Teng v Clark [No 2]

Case [2020] WASC 217

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   TENG -v- CLARK [No 2] [2020] WASC 217

CORAM:   KENNETH MARTIN J

HEARD:   21 MAY 2020

DELIVERED          :   16 JUNE 2020

FILE NO/S:   CIV 1378 of 2019

BETWEEN:   TENG TENG

First Plaintiff

CHIN HUI BENEDICT CHIA

Second Plaintiff

AND

BRENDAN PAUL JAMES RICHARD CLARK

First Defendant

ADAM BRAND

Second Defendant

PORTIA SUBISISIWE THANJEKWAYO

Third Defendant


Catchwords:

Practice and procedure - Rules of the Supreme Court 1971 (WA) Order 16 - Summary judgment ordered upon applications of all defendants - Alternate application to dismiss on basis of strike out of statement of claim for failure to disclose arguable claim against all defendants - Alternate lesser challenges of pleading embarrassment - Leave sought to bring applications out of time - Considerations of uncertainty of contract - Whether inadequacies of pleadings capable of rectification

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Leave granted for defendants' applications to be brought out of time
Defendants' application for summary judgment granted

Category:    B

Representation:

Counsel:

First Plaintiff : Mr P G McGowan & Mr T Houweling
Second Plaintiff : Mr P G McGowan & Mr T Houweling
First Defendant : Mr S Penglis SC
Second Defendant : Mr S Penglis SC
Third Defendant : Mr S Penglis SC

Solicitors:

First Plaintiff : Cornerstone Legal
Second Plaintiff : Cornerstone Legal
First Defendant : Bennett + Co
Second Defendant : Bennett + Co
Third Defendant : Bennett + Co

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

Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552

Anaconda Nickel v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101

AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175

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

Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191

Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87

First Trade Consulting Pty Ltd v GRD Kirfield Ltd [2006] WASCA 175

Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) BPR 14,551

Gerovich v Maxwell John Gerovich as executor of the estate of Anthony Gerovich [2018] WASC 153

Lashansky v Legal Practice Board of Western Australia [No 3] [2013] WASCA 260

McJannett v Gibbs [2012] WASC 369

Meehan v Jones [1982] HCA 52; (1982) 149 CLR 571

Tasman Capital Pty Ltd v Sinclair [2008] NSWCA 248; (2008) 75 NSWLR 1

Teng v Clark [2020] WASC 92

Terrex Resources NL v Magnet Petroleum Pty Ltd (1988) WAR 144

Thorby v Goldberg [1964] HCA 41; (1964) 112 CLR 597

Upper Hunter County District Council v Australia Chilling & Freezing Co Ltd (1968) 118 CLR 429

Westpac Banking Corporation v Anderson [2017] WASC 106

Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2006] WASC 161; (2006) 33 WAR 1

KENNETH MARTIN J:

Introduction

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AGLC
Teng v Clark [No 2] [2020] WASC 217
Case
[2020] WASC 217
Decision Date

CaseChat Overview and Summary

The case of Teng v Clark [No 2] involved the plaintiffs, Teng and Chia, suing multiple defendants for alleged breaches of contract. The primary legal issues were whether the defendants could be held liable for breaching an oral contract and whether the plaintiffs' statement of claim was adequately supported by evidence. The defendants applied for summary judgment or, alternatively, for the plaintiffs' statement of claim to be struck out for failing to disclose an arguable claim. The plaintiffs sought leave to bring these applications out of time.

The court considered whether the plaintiffs' pleadings were sufficient to establish a contractual claim against the defendants. The judge found that the plaintiffs' pleadings were inadequate in terms of demonstrating the defendants' privity to the alleged oral agreement. Specifically, the judge noted that the plaintiffs failed to provide evidence of a binding oral agreement or the authority of the first defendant to enter into such an agreement on behalf of the other defendants. The court also highlighted the uncertainty regarding the essential term of funding in the alleged contract. As such, the judge concluded that the plaintiffs' claim against all defendants should be dismissed.

