Supreme Court New South Wales Medium Neutral Citation: Nicolaou v The Federation of Ethnic Communities' Councils of Australia [2015] NSWSC 1440 Hearing dates: 14 September 2015 Date of orders: 08 October 2015 Decision date: 08 October 2015 Jurisdiction: Common Law Before: Harrison AsJ Decision: The Court orders that: (1) Leave to appeal is granted. (2) The appeal is dismissed. (3) The judgment and orders of her Honour Local Court Magistrate Milledge dated 27 May 2015 are affirmed. (4) The summons filed 23 June 2015 is dismissed. Catchwords: LOCAL COURT APPEAL – leave to appeal on a question of mixed fact and law – construction of a contract a question of law – whether Magistrate erred in her approach in determining whether a binding contract existed Legislation Cited: Civil Procedure Act 2005 (NSW) Local Court Act 2007 (NSW) Cases Cited: Australian Broadcasting Commission v Australian Performing Right Association Ltd (1973) 129 CLR 99; (1973) 47 ALJR 526 Be Financial Pty Ltd v Das [2012] NSWCA 164 Codelfa Construction Pty Limited v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337 Masters v Cameron (1954) 28 ALJR 438; (1954) 91 CLR 353 Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 Category: Principal judgment Parties: Dr Loucas Nicolaou (Plaintiff) The Federation of Ethnic Communities' Councils of Australia (Defendant) Representation: Counsel: D Eardley (Plaintiff) C O'Neill (Defendant) Solicitors: Emanuel Refenes (Plaintiff) M&K Lawyers Group (Defendant) File Number(s): 2015/184951 Publication restriction: Nil Decision under appeal Court or tribunal: Local Court Jurisdiction: General Division Date of Decision: 27 May 2015 Before: Milledge LCM File Number(s): 2014/148081 Judgment 1. HER HONOUR: This is an appeal from a decision of a Local Court Magistrate. By summons filed 23 June 2015, the plaintiff seeks firstly, an order that leave be granted to bring this appeal pursuant to s 40 of the Local Court Act 2007 (NSW); secondly, that the appeal be allowed in respect of the contract claim only; and thirdly, that the judgment of her Honour Local Court Magistrate Milledge be set aside in respect of the contract claim only. 2. The plaintiff in this Court is Dr Loucas Nicolaou ("Dr Nicolaou"), who was the plaintiff in the Local Court proceedings. The defendant in this Court is the Federation of Ethnic Communities' Councils of Australia ("FECCA"), who was the defendant in the Local Court proceedings. 3. On 27 May 2015, the Magistrate entered judgment in favour of FECCA. 4. On 17 July 2015, the Registrar in this Court made an order that the leave to appeal application be dealt with separately. The leave application was listed before me for hearing. At this hearing, with the consent of the parties and in the interest of containing costs, I decided to determine both the application for leave and the appeal itself. The appeal 1. Section 39(1) of the Local Court Act provides that a party who is dissatisfied with a judgment or order of the Local Court may appeal to the Supreme Court, but only on a question of law. 2. Section 40(1) of the Local Court Act provides that a party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court but only by leave of the Supreme Court. 3. Section 40(2) of the Local Court Act relevantly provides that a party who is dissatisfied with an interlocutory judgment of the Local Court may appeal to the Supreme Court, but only by leave of the Supreme Court. 4. Section 41 of the Local Court Act provides that this Court may determine an appeal either (a) by varying the terms of the judgment or order, or (b) by setting aside the judgment or order, or (c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court's directions, or (d) by dismissing the appeal. Whether leave to appeal should be granted 1. The first issue to be determined is whether leave to appeal should be granted. Dr Nicolaou seeks leave to appeal on a question of mixed fact and law pursuant to s 40(1) of the Local Court Act. FECCA opposes such leave being granted. 2. In Be Financial Pty Ltd v Das [2012] NSWCA 164, the Court of Appeal set out the principles to be considered in deciding whether leave to appeal should be granted. At [32], [33] and [35] Basten JA stated: "[32] The principles governing cases such as these have recently been restated in Zelden v Sewell; Henamast Pty Ltd v Sewell [2011] NSWCA 56. As Campbell JA noted (with the agreement of Young JA) at [22]: 'It is of some importance to reiterate the principles that were stated in Carolan v AMF Bowling Pty Limited [1995] NSWCA 69, where Sheller JA said that an applicant for leave must demonstrate something more than that the trial judge was arguably wrong in the conclusion arrived at. Cole JA relied on a principle that where small claims are involved, it is important that there be early finality in determination of litigation, otherwise the costs that will be involved are likely to swamp the money sum involved in the dispute.' [33] In Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 