Star Marketing (Aust) Pty Ltd & Horvat v Hawkes

[2000] SASC 95

STAR MARKETING (AUST) PTY LTD & HORVAT v HAWKES
[2000] SASC 95

Full Court:  Doyle CJ, Debelle and Nyland JJ

1. DOYLE CJ.       I would dismiss the appeal and I agree with the reasons to be given by Debelle J.

2. DEBELLE J.      The question in this appeal is whether the parties have agreed to make an enforceable contract.  The facts are as recited in the reasons of the District Court judge.  It is not necessary to repeat them.  They are not in dispute. 

3. The District Court judge found that the solicitors for the parties had, in a telephone conversation on 17 September 1998, reached agreement as to the terms on which an action threatened by the respondent was being compromised.  The judge found the terms of the agreement were:

1......... That the appellants will pay to the respondent the sum of $35,000 in the manner set out in a letter from the appellants’ solicitors dated 8 September 1998. 

1. That the payment by the appellants would be credited to an account nominated by the respondent. 

3......... That the parties would execute a deed of settlement recording the above terms together with such other terms and conditions as may be necessary or desirable to ensure that the agreement was of full force and effect and mutual releases. 

1. All parties would have to be satisfied that the deed accurately recorded the terms of the agreement. 

I do not think that the third clause of his Honour’s findings correctly records the agreement made between the parties for reasons which I will note shortly. 

1. The judge then held that the parties had entered into an enforceable agreement, the agreement being one in which the parties had reached finality in arranging all the terms of their bargain and intended to be immediately bound to the performance of those terms but at the same time proposed to have the terms restated in a form which would be fuller or more precise but no different in effect, and as such it was an agreement which fell within the first of the three factual situations identified by the High Court in Masters v Cameron (1954) 91 CLR 353 at 360. In my view the judge was correct in reaching that conclusion.

2. There had been an offer made by the respondent’s solicitors on 2 September 1998.  The appellants’ solicitor had made a counter offer in a letter dated 8 September 1998.  The terms of that counter offer were then discussed in the course of a telephone conversation between the solicitors on 17 September 1998 when the agreement was made. 

3. Mr Burtt, who is a solicitor for the respondent, recorded the terms of the conversation in a contemporaneous note.  As the trial judge found, the note records that the parties agreed that the sum of $35,000 would be paid and the manner in which it would be paid.  The payments were to be credited to an account nominated by the respondent.  The note also states that the payment of moneys would not be contingent on the sale of the licensed area.   The note concludes that:

   “I saying on the basis of the proposal simply involving the payments outlined above, it is accepted by my client.  I saying will prepare a Deed of Settlement and forward it to him shortly.”

That note indicates that the trial judge’s finding as to the third term of the agreement goes too far.  Mr Burtt was simply stating that he would prepare a deed of settlement which would reflect the agreement reached between the parties.  He was not saying that the agreement would record such other terms and conditions as will be necessary or desirable to ensure the agreement was of full force and effect.  In other words, nothing was said between the parties which would justify a finding of an agreement in any sense subject to any further agreement by the parties. 

1. Mr Jolly, who appeared for the appellants, submitted that the principle in Masters v Cameron had no operation where the negotiations had been conducted by the agents of the parties.  There is no warrant for that proposition in this case.  When solicitors conclude an agreement on behalf of their clients they are acting within their apparent authority.   Furthermore, the evidence in this case shows that the solicitors acted with the full authority of their respective clients.  In addition, for the reasons I have already given, the agreement was not in any sense subject to the consent of the parties. 

2. For these reasons, I would conclude that the District Court judge reached a correct conclusion.  I would, therefore, dismiss the appeal.

3. NYLAND J.       I agree that the appeal should be dismissed.  I also agree with the reasons given by Debelle J.