Case: Australian Broadcasting Corporation v XIVth Commonwealth Games (1988) 18 NSWLR 540
Outcome: referred to
submits in written closing submission that the authorities such as Anaconda, Pagnan SpA, Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 and Uranium Equities v Fewster [2008] WASCA 33 ; (2008) 36 WAR 97 relied on by FMG state that whether or not the parties intended to contract, they must agree on such terms, normally described as essential terms, such that the contract could be enforced or made complete by implying terms or applying considerations of reasonableness. I will consider these authorities further. In Anaconda [2000] WASCA 27 ; 22 WAR 101 , the Court of Appeal found that a binding contract had been made when a heads of agreement containing five clauses was signed, the last paragraph of which said that the heads of agreement "constituted an agreement in itself intended to be replaced by a fuller agreement not different in substance or form". At [28], Ipp J referred to the following statement by Sugerman J, approved by Menzies J in Thorby v Goldberg [1964] HCA 41 ; (1964) 112 CLR 597 at 607: It is a first principle of the law of contracts that there can be no binding and enforceable obligation unless the terms of the bargain, or at least its essential and critical terms, have been agreed upon. So, there is no concluded contract where an essential or critical term is expressly left to be settled by future agreement of the parties. Again, there is no binding contract where the language used is so obscure and incapable of any precise or definite meaning that the court is unable to attribute to the parties any particular contractual intentions. In Australian Broadcasting Corporation v XIVth Commonwealth Games 18 NSWLR 540 Gleeson CJ, with whom Hope and Mahoney JJA agreed, confirmed at 584E-F the importance in a Masters v Cameron type of dispute of assessing the parties' intention to make a concluded bargain, and stated that the question of intention is distinct from, although it may be closely related to, the question whether the parties have reached agreement upon such terms as are, in the circumstances, legally necessary to constitute a contract. His Honour stated: Nevertheless, in the ordinary case, as a matter of fact and commonsense, other things being equal, the more numerous and significant the areas in respect of which the parties have failed to reach agreement, the slower a court will be to conclude that they had the requisite contractual intention. ASIC 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. 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].