Croser v Focus Genetics Limited Partnership (2548500)
[2020] NZHC 320
•28 February 2020
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2019-485-000625
[2020] NZHC 320
BETWEEN DAMIEN LEIGH CROSER and KIRSTEN LOUISE CROSER
PlaintiffsAND
FOCUS GENETICS LIMITED PARTNERSHIP (2548500)
Defendant
Hearing: 17 February 2020 Counsel:
C Stevens and T Mijatov for the Plaintiffs
D McLellan QC and L C Sizer for the Defendant
Judgment:
28 February 2020
JUDGMENT OF DOOGUE J
Introduction
[1] Damien Croser and Kirsten Croser (“Crosers”) own and operate “Kiranda”, an elite sheep farming operation at Penola, South Australia. Focus Genetics LP (“Focus”) is a limited partnership based in Napier, New Zealand. Focus specialises in livestock genetics. It is controlled by Landcorp Farming Limited (Landcorp), a very substantial government-owned farming enterprise.
[2] In 2013 the parties commenced discussions with the intent that Crosers would breed sheep utilising genetic material provided by Focus. An agreement was concluded (the multiplier agreement).
[3] On or about 25 March 2019, Crosers brought proceedings against Focus, a subsidiary of Landcorp, in respect of a dispute between the parties in contract, tort and
CROSER v FOCUS GENETICS LIMITED PARTNERSHIP (2548500) [2020] NZHC 320 [28 February 2020]
under the Fair Trading Act 1986 (CIV-2019-485-164) (“the Underlying Proceeding”).1 Focus subsequently brought a counter claim against Crosers, including for payment of invoices. In essence what the Court will have to decide in the Underlying Proceeding is whether the multiplier agreement (the only agreement signed by the parties) governed the parties throughout the duration of their arrangement or whether that arrangement was replaced by a new arrangement which saw Crosers, in effect, become elite sheep breeders, with the encouragement and support of Focus. In or about April 2019 the hearing of the Underlying Proceeding was set down for a two-week fixture on 14 October 2019. Crosers say that on the eve of that trial they and Focus (after extensive negotiations) reached a binding settlement agreement (“the Agreement”) which discharged all claims in the Underlying Proceeding.
[4] Focus say there was no binding agreement; the offer and acceptance which the parties had reached was conditional on executing a formal contract.
[5] Crosers say that Focus subsequently resiled from the Agreement. Focus says the parties were unable to agree on the terms of a formal written agreement.
[6] On 25 October 2019 Crosers issued proceedings seeking specific performance of the Agreement without further delay, together with interest on the money component of the Agreement and increased costs.
[7] On 12 November 2019 Focus applied for summary judgment and in the alternative an order striking out Crosers’ claim in whole or in part together with costs on both the substantive proceeding and the summary judgment. These applications are the subject of this decision.
[8] On 18 November 2019, in one of five judgments now delivered by Churchman J in these and the Underlying Proceedings, Churchman J found that Crosers have an arguable case that they reached a binding settlement agreement with Focus and granted an interim injunction in favour of Crosers.2
1 Specifics of which are fully set out in Churchman J’s decision of Croser & Anor v Focus Genetics Limited Partnership (2548500) [2019] NZHC 2995.
2 Croser & Anor v Focus Genetics Limited Partnership (2548500), above n 1.
Factual overview
[9] The parties attempted to negotiate settlement of the Underlying Proceeding by negotiation from early 2019. On 8 August 2019 Focus made a settlement offer on a without prejudice basis save as to costs. The offer contained express terms on the provision of data; something fundamental to the commercial arrangement.
[10] Focus offered to provide data on rams to be sold at the then upcoming October sales. The offer included the provision of “full pedigree information” for the Kiranda flocks. Full pedigree information was defined by Focus as:
… the parentage of all animals in the flock back two generations by reference to the tag number of the forbears, to allow the Crosers to manage inbreeding issues going forwards.
