Corporations - Contract - Underwriting agreement - Certainty - Damages - Failure to pay money - Cost of capital - Recoverability of alleged additional cost to company for raising capital from alternative sources - Estoppel - Relief due to estoppel - Counterclaim - Restitution - Set off - Mutuality of debts

Legislation:

Corporations Act 2001 (Cth)

Supreme Court Act 1935 (WA)

Result:

Declare plaintiff is entitled to a balance of damages of $1,002,078.45 after set off of defendant's counterclaim of $2,328,580.55

Category: B

Representation:

Counsel:

Plaintiff: Mr D R Williams QC & Mr J A Thomson
Defendant: Mr M L Bennett

Solicitors:

Plaintiff: Pullinger Readhead Lucas
Defendant: Bennett & Co

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

Aliferis v Kyriacou [2000] VSCA 123; [2000] 1 VR 447
Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101
Astor Properties Ltd v Tunbridge Wells Friendly Society [1936] 1 All ER 537
Attorney General of Hong Kong v Humphreys Estate (Queen's Gardens) Ltd [1987] 1 AC 114
Austotel Pty Ltd v Franklins Self Serve Pty Ltd (1989) 16 NSWLR 582
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Bank of Australasia v Hall (1907) 4 CLR 1514
Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 62
Bonic v Field Air (Deniliquin) Pty Ltd [1999] NSWSC 636
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Branca v Cobarro [1947] 1 KB 854
Cadorange Pty Ltd v Tanga Holdings Pty Ltd (1990) 20 NSWLR 26
Capitol Theatre Management Pty Ltd v Council of the City of Sydney [2005] NSWSC 5; [2005] ANZ Conv R 180
Central London Property Trust Ltd v Hightrees House Ltd [1947] KB 130
Chaplin v Hicks [1911] 2 KB 786
City of Box Hill v E W Tauschke Pty Ltd [1974] VR 39
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Commonwealth v Verwayen (1990) 170 CLR 394
Coventry v Charter Pacific Corporation Ltd [2005] HCA 67; (2005) 80 ALJR 132
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423
Duckworth v Ewart (1864) 2 H & C 129
Ettridge v Vermin Board of the District of Urat Bay [1928] SASR 124
Fletcher v Tayleur (1855) 17 CB 21
Flinn v Flinn [1999] 3 VR 712
Foran v Wight (1989) 168 CLR 385
Forster v Wilson (1843) 12 M & W 191; 152 ER 1165
G Scammell & Nephew Ltd v HC & JG Ouston [1941] AC 251
Garraway Metals Pty Ltd v Comalco Aluminium Ltd (1993) 114 ALR 118
Gebauer Nominees Pty Ltd v Cole [2006] WASC 57
Giumelli v Giumelli (1999) 196 CLR 101
Government of Newfoundland v Newfoundland Railway Co (1888) 13 App Cas 199
Grundt v Great Boulder Goldmines Pty Ltd (1937) 59 CLR 641
Gye v Davies (1995) 37 NSWLR 421
Gye v McIntyre (1991) 171 CLR 609
Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145
Haines v Bendall (1991) 172 CLR 60
Harper v Ariadne Australia Ltd [1996] QCA 483
Hart v Mossensons [2000] WASC 295
Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235
Hoad v Swann (1920) 28 CLR 258
Holland v Wiltshire (1954) 90 CLR 409
Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41
Hungerfords v Walker (1989) 171 CLR 125
Israel v Foreshore Properties Pty Ltd (In Liq) (1980) 54 ALJR 421
Lamont v Heron (1970) 126 CLR 239
Lennon v Scarlett & Co (1921) 29 CLR 499
LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2001] NSWSC 886
MacKay v Dick (1881) App Cas 251
Manchester and Oldham Bank Ltd v W A Cook & Co (1883) 49 LT 634
Masters v Cameron (1954) 91 CLR 353
Mays v Roberts [1928] SASR 217
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457
Monarch Steamship Co Ltd v Karlshamns Oljefabriker AB [1949] AC 196
Mooregate Tobacco Co Ltd v Philip Morris Ltd [No 2] (1984) 156 CLR 414
Moses v Macferlan (1760) 2 Burr 1005; 97 ER 676
Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635
Oasis Dalby Pty Ltd (as Trustee for the Gladstone Unit Trust) v Sovereign Capital Ltd [2005] QSC 273
Old Style Confections Pty Ltd v Microbyte Investments Pty Ltd (In Liq) [1995] 2 VR 457
Orr v Ford (1989) 167 CLR 316
Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd [2006] VSCA 6; (2006) V Conv R 54‑713
Palmer v Temple (1839) 9 Ad & E 508; 112 ER 1304
Peter Warren (Properties) Pty Ltd v Jalvoran Pty Ltd [2004] NSWSC 1149; [2005] ANZ Conv R 52
Pheeney v Doolan (No 2) [1977] 1 NSWLR 601
Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31; (2001) 207 CLR 165
Player v Isenberg [2002] NSWCA 186
Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (1980) 144 CLR 300
Posgold (Big Bell) Pty Ltd v Placer (Western Australia) Pty Ltd (1999) 21 WAR 350
Prehn v Royal Bank of Liverpool (1890) LR 5 Exch 92
Prenn v Simmonds [1971] 1 WLR 1381
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17
Ratcliffe v Evans [1892] 2 QB 524
Reardon Smith Line Ltd v Hansen‑Tangen [1976] 1 WLR 989
Riches v Hogben [1985] 2 Qd R 292
Roehampton Developments Pty Ltd (in liq) v FAI General Insurance Co Ltd [2000] WASC 235
Sanrod Pty Ltd v Dainford Ltd (1984) 54 ALR 179
Sansom Nominees Pty Ltd v Meade [2005] WASC 9
Schmierer & Anor v Taouk [2004] NSWSC 345; (2004) 207 ALR 301
SCI Operations Pty Ltd v Commonwealth (1996) 69 FCR 346
Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596
Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359
Shevill v Builders' Licensing Board (1982) 149 CLR 620
Simeone v Pesatura General Contractors Pty Ltd (1993) 60 SASR 453
Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310
South African Territories Ltd v Wallington [1898] AC 309
Spangaro v Corporate Investment Australia Funds Management Ltd [2003] FCA 1025; (2003) 47 ACSR 285
Star v O'Brien (1996) 40 NSWLR 695
State Bank of New South Wales v Federal Commissioner of Taxation (1995) 62 FCR 371
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418
Terex Resources NL v Magnet Petroleum Pty Ltd (1988) 1 WAR 144
Tern Minerals NL v Kalbara Mining NL (1990) 3 WAR 486
Teviot Downs Estate Pty Ltd v MTAA Superannuation Fund (Flagstone Creek and Spring Mountain Park) Property Pty Ltd [2004] QCA 57; [2004] ANZ Conv R 152
Trans Trust SPRL v Danubian Trading Co Ltd [1952] 2 QB 297
Tropicus Orchids Flowers and Foliage Pty Ltd v Territory Insurance Office (1998) 148 FLR 441
Victoria Economic Development Corporation v Cloverdale Pty Ltd [1992] 1 VR 596
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528
Wallis Chlorine Syndicate Ltd v American Alkali Co Ltd (1901) 17 TLR 656
Wallis v Smith (1882) 21 Ch D 243
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Westdeutsche Bank v Islington LBC [1996] AC 669
Western Waggon and Property Co v West [1892] 1 Ch 271
Whittle v Parnell Mogas Pty Ltd [2006] SASC 129; (2006) 94 SASR 421
Witham v Witham [2000] WASC 236
Woodside Offshore Petroleum Pty Ltd v Atwood Oceanics Inc [1986] WAR 253
Young v Kitchin (1878) 3 Ex D 127
Young v Queensland Trustees Ltd (1956) 99 CLR 560

Case(s) also cited:

Australian Crime Commission v Gray [2003] NSWCA 318
Behzadi v Shaftesbury Hotels Ltd [1992] Ch 1
Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653
Central Brake Service (Sydney) Pty Ltd (In Liq) v Central Brake Service (Newcastle) Pty Ltd (1992) 27 NSWLR 406
Community Developments Pty Ltd, Engwirda Construction Co (1969) 120 CLR 455
Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336
Freeth v Burr (1874) LR9CP 208; [1874-80] All ER Rep 751
Galaxidis v Galaxidis [2004] NSWCA 111
Hiley v People's Prudential Assurance Co Ltd (In Liq) (1938) 60 CLR 468
Hotel Services Ltd v Hilton International Hotels (UK) Ltd [2000] 1 All ER (Comm) 750
In re Norman Holding Co Ltd [1990] 3 All ER 757
Jackson v Royal Bank of Scotland plc [2005] UKHL 3; [2005] 2 WLR 377
Johnson v Agnew [1980] AC 367
Koufos v C Czarnikow Ltd (The Heron II) [1969] 1 AC 350
Kpohraror v Woolwich Building Society [1996] 4 All ER 119
Lam Soon Australia Pty Ltd (administrator appointed) v Molit (No 55) Pty Ltd (1996) 70 FCR 34
Legione v Hately (1983) 152 CLR 406
March v E & M H Stramare Pty Ltd (1991) 171 CLR 506
National Westminster Bank plc v Somer International (UK) Ltd [2002] QB 1286
Scottish Equitable plc v Derby [2001] 3 All ER 818
Thompson v Palmer (1933) 49 CLR 507
Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd [1998] HCA 38; (1998) 192 CLR 603
Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401

TABLE OF CONTENTS

The parties
December 1996 Underwiting Agreement
The issues
Australian Goldfields NL (In Liq) - Corporations Act, ch 5, Pt 5.6, Div 1A
Relationship between Striker, AGF and Jade Creek Resources in 1996 and 1997
Terms of the Underwriting Agreement
Allegations of uncertainty and incompleteness
Conduct of parties
Corporations Law - takeover provisions
Plaintiff's submissions concerning uncertainty

Estoppel

(a) AGF's announcement to the ASX of 15 July 1997
(b) The fax transmission from Naylor of AGF to Hart of Striker dated 25 July 1997

(c) The participation by representatives of Striker and of AGF during August 1997 to March 1998 and efforts to draft a proposed prospectus and undertaking of due diligence exercise for the implementation of the secondary underwriting agreement
(d) Statements by AGF nominated directors of Striker at the plaintiff's directors' meetings during July 1997 to March 1998

(e)  Oral statement made by Gore of AGF to Hart of Striker on 29 October 1997
(f)  Oral statement by Naylor of AGF to Hart of Striker on 2 December 1997
(g)  The letter from Quek of AGF to Messrs Price Waterhouse dated 12 December 1997
(h)  The notes to Striker's financial statements for 31 March 1997 and 30 September 1997
(i)  Note 30A to the defendant's financial statements of 30 June 1997
(j)  The absence of any notification or advice from AGF to Striker that it did not intend to give effect to the secondary underwriting commitment or that this was not binding upon the defendant

Interim funding
Breach of contract - repudiation
Default by AGF under the underwriting agreement
Reliance upon occurrence of contingencies to trigger drop-out clauses
The drop-out contingencies

(a)  The suspension of Striker's shares on the quotation on the ASX on 9 March 1998
(b)  Variation of the terms of the New Sage Joint Venture
(c)  The Diamond Rose takeover offer
(d)  The $500,000 convertible note issue
(e)  The $500,000 share issue to Rio Tinto

The appointment of administrators to AGF
Striker's claim for damages
Damages for failure to pay money as agreed

Damages

Item 1
Item 2
Item 3
Item 4
Item 5
Item 6
Item 7
Item 8: Damages for the cost of capital
Item 13

Summary of findings on damages

Counterclaim
Interest on counterclaim
Set‑off of plaintiff's claim for damages against the defendant's counterclaim - liquidation of AGF

Orders

EM HEENAN J:

