CATCHWORDS CONTRACT - importation of alpaca - proper construction of agreements - determining operative agreement - proper law of contracts - whether parties expressed choice of law to be applied - whether the word "facilities" should be construed as including an import permit - whether respondent obtained beneficial title pursuant to reserve contract. TORT - whether applicant entitled to damages for tortious inducement of breach - whether respondent has possessory title. SALE OF GOODS - passing of property - whether goods ascertained or unascertained - FOB contract - transfer of property under Chilean law - "traditio" - whether party obtained possessory title to goods. UNJUST ENRICHMENT - whether applicant unjustly enriched - whether sufficient evidence to prove level of unjust enrichment. ACTION ON THE CASE - application of principles in Beaudesert Desert Shire Council v Smith - whether any unlawful act. Sale of Goods Act 1923 No. 1 Hide & Skin Trading Pty Limited v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 Administration of the Territory of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 F. L. Schuler A. G v Wickman Machine Tool Sales Ltd [1974] AC 235 White v Australian and New Zealand Theatres Ltd (1943) 67 CLR 266 Aitken & Ors v State Bank of New South Wales & Anor (New South Court of Appeal, unreported 23 April 1993) Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 Carlos Federspiel & Co. SA v Charles Twigg & Co. Ltd [1957] 1 Lloyds Rep 240 The Ciudad de Pasto (1988) 2 Lloyds Rep 208 Hillas v Arcos (1932) 147 LT 503 Greig v Insole (1978) 1 WLR 302 Lonrho plc v Fayed [1989] 3 WLR 631 Ansett v Australian Federation of Airline Pilots (1990) 95 ALR 211 Beaudesert Shire Council v Smith (1966) 120 CLR 145 Northern Territory of Australia and Ors v Mengel & Ors (1994) 95 NTR 8 David Securities v CBA (1991-2) 175 CLR 353 Maralinga v Major Enterprises (1973) 128 CLR 336 INTERNATIONAL ALPACA MANAGEMENT PTY LIMITED & ORS v BEN K E ENSOR & ORS No G690 of 1992 Beazley J 7 April 1995 Sydney IN THE FEDERAL COURT OF AUSTRALIA ) ) No. G690 OF 1992 NEW SOUTH WALES DISTRICT REGISTRY ) ) GENERAL DIVISION ) BETWEEN: INTERNATIONAL ALPACA MANAGEMENT PTY LIMITED First Applicant TEXTILE FINANCE LIMITED Second Applicant COOLAROO ALPACA GENERAL PARTNER PTY LIMITED Third Applicant AND: BEN K E ENSOR First Respondent GARRYMERE FARMS LIMITED Second Respondent DEPARTMENT OF PRIMARY INDUSTRY AND ENERGY Third Respondent CORAM: BEAZLEY J PLACE: SYDNEY DATE: 7 April 1995 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The parties to bring Short Minutes of Order in accordance with these Reasons for Judgment by 13 April 1995. IN THE FEDERAL COURT OF AUSTRALIA ) ) No. G690 OF 1992 NEW SOUTH WALES DISTRICT REGISTRY ) ) GENERAL DIVISION ) BETWEEN: INTERNATIONAL ALPACA MANAGEMENT PTY LIMITED First Applicant TEXTILE FINANCE LIMITED Second Applicant COOLAROO ALPACA GENERAL PARTNER PTY LIMITED Third Applicant AND: BEN K E ENSOR First Respondent GARRYMERE FARMS LIMITED Second Respondent DEPARTMENT OF PRIMARY INDUSTRY AND ENERGY Third Respondent CORAM: BEAZLEY J PLACE: SYDNEY DATE: 7 April 1995 REASONS FOR JUDGMENT BEAZLEY J: This is a dispute as to the ownership and entitlement to possession of 100 alpaca imported into Australia from Chile in late 1992. In early 1992, the applicant (IAM) entered into an agreement to purchase 100 alpaca which were to be imported to Australia from a Chilean company, Alpac Chile Limitada (ACL), the company through which a Mr Carlos Morales Belmar (Morales) conducted an alpaca export operation in Arica, Chile. The second and third applicants are other entities involved with IAM in relation to the breeding of alpaca. For the purposes of these reasons it is only necessary to refer to IAM. IAM is the management company of a limited partnership involved in breeding alpaca. In the June 1992 financial year, the partnership was seeking additional funds from the public for the expansion of its alpaca breeding activities (the alpaca breeding project) and had issued a prospectus for that purpose. The funds raised were to be applied towards the importation of the 100 alpaca, which were to be part of the alpaca breeding project. There is an issue as to which document constitutes the agreement for IAM's purchase of the 100 alpaca, and as to whether there was one vendor, Mr Ron Inglis (Inglis) or two vendors, Inglis and ACL. The first respondent (Ensor) is a director of the second respondent (Garrymere), a New Zealand company involved in the import of alpaca into Australia and New Zealand. It was agreed by the parties that Ensor's state of mind was Garrymere's state of mind and accordingly it is convenient to make reference only to Ensor in these reasons, even where the contracting party was Garrymere. Ensor had farms in both New Zealand and Australia. In March 1991, Ensor entered into an agreement with ACL for the purchase of 200 alpaca (Ensor's purchase agreement). Ensor also had an agreement with a syndicate in Melbourne for the on-sale of the 200 alpaca. Later, in August 1992, Ensor entered into an agreement with ACL (the reserved contract) purportedly through the agency of Mr Laurie Harrison (Harrison), one of the members of the Melbourne syndicate, to purchase 45 of the 100 alpaca subject of IAM's purchase. In early September 1992, Ensor came into possession of those 100 alpaca. Inglis was also an importer of alpaca and had previously purchased alpaca from ACL. In early 1990, Inglis became ACL's sole selling agent. Inglis, with others, had purchased a New Zealand shelf company, Longstone Alpacas Ltd (formerly known as Sulis Resources Ltd), to be the vehicle for further purchases of alpaca from ACL. The genesis of this venture was an arrangement reached in the latter part of 1990, whereby Morales agreed that Inglis could secure for himself or his nominee company, as many of the alpaca intended to be covered by a potential importer's permit as he was able to negotiate, provided Inglis paid the same price for the alpaca. Inglis was also involved in the alpaca breeding project through a company, International Agricultural Marketing Limited, which was to be paid $2.2 million for the provision of marketing services. Bases of claims to the 100 alpaca IAM claims ownership of the 100 alpaca pursuant to an agreement with Inglis dated 20 February 1992 (the first purchase agreement). Alternatively, it claims ownership pursuant to an agreement dated 20 February 1992, but executed on 24 May 1992 between IAM, Inglis and Morales/ACL (the second purchase agreement). Ensor claims beneficial title to 45 alpaca pursuant to the reserved contract. IAM contends that the reserved contract is, by its terms, incapable of constituting a contract, is void for uncertainty, was not supported by consideration, does not comply with the conditions for a valid contract under Chilean law and is void for duress. Alternatively, IAM claims that if the reserved contract is held to be valid, it is entitled to damages for Ensor's tortious inducement of breach of IAM's contract for the purchase of the 100 alpaca. Ensor also claims, as against IAM, possessory title of the 100 alpaca. IAM denies that Ensor has possessory title, claiming that prior to Ensor obtaining possession of the alpaca, property had passed to it pursuant to the terms of its purchase agreement. Ensor claims alternatively, that if IAM establishes title to the alpaca, it was unjustly enriched by the use of the import permit he had obtained for the importation of 300 alpaca, without paying or otherwise providing a benefit to Ensor for its use. IAM denies this claim, which in any event it seeks to have struck out on the basis that it is unsupported by any evidence. Background Alpaca are extremely valuable animals and sell in Australia for approximately $20,000 each. Their export from Chile and importation into Australia is strictly controlled, with an export permit required from the Chilean government authority, the Servicio Agricola Y Ganadero (SAG) and an import permit from the Australian Quarantine Inspection Service (AQIS). AQIS has introduced a protocol for the importation of alpaca which is strictly administered in Chile by SAG. The protocol involves a "pre-quarantine period" for the alpaca in the Chilean Highlands, where the animals are kept isolated from other farm animals; tests and inspections to ascertain whether the animals are diseased; a quarantine period in Chile; inspection by an Australian Government veterinarian prior to export; a further period of quarantine at the Australian Government Quarantine facility on Cocos Islands prior to entry into mainland Australia; and further tests and inspections carried out after arrival in Australia during a one year on-farm period of isolation. In 1990, Ensor had applied for, and on 14 June 1990, AQIS issued to Ensor, an import permit (CAM5) for the importation of 300 alpaca. CAM5 was accepted by SAG in December 1990 which issued a corresponding export permit to Morales for 300 alpaca. In mid 1990, Ensor commenced negotiations with Inglis, acting as agent for ACL, for the purchase of alpaca from ACL. Initially Ensor believed that he had reached agreement to purchase 300 alpaca. In subsequent negotiations this was reduced to 250, as Inglis told Ensor that ACL wanted to retain 50 for itself on the basis that it would enter a joint venture with Ensor whereby the 50 would be agisted on Ensor's Australian property, with Ensor and ACL to share the progeny. Negotiations continued, with Inglis seeking an ever larger number of the 300 alpaca. Eventually, in early 1991, Ensor, who at this time had travelled to Chile, agreed to a purchase of 200 alpaca at $US2140 per head and on 14 March 1991 entered into a purchase agreement with ACL (Ensor's purchase agreement). On 7 July 1991, this agreement was notarised purportedly so as to comply with Chilean law. I should say something about the context in which the agreement was notarised. Contrary to what Inglis had told Ensor, Inglis, not ACL, was to be the importer of the 100 alpaca. Inglis at all times was keen to obtain as many alpaca as possible of this consignment of 300. Even after execution of Ensor's purchase agreement on 14 March 1991, Inglis continued his attempts to persuade Ensor to take less than the 200 for which he had contracted. In the course of these attempts, Inglis told Ensor that his contract was worthless as it was not notarised. Inglis had in fact told Morales, falsely, that he had managed "to get Ensor down to 150 animals for Ensor and 150 for [Inglis]", and on 16 April 1991, ACL entered into an agreement with Longstone Alpacas Ltd for the sale of 150 alpaca for $US2140 per head (the Longstone agreement). In early July 1991, Morales told Inglis that Ensor would not agree to a reduction in the number of his alpaca to 150 and that "we must stick by the contract". Inglis' response to Morales characterises the atmosphere in which the entire importation process of the 300 alpaca was carried out. He said: "That annoys the hell out of me. Ensor is playing the middle man and has just made himself a huge profit. So much for his commitment to the Australian alpaca industry. Okay, Carlos, if that is what you want, we will stick by the contract but I want to see him sweat first." Shortly after this, during the course of a conversation with Inglis and Morales in which Inglis initially "continued to push Ensor for 150 animals", Ensor became aware that Longstone Alpacas Ltd was the purchaser of the other alpaca from ACL. The conversation concluded as follows: Inglis: "Okay, Ben [Ensor], you can have your 200 and Longstone will have 100 animals on your permit." Morales: "Yes, that's the deal. We will stick by the contract." Inglis: "Now that we are all in agreement as to who gets what, let's all pull together. There is still a hell of a lot of work to do." In July and August 1991, Ensor travelled with Morales, Inglis and others, to the Altiplano in the Chilean Highlands to select the alpaca pursuant to the terms of Ensor's purchase agreement. All but 30 were selected at this time. Once selected, the animals were tagged with a unique identification number and an electronic coding implant was inserted into each animal's rump. The remaining 30 were selected by Ensor in about January 1992. Prior to the July 1991 trip, Morales had selected alpaca for Inglis in accordance with the provisions of the Longstone agreement using the same identification process. On 26 January 1992, all 300 alpaca were placed in pre-quarantine in the Altiplano. However, by late 1991, it had become apparent that Longstone Alpaca Ltd would not be able to fulfil its financial obligations under the Longstone agreement. In January 1992, Morales wrote to Inglis warning that if there was default in payments under the Longstone agreement, the contract would be cancelled. Then, on 13 February 1992, following an invitation from Inglis to do so, ACL wrote to Longstone Alpacas Ltd, informing it that the Longstone agreement "is now at an end due to non-performance on your part". Inglis suggested that he and Morales enter into a new agreement for the purchase of the 100 alpaca along the same lines as in the Longstone agreement. Morales agreed. By this time, Inglis had commenced negotiations with Andrew Forrest (Forrest), IAM's executive chairman, for the on-sale of the 100 alpaca. Shortly after the Longstone agreement was terminated, Inglis requested Morales for a written contract to enable him to satisfy Forrest that he had title to the 100 alpaca. Morales agreed to this. Inglis told him that he would use the Longstone agreement, which it will be remembered was for the sale of 150 alpaca, changing the figures to reflect a sale of 100 animals. Inglis says that Morales also agreed that payments made under the Longstone agreement would be credited to the new agreement. Inglis had an agreement typed up in the same basic format as the Longstone agreement, although with significant variations to the payment schedule, dated it 15 February 1992 and attached to it the copy of a page of another contract bearing Morales' signature (the ACL/Inglis agreement). On 20 February 1992, Inglis entered into the first purchase agreement for the sale of the 100 alpaca to IAM. Prior to this, in January 1992, Ensor had commenced pressing Inglis for a formal cost sharing agreement in relation to the costs of importation of the 100 alpaca, including compensation for the use of CAM5. Ensor informed Inglis at this time that "I can not allow the use of my Permit 5 CAM to Australia free of charge for your 100 Alpaca plus Cria...I need just a little recompense for the administration of my import Permit." In early March 1992, Ensor forwarded a cost sharing agreement prepared by Chris Wren, a Melbourne barrister, who was also a member of the syndicate which had purchased the 200 alpaca from Ensor. The cost sharing agreement, which named Inglis and Longstone as the other parties to it, recited that Inglis and Longstone had entered into an agreement with ACL for the purchase of the 100 alpaca and provided for Inglis and Longstone to transfer 5 alpaca to Ensor for the use of CAM5. Inglis refused, alleging that the "deal" had always been that he would look after the Chilean end and Ensor would look after the Australian end. His letter of refusal concluded by stating: "...I will make the necessary adjustments to the 'draft' contract and send it to you...". On about 11 March 1992, Inglis wrote to Ensor, informing him that he and Morales had "completed formalities" with IAM and that Longstone no longer had any interest in the alpaca, and that the 100 alpaca had "been contracted to this company". Ensor said in evidence that he understood from the letter that Inglis was telling him that Inglis owned the 100 alpaca. A little later, on about 18 March, Harrison told Ensor that Inglis had done a deal with Forrest and that Morales did not know what to do about it as Inglis had cut him out. Morales' upset was understandable as the agreement Inglis reached with IAM involved a purchase price substantially higher than that payable by Inglis. On 12 March 1992, Ensor wrote to Inglis advising that unless the cost sharing agreement was signed: "...by 23 March 1992, I will regard you as having repudiated our original agreement whereby I was prepared to allow you to share my permit and thereafter that Agreement will be terminated". Inglis did not execute the cost sharing agreement. On 24 March 1992, Ensor wrote to Forrest and advised that as the cost sharing agreement had not been signed, Inglis would not "have space upon my permit". He wrote again to Forrest on 31 March 1992 advising him that "R.G. Inglis will not be part of my Permit Cam 5 as an owner...". He reiterated this in a letter to Forrest dated 26 April 1992. On 28 April 1992, Forrest wrote to Inglis referring to a phone call and fax that morning. The letter continued: "We also acknowledge your outstanding obligation to settle an agreement with the permit holder B. Ensor which we assumed was already in place when we executed our own agreement with you". Also at the end of April, Forrest wrote to Morales seeking confirmation that Inglis had made all payments due under his contract. At the beginning of May, Forrest wrote to Inglis raising specific concerns about a payment of $65,000 and in cross-examination, he stated that "the whole process seemed to be short of money from time to time. Earlier, on 25 March 1992, Ensor had written to Morales in which he referred to an arrangement with Inglis to share CAM5 and to the fact that Inglis had failed to sign the cost sharing agreement. Ensor advised that in those circumstances he would only be taking 200 alpaca to Australia. He offered, however, to purchase the balance of the 100 alpaca if Inglis defaulted under his agreement. In early May 1992, Ensor asked Morales whether he had sold the 100 alpaca to Inglis. Their versions of Morales' response differ. Ensor alleges that Morales denied having sold the alpaca to Inglis, stating: "No, Ron says I have but he is using the signed back page of another old contract signed by me." Ensor said: "So you are free to sell me the 100 alpaca." Morales answered: "Yes." Morales denies Ensor's version. He says he told Ensor that he could not sell them. Ensor also says that during this conversation he offered to pay $US2600 a head for the 100 alpaca and the money could be in Morales' account within two weeks. He says that Morales responded to this offer in the following terms: "That's good. But first we have to officially notify Ron that he can't use your permit. I will have my secretary type up a letter now in Spanish and English and then I will take it around to my notary and have it notarised." Ensor says that he saw Morales write out a letter and give it to his secretary to be typed. On the following day, he says he went with Morales to Morales' Notary Public where both the Spanish and English versions of the letter were signed and notarised (the notarised letter). The notarised letter, which was addressed to Morales, stated: "I write to confirm my position as owner and administrator of Import Permit 5CAM to Australia. I am not prepared to have any further discussion with Mr. R. G. Inglis, Longstone Holdings or Longstone Alpacas in regard to possible cost sharing or use of Permit 5CAM to export camelids [sic] to Australia. To conclude, Mr. Inglis and his group can not share part of my Permit 5CAM in any way." Morales agreed in cross-examination that his secretary had typed up this letter and that he had accompanied Ensor to the Notary Public to have it notarised. He said however that he had not drafted its contents. He presumed that Ensor had written out the script which his secretary typed up. Morales denied that the purpose of the document was to enable him to inform Inglis that he could not deal with the 100 alpaca and stated that its purpose was to let Inglis know that he was having problems with Ensor "and that I have a little document backing it up". Morales gave Inglis a copy of the notarised letter shortly thereafter. I will deal with Morales' overall credibility later. It is sufficient at this point to state that I do not accept Morales' version of the conversation as to whether he had sold the alpaca to Inglis as it is contradicted by the correspondence written at the time. On 6 May 1992, Ensor wrote to Morales offering to purchase the 100 alpaca. Morales responded on 12 May 1992, in the following terms: "Thank you for your offer for the 100 alpacas. The only possibility for me to have accepted this offer would have been if I could have had direct contact with the real buyers. I have decided for many reasons not to sign any contracts with intermediators because I lose control of the business and a lot of money because it is shared with many people. Regarding the advance payments, I am very grateful for these. If Laurie Harrison had offered to purchase the 100 alpacas we would have had a deal immediately, but he said he had no problem and was content with the 200 alpacas. He spoke with Chris Wren from my house and said they definitely had the first option to buy the 100 alpacas. It is very important for us all to recognise who occupies each place in this business. My client quarantee [sic] to pay immediately 1/3 of the cost of the aircraft and 1/3 of the cost of the quarantine on Cocos Island. Referring to the associated costs, they have no obligation to pay these. You can discuss and negotiate with them but this must not interfere with my negotiations or exportation." Although, in the letter Morales referred to "my clients" he did so only in the context of "my negotiations or exportation". There was nothing in the letter as to a concluded sale. Apparently Ensor had obtained legal advice in relation to this letter. He was advised that it referred to negotiations only and that is how he understood it. He stated in cross-examination: "You had asked Morales to sell them to you and he had not done so?‑‑‑Yes, sir. And you had offered him a price considerably more than the price at which you had in fact bought your own 200 from him?‑‑‑Yes, sir. And the only reason Mr Morales could not sell them to you was because he had told you [he] had sold them to somebody else?‑‑‑He said he was negotiating with another party. He chose not to accept my offer, he gave a whole lot of other reasons and then he said he's negotiating with another party in a letter of 12 May." Ensor's understanding of the letter was correct. The early portion of the letter stated the reason for Morales not accepting Ensor's offer. It was not because he had an agreement with another purchaser. It was solely because he did not want to deal with middlemen. He said he wanted to deal with end purchasers. He indicated that he had given Wren and Harrison "first option" to purchase the 100 alpaca. And, as I have said, the conclusion of the letter referred to negotiations only. Ensor's understanding of the letter is also consistent with other of his evidence. He said that as at July 1992, he was aware that there was a contract between Inglis and Forrest but that Morales had not made up his mind in relation to the 100 alpaca. He said he Ensor needed him to do so, so that he knew whether to make arrangements for the transportation of 200 or 300 alpaca. In May there was a great deal of other activity. On 1 May 1992, Inglis wrote to Forrest, suggesting to him that he deal directly with Ensor in relation to costs. On 5 May 1992, Ensor wrote to Forrest, stating that "Ron is finished!" and would not be "supplying [you] with alpaca". He asked whether Forrest was interested in purchasing the 100 alpaca from him for cash. Forrest responded by seeking proof of title. On 6 May, Forrest telephoned Morales and sought confirmation that Inglis had purchased the 100 alpaca. There is no evidence as to Morales' response to this inquiry, although it would appear that he confirmed that was the case, as on the same day Forrest sent the following fax to Morales: "Thank you for your phone call today. I provide the following by way of accurate record of the facts established in that phone call. I confirm that Mr Ben Ensor has tried illegitimately to buy the 100 Alpacas from you. You have reminded him that these Alpacas are under contract to R. Ingles [sic], who has passed title to these Alpacas by way of contract to International Alpaca Management ("IAM"). I also confirm that even though he does not own these 100 Alpacas, he has tried to sell them to IAM and had tried to elicit an offer on several occasions from us. We have informed Mr Ensor that we do not believe he owns these Alpacas and have asked him to supply proof of ownership before we speak to him. I now confirm that I will enter into a contract with you which will cover the costs of shipment, and all quarantine and associated costs and if required can offer a bank guarantee to substantiate that our integrity is beyond reproach. This contract will return to you the profit which you expected from R. Ingles [sic] in your original contract with him, and will reward Ron Ingles [sic] and protect his interest. I confirm that you have taken legal advice and are able to enter into this contract with me. This arrangement can then be communicated directly with Mr Ensor to prevent him from making any further dishonest representations to either you, me or IAM. Should Mr Ensor not agree with allowing us the right to export our 100 alpacas to Australia, then Mr Ensor no longer will have the right to use Alpac Chile as exporter for his permit, and his permit will lapse. I am sure Mr Ensor, who has already sold his interest and received the money will not want this to happen." Morales responded in the following terms: "I'm talking with Ron Inglis about your fax date 7 May 1992. Of course is not a good business for Alpac to keep the same profits that have in the original contract. ... I hope that we can make a good agreement." Forrest was also concerned at this time whether Inglis was up to date with his payments to Morales. He sought confirmation of the position from both Inglis and Morales. Inglis also contacted Morales at this time and advised him that Ensor was causing difficulties in relation to the use of CAM5. On about 10 May 1992 Forrest told Inglis that he considered Morales should be made a party to their contract as: "The only way I can see that I can fully protect my position is if we also make Carlos a party to our agreement. That way IAM can be assured of getting its animals and hopefully it will stop Ensor from continuing with his blackmail campaign. Carlos will of course want something out of this. I suggest that the $100,000.00 worth of shares in the company that you are going to receive be converted into cash and given to Morales." In early May 1992, Inglis offered Morales $US75,000 in return for Morales' ensuring that the 100 alpaca would share CAM5 and the quarantine facilities on Cocos Islands. On 11 May 1992, Inglis wrote to Forrest advising him of Morales's agreement to the $75,000 and stating that the "deal" would work as follows: "1. Inglis/Morales contract stays in place. 