[11] Notably, this did not include linkage data which would allow Crosers to establish linkages to Focus’ dataset on its New Zealand flocks. This dataset or intellectual property is what Focus provides to genetic breeding partners and for which genetic breeding partners share their revenue in progeny (ram) sales with Focus.
[12] On 9 September 2019, Crosers responded to that offer with a counter-offer sent by their counsel Ms Anagnostou. On the issue of data, the counter-offer sought “full access to LambPlan … without restrictions based on parentage or other factors.”
[13] A revised offer, on the same terms as to data, was sent by Focus on 13 September 2019. The letter said, at [9]:
On the question of data, Mr & Mrs Croser claim all information held by Focus on the flock. Data capture and management is a significant part of the value Focus brings to its relationship with its breeding partners. It is not prepared to handover all data as this would undermine its business in Australia. We understand Mr & Mrs Croser need certain data in order to operate on their own account. Focus has already offered, through the October sales agreement and its settlement offer, to provide data necessary for Kiranda to build its own genomic relationship matrix and Lambplan data base to operate as an elite breeding enterprise.
[14] The parties were encouraged by the negotiation, and in order to resolve the Underlying Proceeding before the hearing set down for 14 October 2019, they met in Adelaide on 27 and 28 September 2019 to further discuss settlement of the
Underlying Proceeding. Crosers attended the meeting with their counsel Ms Anagnostou, and the representatives of Focus were Mr McMechan, general counsel and company secretary of Landcorp and Mr Creswell, general manager of Focus. No settlement was reached at the Adelaide meeting.
Exchange of correspondence
[15] By letter dated 30 September 2019 Crosers made another offer. That offer included the following statement about data:
c. Data Provision: Focus Genetics agrees to provide the Crosers with all of the data in relation to all of their sheep, as per the following:
(i) “the sheep” being the sheep born between 2014 and 2018 that were not born into the Crosers’ commercial operation, including sheep which the Crosers no longer own; and
(ii) the data to be provided is the data collected on the sheep, including the data in relation to third party tests of such collection (such as TSU sample results).
[16] The parties, through Ms Anagnostou and Mr McMechan, subsequently continued email correspondence to attempt to negotiate settlement of the Underlying Proceeding. Eleven emails were exchanged between 5.03am on 30 September 2019 and 8.59pm on 2 October 2019.
[17] These emails are in sequence, although the times vary between South Australia and New Zealand. South Australia is 2.5 hours behind New Zealand, so seemingly some responses were before the receipt of the email they were responding to.
[18] In the course of these emails, on 30 September 2019, Mr McMechan made an increased compensation offer, and said:
… other terms would be as per your letter and our discussions, subject to me clarifying and us agreeing on the appropriate definition of “data”.
[19]Ms Anagnostou replied rejecting that offer but said:
If we agree on the cash amount, we can work out the most elegant way of framing the definition of data – I think that we are both on the same page there.
[20] Mr McMechan emailed Ms Anagnostou on 1 October 2019 advising a deal was still possible if the Crosers reduced the settlement sum they required. She replied later that day, saying the Crosers would not move on their figure.
[21] Later that day Mr McMechan emailed Ms Anagnostou with a revised settlement offer increasing the compensation payable by Focus to Crosers and containing the following text on “data”:
Focus agrees to provide all data in relation to any sheep (born between 2014- 18 inclusive) belonging to the Crosers that is held by Focus Genetics LP and its subsidiaries, including pedigree information and all raw data (measurements, test results etc) held in respect of those sheep. Focus will warrant that the information provided will be all information held by Focus in relation to the Crosers’ sheep but will provide no other warranty in relation to the data.
Focus agrees to transfer any ownership interest in that data to the Crosers.
Focus will procure the transfer of all unique sheep identification numbers relating to the Crosers’ sheep in Lambplan. Focus will not provide access to any data/records within LambPlan.