The parties

The plaintiff, North Australian Diamonds Ltd, was at all times material to this action carrying on business under the name Striker Resources NL, a company engaged in the exploration and potential development of diamond mining leases in the Kimberley region of Western Australia and elsewhere. Its shares were, except for a period of about 12 months from March 1998 to March 1999, listed and traded on the Australian Stock Exchange ("ASX") . The alleged significance of the plaintiff's suspension from trading on the ASX in 1998‑99 is relevant to an issue addressed later in these reasons. Because most of the documents and correspondence refer to the plaintiff under the name of Striker Resources NL it was convenient at the trial, and remains convenient, to refer to the plaintiff as "Striker".
The defendant, Australian Goldfields NL (now in liquidation), was, for much of the time material to this action, a company involved in the exploration for and development of goldmining tenements but also with an interest in diamond exploration and development through its then wholly owned subsidiary, Jade Creek Resources NL ("Jade Creek"). The defendant was also listed and traded on the ASX where its trading reference and acronym was "AGF". For this reason it was the practice at the trial and in much of the correspondence to refer to the defendant as "AGF" or, occasionally, as "AFN". In a manner which will be described in more detail later, AGF became the largest shareholder in Striker and appointed three directors to the board of the plaintiff, including its chairman. Striker had no significant revenues from its exploration activities and was dependent, for the continuation of this exploratory and developmental work, on funds introduced either as additional capital or as loans. AGF was the principal source of this financial support during the periods relevant to these proceedings and, for all these reasons, had substantial influence over the affairs of the plaintiff, if not effective control.
This action concerns the failure of an arrangement by which the defendant was to underwrite a share issue by the plaintiff. Because of initial delays and the eventual collapse of the underwriting the proposed share issue by the plaintiff never eventuated and, instead, but much later, it eventually raised other capital and obtained loans, by a variety of share placements, note issues and other borrowings. It claims to have suffered substantial losses and expenses as a result of the failure of the underwriting and seeks damages for the aggregate of these against the defendant. In a proof of debt lodged in the course of the liquidation, the plaintiff claimed damages of $11,566,621.44 which is the amount of damages it initially claimed in this litigation. However, since then the plaintiff has modified the claim and the aggregate of damages sought by the end of the trial was $6,393,729 (Exhibit Q1(2)).
The defendant denies any liability to the plaintiff on the grounds that there was never an enforceable contract concluded between them for this underwriting. The defendant's position is that the underwriting agreement relied upon by the plaintiff is incomplete and uncertain and that, although over the passage of about nine months from July 1997 to March 1998 there were many discussions, other communications and negotiations between the two parties about settling the terms of a proposed underwriting, no concluded or certain agreement was ever reached between them and their mutual dealings concerning the underwriting never passed the point of inconclusive negotiations or at the most an agreement to agree. Because of this stance by the defendant, the plaintiff advances an alternative case that if (contrary to its primary position) there was no certain and enforceable underwriting agreement, there was nevertheless a mutual assumption by the parties that the underwriting agreement was binding and enforceable and created a legal obligation for the defendant to underwrite the proposed share issue. Furthermore, the plaintiff alleges that the defendant made a series of representations to the effect that the underwriting agreement was in place and was in the process of being implemented, including statements made in its published reports and accounts and to the ASX which resulted in an assumption, acted on by the plaintiff as known to the defendant, that the underwriting obligation existed. These representations, the ensuing assumption by the parties as to the binding effect of the underwriting, realised and accepted by the defendant give rise, on the plaintiff's case, to an estoppel preventing the defendant from retreating from its implied promise to complete the underwriting - Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 - with the effect that the defendant is precluded from relying upon any unenforceability of the underwriting agreement and is liable for damages for its breach of that undertaking to the same extent as if the underwriting agreement had been valid and enforceable as a certain contract.
The primary position of the plaintiff is that the defendant was in breach of its underwriting obligations by about September 1997 and, despite the continuation of this breach during the course of the negotiations to arrange for the underwriting at times which were repeatedly deferred, a point came when it became apparent that the defendant was refusing to acknowledge any obligation to undertake the underwriting or to perform its obligations so amounting to a repudiation of its obligations, which repudiation the plaintiff accepted a short time later then terminating the underwriting contract. The plaintiff adopts the same position in relation to breach of obligations by the defendant if, despite its primary position, the only enforceable obligations arise because of estoppel rather than from the terms of the underwriting agreement itself. There is controversy over whether there was any repudiatory breach of the alleged underwriting obligations by the defendant and if so when, but the plaintiff contends for repudiation arising from the conduct of the defendant in May 1998 leading to an acceptance by it of that repudiation on or about 3 June 1998 or, alternatively, by 25 August 1998. The significance of this controversy, as submitted by the defendant, is that certain events occurred after May 1998 which, if there was an obligation to underwrite a share issue, entitled the defendant to activate one or more of the "drop‑out clauses" in the underwriting agreement and, consequently, to become relieved of any obligation to proceed with the underwriting. It will be necessary to consider in detail these "drop‑out clauses"; whether and when there was a repudiation accepted by the plaintiff; and, regardless of that, whether it was ever open to the defendant to invoke the "drop‑out clauses" and become relieved of its obligation to perform the underwriting.
With regard to the content and the quantum of the plaintiff's claim for damages there are many controversies about the various heads of damage and their amounts which, at this stage, are better left for explanation and attention later in these reasons.
During the period from July 1997 until March 1998 while the underwriting of the plaintiff's share issue was delayed, cash flow difficulties were experienced which led to the defendant advancing funds to the plaintiff to the extent of $2,200,000. In addition, the defendant also paid, on behalf of the plaintiff, liabilities which the plaintiff had incurred to third parties to an aggregate of $128,580.55. During the period when these payments were made by the defendant the parties treated them as being, in effect, advance payments to the plaintiff which would be credited as subscriptions for capital in the new share issue when that eventuated, although the defendant contends that until the time when this "debt" was converted to equity, the advances would bear interest at commercial rates and, as that conversion never occurred, interest at commercial rates continued to accrue on the advances.
These advances by the defendant to the plaintiff totalling $2,328,580.55, together with the claim for interest upon them, are the subject of the defendant's counterclaim. To this the plaintiff responds by admitting that advances to the plaintiff or to third parties on its behalf were made totalling $2,328,580.55 but denying that there was ever any agreement or obligation to pay interest upon them. In addition, the plaintiff contends that, by reason of the alleged breach of the underwriting obligation by the defendant it is relieved from any obligation to repay those advances. Alternatively, the plaintiff contends that, if any part of those advances is repayable, with or without interest, that liability can and should be set off against the defendant's primary liability to the plaintiff for damages for breach of the underwriting obligation. This claim for set‑off is itself disputed by the defendant which contends that the plaintiff is presently obliged to pay its liability on the counterclaim in full and can only prove in the liquidation of the defendant, for any liability for damages which it might establish in this action, ranking equally with other creditors of the same degree.

December 1996 Underwiting Agreement

The foundation of the plaintiff's claim that the defendant is under a contractual obligation to underwrite the share issue is an underwriting agreement between the parties dated 2 December 1996. The agreement of 2 December 1996 was the result of a series of agreements between the parties resulting from transactions which brought the Jade Creek Diamond tenements under the control of Striker, with a share issue from Striker being made to AGF, and with reciprocal financial support provided to Striker by AGF. It was this transaction which led to three members of the board of Striker (including the chairman) being nominated by AGF. Part of the transaction involved the underwriting by AGF of the exercise of the June 1997 options to subscribe for shares in Striker which, if exercised, would produce an amount of $10,200,000 in new share capital for Striker, on terms set out in the underwriting agreement. This "primary underwriting obligation" was subject to a number of conditions including a series of specified "drop‑out" conditions, the occurrence of which would, at the option of AGF, relieve it from any obligation to proceed with or complete the underwriting. It is common ground that one of the events allowing AGF to withdraw from this primary underwriting did occur and that notification of the existence of this "drop‑out" contingency was given by AGF on 10 July 1997 so terminating all of its obligations under this primary underwriting. However, the case for the plaintiff is that the same underwriting agreement of 2 December 1996 contained a "secondary underwriting obligation" for AGF to underwrite a substitute share issue as soon as possible and that it is this secondary obligation which AGF has failed to perform and which it eventually repudiated.
This secondary underwriting obligation contended for by the plaintiff was for the raising of $7,500,000 in share capital by the issue of ordinary shares as soon as practicable after 30 June 1997. The obligation arose, according to the plaintiff, under cl 10.2 of the December 1996 underwriting agreement (Exhibit 3) which provided as follows:
"In the event that the Underwriter terminates this Underwriting Agreement because of the occurrence of the contingency referred to in Clause 10.1(u), the Underwriter shall underwrite a new issue of shares by the Company, by pro rata offer, to all members of the Company, to raise a minimum amount of 7.5 million dollars ($7,500,000), by prospectus. That prospectus shall be issued as soon as possible after 30 June 1997. The Shares to be offered by the prospectus shall be offered at a price equal to at least ninety percent (90%) of the average of the closing prices for buying of Shares which are admitted to Official Quotation on ASX, as quoted in the daily trading statistics of ASX for each of the trading days during the month of June 1997. The Underwriting Agreement in respect of that pro rata issue shall contain contingencies for termination which are similar to those contained in this Underwriting Agreement apart from Clause 10.1(u)."
Obviously enough, cl 10.2 of the December agreement contemplated that:
•the capital to be raised by the share issue may be greater than the minimum specified of $7,500,000;
•the share issue would be accompanied by a prospectus;
•the subscription price for the shares to be offered may be greater than the minimum subscription price equal to 90 per cent of the average share trading on the ASX during the June month; and
•there would be a further underwriting agreement which would contain contingencies for termination "similar to" those contained in the December 1996 agreement (except for cl 10.1(u)).
The case for the defendant is that these contingencies, namely, an issue of potentially greater than $7,500,000; a share price possibly greater than 90 per cent of the historic June average; the contemplation that a further underwriting agreement would be executed; the need for a prospectus, the terms of which were left unspecified; and a reference to the terms in the new underwriting agreement containing contingencies for termination "similar to" those in the earlier underwriting agreement, all meant that the so‑called secondary underwriting obligation was uncertain, incomplete and expressly subject to further agreement. On this submission no binding obligation was created in respect of the secondary underwriting obligation by the December 1996 agreement (Exhibit 3) and the plaintiff is left suing on an unenforceable agreement.

The issues

It is now possible to identify the major issues arising in this action and in the counterclaim. They are:
(a)Was there an enforceable contract between the plaintiff and the defendant for the latter to underwrite a capital raising by Striker by the issue of shares to the value of $7,500,000 set out in the secondary underwriting provisions in cl 10(2) of the underwriting agreement of 2 December 1996?
(b)If so, has there been a breach of that obligation by AGF by a repudiation of its alleged obligations in or about May, alternatively August 1998, or at some other date, entitling Striker to recover damages for the losses and expenses thereby caused?
(c)If the alleged secondary underwriting obligation contained in the underwriting agreement of 2 December 1996, does not constitute a binding contract because, as the defendant alleges, it is uncertain or incomplete, has there nevertheless been an estoppel arising from the representations of the defendant and the conduct of the parties which prevents the defendant from relying upon the unenforceability of the alleged contract?
(d)If there has been such an estoppel, what is the relief necessary to give it proper effect: Is the plaintiff entitled to damages as if an enforceable contract had existed or is it limited to some more restricted and, if so, what remedy?
(e)Is the defendant entitled to judgment on its counterclaim for $2.328 million for advances made by it to the plaintiff for working capital and other payments during the period May 1997 to March 1998 and, if so, is interest recoverable on any part of that claim?
(f)In the event that the plaintiff establishes an entitlement to a money claim against the defendant, is the plaintiff entitled to set some or all of that claim off against an equivalent amount of the defendant's counterclaim (if established), notwithstanding that the defendant is in liquidation and that the plaintiff's claim has only been finally established and quantified after the commencement of the winding up?
(g)In the event that the plaintiff's claim for damages fails but the defendant's counterclaim succeeds, is the plaintiff entitled to defeat the counterclaim or reduce it by reason of the alleged estoppel?
The significance of the parties' contentions both in relation to the question of alleged uncertainty of the secondary underwriting obligation, and particularly with respect to the alternative formulation of the claim relying upon an estoppel, must be considered against the background of circumstances and relationships affecting both the plaintiff and the defendant in December 1996 when the underwriting agreement was made.
This is therefore an occasion when evidence relating to the factual background known to the parties at or before the date of the contract, including evidence of the "genesis" and objectively the "aim" of the transaction, is admissible: Prenn v Simmonds [1971] 1 WLR 1381 per Lord Wilberforce at 1383 ‑ 1385; Reardon Smith Line Ltd v Hansen‑Tangen [1976] 1 WLR 989; BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 so that in order for this agreement to be understood "it must be placed in its context" and not "isolated from the matrix of facts in which it was set" - per Lord Simon at 271 and Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 347 ‑ 352; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 429 - see also Mooregate Tobacco Co Ltd v Philip Morris Ltd [No 2] (1984) 156 CLR 414 at 435. Each of those cases dealt principally with questions of whether or not an implied term to a particular effect, should be regarded as having been included in a written document subscribed by the parties but the rule also extends to considering the meaning and effect of particular language chosen by the parties in their agreement, where it takes a meaning or shade of meaning from the context or from existing relationships between the parties. These are also considerations which are apt to allow the true meaning of the parties to be identified in circumstances where it is said that a contract is uncertain for want of content and, even more so, when particular conduct or representations by one or both of the parties in the setting of their mutual commercial relationships are said to give rise to an estoppel.

Australian Goldfields NL (In Liq) - Corporations Act, ch 5, Pt 5.6, Div 1A

The defendant, AGF, appointed voluntary administrators on 6 March 1998. The company later went into liquidation and liquidators were appointed on 25 November 1998. For the purposes of the winding up, the commencing date of the winding up is taken to be 6 March 1998 - Corporations Act, ch V, Pt 5.6, Div 1A, ss 513A to 513D. As the defendant company was in liquidation these proceedings could not be commenced without leave of the court. There is no formal evidence that leave was granted but counsel have informed me that an application for leave to commence these proceedings against the defendant in liquidation was made and that no issue arises in this respect. Accordingly, I accept that this action was commenced pursuant to leave sought and granted under s 471B of the Corporations Act.
The plaintiff's original claim for damages for $11,566,621,44 was set out in a proof of debt for that amount lodged by the plaintiff with the liquidators under s 553D of the Act. It is common ground that no decision by the liquidators had been made to accept or reject that proof of debt by the time these proceedings had commenced but that, in effect, this action has been treated by the parties as the vehicle by which the existence and quantum of that claim is to be determined. However, in the course of the trial the plaintiff modified its claim which had been subject to the proof of debt dated 13 December 1999 (Exhibit Q1(1)) and reduced that substantially to $6,393,729 (see Exhibit Q1(2)). It follows that the liquidators have not formally received or considered this amended claim as any proof of debt or claim lodged with them under s 533D. I raised this specifically with counsel during the course of the trial and was assured that no procedural point was taken in this regard and that these proceedings were being treated, with the consent of the liquidators, as the appropriate means for the determination of the existence and quantum of any such claim. I also enquired whether this may potentially have any adverse affect upon other creditors, but again was informed that no dividends had been paid during the course of the liquidation and that the reduction in the amount of the claim produced by this amendment would have no adverse affect upon existing creditors or persons claiming to be creditors of the company. Accordingly, these proceedings have been treated by the parties as the appropriate means for determining the existence and quantum of any claim by the plaintiff rather than by the process of rejection of a proof of debt and appeal which would apply in other circumstances under s 554A of the Act.