Campbell JA, with the agreement of Young and Meagher JJA, expanded on his summary of Carolan, noting that Kirby P had recognised 'that ordinarily it was appropriate to grant leave to appeal only concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond [what is] merely arguable': at [46]. … [35] In Coulter v The Queen [1988] HCA 3; 164 CLR 350, dealing with a challenge to a refusal of the South Australian Full Court to grant leave to appeal in a criminal matter, the majority noted that a leave requirement was a preliminary procedure 'recognised by the legislature as a means of enabling the court to control in some measure the volume of appellate work requiring its attention': at 356 (Mason CJ, Wilson and Brennan JJ). That statement is clearly applicable to civil, as well as criminal, appellate jurisdiction." 1. Counsel for Dr Nicolaou submitted that the Court should have regard to the overriding principles contained in s 56 of the Civil Procedure Act 2005 (NSW) in terms of doing justice between the parties. He argued that by granting leave the Court would correct an injustice that is reasonably clear on the facts and not merely arguable. 2. Counsel for FECCA opposed leave on the following grounds, firstly, that the appeal concerns no issue of general importance, public policy or legal principle over and above the detriment suffered by Dr Nicolaou as a result of the judgment; secondly, the prospects of the appeal succeeding are poor with Dr Nicolaou providing no arguably demonstrable error; and thirdly, the costs involved in arguing the appeal are disproportionate (s 60 Civil Procedure Act). The costs involved in the appeal are now being mostly absorbed by the hearing of the application for leave to appeal and the appeal together. 3. I agree that the amount in dispute is a relatively modest sum of about $36,000 exclusive of GST. The subject matter in dispute is whether there was a binding agreement between FECCA, as an employer, and Dr Nicolaou, as a (former) employee, that Dr Nicolaou's services were required for a further 14 weeks following the termination his employment as Chief Executive Officer of FECCA. 4. The construction of a contract is a question of law and so the appeal is as of right: Australian Broadcasting Commission v Australian Performing Right Association Ltd (1973) 129 CLR 99; (1973) 47 ALJR 526. The agreement between Dr Nicolaou and FECCA is partly written and partly oral. In order to construe the contract, factual findings were made concerning the oral portions of the alleged agreement. Taking these matters into account and in the exercise of my discretion, this appeal is at least arguable. It is my view that leave ought to be granted and I do so. Grounds of appeal 1. Dr Nicolaou appeals on four main grounds. They are, firstly, that the Magistrate erred in not finding that a binding agreement came into existence between 31 March 2014 and 2 April 2014; secondly, that the Magistrate erred in not finding that the email sent by Mr Joseph Caputo of FECCA ("Mr Caputo") on 31 March 2014 did not amount to an offer that could be accepted by Dr Nicolaou; thirdly, that the Magistrate erred in not finding that Dr Nicolaou accepted the agreement contained in the email; and finally, the Magistrate erred in finding that the offer contained in the email was subject to further executive consideration or approval. The pleading framework 1. At paragraphs [6] and [7] of the statement of claim, filed on 16 May 2014 in the Local Court, Dr Nicolaou pleaded: 6. Between the 31 March 2014 to the 2 April 2014 the plaintiff made a concluded agreement with the defendant in that the defendant would engage the plaintiff, through the plaintiff's company (company), in the role of a consultant and the plaintiff, or to the account of the company, would be paid (remunerated) for those consultancy services (agreement). The agreement was partly in writing and partly oral. Particulars a. The amount of remuneration was $36,057 exclusive of goods and services tax (remuneration). b. The term of the agreement being 7 April 2014 to 17 June 2014 (term). c. In a conversation with Caputo on or about the 31 March 2014 Caputo confirmed the amount of remuneration and the term of the agreement and which are representations for the purposes of the ACL. Further it was agreed that the plaintiff would use a company through which the consultancy services would be provided to the defendant. d. Confirmation of this agreement was provided by Caputo to the plaintiff in an email dated 31 March 2014 and which is a representation for the purposes of the ACL. e. Confirmation of this agreement was also provided by Caputo to the plaintiff verbally in a telephone conversation on 1 April 2014. f. Confirmation of this agreement was provided by the plaintiff in an email to Caputo dated 2 April 2014. g. Email from the plaintiff to Caputo dated 2 April 2014, and Advice Note to Caputo from the plaintiff dated 2 April 2014 and Letter of Agreement dated 2 April 2014 (letter of agreement). 