Despina – as discussed, the reason for the last point (different to your d.(ii) point) is that transferring access from Focus to the Crosers within Lambplan will provide the Crosers with access to a wider set of data than that agreed above. Transfer of the unique identifiers is necessary so that the Crosers can continue to use LambPlan for those particular sheep and it would be up to the Crosers to develop their own records within Lambplan with their data.
[22]Mr McMechan also said:
Please let us know if this offer is acceptable to the Crosers and we can then move to document the terms in a settlement agreement.
[23] Later that same evening he sent another email to Ms Anagnostou increasing the settlement offer and saying:
Please confirm by return that we have agreement, subject to documenting the various agreed terms.
[24]Ms Anagnostou replied later that night saying:
We accept your offer to settle on the terms of the below emails read together with our letter to you of yesterday’s date (for the avoidance of doubt, using your definition of data).
[25] On 2 October 2019 Mr McMechan raised an additional matter, from the Focus settlement offer of 8 August 2019, that Focus required in the final deed:
Great to have agreement, thank you and I’m pleased we kept the dialogue open after our meeting in Adelaide.
One point to clarify/add please – as we’ve discussed, just ensuring that the Focus TM point (not covered in your letter but agreed in earlier exchanges) is also covered off in the settlement deed please.
[26]Ms Anagnostou acknowledged this and said:
We are fine to give up the trademarks. It was implied I think in our 30/9 letter but granted not explicit.
Negotiations post alleged agreement
[27] On 4 October 2019 Ms Anagnostou emailed a draft settlement deed to Mr McMechan.
[28]That draft deed included the following clause on data:-
2.4 Transfer and ownership of Data: The Defendant agrees:
(a)No later than 10 October 2019, to provide the Plaintiff all data in relation to all Kiranda Sheep (and therefore including any and all Kiranda Sheep born after 2014) that is held by the Defendant, its subsidiaries and/or any of their contractors, including pedigree information and all raw data (including but not limited to measurements and test results including TSU sample results) (“the Data”). The Defendant will warrant that the information provided will be all the information held by the Defendant or its subsidiaries in relation to the Kiranda Sheep but provides no other warranty in relation to the Data;
(b)No later than 10 October 2019, to procure the transfer to the Plaintiffs of all unique sheep identification numbers relating to all the Kiranda Sheep which have such Lambplan unique sheep identification numbers;
(c)That it transfers to the Plaintiffs any interest that it may have in the Data; and
(d)No later than 10 October 2019, to procure the transfer of all unique sheep identification numbers relating to the Kiranda Sheep in Lambplan.
[29]Mr McMechan replied by email on 8 October 2019. In his email he said:
You’ll note that there’s an outstanding point under the data clause that I need to come back to you on. I’m waiting to hear back from Focus on this point, however, in the interests of keeping this moving … I’m getting the draft to you for review. I’ll send a follow up on the data point once I’ve heard from Focus.
[30] Mr McMechan responded with a marked-up version of the deed and in reference to clause 2.4(a) he included “To avoid doubt, Data does not include [ ]”, together with an explanatory note in the margin:
Commented [AM6]: For clarity here FG would like to be clear about what is and is not in scope. Proposed wording TBC.
[31] Ms Anagnostou responded on 9 October 2019 with a third version of the draft deed, in which she had removed the addition “to avoid doubt” and reverted to the definition in version one.
