Wagdy Hanna and Associates Pty Ltd v Gavagna
[2016] ACTCA 64
•25 November 2016
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Wagdy Hanna & Associates Pty Ltd v Gavagna |
Citation: | [2016] ACTCA 64 |
Hearing Date: | 12 May 2015 |
DecisionDate: | 25 November 2016 |
Before: | Murrell CJ, Penfold and Wigney JJ |
Decision: | The appeal is dismissed with costs. |
Catchwords: | CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – Appeal from finding that no contract entered – whether solicitor in his personal capacity entered contract with appellant company –whether contract made to be determined objectively – appeal grounds based on mis-reading of decision of primary judge – appeal dismissed. |
Cases Cited: | Arfaras v Vosnakis [2016] NSWCA 65; 18 BPR 35,819 Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; 53 NSWLR 153 Masters v Cameron [1954] HCA 72; 91 CLR 353 |
Texts Cited: | JW Carter, Contract Law in Australia (Lexis Nexis, 6th ed, 2013) |
Parties: | Wagdy Hanna & Associates Pty Ltd (Appellant) Steven Gavagna (Respondent) |
Representation: | Counsel Mr R Arthur (Appellant) Mr G Blank (Respondent) |
| Solicitors Donohue & Co (Appellant) Mills Oakley Lawyers (Respondent) | |
File Number: | ACTCA 28 of 2014 |
Decision under appeal: | Court: ACT Supreme Court Before: Master Harper Date of Decision: 21 May 2014 Case Title: Wagdy Hanna & Associates Pty Ltd v Gavagna Citation: [2014] ACTSC 97 |
THE COURT:
Introduction
This is an appeal from a decision dismissing a claim asserting a breach of contract. The action was brought by the appellant, a firm of architects, against the respondent, a solicitor who, the appellant said, had agreed, but subsequently failed, to pay it $250,000 for preparing architectural concept plans for a possible residential development in China.
The principal of the appellant, architect Wagdy Hanna, was personally involved in both the preparation of the architectural plans and in the negotiations said to have resulted in a contract between the appellant and the respondent Steven Gavagna personally.
Background
Mr Hanna met Mr Gavagna, a solicitor, in about 2000 at a contract law seminar being conducted by Mr Gavagna for the Australian Institute of Architects. In early 2001, Mr Gavagna introduced Mr Hanna to Michael Scott, a developer, at the National Press Club. Mr Scott and a company in which he was involved were clients of the firm of solicitors that employed Mr Gavagna (the law firm). Mr Scott told Mr Hanna that he was interested in pursuing development opportunities in China and that there might be an opportunity for the appellant to undertake architectural work on a speculative basis.
On 30 April 2001, Mr Hanna and Mr Gavagna met and, at Mr Gavagna’s request, Mr Hanna agreed to amend existing concept plans for a residential development in China. According to Mr Hanna, at this meeting, Mr Gavagna identified the China Development Authority as the principal. A fee of $250,000 was discussed. The appellant completed the concept plans within a few days.
On 3 May 2001, before the plans were released by the appellant, Mr Hanna faxed to Mr Gavagna at the law firm a document setting out an undertaking to pay the appellant $250,000 for the concept plans, and asking Mr Gavagna to sign the document.
Mr Gavagna sent the document on to Mr Scott. Early on 4 May 2001 Mr Scott faxed a document to Mr Hanna, including the following paragraphs:
At this stage SBC agrees in principal [sic] with your scope of work and fee structure but cannot formally commit until the plans have been accepted by the developer. A contract with our Chinese clients will need to be signed first.
The response has been positive so far and we look forward to viewing the elevations and perspective later today.
Mr Hanna then pressed Mr Gavagna to sign the document, which Mr Gavagna did later that same day.
In 2007, the appellant commenced proceedings against Mr Gavagna claiming the liquidated sum of $250,000 pursuant to the document, which was said to constitute a contract between the appellant and Mr Gavagna.
The alleged contract
The evidence relating to the circumstances in which the alleged contract was signed by Mr Gavagna is set out in some detail in his Honour’s judgment at [10] to [30] (Mr Hanna’s evidence) and [79] to [81] (Mr Gavagna’s evidence).
The document itself was described in his Honour’s judgment at [25] as follows:
On the afternoon of Thursday 3 May, Mr Hanna prepared a two-page document, signed and dated it and sent it to Mr Gavagna by fax. It is this document which is said by counsel for the plaintiff to represent either the written part of the contract sued on, or alternatively the entirety of the contract. The document is on the letterhead of the plaintiff company ...