2. Morales is formally tied into our contract in a way that will substitute a direct Forrest/Morales link re supply of animals as you suggested. 3. Our contract remains in place with modifications to include Morales and new arrangements re the 100,000 shares. 4. Forrest/Morales have a separate agreement regarding the direct payment of $75,000 AUD on delivery at Melbourne airport of the animals. 5. No party is liable for any costs to Ensor." This arrangement was confirmed by Forrest in a letter to Morales dated 12 May 1992 (Forrest's 12 May letter) as follows: "I confirm that the contract between Ron Ingles [sic] and my company remains totally "on foot" and enforceable and that his contract with you, on which my contract relies, also remains totally "on foot" and enforceable. I now further confirm that Ron Ingles [sic] has requested, without prejudice to the balance of his contract, that I pay you a total of AUD$75,000 deductible from the consideration which is due to him once the said alpacas arrive safely in Australia. . . . In consideration of this, you hereby guarantee that all permits, processes, privileges and responsibilities will be achieved by you, to guarantee the said Alpacas' safe and unencumbered passage to Australia. . . ." Subsequently, there were discussions between Forrest and Morales whereby Forrest agreed to increase the payment to Morales to $US100,000. On 24 May 1992, Forrest, Inglis and Morales met. Forrest presented Inglis and Morales with an agreement he had drafted by amending the first purchase agreement. They had the following conversation about the new agreement: Forrest: "I have made both of you parties to the agreement so there is a direct link between all of us. The contract between the two of you dated 15 February stays in place. This agreement supports the position of the agreement Ron and I made in February save for Carlos, you are now getting $75,000 cash. Apart from that everything in the contract is the same except of course Ron you are now getting an extra $25,000 cash instead of units. I think we should leave the date the same. Does anyone have any objection?" Inglis: "No." Morales: "No. I have no objections to that date but I am not happy to received [sic] my $75,000.00 when the animals arrive in Australia. I want the money when they leave Chile." Forrest: "That's not on. As far as I'm concerned as between you and Ron I've always acted in good faith. This whole thing wouldn't be necessary except for the fact that neither of you appear to be able to keep Ensor honest. Ron as far as I'm concerned I am happy to pay Carlos the whole $100,000.00 in cash if he is happy to receive it upon arrival of the animals in Australia. You will of course have to forfeit your $25,000.00." Inglis: "Look, I just want to get this thing done. If I have to compromise my position that is the way it is. Let's just sign the agreement and get on with it." Forrest: "OK." The parties then executed the agreement (the second purchase agreement) but dated it 20 February 1992. At the end of May 1992, Morales, Forrest, Ensor, Harrison and Wren met in Melbourne. During a dinner at which all were present Forrest said to Ensor: "Why did you attempt to sell me the animals when you didn't have title to them? Don't you know that is very dishonest?" Ensor said: "I was just trying to find out what your position was." Forrest said: "My position is none of your business. They are my animals. I have paid for them."" Later that evening, Ensor found a copy of and read Forrest's 12 May letter. He did not discuss the letter with anyone, either at that time or later. He said that he understood that the effect of the letter was that Forrest was offering Morales a "backhander to honour a forged contract". He also stated that he "did not know whether Mr Morales chose to accept the backhander". He said it never occurred to him that the effect of the arrangement was that Morales had become a party to any contract with Forrest. During July, Ensor attempted to enter into a cost sharing arrangement directly with Forrest, both for the use of CAM5 and for sharing the costs of the importation. However, no agreement was forthcoming. Forrest, by this time, had decided to bypass Ensor and sought to deal directly with Wren and Harrison, the end purchasers of Ensor's 200 alpaca. On 28 July 1992, Forrest wrote to Wren suggesting a "cost protocol" with IAM providing for the terms upon which IAM would share the costs of the importation of the 300 alpaca. The contents of this letter are important, not only because of the suggestion that there be a cost protocol, but because IAM relies upon it as giving notice to Ensor of a direct contract between Morales and IAM. Relevant portions of the letter were as follows: "I spoke to your partner, Laurence, over the weekend as you may be aware, in order to lay our own cards on the table. Carlos, as Exporter co-operating with the importer, has made exactly the same obligations to the alpaca Partnership as I understand Ben has made to yourself and Laurence. This bring to light several facts. ... (1) In an equally formal environment, our agreement with Carlos has been made enforceable in the Commercial Division of the Supreme Court of NSW. This, of course, includes undertakings as to damages, if he fails to perform on any part of his contract. Carlos acknowledges in that agreement that several other contracts of significant proportions will be entered into (and now have), on the basis of the representations in his agreement. (2) This agreement specifically provides the undertaking of all matters, and the attainment of all licences and permits, relating to Exporting the 100 Alpaca to Australia. (3) We now have title under our sale agreement with him (Carlos) to those Alpaca. This agreement also covers all costs in relation to the Export to Australia, and it is precisely for that reason which I am writing to you." In late July 1992, Ensor travelled to the United States of America and made arrangements with Instone Airlines for the charter of an aeroplane from Arica to Cocos Island and from Cocos Island to Melbourne for the transportation of both 200 and 300 alpaca. Ensor returned to Chile in early August 1992. By that stage, Ensor had told Morales that if Morales did not sell the 100 alpaca to him he would leave the 100 alpaca behind and take only the 200 subject of his contract. By July 1992, the relationship between Inglis and Forrest had become strained, although it was always one of some suspicion and sometimes of hostility. Some early occurrences demonstrate this. In late April, Forrest accused Inglis of misrepresenting his relationship with "the holder of the import permit to us...Our contract relies on your relationship with that permit holder represented as being sound and beyond reproach". In early May, he expressed concern to Morales that an amount of $65,000 that IAM had paid under its contract "has not been passed on yet as legitimate payments". On 10 May, Forrest wrote to Morales stating "Ron is attempting to separate you and I. Ignore the fax he sent you and have a look at the fax he sent me - he wants all the money". A payment of $25,000 was due under the second purchase agreement towards the end of June 1992 and the payment of $450,000 under clause 3 was due to be placed into a solicitor's trust account by 30 June 1992. However, Forrest had raised only about 20% of the capital anticipated to be raised from the public fundraising for the alpaca breeding project and Inglis became concerned as to IAM's ability to complete the purchase. He wrote to Forrest on both 8 and 9 July 1992, raising his concerns and reminding him that these payments were due. At about this time, Morales had also become upset with Forrest over an incident relating to arrangements for payment for certain veterinarian tests to be carried out in Scotland. On 22 July 1992, Forrest wrote to Morales apologising about the incident. However, he also stated in his letter: "The [alpaca] project did not raise as much capital as what we had hoped so we have to be very careful with the money we raised." On 27 July 1992, Morales asked Inglis to "inform me urgently about...payment" and on 28 July 1992, Inglis requested Forrest to send the "$25,000 AUD due under our contract on 29 June." Inglis was also very concerned at what action Morales would take in relation to the exportation. By the end of July, Forrest had not received any response from Wren and Harrison in respect of a cost protocol. On 29 July 1992, when Ensor was in the United States and apparently not in touch with any of the parties, Inglis wrote to Forrest stating: "...if you don't get a positive response [from Wren in relation to the cost protocol] in a day or two I think we need to begin some 'heavy' tactics with him as I think he will scare easily. ... Harrison thinks [Morales] will load his 200 animals regardless in order to get his money from them and to hell with ours and he will have told Wren this. ... I have kept [Morales] informed so if Ensor arrives & tries his 'standover tactics' he will keep calm until we can role [sic] Wren. .... Please think hard about sending the $25,000 as suggested yesterday - we don't want reverse pressure over non-performance of contractual obligations if this thing's runs right down to the 'wire'". On 30 July, Forrest advised Inglis and Morales that $450,000 had been placed into the solicitor's trust account pursuant to clause 3 of the second purchase agreement and that the $25,000 was being organised. However, on 7 August, Inglis wrote to Forrest pointing out that IAM had failed to make the payments due for June and July, putting IAM "in breach of our contract". Also at this time, Morales needed the monies for "shipment of the animals." On 9 August, 1992, Ensor wrote to Harrison and the other members of the syndicate, advising of the likely export date and that there were no problems in relation to the export, save for the issue surrounding the 100 alpaca. He said that his legal advice was that there was little likelihood of injunctive relief against him and that his Santiago lawyer "has a very good plan, met all parties in Government and will meet local Government in Arica before sitting down with the Exporter". He concluded his letter, stating that he would expect to be able to confirm title by "Thursday or Friday of this week". Mr Ensor agreed in cross-examination that it was his intention at this time to have his lawyer speak to Morales to persuade him to sell the 100 alpaca to him. On 15 August, Inglis wrote to Forrest requesting payment of $110,000 for one third of the cost of the plane to Cocos Island and $56,000 for one third of the costs on Cocos Island. This letter is relevant, not only because of the demand for monies, but because it revealed the stance which Morales had proposed to take in relation to the export of the alpaca. The letter stated: "Carlos has asked me to pass on to you that should he not be in a position to affect this payment on Monday he would not be able to continue with the contract with you - at this moment it is in default. ...Carlos and I write to inform you of the exact position with regards to our contractual arrangements for the 100 alpacas being exported from Chile to Australia. Carlos has decided and I agree totally with him that the only way to resolve this issue is for Carlos to assume a position of strength as the exporter who holds the legal right to export the animals on his own behalf under his contractual rights with Ben Ensor. Originally as you are aware, Carlos signed a contract with Ben to sell him 200 animals and in this contract Ben agreed that them [sic] animals would be part of a total shipment of 300 animals to be exported under Permit No. 5 and that both parties agreed enterily [sic] to this....At no time either in formal discussions surranding [sic] the contract was the matter of consideration being paid to Ben Ensor mentioned. In this context Carlos assumes the full legal rights of the exporte [sic] to take up the balance of the shipment consinting [sic] of 100 animals. His only obligation under this agreements [sic] is to share on the pro-rata basis the cost of exporting the animals to Australia. Obviously, you has ben [sic] unable to reach agreement with Chris Wren on this cost sharing basis and the final solucion [sic] is for Carlos to make this payment directly himself to Ben Ensor. In order to expedite this, Carlos needs the money to pay hin [sic] in a meeting with there [sic] respectives [sic] lowyers [sic] here in Arica on Monday afternoon 17th August 1992." Forrest responded to the request for monies by alleging that it amounted to a variation of contract but agreed to pay it upon certain conditions. Morales and Inglis responded to this on 17 August 1992, at "15:00 p.m." stating: "As vendors, we inform you that we are not in a position to sign your letter in the form in which it was sent. ...You must appreciate that as at 29th July 1992, you were in default of your contract with the vendors Carlos wishes to point aut [sic] that he has complied enterely [sic] with the conditions of the contract which you have constructed whereas you habe [sic] not met your obligations". Morales denied in cross-examination that he had given any instructions to Inglis to write either the 15 or 17 August letter, notwithstanding that his signature appeared on the 17 August letter. Morales said in his affidavit that on about 18 August he received $210,000 from IAM for the anticipated transportation and Chilean quarantine costs. However, independent documentary evidence reveals that those monies were not received until about 31 August. On 26 August 1992 (although the letter is wrongly dated "26/9/92") Inglis wrote to Forrest stating: "The matter of costs associated with the transfer of the animals and the Cocos Island Quarantine over and above the amount you have sent to [Morales'] lawyer...remains unresolved" Inglis concluded the letter by alleging: "I do not want you to enter into any discussion with Ensor on my behalf as at this point you are in default of your contract with me" Earlier, on and from about 17 August 1992, there were a series of meetings between Ensor, Morales and Harrison and also Ensor's and Morales' lawyers in Arica. The end result of those meetings was that on 27 August 1992, the "reserved contract" was signed by Harrison, Ensor, and Ensor's and Morales' lawyers, which provided that of the 300 alpaca, Ensor would take 245 and Morales 55. Both the negotiations leading up to the signing of the document and the terms of the document require examination. However, the respective stances of Ensor and Morales in relation to the exportation prior to the negotiations is also relevant and it is convenient to deal with that matter now. Ensor had made it clear by the beginning of August that he would not take the 300 alpaca unless Morales was prepared to sell the additional 100 to him. However, Ensor's position has to be examined in the light of his understanding at that time of the contractual position. He said: "Do you mean by that then that if Morales in your understanding did have a deal with Inglis for the 100 alpaca ‑ ‑ ‑ ?‑‑‑No, he didn't, sir. I said he didn't have a deal. Meaning thereby that if you came to the understanding that Morales did have a deal with Inglis or Forrest for the 100 alpaca, you would not be free to sell them to Forrest and Forrest to buy them from you?‑‑‑That's right, if he had had a deal, sir, I would not have had those discussions but clearly he told me he did not have a deal, he had the goods there in his hand and that was the basis - I made him an offer to buy them knowing he had full clear title." (emphasis added). Morales, for his part, alleged that on 17 August he told Ovalle, who was then acting for Ensor that he had sold the alpaca and therefore could not deal with Ensor. Morales says that the following conversation then occurred: Ovalle: "I'm instructed that it is my client's permit that is being used to import the alpaca into Australia. If you do not sell him the full 300 alpacas he will only take 200 and leave the other 100 here in Chile." Morales: "I have a contract with Mr Ensor and it clearly states that the 200 are to be a part of a consignment of 300. All 300 must go." Morales says he then showed Ovalle a copy of the contract. The conversation continued: Ovalle: "[The] point is vague. As far as I am concerned, my client can take 200 and leave the 100 here and he will not breach his contract with you. I think you'd better start listening to what he has to say." Morales: "Well, that is a point of view. As far as I am concerned, the whole 300 have to go. If you want to talk to me anymore, you talk to my lawyer." Ovalle: "I understand your position. I will talk to my client and I will come back to you." Morales said that subsequently, Ovalle returned to his office and they had another conversation as follows : Ovalle: "Sorry. I have spoken to my client and he does not want anything to do with Mr Inglis or Mr Forrest. He wants all 300 animals or he just takes 200. He has the plane arranged for 200." Morales: "I said to you before, now you have to speak to my lawyer. I will not speak to you anymore." Ensor who was present during the conversation gave a different version, stating that Morales said that Ensor had an obligation "to my 100 alpaca on your permit". Ovalle neither gave evidence nor was cross-examined about this conversation. Ensor did not deal with Morales' version in his affidavit in reply. Counsel for IAM submitted therefore that Morales' evidence should be believed on this point. At the end of the day, it may be that it will not matter for a determination of the issues in the case which version of this conversation should be accepted. However, for reasons which will appear below, I generally preferred the evidence of Ensor to that of Morales. Further, Ensor's version is consistent with the contents of Inglis's 15 August letter to Forrest referred to above. Morales stated in his evidence in chief that the reserved contract came about after he had received "an Ensor proposition". He stated that he contacted his lawyer, who said that: "We should play the same game and try to find a way to put the animals on the plane. Then those documents [the reserved contract] came about". What Morales had not included in his evidence was the fact that at the time that he entered into the negotiations with Ensor, Morales and Inglis were alleging that IAM was in default of its payments due under the second purchase agreement and that he had informed Harrison of this. Nor did he include in his evidence in chief any reference to the letters of 15 and 17 August. In my opinion, the position at the time of the negotiations for the reserved contract was that Morales was faced with the possibility of not being paid by IAM and of Ensor refusing to allow Inglis or Forrest to use CAM5 for the 100 alpaca. Morales was determined to ensure that the 100 alpaca were exported and was prepared to change his position or otherwise manoeuvre as the need arose to secure the best position for himself in relation to the export of the 100 alpaca. I have already referred to Ensor's evidence that he was aware of the existence of a contract between Inglis and Forrest for the 100 alpaca. However, he consistently denied that he was aware of a contract between Morales and Inglis, having been told by Morales in May 1992 that there was no such valid contract and that he, Morales was free to deal with the 100 alpaca. The following typifies his evidence on the point: "...I knew that there was nothing between Alpaca Chile or Carlos Morales and Inglis, that was what Carlos Morales had told me in his office but clearly these other people had told me they had a contract together between Inglis and Forrest and I never had any notice that that had been dissolved or dealt with properly, satisfactorily. And that was something that both Carlos and I knew needed to be tidied." The next significant matter is the state of Ensor's knowledge as to the status of the Inglis/IAM agreement. Ensor's evidence is that the negotiations which culminated in the reserved contract were initiated after he learned from Harrison that the Inglis/IAM contract had been terminated. He said that his reaction on learning this was that he could now go forward and negotiate for the sale of the 100 alpaca. As he put it "...that was a momentous occasion for me". His evidence of his reaction is consistent with his evidence that he would not have pursued discussions in relation to the 100 if he knew Morales had a deal with Inglis or Forrest. Ensor's evidence that the reserved contract was only entered into after he learned that the Inglis/IAM agreement was no longer on foot is supported by Harrison. In his evidence in chief, Harrison stated that prior to the meeting at which the lawyers were present, Morales told him that the contract Morales and Inglis "had eventually signed [with Forrest] had come to an end". Harrison recalled that this conversation occurred in Morales' home, where Harrison was a guest. He said that Morales also told him: "The contract [between Forrest and Inglis] had apparently been negated and had come to an end and that he was going to share in an agreement with the animals with Ben [Ensor] and if the animals came to Australia could they stay on my property with my animals". Harrison initially recollected that Ensor was present during this conversation but conceded in cross-examination that he was not sure whether this was so. Harrison said that he discussed and reached agreement with Morales as to the terms upon which he would look after the alpaca on his property. Morales agreed in evidence that this had been discussed and was "part of the system", although Morales places the time at which this was discussed as after the meeting at which the reserved contract was executed. In cross-examination, counsel for IAM attempted to establish that Harrison had not been told that the contract with Forrest was at an end, but that payments due under the contract were overdue. Harrison responded: "What I was told was that Andrew Forrest hasn't met a payment. The contract's been terminated; that was basically the crux of the conversation, from memory." Morales did not deny any such conversation with Harrison. Rather, when cross-examined, he evaded the issue, as is demonstrated in the following cross-examination: "MR CONTI: It was at about that time you said to Mr Harrison, "the deal is over with Forrest and Inglis"? THE INTERPRETER: At that moment there was a lot of tension in both groups, in my group, my people and Mr Harrison and his people." Harrison was also cross-examined about a letter he had written at this time to his partner, Christopher Wren. The letter dated 21 August stated: "Ben and Morales have one hour ago resolved situation with 100. Forrest and Ingles [sic] have no part of them. Ben and someone else, a lawyer in Arica own them and will be entering into a cost sharing agreement with us. I believe Forrest broke his contract with Morales." He agreed that the last sentence of the letter was "an accurate summary" of what he "gleaned" from his conversations with Morales. However, I do not consider that Harrison's 21 August letter is inconsistent with this evidence. His expression of "belief" does not in any way diminish the force of his evidence that he was told by Morales that the "contract's been terminated". He merely agreed with counsel that to say that Forrest had broken his contract was an "accurate summary" "gleaned" from his conversations with Morales. There is some confusion in Harrison's evidence as to whether he was speaking of separate agreements between Morales and Inglis and Inglis and Forrest, or whether of a combined arrangement amongst Morales, Inglis and Forrest or of a single arrangement between Inglis and Forrest. However, I am satisfied that, prior to the commencement of the negotiations which led to the reserved contract, Morales told Harrison that the contract in which Forrest was involved had been terminated and that this information was conveyed to Ensor, either as a result of Ensor being present at the conversation or because Harrison told him. It is convenient at this point to refer to another conversation which occurred after the reserved contract was signed when Ensor stated he said to Morales: "Does this mean you have solved your problems with Inglis and Forrest" or, as Harrison recollected the conversation: " Does that terminate their agreement now or is that agreement over or something to that effect". Both Ensor and Harrison state that Morales agreed. Morales does not recall that anything to that effect was said. I accept that Ensor said something to this effect. The fact that he said it after the reserved contract was signed does not dissuade me that he was satisfied, prior to entering into negotiations in August 1992, that the Forrest agreement was no longer on foot. To the contrary, it was consistent with Ensor's demeanour which I observed for many days in the witness box. He had a tendency to state and restate his position and to seek to clarify matters to ensure that his side of the story was put with increasing detail and vigour. The next matter of relevance is the state of Ensor's legal advice at the time that the negotiations commenced. At that time Ensor had been advised that under the terms of his purchase agreement he was not obliged to take out 300 alpaca on CAM5 and that he could take 200 and leave 100 behind. Ensor's lawyer conveyed this to Morales, before Morales' lawyers became involved. I do not agree with this interpretation of Ensor's obligations under his purchase agreement. However, the fact that he had such advice is relevant to the claim of tortious inducement of breach of contract. The negotiations immediately preceding the preparation and signing of the reserved contract occurred over two days, on about 26 and 27 August 1992, at Morales' office. The negotiations were conducted by Ensor's and Morales' lawyers, with Ensor, Morales and Harrison in attendance. The lawyers spoke in Spanish to each other. There were occasions when