Case: Moffat Property Development Group Pty Ltd v Hebron Park Pty Ltd [2009] QCA 60
Outcome: considered
also points to the absence of the following from the framework agreements: no provision for choice of contractors or the selection of materials; no definition of "practical completion"; and no specifications for any design elements of the infrastructure. The documents referred to in the Recitals to each agreement would have, no doubt, assisted in clarifying the matters absent from the agreements. In light of those documents, following the approach of Ipp J in Anaconda [2000] WASCA 27 ; 22 WAR 101 at [61] , it may have been possible to conclude that, despite the long list of matters said to render the framework agreements uncertain and incomplete, there was a binding contract, workable by implying terms or on the proper construction of the agreement. The court will apply orthodox principles of implying terms by reference to the implied duty to co-operate and use considerations of reasonableness, to give effect to that intention: Australian Broadcasting Corporation v XIVth Commonwealth Games 18 NSWLR 540; Moffat Property Development Group Pty Ltd v Hebron Park Pty Ltd [2009] QCA 60. The asserted uncertainty or incompleteness may therefore be overcome once the requisite intention to contract is found to be present. In Tasman Capital Pty Ltd v Sinclair [2008] NSWCA 248 , the NSW Court of Appeal emphasised that determining whether parties have come to a concluded agreement is a matter of their objectively ascertained intention in the particular case. Giles JA stated that the Masters v Cameron categories and a possible fourth category are intellectual aids, and that categorisation does not greatly contribute to the decision in the particular case, which is concerned with finding what agreement, if any, the parties came to, [26]. Similarly, in Moffat Property Development Group Pty Ltd [2009] QCA 60 , Keane JA, with whom McMurdo P and Atkinson J agreed, said at [37] in relation to classifying the putative agreement in that case under one of the four Masters v Cameron categories: In my respectful opinion, however, there is little purpose to be served in seeking to resolve the issue of classification. A concern as to classification should not be allowed to obscure or distract from the real task of the court which is to ascertain and give effect to the intentions of the parties. The approach taken in G R Securities 40 NSWLR 631, Anaconda [2000] WASCA 27 ; 22 WAR 101 and Tasman Capital [2008] NSWCA 248 was followed very recently by the Queensland Court of Appeal in Moffat Property Development Group [2009] QCA 60 , mentioned above, which underlined the importance of the parties' manifest intention to contract. The issue was whether a contract for the sale of rural residential land had been made by an exchange of letters. The Queensland Court of Appeal held that the parties intended to be legally bound through their exchange of correspondence and that there was a contract even though matters such as the timing of completion and arrangements at settlement, the precise timing of the payment of the deposit, the place of settlement, responsibility for insurance, GST issues and the terms of a put and call option were not spelt out in the correspondence. Keane JA delivered the court's judgment. His Honour: (a) accepted McHugh JA's point in G R Securities that "the decisive issue is always the intention of the parties": [23]-[25]; (b) said "the terms of the correspondence exchanged between the parties contemplated the execution of a further contract as the means whereby the bargain which they had concluded would be implemented. It is necessarily implicit in such an agreement that the parties will co-operate to do what must be done to make the further agreement": [30]; (c) adopted McHugh JA's approach in G R Securities and explained that the implied obligation of each party to co-operate with the other to ensure each side obtains the benefit of its bargain serves to supply the deficiencies: [34]; (d) cited Australian Broadcasting Corporation v XIVth Commonwealth Games 18 NSWLR at 548 in stating: "I am of the view that there can be no doubt as to the orthodoxy of referring to 'implied terms or ... considerations of reasonableness' in order to determine whether the parties' 'consensus is sufficiently comprehensive to be legally binding : [51]. Accordingly, Moffat Property Development Group [2009] QCA 60 , has most recently emphasised that the central question is the parties' manifest intention to contract, and the court will apply orthodox principles of implying terms, by reference to the implied duty to co-operate, and use considerations of reasonableness, to give effect to the parties' contractual intention. Alleged uncertainty or incompleteness is usually able to be overcome if the requisite intention to contract is found to be present. Was the opinion of FMG and Forrest honestly and reasonably held? In my view, for the following reasons, the evidence, particularly as to the oversight and legal advice given to FMG by Huston and the adoption of FMG's opinion by the Chinese Contractors amply supports the conclusion that the opinion of FMG through Forrest that the framework agreements were legally binding agreements to build, finance and transfer the infrastructure, were reasonably and honestly held. It also disposes of ASIC's claim that if FMG had obtained competent legal advice it would not have made the disclosures it did as to the legal effect of the framework agreements. ASIC alleges in relation to FMG's disclosures that neither it nor Forrest genuinely held the opinion that each of the framework agreements was a legally enforceable build, finance and transfer agreement. It palpably failed to establish this allegation.