[32] On 9 October Mr McMechan sent a fourth version of the draft deed to Ms Anagnostou, in which he proposed a further, but not final, change to the definition of “Data” in clause 2.4(a):
2.4(a) As soon as practicable and no later than 14 days of the date of signing this Deed, to provide the Plaintiff all data in relation to all Kiranda Sheep (and therefore including any and all Kiranda Sheep born after 2014) that is held by the Defendant, its subsidiaries and/or any of their contractors, including pedigree information and all raw data (including but not limited to measurements and test results including TSU sample results) (“the Data”). To avoid doubt, Data does not include pedigree or parentage information relating to any New Zealand sheep used in the breeding programme under the Sheep Agreements. The Defendant warrants that the information provided will be all information held by the Defendant or its subsidiaries in relation to the Kiranda Sheep but provides no other warranty in relation to the Data…
[33] Ms Anagnostou replied by email on 11 October 2019, and referred Mr McMechan back to his 1 October 2019 definition of Data. For ease of reference I repeat it here:
Focus agrees to provide all data in relation to any sheep (born between 2014- 18 inclusive) belonging to the Crosers that is held by Focus Genetics LP and its subsidiaries, including pedigree information and all raw data (measurements, test results etc) held in respect of those sheep. Focus will warrant that the information provided will be all information held by Focus in
relation to the Crosers’ sheep but will provide no other warranty in relation to the data.
[34] Mr McMechan disputed the draft deed was inconsistent with what had earlier been discussed and said that Ms Anagnostou had “latched on to the wording ‘all data… including pedigree information’ without taking into account the prior words or the following paragraphs which provides context as to what that means.”
[35]The Deed of Settlement was never concluded.
The law
[36] High Court Rule 15.1 provides that the Court may strike out all or part of a pleading if it discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading.
[37] High Court Rule 12.2(2) provides that the Court may give judgment against a plaintiff if the defendant satisfies the Court that none of the cause of action in the plaintiff’s statement of claim can succeed. Summary judgment will generally only be entered against a plaintiff where there is a complete defence to the plaintiff’s claim, or a clear answer to the claim which cannot be contradicted.3
[38] The principles of both strike out,4 and summary judgment,5 are well-known, and need not be repeated here.
[39] Thus, unless Crosers can show a clear incontrovertible binding contract on the face of the settlement correspondence, the application for strike out or summary judgment application will succeed.
3 Westpac Banking Corp v MM Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) at [60].
4 Southland Building Society v Allison [2012] NZHC 2614 at [18].
5 Krukziener v Hanover Finance Ltd (2008) 19 PRNZ 162 (CA) at [26].
Preliminary issues
Is Justice Churchman’s judgment of 18 November 2019 fatal to these applications?
[40] Crosers argued that the Court has no jurisdiction to entertain the applications because the Court has already determined that Crosers have an arguable case that a binding settlement was reached on the aforementioned exchange of written correspondence.
[41] Justice Churchman, in one of five judgments now delivered in the Underlying Proceeding, held on 18 November 2019: “I find that the plaintiffs have an arguable case that they reached a binding settlement agreement with the defendant.”6
[42] It is clear from reading his judgment that he was looking at this squarely in the context of applying the balance of convenience test in determining whether or not to issue an interim injunction in Crosers favour. That test is far different from the test to be applied in the summary judgment context.
[43] It was not, as counsel submitted, a final judicial decision – it was always open for Focus to argue later that there was no such finding available to the Court on closer examination.
Is summary determination of the dispute inappropriate?
[44] Crosers submit that both conflicting evidence and credibility are in issue in this case and that summary determination is not appropriate, relying on the Court of Appeal’s holding in Krukziener v Hanover Finance Ltd that “the Court will not normally resolve material conflicts of evidence or assess the credibility of deponents.”7
[45] Yet Crosers assert a binding contract on the face of the exchange of written correspondence.
6 Croser v Focus Genetics, above n 1, at [35].
7 Krukziener v Hanover Finance Ltd, above n 5, at [26].
[46] The authorities say in such circumstances this must be ascertained on an objective assessment of the text of the written correspondence and the post alleged settlement conduct of the parties and not their ex post facto assertions as to what that correspondence or conduct was intended to mean by them.8
[47] Crosers gave two examples of what they say is conflicting evidence and credibility that should preclude this Court from dealing with the matter summarily:
(a)the meaning of Mr McMechan’s “Great to have agreement” email; and
(b)differing interpretations of what “all data” meant in the exchanges.