Morales and Ensor each conferred separately with his own lawyer. On 26 August, Mr Tapia (Tapia), Ensor's lawyer, presented a draft contract which he had prepared. The document was written in Spanish and there was no English translation available at any time before it was executed. At the conclusion of the meeting, Tapia took the draft contract back to the office of Mr Coluccio (Coluccio), Morale's lawyer, where a new version was prepared and brought back to Morales' office. Harrison signed the agreement first, then Ensor and then Ensor's lawyer. The document was not translated to Harrison before he signed. However, Tapia explained to him that it was an agreement between Ensor and Morales, that the alpaca were to be looked after by him in Australia and that he was to be the custodian of the document. Next Morales' lawyer took the document and he and Morales left the room. When they returned, Morales' lawyer handed back the document. Both Ensor and Harrison gave evidence that they believed that Morales had signed the document. However, it was in fact only signed by Coluccio. The document was handed to Harrison, and according to both Ensor and Harrison, Ensor and Morales shook hands. Morales could not recall whether he shook hands but said it was possible. Morales said that after the meeting ended, his lawyer told him that he had explained to Tapia that Morales could not sign the agreement because Morales' had a contract with Forrest. He further said that Coluccio told him that Tapia had said that Ensor was aware of Morales' contract with Forrest but that it was not worth anything; that Tapia was going to draft an agreement so that Morales did not have to sign it; and that he did not know what went on in Tapia's head as such an agreement would be worth nothing. On the day following the signing of the reserved contract, there was a meeting between Morales and Ensor at which Dr Davis, the veterinarian from AQIS was present. Morales and Ensor drew lots for their respective 55 and 45 alpaca. Morales wrote down the tag numbers of the alpaca as they were drawn out and identified, by crosses and circles, those which were his and those which were Ensor's. About a week after the reserved contract was signed, Ensor had the document translated into English. Both Morales and Harrison were present when this was done. However, Harrison described the translator's English as "terrible" so that the translation was not of much assistance, although Harrison believed it confirmed the basic outline of what he had been told by Tapia. On about 28 August 1992, Ensor obtained clearance from SAG for the export of 300 alpaca. Ensor and Morales met again on 7 September 1992. Ensor showed Morales his cheque for the balance of the purchase price and asked for an invoice and receipt. Morales advised him that the invoice was with the Customs Clearing Agent. Ensor told him that he would exchange his cheque for the receipt after the animals had been loaded at the airport. Ensor obtained a copy of the invoice from the Customs Clearing Agent. The invoice, which was dated 2 September 1992 and was prepared by Morales' accountant, specified a sale of 300 alpaca at $1050 per head, being a total of $315,000. It also specified that full payment had been made. Morales asserted that the invoice did not reflect the correct details of the contract between ACL and Ensor. He stated that the price of US$1050 was a figure inserted by his accountant for tax purposes and he denied that the invoice was ever intended to be presented to Ensor as evidence of the receipt of US$315,000 or of any agreement with respect to the 300 alpaca. However, the fact that the invoice deliberately contained errors for tax purposes means that it is too unreliable to draw any inference from it. Morales gave Ensor a receipt for US$166,920 for "the last instalment of the invoice price". Morales asserted that this was a final payment under Ensor's purchase agreement for 200 alpaca and did not constitute payment for the 300 alpaca. However, no additional monies were payable by Ensor under the reserved contract in respect of the 100 alpaca. Morales also caused the shipping documents for the 300 alpaca to be issued in Ensor's name. The 300 alpaca were loaded onto the aeroplane at Arica on 7 and 8 September 1992. Ensor and Harrison, Harrison's son, the AQIS veterinarian, Dr Davis, and a Mr Stachowski, an associate of Harrison's, accompanied the animals on the flight. They arrived at Cocos Island on 10 September 1992. Whilst Ensor was at Cocos Island, he made arrangements for the transport of the alpaca to mainland Australia. Also whilst there, Ensor was advised that Forrest was coming to inspect what he said were his animals. Ensor and Forrest met on Cocos Island on 24 September 1992 during which time they discussed questions of ownership of the alpaca. At the conclusion of the conversation, Forrest served Ensor with the application which commenced these proceedings. FINDINGS ON WITNESSES' CREDIT There was a substantial attack on the credit of all witnesses. Before turning to that issue, it is worth commenting that many of the difficulties which this case presented arose from the fact that many of the documents brought into existence during the course of negotiations did to accurately reflect the true position as to the facts alleged in it. I will refer to some of these shortly. The documents also revealed the rugged and sometimes hostile atmosphere in which the various transactions were negotiated, brought into existence and were carried out. These factors are also relevant to the issues of credit as they tend to demonstrate the determination with which various of the parties pursued their respective commercial objectives, often at the expense of the truth. Inglis' credit Inglis demonstrated himself during the course of the events relevant to these proceedings to be ruthless and dishonest. This conduct commenced with the negotiations with Ensor in 1990. During those negotiations, Inglis told Ensor that ACL was to retain the balance of alpaca and would be involved in a joint venture with Ensor, whereas, even at that time, it was Inglis' intention to purchase them for himself. The terms of the ACL\Longstone agreement demonstrate his ruthlessness. At the time that he entered into that agreement he was fully aware that Ensor had entered into a contract for 200 alpaca and even after Ensor's agreement was signed, attempted to bully Ensor into taking less. His statements about the invalidity of Ensor's contract and his statements at the meeting with Morales and Ensor in early July 1991 are evidence of this. Another example is his letter of 11 March 1992, when he falsely advised Ensor that he and Morales had concluded arrangements with Forrest. Morales was not a party to those arrangements and was initially very upset with Inglis for having kept him out of that deal. On 25 March 1992, Inglis wrote to Forrest. Both the content and tone of the letter are important. As to its content, he told Forrest that: "I have always had a very clear agreement with Ensor over my 100 animals & cost-sharing which is well documented in our original communications going back to 1990... There was no such documentation in relation to cost sharing. Towards the beginning of the letter he said: "Now Andrew, lets get a few things very clear sunshine!" This was not the only letter in which Inglis adopted this tone. Inglis's letter to Forrest of 7 July 1992 provides another example. Later in the letter he said: "Forget the threats Andrew, nothing & nobody frightens me least of all you" This was not the only letter in which Inglis adopted this tone. Inglis's letter to Forrest of 7 July 1992 provides another example. In a letter dated 1 May 1992 to Forrest, Inglis admitted that, contrary to the fact, he had denied the involvement of a Mr Phillip Street in the IAM importation. Inglis has a major commercial interest at stake in these proceedings in that the sum of $350,000 which he was to be paid under the clause 3 of the second purchase agreement is directly at risk if the applicants are not successful in their claim. He presented in the witness box as sure of himself and arrogant. Forrest's credit Forrest also demonstrated that he would conduct his business in a way to achieve his commercial ends, even if that involved threats and falsehoods. His letter to Wren of 28 July 1992 is perhaps the best example of this. Portions of that letter have already been set out. In cross-examination, Forrest admitted that the allegation he made in relation to the processing of Ensor's permit was not his state of belief at the time he wrote the letter. Rather he had made the statement for "negotiation purposes". Similarly the statement in that letter that "Carlos as Exporter...has made exactly the same obligations to [IAM] as I understand [Ensor] has made to yourself and [Harrison]" was not correct, as Morales did not undertake the obligations of a seller under that agreement, as Forrest well recognised in his evidence that in his perception "[the] agreement to purchase the alpacas was always the one agreement"; that it was the "the same agreement". Forrest also presented as self-assured and at times amused by his own evidence. Overall however, I considered that he attempted to answer the questions asked honestly. Relevantly, there was little of his evidence which was contentious from a credit point of view. Morales credit Morales presented as an unsatisfactory witness. I have already referred to occasions where I do not accept his evidence. His whole attitude in the witness box was of cocksureness. The following evidence is an example: "MR CONTI: To your perception, Mr Morales, Mr Ensor did not regard the discussions and the production of the legal document as a solemn farce, did he? THE INTERPRETER: I don't know what he considered. MR CONTI: That is not a truthful answer, is it, Mr Morales? THE INTERPRETER: Why not? MR CONTI: Did you make an oath on the bible, Mr Morales? THE INTERPRETER: Yes. MR CONTI: Now, answer my question. To your perception and understanding Mr Ensor did not think that the discussions and the production of the legal documents was a solemn farce, did he? THE INTERPRETER: If that pleases you, I will agree with you. HER HONOUR: Is that an answer, Mr Morales? THE WITNESS: Yes." There were other occasions when it took an inordinate time for Morales to directly answer the question he was asked. He also changed his evidence within his cross-examination. His evidence as to whether he believed that Ensor thought he had entered into a binding agreement is indicative of both these aspects of his evidence. Further, the way that he conducted himself in relation to the various transactions demonstrated that he was an opportunist at many turns. His agreement to enter into a contract with Longstone in April 1991 for 150 alpaca, when a month previously he had entered an agreement with Ensor for 200 alpaca, is an early demonstration of this. His importuning Ensor to give him the notarised letter is another example. Finally, his conduct in relation to and at the time of the reserved contract is perhaps the most telling example. Morales and Inglis for the most part worked closely and this was so in August. Even assuming Morales to be under extreme pressure at that time in relation to the exportation, it is difficult to believe that he would not tell Inglis that he was proposing to do a deal with Ensor so as to trick Ensor unless it was for the very purpose of concealing that deal from Inglis. In any event, this evidence is inconsistent with Inglis' letter to Forrest of 15 August. Morales did not make any mention in his affidavit that he believed that IAM was in default of payments as at mid-August. That in itself was a significant omission and his evidence in cross-examination on this issue was simply not believable. As I have stated above, Morales evidence was that he did not give instructions to Inglis to send either of the letters of 15 and 17 August. However, his signature appeared on the 17 August letter. The following cross-examination further demonstrates the unsatisfactory nature of his evidence on this issue: "THE INTERPRETER: No, I gave no instructions. MR CONTI: Look, two days later, Mr Morales, you with Mr Inglis were telling Mr Forrest that he had not met his obligations? THE INTERPRETER: We had a small difference similar to the difference that we had with the payment about the lab. It was a small disagreement but it didn't have anything to do with my cancelling my business with him at any moment. MR CONTI: Mr Morales, there is no reference to any small difference in either of the two letters that I have just shown you, one at page 156 of the small bundle and one at 407 of the big bundle, is there? THE INTERPRETER: From that it is obvious that there is a problem. MR CONTI: Yes, and you only talked about there being a matter of a small problem just to help Mr Forrest's case then, did you not? THE INTERPRETER: When I said that it was small to arrive to this." Morales appears to have a financial interest in the outcome of the proceedings. The payment of $100,000 to which he was entitled under the second purchase agreement is held in trust by solicitors. Morales agreed that the monies had not been paid because of these proceedings, although he would not concede that he would only get the monies "if Forrest wins this case". He stated: "That is a problem that I have to solve with Forrest. That has nothing to do whether I win or lost this case. I am not - I do not want to disclose whether it is going to be paid or not, but that is a matter that I would like to solve it later on." The fact that a witness has a financial interest in the outcome of proceedings is a consideration which may be relevant to assessing that witnesses' credit. As with all matters which impinge upon credit, it is not determinative. In the present case, I consider that this factor was relevant, because it was part of the picture of Morales which emerged in the whole of his evidence and in his demeanour. Morales revealed himself to be opportunistic, cocky and amused by his own cleverness. He gave every impression that he was a person who would make such deals as would suit his own purposes and who keep his options open as far as, and as long as, possible. Even his answer as to whether the payment of $100,000 was dependant on the outcome of this case was reflective of this attitude. Ensor's credit In a separate submission, counsel for the applicants provide a long list of "unbelievables" in Ensor's evidence. I do not propose to set out that list. Ensor was cross-examined for 6 days. It was an exhaustive and exhausting exercise. In contrast, the other witnesses were cross-examined for a day or a little over a day. It would be unusual if a witness during such lengthy cross-examination did not give some inconsistent evidence. However, many of the examples relied upon as demonstrating Ensor's lack of credit misunderstand his evidence or put a gloss on it which is unwarranted. Aspects of his evidence were contracted and at times contorted as Ensor got himself entangled in legal terminology and concepts, an entanglement which cross-examining counsel sought to use to the applicant's advantage. His evidence about the early negotiations is an example. Ensor stated: "I thought I had an agreement but I didn't have a contract." Shortly afterwards he said: "I thought we had a concrete agreement". It was submitted that this was directly contradictory evidence. I do not agree, nor did I consider it to be contradictory at the time the evidence was given. Rather it was part of Ensor's convoluted way of giving his evidence. There is no doubt that at times he proved himself to be a most difficult witness to cross-examine and there were inconsistencies in his evidence, some of which he insisted on pointing out by reference to "imperfections" in his affidavit evidence. Some of the inconsistencies arose because he was trying to give an answer which was not responsive, and which counsel rightly pressed. In addition, as Ensor stated, there were occasions when his memory was jogged by the questioning itself. At the end of the day, the question of Ensor's credit has to be assessed from the impression I gained of him in the witness box. As I have said, he had to deal with a very long cross-examination, much of it aggressive (although not improperly so), and with respect to cross-examining counsel, some of which was confusing. It was my overall impression that Ensor was an honest witness. Harrison falls into a different category from the other witnesses. He had not sworn an affidavit in the proceedings, nor provided a signed statement to either party and attended to give evidence pursuant to a subpoena, although he had been interviewed by IAM's lawyers at an earlier stage in the proceedings. His reason for not providing a signed statement to any party in the proceedings was that he wished "to remain unbiased in the whole matter". Unlike any other witness, he has no financial interest in the outcome of the proceedings. I accept that Harrison did in fact wish "to remain unbiased in the whole matter" and that he attempted to do so. The only difficulty which his evidence presented, a difficulty which he readily acknowledged, was that which flowed from the passage of time since the events in question took place and from the fact that the matters about which he gave evidence occurred over a period of time and over many conversations. With those qualifications, I consider that Harrison was a most credible witness. Having regard to my findings on credit, where the evidence of Inglis or Morales conflicts with that of Harrison and Ensor, I prefer the evidence of the latter. THE TRANSACTIONS In order to determine who is entitled to the 100 alpaca, it is necessary to determine the effect of the various transactions entered into by the parties. It will be recalled that those transactions are: Ensor's purchase agreement; the ACL/Inglis agreement; the first and second purchase agreement and the reserved contract. Mention should also be made of the Longstone agreement which was terminated by Morales' letter dated 13 February 1992, a matter about which there is no dispute. PROPER LAW OF THE CONTRACTS Before dealing with the issues which arise in respect of the various agreements, it is convenient to deal with the proper law of the contracts. The parties to a contract, save for certain exceptions not relevant here, may specify the law which is to govern the contract: Vita Food Products Inc v Unus Shipping Co. [1939] AC 227 (PC); see also Sykes and Pryles, Australian Private International Law (2nd Edn, 1987); Benjamin's Sale of Goods (4th Edn., 1992) paras 25-113 and ff; Dicey and Morris Conflict of Laws (2nd Edn, 1980) at 761. An agreement to submit disputes under or in relation to a contract is not necessarily a choice of law provision, although taken with other factors it may be so construed. However, the clause: "disputes shall be settled by...law" was held to be choice of law provision in Perry v Life Insurance Society (1929) 45 TLR 468. The may by implication express a choice of law: United Stated Surgical Corp. v Hospital Products International Pty Ltd [1983] 2 N.S.W.L.R. 157 at 190 (C.A.); reversed on other grounds (1984) 55 A.L.R. 417 (H.Ct.); see Sykes and Pryles, Australian Private International Law at pp546-55ff. That matter does not arise here. Where the parties have not chosen the law which is to govern the contract, the applicable law is the law with which the contract is most closely connected or has the most real connection: Bonython v Commonwealth of Australia [1951] AC 201 at 219; Tomkinson v. First Pennsylvania Banking and Trust Co. Ltd [1961] A.C. 1007 at 1068, 1081-1082; Stanley Kerr Holdings Pty Ltd v Gibor Textile Enterprises Ltd [1978] 2 N.S.W.L.R. 372; Mendelson-Zeller Co. Inc. v T. & C. Providores Pty Ltd [1981] 1 N.S.W.L.R. 366 at 368-369; Amin Rasheed Shipping Corp. v. Kuwait Insurance Co. [1983] 3 W.L.R. 241 at 255 (per Lord Wilberforce); United Stated Surgical Corp. v Hospital Products International Pty Ltd; see generally Sykes and Pryles, Australian Private International Law at pp546-551. Relevant factors include, the place where the contract was entered into; the place where the contract was to be performed; the place of residence or business of the parties and the nature and subject matter of the contract: Re United Railways of the Havana and Regla Warehouses Ltd [1960] Ch. 52 at 91. The applicable law may be different depending upon the nature of the contractual obligation in question. In Benjamin's Sale of Goods (4th Edn., 1992) the authors state at para 25-113 and ff that the general rule is that the passing of title is governed by the lex situs at the date of transfer. Each of the ACL/Inglis agreement, the second purchase agreement and the reserved contract contained clauses dealing with the law to be applied. The ACL/Inglis agreement provided: 11.1. "The parties to this agreement agree that the law application to this contract shall be the law of Chile, or any other court of competent jurisdiction as circumstances may require". The second purchase agreement provided: "9.1. In the event of any dispute arising under this Agreement, then the parties agree that such matters that are in dispute shall be bound by Australian law and settled on the basis of such law as applicable in the Commercial Division of New South Wales". The reserved contract provided: FOURTEENTH: The parties agree that if it were necessary, the legislation applicable to this contract shall be the one in force in Australia and New Zealand. Whilst I consider each of these clauses is a choice of law, none of these clauses is a choice of law clause, none is entirely satisfactory. For example what are the factors in the case of the second purchase agreement whereby one would choose "any other court of competent jurisdiction as circumstances may require" or in the case of the reserved contract, in what circumstances would one choose between Australia or New Zealand. What would the position be if proceedings in respect of the second purchase agreement were brought in this court, which, whilst applying "the law of Australia", is not bound by decisions of the Commercial Division of the Supreme Court of New South Wales? Notwithstanding the difficulty of construction which these clauses throw up, the resolution is perhaps not as difficult as would first appear, especially when it is borne in mind that even where the parties have not expressed a choice of law, different laws may govern different aspects of the contract. Accordingly, I am of the opinion that, in the case of the ACL/Inglis agreement, it is subject to Chilean law, unless it is being considered in any other court of competent jurisdiction". It was not suggested by any of the parties that this was not a court of competent jurisdiction. Accordingly, I am of the opinion that this agreement should be considered on the basis that Australian law is to apply. In the case of the second purchase agreement, the choice of law clause is clearer. Australian law is to apply. The effect of the qualification as to the application of the law of the Commercial Division of the Supreme Court of New South Wales does not need to be determined as it was not suggested that the law so applied was different from the law to be applied in this court. As to the reserved contract, I am of the opinion that a similar approach should be taken to that which I consider to be appropriate in the case of the ACL/Inglis agreement. Where the parties have provided for two choices, then if the litigation where an issue arises in respect of the contract is conducted in the courts of one of those countries, the law of that country should apply. In this case, that is the law of Australia. In any event, there was no evidence that the law of New Zealand was different from the law of Australia on the issues in question. ENSOR'S PURCHASE AGREEMENT The only contentious issue in relation to Ensor's purchase agreement, and one which, on the respondents' case, is fundamental to the outcome of the case, is whether clause 8.1 imposed an obligation on Ensor to permit CAM5 to be used for the importation of the 100 alpaca. Clause 8.1 provided: "The parties agree that the animals which are the subject of the agreement will be part of a total consignment of approximately 300 alpaca of similar quality and all animals will share the facilities at all times from initial selection until disembarkation at Cocos Island." Counsel for IAM submitted that clause 8.1 imposed an obligation on Ensor to share the permit. His submissions recognised that there was a correlative obligation to share, pro rata, the costs associated with the use of the permit. Ensor's counsel submitted that clause 8.1 did not impose any such obligation, but that if it did, the obligation did not extend to permitting the use of the permit by persons other than ACL, without Ensor's consent, and Ensor had not given his consent to its use by Inglis or IAM. This submission forms the basis of Ensor's case that the basic element necessary for the effective operation of IAM's purchase agreement (whether that be the first or second purchase agreement), that is, access to CAM5, was missing, due to no legal wrongdoing on Ensor's part. It further followed, on this submission, that Morales and Ensor were free to lawfully enter into the reserved contract, unfettered by other contractual obligations. Construction of clause 8.1 The correct approach to the construction of contracts was stated by Kirby P in Hide & Skin Trading Pty Limited v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 326: It is the fundamental rule, that the court should give the words of a written agreement the natural meaning that they bear. Subject to that rule, in giving meaning to the words of an agreement between commercial parties, courts will endeavour to avoid a construction which makes commercial nonsense or is shown to be commercially inconvenient. This is because courts will infer that commercial parties would not themselves normally agree in such a way." Clause 8.1 makes no reference to CAM5, or to permits or licenses. Rather, in the context of a consignment of 300 animals, it speaks of "facilities", a term not defined in the agreement. The word "facility" is defined in the Macquarie Dictionary, 2nd ed. to mean: "something that makes possible the easier performance of any action;" and in The Shorter Oxford English Dictionary on Historical Principles, 3rd ed. to mean: "The fact or condition of being easy or easily performed; freedom from difficulty, ease". So defined, the word "facilities" is wide enough to extend to CAM5. The word "facilities" is also used in clause 14 of the Ensor purchase agreement, which provided: "This agreement is conditional upon the purchaser's approval of the animals, facilities, exporter's expertise, and associated equipment including vehicles prior to selection and identification of animals by him and in the event of non-confirmation the deposit will be refunded without deduction to the purchaser forthwith." As used in clause 14, I am of the opinion that the word refers to physical facilities such as holding areas, pens and the like. However, whilst words in the one document are generally to be construed as having the same meaning, their construction must yield to the particular context. Therefore, the meaning of "facilities" in clause 14 is not determinative of its meaning in clause 8. More relevant to the proper construction of clause 8 is clause 9, which deals directly with permits. It provides: "9.1The Parties to this agreement agree that the Vendor shall be responsible for obtaining all relevant permits, licenses, documents, and authorities required of him to enable the animals to be placed FOB Arica. 