John R Keith Pty Limited v Multiplex Constructions (NSW) Pty Limited & Anor [2002] NSWSC 43

New South Wales Supreme Court

CITATION : John R Keith Pty Limited v Multiplex Constructions (NSW) Pty Limited & Anor [2002] NSWSC 43 revised - 3/12/2002 FILE NUMBER(S) : SC 3387/00 HEARING DATE(S) : 30/01/02, 31/01/02, 1/02/02, 5/02/02, 6/02/02, 7/02/02, 8/02/02 JUDGMENT DATE : 14 February 2002

John R Keith Pty Limited (Plaintiff) PARTIES : Multiplex Constructions (NSW) Pty Limited (First Defendant) Multiplex Constructions Pty Limited (Second Defendant) JUDGMENT OF : Einstein J

COUNSEL : Mr V Gray (Plaintiff) Mr F Corsaro SC, Ms R Rana (Defendants) SOLICITORS : Gye & Associates Lawyers (Plaintiff) Minter Ellison (Defendants) CATCHWORDS : Contract - Formation of contract - Ongoing negotiations - Intention to contract - Masters v Cameron classes - Whether binding and enforceable subcontract formed between the plaintiff and second defendant - If a contract is found, an arbitration clause requires proceedings to be stayed pursuant to s53 (1) of the Commercial Arbitration Act 1984 (NSW) - Invitation made by defendant to plaintiff to tender for the design and construction of hydraulics services for the Stadium Australia project - Request to tender contained documents including standard subcontract agreement - Plaintiff submitted tender proposal based on tender documents - Plaintiff issued series of revised proposals modifying both tender price and scope of work - Plaintiff notified as being preferred tenderer - Plaintiff commenced work - Plaintiff sent letter outlining total tender price and scope of work which letter was negotiated, amended and resent by consensus - Plaintiff sent subsequent letter referring to total contract price - Second subcontract agreement sent to plaintiff in terms different from original standard subcontract agreement - Subsequent negotiations ensued between parties over terms of second subcontract agreement - Whether binding contract was formed at any time during ongoing negotiations between parties - No formal signed agreement entered into by parties - Fourth class of Masters v Cameron - Existence of informal contract with further terms to be negotiated and included in a formal document - Relevance of prior negotiation and subsequent conduct - Objective determination of the intention of the parties - Classical theory of contract formation - Relevance of the subjective intention of the parties - Admissibility of post-contractual conduct - Whether parties arrived at a consensus capable of forming a contract - Whether alternative proposal put forth by plaintiff constituted an abandonment of the terms of the original subcontract - Whether second subcontract negotiations supports or mandates inference that parties did not intend to make concluded bargain Commercial Arbitration Act 1984 LEGISLATION CITED : Evidence Act 1995 ss60,70 Supreme Court Rules Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 Allen v Carbone (1975) 132 CLR 528 Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101 Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647 Baulkham Hills Private Hospital Pty Ltd v G R. Securities Pty Ltd (1986) 40 NSWLR 622 Brambles Holdings Ltd v Bathurst City Council (Unreported, 2001, NSWCA, Mason P, Heydon JA and Ipp AJA) Brunninghausen v Galvanics (1999) 46 NSWLR 538 B Seppelt & Sons Ltd v Commissioner for Main Roads (1975) 1 BPR [97011] Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251 Godecke v Kirwan (1973) 129 CLR 629 Graham Evans Pty Ltd v Stencraft Pty Ltd 16 BCL 335 G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 63 CASES CITED : Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68 Heysham Properties Pty Limited v Action Motor Group Pty Limited & Ors (1996) 14 BCL 145 Inland Revenue Commissioners v Raphael [1935] AC 96 Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 97326 Integrated Computer Services Pty Limited v Digital Equipment Corporation (Australia) Pty Limited (unreported, NSWCA, McHugh, Mahoney and Hope JJA, 23 December 1988) Love & Stewart Ltd v S Instone & Co Ltd (1917) 33 TLR 475 Masters v Cameron 1954 91 CLR 353 Pobije Agencies Pty Ltd v Vinidex Tubemakers Pty Ltd [2000] NSWCA 105 Raguz v Sullivan (2000) 50 NSWLR 236 Reardon -Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989 Revenue Commissioners v Raphael [1935] AC 96 at 142 Ryan v Textile Clothing & Footwear Union of Australia [1996] 2 VR 235 Sinclair Scott Co Ltd v Naughton (1929) 43 CLR 310 Telstra Corporation Limited v Australis Media Holdings (1997) 24 ACSR 55 Tern Minerals NL v Kalbara Mining NL (1990) 3 WAR 486 Thompson (1933) 49 CLR DECISION : Short minutes to be brought in.