The document read as follows:
To: Steven Gavagna
O’Connor Harris
Fax number: 6247 0984
From: Wagdy Hanna
Number of pages including this one: 2Date: Thursday 3 May 2001
Subject: Jaixing [sic] Residential Development – China
Message:
Thank you for yesterday’s voice mail assuring me “all is well” and that you are pleased with the way the design issues have been resolved.
Mr Michael Scott, Chairman of Scott Brothers Constructions Pty Ltd, visited our offices today and provided the photos you mentioned in your voice mail. Mr Scott also advised that the news is positive for the design. He also advised that they will be starting on the project in two months time.
The agreed scope of services:
You have retained our office to provide a Concept Plan for the residential development.
Deliverable:
As agreed we are progressing to have a complete Concept Plan ready by this Friday.
By this Friday, we are hoping to have:
1. Floor plans for a typical floor.
2. Elevations.
3. Perspective.
I understand that you will wish to fax these drawings to China. I will therefore produce these drawings in A4 size to ensure they are faxable. You will nevertheless need to post or courier them as they are in colour.
Clients and instructions
We receive instructions from you and therefore we consider you our client as well as our solicitor in this transaction.
We do understand that you are acting for the China Development Authority who is located in Brisbane.
If we receive any instructions from other people involved in the project we will immediately notify you and seek directions.
Quantum of fees:
The agreed fee is two hundred and fifty thousand dollars ($250,000.00) nett payable by instalments during the progress of the work.
Payment of fees:
We request that fees be paid by direct transfer.
Details will be clearly stated on our invoice.
Our next meeting:
Our next meeting will be before close of business on Friday 4 May 2001.
I shall contact you mid afternoon to confirm our meeting. Please pencil in 4:30 pm.
Our records:
For our files, please countersign this fax and send it back. It will serve as a record of our agreements and undertakings.
Agreed as true record of agreement reached on Monday 30 April 2001.
Wagdy Hanna Steven Gavagna
Managing Director B. Build.LLB
Wagdy Hanna & Associates Pty Ltd Associate
Architects and property consultants O’Connor Harris
Barristers & Solicitors
His Honour reached the following conclusions:
138. The plaintiff’s case is based upon my being persuaded that the “agreement” signed by Mr Hanna on 3 May and Mr Gavagna on 4 May 2001, being the fax transmission dated 3 May 2001, is a contract between the plaintiff company and the defendant. I am satisfied that Mr Hanna was aware at all relevant times that Mr Gavagna did not sign that document as a party to a contract. Firstly, I am satisfied that Mr Hanna was well aware that Mr Gavagna was not a principal. He was an employed solicitor with O’Connor Harris, and the solicitors were acting for a client. Mr Hanna may have thought that the client was China Development Corporation, which it clearly was not, but I think it more likely that he was aware that the client of O’Connor Harris was Scott Brother Constructions Pty Ltd. That company is identified in the preamble to the document itself. At all events I am satisfied that Mr Hanna did not see Mr Gavagna as personally a party to any contract, but simply as having the authority to sign it on behalf of either his firm or a client of his firm. It is unnecessary for present purposes for me to decide precisely what Mr Hanna thought in that regard. It may be that he did not think it through to a conclusion.
139. That is probably enough for me to conclude that the plaintiff company cannot succeed in the action.
140. I should go on to say that there would have been other difficulties in its way. One difficulty relates to the inherent improbability that Mr Hanna and Mr Gavagna would have agreed to an arrangement whereby Mr Hanna’s firm was to be paid $250,000.00 for three or four days’ work preparing a few concept plans and diagrams. I accept the unchallenged evidence of Mr Rihs that the work itself could not have justified a fee of any more than something within a range of $5,000.00 to $20,000.00.
141. I am also persuaded that it was common practice within the architecture profession for architects to undertake preliminary work on the understanding that they would not be paid if the work did not lead to a profitable contract but would be well remunerated if it did. I am persuaded that Mr Hanna was aware at all material times of that practice in his profession.
142. I am further influenced by the fact that the document provided that the fee was to be “payable by instalments during the progress of the work”. This seems to me inconsistent with an interpretation that the fee was to be payable immediately and regardless of whether or not any work eventuated. I am accordingly satisfied that the agreement should be construed as having been contingent on construction work proceeding on a contractual basis flowing from the plans and documents prepared by Mr Hanna.