9.2The parties further agree that the Vendor shall also obtain all necessary permits, licenses, documents and authorities required of him to enable the animals to be imported into Australia as required by A.Q.I.S." The qualification of the words "the animals" in subclause 1 by the words "to be placed FOB Arica" makes it clear that the subclause is dealing with Ensor's 200 alpaca. This construction is consistent with the use of the phrase "the animals" elsewhere in the agreement. There is nothing in clause 9.2 which requires that the phrase be read differently from clause 9.1. The express provisions relating to permits in clause 9 is an indicator that clause 8 was meant to deal with matters other than permits, notwithstanding that the word "facilities" in clause 8 is wide enough to include permits. Clause 6 is also relevant to the construction of clause 8. In its printed form, clause 6 provided: "6. PRICE 6.1 The price payable by the Purchaser to the Vendor is agreed $2140 per head. In addition the Purchaser will pay all costs of shipping and animal maintenance costs, Arica to Australia and related animal health testing as charged by A.Q.I.S. Such payment to be made on receipt of documentation of expenditure. 6.2 The Vendor warrants that he will place the animals free on board an aircraft at Arica Airport, Chile. All quarantine costs, transport veterinary and fodder costs to the point of FOB will be met the Vendor [sic]." On the original agreement, immediately below clause 6.1, Ensor had handwritten the words "For His Animals". On the copy of the agreement initialled by Ensor and Morales on 7 July 1991, there is an additional handwritten notation: "For his share". The notations were not initialled on either document. The formal notarised agreement does not bear either notation. Ensor was uncertain as to when he made the notations. He thought it was likely that he wrote the words "For his share" in March, although he also suggested that he may have written the words on the document when he consulted his New Zealand solicitor. There was no evidence that Inglis or Morales were aware the notations had been made. Ensor said that his purpose in writing both comments was so as to make it more abundantly clear that he was only paying the costs for 200 alpaca. He also stated that it was clear to him that Morales was bearing one third of the costs for the alpaca - that was the deal he had. In my opinion, the two notations do not form part of the contract. If they have any relevance at all, they are as post-contractual statements of Ensor's understanding of the contract. The question arises, therefore, whether, as such, they can be used in aid of the construction of the contract. The law in Australia appears to be unsettled as to the use which can be made of post-contractual statements in the construction of contracts. In Administration of the Territory of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 Gibbs J stated at 446 that the "general principle" was that "it is not legitimate to use as an aid in the construction of the contract anything which the parties said or did after it was made." His Honour relied upon the House of Lords decisions of James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583 and F. L. Schuler A. G v Wickman Machine Tool Sales Ltd [1974] AC 235 where the principle was considered in some detail. However, his Honour did not refer to the earlier High Court decision of White v Australian and New Zealand Theatres Ltd (1943) 67 CLR 266. In White, the court held as admissible, evidence of surrounding circumstances, including some matters which had occurred post-contractually, in aid of the construction of words in a contract. In Hide & Skin Trading Pty Limited v Oceanic Meat Traders Ltd case, Priestley J at 326-328 reviewed the authorities and concluded that the High Court's statements in Papua and New Guinea v Daera Guba and White's case might be in conflict. He considered that the statement by Gibbs J in Papua and New Guinea v Daera Guba may not have been necessary for the decision, as his Honour stated that he had reached his decision independently of the post-contractual statements. Priestley J concluded that given the apparent conflict between the two High Court decisions, he should proceed upon the basis that White was binding upon him. In Aitken & Ors v State Bank of New South Wales & Anor (New South Wales Court of Appeal, unreported 23 April 1993) Sheller JA at 14-15 found that whilst evidence of subsequent conduct was admissible in determining what the terms of a contract were, it was not admissible as an aid to construction of the contract. His Honour referred, to but did not discuss, a number of authorities including F. L. Schuler A. G v Wickman Machine Tool Sales Ltd. Notwithstanding Priestley JA's analysis of the two High Court decisions, I am of the opinion that Papua and New Guinea v Daera Guba represents the present state of law in Australia on this point. Even though Gibb J's statement may be strictly obiter, it was a considered statement by his Honour on a matter in issue in the proceedings. It has been followed by various state courts and is consistent with the law in England. The rationale for the rule is sound. Further, in White's case, there was no exposition of principle. The court merely listed certain evidence which was held to be admissible in aid of the construction of the agreement in question. Accordingly, Ensor's notations on the agreement should not be accepted as admissible as an aid to construction of the contract. It is apparent from what I have said that the express words of the contract as a whole have not resolved the ambiguity in clause 8.1. However, during the course of the negotiations prior to the execution of Ensor's purchase agreement, Ensor agreed with Inglis, as agent for ACL, that ACL could use CAM5 for the importation of the balance of the 300 alpaca not purchased by him. There were also discussions about a joint venture whereby ACL's alpaca would be agisted on Ensor's property. The extent to and purpose for which statements made during the course of negotiations are admissible in evidence was stated by Mason J in Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352 as follows: "The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although...if the facts are notorious knowledge of them will be presumed. It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract...But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable" In the present case, clause 8.1 is susceptible of more than one meaning. The facts relating to CAM5 and the conversations as to its use were known to both parties and tend to establish part of the subject matter of the contract. Accordingly, they are admissible as an aid to construction of clause 8.1. However, in so far as the negotiations involved discussion of a joint venture between Morales and Ensor as to the agistment of the animals on Ensor's Australian property, they relate to Ensor's expectations only, in relation to a matter which did not form part of the subject matter of Ensor's purchase agreement. In my opinion, having regard to the negotiations between Ensor and Inglis in relation to the use of CAM5, the word "facilities" should be construed as meaning that the parties were to share all that was necessary for the importation of the alpaca, including the use of CAM5. Counsel for Ensor submitted that even if clause 8.1 included a reference to CAM5, it was declaratory in form and did not impose any obligation upon the parties. I do not agree with this submission. The contract should be read in a practical and workable way: Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd; Although it may be that having regard to the way clause 8 is cast, the obligation to share "facilities" is an implied obligation. Notwithstanding my construction of clause 8.1, the consequence of Morales suggesting that Ensor provide him with the notarised letter must be considered. At that time, in early May 1992, Ensor had taken the view that not only did he have no obligation to permit access to CAM5 by persons such as Inglis and Forrest, but that he was not going to. Morales, although having denied the existence of a contract between ACL and Inglis, acquiesced in or accepted or adopted Ensor's stance in relation to the use of CAM5 by requesting the notarised letter and being party to its preparation. It may be that in so doing Morales waived ACL's rights to insist that CAM5 be available for use by Inglis or Forrest. A party to a contract may waive the benefit of a term which is solely for that party's benefit: see generally Greig and Davis: The Law of Contract (1987) pp 375 to 376 and pp707 to 709. In the present case, the right to use CAM5 for the 100 alpaca was a clause inserted solely for the benefit of ACL. The concept of waiver is of uncertain application. It is a term which has frequently been used loosely or confused with election and estoppel. Notwithstanding that, its separate existence remains: see Greig and Davis The Law of Contract Ch 4. One of the effects of waiver is that it is revocable upon reasonable notice being given to the other side. Thus, a person may waive a certain type of performance of a contractual term. However, if at a later point of time, the party wishes to insist on performance, it can only do so if it gives the other side reasonable notice. In the present case, Morales never told Ensor that ACL was insisting that he have the right to use the permit for the purposes of a sale to either Inglis or Forrest. Rather, he entered into negotiations with Ensor in respect of the disposition of the 100 alpaca. It follows that up to the time of the reserved contract, the effect of the waiver remained. THE ACL/INGLIS AGREEMENT Initially, there were three issues in respect of the ACL/Inglis agreement. First, did any such agreement come into existence? Secondly, if there was such an agreement, when did property in the alpaca pass to Inglis? Thirdly, what payments were made under the agreement. The first issue was resolved in part when Ensor's counsel correctly conceded that there was an agreement between ACL and Inglis. There remains an issue as to whether the agreement was reflected in the written document of 15 February 1992, or whether it was an oral agreement entered into about that time. The third issue is only relevant if the passing of property is dependant upon all payments under the contract being made. Whether the written agreement of 15 February 1993 constitutes the agreement between ACL and Inglis Counsel for IAM submitted that Morales and Inglis entered into an oral agreement in mid-February 1992, but that its terms were reflected in the written agreement dated 15 February 1992, being the contract into which Inglis had interleaved the page from an earlier contract bearing Morales' signature. Ensor's counsel contended that the effect of this submission was that IAM sought to rely upon an oral contract as that was more favourable to its case on the passing of title. Ensor's counsel also submitted that Inglis' evidence that "[t]here was an oral contract made between us in January and cemented into place in February" was a fabrication, typifying Inglis' endeavours to advance IAM's case on critical issues. This submission misunderstands the applicants's case on this issue. Counsel for the applicant submitted that although there was an oral agreement entered into, the terms of that oral agreement became reflected in the written document. That submission is consistent with the evidence and with IAM's submissions. Accordingly, I am of the opinion that the terms of the written document of 15 February 1993 are the relevant terms to consider for the purposes of determining the passing of property pursuant to the contractual arrangements between Morales and Inglis. Passing of property The passing of property in goods is governed by ss 21 to 24 of the Sale of Goods Act (NSW). The first inquiry under these provisions is whether the goods are unascertained or ascertained. Clause 1.2 of the ACL/Inglis agreement described the goods subject of the sale as follows: "The Vendor will sell and the purchaser will buy 100 (one hundred) head of South American Cameloids of the Alpaca variety". This clause, when considered in isolation from the circumstances in which the agreement came into existence, bears the language of a sale of unascertained goods. However, by the time the ACL/Inglis agreement was entered into, Inglis had selected his animals, which had been eartagged and recorded on a list which had been provided to Morales. The animals so selected had gone into pre-quarantine. Accordingly, notwithstanding the wording of clause 1.2, the sale under the ACL/Inglis agreement was a sale of the 100 alpaca which had earlier been selected and tagged. It was thus a sale of ascertained goods. The passing of property in ascertained goods is determined in accordance with s 22 of the Sale of Goods Act (NSW) which provides: "22.(1) Where there is a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred. (2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties, and the circumstances of the case." If the intention of the parties cannot be determined in accordance with s 22, recourse is to be had to s 23: R.V. Word Ltd v Bignall (1967) 1 2B 534 at 545; see also Minister for Supply and Development Servicemen's Co-Operative Joinery Manufacturers Ltd (1951) 82 CLR 621 at 635, 641. Section 23 provides that unless a different intention appears the intention of the parties is to be ascertained by the application of the five rules contained in the section. Rules 1 and 2 are relevant here. They provide: "23.Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer. Rule 1. Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, be postponed. Rule 2. Where there is a contract for the sale of specific goods, and the seller is bound to do something to the goods for the purpose of putting them in a deliverable state, the property does not pass until such thing be done and the buyer has notice thereof." The provisions of the ACL/Inglis agreement which may reveal the intention of the parties are clauses 4 and 6.2. Those clauses provided: "4. DELIVERY 4.1 Delivery of the animals shall be given at the point of purchase in the Altiplano Chile. 4.2 Upon delivery the property in the animals shall pass unencumbered to the Purchaser subject to the terms of payments as detailed in Section 7 below being affected (sic). 4.3 The Vendor warrants that the animals are his property immediately prior to his giving delivery to the Purchaser. The Vendor further warrants that he shall use every reasonable endeavour to ensure that title to the duly selected and properly identified animals is effected. 6. PRICE ... 6.2 The Vendor warrants that he will place the animals free on board an aircraft at Arica Airport, Chile. All quarantine costs, transport veterinary and fodder costs to the point of FOB will be met by the Vendor." Clause 4.2 which on its face deals with the passing of property. Clause 4.2 depends upon the event of delivery provided for in clause 4.1. That event had passed at the time the contract was entered into. That circumstance in turn raises the question whether s 31 of the "Sale of Goods Act" applies. It provides: "Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions..." Notwithstanding that the events referred to in Clause 4.1 had passed at the date of this agreement, I am of the opinion that the agreement on its proper construction provided for delivery unassociated with payment. Section 31 therefore does not apply. In the circumstances where there had been a delivery of the animals under the Longstone agreement, the terms of which for the most part were adopted for the purpose of this agreement, I am of the opinion that there was a notional delivery of the alpaca at the time that the agreement was entered into. The question thus becomes whether clause 4.2 expresses the intention of the parties as to the passing of property under a new contract when the factual basis upon which passing of property was based, had altered. There is no reason why clause 4.2 should not be read according to its terms, which makes the passing of property coterminous with the event of delivery subject to compliance with the payment schedule in clause 7. This conditional aspect of clause 4.2 raises the question whether property was to pass immediately, subject to defeasance if payments under the schedule were not paid: The Colonial Insurance Company of New Zealand v The Adelaide Marine Insurance Company (1886) 12 App Cas 128 at 140; McDougall v Aeromarine of Emsworth Ltd [1958] 1 WLR 1126 at 1130; or alternatively, whether it was not to pass unless and until all payments were made under the contract. In my opinion, clause 4.2 has the latter effect. Notwithstanding that its opening words are clear and unambiguous - property passes at the time of delivery, the qualification introduced by the words "subject to the terms of payment...being [effected]" has the effect of delaying the time for the passing of property until all payments had been made. Ensor's counsel submitted that Clause 6.2 which makes provision for the placement of the alpaca "free on board" and not clause 4.2, governed the passing of property. The usual rule in relation to the passing of property under an "FOB" contract is that property passes once the goods have been "passed over the...rail". See Sutton: Sales and Consumer Law in Australia and New Zealand, 1984 at 548. In Benjamin, Sale of Goods, 3rd Edn, 1987, para 1484, the learned authors state: "In overseas sales, there is...a fairly strong presumption that the seller does not intend to part with property until he has either been paid or been given an adequate assurance of payment. Of course the presumption may be rebutted: for example, by the fact that buyer and seller are associated companies (so that the seller does not need security for payment) or by the fact that the contract expressly provides for credit." This passage was approved in The Ciudad de Pasto (1988) 2 Lloyds Rep 208 at 214. The usual rule is subject to the intention of the parties as expressed in their agreement and all the circumstances of the case: Carlos Federspiel & Co. SA v Charles Twigg & Co. Ltd [1957] 1 Lloyds Rep 240 at 256. As Sutton notes at 552: "...the parties may use an f.o.b. clause purely as a basis for calculating the price of the goods and what is included in that price...without intending to employ the term as defining the relative responsibilities of the parties". Clause 6 deals with "PRICE". Clause 6.1 specifies the price payable per head, and the specific items for which Ensor is liable, such as the cost of shipping and animal maintenance costs, Arica to Australia. The second sentence of clause 6.2 specifies that quarantine costs and other costs "to the point of FOB" will be paid by the vendor. However, the first sentence of 6.2 does not deal specifically with costs. Rather it contains a warranty that the vendor "will place the animals free on board an aircraft at Arica." In my opinion, this is the language of a traditional FOB contract. This is supported by the provisions of clause 9.1 as well as the phraseology in the second sentence of clause 6.2 which identifies the payments to be made to the point of FOB. There is nothing in the agreement as a whole, or the terms of clause 6.2 which indicates that the phrase "FOB" in clause 6.2 was only intended as a basis for calculating the price of the goods. If that was intended it would have been sufficient for the parties to have inserted the second sentence only of the clause, which specifically deals with the burden of costs "to the point of FOB". In my opinion, clause 6.2 has all the indicia of a traditional FOB clause. The traditional rule as to passing of property under an FOB contract, is no more than a presumption of the intention of the parties having regard to all the circumstances of the case: see s 22. The conduct of the parties or the circumstances may indicate that the usual presumption as to an FOB clause may not operate, even though its terms are such as would usually determine when property was to pass. In the present case, clause 6.2 appears in a contract the terms of which expressly dealt with the passing of property. In those circumstances, the express provision would prevail. However, having regard to the conclusion I have reached in relation to the construction of clause 4.2, the effect of that clause and clause 6.2 is the same. ACL/Inglis agreement: Transfer of property under Chilean law Even if Australian law is not the applicable law for the purposes of the determination which I am required to make in this case, Ensor's counsel's submitted that there was no relevant difference between the law of Chile and the law of Australia. In order for property to pass under Chilean law there must be "traditio", that is, delivery of the goods. A purchaser does not become the owner of goods until there has been "Traditio". Delivery may be actual, where the buyer obtains material possession of the goods. In this case, Inglis did not obtain actual possession of the alpaca. "Traditio" may also be symbolic. Mr Ovalle gave two examples of symbolic "Traditio" as follows: "3.1) The reference in Art. 1817 to the requirement of having obtained delivery of the goods should be understood as a reference to either actual delivery or symbolic Tradition. In other words, the delivery that meets the characteristics of the Traditio is the one that will rant the preference provided for in Art. 1817 of C.C. 3.2) The postponed buyer does not have an action against the buyer that becomes the owner. The postponed buyer only has an action against the person that sold separately the same thing to two persons. Such action consists in the termination of the sale contract agreement plus the compensation for the damages caused." Even where there are acts of symbolic "traditio" the intention of the parties as to passing of property is determinative. Mr Ovalle gave the following evidence on this aspect: "And that is what you meant when you said in your conclusion, expressed at the foot of page 2 of your report, that in the case of symbolic delivery that is ultimately to be determined by reference to the mutual intention of the seller and buyer as to when title should pass?‑‑‑Yes. And of course one could find no better expression of the mutual intention of the seller and buyer as to when title should pass than by looking at the very contract, if they have written one, between them?‑‑‑Yes. It's a good point to determine which or where the will of the parties is to be found. Of course, the contract provides a good element of interpretation of the will of the parties. Are you saying it is not decisive but it is a relevant factor?‑‑‑Of course it is a relevant fact, but the contract itself, according to our law, must also be interpret - the intention of the parties must also be interpreted. Aside from the sole, the mere text of the contract, it is required to determine the intention of the parties. And one of the elements among others is how the parties perform the contract, that is an element of interpretation of the contract. So it should be rather limited to try to find the intention in the sole contract, disregarding the circumstances that later appear. Of course. So at least we know it is one element, matter to bring into account?‑‑‑Yes. And secondly you would agree with me, it is an important matter to bring into account?