7. Paragraphs 6(c), 6(d) and 6(e) are collectively referred to as representations for the purposes of the ACL." 1. FECCA denied these allegations (Defence [6] and [7]). 2. There were also claims for estoppel and false or misleading conduct. Neither of these claims were pursued on this appeal. Background 1. On 27 February 2012, Dr Nicolaou commenced employment as Chief Executive Officer of FECCA. 2. In November 2013, Mr Caputo was appointed the new chairperson of FECCA. 3. On 14 January 2014, Mr Caputo met Dr Nicolaou at a restaurant in Bondi Junction. Mr Caputo informed Dr Nicolaou that he was a problem for FECCA and that an operational review would be undertaken. 4. On 24 March 2014, Mr Caputo and Dr Nicolaou met again. At this meeting Dr Nicolaou was provided with a letter of redundancy. It was at this meeting that options for "an ongoing role" were discussed. 5. On 27 March 2014, Mr Caputo emailed Dr Nicolaou relevantly stating: "As to the consideration of alternative arrangements we need to take one step at a time Firstly we need to implement the decision to restructure the FECCA organisation as recommended by the report. After we do this we can then move on to set up other arrangements. As you can appreciate I will need to undertake all this work in an open and transparent manner that will have the support - hopefully the unanimous consensus - of our Executive." 1. On 28 March 2014, Dr Nicolaou emailed Mr Caputo responding: "From our discussions of last Monday evening, I thought a key part of our next meeting was to include a discussion on possible options about other arrangements for a continued working relationship. Last night's email suggests that I would need to be out of the door before such arrangements can be explored." 1. On 31 March 2014, Mr Caputo and Dr Nicolaou met at the FECCA office at Bondi Junction and had a long discussion and conducted negotiations. At 11.30 pm that evening, Mr Caputo emailed Dr Nicolaou. That email relevantly reads: "…The second part of our agreement/understand [sic] is in relation to you continuing to work, under my direction, as a Consultant in the Ageing Area/Unit Starting Monday 7th April to mid June 2014. In this role I expect you to write me a full list of tasks and deliverables to be undertaken by you during this period. It is advisable that you do this before the end of the week as I plan to send a circular to all Executive members advising them of the outcome of the restructuring and the arrangements in place. NB: As of this coming Thursday (3/4) I will be appointing an Acting Manager to assist in running FECCA and preparing for alternative structure. This will mean that no staff will be reporting to you, starting from this week and that in your proposal for the work/tasks to be undertaken until June, please include the importance that you will work cooperatively with Liz and Ruth in the Ageing Area. Thanks for your professional approach to this transition and I look forward working with you. Upon your positive response I will instruct Ross to make the necessary arrangements without delay. …" (TB 70). 1. In this Court, counsel for Dr Nicolaou referred to portions of the Local Court transcript relating to the above email. He submitted that the above email constituted an offer made by FECCA to Dr Nicolaou. 2. Counsel for Dr Nicolaou, after referring to the email above, referred to his cross examination of Mr Caputo as follows: "Q. If you can find this email, sir … you recognise this is from you to Dr Nicolaou on 31 March 2014 at 11.30pm, approximately nine and a half hours after the meeting you had with Dr Nicolaou. So events would have been very fresh in your mind at that point in time? That's a yes, sir? A. The answer is yes. Yes, that's my, that's my, that's my, this email, yes. Q. … I put it to you that on 31 March 2014, you made an agreement with Dr Nicolaou that you as the chair of FECCA would retain him in a consultancy position through his company, yes or no? A. Yes. Sorry, yes, but there is, I mean, if you read that- Q. I'm going to pause you there sir. You've given your evidence, You've now conceded that you made the agreement on that day. You made an agreement that you would retain Dr Nicolaou through his company from 7 April 2014 to 17 June 2014, yes or no? A. No. (T71.24-48). … Q. You wrote those words, didn't you? A. I did. Q. You confirmed to Dr Nicolaou in this email on 31 March 2014 that there was an agreement as to a consultancy role, didn't you? A. No." (T72.43-48). 1. Counsel for Dr Nicolaou drew this Court's attention to Mr Caputo's answer "Yes. Sorry, yes, but there is, I mean, if you read that-". 