143. It is plain that Mr Hanna did not regard Mr Gavagna as personally liable on the contract in the early years after 2001. He never made demand on Mr Gavagna for payment of the fee he now claims, until he commenced the present action, almost six years after he prepared the plans. He never sent a tax invoice to Mr Scott or any of his companies, and never made any demand upon them. He never sent a tax invoice to China Development Corporation, or made any demand upon it. He did send a letter of demand to O’Connor Harris but did not pursue a claim against that firm after its denial of liability during 2003.
144. It may be that at some point Mr Hanna became suspicious that Mr Gavagna might use the plans he had prepared for his own purposes. If that is so, those suspicions did not arise for many months after the alleged contract was entered into.
145. I have no doubt that during those days in early May 2001 Mr Hanna became concerned that he might spend a lot of time, and expend some of his company’s money, in preparing the plans and diagrams he had been asked to prepare, and that he wished to obtain a signature on a document which would form the basis of a claim for payment at some time in the future. However, I am not persuaded that there was any contract between Mr Hanna’s company and Mr Gavagna personally.
Grounds of appeal
The appellant’s original notice of appeal was lodged, and may have been drafted, by Mr Hanna. An amended notice of appeal was filed on 18 February 2015, apparently after Mr Hanna had engaged a firm of solicitors; it set out the following grounds of appeal:
1.His Honour erred in law in relying (at [138] of his reasons for decision delivered 21 May 2014) on the subjective belief of Mr Hanna that the Respondent was not signing the contract as a party to the contract as a basis for holding that the Respondent was not personally liable on the contract.
2.His Honour erred in law in relying (at [143]) on the conduct of Mr Hanna subsequent to the contract as a basis for holding that the Respondent was not personally liable on the contract.
3.His Honour erred in law in finding (at [142]) that the agreement should be construed as having been contingent on building work proceeding on a contractual basis flowing from the plans and documents prepared by Mr Hanna, without giving reasons for such a construction and without giving reasons why he did not accept an alternative construction put to him by the Appellant.
4.His Honour erred in law in relying (at [140-141]) solely on matters external to the contract in holding that it was inherently improbable that the parties would have agreed to a contract price of $250,000.00.
The issues
The appellant’s claim was initially pleaded as based on a contract consisting of written and oral elements (a mixed contract). At the hearing before the primary judge, a substantial amount of evidence was led by the appellant that appeared only to have been relevant in relation to a mixed contract.
However, in what counsel for the appellant described as his “final submissions” and counsel for Mr Gavagna described in submissions on the appeal as the appellant’s “full closing submissions”, counsel for the appellant told the primary judge that the appellant’s case was that the agreement was a wholly written one, being an agreement within the first category of contract identified in Masters v Cameron [1954] HCA 72; 91 CLR 353, the initial oral agreement having been fully subsumed into the written agreement.
Whether the agreement asserted was wholly in writing or consisted of both written and oral elements was significant in determining the nature of some parts of the inquiry to be undertaken by the primary judge.
If the document signed by Mr Hanna and Mr Gavagna recorded the entire agreement, then the primary judge’s task was to construe the document, and there were strict limits on the evidence of matters extrinsic to the document that could be considered in that construction exercise.
On the other hand, if the agreement involved written and oral elements, then the primary judge’s first task was to make findings of fact identifying the terms of the agreement. That would obviously involve consideration of a wider range of evidence of the circumstances in which the appellant said an agreement had been made and the conduct of the people involved. Where there is a dispute about the nature of an agreement, the question of what evidence may be considered in order to resolve that dispute may involve some complexity.
However, apart from the question of the nature of the contract, and what material could be considered in construing it, there was in this case a preliminary but fundamental question, which was explicitly raised in the defence filed in August 2007, about whether there was a contract at all between the appellant company and Mr Gavagna.
Thus, the case potentially raised at least the following questions, but would be determined by a negative answer to the first question:
(a)Was there a contract at all, or at least was there a contract between the parties to the proceeding?
(b)Was the contract asserted by the appellant:
(i)entirely contained in the document signed by Mr Hanna on 3 May 2001 and by Mr Gavagna on 4 May 2001? or
(ii)an agreement consisting of the terms set out in the document and other terms that were the subject of oral agreement reached before the document was signed?
(c)If the contract was entirely a written one:
(i)what extrinsic evidence, if any, was available to his Honour in construing the terms of the document concerned? and
(ii)what was the effect of the document?