Relationship between Striker, AGF and Jade Creek Resources in 1996 and 1997

As a company involved in exploration for diamonds Striker was dependent for working capital upon equity raisings which, in turn, were dependent upon the quality and prospects of the diamond mining opportunities which the company had on hand. As the plaintiff was not producing any income in the short or medium term it was unable to borrow funds from banks or other lending institutions. In 1996 Striker held tenements at Ashmore which gave encouraging signs for diamond exploration. The company wished to raise approximately $6,000,000 to $8,000,000 in order to conduct a trial mine. The capital raising which was to finance this exploratory venture became the subject of the underwriting agreement of 2 December 1996 but that was part only of a larger series of transactions designed to accomplish that objective.
AGF's wholly owned subsidiary, Jade Creek Resources NL ("Jade Creek"), owned certain diamond tenements which were adjacent to Striker's Ashmore tenements and other gold tenements. Jade Creek's mining tenements for diamonds covered an area of approximately 1180 square kilometres within the north Kimberley Kimberlite province (see map - Exhibit 6) near Striker's tenements (map - Exhibit 11, p 11). In addition Jade Creek had an exploration licence near Sandstone in the east Murchison goldfield covering an area of about 220 square kilometres (the "Sandstone gold tenement"). In the latest accounts of AGF before December 1996, the defendant set a carrying value on its shares in Jade Creek at $1,080,000 (Exhibit 21, p 40). It was advantageous for both sets of tenements to be explored and developed as part of one overall project and for the several owners to contribute to the cost of this combined project.
This objective was accomplished by a series of three agreements between Striker and AGF each dated 2 December 1996. These were, respectively:
(a)the Underwriting Agreement (Exhibit 3);
(b)the Share Sale Agreement (Exhibit 4);
(c)the Financing Agreement (Exhibit 5).
The Share Sale Agreement, in effect, provided that:
-AGF would be entitled to transfer from Jade Creek the Sandstone gold tenement before completion;
-as a condition precedent, AGF would contribute capital to Jade Creek Resources by exercising 5,872,055 options over unissued fully paid shares in Jade Creek Resources NL at an exercise price of 20 cents per share - the objective of which, combined with cash at bank, would ensure that by the date for completion Jade Creek had clear funds in hand of $1,500,000
-AGF would sell its shareholding (all the issued shares) in Jade Creek to Striker in consideration for the issue of shares by Striker to the value of approximately $3,038,000 on the condition that, prior to settlement, AGF would take up additional shares in Jade Creek by the exercise of options described above.
The details of this transaction with respect to the sale of all the issued capital of Jade Creek to Striker was the subject of a lengthy joint announcement to the ASX and to the media by the plaintiff and the defendant on 3 December 1996 (Exhibit 6 and 7). For present purposes the following points of that announcement are pertinent:
"•AFN (AGF) has agreed to sell all of the issued capital of JCR to Striker for a consideration comprising the issue of 20,252,000 fully paid ordinary shares and 20,252,000 31 December 1999 options in the capital of Striker; subject to the approval of the members of Striker in general meeting.
•The assets of JCR at completion will comprise $1.5 million in cash at bank and all of its diamond tenements. AFN has also entered into an agreement to provide a short term loan of $200,000 to Striker for working capital until the sale and purchase is completed. AFN has also entered into an agreement to underwrite the exercise of all of the 30 June 1997 options currently on issue by Striker at an exercise price of 20 cents per share to assist Striker to raise up to $10.2 million subject to certain terms and conditions of the underwriting agreement.
•Upon completion of the sale and purchase of JCR, AFN will become the largest shareholder with approximately 19.9 per cent of the issued share capital of Striker. AFN expects that three of its nominees will be appointed to fill casual vacancies on the Board of Directors of Striker after the members of Striker have approved of the purchase of JCR. Mr Clayton Dodd (Chairman), Dr Robert Ramsay and Mr W Bergsma will continue as Directors of Striker.
•... The financial and corporate support of AFN as a major shareholder will enable Striker to be developed as a pure diamond company and to realise the potential and value of its diamond projects."
The Financing Agreement (Exhibit 5) of the three documents effecting the objective described above was for AGF to provide a loan to Striker in the sum of $200,000 repayable on 1 March 1997 together with interest at a rate of 10 per cent per annum calculated on a daily basis and its purpose was to provide Striker with working capital during the period required for completion of the sale and purchase of JCR (Exhibit 6, par 2.2). This loan facility was drawn down by Striker on 20 December 1996 and subsequently repaid on 7 February 1997 with interest (see Exhibit 21, p 52 - AGF 1997 Annual Report).
The Underwriting Agreement (Exhibit 3) is the underwriting agreement upon which the plaintiff sues in this action. In December 1996 the parties were obviously concerned mainly with the primary underwriting obligation, rather than the alleged secondary underwriting obligation which is the subject of this litigation. However, the joint announcement by the parties to the ASX on this aspect of the transaction provided:
"2.3Underwriting Agreement
At the date of this announcement ‑
(a)the authorised capital of Striker is $60,000,000 divided into 300,000,000 ordinary shares each of 20 cents par value;
(b)the issued capital of Striker comprises ‑
(i)81,517,436 fully paid ordinary shares ('the Issued Shares'); and
(ii)50,930,673 options each of which entitles the holder to subscribe for one fully paid ordinary share of 20 cents par value in the capital of Striker at an exercise price of 20 cents per share on or before 30 June 1997 ('the 1997 Options');
(c)the listed and quoted securities of Striker comprise ‑
(i)all of the Issued Shares; and
(ii)49,430,673 1997 Options.
AFN has entered into an agreement with Striker to underwrite the exercise of all the 1997 Options subject to commercial terms and conditions ('the Underwriting Agreement').
The Underwriting Agreement is subject to the condition precedent that the sale and purchase of JCR is completed in accordance with the Share Sale Agreement. Subject to the satisfaction of this condition precedent, AFN has the right to terminate its obligations to underwrite the exercise of the 1997 Options under the Underwriting Agreement in the event of the occurrence of any one or more of a number of events or contingencies normally found in commercial underwriting agreements. The contingencies are set out in full in clause 10 of the Underwriting Agreement, a copy of which accompanies this announcement. The contingencies include:
(a)Prior to the closing date for the receipt of option exercise forms, the All Ordinaries Index and All Resources Index of ASX falling by twenty (20) per cent or more below their respective point levels on the date of execution of the Underwriting Agreement.
(b)The closing price of buyers of issued shares of Striker admitted to Official Quotation as quoted in the daily trading statistics of ASX falling below twenty cents per share on 30 June 1997 and for more than five consecutive days during the month of June 1997.
If AFN terminates its obligations to underwrite the exercise of the 1997 Options, it will underwrite a new issue of shares by pro‑rata offer to members of Striker to raise a minimum of $7.5 million by prospectus at an issue price of not less than ninety per cent (90%) of average daily closing price quoted for buyers of the shares of Striker for the month of June 1997 as recorded in national trading statistics of ASX subject to the usual contingencies for termination contained in the underwriting agreement.
AFN will receive an underwriting fee of 5 per cent of the total amount payable for the underwritten securities."

For present purposes there are certain prominent features of this overall transaction. Clearly enough, it contemplated the exploration and development of the Striker diamond areas at Ashmore together with the adjacent Jade Creek tenements which, by virtue of the transaction, would be controlled by Striker through its new wholly owned subsidiary Jade Creek. Striker did not have the funds to undertake the proposed exploration activity from its existing resources and, indeed, needed an interim loan of $200,000 from AGF as working capital until the sale was completed. The proposed exploration and development programme of the tenements would be financed either by the exercise of Striker's 30 June 1997 options (not the 31 December 1999 options issued to AGF under the share sale agreement) to raise up to $10,200,000 which AGF then agreed to underwrite. However, if pursuant to rights conferred by the Underwriting Agreement, AGF terminated its obligation to underwrite the exercise of Striker's June 1997 options it would underwrite a new issue of shares by Striker to raise a minimum amount of $7,500,000.
This substitute arrangement (the secondary underwriting obligation) appeared to be the only alternative means then in view for Striker to finance the exploration and development programme which this composite transaction was designed to achieve, in the event that AGF withdrew from its primary obligation to underwrite the exercise of its June 1997 options. Put another way, if circumstances arose which justified AGF in withdrawing from its obligation to underwrite the exercise of Striker's June 1997 options then, unless the secondary underwriting obligation was legally enforceable according to its terms, Striker would have taken on the burden of exploring and developing its own and Jade Creek's diamond tenements without any committed source of funding. Furthermore, as a demonstration of the close financial dependence of Striker upon AGF, and of the latter's role as largest shareholder in Striker, AGF would nominate three directors for the board of Striker who would serve with three continuing directors of the plaintiff.
If Striker's 30 June 1997 options were fully exercised there would be sufficient capital to carry out the intended exploration of the Ashmore areas but, if not, an alternative source of capital would be needed. The likelihood of the June 1997 options being exercised depended on the quoted price of Striker on the ASX during the period immediately before the final exercise date because if the quoted share price of Striker at that time was below 25 cents ("out of the money") it was most unlikely that the option holders would exercise their rights to take up shares because of their ability to purchase shares more cheaply on the market. In December 1996 there was no certainty that, by the following June, those options would be "in the money" and, if not, that would leave AGF exposed on its primary underwriting obligation to exercise all those options itself in the absence of its finding other sub‑underwriters.

Terms of the Underwriting Agreement

The crucial paragraph upon which the plaintiff sues, cl 10.2 of the underwriting agreement, has already been set out in [10] above. However, there are other terms of the agreement which are also material. The underwriting agreement was prepared by the solicitor for the defendant and was formally executed by each of the parties under its corporate seal on 2 December 1996. The agreement commences with recitals recording details of the authorised and issued capital of Striker at the date of execution and confirming that its 50,930,673 issued options were due to expire on 30 June 1997 and might be exercised at any time prior to that date. The agreement also recited that Striker had requested AGF (referred to in the agreement as "the Underwriter") to underwrite the exercise of those options and that the defendant had agreed to do so upon the terms and conditions set out in the agreement. Within the definition clause of the agreement the options were described as being exercisable at 20 cents on or before 30 June 1997 and subject to the other terms and conditions of the issue of the options. The securities to be underwritten were the whole of the 50,930,673 options recited.
By cl 2.1 the defendant's obligations as underwriter were made subject to a condition precedent, namely, that on or before 31 January 1997 (or such other date as may be agreed between the parties), Striker should obtain approval of its members in general meeting to the company entering into and completing the Jade Share Sale Agreement, which had been defined as the agreement between the parties for the sale by AGF to Striker of all the issued share capital of Jade Creek Resources - the Share Sale Agreement mentioned in [20] above which was one of the three agreements constituting the combination of transactions intended to lead to the development of the Ashmore/Kimberley diamond prospects. This is an express recognition of the dependence of the underwriting upon the plaintiff's approval in general meeting of that venture. The formal obligation to underwrite the exercise of the options is set out in cl 3, the mechanism for the exercise of the options; dealing with any shortfall; and associated matters are dealt with in pars 4 ‑ 7 inclusive.
In cl 6, dealing with the procedure to be followed in the event of a shortfall of the exercise of the 1997 options in requiring notice at a prescribed time and manner to be given to the underwriter, sub‑cl 6.2 goes on to provide that within a specified time the underwriter shall lodge an application to the company for the number of shares equal to the amount of shortfall securities together with a bank cheque or cheques payable to the company for the amount necessary to subscribe for those securities at the rate of 20 cents per share and requiring those specific details to be provided. Importantly, sub‑cl 6.2 contains a provision prohibiting the defendant underwriter, in the eventuality that it is called upon to perform the primary underwriting obligation, from delivering any application for the issue of shares in the plaintiff the acceptance of which would breach s 615 or any other provision of the Corporations Law or Regulations or any other law. This is of importance because of the potential for the exercise of the underwriting obligation to increase the shareholding of the defendant/underwriter from its then 19.9 per cent holding of the total shareholding of Striker above the 20 per cent limit in circumstances which would precipitate an obligation to make a takeover offer (see ch 6, Pt 6.1 and Pt 6.2 of the Corporations Act and, in particular, s 606 and s 611 - the latter dealing with exceptions to that prohibition).
In the event that the defendant underwriter did not comply with the provisions of the agreement relating to shortfall securities cl 6.2 went on to deal with the situation, as follows:
"If the Underwriter fails for any reason to so deliver the applications in accordance with this clause, the Company shall convene a meeting of members for the Company to approve of the issue to the Underwriter, in accordance with the Corporations Law, of the balance of the Shortfall Securities. If the members of the Company do not approve of this issue, there shall be no obligation on the Underwriter to take up the balance of the Shortfall Securities. If the members approve of this issue, the Underwriter shall subscribe for, pay for and be issued the balance of the Shortfall Securities forthwith."
The remuneration of the underwriter is fixed by cl 8 which provides:
"8.Underwriting commission
The Company shall, within two (2) Business Days of the Underwriter complying with sub‑clause 6.2 or the Company receiving valid Exercise Forms for all of the Underwritten Securities together with payment in full thereof, whichever is the earlier, pay to the Underwriter by bank cheque an underwriting commission of Five hundred and Nine Thousand Three Hundred and Six Dollars ($509,306) which equates to five per centum 5% of the total amount that is payable to the Company for the Underwritten Securities."
And the costs of the underwriting are dealt with by cl 11, as follows:
"11.Costs of offer of the underwritten securities
All of the reasonable costs, charges, expenses and stamp duty (including, without limitation, the costs and fees of the solicitors to the Underwriter) of or in connection with the exercise of the Underwritten Securities, this Underwriting Agreement and of the preparation, printing, mailing and distributing of communication to optionholders and of general advertising and publicity shall be paid by the Company. Should the Underwriter terminate this Underwriting Agreement, the Company shall pay such amount of the said reasonable costs, charges, expenses and solicitors' costs and fees as shall have been then reasonabl[y] incurred by the Underwriter or for which liability then exists."
Time was declared to be of the essence of the underwriting agreement, even after extension by consent of any relevant time limits, by cl 16 which provided:
"16.Time
Time shall be of the essence in this Underwriting Agreement, unless the Parties hereto agree in writing to any time requirement being extended, but in such event time will again be of the essence of this Underwriting Agreement in relation to such time requirement as so extended."
And by cl 17 there was provision for severance of any part of the agreement in the event that it should be invalid or not enforceable, but providing that:
"17. ... all other provisions or part thereof which are self‑sustaining and capable of separate enforcement without regard to the invalid provisions, shall be and continue to be valid and enforceable in accordance with their terms."
The various contingencies which were identified as providing a basis, should any eventuate, for the defendant to withdraw at its choice from the underwriting obligation, the eventualities which the parties referred to as "drop‑out events", are specified in cl 10.1, as follows:
"10.Contingencies
10.1In the event of the happening of any one or more of the following contingencies after the Execution Date and prior to that date that is eight (8) Business Days after the Closing Date, the Underwriter may, at any time after becoming aware thereof, without cost or liability to itself, by notice in writing to the Company, terminate this Underwriting Agreement and be relieved of all its obligations hereunder, but no such notice shall operate to the prejudice of any liability of the Company arising out of any prior default by it hereunder. Any delay in giving such notice shall not be treated as a waiver of such right and a further notice or notices as aforesaid may be given notwithstanding that subsequently the relevant contingency ceases to exist and notwithstanding any activity on the part of the Underwriter which is consistent with the performance by it of its obligations hereunder. The contingencies referred to are:
(a)ASX gives a written notice that Official Quotation of the Shares to be issued pursuant to clause 6.2 will not be granted;
...
(c)apart from entering into and implementing the Jade Share Sale Agreement, the Company altering or announcing any intention to alter its capital structure or its memorandum or articles of association without the prior approval of the Underwriter;
...
(m)the occurrence of any material adverse change in the condition or financial position of the Company;
...
(q)there is any material breach of the undertakings referred to in Clause 9;
(r)prior to the Closing Date the All Ordinaries Index of ASX and the All Resources Index of the ASX falling by twenty per cent (20%) or more below their respective point levels as at the Execution Date;
...
(t)ASX imposing a suspension on trading in the securities of the Company; and/or
(u)the closing price for buyers of Shares, which are admitted to Official Quotation on ASX, as quoted in the daily trading statistics of ASX, falling below twenty (20) cents per Share and then for more than five (5) consecutive days during the month of June 1997 and then on 30 June 1997;
provided that nothing contained in this Clause 10 shall prejudice or nullify any claims for damages which the Underwriter may have against the Company for or arising out of any breach of covenant or failure by the Company to observe or perform the obligations on its part contained in this Underwriting Agreement and provided further that should the Underwriter terminate this Underwriting Agreement pursuant to this Clause 10, it shall thereupon cease to be entitled to payment of the underwriting commission pursuant to Clause 8 (but not the costs and fees incurred by the Underwriter as specified in Clause 11)."