[48] The first is a matter of objective assessment on the face of the documents and not only does not require credibility findings, but should not be resolved on the basis of the parties’ ex post facto assertions as to what they meant.
[49] On the second matter, Crosers argue that the “all data” issue was discussed and resolved during the negotiations in Adelaide. This is no reason to preclude considering the matter summarily because the Crosers rely on the correspondence as constituting a clear binding agreement containing certainty in all its terms.
Did the parties intend to be contractually bound at the end of their exchange of correspondence as to settlement?
[50] The prerequisites to the formation of a contract were referred to by Blanchard J in Electricity Corporation of New Zealand Ltd v Fletcher Challenge Energy Ltd:9
…
(a)An intention to be immediately bound (at the point when the bargain is said to have been agreed); and
(b)An agreement, express or found by implication, or the means of achieving an agreement (eg an arbitration clause), on every term which:
(i)was legally essential to the formation of such a bargain; or
8 Electricity Corporation of New Zealand Ltd v Fletcher Challenge Energy Ltd [2002] 2 NZLR 433 (CA) at [31].
9 At [53].
(ii)was regarded by the parties themselves as essential to their particular bargain.
[51] The first question that must be addressed is whether the parties intended to be immediately bound at the conclusion of the settlement correspondence. This must be ascertained on an objective basis, and not by deciding whether the various parties’ assertions as to what they intended are true or false. It is necessary to look on a neutral basis at the background circumstances which led to the agreement, the words and actions of the parties during the agreement discussions, and the conduct of the parties that followed.10
[52]The subjective state of mind of the respective parties is immaterial.11
[53] The three possible situations where the parties may have reached agreement after negotiations were identified in Masters v Cameron:12
…the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect.
…the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document.
…the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.
[54] Crosers submit the parties intended to be immediately bound at the conclusion of the email exchanges on 2 October 2019. They say the agreement was constituted by the email exchange together with Mr McMechan’s letter dated 30 September 2019. That is, the first situation in Masters.
[55] Focus submitted that considered objectively, no such intention can be discerned and that the parties did not consider that they would be bound until a written contract was executed. That is, the third situation in Masters.
10 At [54]-[58].
11 At [31] and [54].
12 Masters v Cameron (1954) 91 CLR 355 at 360-361.
Crosers’ submissions
[56] Crosers submit that all the particulars essential for finality and completeness existed at the conclusion of the negotiations as at 2 October 2019. They say that even though the parties agreed to reduce their offer and acceptance into a formal deed, the terms had already all been particularised and agreed to by the parties such that there was no need for further refinement or discussion. The purpose of the deed was simply to have the terms restated in a form which may “be fuller or more precise but not different in effect”.13
[57] In support of this submission they say that this conclusion can be reached in reliance on the following:
Wording
(a)Mr McMechan offered settlement (including with terms in respect of genetic data).
(b)Ms Anagnostou accepted that offer, including expressly stating that Mr McMechan’s definition of data would apply.
(c)The use of the words “documenting the various agreed terms” (emphasis added) in his email of 1 October 2019 at 6:26 PM,14 because the word “agreed” in context indicates that the intention of the parties was at that point already agreed.
(d)Mr McMechan’s “Great to have agreement” statement in his email of 2 October 2019 at 5:22:26 AM.15
(e)Focus advised that the settlement sum is available for immediate payment.
13 At 360.
14 Refer to [17] to resolve apparent inconsistencies in timing.
15 Refer to [17] to resolve apparent inconsistencies in timing.
Post “contract” conduct
(f)The parties’ post-contract conduct where, with the knowledge of Focus, Crosers’ lawyers advised the Court the fixture could be promptly vacated; and finally
(g)That it was not until over a week later that Focus queried what was meant by “data” in the negotiation that Crosers say was concluded and binding on 2 October 2019.
