Case: Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110
Outcome: cited
It was submitted by the applicants in the light of the foregoing authorities that in determining whether each of them is entitled to the relief sought in the present proceedings against CAO, it is necessary to consider the total relationship between the applicants and CAO, and hence all the facts and circumstances bearing upon the applicants' particular employment. In so doing, it was further submitted that the Court is entitled to have regard to conduct that occurred after the relationship commenced. I was referred to what was observed by Heydon JA (as he then was) in Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61 ; (2001) 53 NSWLR 153 at 163-164, commencing, 'The second relevant principle is that post-contractual conduct is admissible on the question of whether a contract was formed' , his Honour thereby citing authority, commencing with Howard Smith &amp; Company Limited v Varawa [1907] HCA 38 ; (1907) 5 CLR 68 at 77, in the context of his discussion of principles of contract formation. Further in Brambles at 177 on the subject of limitations upon an offer and acceptance analysis, Heydon JA adopted the following dictum of the New South Wales Court of Appeal in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,118 (McHugh JA with whose reasons Hope and Mahoney JJA concurred) : 'Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled. Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties' subsequent conduct become sufficiently specific to give rise to legal rights and duties. In any dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed.' It would be somewhat of an overstatement to describe the present context as involving a 'dynamic commercial relationship' , but nevertheless the foregoing dictum is by no means out of place in the present context. 32 The applicants cited extensively from the Full Federal Court judgments in Damevski v Giudice and Others [2003] FCAFC 252 ; (2003) 133 FCR 438, where the unanimous conclusion of Marshall, Wilcox and Merkel JJ was to the effect that the purported restructure of a cleaning operation from that of former employees to their ongoing provision of cleaning services as contractors, but nevertheless still engaged by their former employer as a principal to the ongoing controversial relationship, did not operate to terminate the pre-existing contracts of employment for the purpose of the operation of the WR Act, no change having occurred in any physical sense to the work activities of the purported contractors from what had previously been undertaken by them as employees. I would interpolate to observe that no such restructure of any existing employment relationship of relevance took place in the present context, and care therefore needs to be taken in relation to any application to the principled approach there taken. The extensive reasons for judgment of Marshall J (with whom Wilcox J agreed whilst adding observations of his own) included emphasis at [86] upon the practical difficulty of locating or demonstrating an offer and acceptance in the traditional sense in the kind of context for instance there involved, his Honour pointing to what was further observed by McHugh JA in Integrated Computer Services concerning the difficulty of fitting 'a commercial arrangement into the common lawyers analysis of a contractual arrangement' , and moreover as to the need to distil 'the precise moment when the legal criteria of a contract have been fulfilled' , given that '[i] n a dynamic commercial relationship new terms will be added or will supersede older terms. ' As McHugh JA had also emphasised, it is necessary '... to look at the whole relationship and not only at what was said and done when the relationship was first formed' . In the present case, however, the framework of the relationship between the applicants and CAO stood still relevantly from the outset, as it were. 126 CAO acknowledged that the concept of a contract existing by mutual assent has been recognised in circumstances where the traditional analysis of offer and acceptance is inappropriate. I have earlier cited dicta (see [31] to [34]) in that regard appearing in Brambles, Integrated Computer Services and Damevski . In his concurring judgment in Brambles , Mason P referred to 'the difficulties of pressing too far classical theory of contract formation based upon offer and acceptance' . At the bottom line there must be satisfied at least the notion or test of mutual assent, viewed objectively from the point of view of reasonable persons on both sides to the objective candidature for establishment of a concluded bargain. Further in Brambles at [81], Heydon JA observed that '[i] n the 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 Council and a reasonable person in the position of the defendant think as to whether there was a concluded bargain?' Merely because some dealings have occurred between the prospective parties to a bargain does not necessarily mean that a contract exists. As McHugh JA said further in Integrated Computer Services at 11,117, '[t] he question in this class of case is whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement' , to which his Honour added '[t] he conduct of the parties, however, must be capable of proving all the essential elements of an express contract '.