FEDERAL COURT OF AUSTRALIA
Vassallo Constructions Pty Ltd v Andergrove Lakes Pty Ltd [2014] FCA 862
Citation: Vassallo Constructions Pty Ltd v Andergrove Lakes Pty Ltd [2014] FCA 862 Parties: VASSALLO CONSTRUCTIONS PTY LTD ACN 078 963 498 v ANDERGROVE LAKES PTY LTD ACN 123 210 720 File number: QUD 133 of 2013 Judge: DOWSETT J Date of judgment: 15 August 2014 Catchwords: PRACTICE AND PROCEDURE – Summary judgment – Where contract alleged to have been made and repudiated – Where same conduct alleged to be misleading or deceptive – Whether no reasonable prospect of success in establishing claims.
PRACTICE AND PROCEDURE – Leave to amend – Where party responding to application for summary judgment sought leave to amend statement of claim – Where proposed amendment alleged to have no reasonable prospect of success if granted – Whether application of test for summary judgment to application for leave to amend appropriate – Whether proposed amendments had no reasonable prospect of success.
Legislation: Competition and Consumer Act 2010 (Cth) Sch 2, s 236
Federal Court of Australia Act 1976 (Cth) s 31ACases cited: ABC v XIVth Commonwealth Games (1988) 18 NSWLR 540 cited
Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499 followed
Ballas v Theophilos (No. 2) (1957) 98 CLR 193 considered
Deputy Commissioner of Taxation v Berhad (No 2) [2010] FCA 1296 cited
Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 cited
Masters v Cameron (1954) 91 CLR 353 applied
Prudential Assurance Co Ltd v Health Minders Pty Ltd (1987) 9 NSWLR 673 considered
Quadling v Robinson (1976) 137 CLR 192 consideredSmartec Capital Pty Ltd v Centro Properties Ltd [2011] FCA 716 cited
Date of hearing: 1 August 2013 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 123 Counsel for the Applicant: Mr M Amerena Solicitor for the Applicant: McKays Counsel for the Respondent: Mr P O'Shea QC with Mr R Jackson Solicitor for the Respondent: Cooper Grace Ward
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
QUD 133 of 2013
BETWEEN: VASSALLO CONSTRUCTIONS PTY LTD ACN 078 963 498
ApplicantAND: ANDERGROVE LAKES PTY LTD ACN 123 210 720
Respondent
JUDGE:
DOWSETT J
DATE:
15 AUGUST 2014
PLACE:
BRISBANE
REASONS FOR JUDGMENT
BACKGROUND
On 5 March 2013 the applicant (“Vassallo”) commenced these proceedings against the respondent (“Andergrove”). Vassallo seeks:
·recovery of a debt allegedly due pursuant to a contract;
·damages for breach of contract;
·damages pursuant to s 236 of Sch 2 to the Competition and Consumer Act 2010 (Cth) (the “CCA”);
·interest; and
·costs.
Vassallo is a builder. Andergrove was, at the relevant time, engaged in property development. In 2011 and thereafter, Andergrove proposed to develop land in the Mackay region (the “development”). It retained Westera Partners Pty Ltd (“Westera”) to provide services in connection with the development, including the calling of tenders for engineering works. Westera employed one…
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Details
- Case
- [2014] FCA 862
- Decision Date
CaseChat Overview and Summary
In the Federal Court of Australia, Vassallo Constructions Pty Ltd filed a case against Andergrove Lakes Pty Ltd, disputing the formation of a contractual agreement between the parties. Vassallo claims that a contract was formed on 9 December 2011, based on the exchange of documents and an email, while Andergrove argues that no such contract was formed and that any subsequent negotiations did not result in a binding agreement. The court was tasked with determining whether the exchange of documents and the email correspondence constituted a valid and binding contract between the parties, as well as whether there was any reasonable prospect of success for the claims made by Vassallo.