Focus’ submissions
[58] Focus relies on the context of the transaction, the wording of the email and correspondence exchange and the post “contract” conduct and submits the offer to settle was subject to entering into the proposed formal deed.
[59] It says that the Agreement concerned the settlement of complex litigation, trademark issues, third party interests, and sophisticated rights in complex intellectual property and data, and relies on the Supreme Court of New South Wales’ finding that:16
… the more complex a commercial transaction, the more likely it is that the parties do not intend to be bound except upon finalisation of negotiations as reflected in a formally executed and exchanged document.
[60] Focus relies on the following words: “Please confirm by return that we have agreement, subject to documenting the various agreed terms” as making the agreement conditional on the execution of formal documents by the parties.
[61] Further, it says the offer did not clearly set out all the terms of the offer to settle. It says the primary issue for settlement was the sum to be paid by Focus on settlement and that definitions such as the all-important definition of data were still to be worked out between the parties. It refers to Ms Anagnostou’s statement in her email of 30 September 2019:
If we agree on the cash amount, we can work out the most elegant way of framing the definition of data – I think we are both on the same page there.
16 Vitek v Estate Homes Pty Ltd [2008] NSWSC 931 at [28].
[62] It submits the acceptance by Crosers was a counter-offer. It introduced a new element to the offer, namely that the offer was to be “read together with our letter to you of yesterday’s date”, being the 30 September 2019 letter.17
[63] Focus says Mr McMechan’s email in reply on 2 October 2019 was not an acceptance of that counter-offer, because Mr McMechan introduced a further term required for the settlement – one concerning trademarks.
[64]Finally, it points to the dates of transfer of ownership not being settled.
Post “contract” conduct
[65] Focus points to Ms Anagnostou’s email of 1 October 2019 accepting the offer, and stating that Crosers would draft a deed of settlement. The parties then began the process of negotiating a comprehensive deed of settlement. Neither party took any steps to perform the terms of the alleged contract during this period.
[66] Focus submits the language of the deed, the first draft of which was prepared by Crosers, demonstrates that both parties intended the obligations and rights in the deed would only come into force by the execution of the deed itself:
(a)Clause 2 refers to the parties’ agreement in the present tense, and clause
2.1 expressly records that the respective claims will be settled by “entry into the deed”;
(b)The draft includes an entire agreement clause, which is inconsistent with a prior binding contract.
[67] Subsequent drafts of the deed added additional terms beyond those in the allegedly binding correspondence:
17 Referred to above at [15].
(a)Crosers’ first draft added FGA as a party, a qualification to the agreement not to use Focus’ IP, and a clause requiring trademark applications to be withdrawn;
(b)Focus’ first draft of the deed included an additional term, extending settlement to the officers, employees and contractors of Focus and FGA;
(c)that draft also stated that the clause on data needed to be amended to make clear what was included and what was not included; and
(d)Crosers’ response was that they would consider any clarification to the data to be provided under the deed.
[68] In summary, Focus submitted the written terms in the draft deed were inconsistent with there having been a binding agreement on the basis of the words in the offer.
[69] Additionally, Focus points to the fact that both parties were incurring significant daily costs preparing for the trial scheduled 14 October 2019. It made no sense for either party to continue incurring the costs of trial preparation while a settlement deed was negotiated and executed. Instead, the trial was adjourned but it was not discontinued, so it could be re-instated if a final agreement could not be reached. Indeed, the draft deed required the parties to file discontinuances “within two days of the satisfaction” of certain clauses contained in it.
Analysis
[70] The exchange of correspondence did not clearly set out all the terms of the offer to settle. Ms Anagnostou’s email of 30 September 2019 is evidence of the parties still needing to confirm the definition of data, for instance. That uncertainty reflects the fact that the relevant correspondence was drafted on the basis that the relevant terms would be fully negotiated and set out in a formal agreement at a later date.