‑‑‑Yes..." I have found that the intention of the parties in the ACL/Inglis contract was that property was not to pass until all payments required to be paid in accordance with clause 7 have been paid. I have also found that there is no evidence that all those monies have been paid. Save for one matter, I do not consider that there was any mode of performance of the contract which affects this interpretation. The one matter which may affect the interpretation is the fact that Morales remained responsible for the animals and was liable for all costs up until the point of embarkation. That matter reinforces my opinion as to the intention of the parties as to the passing of property. Accordingly, ownership of the animals has never passed to Inglis under Chilean law. Ovalle also gave evidence that in the case of an FOB agreement, the usual position was that title to the goods passes when the goods are loaded on board the ship or aircraft. This is no different to the usual rule as to FOB contracts in Australian law. Payments made under the ACL\Inglis agreement Clause 7 provided the following schedule for payments to be made for the alpaca: "7. PAYMENT The Purchaser agrees to make payment to the Vendor under the following timetable of events:- (i) Deposit payable on signing of this Agreement $75.000 (ii) The Purchaser agrees to make payment of Nil as soon as the Purchasing programmecommences in the Altiplano in Chile. (iii) The Purchaser agrees to make payment of Nil immediately after S.A.G. commencesofficial supervision of animals in pre-quarantine (iv) The Purchaser agrees to make payment of $10,000US within two working days of receiving notice in writing or by facsimile from the Vendor thatthe animals have entered quarantine in Chile. (v) The Purchaser agrees to make payment of $5,000US one calendar month following the date the animals entered quarantine (vi) The Purchaser agrees to make payment of $5,000US two calendar monthsfollowing the date the animals entered quarantine (vii) The Purchaser agrees to make payment of $119,000US to the Vendor on less embarkation of the animals $77,000US for shipment to Australia paid in advance) 7.1 Should the purchaser fail to comply with the above schedule of payments then penalty interest at the rate of 18% shall be payable to the Vendor on the outstanding amount in default for the period of such default." In addition, clause 6.1 provided: "The price payable by the Purchaser to the Vendor is agreed $2140 per head. In addition the Purchaser will pay all costs of shipping and animal maintenance costs, Arica to Australia and related animal health testing as charged by A.Q.I.S. Such payment to be made on receipt of documentation of expenditure." Both Inglis and Morales gave evidence that Longstone paid $75,000 to ACL on 16 April 1991, at the time of entry into the Longstone agreement, in compliance with the provisions of that agreement. Inglis further alleges that as a result of earlier payments of $US77,000 to Morales to assist him with an alpaca research project, the total amount to be credited to the ACL/Inglis agreement was $US152,000. Although there is no independent evidence in respect of the payment of the $75,000, there is no evidence of any complaint that the deposit of $US75,000 was not paid. As the evidence revealed that Morales at all times was concerned about monies which were due to him, complained when payments were late and occasionally sought advances of monies not only from Inglis, but also from Ensor and Forrest, I am of the opinion that if the $US75,000 was not paid, Morales would have protested its non-payment. Therefore, I accept that the initial payment of $US75,000 due under the Longstone agreement was paid. As to the payment of $77,000, there is documentary evidence of payments of $US66,200 to Morales prior to entry into the Longstone agreement. Inglis gave evidence that he and Morales agreed that monies paid under the Longstone agreement could "count towards the new contract". Morales did not give any evidence as to the existence of any such agreement, nor was he cross-examined on the matter. However, there is evidence that Morales demanded and received payments of money from time to time after the ACL/Inglis agreement was entered into. However, there is no evidence of complaint that there was default in payment of the $75,000 specified to be paid under the ACL/Inglis agreement. In addition, it appears that both Morales and Inglis viewed Inglis as taking over the Longstone contract. In those circumstances, I infer that it was agreed that there was to be a credit of $75,000 applied to the ACL/Inglis contract. As to the $77,000, clause 7(vii) makes express provision for crediting that amount to the last payment due. Given Morales' acceptance of the ACL/Inglis agreement, he is bound by clause 7(vii), notwithstanding that the documentary evidence of these payments only supports payment of $66,000. The two payments which I have dealt involve a credit of $152,000 to the agreement. In his written submissions, IAM's counsel put forward a summary of payments which had been made to ACL. These payments were supported by documentary evidence. The payments said to have been made were: 3.1.92 $US 5,400 3.2.92 4,500 3.3.92 5,500 12.3.92 6,000 15.5.92 10,000 TOTAL 30,900 There was also evidence of a payment made directly by IAM of $US32.278 (although IAM's submission stated the amount to be $US32,690) on 12 June 1992. Counsel for IAM submitted therefore that a total of approximately $US215,000 had been paid or credited to the ACL/Inglis agreement, representing a slight overpayment of the contract cost. The difficulty with this submission is that on their face, the payments referred to above bear no relationship in amount or time to the payment schedule under either the Longstone agreement or this agreement. More importantly, Inglis gave evidence that the amount of $5,400 was a part payment of the sum of $10,000 which Morales had requested in December 1991 for agistment and management fees, which have nothing to do with schedule 7 payments. He paid the balance of that $10,000 in February 1992. Again, that was a payment unassociated with the purchase price of the alpaca. The animals went into quarantine in Arica in about mid March. None of the payments from March onwards bear any relationship to the obligations under clause 7. There was no evidence to link these payments to payment for the alpaca, with which schedule 7 dealt. They could consistently have been monies payable under clause 6.1. There is also evidence which indicates that the payment of $10,000 on 15 May 1992 may have been a request by Morales for additional monies or an advance, as on 11 May 1992, Morales wrote to Inglis as follows: "Please, if you can, send to me US10,000. I'll be solving some problems here and I fly to Australia next week" There was nothing in this letter which related the sum sought to any payment due under the ACL/Inglis agreement, or for that matter under the Inglis/IAM agreement. There is evidence from which it could be inferred that Morales was short of money at this time as in his letter of 12 May 1992 to Ensor, Morales specifically thanked Ensor for "advance payments". Additionally, Forrest gave evidence that, at different times, he had loaned monies to Morales. Further, Inglis's own evidence is inconsistent with IAM's submission. In about early July 1992, Forrest alleged that less than 50% of the monies IAM had paid pursuant to the Inglis/ACL agreement had been applied towards the importation. Inglis responded by a letter dated 7 July 1992, in which he set out the payments which had been made by IAM and specified the application of those monies to that date. He recorded payments of $150,000 and related expenditure of $122,000. He stated: "The balance currently held by me is approximately $28,000. Of this [Morales] is owed aprox. [sic] this much to complete the purchase of animals". The only monies which could have been owing to Morales were those payable under the ACL/Inglis agreement. This is the case, not only as a matter of construction of the second purchase agreement, but Inglis's letter does not make any other sense. There was no suggestion in the evidence that Morales was to receive the same price for the alpaca from Inglis as was payable by IAM to Inglis. It will be recalled that the substantial increase in price payable to Inglis under the Inglis/IAM contract had been a matter of upset to Morales and was part of the background to Morales being offered an additional payment under the second purchase agreement. Accordingly, there is no evidence that all payments required to be made under clause 7 were made. Nor was there any evidence that compelled an inference to that effect. Accordingly, there is no evidence which requires or even enables a conclusion to be drawn that property passed under the ACL/Inglis agreement. FIRST AND SECOND PURCHASE AGREEMENTS It will be recalled that on 20 February 1992, Inglis and IAM entered into the first purchase agreement and on 24 May 1992 Inglis, Morales and Forrest entered into the second purchase agreement, the text of which comprised the first purchase agreement together with certain new clauses inserted by Forrest. These two agreements gave rise to a number of issues. First, did the entry into the second purchase agreement effect a termination of the first purchase agreement; secondly, did the second purchase agreement also replace the ACL/Inglis agreement so as to effect its termination; thirdly, what were Morales' obligations under the second purchase agreement and in particular, (a) was he a vendor under the agreement so as to have co-extensive rights and obligations with Inglis as his co-vendor and (b) did Morales have an obligation under the agreement to obtain access to a relevant permit to enable the 100 alpaca subject of that agreement to be imported into Australia; and fourthly when did property pass under the agreement. The terms of the second agreement were identical to the first purchase agreement, save for the additions made by Forrest. Prior to signing the second purchase agreement, Forrest stated to Inglis and Morales that he thought that the date should be left the same. The others agreed. No change was made to the date of "20 February 1992" which was already on the document. In those circumstances, it is clear that the parties intended the second purchase agreement to govern their relationship from the date it bore, that is 20 February 1992, and not from the date upon which it was signed. Having regard to these factors, I am of the opinion that the second purchase agreement was intended to be a complete replacement for the first purchase agreement, with the consequence that the first purchase agreement was rescinded upon entry into the second: see generally British & Beringtons Ltd v N.W. Cachar Tea Co Ltd [1923] A.C. 48, 69; United Dominions Trust (Jamaica) Ltd v Shoucair [1969] A.C. 340. Morales' obligations under second purchase agreement Counsel for IAM submitted that the effect of the second purchase agreement was to introduce Morales as a co-vendor, and that upon its proper construction it constituted either: "At its very least...: - an affirmation by Morales of Inglis' right to sell to IAM, and therefore, necessarily, ACL's sale to Inglis; or - a sale to IAM of whatever interest ACL had in the 100 alpaca and any interest Inglis had in the 100 alpaca". Counsel further submitted that if there had ever been a "lacuna or hiatus in the ACL-Inglis link it was now cured". Ensor's counsel contended however, that there were no obligations imposed upon Morales by the second purchase agreement. Alternatively, he submitted that, at the most, the only obligation upon Morales related to the warranty in clause 7.2 which provided: "7.2The Vendor warrants that the permit holders of CAM No. 5 under which these animals are to be imported into Australia will obtain all necessary permits, licenses, documents and authorities required of him to enable the animals to be imported into Australia as required by AQIS" It is necessary to examine the terms of the second purchase agreement in some detail to determine its effect. The first amendment made by Forrest was to clause 1 where, under the heading "PARTIES", he inserted the sub-headings "The Vendors" and "The Purchaser". Under the heading "The Vendors" the names of both Inglis and Morales appeared. In the case of Inglis, the identical entry to that in the first purchase agreement appeared as follows: "Ron G. Inglis its nominee or agent (Vendor)... whose performance is guaranteed by Ron G Inglis." However, the reference to Morales did not include a definition of him as a "Vendor": It merely stated: "Carlos Morales of Alpac Chile Ltda of Arica Chile." Thereafter in the agreement, the reference to "Vendor" is always in the singular, as it was in the first purchase agreement. Ensor's counsel submitted that upon its proper construction, wherever "Vendor" appeared in the second purchase agreement, it referred only to Inglis. The use of the singular throughout the agreement does not assist in the construction of the contract. As already stated, Forrest drew up the second purchase agreement on his computer by using a copy of the first purchase agreement. There are typographical errors in the document, including the use of the plural "purchasers" when there is no doubt that there was only one purchaser. There is a further typographical error in one of the new provisions in clause 3.1, where the reference to "Purchasers" is clearly a reference to Inglis and Morales. In my opinion, the parties did not pay any attention to the detail of whether Morales was defined as a vendor, or whether the words "vendor" and purchaser" or "vendors" and purchasers" were consistently used throughout the document. Therefore, I do not draw any inference that the use of the singular "vendor" to describe the selling party was intended to refer to Inglis only. Rather, the effect of the contract as a whole and the obligations of the parties thereunder have to be determined by construing the individual clauses of the contract. In this regard Clause 1.1 is probably fundamental to determining the scope of the contract. It provided: "The Vendor shall sell and the Purchasers shall purchase the whole share of 100 adult alpacas plus all cria purchased under contract by the Vendor from Alpac Chile of Arica Chile, as expressed by AQIS Camelid Import Permit, No. 5 Cam ("Cam no.5"). The effect of the clause was that it provided for a sale of those alpaca which Inglis had purchased from ACL and therefore preserves, or perhaps, to put it more accurately, does not interfere with, the ACL/Inglis contract. The consequence of this is that the vendor of the alpaca, for the purposes of the second purchase agreement, was Inglis alone. In any event, any ambiguity as to the proper construction of the contract is fully resolved by the pre-contractual negotiations, both written and oral in relation to the second purchase agreement: Codelfa. I should briefly refer to those negotiations. I have already referred to Forrest's statements to Inglis and Morales at the time he presented the second purchase agreement to them for signature. Earlier in May, Inglis had said to Morales: "As I understand it, the deal with Andrew will be that our 15 February Agreement stays in place and that you will be formally tied into my contract with IAM so that there is a direct link between you and IAM. Andrew wants this just to make sure that Ensor can't cause any problems" Morales agreed with this. Inglis added: "Well, my contract with Andrew will essentially remain in place with a modification with respect to the shares I was going to receive. You can then have your agreement with Andrew for $75.000". Inglis's letter to Forrest in early May 1992 as to how the new "deal" was to work and also Forrest's 12 May letter are to the same effect. It is perhaps worth noting that the construction at which I have arrived is consistent with Forrest's understanding that the second purchase agreement was "the same agreement" as the first purchase agreement, save only that Morales was "tied into the second document". That leaves for determination whether Morales had any obligation under clause 7.2 in relation to the use of CAM5. In my opinion, he did. He was joined as a party to the agreement and was to receive a benefit of $100,000, subject to the alpaca reaching Australia. Forrest's 12 May letter, which I have found to be admissible in relation to the construction of the agreement, indicates that the payment of monies was the consideration for Morales guaranteeing that "all permits...will be achieved by you, to guarantee the said Alpacas' safe and unencumbered passage to Australia". There is nothing in clause 7.2 which indicates that the word "vendor" should not include both parties named as vendor in the agreement. Nor is there any other term of the agreement which affects this construction. The effect of clause 7.2 therefore is that Morales (and Inglis) warranted that Ensor would do everything necessary in relation to the obtaining of permits and the like to enable the 100 alpaca to be imported into Australia. To make good that warranty, Morales needed to have in place an agreement with Ensor in respect of the use of CAM5 at the time that the alpaca were ready for exportation. However, notwithstanding that Morales had that obligation, he had by the time he became a party to the second purchase agreement, waived that right. Passing of title under the second purchase agreement Clause 1.2 identifies the goods sold under the second purchase agreement as the alpaca purchased by Inglis under the ACL/Inglis agreement. Had the alpaca not been ascertained at the time the second purchase agreement was entered into, it would have been a contract for unascertained goods. However, as I have found that the ACL/Inglis agreement was a contract for the sale of ascertained goods, it follows that the second purchase agreement is also a contract for the sale of ascertained goods. Passing of property in the alpaca under the agreement is thus governed by s 22 and, if necessary, s 23 of the Sale of Goods Act. Part of Clause 4.2, and clauses 6.1, 7.1 and 8 are the provisions of the second purchase agreement relevant to this issue. Those clauses provide: "4. PAYMENT "4.2The sum of $50,000 (Aus) [to be paid] on or before the 29 February 1992 to convert the option. This sum has been paid by the Purchaser in fulfilment of this clause giving the Purchaser unencumbered title to the alpaca. As a guide only and dependent upon the date of the actual receipt by the Purchaser, as provided by the Vendor of the actual accounts rendered to the Vendor as a direct result of the exportation and quarantining of the Alpacas from Chile to Australia, the following payments will be made on the following dates. (a) The sum of $85,000 (Aus) on 20 March 1992. (b) The sum of $25,000 (Aus) on 20 April 1992. (c) The sum of $25,000 (Aus) on 15 May 1992. (d) The sum of $75,000 (Aus) on 20 May 1992. (e) The sum of ($25,000) on 20 June 1992.) ... 6. DELIVERY 6.1 The title to the property of the Alpacas shall pass to the Purchaser on completion of payment 4.2 above. 7.1 The Vendor shall be responsible for obtaining all relevant permits, licenses, documents and authorities required of him to enable the animals to be placed FOB Arica. 8. PERFORMANCE 8.1 If the Purchaser does not comply with the terms as outlined in the payment schedule then the Vendor may: 8.1.1 Without prejudice to any other rights or remedies available to the Vendor at law or in equity the Vendor may: (a) Sue the Purchaser for specific performance or (b) Cancel the contract and sue the Purchaser for damages. Provided a period of not less than 4 Weeks has expired since the Purchaser failed to perform. ... 8.1.2 When the Vendor is entitled to cancel the contract the entry by the Vendor into an unconditional contract for the resale of the Alpaca or any part thereof by the Vendor shall take effect as a cancellation of the contract by the Vendor. If the contract has not previously been cancelled then such resale shall be deemed to have occurred after a cancellation. Clauses 6.1, 7.1 and 8 remained unchanged from the first purchase agreement. Clause 6.1 dealt expressly with the passing of title. Clause 7 arguably related to the passing of property by its reference to FOB. Given the express provisions of clause 6.1 and the fact that an FOB reference only raises a presumption as to passing of title, it is more likely that clause 6.1 expressed the intention of the parties. However, in practical terms the effect of clauses 6.1 and 7 as to the passing of property under the first purchase agreement was the same, as property would not pass under either clause until payments for quarantine and the costs associated with the export had been paid. Under the first purchase agreement, the provisions of clause 6.1 (or for that matter clause 7.1) and clause 8 were consistent, as, if property had not passed, the contract could be cancelled if there was non-payment. The new provision as to title in clause 4.2 is inconsistent with clause 6 and therefore with the right to cancel the contract provided for in clause 8. Having regard to the way in which the second purchase agreement came into existence, it seems that the parties overlooked these terms and failed to observe the inconsistencies caused by the insertion of the new provision as to title in clause 4.2. However, as the insertion of the new provision as to title in clause 4.2 demonstrates that the parties turned their minds to the question of passing of title under the second purchase agreement, clause 4.2 must prevail and property in the alpaca passed to IAM as from the time of payment of the $50,000. THE RESERVED CONTRACT Pursuant to the reserved contract, Morales agreed with Ensor that of the 300 alpaca, 55 would be his and the balance would be Ensor's. Ensor claims that this contract was effective to transfer beneficial title to him in 45 alpaca. The applicant disputes Ensor's claim. Counsel for the applicant submitted: "1. Upon its proper construction, it was not an enforceable contract between Ensor and Morales as: (i) it was never executed by or on behalf of ACL and it had not otherwise been acquiesced in or adopted by ACL; (ii) it was not binding in Chilean law because of the absence of specification of price; (iii) It was not a binding contract under New South Wales law because of the absence of consideration; (iv) It could not be construed so as to give it any commercial efficacy; (v) There was no mutual intention to be legally bound by the contract. 2. Ensor did not enter into the reserved contract in good faith and without notice of the sale to Inglis or IAM: see s 28 of the Sale of Goods Act. 3. The reserve contract was vitiated by duress." I will deal with these issues in the order in which they appear below. Reserved contract not capable of commercial efficacy IAM's counsel analysed the terms of the reserved contract to demonstrate that its contents were either false to the knowledge of the parties or incapable of a construction which would give it commercial efficacy. I should state at the outset that the falsity of matters stated in a contract does not rob it of effect. The point I understand the applicant seeks to make, however, is that the false statements in the reserved contract are evidence that the parties did not have the requisite contractual intention at the time they entered the agreement. It is convenient to consider this issue by direct reference to counsel's analysis of the terms of the contract which I will set out verbatim and underline for ease of reference and identification. Before doing so, it is necessary to set out the terms of the reserved contract: RESERVED CONTRACT OF TRANSACTION "In Arica, on the twenty seventh of August in the year one thousand nine hundred and ninety two, there appeared, on one part, Mr. LAURENCE FRANCIS HARRISON, married, businessman, residing in Australia, . . . as a representative of the firm ALPAC CHILE Pty Ltd, and on the other part, as importer and/or purchaser, MR. BEN K.E. ENSOR, single, businessman, residing in this city, . . . They have stated that they have reached an agreement in the reserved contract of transaction, which is set forth in the following clauses: FIRST: A contract was entered into between Mr. CARLOS MORALES BELMAR and BEN K.E. ENSOR for the purchase and sale of three hundred alpacas which were to be exported and imported, respectively. SECOND: The vendor, ALPAC CHILE Pty Ltd., represented by Mr. Laurence Francis Harrison, has stated that he understood from that contract that one hundred animals belonged to him. On his part, Mr. BEN K.E. ENSOR has stated he understood that he had entered into the contract in order to purchase three hundred alpacas for himself. THIRD: By means of this instrument, and the parties appearing have agreed to give it a reserved category, they clarify the situation arising between them regarding the enforcement of the above-mentioned contract. They agree on the following: 1) Of the total number of three hundred alpacas, two hundred and forty five are the property of Mr. BEN K.E. ENSOR and fifty five are the property of Mr. LAURENCE FRANCIS HARRISON. 