The primary legal issue the court had to address was whether the parties had indeed entered into a contract on 9 December 2011, as Vassallo claimed. The court had to examine the content and context of the documents exchanged between the parties, as well as the email communication, to determine whether these constituted an acceptance of the tender and the formation of a contract. Another issue the court had to consider was whether the proposed amendments to the statement of claim by Vassallo would raise a claim that had no reasonable prospect of success, which could be grounds for opposing the application for amendment.
The court found that the documents exchanged and the email correspondence did not constitute a valid and binding contract between the parties on 9 December 2011. The court concluded that the terms and conditions required for the formation of a contract were not sufficiently clear and unambiguous, and that there were no other factors that would lead to the conclusion that a contract was formed on that date. The court also found that Vassallo's proposed amendments did not raise a claim that had no reasonable prospect of success, and therefore the application for amendment was not opposed on those grounds. The court ultimately ruled in favour of Andergrove Lakes Pty Ltd, dismissing Vassallo Constructions Pty Ltd's claims and finding that no contract was formed between the parties on 9 December 2011 or at any other time.
The primary legal issue the court had to address was whether the parties had indeed entered into a contract on 9 December 2011, as Vassallo claimed. The court had to examine the content and context of the documents exchanged between the parties, as well as the email communication, to determine whether these constituted an acceptance of the tender and the formation of a contract. Another issue the court had to consider was whether the proposed amendments to the statement of claim by Vassallo would raise a claim that had no reasonable prospect of success, which could be grounds for opposing the application for amendment.
The court found that the documents exchanged and the email correspondence did not constitute a valid and binding contract between the parties on 9 December 2011. The court concluded that the terms and conditions required for the formation of a contract were not sufficiently clear and unambiguous, and that there were no other factors that would lead to the conclusion that a contract was formed on that date. The court also found that Vassallo's proposed amendments did not raise a claim that had no reasonable prospect of success, and therefore the application for amendment was not opposed on those grounds. The court ultimately ruled in favour of Andergrove Lakes Pty Ltd, dismissing Vassallo Constructions Pty Ltd's claims and finding that no contract was formed between the parties on 9 December 2011 or at any other time.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
In its statement of claim, Vassallo pleads relevantly as follows:4.On or about 31 October 2011 the applicant submitted a written response to the Invitation to Tender (the “Applicant’s Tender” or “the Vassallo Tender”).5.Following a telephone conversation between Victor Vassallo and Ide on or about 21 November 2011 the applicant submitted a further document dated 28 November 2011 (“the 21 November 2011 Discussion” and “the First Updated Tender Costing”).6.On 6 December 2011, the respondent provided to the applicant a written document namely a revised bill of quantities (“the Revised Bill of Quantities”).…17.By written document dated 7 December 2011, the applicant provided to Westera, on behalf of the respondent, a further document containing a revised tender price in accordance with the Revised Bill of Quantities supplied by the respondent to the applicant on 6 December 2011 (“the Second Updated Tender Costing”).18.On 9 December 2011, by e-mail from Ide on behalf of the respondent to Victor Vassallo on behalf of the applicant, the respondent formally accepted the Vassallo Tender as amended by the Second Updated Tender Costing (“the Formal Acceptance E-mail”).19. The Formal Acceptance E-mail expressly stated, inter alia, as follows:“On behalf of our client, Andergrove Lakes Pty Ltd, we are pleased to confirm the principal’s intention to award you the civil contract for Andergrove Lakes Stages 1 - 3, subject to finalisation of the terms with financiers, with a view to commencing work on-site in March, or as soon thereafter as the weather permits.…The other Tenderers have been notified of the intention to award the contract to you company.”20.The Formal Acceptance E-mail was accompanied by a formal agreement, the express terms of which:(a) Incorporated the General Terms of Contract AS4000 unamended;(b)Included the terms of the Applicant’s Tender as amended by the First Updated Tender Costing and the Second Updated Tender Costing;21.In the circumstances the applicant and the respondent entered into an contract whereby the applicant agreed to undertake the work defined by the Applicant’s Tender, as amended by the First Updated Tender Costing and the Second Updated Tender Costing, in consideration for the respondent making payments to the applicant for that work (“the Agreement” or “the Contract” and “the Contract Works”).22. The express terms of the Contract include those contained in:(a)The Applicant’s Tender as amended by the First Updated Tender Costing and the Second Updated Tender Costing;(b)The General Terms of Contract AS4000 unamended.THE PLEADING AND THE EVIDENCE Paragraphs 20 – 22, as they presently stand, are unclear. Vassallo seems to plead that the terms of the contract are contained in the two identified documents, the final tender and the general conditions. The assertion that the “General Terms of Contract”, (presumably the general conditions) in their “unamended form”, formed part of the contract may be a little misleading. The relevant form of the general conditions is exhibited to Mr Ide’s affidavit (exhibit “SJI‑22”) and to that of Mr Vassallo (exhibit “VGV15”). In each case the exhibit shows that it incorporates amendments 1, 2 and 3, presumably amendments to the “standard form” of the general conditions. However I understand Vassallo to mean that the general conditions (as so amended) were not further amended by the parties for the purposes of the proposed transaction.