[71] In Mr McMechan’s 1 October 2019 offer, he explained that Focus would not simply provide access to the existing LambPlan data to Crosers because it would provide them “with access to a wider set of data than that agreed above”. The email did not explain what that wider set of data was.
[72] The uncertainty in Mr McMechan’s email on that important issue shows that it was objectively not intended to be – and could not be understood as – a carefully drafted contractual term with immediate binding effect if accepted. Instead, it reinforces the view that the definition of data would be more fully articulated in the formal written agreement once there was agreement on the sum to be paid by Focus to Crosers.
[73] Crosers say that the alleged agreement includes “all data” and yet provide no explanation as to what they say constitutes the wider set of data to which access was not being provided. Nor do they explain what data in the LambPlan dataset was excluded from the offer.
[74] It is also clear that the exchange of correspondence was not comprehensive nor conclusive of all germane matters, for example in an email exchange after the agreement was reached Mr McMechan asked Ms Anagnostou to “clarify/add” that the trademark issue would be “covered off” in the settlement deed. She replied saying that she thought this was implied in previous correspondence “but granted not explicit”. This shows the evolving nature of the negotiations over time and makes sense of both parties’ agreement that the final agreement was subject to it being fully documented.
[75] The offer also stated that “other terms are as set out in correspondence between us”. Mr McMechan did not identify which correspondence that was or which terms from what other correspondence were included in the offer. That uncertainty was not cured by Ms Anagnostou’s email of 1 October 2019 accepting the offer, which provided that Crosers “accept your offer to settle on the terms of the below emails read together with our letter to you of yesterday’s date (for the avoidance of doubt, using your definition of data)”. The acceptance, therefore, was expressly on the basis of Mr McMechan’s uncertain reference to terms as set out in earlier correspondence
which went back many weeks and included the intervening negotiation meeting in Adelaide.
Conclusion
[76] The alleged agreement concerned the settlement of complex intellectual property litigation with significant issues about the definition and ownership of data and third-party interests. It is clear, looking at the situation objectively, that the parties intended that a detailed legal agreement was to be drafted and crucial elements of the settlement had been left only partially discussed, with issues still to be resolved. Those issues included the definition of data, inclusion of an agreed position on trademark, and more generally what other terms that had not been discussed might necessarily be included to resolve all matters between the parties.
[77] I consider that the complexity of the issues and their antiquity, the fact that all complex matters had not been adequately resolved, and the mutual commitment to the preparation and execution of a deed together signify that the parties did not intend to be legally bound at the conclusion of their settlement correspondence.
[78] Rather, I consider that they had reached agreement on some of the major issues and assumed others would be worked through or refined and that a legal agreement would ultimately be formalised. They agreed the trial could be vacated as they both expected matters would be concluded satisfactorily in an agreement. But this was a job still to be done. There were still matters to be thought through, as later events proved.
[79] It is clear there were fundamental differences in approaches to some of the key matters that needed to be resolved and that they were lost in translation in the speed of the flurry of relevant emails. Thus, there was insufficient certainty of terms about what was agreed to.
[80] It follows that I find it was not the intention of the parties to make a concluded bargain unless and until they had executed a formal deed finalising all outstanding matters between them.
Result
[81] Judgment is entered for Focus dismissing Crosers claim for an order requiring Focus to perform the Agreement and for interest on the money component of the Agreement from 11 October 2019.
[82] I would expect costs to follow the event and be awarded to Focus on a 2B basis. However, I have not heard submissions on the issue, and given the long history of the case I will give the parties an opportunity to make submissions (no more than five pages in length).
[83] If the parties wish to proceed to hearing of the Underlying Proceeding I have no doubt the Court would accord the fixture priority given its history.
Doogue J
Solicitors:
Buddle Finlay, Wellington.
Succeed Legal Limited, Wellington.
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