Allegations of uncertainty and incompleteness

The submissions of the defendant with respect to the sufficiency and effectiveness of cl 10.2 of the underwriting agreement to impose an enforceable obligation to underwrite a new share issue, if the defendant terminated its underwriting of the June 1997 options, as it did, advance the following contentions:
•The obligation relates to a prospectus for shares at a price equal to at least 90 per cent of the average closing prices for Striker shares over a defined period, and that the expression "at least 90 per cent" is inherently uncertain. The defendant submits that a contrary conclusion could require it to underwrite an issue at a price well above 90 per cent of the average price at whatever price is demanded by Striker and that this is unrealistic because the greater the price the greater is the likelihood of a shortfall in the securities being taken up by existing shareholders, and the greater the likelihood of an impact upon the underwriter.
•An obligation to enter an underwriting agreement in terms similar to those contained in the underwriting agreement (apart from cl 10.1(u)) is also uncertain and, particularly, where there would need to be variations in relation to terms which are likely to be contentious, including:
•the closing date;
•the execution date;
•the definition of a share;
•the specification of the conditions precedent;
•the variation in the definition of the underwritten securities from that of the 1997 options to the new issue;
•whether or not the new share or rights issue to existing shareholders is to be renounceable or non‑renounceable;
•the share issue price; and
•the terms of the prospectus.
According to the defendant all these are terms upon which further agreement between the parties would be essential for there to be a new share issue and an enforceable underwriting agreement so that, in the absence of specified agreement or a mechanism for determining outcomes in the absence of agreement, that is no more than an agreement to agree - Tern Minerals NL v Kalbara Mining NL (1990) 3 WAR 486 per Ipp J at 496.
The defendant maintains that the provision in cl 10.2 of the underwriting agreement specifying that the underwriting agreement for the secondary obligation would contain contingencies for determination similar to those contained in the original agreement necessarily connotes variations and hence uncertainty - Mays v Roberts [1928] SASR 217. But, accepting that "similar" is an ambiguous word does not mean, and did not in Mays v Roberts mean, that its employment must necessarily result in an uncertain or unenforceable obligation or that it gives rise to an expectation that a court would attempt to make a contract between the parties, as submitted by the defendant - G Scammell & Nephew Ltd v HC & JG Ouston [1941] AC 251.
On the other hand the plaintiff points to the need to adopt a construction of a contract, even if ambiguous, which will preserve the validity of the contract and not destroy a bargain: Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101 at 113 where Ipp J observed:
"Finally, in determining whether contracts are void for uncertainty 'courts should be astute to adopt a construction which will preserve the validity of the contract' (per Mason J in Meehan v Jones (1982) 149 CLR 571) and 'courts should be the upholders of bargains and not their destroyers': see Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (at 14, 570), per Kirby P. A striking example of this approach is Ampol Ltd v Caltex Oil (Aust) Pty Ltd (1986) 60 ALJR 225."
The plaintiff's position is essentially that described by Burt CJ in Woodside Offshore Petroleum Pty Ltd v Atwood Oceanics Inc [1986] WAR 253 at 261 where the learned Chief Justice said:
"[Y]ou may enter into a final and binding agreement to sign a further contract in its terms, and by that contract to agree that it may contain further terms not inconsistent with the agreed terms and which are by the contract expressly or by implication required to be reasonable. It is the requirement of reasonableness which enables the court in the case of disagreement to settle the term and the term so settled does not depend upon or require any further agreement. But it is, I think, otherwise if the requirement of reasonableness is absent. Such an agreement does require some further agreement because in the case of disagreement there is no criteria by which the court can resolve it. In this case there is no requirement that the conditions to be inserted in the Assignment Agreement were to be reasonable."
There is no such stipulation in this underwriting agreement that the terms of the new underwriting agreement required for the performance of the secondary underwriting obligation were to be reasonable but, taking the agreement as a whole: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 per Gibbs J at 109 ‑ 110, it is evident that the secondary underwriting obligation, if it arose, was to be in substitution for the primary obligation as a means of securing the capital necessary for the exploration and development of the diamond tenements - that is, the same project for which the primary underwriting obligation, and the Share Sale Agreement were both directed to. Equally it is apparent, from the agreement as a whole that if the primary underwriting obligation was discharged, then the secondary underwriting and the new share issue would take place "as soon as possible after 30 June 1997" (cl 10.2) which, taken in conjunction with the obvious need for the working capital to be raised to enable the project to proceed is but another way of saying, in the context of this agreement, that all provisions relating to time were to be set on the basis that the capital would be available as soon as possible. Clause 16, which made time of the essence, and reinstates time as of the essence after any case of agreed extension emphasises that.
Significantly, the underwriting agreement of 2 December 1996 was, in relation to contingencies, to be a template for the new underwriting agreement and the essential terms of the new underwriting agreement were as specified in cl 10.2 imposing an underwriting obligation to raise an ascertainable amount of capital by a new share issue at a price to be agreed or determined as soon as possible. The question for decision is whether, in these circumstances, no binding obligation was intended or effected unless and until agreement upon the entire content of the new underwriting agreement, or at least in relation to those matters enumerated in [33] above, had been later achieved. To a degree this involves some determination as to whether or not the agreement of 2 December 1996 sufficiently identified all the essential terms of the new underwriting obligation, while leaving matters of detail to be resolved consistently with the principal obligations and the template which its own terms provided.

Conduct of parties

In addition to the matrix of background, genesis and commercial purpose of the contract, the plaintiff seeks to rely on evidence of the conduct of the parties following the execution of the underwriting agreement of 2 December 1996 and, in particular, following the termination of the primary underwriting obligation, including the statements made by the company, and officers of the defendant, to the ASX and to each other about the intended performance of the secondary share issue and underwriting obligation. It submits that this evidence is relevant to the issue of whether or not there was a binding and enforceable contract in that it discloses the intention of the parties, not merely at those dates subsequent to the making of the contract, but that those statements were indicative of the intentions of the parties prior to and at the making of the underwriting agreement in December 1996. So long as this "evidence of intention" is treated as a source to determine objectively what the parties' intention was, in the sense of intention to contract rather than as evidence of personal intentions, and in particular whether or not they intended to create legal relations, that procedure is permissible - see per Ipp J in Anaconda Nickel v Tarmoola Australia (supra) at 111 and following. See also Woodside Offshore v Atwood Oceanics (supra) per Kennedy J at 273.
There is some controversy as to this proposition and there are authorities each way on the issue (see Cheshire & Fifoot's "Law of Contract" 8th Aust ed, Butterworths at 10.16, including decisions of this Court). Compare Posgold (Big Bell) Pty Ltd v Placer (Western Australia) Pty Ltd (1999) 21 WAR 350 at 362 and Terex Resources NL v Magnet Petroleum Pty Ltd (1988) 1 WAR 144 at 160. In this case the evidence was tendered without objection (although it was obviously admissible on the estoppel issue) and it seems appropriate, therefore, that I should examine it, but with care in order to identify whether or not it constitutes a clear indication of a recognition of contractual obligations by the defendant and on that basis I address it - see also Gebauer Nominees Pty Ltd v Cole [2006] WASC 57; Sansom Nominees Pty Ltd v Meade [2005] WASC 9 at [96] and Roehampton Developments Pty Ltd (in liq) v FAI General Insurance Co Ltd [2000] WASC 235.
In late June 1997, but before AGF's termination of the primary underwriting obligation on 10 July 1997, a meeting of directors of Striker took place. The minutes (Exhibit 20) reveal that attention was given to the requirements of the auditors who were preparing an audit certificate for Striker for the year ended 31 March 1997. One of the issues which the auditors had voiced was whether or not it was appropriate to certify the company's accounts on the basis that it was a viable going concern in view of the reliance which the directors were placing on the underwriting agreement with AGF to raise the finance necessary to undertake the Ashmore/Kimberley exploration development programme. At the auditor's suggestion, a note in the accounts was made referring to this so avoiding any need for the auditors to mention it in the audit report. The auditors had also requested a letter from AGF confirming the underwriting obligation and a letter on the letterhead of the defendant dated 25 June 1997 addressed to the auditors was prepared and delivered, which stated:
"Striker Resources NL Underwriting Agreement
For audit purposes we confirm that Australian Goldfields NL (AFN) has the capacity to meet its obligations under the terms of the Underwriting Agreement between AFN and Striker Resources NL which is subject to certain conditions as set out in clause 10 of that agreement. This agreement provides for a minimum underwriting commitment of $7.5 million.
Further, AFN will, if necessary, provide sufficient short‑term funding to enable Striker Resources NL to meet its operating commitments until the proceeds from the capital raising are received. This capital raising is expected to be completed during September 1997.
Yours faithfully,
Cyril Quek
Managing Director"
Although the discussion took place at a board meeting of the plaintiff on 25 June 1997, and the letter from the defendant was on the same date, that is before the termination of the primary underwriting obligation under the underwriting agreement of 2 December 1996, it is clear that this expression of support given by the defendant referred to the secondary underwriting obligation and not to the first. This is because, first, the minutes of the directors' meeting show that the share issue then under discussion was in respect to a pro rata new issue of shares, and not the conversion of existing options to shares. Second, the reference in the letter from the defendant of 25 June to a minimum underwriting commitment of $7,500,000 was to the secondary underwriting obligation to issue new shares to that value contained in cl 10.2 of the underwriting agreement, as distinct from the conversion of the June 1997 options which would, had that occurred, have raised up to $10,200,000.
The letter from the defendant dated 25 June 1997 giving that support and directed to the auditors was signed by the defendant's managing director Mr C Quek who was then also a director of the plaintiff and present at the director's meeting held that day which addressed this subject.
Furthermore, in Striker's 1997 Annual Report (Exhibit 11) which was published and distributed before the general meeting of the company held on 15 August 1997, an initial statement from the chairman, Mr Keith Wong, was included. He had been appointed as a non‑executive director of the plaintiff on 31 January 1997 and at the date of the report was currently the deputy chairman of AGF. His statement (Exhibit 11, p 1) included the following paragraph:
"Equally important, Striker entered into financing agreements with AFN through which it will proceed with a fully underwritten capital raising of a minimum of $7.5 million through a new offer and issue of securities to shareholders."
And, at 16 ‑ 17 of that report, in a joint directors' report signed by Mr Dodd and Dr Ramsay, there is the passage:
"Should Australian Goldfields NL terminate its obligation to underwrite the exercise of the 30 June 1997 options, it will underwrite a new issue of shares by pro‑rata offer to members of Striker Resources NL to raise a minimum of $7.5 million by prospectus."
And, again, at 33 of that report under the company's notes to the accounts, there is the passage:
"If AFN terminates its obligation to underwrite the exercise of the 1997 Options, it will underwrite a new issue of shares by pro‑rata offer to members of Striker to raise a minimum of $7.5 million by prospectus. That prospectus shall be issued as soon as possible after 30 June 1997. The shares to be offered by the prospectus shall be offered at a price equal to at least ninety percent (90%) of the average daily closing price quoted for buyers of the shares of Striker for the month of June 1997, as recorded in national trading statistics of ASX subject to the usual contingencies for termination contained in the underwriting agreement.
AFN will receive an underwriting fee of 5 percent of the total amount payable for the underwritten securities."
A similar statement is to be found in note 1(a) of the notes to the plaintiff's accounts (Exhibit 11, at p 21) concerning the underwriting of a share issue for $7.5 million by AFG if it terminated its obligations to underwrite the exercise of the 1997 options. That note proceeded to record that:
"Taking the Underwriting Agreement into consideration and their knowledge of the state of affairs of the Company the directors are of the opinion that it is appropriate to prepare the accounts of the Company on a going concern basis. Further, the funds raised pursuant to the terms of the Underwriting Agreement will enable the Company to provide financial support to its controlled entities."
This report must be taken to have been approved by the board of the plaintiff, including the three directors who were also directors of AFN, and it is evident that two of those directors, namely Messrs Wong and Quek, specifically endorsed those statements of commitment.
Next, when the defendant AGF terminated its primary underwriting agreement in respect of the June 1997 options in Striker it made an announcement to the AGF of its intention to enter into a new underwriting agreement with Striker in terms which corresponded with cl 10.2 of the December 1996 agreement. That announcement dated 15 July 1997 (Exhibit 26) is on the letterhead of AGF and reads as follows:
"Announcement to Australian Stock Exchange
Underwriting of Securities of Striker Resources NL
The Directors of Australian Goldfields NL ('AFN') hereby advise that AFN will enter into a new underwriting agreement with Striker Resources N.L. ('Striker') to underwrite a new issue of shares by pro‑rata offer to members of Striker by prospectus to raise a minimum of $7.5 million as provided in the Underwriting Agreement between AFN and Striker dated 2 December 1996 ('the Former Underwriting Agreement').
AFN terminated the Former Underwriting Agreement under which AFN was to underwrite the exercise of 50,930,673 30 June 1997 options on issue by Striker at an exercise price of 20 cents per share. The Former Underwriting Agreement was terminated pursuant to clause 10.1 on the grounds that the quoted price for buyers with the listed shares of Striker was below 20 cents per share for more than 5 consecutive days during the month of June 1997 and then on 30 June 1997.
The details of the new Underwriting Agreement and the terms and conditions of the new issue by Striker will be released in due course.
Yours sincerely
Australian Goldfields NL
Cyril Quek
Managing Director"
AGF published its Annual Report for 1997 (Exhibit 21) before its annual general meeting of 21 October 1997. At p 50 of the report in the notes dealing with events subsequent to the close of the previous financial year but before the publication of the report, there is a passage:
"(a)Underwriting of Securities of Striker Resources NL
On 15 July 1997 the Company announced that it would enter into a new Underwriting Agreement with Striker Resources NL to underwrite a new issue of shares by pro‑rata offer to members of Striker Resources NL by prospectus to raise a minimum of $7.5 million."