(d)If the contract was a mixed one:
(i)what evidence was available to his Honour in determining its terms? and
(ii)what were the terms of the contract?
The primary judge’s decision
His Honour did not articulate or otherwise identify these questions. Rather, after summarising the evidence, he reviewed that evidence, made the findings contained in [138] to [145], and from those findings concluded that the appellant could not succeed in his action. In effect, it seems that his Honour started with what we have identified above as question (a) and, relying on specified aspects of the evidence that was put before him, concluded that there was no contract between the parties.
Having reached that conclusion, his Honour at [146] adverted to the question we have identified above as question (c), saying:
Counsel referred me to a number of authorities as to the circumstances in which evidence is admissible about the circumstances in which a written contract has been entered: notably Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; and Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471. Because of my findings of fact, I have not found it necessary to call in aid any of the principles emerging from these decisions.
It seems to us that his Honour had reached what he clearly saw as findings of fact, those findings of fact being to the effect that, at least between the appellant and Mr Gavagna, there was no contract for the payment of $250,000 to the appellant for the provision to Mr Gavagna of architectural drawings for a possible construction project in China. Therefore, the appellant could not succeed in its action. For that reason, it seems, his Honour saw no need to concern himself with question (b) (the form of any such contract), or with either question (c) or (d), which would only arise after question (b) was answered.
The findings at first instance
The primary’s judge’s conclusions (quoted at [12] above) suggest that he relied on the following factual findings in concluding that, despite the fact that Mr Hanna and Mr Gavagna had both signed the document set out at [10] above, no contract had been made between the appellant and Mr Gavagna:
(a)That Mr Hanna was well aware that Mr Gavagna was not a principal in any dealings with Mr Hanna, but an employed solicitor with O’Connor Harris, a law firm acting for a client.
(b)That Mr Hanna might have thought that the law firm’s client was China Development Corporation, or might have thought that the client was Scott Brother Constructions Pty Ltd (which is mentioned in the preamble to the document).
(c)That Mr Hanna was aware at all relevant times that Mr Gavagna did not sign the document as a party to a contract and did not sign the document in a personal capacity, but had authority to sign it on behalf of either the law firm or the law firm’s client.
(d)That it was inherently improbable Mr Hanna and Mr Gavagna would have agreed to an arrangement whereby Mr Hanna’s firm was to be paid $250,000 for three or four days’ work preparing a few concept plans and diagrams (noting the unchallenged evidence of Mr Rihs that the work itself could not have justified a fee over $20,000).
(e)That it was common practice within the architecture profession for architects to undertake preliminary work on the understanding that they would not be paid if the work did not lead to a profitable contract but would be well remunerated if it did.
(f)That Mr Hanna was aware at all material times of that practice in his profession.
(g)That the reference in the signed document to the fee being “payable by instalments during the progress of the work” is inconsistent with the appellant’s claim that the fee was to be payable immediately and regardless of whether or not any work eventuated.
(h)That the appellant made no demand on Mr Gavagna for payment of the fee under the signed document until the legal action was instituted shortly before the expiry of the limitation period applicable to the claim.
(i)That the appellant made no demand on China Development Corporation, or on Scott Brothers Constructions Pty Ltd, or on Mr Scott, for payment in accordance with the signed document.
(j)That the appellant sent a letter of demand to the law firm, but did not pursue that claim after the law firm denied any liability in 2003.
(k)That in the days before the document was signed, Mr Hanna might have been concerned about spending time and money preparing plans and diagrams for which he might not be paid, and wanted to get a signature on a document which would form the basis of a claim for payment at some time in the future.
Determining whether there is a contract
Various questions arise in determining whether a contract has been concluded, including questions as to whether any agreement has been reached, and if so in what terms and between whom.
These days, such fundamental questions do not commonly arise in litigation, and counsel did not (presumably because of the way the appeal was framed and conducted), address us in any detail about them, but the basic propositions are reasonably clear. In JW Carter, Contract Law in Australia (Lexis Nexis, 6th ed, 2013) 42-44, the approach is relevantly summarised as follows:
The true situation is that a binding agreement can be found without identifying an offer and acceptance. Often there is little doubt on the facts that agreement has in fact been reached. It is in cases where one party denies the other party’s claim that agreement had been finalised that an analysis of the facts in terms of offer and acceptance will prove useful. Offer and acceptance is best seen as an analytical tool which, in at least the great majority of disputed cases, assists in determining whether the parties had in fact reached agreement.