Based on the reasoning above, the court ordered the summary judgment in favour of all defendants and dismissed the plaintiffs' claim. The court found that the plaintiffs' statement of claim did not adequately support an arguable claim against any of the defendants, and therefore, the claim must be dismissed.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

Fifth, absent some evidence of an arguable level of authority in the first defendant, Mr Clark, to allow him to lawfully bind to a contractual commitment, his wife, the third defendant, or his fellow AMCZ shareholder, Mr Brand, that is simply something he cannot do. Their first names (only) are seen of course as the typed co-senders of this email, that was sent by Mr Clark and is suggested to have been copied to the email addresses of Mr Brand and, I infer, the third defendant as well. But copying them in by email is not enough without more to conclude that somehow, those extra persons were arguably privy to a wholly oral and earlier perfected contract, and that is only said to be evidenced by this later November 2018 email. (The term used in ASOC par 10 being 'reiterated' as regards this email 'the terms of the Shareholders Agreement'.) Assessing matters overall then, as regards, at the outset the positions of the second and third defendants, my assessment is that there is nothing to be found emerging from the evidence before me, that is arguable from a contractual perspective in terms of supporting those defendants' arguable privity to an oral agreement perfected as between them with the plaintiffs and the first defendant. On that basis, the claim against them must be summarily dismissed. As regards the first defendant, his position is different, essentially due to the state of the conflicting evidence and the even further inconvenient state of the ASOC pleas about an oral agreement which, in short, do not align with the affidavit evidence of Ms Teng and Mr Chia. As I understood the submission of counsel for the plaintiffs, his contention in opposing a summary judgment as regards all defendants, was that I should assess the matter by reference to the affidavit evidence, rather than by the deficient ASOC pleading. I accept that that is the correct approach. Nevertheless, as regards the first defendant, even if it can be argued that somewhere within what is otherwise an unacceptable pleading mess, that there can be inferred or winkled out a promise made by him as a director or shareholder, or, for argument's sake, as CEO of the Zambian corporation AMCZ, that Mr Clark would procure for the plaintiffs at some later time an allocation of 10% of the shares in that corporation, but which procurement promise was then later dishonoured and breached by him (and breached by him alone), that still the insuperable difficulty that confronts, is the residual problem of legal uncertainty - as regards a critically missing essential term as to the agreed level of future funding by the plaintiffs, in such a contended wholly oral contract (Shareholders Agreement). I repeat again that I am putting aside any restitutionary claim by the plaintiffs against AMCZ seeking to get back the value of the benefit of moneys outlaid to AMCZ creditors for the benefit of that corporation. Such a claim would be something else altogether different to what is currently being pursued.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

As Gleeson CJ (then of the New South Wales Supreme Court) had explained in Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, 548 - 549:It is to be noted that the question in a case such as the present is expressed in terms of the intention of the parties to make a concluded bargain: see, eg, Masters v Cameron (at 360). That is not the same as, although in a given case it may be closely related to, the question whether the parties have reached agreement upon such terms as are, in the circumstances, legally necessary to constitute a contract. To say that parties to negotiations have agreed upon sufficient matters to produce the consequence that, perhaps by reference to implied terms or by resort to considerations of reasonableness, a court will treat their consensus as sufficiently comprehensive to be legally binding, is not the same thing as to say that a court will decide that they intended to make a concluded bargain. … Reference has earlier been made to 'intention'. Cases which typically give rise to problems of the kind presently under consideration are cases in which there is no doubt that the parties had a common intention that at some stage, and by some means, they would enter into contractual relations. They have entered into negotiations for that specific purpose. The problem which arises is that they have exchanged communications which, on the one hand, use the language of agreement but, on the other hand, disclose an expectation that at some future time a document embodying the terms of their contractual arrangement will be brought into existence. Of course, it is possible for parties to have entered a valid contract which only consists of a very limited number of essential terms within that contract and with the expectation that later on a further contract would clarify consolidate the first contract: see Anaconda Nickel [25], referring to the observations of Kennedy J in Terrex Resources NL v Magnet Petroleum Pty Ltd (1988) WAR 144 at 159. See also Tasman Capital Pty Ltd v Sinclair [2008] NSWCA 248 [27] - [28]; (2008) 75 NSWLR 1. However, for circumstances where an instrument has been entered but the intention between the parties is still not clear, a court may look to relevant circumstances to determine, objectively, what the intention was (Anaconda Nickel [26]). To this, the best evidence is the actual communications between the parties (ABC v XIVth Commonwealth Games at 548). Once the requisite intention is found, attention then must turn to the certainty of the terms of the contract. In that regard, Menzies J in Thorby v Goldberg [1964] HCA 41; (1964) 112 CLR 597, 607 cited with approval the observations of Sugerman J in the Full Court of the Supreme Court of New South Wales below (more recently was also cited with approval in this court by Buss JA (as his Honour then was) in Australian Goldfields NL at [139]):It is a first principle of the law of contracts that there can be no binding and enforceable obligation unless the terms of the bargain, or at least its essential or critical terms, have been agreed upon. So, there is no concluded contract where an essential or critical term is expressly left to be settled by future agreement of the parties. Again, there is no binding contract where the language used is so obscure and incapable of any precise or definite meaning that the court is unable to attribute to the parties any particular contractual intention.