Decision
Reasons for decision
Vassallo seeks to amend its statement of claim to allege that if no contract was formed on 9 December 2011, subsequent negotiations between the parties led to the formation of a contract on 29 March 2012, 3 April 2012 or 5 April 2012. Andergrove opposes the application for amendment upon the basis that if the amendment were allowed, Vassallo would have no reasonable prospect of success in establishing any such alleged contract. Lack of prospect of success may not, technically, be a basis for resisting the amendment. It is a test prescribed by statute in connection with summary judgment applications. However if, by the proposed amendment Vassallo seeks to raise a claim which will be susceptible of summary dismissal, then there would be no point in allowing such amendment. In any event the parties have conducted the matter on that basis. Vassallo’s proposed amendments do not raise a claim pursuant to the CCA as an alternative to its claim that a contract was made on 29 April, 3 May or 5 May 2012. Nor does it address such a claim in its supplementary written submissions. In oral submissions counsel for Vassallo seemed to suggest that there was an alternative claim pursuant to the CCA, although he conceded that it would be difficult to advance. In the circumstances, I proceed upon the basis that there is no such alternative claim. Vassallo also seeks to make other amendments to the statement of claim. Where they are relevant, I shall identify them.SUMMARY JUDGMENT Section 31A of the Federal Court of Australia Act 1976 (Cth) (the “Federal Court Act”), relevantly provides: (2)The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:(a)the first party is defending the proceeding or that part of the proceeding; and (b)the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. In Spencer v Commonwealth (2010) 241 CLR 118, French CJ and Gummow J said at [25]:Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a “fanciful” prospect of success. That may be a judgment of law or fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Their Honours went on to note that the case involved, “important questions of public and constitutional law and potentially complex questions of fact” (at [27]), and so they concluded that it was unsuitable for summary dismissal. Hayne, Crennan, Kiefel and Bell JJ said at [58]-[60]: How then should the expression “no reasonable prospect” be understood? No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content. Nor can the expression usefully be understood by the creation of some antinomy intended to capture most or all of the cases in which it cannot be said that there is “no reasonable prospect”. The judicial creation of a lexicon of words or phrases intended to capture the operation of a particular statutory phrase like “no reasonable prospect” is to be avoided. Consideration of the difficulties that bedevilled the proviso to common form criminal appeal statutes … , as a result of judicial glossing of the relevant statutory expression, provides the clearest example of the dangers that attend any such attempt.In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the proceeding could be described (with or without the addition of intensifying epithets like “clearly”, “manifestly” or “obviously”) as “frivolous”, “untenable”, “groundless” or “faulty”. But none of those expressions (alone or in combination) should be understood as providing a sufficient chart of the metes and bounds of the power given by s 31A. Nor can the content of the word “reasonable”, in the phrase “no reasonable prospect”, be sufficiently, let alone completely, illuminated by drawing some contrast with what would be a “frivolous”, “untenable”, “groundless” or “faulty” claim.Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is “no reasonable prospect” of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to “no reasonable prospect” can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase “just and equitable” when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.
Ratio Decidendi
Legal Principle Established
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