2) Mr BEN K.E. ENSOR shall pay the price of two hundred alpacas at the value of US$2,140 (American dollars) each. FOURTH: The total quantity of these animals, that is to say, the three hundred animals, must be shipped, invoiced, documented, or whatever relevant documentation must be issued in order that they can be brought to Australia under the name of Garrimere (sic) Farm, in accordance with the 5CAM import permit. FIFTH: ALPAC CHILE Pty. Ltd. shall pay for transportation by air from Arica to Cocos Island, which shall be done jointly with the remainder of the animals and shall bear the cost of one third of the expenses which the transportation implies. SIXTH: Mr. BEN K.E. ENSOR, on his part, shall pay for the total amount of the quarantines that these animals may be subject to in order to be admitted to their final destination. He shall also pay for insurance pertaining to the transportation of all the livestock to Melbourne and health tests and permits which may be required for these alpacas. In addition, he shall pay for the transportation of all the animals, from Cocos Island to Melbourne. SEVENTH: The following animals, numbers: shall be the property of Mr. LAURENCE FRANCIS HARRISON. All remaining animals shall be the property of Mr. BEN K.E. ENSOR. EIGHTH: The parties agree that any young that might be born during the trip to Melbourne, pertaining to the one hundred aforementioned animals, shall be the property of LAURENCE FRANCIS HARRISON. NINTH: ALPAC CHILE Pty Ltd., in its capacity as exporter, agrees to issue all the health, commercial, legal or any other type of documentation that may be necessary for the transportation of the animals to Melbourne. TENTH: Mr. BEN K.E. ENSOR, agrees to provide all the necessary legal assistance that may be required, to CARLOS MORALES BELMAR, personally or ALPAC CHILE Pty Ltd. as a company, bearing the cost of solicitors, in the event that CARLOS MORALES BELMAR or ALPAC CHILE Pty Ltd., should encounter legal difficulties in Australia, New Zealand or Chile, arising from the original contract. ELEVENTH:The parties appearing agree that for all the legal, Customs, documentation, health or other purposes, the only existing contract shall be the one which is set forth in this act. That is to say, Mr. BEN K.E. ENSOR, shall utilise the original contract entered into for all legal purposes, and ALPAC CHILE Pty. Ltd., shall utilise exclusively the same contract and, between them, they agree that it shall apply in relation to all the other aspects including Clause 8-1, subject of this discussion. TWELFTH: The parties agree that Mr. BEN K.E. ENSOR shall keep this contract reserved, absolutely and ALPAC CHILE Pty. Ltd. shall do the same. Mr. LAURENCE HARRISON shall offer as a reason to other suppliers, that he was forced to comply with the original contract, sending all the animals under the name of GARRIMERE (sic) FARM. THIRTEENTH: The parties agree that this contract shall be issued without any copies, and that this single document shall remain in the custody and possession of Mr. LAURENCE FRANCIS HARRISON, and only he may issue a copy to any party concerned with prior consent of Mr. CARLOS MORALES BELMAR and Mr. BEN K.E. ENSOR. FOURTEENTH: The parties agree that if it were necessary, the legislation applicable to this contract shall be the one in force in Australia and New Zealand. In proof thereof and after having read same, it has been ratified and signed by Messrs BEN K.E. ENSOR, LAURENCE FRANCE HARRISON, in the capacity in which they appear and by witnesses, Solicitor, Mr. SALVADOR COLUCCIO IZZO and Mr. JORGE SALAZAR TAPIA. Counsel's anaylis "The Reserved Contract commenced with the perfectly false declaration that Harrison appeared as the representative of ACL." The evidence is clear that Harrison was not appointed as ACL's agent for the purposes of entering the contract. He knew that he was named in the contract and was requested to sign it. He believed that his role in the matter was to be the custodian of the document because he was considered to be "neutral". Morales knew that Harrison was named in the contract as agent. He was in the room throughout the negotiations, was represented by his lawyer and was consulted by his lawyer from time to time during the negotiations. He read the document. He was also present when Ensor's lawyer said that the document was to "facilitate an agreement between [Ensor] and [Morales] and that [Harrison] was on there more or less as a keeper of the document." The contract, on its face, purported to be a contract between ACL and Ensor. Morales shook hands with Ensor after the signing of the contract. Notwithstanding that a person may not have actual authority, a party may still be bound by the acts of that person if the person is clothed with ostensible authority. The classic statement of the principles as to ostensible authority are to be found in the judgment of Diplock LJ in Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 Q.B. 480 at 503: "An 'apparent' or 'ostensible' authority...is a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the 'apparent' authority, so as to render the principal liable to perform any obligations imposed upon him by such contract. To the relationship so created the agent is a stranger. He need not be (although he generally is) aware of the existence of the representation but he must not purport to make the agreement as principal himself. The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract. It is irrelevant whether the agent had actual authority to enter into the contract." Given Morales' conduct in permitting the negotiations to proceed without disabusing Ensor that ACL was not to be bound by the agreement, I am of the opinion that Harrison had ostensible authority to enter into the contract. In any event, as will be seen later, Morales personally performed the contract, so that not only was the contract executed, Morales thereby ratified the contract. Leaving aside the legal issue as to agency, the submission asserts that the falsity of the statement as to agency was evidence that the whole agreement was never intended to be, or could not be a binding agreement between the parties. If a contract as a whole, to the knowledge of the parties to it, contains a string of erroneous matters and little or nothing else, that may be evidence that the parties did not intend the contract to have any binding force. It is doubtful that such an allegation would be made out on the falsity of one statement. The agreement has to be considered as a whole. It will be necessary therefore to return to this issue as the same allegation is raised in relation to a number of the clauses in the contract. When that allegation is raised, I shall for convenience refer to it as the "falsity issue". "It falsely recited that Harrison had reached an agreement with Ensor in the reserved contract." This allegation requires a literal reading of the reserved contract. However, it ignores the fact that the document refers to Harrison in the capacity of agent. "It quite falsely recited [in the FIRST clause] a prior contract of sale between Morales and Ensor for 300 alpacas - no such sale had ever taken place, on any view of the evidence." "The SECOND clause was also quite false. Harrison could not have stated that the 100 alpaca belonged to him. Ensor could not (even accepting the whole of his evidence at its very highest) have ever stated that he understood that he had contracted to purchase 300...." The first matter to note in respect of the FIRST and SECOND clauses, as the submission recognises, is that they are recitals and not operative terms of the agreement. The terms of a recital are sometimes relied upon to raise an estoppel between the parties, so that even if a recital contained an error, a party could be bound by the statement made. That is not the issue here. The issue is the falsity issue, which I shall deal with later. Secondly, although the FIRST clause refers to a contract between Morales and Ensor for the purchase and sale of 300 alpaca, which is not correct, the clause may have been intended to refer to the original arrangement which Ensor believed he had for the sale of the 300 alpaca. That is an assertion that had been made earlier, in a letter from Buddle Findlay, solicitors, to Inglis on 16 April 1992. It also has credence when the imprecision with which Ensor expressed himself, including in relation to the negotiations leading up to entry into Ensor's purchase agreement to which I have referred earlier, is borne in mind. This construction also has some sense when the FIRST clause is read in conjunction with the SECOND clause, where there is a reference to Ensor's and Morales' understanding of what each was entitled to under Ensor's purchase agreement. Ensor provided another explanation of the FIRST clause. He stated in cross-examination: "...I put to you the proposition that it was incorrect to say that a contract was entered into between...Morales...and you for the purchase and sale of 300 alpacas which were to be exported and imported respectively--I think it's actually correct at that point, Sir. How is it?---...I had a purchase agreement in place of a straight cash transaction for the 200 and I believed that the lawyers were setting it up to merge the two lots of discussions into one so that I was then purchasing a total of 300 animals. But you never purchased a total of 300 animals?---Yes, yes, that's what the deal was at that time. At what time?---Around 21 August. That is what we had agreed to but.. --- But Mr Morales was to get - it must have been the lawyers were to set it up so that under some sort of bailment system or something when they got to Australia that 55 of them were going to end up back and be vested back to Morales." He said that whilst no-one had mentioned "a bailment" in the discussion, that was an understanding he had obtained from other contracts he had entered into. This evidence demonstrates Ensor's imperfect and confused understanding of legal notions generally and the precise legal nature of this contract in particular. "The THIRD clause contained two curiosities. Firstly, it is at the least quite odd that the 55 alpaca are recited to be the property of Harrison, not ACL. Secondly, the clause merely re-stated Ensor's existing obligation to pay US$2140 for each of the 200 alpaca he had already long since contracted to purchase from ACL under the ACL/Ensor Contract. In the FIFTH clause, ACL and not Harrison was described as the entity having responsibility for payment of transportation to Cocos. Further, ACL was required to bear the cost of one third of the expenses i.e. the cost of transporting 100 of the 300 animals, yet Ensor was supposed to be acquiring 45 of that 100. The SIXTH clause purported to place liability for payment of the costs of quarantine and Cocos-Australia transportation for the whole 300 upon Ensor; but, quite unlike the preceding clause, it did not indicate the proportions in which such costs should be borne." The reference to Harrison in the THIRD clause is again a reference to him in the capacity as agent for ACL. The effect of this clause, therefore, was that the parties to the contract, ie ACL and Ensor, agreed to a division of the 100 alpaca on the basis of 55 to ACL and 45 to Ensor. The provision that Ensor pay $US2140 for 200 alpaca is not curious, as is alleged. It simply expressed an agreement that no additional monies were payable for the extra 45 alpaca acquired by Ensor. However, the FIFTH and SIXTH clauses imposed obligations on both parties in respect of the importation each of which involved a cost. The first part of the SIXTH clause also highlights the inconsistency in the drafting which was a feature of the Reserved contract as a whole, with Harrison's name sometimes being used and sometimes that of ACL. The essence of the second part of counsel's submission in respect of the FIFTH clause is that it would be improbable that ACL would agree to pay one third of the costs of transportation when its share of the costs, on a per animal basis, would be less. However, this submission fails to recognise that in the SIXTH clause, Ensor agreed to pay the whole (not some unspecified portion as counsel submitted) of the Australian quarantine costs and the whole of the cost of transportation from Cocos Islands to Melbourne. It also fails to pay any attention to the fact that these two clauses contained the financial obligations of each under the contract as a whole. "The SEVENTH and EIGHTH clauses purported to confer property in the alpaca (to be identified) and various cria upon Harrison. The reference to Harrison as the person having property in the alpaca was apparently deliberate and stood in contradistinction with the reference to ACL in the FIFTH clause, and also in the subsequent NINTH clause. Yet on no account of any of these events was Harrison ever intended to have property in any of the subject 100 alpaca." Notwithstanding the inconsistency in drafting between the FIFTH clause and the NINTH clause, the whole agreement is predicated upon Harrison being ACL's agent. Thus, I remain of the opinion that any reference to Harrison is a reference to him in his representative capacity as agent for ACL. "The TENTH clause was either extraordinary, or devastating to the Respondents' case. If the "original contract" was a reference back to the contract described in the FIRST clause, it was a nonsense, because there never was a contract with Ensor for 300 alpaca; also even if there had been such a contract, it could not have exposed Morales or ACL to a liability to one another, for the costs of responding to a claim for which this clause purportedly provided Ensor's indemnity. On the other hand, if as Ensor believed (T/s 1088/28, 1089/4, 1089/8), there was an exposure to liability at the suit of Inglis and/or Forrest arising from Inglis' and/or Forrest's contract, (as Harrison was, indeed, at that very time warning Ensor), that stands as the clearest evidence of notice and want of good faith by Ensor for the purposes of the Sale of Goods Act." There are difficulties with this clause if it refers to the transaction identified in the FIRST clause. However, as I stated earlier there are possible explanations for its terms. In any event, rather than being devastating to Ensor, it may not have any practical effect, it does intend to deal with the relationship arising out of Ensor's purchase agreement, being the only contract between ACL and Ensor. However, the more likely operation of the clause is to be found when regard is had to the ELEVENTH clause which refers to clause 8.1. In my opinion, this is a reference to clause 8.1 of Ensor's purchase agreement. It will be recalled that there is a dispute as to whether Morales could pass on the benefit of the use of that clause to others, and in particular to Inglis and Forrest. I am of the opinion that the clause was intended to provide ACL with an indemnity for solicitors' costs should Inglis or IAM cause "legal difficulties" in relation to the use of the permit. As to the allegation of want of good faith, I shall deal with that as part of my consideration of good faith for the purposes of s 28 of the Sale of Goods Act. "It is difficult to attribute any sensible meaning to the ELEVENTH clause. It purported to confine the relationship of the parties to those arising under the Reserved Contract, but at the same time required Ensor to utilise, and ACL to utilise exclusively, the "original contract"." I do not agree with this submission. Notwithstanding its inelegance, the reference to clause 8.1 clearly gives the clue to its meaning. The effect of the ELEVENTH clause was that it provided that for the purposes of effecting the mechanical steps necessary to export the animals, the original contract, that is Ensor's purchase agreement, would be used by the parties. "The first sentence of the TWELFTH clause required that Ensor and ACL keep the contract "reserved". Ensor understood and intended this expression to mean "secret" i.e. to be kept from the eyes and ears of Inglis (T/s 1091/26, 1094/19). Ensor intended to preserve the Reserved Contract from Inglis' and presumably also Forrest's "interference" (T/s 1091/27), interference which, in all the circumstances, we would submit, would be entirely understandable and warranted. Harrison's evidence confirmed Ensor's recognition of the need for secrecy (T/s 294/2-18), yet further testimony to Ensor's notice of Inglis' and Forrest's purchases and of Ensor's want of good faith." This submission raises the issues of notice and good faith with which I shall deal shortly. "For what it be worth, there is an inherent difficulty in seeking to give effect to the FOURTEENTH clause, by attempting to give effect to the legislation "in force in Australia and New Zealand"." This is another clause where its inelegance causes difficulty of construction. However, as I have discussed earlier, the effect of the clause is that either the law of Australia or New Zealand was to govern the terms of the contract, depending upon which forum was chosen to litigate any dispute. "There was no provision in the Reserved contract for Morales to sign, notwithstanding that he was the principal of ACL, as Ensor well knew". This submission is correct, although both Harrison and Ensor believed that Morales had signed. Morales had gone out of the room with his lawyer after Ensor and Harrison had signed. Both Ensor and Harrison believed that was for the purpose of signing the document and assumed that that is what happened. When Ensor had the document translated he said that the translator did not read out the names of the parties who had signed. At one stage Ensor said the translator had said "signed such and such and such and such", but that she didn't say the names. Ensor withdrew this evidence stating: "I am incorrect in saying such and such and such and such and such because she didn't tell me - she doesn't know the parties. She works in a jeans factory." Counsel for IAM attacked Ensor's evidence on this issue as being a "blatant piece of fabrication, palpably false, conceived in the witness box as a means of avoiding the inevitable", "fanciful, and another incident of Ensor paying no regard to his oath and trifling with the truth". I do not agree. Harrison, whose evidence was not so viciously attacked and whose evidence I accept, also thought Morales had signed. He was not asked whether the translator had read out the names, although he did state that he did not pay a great deal of attention to the translation. There was nothing in the evidence which would compel me not to accept Ensor's evidence that he did not realise that Morales had not signed. It should also be remembered that Ensor did not have custody of the document, so that this was not something that he could check. It is necessary to return to the allegation that the contents of the reserved contract were either false to the knowledge of the parties or incapable of a construction which would give it commercial efficacy. As it turns out there are only two possible false statements in the document. The first is as to the appointment of Harrison as agent. The second is as to Ensor's contract for 300 alpaca. These false statements however, do not render the contract unworkable for the reasons which I have stated. Further, the submission only has force if it can be demonstrated that the statements were false to the knowledge of both parties. There is no evidence that Ensor knew that Harrison was described as an agent, although, he must be taken as having knowledge of that matter through his solicitor. However, there is no evidence that Ensor's solicitor knew the statement to be false. Accordingly, I do not consider that the alleged falsities in the reserved contract are sufficient to require the conclusion that the contract cannot have commercial efficacy. It also follows from what I have said above in respect of the various terms of the contract that the contract is not so vague or uncertain as to have no legal effect. As counsel for the respondent submitted, the words of Wright LJ at 514 in Hillas v Arcos (1932) 147 LT 503 are apposite: "Business men often record the most important agreements in crude and summary fashion; modes of expression sufficient and clear to them in the course of their business may appear to those unfamiliar with the business far from complete or precise. It is accordingly the duty of the court to construe such documents fairly and broadly, without being too astute or subtle in finding defects; but, on the contrary, the court should seek to apply the old maxim of English law, verba ita sunt intelligenda ut res magis valeat guam pereat. That maxim, however does not mean that the court is to make a contract for the parties, or to go outside the words they have used, except in so far as there are appropriate implications of law, as for instance, the implication of what is just and reasonable to be ascertained by the court as matter of machinery where the contractual intention is clear but the contract is silent on some detail". See also Hide & Skin Trading Pty Limited v Oceanic Meat Traders Ltd Failure of ACL/Morales to execute the contract or acquiescence in or adopt its terms IAM's counsel submitted that ACL was not bound by the contract as Morales had not signed the contract, nor had Harrison intended to sign the contract as a party to it. He further submitted that ACL or Morales had not acquiesced in or adopted the contract. He had merely stood by whilst the negotiations were carried on. This submission should be rejected for a number of reasons. In the first place, it is not correct to say that Morales merely stood by whilst the negotiations were being carried on. The negotiations were carried on by his lawyer, who for that purpose was his agent. His lawyer consulted with him during the course of the negotiations. Secondly, as I have found Harrison had ostensible authority to enter the contract. Thirdly, Morales so conducted himself during the course of the negotiations as to cause Ensor to believe that he had signed the document. After the contract was signed, Morales shook hands with Ensor. Finally, and most significantly, Morales personally performed the contract the day after the contract was signed when lots for the alpaca were drawn. Thus, even if he had not formed the requisite intention to be bound by the reserved contract, Morales' performance of the contract is sufficient to cause him to be bound by it as a matter of law. See Smith v Hughes (1871) LR 6 QB 597 where Blackburn J stated at 607: "If, whatever a man's real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party's terms". See also Carter & Harland at 205 where the authors state: "The formation of agreement will in many cases be inferred from the conduct of the parties. Sometimes there may be no identifiable offer and acceptance because the parties have not expressly discussed the formation of contract but have indicated by their conduct that they did not in fact intend to contract (See, eg Haynes v McNeil (1906) 8 WALR 186; Glass v Pioneer Rubber Words of Australia Ltd [1906] VLR 754". Absence of consideration IAM's counsel submitted there was no consideration for the "gift of the 45 alpaca". He contended: "If the parties intended there to be any consideration for the gift of those alpaca, it was that expressed in the clauses FIRST, SECOND and THIRD i.e. in resolution of a dispute as to whether Ensor was entitled to 300 or only 200 of the 300 alpaca which he had contracted to purchase. In truth, the parties well knew, and the Court well knows, that there never was any such dispute, and thus no such dispute to be resolved, so as to provide the consideration for the "sale" of the 45 alpaca. The consideration was thus illusory: White v. Bluett (1853) 23 L.J. Ex.36 at 37, 38; Chitty on Contracts, General Principles, 25th Ed. para.159. The whole agreement falls." In my opinion, the reserved contract was clearly supported by consideration. First, there was the use of CAM5 for the importation of ACL's 55 alpaca which, once imported, were of substantial value. Ensor had been seeking compensation for the use of the permit since at least January 1992. Secondly, clauses 6 and 10 constituted consideration for the bargain between the parties. In any event, there was a dispute between Ensor and Morales in relation to his purchase agreement arising out of Ensor's stance that he would not allow Inglis or Forrest to have access to his permit and that he was prepared to take only 200 of the alpaca on his permit . It may be however, that because of the confusion or error in the description of the dispute in the FIRST and SECOND clauses, that the fact of resolution of the dispute by the agreement cannot be relied upon as consideration for the contract. Reserved contract not binding in Chilean law I have found that I should apply the law of Australia when determining issues relating to the reserved contract. Counsel for IAM did not submit directly that Chilean law applied. Rather he approached the matter on the basis that under either Australian or Chilean law there was no valid contract. It was submitted that the reserved contract was not binding in Chilean law because it did not specify a price for the transfer of the 45 alpaca. Counsel for IAM relied upon the following evidence of Mr Ovalle: "By the way, if there is no specification in the agreement as to price of the goods, there will under Chilean law be no effective or binding contract?---That's correct". This evidence has to be considered in context. IAM's counsel was cross-examining Mr Ovalle's as to the provisions of the Chilean Civil Code relating to "traditio". "Traditio" broadly corresponds with the requirements of delivery for the purposes of passing of property under the Sale of Goods Act. The cross-examination, immediately before the above quoted evidence had proceeded as follows: You say that to satisfy article 684, sub-article 4, two things are needed for traditio to be satisfied under that article: Clear identification of the obligations assumed by the seller, and you say in parentheses; (for example, the time and place of delivery). Do you remember?‑‑‑The - yes, I remember, excuse me. Secondly: A clear identification of the goods to be delivered. Is that right?‑‑‑I remember. I just want to ask you a question about the first requirement: Clear identification of both obligations of the seller, namely, time and place of delivery. Are you right?‑‑‑Mm. Your translation of article 684...speaks of one party making the thing available to the other at the agreed place, and does not say anything about the agreed time, do you understand?‑‑‑Yes, I understand. ... Where is the provision in the civil code as to the requirements of article 684, sub-article 4, requiring identification of the time of delivery?‑‑‑It is not expressed. Where is it implied?‑‑‑It is implied in the necessary delimitation of the obligations assumed by the agreement. ... You go ahead?‑‑‑It is required for having a binding obligation; a binding agreement, that the obligation has sufficient elements to determine how parties are obliged or what rights have the other party in connection with obligation. For that reason I indicated in my affidavit that one of the requirements of these number 4 - article 684, it has referred to the necessary identification - I don't know which is the word - delimitation of the obligation - I've put the words at disposal - of the buyer. That's it. But you would agree, would you not, under Chilean law it would be sufficient for there to be a valid contract provided the parties agree upon the goods to be sold and the corresponding sales price?‑‑‑Yes, that's true. By the way, if there is no specification in the agreement as to the price of the goods, there will under Chilean law be no effective or binding contract?