2. In re-examination, counsel for FECCA asked Mr Caputo the following questions: "Q. You were asked some questions by my friend, Mr Caputo, in relation to what the email dated 31 March 2014 said and you said, 'I can explain, there is a context.' Do you recall that question? A. Yes, I do. Q. What was the context that you wanted to explain? A. The context is that we had a number of discussions with Dr Nicolaou starting on 24 March right up to the 31st, within that week, and Dr Nicolaou was virtually very emotional and I felt sorry for him. He said, you know, he was going to be without work, without a job and I said, 'Look, let us,' I said, 'In the future when there are vacancies, you are welcome to apply for them.' Then on 31 March, he actually specifically said that there were unfinished business within the organisation. And I was, as chair, I was concerned. I said, 'If there are unfinished business, then by all means', I said, 'bring it to my attention and I will put it to the executive of the, of the organisation' and that was the context. So I assumed all along that whatever discussion was taking place, it has to be done in an open and transparent manner, that the executive had to be informed and involved in it, that I myself am only the first amongst people in the organisation, that the organisation ..(not transcribable).. deal with such sensitive matters. That was the context. Q. Had you informed Dr Nicolaou of that context? A. Yes." (T90.42-50; T91.1-15) 1. There was some evidence given by Mr Caputo in relation to whether FECCA could retain consultants without the approval of the FECCA executive. On this topic, Mr Caputo gave the following evidence: "Q. … I asked you a specific question about consultants and you said some organisations. My question to you is, I'll put it in this way to you. Do you accept my proposition that from time to time FECCA retains consultants, yes or no? A. Yes, yes… Q. You accept the proposition that from time to time when these consultants are retained, the executive members or the executive committee are not consulted? A. Depending on the positions, yes." (T90.23-32). 1. On 2 April 2014, Dr Nicolaou emailed Mr Caputo attaching a document containing proposed deliverables and submitting that the key element of his agreement to accept his redundancy was that he would work for FECCA as a consultant. 2. On 2 April 2014, Mr Caputo replied: "Dear Loucas, Thank you for sending the documentation promptly as requested and your comments are noted. In relation to the document 'Terminating the FECCA CEO Employment Contract', could you delete the following paragraph: 'In addition, a key element of this agreement is that I will work for FECCA as a Consultant, reporting to you, focusing on FECCA aged care activities from Monday 7 April 2014 to Tuesday 17 April 2014 (inclusive), paid at my current salary package. The details of this arrangement, including the specific activities to be pursued during this period, are outlined in a separate document, submitted along with this Note.' ... The matter of subsequent work is a matter we need to discuss separate from the 'separation agreement' and ensure that it is done in the most 'open and transparent manner'. In the next few days I will discuss the proposed agreement, the tasks and deliverables as in your 'Letter of Agreement', with members of the Executive and respond in the most positive manner possible. You will appreciate that my mandate was to discuss and reach an agreement in relation to FECCA restructuring. Whilst I personally will recommend that we take up the opportunity of utilising your skills as long as possible, I cannot make this decision on my own and will do so in consultation with a number of people within FECCA. I expect that by the coming weekend I will be in a position to respond positively to your proposed work and deliverables as per Letter of Agreement." 1. Later on 2 April 2014, Dr Nicolaou forward a revised list of deliverables removing the paragraph relating to the "key element" as requested. He relevantly stated: "I had accepted the arrangement to terminate my CEO contract - in good faith - as from Friday 04 April 2014 on the understanding I will continue as a Consultant from Monday, 7 April 2014, including managing in FECCA's interests the aged care meetings already scheduled in Canberra next week. However, I understand you need to confirm this arrangement with other FECCA people." 1. Dr Nicolaou submitted that this reply constituted an acceptance of the offer and at that time there was a binding agreement between the parties that had been partially performed such that it fell with the first category of Masters v Cameron (1954) 28 ALJR 438; (1954) 91 CLR 353 at 360. 2. On 3 April 2014, Dr Nicolaou was informed by Mr Caputo that his appointment as a consultant was not supported by FECCA. 