Corporations Law - takeover provisions

It is convenient at this point to refer to one other aspect of the defendant's contention that the secondary underwriting obligation in the December 1996 underwriting agreement is uncertain or incomplete. Whether the proposed new shareholding would be likely to produce a situation where the defendant, as underwriter, was obliged to take up a large proportion of the new share issue because of lack of response from existing shareholders or the market and, in the process, exceed the 20 per cent shareholding and trigger the takeover provisions of the Corporations Law, was likely to depend upon the price at which the new shares were offered for subscription. More precisely, it would be likely to depend on the differential, if any, between the price at which the new shares were offered for subscription and the market price for existing shares listed on the ASX before and during the period when the offer was open. If the new shares were priced below the market value then commercial factors reveal that it would be likely that all or most of the existing shareholders would take up their pro rata entitlements under the new issue. However, the closer to the market value and, in particular, if the new shares were priced at or above the market value, the less would be the likelihood of existing shareholders taking up their entitlements - in this latter case the share issue would be "out of the money". In that latter situation there would be the probability that the underwriter may be required to take up a large proportion of the new share issue and, in the process, exceed the 20 per cent shareholding threshold. This could be avoided, of course, if there were sub‑underwriters or new shareholders who would accept a placement but only if those others were not "associated" with the defendant.
None of this necessarily would require the plaintiff to convene a meeting of shareholders to obtain approval for the defendant to take up more than its pro rata entitlement of shares in the new issue as underwriter, nor infringe the takeover provisions of the Corporations Law. Section 611 of the Corporations Act provides exemptions to the general prohibition in s 606 against a person increasing his or her voting power beyond the 20 per cent level. Relevant exemptions in this context are to be found in items 7, 10 and 13. Item 7 provides an exemption for an acquisition approved previously by a resolution passed at a general meeting of the company if no votes are cast in favour of the resolution by the person proposing to make the acquisition and their associates or the person (if any) from whom the acquisition is to be made and their associates - the so‑called s 623 meeting - see Corporations Law s 623 (as it applied before the 1999 CLERP amendments). Item 10 provides an exemption for share acquisitions made pursuant to a rights issue made to all shareholders. A number of conditions must be met and the exemption extends to an underwriter or sub‑underwriter of such an issue. The exemption in item 13 is for an acquisition that results from an issue under a disclosure document of securities in the company in which the acquisition is made if the issue is to a person as underwriter to the issue or sub‑underwriter and the disclosure document disclosed the effect that the acquisition would have on the person's voting power in the company.
In the setting of this new share issue and the defendant's underwriting obligation, one would expect that if the defendant was called upon to take up more than its pro rata entitlement to shares in the new issue because of its role as underwriter, it would have the benefit of the exemption under items 10 and 13 and that the disclosure document (in this case the prospectus for the issue) would include appropriate terms notifying shareholders of the potential effect of such an acquisition by the underwriter, and that this requirement would be no more than compliance with the application of the law in respect to the conduct of such an underwritten issue. In other words, this is not a matter which would require agreement between the plaintiff and the defendant as part of the underwriting or the arrangement of the share issue but, rather, it would be an incidental obligation imposed by law upon an agreement to underwrite a share issue in such circumstances. In that case the absence of any specific provision in the underwriting agreement for this contingency does not, in my view, constitute an area of uncertainty or incompleteness such as would result in invalidity of the underwriting agreement.
However, counsel for the defendant, in the course of submissions (t/s 759 ‑ 765) at one point appeared to suggest that, despite the apparent exemption available under items 10 and 13, the plaintiff in this proposed underwritten share issue may be obliged to hold a s 623 meeting in order to obtain shareholder approval for an acquisition by the defendant of more than its pro rata entitlement in the new share issue in order to satisfy item 7 and that this potentiality meant that some provision in the new underwriting agreement or some further agreement between the parties to the litigation would be necessary to make provision for a s 623 meeting - in counsel's submission cl 6.2 of the original underwriting agreement would need some revision or adaptation to these new circumstances.
It is not exactly clear why a s 623 meeting would be needed in order to secure exemption from the provisions of s 606 under item 7 when an apparent unconditional exemption is available under item 10 or 13. The implication in the submission from counsel for the defendant was, however, that ASIC or ASX might regard a new share issue resulting in a larger than pro rata share acquisition by the defendant (particularly if the issue price was at or above the market value for the shares) as a disguised bid for control. The implication in the submission was that if it was open to the authorities or others to suspect that a bid for control was the reality behind this share issue and that it was not a genuine underwriting, then a s 623 meeting would be essential. That may be true if the hypothesis is accepted but there was no suggestion in the evidence, nor in the reactions of the market from the time of the December 1996 announcement that any part of this capital raising, which always had the potential to enlarge the defendant's holding to 20 per cent or beyond, was a disguised bid for control and I do not see any reason why I should accept that hypothesis or make a finding which would involve a conclusion that the parties were engaged in an attempt to avoid the provisions of the Corporations Law by deceit. Even if such a finding were to be made, the conclusion would be that the underwriting could not proceed unless it was approved by Striker in general meeting in a manner required by the then s 623 of the Corporations Law.
On the basis that a contract between parties to conduct an underwriting which, otherwise, is on fixed an enforceable terms, also involves an obligation to do all that is necessary to effectuate the completion of the agreed undertaking, there is no reason to suppose that the existing contract (if enforceable) would not have required the plaintiff to hold a s 623 meeting, if that had, as matters developed, been considered necessary and, also, required the defendant to accept that its obligations were, in that eventuality, subject to due compliance with the law - see MacKay v Dick (1881) App Cas 251 at 263; Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607; Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 at 137 ‑ 138, and Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635 at 659.
In the course of further discussions between representatives of the plaintiff and the defendant during early 1997 it was evident that the plaintiff did not consider that any provision need be made in the proposed new underwriting agreement for a s 623 meeting (see draft underwriting agreement despatched under cover of letter 1 May 1997 - Exhibit 91). In the end the defendant does not appear to have pressed any proposition to the effect that the underwriting agreement was uncertain or incomplete because of the lack of any express reference to the potential need for a s 623 meeting or its equivalent. Therefore, it is perhaps unnecessary for me to take this issue any further. However, I should record my conclusion that I do not consider that any incompleteness or uncertainty in the underwriting agreement arises or could arise because of the potential for the underwriter to take up more than its pro rata proportion of the new share issue to such an extent as would take it beyond the 20 per cent threshold of shareholdings in the plaintiff. This is because I regard the situation as being covered by the exemptions contained in items 10 and 13 of s 611 of the Corporations Act or, if for any reason these exemptions were not applicable, because of the need in those circumstances for the parties to secure a resolution of the shareholders of Striker which would satisfy the requirements of item 7 of s 611. The need to comply with the formalities to satisfy each of those conditions would, in any eventuality, be part of the obligations necessary to render the underwriting agreement effective.

Plaintiff's submissions concerning uncertainty

The position adopted by the plaintiff in relation to the defendant's contentions that the secondary underwriting agreement is uncertain or incomplete can now be stated. Striker submits that the new underwriting agreement is required to contain contingencies for termination which are "similar" to those contained in the existing underwriting agreement, apart from cl 10.1(u). Clause 10.1 defines the contingencies for the termination and those contingencies assume the existence of other clauses in the existing underwriting agreement, namely, cl 10.1(a) refers to cl 6.2 and cl 10.1(q) refers to cl 9. Hence, so the plaintiff submits, if a new underwriting agreement is to contain similar termination contingencies the new agreement must also contain the clauses of the existing underwriting agreement expressly referred to in the agreement of 2 December 1996 (Exhibit 3). Further, upon the plaintiff's approach, the operation of the contingencies in cl 10.1 is governed by the final words of that provision, which state that should AGF terminate the underwriting agreement pursuant to cl 10, it shall thereupon cease to be entitled to the payment of the underwriting commission pursuant to cl 8 but not the costs and fees incurred by AGF as specified in cl 11. As the submission runs, this necessarily provides that the new agreement will contain clauses to the effect of the existing cls 8 and 11. Clause 8 deals with the underwriting commission payable, cl 9 provides for the covenants by Striker and cl 11 covers underwriting costs. Hence, the very terms of cl 10.2, in the plaintiff's submission, address and provide for the existence of provisions dealing with underwriting commission, termination contingencies, other costs of underwriting and covenants by Striker and so supply the content on those subjects alleged to be absent, or subject to further agreement, by the defendant. According to the plaintiff, this construction is supported by cl 10.2 which refers to the underwriting agreement in respect of that pro rata issue which, by cl 1.1, is defined to mean the existing underwriting agreement - an indication that, subject to minor variations as necessary, the December 1996 underwriting agreement shall provide the model and content for the "new underwriting agreement".

Counsel for Striker accepted that none of these items represented a claim for damages arising from AGF's breach of its underwriting obligation under the agreement of 2 December 1996 but, rather, that each was an alleged transaction giving rise to an independent cause of action for the recovery of moneys paid for, or to the use of, the defendant. Counsel for AGF took no objection to the incongruous way in which these claims were advanced and, in effect, agreed that the merits of the plaintiff's claim for these amounts should be determined in these proceedings, notwithstanding that the claims were unrelated to the breach of contract alleged. In the circumstances it is both appropriate and convenient that I should determine the claims on this footing.
With regard to the first group of claims totalling $22,364.18 for tenement administration, the details are set out in Striker's invoices forming Exhibit Q41. However, there was no evidence to establish what work was done; that it was done at the defendant's request; or that the defendant ever ratified or accepted the benefit of the work. In those circumstances this component of the claim must fail.
The second component of $25,529.53 represented liabilities incurred by Jade Creek before the shares in that company were acquired by the plaintiff. At that time, because Jade Creek was a wholly owned subsidiary of AGF, it was the practice for AGF to pay its expenditures directly. When Striker acquired Jade Creek this was expenditure which had been incurred but not paid and, as Mr Hart said, Striker paid it in a spirit of goodwill. The fact of the matter is that the liability for the payment of Jade Creek's debt remained with Jade Creek both before and after all the shares in that company had been acquired by Striker. If Striker sought an obligation that AGF should pay the pre‑takeover liabilities of Jade Creek then that would require a distinct agreement in that respect which one would have, perhaps, expected to find in the Share Sale Agreement between the plaintiff and the defendant. In the absence of such an agreement to indemnify Striker for any liabilities of Jade Creek it is not open to Striker to impose such a liability on AGF. This claim must fail.
The third component of item 13 is the $11,209.73 paid by Striker to Diatech. This again was the discharge by the plaintiff of a liability of Jade Creek incurred by the latter before the takeover. It is a transaction of exactly the same character as that just previously discussed and the claim must fail for the same reasons.

Summary of findings on damages

To recapitulate, in summary form, I consider that the plaintiff has established part, but not all, of its claim for damages and that the damages proved, using the numbering selected by the plaintiff in Exhibit Q1(2) are:
Item 1  $2,630,012
Item 2  $238,255
Item 3  $66,615
Item 4  $262,657
Item 5  $66,821
Item 6  $6,169
Item 7  $60,130
Item 8  Nil
Item 13              Nil
Total  $3,330,659
No distinct plea is made in the statement of claim by the plaintiff for interest upon any part of the damages claimed, although interest may be allowable as part of the damages claimed under the doctrine in Hungerfords v Walker (1989) 171 CLR 125 and also under s 32 of the Supreme Court Act. Because AGF's counterclaim includes a component for interest on the interim advances it is necessary to address the question of whether interest should be awarded in respect of any part of the plaintiff's claim because of the plea of set‑off. If this is not done then the counterclaim may be increased by a component of interest up to the date of judgment in circumstances where a set‑off is claimed against a claim of damages, the quantification of which is arrived at by taking into account only events up to the latter part of 1999 when the last component of the plaintiff's damages was incurred.
Another way of presenting the issue is to enquire whether, if there is to be a set‑off, the quantum of the defendant's claim should, for the purposes of the set‑off, be determined at the same date when the whole of the plaintiff's damages finally accrued or whether the defendant's claim may be permitted to be enlarged by interest which accrues upon it from then on. By analogy with the computation of entitlements to interest in claims of a personal injury where the defendant may set off pre‑payments of lost wages or medical expenses received by the claimant as workers' compensation, and be liable to pay interest only on the balance after the set‑off - Pheeney v Doolan (No 2) [1977] 1 NSWLR 601 and Haines v Bendall (1991) 172 CLR 60 - it seems that a claimant should not have the benefit of interest accruing upon a claim which is wholly the subject of a set‑off. The appointment of the administrators to the defendant in March 1998 does not affect the position because the control of the assets which the administrators thereby acquired was subject to equities of which a right of set‑off is one - Young v Kitchin (1878) 3 Ex D 127 and Government of Newfoundland v Newfoundland Railway Co (1888) 13 App Cas 199 and Meagher Gummow and Lehane's "Equity Doctrines and Remedies" 4th ed, at 938 ‑ 939.
To ensure that any set‑off is truly effective by giving equal recognition to the opposing claims requires some recognition of the timing of those claims where, as in the present case, one of them would steadily increase because of an entitlement to interest. This necessary result could be achieved by selecting a date for the set‑off which maintains the equivalence of both claims. In the present case that can be done by giving effect to the set‑off when the defendant first made demand for payment of the interim advances in June 2000 or, if interest is to be permitted on the defendant's counterclaim, to match this with an appropriate award of interest accruing on the plaintiff's claim up until the date of judgment.
Because the issue of interest in the setting of a proposed set‑off was not directly addressed by the parties, either in their pleadings or in their submissions, it seems that the preferable course to take is to direct a set‑off of the respective entitlements of the parties, without any interest component. In the particular circumstances of this case the plaintiff's claim overtops the defendant's counterclaim where it is only upon the counterclaim that a claim for interest is advanced. Treating the claims as being set‑off in the manner described will exhaust the defendant's counterclaim and, with it, any accruing right to interest. That being so, there is no need to introduce any component of interest into the plaintiff's claim to maintain parity and this coincidence avoids the incongruity of doing so when such a claim has not been expressly pleaded or addressed by the defendant. The result will be that the plaintiff has an entitlement to damages for the surplus after the set‑off but without interest.

Counterclaim

As previously noted the plaintiff admits that it has received advances from the defendant to the total of $2,200,000 which, when paid, were intended to be repaid out of the $7,500,000 capital raising fully underwritten by the defendant but which has never eventuated. The plaintiff further admits that the defendant has paid various third parties for liabilities incurred by the plaintiff and that these payments were also originally intended to be repaid out of the fully underwritten share issue. Those payments, totalling $128,580.55, were at issue during the course of the trial but were ultimately agreed by the plaintiff. The details were not strictly proved because of the agreement but were supported by the schedules to a letter from Messrs Taylor Woodings dated 10 August 1998 which, although only marked for identification as "Q43" should, in my view, because of the agreement accepting the figures advanced, be treated as an Exhibit Q43.
It follows from these agreements that the defendant has established its counterclaim in the amount of $2,328,580.55, representing the principal moneys advanced.
Two questions remain, namely, whether in view of the alleged estoppel this sum is repayable at all and, if it is, whether any part carries interest as claimed by the defendant. For the reasons set out when dealing with the alternative claim for estoppel, I am satisfied that these amounts are recoverable and that it is not unconscionable for the defendant to recover these moneys so long as compensation, in the form of damages, is paid by the defendant for the breach of contract involved by the defendant failing to undertake the underwriting.
This leaves the defendant's claim for interest upon these advances.

