basis.

61. I will give the parties an opportunity to agree on orders for costs and interest, however, if agreement cannot be reached, I will order a timetable for submissions, evidence, and, in the event that it is required, a further hearing.

Orders

62. The orders of the Court are:

1. Judgment for the plaintiff against the defendant in the sum of $577,500 including GST.

2. Dismiss the cross-claim.

3. Direct the parties to liaise as to appropriate interest and costs orders. In the event that the parties have not reached agreement on orders with respect to interest and costs, and notified my Associate of such agreement by 5pm on 28 February 2025, list the question of interest and costs for hearing on 14 March 2025 at 10am before Andronos SC DCJ.

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Decision last updated: 20 February 2025