3. Before I refer to the Magistrate's reasons for her decision, it should be noted that the Magistrate had this to say about the parties credibility (J7.46-59; J8.103): "…The plaintiff and Mr Caputo have very little common ground, when dealing with the issue of consultancy. Neither the plaintiff or Mr Caputo were impressive witnesses. Both are intelligent individuals, both well respected in the fields and they each did themselves a disservice in the way that they presented in the witness box. They were both hesitant to answer directly and simple questions that were put to them and both, when asked simply to explain something, gave very convoluted or evasive answers." The Magistrate's decision 1. After the Magistrate set out the emails referred to earlier in this judgment, her Honour then stated: "This is the plaintiff's position, that Mr Caputo was going to be his supervisor and in fact was his supervisor when he was CEO. The plaintiff says he had absolute authority to employ him as a consultant, that he did not need to consult with the executive and yet here he is in this email saying for a meeting, simply to go to a meeting. I accept that just to go to a meeting in Canberra, I accept that you have to confirm this arrangement with other FECCA people. It does not sit with the position that he said Mr Caputo had and the authority he said Mr Caputo had, in negotiating with him this consultancy. The defendant, through Mr Caputo, says the executive always needed to have the final word and I do not accept, from the plaintiff, that his conclusion in that email, of confirming arrangement with other FECCA people, simply means with regards to that meeting in Canberra. That does not sit with the position that the plaintiff says Mr Caputo had. If Mr Caputo said in his earlier email to me [sic], go off, do the aged care meetings, do all of that but do not take on any other non-aged care matters, do not go to any of those meetings, Mr Caputo had already told him that he could go to the meeting in Canberra and yet in that email, the plaintiff says he only meant that Mr Caputo had to confirm the arrangement with him going to the Canberra meeting. I do not accept that from the plaintiff. That is in reference to the fact that Mr Caputo, even though there was a short period where the executive may not have been mentioned in some discussions, that from the beginning of discussions and firmly at the end of discussions, the offer was always dependent on the fact that the executive had to give approval for the consultancy. Therefore, I am not satisfied that this late night email of 31 March, coupled with the disputed conversation that the plaintiff said he had with Mr Caputo, on 1 April, are sufficient to ground a legal agreement between the parties. Any preparation the plaintiff undertook, following that email, was done at a time when he was still employed by FECCA. He was employed up until 4 April and he got the bad news about his lack of consultancy position on the evening before his last day, through Mr Caputo. Any preparation that the plaintiff done was done at the time when he was employed by the defendant. The evidence supports the defendant's position that any offer was always conditional on the defendant's executive approving any appointment." (J 10.30-59; 11.1-19). Counsel for Dr Nicolaou's submissions in the Local Court 1. Dr Nicolaou submitted that on the authority of Masters v Cameron, FECCA is bound by the contract by virtue of part performance. 2. Counsel for Dr Nicolaou submitted that FECCA, in the course of negotiations with Mr Caputo prior to the making of the agreement, did not inform Mr Caputo that executive approval was required for the agreement (T75.5-75.20). Counsel for Dr Nicolaou submitted that FECCA had retained consultants previously without the need for executive approval, as conceded by Mr Caputo (T90.29-90.32). It was Dr Nicolaou's evidence that Mr Caputo did not require executive approval to enter into a contract with him, and in fact FECCA did (T30.40-30.50; T31.44-31.46; T32.18-32.24; T33.28-33.41; T36.5-36.14; T41.15-41.24; T42.35-42.43). 3. Counsel for Dr Nicolaou also submitted that the Magistrate should accept the admission made by Mr Caputo that he failed in his evidence to address paragraph 70 of Dr Nicolaou's evidence and that the evidence of Dr Nicolaou should be accepted. Counsel for Dr Nicolaou further submitted that the Magistrate should accept that there was performance of the agreement because Dr Nicolaou provided a list of deliverables as requested by Mr Caputo (T84.6-84.44). The Magistrate was also asked to accept the admission of Mr Caputo that Dr Nicolaou sent an email on 2 April 2014 confirming the agreement and that the email confirmation sent by Dr Nicolaou was consistent with the email that Mr Caputo sent to Dr Nicolaou on 31 March 2014 (T84.16-84.44; T85.5-85.31). Counsel for Dr Nicolaou directed the Magistrate to Dr Nicolaou's diary entry dated Tuesday, 1 April 2014 (Ex 1D), which contains a contemporaneous file note made by Dr Nicolaou as to the consultancy role and the agreement. 4. Counsel for Dr Nicolaou further submitted that Mr Caputo accepted that the email that he sent on the 31 March 2014 was truthful (T87.12-22) and the Magistrate should accept this evidence in making a finding that there was a binding agreement in law. 5. The first category of case mentioned in Masters v Cameron is as follows: (at 360): "Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three cases. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. … …in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution…" Counsel for FECCA's submissions in the Local Court 1. Counsel for FECCA submitted that Dr Nicolaou's case ought to be dismissed with costs for the following reasons, firstly, the contemporaneous and direct evidence proves that there was no agreement as to future employment or engagement by FECCA as Dr Nicolaou asserts; secondly, the factual circumstances make it clear that there was no congruous link between the redundancy of Dr Nicolaou and any agreement as to future employment/ engagement; and thirdly, it was clear that any offer of future employment or engagement was conditional upon the parties reaching agreement as to what tasks Dr Nicolaou was to provide in any future role and approval of any such agreement by the senior executive group of FECCA. 2. Counsel for FECCA submitted that the chronology was telling because it proves that no agreement to offer a further consultancy was reached that could possibly have been binding on the parties. It also makes clear that what was really agreed upon on 31 March 2014 was that Mr Caputo would put Dr Nicolaou's proposal that he be employed or engaged as a consultant to the senior executive of FECCA. 3. Dr Nicolaou was cross examined on this timeline. He conceded that there was to be a two step process whereby he was to be "out the door" before other employment options would be explored. Dr Nicolaou then sought to explain that despite the plain words Mr Caputo had used on two occasions (the effect of which being that he required the executive's approval before any further employment/engagement option could be explored), he knew that Mr Caputo had authority to hire and fire "based on previous experience". However, this previous experience was based on a consultancy in 2012 before Mr Caputo was the chairperson of FECCA. 4. Counsel for FECCA submitted that Dr Nicolaou's case simply ignores the emails from Mr Caputo on 27 and 28 March 2014 and their content. In cross examination, Dr Nicolaou denied that Mr Caputo did not have the ability to offer him a consultancy based on his previous experience. Overall, FECCA submitted that what Dr Nicolaou was seeking to do was cherry pick which information he chose to rely on and which he chose to ignore. Conclusion 1. The approach to be adopted in construing a contract is a question of law. When construing a contract, or whether one had come into existence, the rights and liabilities of the parties are to be determined objectively. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party, by words and conduct, would have led a reasonable person in the position of the other party to believe. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction – see Codelfa Construction Pty Limited v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337 at 350; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 at [40]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at 179. 2. To accept Dr Nicolaou's approach to establish that an agreement was formed, is one of contortion and not borne out by the objective facts and circumstances. 3. The Magistrate analysed the objective intentions of the parties by reference to the disputed oral conversations and the written documents. After undertaking that task, she concluded that she was satisfied that the late night email of 31 March 2014, coupled with the disputed conversation that Dr Nicolaou said he had with Mr Caputo on 1 April 2014, were not sufficient to ground a legal agreement between the parties. It was not the situation in which the parties had reached finality in arranging all the terms of their bargain and intended to be immediately bound to the performance of those terms. 4. It is my view that her Honour adopted the correct approach. She analysed the oral and written evidence and came to the correct conclusion. There is no error of law. 5. The result is that the appeal is dismissed. The Court orders that: (1) Leave to appeal is granted. (2) The appeal is dismissed. (3) The judgment and orders of her Honour Local Court Magistrate Milledge dated 27 May 2015 are affirmed. (4) The summons filed 23 June 2015 is dismissed. (5) The plaintiff is to file and serve written submissions on costs on or before 15 October 2015. (6) The defendant is to file and serve written submissions on costs on or before 22 October 2015. (7) The plaintiff is to file and serve written submissions in reply on or before 29 October 2015. I certify that this and the 16 preceding pages are a true copy of the reasons for judgment herein of the Honourable Associate Justice Harrison. Dated: Thursday, 8 October 2015 Associate ********** Amendments 09 October 2015 - Costs order not made. Timetable given. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 October 2015