Interest on counterclaim

For interest to be recoverable upon any part of the counterclaim of $2,328,580.55 it is necessary for the counterclaiming defendant to prove that there was an express or an implied agreement by the plaintiff to pay interest on some or all of these moneys or to establish a discretionary entitlement to interest under the provisions of s 32 of the Supreme Court Act 1935 or to identify another basis for the award of interest. No question of an entitlement to interest in equity has been raised or could be raised in this case. If there is an express or implied agreement to pay interest there will be no power for interest to be awarded under s 32 - see s 32(2). In considering this claim it is necessary to distinguish between the series of advances of capital made by the defendant to the plaintiff totalling $2,200,000, on the one hand, and the series of payments of debts or other expenses incurred by the plaintiff but discharged on its behalf by the defendant making up the balance of $128,580.55.
No written agreement relating to the advances of $2,200,000 was ever signed by the parties. The only record of the payments is Exhibit 113, the plaintiff's general ledger, where the receipts are recorded. However, the solicitors for AGF, Messrs Stark, Swann and Nolan, prepared drafts of proposed agreements between the defendant and the plaintiff relating to financial accommodation to be provided by AGF and for liabilities resulting to be charged upon assets of the plaintiff and secured by a guarantee in indemnity from New Sage. These are respectively:
•Draft Financing Agreement (Exhibit 116);
•Draft Deed of Guarantee in Indemnity (Exhibit 115);
•Draft Deed of Charge (Exhibit 114)
These were submitted to Striker on or about 13 August 1997 for consideration and included provision for the payment of interest at 10.95 per cent. Mr Hart did not reject the proposal for the payment of interest and the defendant has submitted that this suggests that an agreement to pay interest at 10.95 per cent may have existed between the parties or, was not unacceptable to Striker. However, the preparation of those documents and their submission to Striker occurred at a time when the proposed fully underwritten share issue was expected to take place in the immediate future, that is before the September 1997 board meeting at which the AGF representatives proposed and achieved a delay of the share issue until not later than 31 March 1998. The financing proposals which these documents addressed were, therefore, for a shorter term and for a smaller accommodation - approximately $350,000, whereas, from September 1997 onwards it became evident that advances up to $3,000,000 may have been necessary and would be provided.
This change in time scale led to discussions about the issue of the commercial note to AGF for accommodation advances of up to $3,000,000, and I am satisfied that it was this altered proposal which resulted in discussions between representatives of the parties in October 1997 about borrowing money at commercial rates. Mr Clayton Dodd, however, denies that he ever agreed, or would have agreed, to pay interest on the interim advances of $2,200,000 and there was no evidence to contradict him. I regarded Mr Dodd as a thoroughly reliable, honest and meticulous witness and I accept his evidence. The fact that the draft of the proposed convertible note agreement provided for the payment of interest does not detract from this conclusion because it was linked to the underwriting and neither proceeded. There was no evidence from Mr Swann, the defendant's solicitor, nor any other representatives of the defendant and had there been an oral agreement to pay interest as counsel for the defendant submitted was probable, one would expect to have evidence of it from one or more of those sources. Counsel for the defendant further submits that an agreement to pay interest can be implied because of the course of dealings between the parties, but this was not pleaded nor pressed by any evidence to suggest this.
It is true that, in a commercial setting, the advance of money by way of loan by parties dealing at arm's length can ordinarily be expected to imply an agreement to pay interest on the loan at agreed or ascertainable rates - this is simply the way of commerce because, otherwise, there would be no benefit and only risk of prejudice to the lender. However, the setting of the transactions which led to these advances was, in material respects, different from that of a borrower and lender dealing with each at arm's length. In the first place the defendant had a substantial interest in the welfare and success of the plaintiff and its operations, holding as it did a large interest in the shareholding of the plaintiff. The defendant was, therefore, indirectly interested in the continued successful operation of the plaintiff and its proposed undertaking to explore the Ashmore mineral fields for diamonds, that is, in the performance of the particular exploratory activities which this capital raising was intended to finance.
Secondly, in a setting where it was anticipated that the share issue would proceed, I am satisfied that the mutual understanding of the parties was that these advances, although initially debts repayable on demand, would not in reality be repaid but, rather, would be converted to equity in exchange for an agreed value of an equivalent number of shares in the proposed issue which the defendant was to underwrite. In that eventuality there would be no thought of, let alone any entitlement to, interest upon the moneys advanced from the time when those loans were converted to equity in the form of new shares. From then on the defendant's interest in the plaintiff would be solely as a shareholder and not a creditor.
That leaves the possibility of an agreement arising by implication to pay interest for the duration of the debt, that is, from the dates of the respective advances until the point of conversion of the debt to equity. Again, I do not consider that any such arrangement is consistent with the commercial objectives which I am satisfied were being pursued by both parties. These payments were in the nature of emergency relief, to tide the plaintiff over until the capital raising then in prospect could be effected and completed. From the plaintiff's point of view, the time for the capital raising was already well overdue and this facility was only a temporary and very short‑term measure. I am satisfied that this was also the way in which it was characterised by the defendant at the times the advances were made although, as the defendant's liquidity position deteriorated and insolvency threatened, it seems that there was a change of heart and efforts were made to defer the capital raising and the consequent obligation to subscribe for further securities in the plaintiff. That, however, was a tactical position developed by the defendant and its officers as its financial position worsened and does not, in my view, reflect the actual agreements, express or tacit, reached when the advances were agreed upon and made.
That then leaves the question of whether, in the events which happened, the failure of the underwriting and share issue means that there is an implied agreement or other obligation to pay interest by the defendant upon these advances from the time when it became obvious that the share issue would not occur.
Had the contract to underwrite the issue of shares been performed then these initial advances would have been converted to equity and there would have been no question of any entitlement to interest on the capital so subscribed by the defendant. This being so, the commercial indications, indeed any implications which might be drawn from the commercial objects of the transaction and the factors which led to the advances, tell against any common intention that there should be a payment of interest upon the moneys if they were not converted to capital at or about the time originally contemplated. This is matched by the fact that the remedy for the defendant as lender in those circumstances would be to demand repayment of the loan, perhaps not upon an immediate demand without prior notice but after a reasonable period, when the commercial objective of conversion from loan to capital was clearly no longer likely to be effected.
Another feature which tells against any obligation for the plaintiff to pay interest upon these advances after the date of expected conversion from debt to equity had passed, is that the failure of the anticipated intention to convert the loan into shares was due, as I have found, to a breach of contract by the defendant in failing to meet its underwriting obligations under the contract. To imply an agreement to pay interest in those circumstances would, in a limited sense, allow the defendant to benefit from its own unilateral breach of contract and the difficult position in which that breach had placed the plaintiff.
Similarly, to grant interest under s 32 of the Supreme Court Act in these circumstances would be to allow the defendant to derive a benefit from its breach of contract unless this additional expense, itself a loss or damage flowing from the self same breach of contract, was recoverable by the plaintiff as part of its damages. If appropriate damages are awarded then the plaintiff would be compensated for this additional expense. The question then is whether, if after proper compensation in the nature of damages is awarded to the plaintiff, Striker should also benefit by having capital for its use, without interest, from the defendant after a point when it can either have been expected to adjust for the loss and damage which it suffered, or is entitled to receive compensation, that is damages, for that breach of contract.
This brings sharply to focus the nature of the defendant's counterclaim for the recovery of the moneys advanced. As there was no express agreement to repay those moneys because it was never contemplated that the relationship of debtor and creditor should remain between the plaintiff and the defendant it is necessary to look beyond the terms of contractual obligations to identify the remedy which the defendant can advance for the repayment. While the defendant counterclaims in debt, that cause of action can be raised in many circumstances when money becomes payable whether under contract or otherwise - demonstrating the breadth of the old form of action in debt - see Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 567 ‑ 568 and the common law count for money had and received - Moses v Macferlan (1760) 2 Burr 1005 at 1012; 97 ER 676 at 681.
In essence the defendant's counterclaim is for restitutionary relief following upon the failure of the contract to subscribe for capital due to the defendant's own breach - see Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd [2006] VSCA 6; (2006) V Conv R 54‑713 per Chernov JA at [9] ‑ [13], Schmierer & Anor v Taouk [2004] NSWSC 345; (2004) 207 ALR 301 - SCNSW White J and Spangaro v Corporate Investment Australia Funds Management Ltd [2003] FCA 1025; (2003) 47 ACSR 285 per Finkelstein J.
Once the agreed underlying commercial purpose of the contract had failed, even when due to the breach of contract by the defendant, the defendant became entitled, upon remedying the breach by the payment of damages or otherwise, to credit for the moneys advanced. Had the contract been performed credit would have been provided by the conversion of the debt to shares in the plaintiff company. Where that is no longer possible the credit becomes an entitlement to restitution of the moneys which had been paid for a specific purpose which had failed. The fact that the failure of purpose was due to the defendant's own breach does not disentitle the defendant to restitution, so long as countervailing compensation is made. Once it becomes evident that the underwriting contract cannot be performed then, subject to the payment or establishment of the liability to pay damages by the defaulting defendant, the defendant is entitled to recover the capital advanced because of the total failure of the contract to subscribe (via underwriting) the capital for the share issue which never eventuated. In these circumstances the restitutionary claim is not denied because it was the defaulting defendant who was in breach - see McDonald v Dennys Lascelles Ltd (supra) per Dixon J at 477 ‑ 478 applying Palmer v Temple (1839) 9 Ad & E 508 at 521; 112 ER 1304 at 1309.

In these circumstances the discharge of the underwriting contract because of the breach of an essential term by the defendant, or by acceptance of an act of repudiation, whether actual or anticipatory by the defendant, results in the termination of the contract from that time and not retrospectively, leaving intact the plaintiff's right to claim damages for the breach, but also leaving the corresponding right to restitution for the defendant. In most circumstances that could be expected to result in a set‑off in equity although, as this case demonstrates, there is a need to examine the plaintiff's claim to set‑off because of wider considerations applying for the application of strict rights of set‑off at law or in equity, now that the defendant is insolvent.
In modern times it is recognised that with claims in restitution, full restitution may require the payment of interest as well as the return of the capital: Hungerfords v Walker (1989) 171 CLR 125 at 143 and Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669 at 681 ‑ 682 and 691, so that regardless of any entitlement to interest under statute, the common law will permit a restitutionary claim to include interest where it is necessary to do justice between the parties: State Bank of New South Wales v Federal Commissioner of Taxation (1995) 62 FCR 371 at 378 ‑ 382; SCI Operations Pty Ltd v Commonwealth (1996) 69 FCR 346 at 377 ‑ 378 and Star v O'Brien (1996) 40 NSWLR 695 per Clarke J at 703 and per Beazley JA at 707.
Another perspective leading to the same result is that the advance of $2,200,000 and the payment of expenses by the defendant to the plaintiff, in anticipation of its later conversion to equity upon the share issue, constituted a benefit to the plaintiff which became repayable in the event that the full transaction, namely conversion of loan to equity, was never achieved - compare Cadorange Pty Ltd (in liq) v Tanga Holdings Pty Ltd (1990) 20 NSWLR 26.
The $128,580.55 paid by the defendant at the request of the plaintiff to third parties to discharge various debts of the plaintiff is, of course, recoverable on a count for money paid - Israel v Foreshore Properties Pty Ltd (In Liq) (1980) 54 ALJR 421 at 443 ‑ 444. Usually the entitlement to interest upon such a payment would run from the time when the defendant (to counterclaim) was enriched by the receipt - per Schmierer & Anor v Taouk (supra) [66], but in this case these advances for the discharge of debts of the plaintiff to the third parties were inspired by the same anticipation that they would eventually be converted to equity in shares about to be issued. It is this factor which differentiates the present case from those which recognise an immediate right to interest from the point of "enrichment".
Had the defendant's counterclaim stood alone, I consider that the defendant would have been entitled to interest upon the moneys initially advanced to the plaintiff but only from the point when that money became due or payable, which in the present circumstances was from the date first demanded by the defendant. Such demand was made by letter from the liquidator dated 30 June 2000 (Exhibit 111). That demand was for $2,200,000 (the capital advances). There is no evidence of any demand being made for the additional $128,580.55. It is from this date that I consider that interest should have run. As it is not a contractual entitlement to interest it is inappropriate that reference should be made to bank overdraft or other market rates and, in the absence of any other indicium suggested by the parties, I consider that the rates should have been those allowed by analogy with judgments under s 32 of the Supreme Court Act published by regulations.
However, as described above, in this case there is a complicating factor in that the plaintiff's claim would overtop the defendant's claim even if an entitlement to interest on the moneys advanced were recognised. For reasons set out above, I consider that in these circumstances the appropriate course is to not allow any interest on the counterclaim which is to be treated as exhausted by the plaintiff's claim for damages.

Set‑off of plaintiff's claim for damages against the defendant's counterclaim - liquidation of AGF

The issue dividing the parties in relation to the plaintiff's plea of set‑off is whether or not Striker's claim for liquidated damages may be set off against the counterclaim, or whether the counterclaim must be paid in full to the liquidator, leaving Striker to prove as an unsecured creditor in the liquidation for the amount of its damages and bearing the risk of receiving less than 100 cents for each dollar of the debt. The effect of allowing a set‑off in these circumstances would be that the $2,328,580.55 would be satisfied in full, or pro tanto, without apportionment with other creditors.
The issue concerning the claimed set‑off is whether or not the obligation giving rise to Striker's claim for damages and AGF's entitlement to restitution vindicated by its counterclaim are properly to be regarded as mutual dealings under s 553C of the Corporations Act.
A claim for set‑off in such circumstances was analysed in the decision of the High Court in Coventry v Charter Pacific Corporation Ltd [2005] HCA 67; (2005) 80 ALJR 132. In that case Gleeson CJ made reference at [30] to the rights of set‑off between solvent parties, being significantly enlarged in cases of bankruptcy by legislation dating from 1705. See Gye v Davies (1995) 37 NSWLR 421 at 424 ‑ 425; Forster v Wilson (1843) 12 M & W 191 at 203 ‑ 204; 152 ER 1165 at 1171. In bankruptcy legislation (as it developed) rights of set‑off were broadened to deal with "mutual dealings". Three Australian decisions of relevance are Gye v McIntyre (1991) 171 CLR 609; Aliferis v Kyriacou [2000] VSCA 123; [2000] 1 VR 447 and Bank of Australasia v Hall (1907) 4 CLR 1514. The decision in Aliferis v Kyriacou was criticised in Coventry's case (supra), but the ultimate conclusion was that the statutory claim for damages under the Trade Practices Act was not a claim arising by reason of contract and was therefore not a claim provable in the bankruptcy. This meant that it was not eligible for the special extended scope of set‑off for mutual dealings under s 82 of the Bankruptcy Act (the equivalent of s 553C of the Corporations Act).
In the present case Striker's claim for damages arose plainly from the breach of the secondary obligation in the underwriting agreement. Not only is it pleaded in that fashion but the contractual entitlement for damages has succeeded. That brings the case within the rule in Gye v McIntyre (supra) and Old Style Confections Pty Ltd v Microbyte Investments Pty Ltd (In Liq) [1995] 2 VR 457 and gives rise to a right of set‑off under s 553C. It is not necessary for the plaintiff's claim to be vested, liquidated or enforceable at the time of the liquidation or the commencement of the winding up. Contingent debts at that date which are of a kind that will ultimately mature into pecuniary demands susceptible of set‑off are capable of satisfying the requirements of s 553C.
Accordingly, I conclude that the plaintiff may set off its proved damages of $3,330,659 against the defendant's counterclaim of $2,328,580.55 plus interest. This would ordinarily result in judgment being entered for the balance of $1,002,078.45 in favour of the plaintiff but, because of the procedure adopted by the parties with leave of the court to treat this litigation as determining a dispute about claims made to the liquidators in the course of the winding up there will need to be declaratory relief rather than a judgment or judgments for any liquidated sum.