Business people do not usually conduct negotiations in terms of such concepts as offer, acceptance, revocation and counter-offer .... For example, a statement described as an 'acceptance' may very well be, in legal effect, a 'counter-offer'. Our task is to look to the intentions of the parties as disclosed by their words and conduct and to attempt, by applying such concepts to the facts, to see whether agreement was ever reached.
...
[3-06] Objective approach. The law is concerned with the interpretation which would be placed upon the words and actions of the parties by a reasonable person, rather than upon their subjective intentions. This approach is based partly upon practical problems of proof, and partly upon the notion that a person is entitled to act on the basis that what another appears to intend will be binding upon him or her. Thus an offer must normally be interpreted in the sense in which it would reasonably be understood by an ordinary person, even though the offeror's actual meaning was otherwise (citations omitted).
In Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; 53 NSWLR 153 Heydon JA, after reviewing a number of earlier cases, said at [81]:
In light of the above cases, it is relevant to ask: in all the circumstances can an agreement be inferred? Has mutual assent been manifested? What would a reasonable person in the position of [the appellant] and a reasonable person in the position of [the respondent] think as to whether there was a concluded bargain?
This approach has also been recently endorsed by the New South Wales Court of Appeal in EPS Constructions Pty Ltd v Mass Holdings Pty Ltd [2015] NSWCA 317 where Sackville AJA (with whom Leeming JA and Simpson JA agreed) said at [79]:
The issue before the primary Judge was whether the words and conduct used by the parties to the alleged agreement would have led a reasonable person to conclude that the parties had reached consensus. This required his Honour to determine whether, in all the circumstances, mutual assent has been manifested such that an agreement can be inferred.
(Citations omitted)
Carter addresses the question whether the “parties” intended to create legal relations between themselves, another requirement for the creation of a contract, as follows (at 175-176):
the law requires that, in addition to agreement and consideration, a third element is necessary to a contract, namely, an intention to create legal relations. Equally, since a contract is a 'legally binding agreement', it would be paradoxical if an agreement could be held a contract in the face of the parties’ intention that it should not give rise to legal rights and obligations. Therefore, a common positive intention not to contract will be respected.
The requirement that there be an intention to create legal relations does not mean that a party seeking to enforce a contract must show that the parties consciously adverted to the legal implications of what they were doing. Moreover, because the test of intention is objective, it is not usually open to one party to prove that subjectively a unilateral intention was that legal relations should not arise. Therefore, in practice, the issue of intention to create legal relations does not often arise. Accordingly, apart from the uncommon cases where the parties agree that their agreement is not to attract legal consequences, the issue is determined as an inference of fact ....
[8-02] Intention may be express or implied. The presence or absence of the intention to be legally bound depends on the facts of each case. The relevant intention may be express or implied. However, in the case of parties at arm's length, and in particular, in the case of commercial agreements, an intention that the agreement was not intended to be legally binding will not lightly be inferred (citations omitted).
In Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; 209 CLR 95 at 105, the plurality noted that the question whether the “parties” intended to create legal relations between themselves must be determined objectively. It must be determined having regard to the subject matter of the agreement, the positions of the parties and the relevant surrounding circumstances. See also: Arfaras v Vosnakis [2016] NSWCA 65; 18 BPR 35,819 at [50].
Whether or not these fundamental principles were canvassed in submissions at first instance, they were not referred to, as principles, in the primary judge’s decision.
Nevertheless, it is clear that the first element of the defence case, that there was no contract between the parties to the proceeding, required the primary judge to start by examining the words and actions of the alleged parties to the contract, and the other circumstances in which the document was signed by Mr Hanna and Mr Gavagna.
For that purpose, it would have been appropriate for him to consider the objective questions of:
(a)generally, how a reasonable person would have interpreted the conduct of each of the alleged parties to the asserted contract, including:
(i)the dealings between the appellant and Mr Gavagna in the broader circumstances of their relationship;
(ii)their own roles in those dealings; and
(iii)the roles of other people and entities involved in those dealings; and
(b)in particular, whether a reasonable person:
(i)would have expected an employed solicitor (who worked in a law firm that acted for the commercial entity using the appellant’s professional services) to undertake personal liability for making payment for those services; or
(ii)would have interpreted those dealings as indicating an intention to make a legally binding agreement that the appellant should be unconditionally entitled to a payment by Mr Gavagna, in his personal capacity, of $250,000 for work objectively valued, within Mr Hanna’s profession, at no more than $20,000.