‑‑‑That's correct." Not only must the answer be read in context, regard has to had to earlier evidence of Mr Ovalle, where he stated that Chilean law recognised a barter transaction. Given the context in which Mr Ovalle gave the evidence upon which counsel for IAM relied, namely that a contract must identify the obligations of the parties and his earlier evidence as to barter transactions, the sole answer relied upon by IAM's counsel cannot be taken as an exhaustive statement of the requirements of a valid contract under Chilean law. In this case, the obligations of the parties were clearly stated in the contract. As there may be some issue in relation to the application of Chilean law to this contract, it is also appropriate to consider other aspects of Chilean law in relation to the reserved contract. Validity of reserved contract: Agency of Harrison and Intention to contractually bound: Ovalle gave evidence that under Chilean law, where a party (the grantee) purports to act on another's behalf (the grantor), the grantor may be bound by the actions of the grantee if the grantor does not take any action to protest or communicate the lack of authority of the grantee. The attendance of a grantor at a meeting and reading the contract which the grantee was purporting to enter into or permitting a grantee to sign without raising the grantee's want of authority, would be sufficient to cause the grantor to be bound by the acts of the grantee. In this case, Morales both took part in the meeting, read the contract and saw Harrison sign. Those actions would be sufficient to cause him to bound by the contract. Under Chilean law, where a party has a different intention in relation to the contract to that which appears, it is the expressed intention or overt acts which prevail. Morales' conduct therefore in appearing that he was joining in the contract, by taking part in the negotiations, by having his lawyer present and by shaking hands with Ensor, were all overt actions also sufficient to bind ACL. Finally, Morales's conduct in drawing lots for the alpaca the day following the execution of the reserved contract would also amount to a ratification of the contract. Accordingly, ACL would be bound by the contract under Chilean law as a result of any one of the above circumstances. Transfer of property under Chilean law As I have stated above, title to the goods will be transferred where there has been actual delivery. In the case of the reserved contract the goods were delivered to Ensor, at least on the 7 or 8 September 1992. Accordingly, ownership of the 45 alpaca passed to Ensor at that time. Priority as between the Inglis/IAM agreement and the reserved contract Pursuant to Art 1817 of the Chilean Code, if the one seller sell the same goods to two different buyers, the purchaser who has obtained possession will gain title to the goods. Possession for the purposes of the Article is actual delivery or symbolic "Traditio". As Ensor obtained actual possession of the goods his contract has priority over Inglis's, leaving IAM, under Chilean law, to a remedy against Morales only. Sale of Goods Act: Section 28; Acting in good faith and without notice IAM's counsel submitted that even if the reserved contract was a valid contract between Morales and Ensor, Ensor did not obtain title to the alpaca because he entered into the contract with notice of the prior sale to Inglis and/or the sale to IAM. Ensor's counsel submitted that Ensor was entitled to the protection afforded by s 28(1) of the Sale of Goods Act. At the heart of s 28 are the requirements of lack of notice and of good faith. It provides: "Where a person having sold goods continues or is in possession of the goods or of the documents of title to the goods, the delivery or transfer by that person ...of the goods or documents of title under any sale pledge or other disposition thereof to any person receiving the same in good faith and without notice of the previous sale shall have the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same." Section 5(2) of the Sale of Goods Act (NSW) provides: "A thing is deemed to be done "in good faith" within the meaning of this Act when it is in fact done honestly, whether it be done negligently or not;" In Heap v Motorists Advisory Agency Ltd [1923] 1 KB 577, Lush J held that the requirements of good faith and acting without notice were distinct statutory requirements. However, in practice the requirements are often inseparable: see Barclay Bank Ltd & Ors v TOSG Trust Fund Ltd & Ors [1984] BCLC 1 at 18. As Sutton points out at 318: "a purchaser can scarcely act in good faith if he has actual notice of the ... lack of authority [to sell]." And as Lord Wilberforce said in Midland Bank Trust Co v Green [1981] AC 514 at 528: "...the character in the law known as the bona fide (good faith) purchaser for value without notice was the creation of equity. In order to affect a purchaser for value of a legal estate with some equity or equitable interest, equity fastened upon his conscience and the composite expression was used to epitomise the circumstances in which equity would or rather would not do so. I think that it would generally be true to say that the words "in good faith" related to the existence of notice. Equity, in other words, required not only absence of notice, but genuine and honest absence of notice...But...it would be a mistake to suppose that the requirement of good faith extended only to the matter of notice...". Because the existence or otherwise of notice is integral to the question of good faith, it is convenient to first consider whether Ensor's acquisition of the 45 alpaca was affected by notice. The question whether notice for the purposes of s 28 means actual or constructive knowledge is unsettled. The Act itself says nothing on the matter. The authors of both Sutton and Benjamin's Sale of Goods 4th Edn 1992 indicate that as the courts have been reluctant to embrace the notion of constructive notice in commercial transactions, the requirement of notice in the Sale of Goods Act (NSW) is probably a requirement of actual notice. However, the authorities are not clear as to what constitutes actual knowledge. In Evans v Trueman (1830) 1 Moody & R.10, Lord Tenterden stated at 12: "A person may have knowledge of a fact either by direct communication, or by being aware of the circumstances which must lead a reasonable man applying his mind to them, and judging from them, to the conclusion that the fact is so. Knowledge acquired in either of these ways is enough, I think, to exclude a party from the benefit of the provisions of this statute (Factors Act 1825): a slight suspicion, I think, will not". This statement was approved in Navulshaw v Brownrigg (1852) 21 L.J. Ch 908. In that case Leonards LC also drew attention to the fact that a "mere suspicion should not amount to notice". In Heap v Motorists' Advisory Agency Ltd [1923] 1 KB 577, Lush J held at 591 that the defendants were fixed with notice of want of authority in the agent where they: "did not do what any reasonable person would have done in this case - namely, decline to buy this car without knowing more about it". These statements do not appear to differ in substance from Sutton's description of constructive notice at 318 as follows: "A person is said to have constructive notice when, although he is not actually aware of the position, notice is imputed to him because in the circumstances it is "just and reasonable" to regard him as having notice. Such would be the case, for instance, where a purchaser deliberately refrained from making any inquiry with the express purpose of avoiding notice. It is very doubtful whether mere lack of diligence, the failure to make those inquiries which a careful and prudent man would have made, will bring the doctrine into play". J.W. Jones in his essay, "The Position and Rights of a Bona Fide Purchaser for the Value of Goods Improperly Obtained" (1921) makes the same observation. At 20-21 he states: "The result is that the purchaser is not put upon inquiry as to any defect of title where he has no suspicion that anything is wrong; when he has such suspicion, on the other hand, he is not necessarily deprived of protection, for his failure to make inquiries may be due to negligence, which, however gross, will not affect his position. Suspicion must continue to be nothing more than suspicion, and the best proof of this is that the purchaser made a fair inquiry, and received an answer which he believed to be true and which he is, therefore, entitled to act upon (Macbryde v. Eykyn (1871), 24 L.T. 464; not that he is bound to make such inquiry, but, having done so, he is clearly acting in good faith. For suspicion may become something more. Instead of negligently paying no heed to suspicious circumstances the purchaser may turn his back upon them and resolve not to see anything contrary to what he conceives to be his interests. In such a case he is liable under the rules both of law and of equity for he is acting in bad faith, and good faith is the same in the law merchant, as introduced into the common law, as in equity (Ames, cases on Bills, p.714; also 1 Hare 43 per Wigram, V.C., at p.71)". I consider this to be the correct approach to notice under s 28. Thus, even if a person does not have actual notice, there will be want of good faith if, having regard to the whole of the circumstances, a reasonable person would have been put on inquiry. A deliberate "turning a blind eye" would not attract the protection of the section. Notice of previous sale To determine whether Ensor had notice for the purpose of s 28, it is first necessary to identify the relevant "previous sale". Section 28 deals with a sale by the same seller to two different purchasers. I have found that the operative contracts were the ACL/Inglis agreement and the second purchase agreement and that Morales was only a seller under the former. It is that agreement, therefore, which is the relevant "previous sale". The state of Ensor's knowledge of that agreement has to be determined as at August 1992 when the reserved contract was executed. Ensor knew of the Longstone agreement. He was also aware of some arrangement between Morales and Inglis for the sale of 100 alpaca. However, to the extent that at one time he had some knowledge of a sale by Morales to Inglis, that knowledge was dispelled when Morales told him on about 5 May 1992 that he did not have any agreement with Inglis. This information was confirmed by Morales letter to Ensor of 12 May 1992 rejecting Ensor's offer to purchase the 100 alpaca. After that time there were two occurrences which might arguably have affected his state of knowledge: first, Ensor's reading of Forrest's 12 May letter; secondly, his receipt and consideration of Forrest's letter of 28 July 1992 to Wren and Harrison. Counsel for IAM submitted that Forrest's 12 May 1992 letter put Ensor on notice of the ACL/Inglis contract. The first thing to note is that there was nothing in the letter to indicate that Morales had agreed to sell the alpaca to IAM. Rather, it referred to a sale from ACL to Inglis and from Inglis to IAM. The letter then made an offer of monies to Morales to "guarantee that all permits, processes, privileges and responsibilities will be achieved by you, to guarantee the said Alpacas' safe and unencumbered passage to Australia". It will be recalled that Ensor interpreted this letter as offering Morales "a backhander" and as being no more than an assertion by Forrest that there was a contract between ACL and Inglis. However, the fact there was that assertion raises the question whether its contents were such that, prior to entering into the reserved contract, Ensor should have made inquiries of Inglis, Forrest or Morales in relation to the sale of the alpaca to Inglis. Ensor said that he did not speak to Inglis about the letter as he did not consider he would get a "straight answer" from him. This was both an understandable and reasonable attitude. There was a great deal of hostility between Inglis and Ensor. Inglis had demonstrated himself to be ruthless and, on his own admission, dishonest in his dealings with Ensor. This is hardly the type of relationship in which a person could be confident of receiving accurate information from a commercial opponent. Nor did Ensor trust Forrest, whom he considered not to be "straightforward", a "feeling" he said he had been gaining for some time and which was confirmed by the offer of the "backhander". The evidence supports Ensor's reaction to Forrest. He had been aggressive towards Ensor and dishonest in some of his statements, as demonstrated in the conversation at the dinner on 26 May 1992 prior to Ensor finding Forrest's 12 May letter. In that conversation Forrest stated he had paid for the animals. This statement was not accurate. In any event, Forrest had told Ensor at the dinner that IAM's dealings in relation to the alpaca was "none of [Ensor's] business". Even more significantly, as Forrest was not a party to the "previous sale", he was not an appropriate person from whom to make inquiries. That leaves Morales. Ensor said that he did not discuss the contents of the letter with Morales as he regarded it as "...really pushing ethics to read the...thing...". As Morales is a party of whom inquiries should have been made, if at all, it is important to understand what information Ensor obtained from the letter and whether, having regard to all the circumstances, that information was sufficient to put him on inquiry. It will be remembered that only a few days earlier than the date of the letter, Morales had told Ensor that, although Inglis was asserting he had a contract with Morales, he had not sold the alpaca to Inglis. At the same time, Morales had obtained a notarised letter from Ensor stating that Inglis could not have access to CAM5. He had also written to Ensor on the same date as Forrest's 12 May letter in terms which confirmed to Ensor that Morales had not at that stage sold to anyone, but was in negotiations with an unnamed client. In these circumstances, it was reasonable for Ensor to treat Forrest's letter as a mere assertion of a contract between ACL and Inglis. That was simply consistent with what Ensor knew. Further, there was no cause for Ensor to make any inquiry at that point of time. He was not then involved in any negotiations with Morales for the purchase of the 100 alpaca. He had made an offer for them 2 weeks previously, which had been rejected. Counsel for IAM next submitted that the conversation between Forrest and Ensor at dinner on the evening of 26 May 1992, in which Forrest remonstrated with Ensor for having tried to sell him the 100 alpaca, is also evidence of Ensor having notice that Forrest "had duly acquired the animals". There is no dispute that Ensor had knowledge of Forrest's contract to buy the alpaca. Although the second purchase agreement had been signed by that time, no notice of that had been given to Ensor. Accordingly, the only contract to which this submission can refer is the Inglis/ACL agreement. However, that contract is not the relevant "previous sale" for the purposes of s 28. During the course of July 1992, Ensor attempted to obtain a cost sharing agreement with Forrest, including obtaining 5 alpaca or a number of cria from Forrest as consideration for use of his permit. Counsel for IAM submitted: "This he could have done only if he believed Forrest had alpaca to provide. He could only have believed Forrest had alpaca to provide if he had acquired them from Inglis. Inglis could only have conveyed them to Forrest if he acquired them from Morales." This analysis, whilst setting out the requisite chain of title, does not demonstrate that Ensor had notice of the ACL/Inglis agreement. Ensor's evidence is that: "I knew that there was nothing between Alpaca Chile or Carlos Morales and Inglis, that was what Carlos Morales had told me in his office but clearly these other people had told me they had a contract together between Inglis and Forrest and I never had any notice that that had been dissolved or dealt with properly, satisfactorily. And that was something that both Carlos and I knew needed to be tidied." Ensor thus considered that Inglis and Forrest had reached agreement in circumstances where there was "absolutely no link" between Morales and Inglis who were "sitting right out on a limb and they could say or do what they wanted." The next relevant event is Forrest's letter to Wren and Harrison of 28 July 1992. Counsel for the applicant submitted that the effect of this letter was as follows: it disclosed IAM's interest as purchaser of the alpaca; drew attention to the fact Morales no longer owned the 100 alpaca as had been recorded at a previous meeting; recounted the reciprocity of obligations of Ensor and Morales with respect to the permits; identified a contractual relationship between Forrest and Morales, warned against interference with it and recorded a "sale agreement" between Morales and Forrest under which the latter now had title". This is a correct summation for present purposes. Ensor received a copy of the letter on about 5 August. Counsel submitted that "after this point in time, any suggestion that Ensor did not have notice of the previous sale becomes tendentious in the extreme". Counsel's reference to the "previous sale" in this submission is not clear, although having regard to the contents of the letter of 28 July, portion of which is set out earlier in these reasons, it can only be a reference to a sale between ACL and IAM. Ensor conceded that he knew that the reference in Forrest's letter of a "contractual relationship between him and Morales" was a "legal thing". However, I do not see how that evidence is of any assistance to the applicant, given that the letter alleged a contract between ACL and IAM, for the sale of the alpaca which Forrest admitted was false and as Ensor insisted in his response to Wren and Harrison on 5 August: "...The contract I saw that Laurie sent me was between Inglis and Morales-Nothing between Morales and Forrest". Accordingly, I am of the opinion that there was nothing in these events which changed Ensor's knowledge in relation to any contract between Morales and Inglis. There was therefore for him to make enquiries about. Counsel for IAM also relied upon a number of other factors in support of the contention that Ensor had notice sufficient to deprive him of the protection of s 28. On 19 July 1992, Ensor had written to Harrison stating: "My advice from Mark Russell (my New Zealand solicitor) is in brief - he feels a decent legal opinion from a big gun in Santiago clarifying the Inglis/Morales lack of ground upon my permit should be enough to budge them...". Counsel for IAM submitted that the reference to "them" was clearly a reference to Morales and Inglis, and thus an acknowledgment of the Morales/Inglis chain of title to Forrest. Ensor conceded that the reference to "them" included a reference to Inglis, whom he described as "...sitting out there on a limb with contract with Mr Forrest...and that's a matter which needs addressing [by Inglis]. Ensor believed his legal advice would confirm that Morales had no recourse to CAM5 and that in relation to the sale of 100 alpaca, "Morales to me was still on the fence and not deciding what he is doing and I wanted to resolve it". Counsel for IAM also submitted that a letter of advice dated 5 August 1992 from Messrs Phillips Fox to Ensor "incorporates the chain of title via Inglis" and that "the advice proceeds upon the basis that both [the ACL/Inglis and Inglis/IAM agreements] are valid." It was submitted that this too was sufficient to put Ensor on notice of the ACL/Inglis agreement. I do not agree that that is a correct interpretation of the letter. The language used in the letter is quite different in its reference to the two agreements. It refers to a "binding agreement" in the case of the Inglis/IAM agreement and to a "loose arrangement" in respect of the ACL/Inglis agreement and there is nothing in the advice which is predicated upon the validity of the ACL/Inglis agreement. Rather, the advice assumed that the ACL/Inglis agreement was not a binding agreement. Next it was submitted that by early August 1992, Ensor had, and was putting in place a strategy in relation to the export of the alpaca "which did not involve any termination of the contractual rights as between Morales, Inglis and/or Forrest" and which did not put him at risk of any injunctive action "as any action would be against Inglis". This submission fails to take into account the state of Ensor's knowledge as from May 1992 when Morales told him there was no agreement between ACL and Inglis and the fact that nothing had happened since that time to change that knowledge. In any event, even if, at mid-August when the negotiations began for the reserved contract, Ensor had some information of a sale from ACL to Inglis sufficient to put him on inquiry, that position changed on about 17 August when Morales told Harrison that the Forrest contract was at an end. Accordingly, I am of the opinion that Ensor did not have actual notice of the ACL/Inglis agreement nor did his failure to make any inquiry affect his good faith. Counsel for IAM submitted that given that knowledge, Ensor did not act in good faith in bringing pressure to bear upon Morales to sell the 100 alpaca to him. He submitted that Ensor's bad faith demonstrated itself in the threats to Morales to take 200 alpaca on his permit unless Morales sold the 100 to him. It will be remembered that Morales stated that he was under immense pressure at this time, being a description with which Harrison agreed. It emerged from cross-examination of Ensor that IAM's case is that Morales only told Ensor that "payments required to be paid by Mr Forrest's company had become overdue" and that Ensor had concluded from that that "Inglis had terminated Forrest's contract". However, I accept both Harrison's and Ensor's version of this event, namely that Morales told Harrison that the Forrest contract was terminated for non-payment. However, the question remains whether Morales made that statement because of the threats which had been made or because Ensor had pressured him. From at least mid August, Morales was concocting his own plan with his lawyer as demonstrated by the following evidence: "MR COTMAN: Now, why did you allow a document with that description of Mr Harrison in it to go out of your hands on that day? THE WITNESS: Well, I begin at the beginning. We must - we try to find a way to put animals on the plane, my lawyer, and then we receive an Ensor proposition . . . . .inaudible. . . . . MR COTMAN: Sorry, Mr - - - HER HONOUR: We received the Ensor proposition? THE WITNESS: One of them. I call my lawyer and then he say me that the objective now is put the animals on the plane, if not we lose all. He say that we can - - - THE INTERPRETER: He said even that we should play the same game and try to find a way to put the animals on the plane. Then those document came about. In that document then, some animals were distributed to me and some to Ensor. That is why my lawyer clearly said that I shouldn't sign it". The letter of 15 August to Forrest is further evidence of Morales having determined to put into effect a plan such as eventuated. In this regard it is interesting that Morales' opening offer in the course of the negotiations was to split the 100 alpaca on the basis of 90 to ACL and 10 to Ensor. In my opinion, in circumstances where Ensor had legal advice that he had no obligation under his contract with Morales to take 300 alpaca, where he did not accept there was any contract between Morales and Inglis or for that matter between Morales and Forrest for the sale of the 100 alpaca, and given Morales' advice that the Forrest contract had been terminated, I do not consider that Ensor was affected by notice or by bad faith. Accordingly, I am of the opinion that Ensor is entitled to the protection of s 28 and that he obtained good title to 45 alpaca under the reserved contract. Ensor's possessory title Ensor claims alternatively that he has possessory title to the 100 alpaca. For the purposes of this claim, Morales' beneficial title to either the 100 alpaca or the 55 alpaca is acknowledged. In order to establish this claim, it is necessary for Ensor to establish that IAM was not, as at the date that Ensor claims possession, the true owner of the goods. The principle as to possessory title, namely that "a possessor of goods has a good title as against every stranger" is of ancient standing: see The Law of Torts; Fleming, 8th Edn at 66. Professor Fleming identifies the principle as deriving from the "medieval axiom that possession is as good as title against all but the true owner". The principle does not operate in a possessor's favour where the true owner has ratified or authorised the act of the defendant who seeks to plead a third party's superior right. The principles relating to possessory title were considered in Russell v Wilson (1923) 33 CLR 538 by Isaacs and Rich JJ. At 546-7 their Honours reviewed the authorities. Although the passage is lengthy, it comprehensively sets out the law in this area. Their Honours stated: "In Glenwood Lumber Co. v Phillips (1904) A.C., at 410 Lord Davey quoted from Jeffries v. Great Western Railway Co. (1856) 5 E. & B. 802 at p. 805 the words of Lord Campbell, who said: "I am of opinion that the law is that a person possessed of goods as his property has a good title as against every stranger, and that one who takes them from him having no title in himself is a wrongdoer, and cannot defend himself by showing that there was title in some third person, for against a wrongdoer possession is title." Lord Davey added some words of the Master of the Rolls in the Winkfield (1902) P., at p.55), namely: "Therefore it is not open to the defendant, being a wrongdoer, to inquire into the nature of limitation of the possessor's right, and unless it is competent for him to do so the question of his relation to, or liability towards, the true owner cannot come into the discussion at all, and therefore, as between those two parties, full damages have to be paid without any further inquiry." In the later case of Eastern Construction Co. v. National Trust Co. (1914) A.C. 197 at pp 209-211 Lord Atkinson, delivering the judgment of the Privy Council (Lords Atkinson, Moulton and Parker), also referred to the question. He quoted Lord Campbell's observation that as "against a wrongdoer possession is title." He quoted Armory v. Delamirie (1722) 1 Str., 505 as deciding the finder has "such a property as will enable him to keep it against all but the rightful owner," and reaffirmed Glenwood Lumber Co. v. Phillips (1904) A.C., 405. It is therefore clear that Wilson had by that possession a real "title" to the property, just as lawful and just as powerful as if it were the absolute title, except as against the absolute owner, or any person claiming to hold by virtue of the absolute owner's authority. And it is also clear that a wrongdoer is, according to Lord Campbell, "one who takes them" (the goods) "from him" (the possessor), "having no title in himself." The expression "having no title in himself" must, we think, mean no legal right superior to the title of possessor. If the person taking the goods has a superior right, then to the extent of that superior right, and to that extent only, must the possessory title yield. The absolute owner, high rights being unqualified by any circumstance, would of course be justified in taking and keeping or demanding the goods, because his title is superior". After the signing of the reserved contract, a number of events occurred which resulted in Ensor obtaining possession of the 100 alpaca. In late August and early September, he "spent a considerable amount of time negotiating with SAG for final export clearance...I obtained clearance for 300 animals on or about 28 August 1992". He enabled Ensor to obtain the invoice for the goods which was made out in Ensor's name for the 300 alpaca. The invoice bore the stamp of the Chilean customs authorities. Ensor paid US$166,920 to ACL, for which Morales issued a signed receipt which specified that the payment was the final payment. On 7 September 1992, SAG issued a "Certificado Sanitario de Exportacion" in respect of 303 alpaca. Morales identified this document as being part of his export permit. The "Certificado Sanitario de Exportacion" was issued after officers from the Chilean Agricultural and Cattle Service had inspected the animals in quarantine. Ensor was given possession