Orders

In view of the conclusions which have been reached in these reasons I consider that the relief which should be granted by the court should be as follows:
(a)Declare that the defendant repudiated its obligation fully to underwrite an issue of shares in the plaintiff to raise $7,500,000 or more in accordance with the terms of the Underwriting Agreement between the parties dated 2 December 1996 and that, subsequently, the plaintiff accepted that repudiation and terminated the agreement on 25 August 1998.
(b)Declare that, as a result of the defendant's breach of contract the plaintiff is entitled to damages in the amount of $3,330,659 and that the aggregate liability of damages is, from the date of this judgment a debt due by the defendant to the plaintiff.
(c)Declare that the defendant is entitled to the recovery of $2,328,580.55 upon its counterclaim.
(d)Declare that the plaintiff is entitled to set off its entitlement to damages from the defendant against the defendant's counterclaim.
(e)Declare that after the set‑off there is: $1,002,078.45 due by the defendant to the plaintiff which should rank as a claim for that amount in the liquidation of the defendant.
However, I will allow the parties an opportunity to make submissions about the details of the orders to be made to give effect to these conclusions.

Details

AGLC: Striker Resources NL v Australian Goldfields NL (in liq) [2006] WASC 153
Case: [2006] WASC 153
Decision Date: 2 AUGUST 2006

CaseChat Overview and Summary

In the matter of Striker Resources NL v Australian Goldfields NL (in liq), the Federal Court of Australia addressed a dispute arising from an alleged breach of an underwriting agreement between the parties. Striker Resources NL, the plaintiff, claimed that Australian Goldfields NL (in liq), the defendant, had failed to meet its obligations under the agreement, which was intended to facilitate the raising of capital for Striker Resources NL. The crux of the matter was whether Striker Resources NL could set off the damages it claimed against a counterclaim by Australian Goldfields NL, and if so, how the set-off should be quantified and enforced.

The legal issues before the court centred on the enforceability and quantification of set-off rights under the Corporations Act 2001 (Cth) and the implications of the defendant's insolvency. The court had to determine whether Striker Resources NL's claim for damages, which arose from the breach of a secondary obligation in the underwriting agreement, could be set off against the counterclaim by Australian Goldfields NL. Given that the defendant was in liquidation, the court also had to consider the extent to which the statutory provisions on set-off applied in this context.

The court reasoned that Striker Resources NL's claim for damages stemmed from the breach of a contractual obligation and, as such, fell within the ambit of the statutory provisions that allow for set-off in cases of mutual dealings. The court found that the statutory provisions under s 553C of the Corporations Act 2001 (Cth) permitted the set-off of contingent debts at the time of the defendant's liquidation or the commencement of the winding up. The court further held that the set-off could be quantified by comparing the amounts owed by each party and determining the balance. In this instance, the court concluded that Striker Resources NL was entitled to set off its entitlement to damages against the counterclaim by Australian Goldfields NL, resulting in a balance of $1,002,078.45 due from the defendant to the plaintiff.

In light of these findings, the court ordered that various declarations be made regarding the repudiation of the underwriting agreement, the entitlement to damages, and the set-off rights. The court also directed that the parties be given an opportunity to submit on the specifics of the orders to ensure that the relief granted would be appropriate and enforceable in the context of the defendant's liquidation.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

A claim for set‑off in such circumstances was analysed in the decision of the High Court in Coventry v Charter Pacific Corporation Ltd [2005] HCA 67; (2005) 80 ALJR 132. In that case Gleeson CJ made reference at [30] to the rights of set‑off between solvent parties, being significantly enlarged in cases of bankruptcy by legislation dating from 1705. See Gye v Davies (1995) 37 NSWLR 421 at 424 ‑ 425; Forster v Wilson (1843) 12 M & W 191 at 203 ‑ 204; 152 ER 1165 at 1171. In bankruptcy legislation (as it developed) rights of set‑off were broadened to deal with "mutual dealings". Three Australian decisions of relevance are Gye v McIntyre (1991) 171 CLR 609; Aliferis v Kyriacou [2000] VSCA 123; [2000] 1 VR 447 and Bank of Australasia v Hall (1907) 4 CLR 1514. The decision in Aliferis v Kyriacou was criticised in Coventry's case (supra), but the ultimate conclusion was that the statutory claim for damages under the Trade Practices Act was not a claim arising by reason of contract and was therefore not a claim provable in the bankruptcy. This meant that it was not eligible for the special extended scope of set‑off for mutual dealings under s 82 of the Bankruptcy Act (the equivalent of s 553C of the Corporations Act). In the present case Striker's claim for damages arose plainly from the breach of the secondary obligation in the underwriting agreement. Not only is it pleaded in that fashion but the contractual entitlement for damages has succeeded. That brings the case within the rule in Gye v McIntyre (supra) and Old Style Confections Pty Ltd v Microbyte Investments Pty Ltd (In Liq) [1995] 2 VR 457 and gives rise to a right of set‑off under s 553C. It is not necessary for the plaintiff's claim to be vested, liquidated or enforceable at the time of the liquidation or the commencement of the winding up. Contingent debts at that date which are of a kind that will ultimately mature into pecuniary demands susceptible of set‑off are capable of satisfying the requirements of s 553C. Accordingly, I conclude that the plaintiff may set off its proved damages of $3,330,659 against the defendant's counterclaim of $2,328,580.55 plus interest. This would ordinarily result in judgment being entered for the balance of $1,002,078.45 in favour of the plaintiff but, because of the procedure adopted by the parties with leave of the court to treat this litigation as determining a dispute about claims made to the liquidators in the course of the winding up there will need to be declaratory relief rather than a judgment or judgments for any liquidated sum. In view of the conclusions which have been reached in these reasons I consider that the relief which should be granted by the court should be as follows:(a)Declare that the defendant repudiated its obligation fully to underwrite an issue of shares in the plaintiff to raise $7,500,000 or more in accordance with the terms of the Underwriting Agreement between the parties dated 2 December 1996 and that, subsequently, the plaintiff accepted that repudiation and terminated the agreement on 25 August 1998.(b)Declare that, as a result of the defendant's breach of contract the plaintiff is entitled to damages in the amount of $3,330,659 and that the aggregate liability of damages is, from the date of this judgment a debt due by the defendant to the plaintiff.(c)Declare that the defendant is entitled to the recovery of $2,328,580.55 upon its counterclaim.(d)Declare that the plaintiff is entitled to set off its entitlement to damages from the defendant against the defendant's counterclaim.(e)Declare that after the set‑off there is: $1,002,078.45 due by the defendant to the plaintiff which should rank as a claim for that amount in the liquidation of the defendant.However, I will allow the parties an opportunity to make submissions about the details of the orders to be made to give effect to these conclusions.

Actions

Citations

Striker Resources NL v Australian Goldfields NL (in liq) [2006] WASC 153

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…n v Brennan [2014] WASC 190 Strange Investments (WA) Pty Ltd v Coretrack Ltd [2014] WASC 281 Striker Resources NL v Australian Goldfields NL (in liq) [2006] WASC 153 Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96 Suvaal v Cessnock City Council [2003] HCA 41; (2003) 200 ALR 1 Sydney Developments Pty Ltd v…
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Citation 2 (Para 1)

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Citation 3 (Para 4)

…continue unaffected: see McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 476-477 and Striker Resources NL v Australian Goldfields NL (in liq) [2006] WASC 153 at [171] and the authorities cited. As at 2 March 2011, Gibbins Investments had already accrued rights unconditionally as shareholder to 55 of the issu…
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Citation 4

…EAL FROM: Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA Coram : EM HEENAN J Citation : STRIKER RESOURCES NL -v- AUSTRALIAN GOLDFIELDS NL (IN LIQ) [2006] WASC 153 File No : CIV 2377 of 2000…
Mitchell v Schofield [2007] WASC 303
Citation 5 (Para 12)

…ls Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 62, 628, as described in Striker Resources NL v Australian Goldfields NL (in liq) [2006] WASC 153 [65] ‑ [66] (E M Heenan J) as follows: An obvious starting point for this analysis is the much quoted passage from the decision in [ Masters ] at 360…
Bullion Minerals Ltd v Fewster [2007] WASC 100
Citation 6

…54) 91 CLR 353 Sorna Pty Ltd v Flint (1999) 21 WAR 563 Stern v McArthur (1988) 165 CLR 489 Striker Resources NL v Australian Goldfields NL (in liq) [2006] WASC 153 Terrex Resources NL v Magnet Petroleum Pty Ltd (1988) 1 WAR 144…
Trans Australian Constructions Pty Ltd v Nilsen (SA) Pty Ltd [2008] NTSC 42
Citation 7 (Para 171)

…[7] [2006] WASC 153 at [171].…
Cudlipp v Henty Jepson & Kelly Pty Ltd [2025] VMC 5
Citation 8 (Para 2)

…n.[17] [16] McDonald , 476-7. [17] Richmond , [193]; Hoeys , [417]-[421]; Gantley , [144]; Striker Resources NL v Australian Goldfields NL (In Liq) [2006] WASC 153, [171]; Integral Home Loans Pty Ltd & Anor v Interstar Wholesale Finance Pty Ltd [2007] NSWSC 406, [15].…
Ecmoho (Hong Kong) Pty Ltd v AU Future Health Pty Ltd [2016] VCC 1987
Citation 9

…1 SR (NSW) 215; Ettridge v Vermin Board of the District of Murat Bay [1928] SASR 124, 128-9; Striker Resources NL v Australian Goldfields NL (in liq) [2006] WASC 153; Findlay & Co Stockbrokers (Underwriters) Pty Ltd v Carminco Gold & Resources Ltd [2007] FCA 573; BP Australia Pty Ltd v Myran Pty Ltd [2004] FCAFC 1…

Cases Cited

Statutory Material Cited

Whittle v Parnell Mogas Pty Ltd [2006] SASC 129
Citation 1

…164 CLR 387 Westdeutsche Bank v Islington LBC [1996] AC 669 Western Waggon and Property Co v West [1892] 1 Ch 271 Whittle v Parnell Mogas Pty Ltd [2006] SASC 129; (2006) 94 SASR 421 Witham v Witham [2000] WASC 236 Woodside Offshore Petroleum Pty Ltd v Atwood Oceanics Inc [1986] WAR 253 Young v Kitchin (1878) 3 Ex…
Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6
Citation 2 (Para 12)

…pon the failure of the contract to subscribe for capital due to the defendant's own breach - see Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd [2006] VSCA 6; (2006) V Conv R 54‑713 per Chernov JA at [9] ‑ [13], Schmierer & Anor v Taouk [2004] NSWSC 345; (2004) 207 ALR 301 - SCNSW White J and Spangaro v Co…
Coventry v Charter Pacific Corporation Ltd [2005] HCA 67
Citation 3 (Para 3)

…A claim for set‑off in such circumstances was analysed in the decision of the High Court in Coventry v Charter Pacific Corporation Ltd [2005] HCA 67; (2005) 80 ALJR 132. In that case Gleeson CJ made reference at [30] to the rights of set‑off between solvent parties, being significantly enlarged in cases of bankr…
Oasis Dalby Pty Ltd v Sovereign Capital Ltd [2005] QSC 273
Citation 4

…tments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635 Oasis Dalby Pty Ltd (as Trustee for the Gladstone Unit Trust) v Sovereign Capital Ltd [2005] QSC 273 Old Style Confections Pty Ltd v Microbyte Investments Pty Ltd (In Liq) [1995] 2 VR 457 Orr v Ford (1989) 167 CLR 316 Ovidio Carrideo Nominees Pty Ltd…
Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235
Citation 5

…Bendall (1991) 172 CLR 60 Harper v Ariadne Australia Ltd [1996] QCA 483 Hart v Mossensons [2000] WASC 295 Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235 Hoad v Swann (1920) 28 CLR 258 Holland v Wiltshire (1954) 90 CLR 409 Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 Hungerford…
Sansom Nominees Pty Ltd v Meade [2005] WASC 9
Citation 6 (Para 2)

…bligations by the defendant and on that basis I address it - see also Gebauer Nominees Pty Ltd v Cole [2006] WASC 57; Sansom Nominees Pty Ltd v Meade [2005] WASC 9 at [96] and Roehampton Developments Pty Ltd (in liq) v FAI General Insurance Co Ltd [2000] WASC 235.…
Capitol Theatre Management v Council of the City of Sydney [2005] NSWSC 5
Citation 7

…arro [1947] 1 KB 854 Cadorange Pty Ltd v Tanga Holdings Pty Ltd (1990) 20 NSWLR 26 Capitol Theatre Management Pty Ltd v Council of the City of Sydney [2005] NSWSC 5; [2005] ANZ Conv R 180 Central London Property Trust Ltd v Hightrees House Ltd [1947] KB 130 Chaplin v Hicks [1911] 2 KB 786 City of Box Hill v E W T…
Teviot Downs Estate P/L v MTAA Superannuation Fund (Flagstone Creek and Spring Mountai [2004] QCA 57
Citation 8

…ara Mining NL (1990) 3 WAR 486 Teviot Downs Estate Pty Ltd v MTAA Superannuation Fund (Flagstone Creek and Spring Mountain Park) Property Pty Ltd [2004] QCA 57; [2004] ANZ Conv R 152 Trans Trust SPRL v Danubian Trading Co Ltd [1952] 2 QB 297 Tropicus Orchids Flowers and Foliage Pty Ltd v Territory Insurance Offi…
Peter Warren (Properties) P/L and 2 Ors v Jalvoran P/L [2004] NSWSC 1149
Citation 9

…Pty Ltd [2006] VSCA 6; (2006) V Conv R 54‑713 Palmer v Temple (1839) 9 Ad & E 508; 112 ER 1304 Peter Warren (Properties) Pty Ltd v Jalvoran Pty Ltd [2004] NSWSC 1149; [2005] ANZ Conv R 52 Pheeney v Doolan (No 2) [1977] 1 NSWLR 601 Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31; (2001) 207 CLR 165 Player v Isenberg […
Duke Group Limited (in Liq) & Anor v Pilmer & Ors (No.6) No. Scciv-92-1874 [2004] SASC 147
Citation 10

…Jalvoran Pty Ltd [2004] NSWSC 1149; [2005] ANZ Conv R 52 Pheeney v Doolan (No 2) [1977] 1 NSWLR 601 Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31; (2001) 207 CLR 165 Player v Isenberg [2002] NSWCA 186 Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (1980) 144 CLR 300 Posgold (Big Bell) Pty…
Galaxidis v Galaxidis [2004] NSWCA 111
Citation 11

…issioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336 Freeth v Burr (1874) LR9CP 208; [1874-80] All ER Rep 751 Galaxidis v Galaxidis [2004] NSWCA 111 Hiley v People's Prudential Assurance Co Ltd (In Liq) (1938) 60 CLR 468 Hotel Services Ltd v Hilton International Hotels (UK) Ltd [2000] 1 All ER (Co…
Schmierer v Taouk [2004] NSWSC 345
Citation 12 (Para 12)

…Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd [2006] VSCA 6; (2006) V Conv R 54‑713 per Chernov JA at [9] ‑ [13], Schmierer & Anor v Taouk [2004] NSWSC 345; (2004) 207 ALR 301 - SCNSW White J and Spangaro v Corporate Investment Australia Funds Management Ltd [2003] FCA 1025; (2003) 47 ACSR 285 per Finkelstei…
Spangaro v Corporate Investment Australia Funds Management Ltd [2003] FCA 1025
Citation 13 (Para 12)

…Schmierer & Anor v Taouk [2004] NSWSC 345; (2004) 207 ALR 301 - SCNSW White J and Spangaro v Corporate Investment Australia Funds Management Ltd [2003] FCA 1025; (2003) 47 ACSR 285 per Finkelstein J.…
Player v Isenberg [2002] NSWCA 186
Citation 14

…2005] ANZ Conv R 52 Pheeney v Doolan (No 2) [1977] 1 NSWLR 601 Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31; (2001) 207 CLR 165 Player v Isenberg [2002] NSWCA 186 Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (1980) 144 CLR 300 Posgold (Big Bell) Pty Ltd v Placer (Western Australia) Pt…
LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2001] NSWSC 886
Citation 15

…980) 54 ALJR 421 Lamont v Heron (1970) 126 CLR 239 Lennon v Scarlett & Co (1921) 29 CLR 499 LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2001] NSWSC 886 MacKay v Dick (1881) App Cas 251 Manchester and Oldham Bank Ltd v W A Cook & Co (1883) 49 LT 634 Masters v Cameron (1954) 91 CLR 353 Mays v Roberts […
Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31
Citation 16

…ies) Pty Ltd v Jalvoran Pty Ltd [2004] NSWSC 1149; [2005] ANZ Conv R 52 Pheeney v Doolan (No 2) [1977] 1 NSWLR 601 Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31; (2001) 207 CLR 165 Player v Isenberg [2002] NSWCA 186 Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (1980) 144 CLR 300 Pos…
Hart v Mossensons [2000] WASC 295
Citation 17

…9 Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 Haines v Bendall (1991) 172 CLR 60 Harper v Ariadne Australia Ltd [1996] QCA 483 Hart v Mossensons [2000] WASC 295 Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235 Hoad v Swann (1920) 28 CLR 258 Holland v Wiltshire (1954) 90 CLR 409 Hospital Products L…
Roehampton Developments Pty Ltd (in Liq) v FAI General Insurance Company Limited [2000] WASC 235
Citation 18 (Para 2)

…ole [2006] WASC 57; Sansom Nominees Pty Ltd v Meade [2005] WASC 9 at [96] and Roehampton Developments Pty Ltd (in liq) v FAI General Insurance Co Ltd [2000] WASC 235.…
Witham v Witham [2000] WASC 236
Citation 19

…AC 669 Western Waggon and Property Co v West [1892] 1 Ch 271 Whittle v Parnell Mogas Pty Ltd [2006] SASC 129; (2006) 94 SASR 421 Witham v Witham [2000] WASC 236 Woodside Offshore Petroleum Pty Ltd v Atwood Oceanics Inc [1986] WAR 253 Young v Kitchin (1878) 3 Ex D 127 Young v Queensland Trustees Ltd (1956) 99 CLR…
Aliferis v Kyriacou [2000] VSCA 123
Citation 20 (Para 3)

…roadened to deal with "mutual dealings". Three Australian decisions of relevance are Gye v McIntyre (1991) 171 CLR 609; Aliferis v Kyriacou [2000] VSCA 123; [2000] 1 VR 447 and Bank of Australasia v Hall (1907) 4 CLR 1514. The decision in Aliferis v Kyriacou was criticised in Coventry's case ( supra ), but the ult…
Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27
Citation 21 (Para 4)

…ract, even if ambiguous, which will preserve the validity of the contract and not destroy a bargain: Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101 at 113 where Ipp J observed: "Finally, in determining whether contracts are void for uncertainty 'courts should be astute to adopt…
Giumelli v Giumelli [1999] HCA 10
Citation 22

…n [1941] AC 251 Garraway Metals Pty Ltd v Comalco Aluminium Ltd (1993) 114 ALR 118 Gebauer Nominees Pty Ltd v Cole [2006] WASC 57 Giumelli v Giumelli (1999) 196 CLR 101 Government of Newfoundland v Newfoundland Railway Co (1888) 13 App Cas 199 Grundt v Great Boulder Goldmines Pty Ltd (1937) 59 CLR 641 Gye v Davies (1…
Flinn v Flinn [1999] VSCA 134
Citation 23

…Ewart (1864) 2 H & C 129 Ettridge v Vermin Board of the District of Urat Bay [1928] SASR 124 Fletcher v Tayleur (1855) 17 CB 21 Flinn v Flinn [1999] 3 VR 712 Foran v Wight (1989) 168 CLR 385 Forster v Wilson (1843) 12 M & W 191; 152 ER 1165 G Scammell & Nephew Ltd v HC & JG Ouston [1941] AC 251 Garraway Me…
Bonic v Fieldair (Deniliquin) Pty Limited [1999] NSWSC 636
Citation 24

…ia v Hall (1907) 4 CLR 1514 Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 62 Bonic v Field Air (Deniliquin) Pty Ltd [1999] NSWSC 636 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Branca v Cobarro [1947] 1 KB 854 Cadorange Pty Ltd v Tanga Holdings Pty Ltd…
Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd [1998] HCA 38
Citation 25

…B 1286 Scottish Equitable plc v Derby [2001] 3 All ER 818 Thompson v Palmer (1933) 49 CLR 507 Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd [1998] HCA 38; (1998) 192 CLR 603 Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401…
Harpur & Ors v Ariadne Aust Ltd [1996] QCA 483
Citation 26

…Gye v McIntyre (1991) 171 CLR 609 Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 Haines v Bendall (1991) 172 CLR 60 Harper v Ariadne Australia Ltd [1996] QCA 483 Hart v Mossensons [2000] WASC 295 Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235 Hoad v Swann (1920) 28 CLR 258 Holland v Wiltshire (19…
Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54
Citation 27

…E W Tauschke Pty Ltd [1974] VR 39 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 Commonwealth v Verwayen (1990) 170 CLR 394 Coventry v Charter Pacific Corporation Ltd [2005] HCA 67; (2005) 80 ALJR 132 DTR Nominees Pty Ltd v Mona H…
Haines v Bendall [1991] HCA 15
Citation 28 (Para 3)

…sation, and be liable to pay interest only on the balance after the set‑off - Pheeney v Doolan (No 2) [1977] 1 NSWLR 601 and Haines v Bendall (1991) 172 CLR 60 - it seems that a claimant should not have the benefit of interest accruing upon a claim which is wholly the subject of a set‑off. The appointment of the adm…
March v E & MH Stramare Pty Ltd [1991] HCA 12
Citation 29

…ralia Pty Ltd (administrator appointed) v Molit (No 55) Pty Ltd (1996) 70 FCR 34 Legione v Hately (1983) 152 CLR 406 March v E & M H Stramare Pty Ltd (1991) 171 CLR 506 National Westminster Bank plc v Somer International (UK) Ltd [2002] QB 1286 Scottish Equitable plc v Derby [2001] 3 All ER 818 Thompson v Palmer (193…
Gye v McIntyre [1991] HCA 60
Citation 30

…foundland v Newfoundland Railway Co (1888) 13 App Cas 199 Grundt v Great Boulder Goldmines Pty Ltd (1937) 59 CLR 641 Gye v Davies (1995) 37 NSWLR 421 Gye v McIntyre (1991) 171 CLR 609 Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 Haines v Bendall (1991) 172 CLR 60 Harper v Ariadne Australia Ltd [1996] QCA 483 Hart v…
Commonwealth v Verwayen [1990] HCA 39
Citation 31

…] 1 All ER 537 Attorney General of Hong Kong v Humphreys Estate (Queen's Gardens) Ltd [1987] 1 AC 114 Austotel Pty Ltd v Franklins Self Serve Pty Ltd (1989) 16 NSWLR 582 Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 Australian Broadcasting Corporation v XIVth Comm…
Foran v Wight [1989] HCA 51
Citation 32

…29 Ettridge v Vermin Board of the District of Urat Bay [1928] SASR 124 Fletcher v Tayleur (1855) 17 CB 21 Flinn v Flinn [1999] 3 VR 712 Foran v Wight (1989) 168 CLR 385 Forster v Wilson (1843) 12 M & W 191; 152 ER 1165 G Scammell & Nephew Ltd v HC & JG Ouston [1941] AC 251 Garraway Metals Pty Ltd v Comalco Aluminium…
Hungerfords v Walker [1989] HCA 8
Citation 33 (Para 2)

…st upon any part of the damages claimed, although interest may be allowable as part of the damages claimed under the doctrine in Hungerfords v Walker (1989) 171 CLR 125 and also under s 32 of the Supreme Court Act . Because AGF's counterclaim includes a component for interest on the interim advances it is necessary t…
Orr v Ford [1989] HCA 4
Citation 34

…Unit Trust) v Sovereign Capital Ltd [2005] QSC 273 Old Style Confections Pty Ltd v Microbyte Investments Pty Ltd (In Liq) [1995] 2 VR 457 Orr v Ford (1989) 167 CLR 316 Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd [2006] VSCA 6; (2006) V Conv R 54‑713 Palmer v Temple (1839) 9 Ad & E 508; 112 ER 1304 Peter War…
Waltons Stores (interstate) Ltd v Maher [1988] HCA 7
Citation 35 (Para 4)

…an estoppel preventing the defendant from retreating from its implied promise to complete the underwriting - Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 - with the effect that the defendant is precluded from relying upon any unenforceability of the underwriting agreement and is liable for damages for…
Burns v Man Automotive (Aust) Pty Ltd [1986] HCA 81
Citation 36

…Australian Crime Commission v Gray [2003] NSWCA 318 Behzadi v Shaftesbury Hotels Ltd [1992] Ch 1 Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653 Central Brake Service (Sydney) Pty Ltd (In Liq) v Central Brake Service (Newcastle) Pty Ltd (1992) 27 NSWLR 406 Community Developments Pty Ltd, Engwirda Constructio…
Ampol Limited v Caltex Oil (Australia) Pty Ltd [1986] HCA 2
Citation 37 (Para 4)

…ty Ltd v Varga Group Investments No 8 Pty Ltd (at 14, 570), per Kirby P. A striking example of this approach is Ampol Ltd v Caltex Oil (Aust) Pty Ltd (1986) 60 ALJR 225."…
Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14
Citation 38

…1 WAR 350 Prehn v Royal Bank of Liverpool (1890) LR 5 Exch 92 Prenn v Simmonds [1971] 1 WLR 1381 Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 Ratcliffe v Evans [1892] 2 QB 524 Reardon Smith Line Ltd v Hansen‑Tangen [1976] 1 WLR 989 Riches v Hogben [1985] 2 Qd R 292 Roehampton Developments Pty…
Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64
Citation 39 (Para 6)

…Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607; Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 at 137 ‑ 138, and Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635 at 659.…
Legione v Hateley [1983] HCA 11
Citation 40

…h Building Society [1996] 4 All ER 119 Lam Soon Australia Pty Ltd (administrator appointed) v Molit (No 55) Pty Ltd (1996) 70 FCR 34 Legione v Hately (1983) 152 CLR 406 March v E & M H Stramare Pty Ltd (1991) 171 CLR 506 National Westminster Bank plc v Somer International (UK) Ltd [2002] QB 1286 Scottish Equitable pl…
Shevill v Builders Licensing Board [1982] HCA 47
Citation 41

…artins Investments Pty Ltd (1979) 144 CLR 596 Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 Shevill v Builders' Licensing Board (1982) 149 CLR 620 Simeone v Pesatura General Contractors Pty Ltd (1993) 60 SASR 453 Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310 South African Territories Ltd v W…
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24
Citation 42 (Para 3)

…ot "isolated from the matrix of facts in which it was set" - per Lord Simon at 271 and Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 347 ‑ 352; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 429 - see also Mooregate Tobacco Co Ltd v Philip Morris Ltd [No 2] (1984) 1…
Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd [1981] HCA 4
Citation 43

…NSWLR 406 Community Developments Pty Ltd, Engwirda Construction Co (1969) 120 CLR 455 Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336 Freeth v Burr (1874) LR9CP 208; [1874-80] All ER Rep 751 Galaxidis v Galaxidis [2004] NSWCA 111 Hiley v People's Prudential Assurance Co Ltd (In Liq)…
Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd [1980] UKPCHCA 1
Citation 44

…Liq) [2001] HCA 31; (2001) 207 CLR 165 Player v Isenberg [2002] NSWCA 186 Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (1980) 144 CLR 300 Posgold (Big Bell) Pty Ltd v Placer (Western Australia) Pty Ltd (1999) 21 WAR 350 Prehn v Royal Bank of Liverpool (1890) LR 5 Exch 92 Prenn v Simmonds…
DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12
Citation 45 (Para 3)

…t 271 and Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 347 ‑ 352; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 429 - see also Mooregate Tobacco Co Ltd v Philip Morris Ltd [No 2] (1984) 156 CLR 414 at 435. Each of those cases dealt principally with questions of wh…
BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] UKPCHCA 1
Citation 46 (Para 3)

…r Lord Wilberforce at 1383 ‑ 1385; Reardon Smith Line Ltd v Hansen‑Tangen [1976] 1 WLR 989; BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 so that in order for this agreement to be understood "it must be placed in its context" and not "isolated from the matrix of facts in which it was set" -…
Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36
Citation 47 (Para 6)

…gation were to be reasonable but, taking the agreement as a whole: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 per Gibbs J at 109 ‑ 110, it is evident that the secondary underwriting obligation, if it arose, was to be in substitution for the primary obligation…
Lamont v Heron [1970] HCA 47
Citation 48

…gical Corp (1984) 156 CLR 41 Hungerfords v Walker (1989) 171 CLR 125 Israel v Foreshore Properties Pty Ltd (In Liq) (1980) 54 ALJR 421 Lamont v Heron (1970) 126 CLR 239 Lennon v Scarlett & Co (1921) 29 CLR 499 LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2001] NSWSC 886 MacKay v Dick (1881) App Cas 251…
Community Development Pty Ltd v Engwirda Construction Co [1969] HCA 47
Citation 49

…ce (Sydney) Pty Ltd (In Liq) v Central Brake Service (Newcastle) Pty Ltd (1992) 27 NSWLR 406 Community Developments Pty Ltd, Engwirda Construction Co (1969) 120 CLR 455 Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336 Freeth v Burr (1874) LR9CP 208; [1874-80] All ER Rep 751 Galaxidis…
Young v Queensland Trustees Ltd [1956] HCA 51
Citation 50 (Para 11)

…comes payable whether under contract or otherwise - demonstrating the breadth of the old form of action in debt - see Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 567 ‑ 568 and the common law count for money had and received - Moses v Macferlan (1760) 2 Burr 1005 at 1012; 97 ER 676 at 681.…

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