The primary judge’s approach
If it is correct that the initial question facing the primary judge related to whether, objectively, there was a contract at all, and that it was that question which his Honour sought to answer at [138] to [145] of his judgment, then it would have been useful for his Honour, before simply canvassing what he saw as the relevant facts, to explain briefly the question he was addressing and the law he was applying. It would have been particularly useful for his Honour to consider, at [138], not what Mr Hanna believed, but what a reasonable person would have believed, in the relevant circumstances.
On the other hand, his Honour’s canvassing of the facts does indicate, especially at [138], that his inquiry was whether there was any kind of contract between the appellant company and Mr Gavagna in his personal capacity. That it was the primary judge’s conclusion that there was no relevant contract is borne out by his Honour’s comment at [146] of his judgment that there was no need for him to concern himself with the authorities about the availability of extrinsic evidence in construing a written contract; if there was no contract, then those authorities were indeed irrelevant.
Consideration of appeal grounds
On the basis that the primary judge began by considering the fundamental question whether there was any kind of contract, and concluded that there was no such contract, then, with some minor qualifications, the errors asserted in the appeal grounds seem to be irrelevant.
Appeal ground 1 asserts an error constituted by his Honour’s reliance on the subjective belief of Mr Hanna that Mr Gavagna was not signing the contract so as to accept personal liability under it. However, having found that there was no contract, his Honour did not purport to find that Mr Gavagna was not personally liable under a contract that he had nevertheless signed. His Honour’s conclusion that there was no contract was an available and not apparently erroneous conclusion from a consideration whether a reasonable person would have interpreted the dealings between Mr Hanna and Mr Gavagna as intended to create a contract to which Mr Gavagna was a party in his personal capacity.
There is no doubt that his Honour could have expressed his reasoning better. In particular, he could have made it clear that the question that needed to be addressed was not whether Mr Hanna believed that Mr Gavagna was contracting with him in a personal capacity but whether a reasonable person would have believed that. However, in the absence of any submission that a reasonable person would have believed that Mr Gavagna had entered a contract in his personal capacity even though his Honour found that Mr Hanna did not believe it, the appeal ground does not cast any relevant doubt on the validity of his Honour’s effective conclusion.
Appeal ground 2 (that his Honour should not have relied on Mr Hanna’s conduct subsequent to the contract), also fails, because it assumes that his Honour was interpreting a contract between the appellant and Mr Gavagna, rather than considering whether there was a contract and then rejecting that proposition. The reference to conduct by Mr Hanna “subsequent to the contract” has no meaning in the context of an examination of the conduct of the alleged parties to determine whether there ever was a contract between them.
Appeal ground 3 (that it was an error by the primary judge to construe the agreement in a particular way without giving reasons for rejecting an alternative construction) falls away on the basis that his Honour had concluded that there was no contract to construe.
Finally, appeal ground 4 (that the evidence to the effect that the asserted contract price of $250,000 was inherently improbable was entirely “external to the contract”) also has no substance. When the question is whether, objectively, there was a contract, then it makes no sense to describe particular facts or circumstances as “external” to the contract. The evidence concerned was certainly external to the document signed by Mr Hanna and Mr Gavagna, but the document was only one aspect of the evidence that the primary judge considered, and his Honour concluded that the evidence considered as a whole did not establish the existence of any contract between the appellant and Mr Gavagna, at least in Mr Gavagna’s personal capacity.
Having concluded that the appeal grounds must fail because they do not relate to the task that the primary judge undertook, it may be worth noting that, having regard to the evidence and the need to take an objective approach to whether a contract had been formed, we can see no error in the conclusion reached by his Honour that there was, at the least, no contract between the appellant company and Mr Gavagna in his personal capacity.
Conclusion
As already noted, the primary judge could usefully have made his reasoning process more explicit, both in terms of the questions he was considering and the basis on which he dealt with those questions.
However, his ultimate reason for giving judgment for the defendant was set out quite explicitly at [145], when he said:
I am not persuaded that there was any contract between Mr Hanna’s company and Mr Gavagna personally.
That finding did not invite claims of error made on the assumption that his Honour had found a contract but had considered inadmissible evidence in construing it. The appeal must be dismissed, with costs.
| I certify that the preceding forty-five [45] numbered paragraphs are a true copy of the Reasons for Judgment of the Court. Associate: David Hoitink Date: 25 November 2016 |
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