of, or at least access to, the various export documents, including the Certificado Sanitario de Exportacion to enable the alpaca to be loaded on board the plane. The fact that the various invoices, receipts and export documents were in Ensor's name is a relevant consideration to the issue of possession. Ensor gave evidence that he had previously utilised a single permit for exportation on behalf of different parties and had used the respective parties' names on the various shipping documents. On this occasion, all the documents were in the name of the Garrymere Farm. However, whilst this is a relevant factor, it is only one in number of factors which have to be considered. On its own, it is neither conclusive nor substantial. The alpaca remained in quarantine, on Morales' property, looked after by Morales' employees, until they were loaded onto trucks for transportation to the plane. Ensor was present when Morales' employees loaded the alpaca onto the truck and Ensor travelled with the truck to the airport and was present when the animals were loaded onto the plane. Lan Chile's cargo manifest was in respect of a consignment of 300 alpaca to Garrymere Farms. The manifest bore the stamp both of the Chilean Customs Department and SAG. Ensor accompanied the alpaca to the Cocos Islands for the purposes of their quarantine there. The Australian Department of Primary Industries and Energy's Order into Quarantine issued to "Ben K.E. Ensor/Garrymere Farms" in respect of the total consignment. There was no presence by or on behalf of Inglis or IAM either at the time the alpaca were loaded onto the truck at Morales' property for transportation to the airport, at the airport at the time of embarkation, during the flight to Cocos Islands or at Cocos Islands until Forrest arrived there on 24 September 1992, during which time he served Ensor with the application herein. In my opinion, Ensor came into possession of the alpaca at least at the time that they were loaded onto the plane. At that time the following was the position as to title. Notwithstanding Morales' denials to Ensor, the ACL/Inglis agreement was still on foot. However, property in the alpaca had not passed to Inglis at that time. The Inglis/IAM agreement was still on foot. Although according to its terms property in the alpaca had passed to IAM, the passing of property under that contract was dependant upon the passing of property under the ACL/Inglis agreement. Accordingly, IAM is not in a position to set up its title to the goods against Ensor's possessory title. DURESS Counsel for IAM submitted that the reserved contract was vitiated by duress. A contract will be vitiated by duress if illegitimate pressure is exerted upon a party to enter the contract: Crescendo Management Pty Ltd v Westpac Banking Corporation [1988] 19 NSWLR 40; Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 11 ACSR 642. In the present case, the applicant seeks to have the reserved contract, to which it was not a party, set aside for duress applied by one party to the contract, Ensor, to the other party to the contract, Morales. Counsel for the respondent submitted this claim was totally misconceived, as AIM, not being a party to the contract, did not have standing to bring such an action. I agree with this submission. It is not necessary therefore to deal with this claim further. TORTIOUS INDUCEMENT OF BREACH OF CONTRACT Counsel for IAM next asserted that Ensor tortiously induced Morales to breach the various contractual arrangements in place in respect of the sale of the 100 alpaca. He submitted that it did not matter that IAM was not a party to the contract which was breached, that is the ACL/Inglis agreement, as, he submitted, the effect of the breach of that agreement was that Inglis then breached the Inglis/IAM agreement. Professor Fleming in The Law of Torts, (8th Edn) states at 690 that for the purposes of the tort of wrongful inducement of breach of contract: "Liability will attach if the intervenor, with knowledge of the contract and intent to prevent or hinder its performance, either (1) persuades, induces or procures one of the contracting parties not to perform his obligations, or (2) commits some act, wrongful in itself, to prevent such performance. (The plaintiff must also prove special damage, except in a quia timet action when likelihood of damage is sufficient: Greig v. Insole [1978] 1 W.L.R. 302 at 332.)" The first of Professor Fleming's categories is sometimes referred to as direct interference, the second, as indirect interference. If Ensor is guilty of tortious interference, it will be on the basis of direct interference, as he did not commit any act wrongful in itself to prevent or hinder performance. It may be that the law is as yet not settled as to the precise scope of this tort: see Lonrho plc v Fayed [1991] 3 All ER 303 per Templeman LJ at 314; or indeed its existence: see Copyright Agency Ltd v Haines (1982) 1 NSWLR 182 per McLelland J at 194 and Ansett v Australian Federation of Airline Pilots (1990) 95 ALR 211 per Brooking J at 244-5. However, both parties proceeded upon the basis that the tort exists and that Professor Fleming's statement accurately stated the elements of the tort. It should be noted that Professor Fleming further stated at 695: "...this tort has not yet developed formalised privileges, the issue in each case being rather whether, upon consideration of the relative significance of all the factors involved, the defendant's conduct should be tolerated despite its detrimental effect on the interests of the other. For this purpose, it has been said, the most relevant are the nature of the contract, the position of the parties to it, the grounds for the breach, the means employed to procure it, the relation of the person procuring it to the contract breaker, and the object of the person procuring the breach." It is not necessary that the inducing party know the precise terms of the contract of which breach is induced. It is sufficient if the existence of the contract is known: Emerald Construction Co Ltd v Lowthian [1966] 1 All ER 1013; Greig v Insole, [1978] 3 All ER 449. In Greig v Insole Slade J at 486 considered the meaning of direct and indirect interference for the purposes of the tort as follows: "...the phrase 'direct interference' covers the case where the intervener, either by himself or his agents, speaks, writes or publishes words or does other acts which communicate pressure or persuasion to the mind or person of one of the contracting parties themselves while 'indirect interference' refers to the case where, without actually doing any of these things, the intervener nevertheless procures or attempts to procure a situation which will result or may result in a breach of the contract: see, for example, J T Stratford & Son Ltd v Lindley [1964] 3 All ER 102 at 112, [1965] AC 269 at 333, per Lord Pearce and DC Thomson & Co Ltd v Deakin [1952] 2 All ER 361 at 368, [1952] Ch 646 at 678, per Evershed MR." The wrongdoer must intend to procure the breach. In Emerald Construction Co Ltd v Lowthian, Diplock J at 1019, described the intent necessary for the tort to be established as: "...sufficiently established if it be proved that the defendants intended the party procured to bring the contract to an end by breach of it if there were no way of bringing it to an end lawfully". At the date the reserved contract was entered into, Ensor knew of the existence of the Longstone agreement and the first purchase agreement. He did not know that the second purchase agreement had been entered into. He had some understanding, up until May 1992, that there was an agreement or purported agreement between Morales and Inglis in relation to the sale of the 100 alpaca. However, in May 1992, he was told by Morales that there was no such agreement. At the same time, Morales had Ensor sign a statement that Inglis could not use CAM5. He knew Morales had been offered money to secure the use of CAM5 but did not know the outcome of that offer. He knew that Forrest had asserted in a letter to Wren and Harrison on 28 July 1992 that Forrest had a contract with Morales for the sale of the 100 alpaca. He disputed that statement, as he had only ever seen a contract between Morales and Inglis, the validity of which Morales had disavowed to him in May. I have found that nothing that came after that gave Ensor knowledge of the existence of a contract with Inglis. Before negotiations were entered into for the reserved contract, he had been informed that Forrest's contract had been broken and was at an end. Accordingly, no matter how keen Ensor was, or always had been, to secure the additional 100 alpaca, he had no knowledge of a contract between Morales and Inglis. Accordingly, one of the essential elements necessary to establish the tort is absent. The only basis upon which it might be said that, notwithstanding that Morales had told Harrison that his contract with Forrest was at an end, Ensor induced him to breach the contract, was if Ensor placed him under such pressure that Morales made that statement so as to relieve or escape from the pressure. I have already referred to the evidence that the pressure at this time was immense. Indeed, Morales colourfully described himself as being between a "sword and a wall" and that he had a "gun at his head". I have no doubt that there was a great deal of pressure involved in the situation at the time. It was pressure which was felt by all, including Harrison. I also have no doubt that Ensor, because of his personality, was the cause of much of that pressure. I have earlier referred to his tendency to state and restate his position. He not only resisted the use of CAM5 by Inglis or Forrest but approached the task of seeking to obtain the additional 100 alpaca with a terrier like determination. I do not consider however, that he did so in any undue or unlawful way. Furthermore, there was evidence that there were many factors which contributed to the pressure, not only Ensor's threat to take only his 200 alpaca. I consider that much of the pressure that felt by Morales was due to his own financial circumstances. I also consider that there was a great deal of built up pressure from the manner in which the various transactions had been carried out. The export of these alpaca had proved a costly affair for him. He had been involved in protracted legal proceedings in Chile in respect of the export permit which had delayed the export by over 12 months. He said that, had he not been able to export the 100 alpaca at this time, he would have been delayed another 2 to 3 years, as it would take that time to arrange another export permit. In the meantime he had incurred and paid substantial monies in respect of the export of 300. He had also spent substantial monies on alpaca breeding generally and had borrowed a substantial sum from Inglis for that purpose, which was to be deducted from the sale, first to Longstone and then to Inglis. He had borrowed from Forrest and obtained advances on scheduled payments from Ensor. At the time that he entered into the discussions leading up to the reserved contract he was owed $US 166,920 by Ensor. He admitted in cross-examination that he wanted to get that money. He denied however that his determination to do so was such that he was prepared to trick Ensor into entering into the reserved contract. Subsequently he agreed that he had tricked Ensor "because I had a gun on my head... I was between a wall and a sword". The contractual arrangements with Inglis and Forrest were balanced on a financial knife-edge for most of the period. Longstone had defaulted. Inglis' ability to finance the ACL/Inglis agreement was dependant upon IAM's performance of the first, and then the second purchase agreement. Indeed, Inglis had linked the payment schedule in those purchase agreements to his payment schedule under the ACL/Inglis agreement. Notwithstanding this, there were doubts from time to time as to whether Inglis had met his payment obligations. Morales "grizzled" from time to time about problems with the payments. IAM had raised only 20% of the target funds in the public offering for the alpaca breeding project. There was default in payment on more than one occasion, causing some vitriolic correspondence from Inglis. There was a great deal of aggravation about payment, with Morales writing to Forrest on one occasion stating "who will make [a particular] payment?". As Forrest did not trust Inglis sufficiently to keep his payments up to date, he instituted a system whereby he would pay half the monies owing under the second purchase agreement to Inglis, direct to Morales. There were allegations by Forrest and Inglis that each was trying to "separate" the other from Morales. Overall, Morales gave the impression that he would shift camp to the party he thought would most likely pay. There is evidence that he did so or tried to do so more than once. His proposed dealings with his "unnamed clients", whom he identified in cross-examination to be Forrest, is one example. His obtaining of the notarised letter is another. His dealings with Ensor in August, at a time when he was alleging that IAM was in default of its contract is yet another. However, he would always try to do so without severing his relationship with the other party. There was also the ever present uncertainty as to whether the alpaca would get export clearance having regard to the strict requirements of both SAG and AQIS. Having regard to all of these factors, it cannot be said that Ensor was the cause of pressure which caused Morales' breach of the ACL/Inglis agreement. Further, at the time that Ensor was attempting to obtain the 100 alpaca, he had legal advise that the ACL/Inglis contract was not lawful because Morales had not signed it and he did not have any obligation to permit Morales to use CAM5 for the 100 alpaca. I have come to a different view in relation to that matter but that is not the issue. A person is permitted to assert a position and to do so strongly, albeit that the position be legally wrong. In addition, not only had Ensor been told in May 1992 that there was no contract with Inglis, he said he would not have entered into the negotiations for the 100 alpaca if Forrest's contract was still on foot and also gave evidence that he only entered into the negotiations for the 100 alpaca after he was told that Harrison's contract had been terminated. Having regard to these matters, I am of the opinion that Ensor did not have the necessary intent for the purposes of the tort. The final matter of which mention should be made is that Inglis, who is the party who would have suffered the damage as a result of the breach of the ACL/Inglis agreement, is not a party to these proceedings. However, counsel for the applicant sought to rely upon a derivative form of action. He submitted that because Morales had broken the ACL/Inglis agreement, Inglis could not perform his contract with IAM so that IAM thereby suffered a breach. He also submitted that Ensor knew, that for Inglis to be able to perform his agreement with Forrest, Inglis needed the 100 alpaca. Ensor acknowledged that this was the necessary chain of title. Notwithstanding that IAM was standing on the queue of potential loss if Morales did not perform the ACL/Inglis agreement, I do not consider that IAM has standing to bring this action, although, because of the view of the facts at which I have arrived, it is not necessary to deal with this issue. So far, I have dealt with the case that the relevant breach arose from the 100 alpaca to Ensor. There is one matter though which should be addressed, and that is Ensor's refusal to permit the 100 alpaca to be taken out on his permit if Inglis or Forrest were to be the beneficiaries of its use. It will be recalled that I have found that under the second purchase agreement, Morales warranted that the permit holder of CAM5 would obtain all necessary permits to allow the 100 alpaca to be imported into Australia. However, Morales, in obtaining the notarised letter from Ensor had joined with Ensor in giving notice to Inglis that CAM5 was not available to him. In my opinion, that conduct, whether or not it amounted to a waiver of contract, of itself is sufficient to defeat this claim against Ensor, as Morales was equally, if not totally responsible for putting it out of his means to perform the contract. When there is added to that the contents of Morales' 12 May letter to Ensor, his advice to Ensor in May that there was no contract with Inglis, and his advice to Harrison that Forrest had defaulted and the contract had been cancelled, there can be no conceivable basis upon which it can be found that Ensor had induced the breach of contract. In addition, Ensor had legal advice that he was under no obligation to allow CAM5 to be used by persons other than Morales. In Spectra Group v Eldred Sollows [1991] 7 C.C.L.T. (2d) 169, it was held that a threat to resort to legal proceedings, even if it turned out that the legal basis upon which the threat was made was wrong, did not amount to tortious inducement of contract. In my opinion, the position is no different if a person decides, to stand upon that person's asserted legal rights, even if those rights turn out not to be as asserted. This is even more so where the person was acting on legal advice. Although I consider the legal advice received by Ensor in relation to CAM5 to be wrong, Ensor clearly accepted it and believed that his resistance to the use of CAM5 was justified. There is another factor in relation to the use of CAM5 which I consider to be relevant. From an early time, Morales left the arrangements as to cost sharing in respect of the importation to Inglis. At various times, Inglis left these arrangements to Forrest. As early as July 1991, Inglis had stated to both Morales and Ensor that Longstone would have 100 animals on the permit. In early 1992, he conceded that the use of the permit was always on the basis that there would be in place appropriate arrangements in respect of costs. On 7 February 1992, Forrest wrote to Inglis stating "...we accept the responsibility for funding your third of CAM5...". On 11 March 1992, Inglis responded to the request to sign a cost sharing agreement in terms which are consistent only with an acceptance that he (not Morales) had the obligation in respect of sharing the costs for the importation. He said: "When we talked recently...you said clearly that Bank guarantees would not be required on these costs...IAM not willing to provide that now but in conjunction with IAM Pty Ltd we can come to some arrangement you are comfortable with. Surely Ben you would not expect us to load the animals on a plane you contracted unless we had prepaid...". On 29 April 1992, Inglis wrote to Forrest referring to his "cost sharing obligations to Ensor for plane and Quarantine fees", in a letter which dealt separately with his obligations to Morales under the ACL/Inglis contract. Correspondence from Forrest, which I have set out earlier in these reasons, reflects an understanding that Inglis had an independent relationship with Ensor in relation to cost sharing for the use of CAM5. Forrest's later attempts, at Inglis' instigation, to deal with Wren and Harrison in relation to cost sharing are also evidence of this understanding. That this was the basis upon which the parties were proceeding until at least mid-August is also evidenced by Inglis' letter to Forrest of 15 August, when he stated that "Carlos has decided to assume a position of strength as the exporter". Satisfactory arrangements were never entered into by Inglis or Forrest in relation to cost sharing, as Morales well knew. It is possible that in leaving the question of cost sharing to Inglis, Morales also waived his rights to insist on Ensor's performance of clause 7.1 of his purchase agreement. However, even if that is not the case, his conduct in so doing is another factor to be taken into account in determining whether, to recall the statement of Professor Fleming: "...upon consideration of the relative significance of all the factors involved, the defendant's conduct should be tolerated despite its detrimental effect on the interests of the other" Having regard to all these factors, I am of the opinion that Ensor's conduct, either in relation to entering the reserved contract, or in refusing to make CAM5 available to Inglis, or to IAM, did not amount to tortious inducement of breach of contract. Beaudesert Shire Council v Smith IAM claimed that it was entitled to damages pursuant to the principles in Beaudesert Shire Council v Smith (1966) 120 CLR 145 at 156, where the High Court recognised: "...by an action for damages upon the case, a person who suffers harm or loss as the inevitable consequence of the unlawful, intentional and positive acts of another is entitled to recover damages from that other.... " Counsel for IAM submitted that Ensor's conduct was unlawful in that he intentionally interfered in the economic relations of ACL & Inglis, Inglis and IAM and/or Morales and IAM, and that it was the inevitable consequence of Ensor's procuring the delivery to him of some or all of the 100 alpaca that ACL could not effect delivery to Inglis and therefore there could not be any delivery to IAM. It was submitted therefore that non-delivery would constitute an inevitable and essential breach of contract. Presumably, counsel intended to refer to any of the three contracts which he identified as being sufficient for his purpose. The Beaudesert case has not had a productive life. So far as I am aware it has not been successfully applied in any case until the recent decision of Northern Territory of Australia and Ors v Mengel & Ors (1994) 95 NTR 8 (which is presently before the High Court). In that case the Northern Territory Government Stock inspectors informed the respondents that their stock were under quarantine and could not be moved. The respondents complied with the direction until 2 months later, when the inspectors informed them that all quarantine was lifted. The inspectors had believed they were acting on the authority of a gazetted notice published pursuant to s 27(2) of the Stock Diseases Act 1954 (NT). However, the gazette notice was held not to "give the power to impose movement restrictions" on the respondent's cattle. It was held that the appellant was liable to the respondents under the Beaudesert principle. Priestley J reviewed Beaudesert and the subsequent discussion of it by Mason J in Kitano v Commonwealth (1974) 129 CLR 151 and by the Privy Council in Dunlop v Woollahra Municipal Council [1981] 1 NSWLR 76. Priestly J did not define the "outer limits" of what was encompassed by "positive act" but found that the information which the stock inspectors conveyed to the respondents which had the effect of "apparently lawful commands" disobedience of which could result in lawful punishment by way of a fine or imprisonment. Priestley JA next held that the second element of the action, "inevitable consequence", meant "direct consequence or...that the damage suffered by a plaintiff must be caused by the defendant's action". Finally, in dealing with the third element of the action, namely that the action must be "unlawful" his Honour held at 48 that the tort was not restricted to cases where the unlawful act was contrary to statute or some regulation, but included tortious acts. In the present case, I have already found that there was no wrongful or unlawful act by Ensor. It follows that this claim must also fail. UNJUST ENRICHMENT The respondents finally claimed that, should they be unsuccessful in their claims for possessory title to the 100 alpaca and beneficial title to 45, they were entitled to compensation for the applicant's unjust enrichment in having use of CAM5 without having paid Ensor for its use. It was submitted that mistake is one of the categories which the law has recognised in principle as subject to the doctrine: David Securities v CBA (1991-2) 175 CLR 353 at 379, 392-3; and that there was no reason why it should not extend to unilateral mistake: Maralinga v Major Enterprises (1973) 128 CLR 336 at 351-2. It was further submitted that the applicants had stood by and allowed Ensor to render services to them in the form of his valuable permit without which the applicants could not have brought the alpaca to Australia. It is not necessary for me to determine this claim, having regard to the findings which I have made. However, even if the claim was well founded, it was made without there being any evidence as to the amount of just restitution. Counsel for the respondents submitted that there was a range of possible restitution, from 45 alpaca, which Morales had in effect agreed to give Ensor to enable him to import the balance of the 100 alpaca, to one half of the $660,000 AUD profit Ensor had earned on the resale to Wren and Harrison, to 5 alpaca subject of Ensor's claim in the cost sharing agreement he sought to have Inglis enter, and finally $60,000US offered by Inglis to Ensor. There should also be added to this wildly varying list, the provision in Ensor's purchase agreement for the use of CAM5 in respect of which there was no provision for repayment. It would be quite inappropriate to "pluck" one of these figures from the list without some evidence as to whether a share in a permit in fact had any value. There was no such evidence. Accordingly, I am of the opinion that this part of the respondent's claim must fail. Conclusion As the Morales is not a party to these proceedings, any order which I make is not binding upon him. However, to enable the parties to these proceedings to know their position in relation to the 100 alpaca it seems that it is appropriate that a declaration be made in relation to the reserved contract. Ensor's possessory title should also be declared. The alpacas are presently in the possession of IAM pursuant to an order of the court. It may be that the parties will need to deal with the formal requirements of releasing them to Ensor. In these circumstances, the parties should bring in short minutes of order to reflect my reasons. I certify that this and the preceding (143) pages are a true copy of the Reasons for Judgment of the Honourable Justice Beazley. Associate: Dated: 7 April 1995 APPEARANCES Counsel for the Applicant: M. L. D. Einfeld QC and N. Cotman Solicitors for the Applicant: Messrs Weebeck Farland Pender Counsel for the Respondent: R. A. Conti QCand R Sofroniou Solicitors for the Respondent:Messrs Mallesons Stephen Jaques Dates of hearing: 22-26 November 1993, 06-10, 14-15, 30 June 1994, 12-14, 16, 29 September 1994.