Supreme Court New South Wales Medium Neutral Citation: Cox Purtell Staffing Services Pty Ltd v Our Energy Group Pty Ltd [2017] NSWSC 1122 Hearing dates: 11 May 2017 Date of orders: 24 August 2017 Decision date: 24 August 2017 Jurisdiction: Common Law Before: Walton J Decision: (1) The appeal is dismissed. (2) Costs are reserved. (3) In the event that the parties agree as to orders for costs, short minutes of order should be filed reflecting that agreement within 7 days of publication of this judgment. In the absence of agreement, the defendant shall file and serve a short submission in support of any application for costs within 14 days of publication of this judgment. The plaintiff shall file any submissions in reply within a further 14 days of service of those submissions by the defendant. If a party wishes to have an oral hearing in relation to the question of costs that contention should be incorporated in their submissions. Otherwise, the Court will determine any disputed question of costs on the papers. Catchwords: APPEAL – appeal from Local Court – question of law – precise grounds required – whether misapplied own findings – construction of pleadings – formation of contract – terms of contract – mutual assent – offer and acceptance – acceptance by conduct – express pleading required for implication of acceptance by conduct – whether parties agree to contest outside pleadings – discretion to permit case outside pleadings – failure to appeal refusal of amendment – questions raised by plaintiff answered in negative – single ground refused – appeal dismissed – costs reserved Legislation Cited: Local Court Act 2007 (NSW) Local Court Rules 2009 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: B & L Linings Pty Ltd v Chief Commissioner of State Revenue (2008) 74 NSWLR 481; [2008] NSWCA 187 Banque Commerciale SA, (In liq) v Akhill Holding Ltd (1990) 169 CLR 279; [1990] HCA 11 Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 Chamseddine v R [2017] NSWCCA 176 Day Morris Associates v Voyce [2003] EWCA Civ 189 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 Hoist-up Pty Ltd v Heartland Motors Pty Limited [2015] NSWSC 903 House v The King (1936) 55 CLR 499; [1936] HCA 40 Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (2008) 73 NSWLR 653; [2008] NSWCA 206 Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 97, 326 International Fashion Group Pty Ltd v Johnco Imports Pty Ltd [2014] NSWSC 60 Issa v Australian Alliance Insurances Co Ltd t/as Shannons Insurance [2017] NSWCA 87 Kriketos v Livschitz (2009) 14 BPR 26, 717; [2009] NSWCA 96 Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 Madden's Stable Bedding Pty Ltd v Reid [2014] NSWSC 554 Orio Holdings Pty Ltd v Costi & Co (No 1) [2007] SASC 403 Texts Cited: Practice Note No SC CA 1 Category: Principal judgment Parties: Cox Purtell Staffing Services Pty Ltd (Plaintiff) Our Energy Group Pty Ltd (Defendant) Representation: Counsel: B Phillips (Plaintiff) A Gerard (Defendant) Solicitors: Deutsch Partners (Plaintiff) Strategic Legal (Defendant) File Number(s): 2016/286006 Decision under appeal Court or tribunal: Local Court Jurisdiction: Civil Date of Decision: 30 August 2016 Before: Magistrate Pearce File Number(s): 2016/00019726 Judgment 1. HIS HONOUR: This matter concerns an appeal brought by Cox Purtell Staffing Services Pty Ltd ("the plaintiff") against an ex tempore decision of the Local Court made 30 August 2016. 2. The plaintiff was a business involved in the provision of recruitment services. By a statement of claim filed 20 January 2016, the plaintiff brought an action in contract seeking to recover monies alleged to be owed pursuant to the contract for the provision of a temporary employee to Our Energy Group Pty Ltd ("the defendant"). Central to that claim was an email forwarded to the defendant from the plaintiff on 27 July 2015 ("the 27 July email"). The sum claimed was $14,973.80 plus interest and costs. 3. At the close of the proceeding, Magistrate Pearce entered judgment for the defendant in those proceedings and gave short ex tempore reasons as follows: The plaintiff pleads an agreement which is the email of 27 July. It is not, in its own terms it is not. It purports to confirm the assignment which is not the language of contract completely. Plainly there was a contract in fact constituted, in my view, in part by the email and part by the conduct including the acceptance by the defendant of the hiring of Ms McCauley and she started the next day, the day after the email and in part by the terms of the business which expressly contemplated that very notion of confirmation of the timing and it was not pleaded. What is pleaded is something entirely different, a much lesser thing, namely the email only as the agreement. 1. His Honour made an earlier interlocutory judgment in which he refused an application by the plaintiff to amend its pleading. GROUND OF APPEAL 1. The appeal was commenced by a summons filed 23 September 2016. It contained a single ground of appeal in the following terms: In the light of the findings made by the Magistrate as to the terms of agreement between the plaintiff and the defendant, the Magistrate erred in law by failing to enter judgment for the plaintiff in the amount sought by the plaintiff. 1. There was no appeal from the refusal of an amendment to pleadings. 2. Whilst the appeal does not refer specifically to s 39(1) of the Local Court Act 2007 (NSW), the reference to an error of law in the ground would indicate that the plaintiff sought to invoke that provision: see Madden's Stable Bedding Pty Ltd v Reid [2014] NSWSC 554 at [9] (per Button J). This conclusion also follows from that fact the plaintiff did not seek leave to appeal pursuant to s 40 of that Act. 3. Section 39(1) of the Local Court Act provides an appeal is a right to a party who is dissatisfied with a judgment or order of the Local Court to this Court "on a question of law" (s 40(1) of that Act provides for an appeal by leave on a ground that involves a question of "mixed law and fact"). 4. Such an appeal must be predicated upon "an identified question of law" or "an erroneous answer in respect of a question of law": see B & L Linings Pty Ltd v Chief Commissioner of State Revenue (2008) 74 NSWLR 481; [2008] NSWCA 187 at [75] (per Allsop P) and [150] (per Basten JA). 5. The grounds of appeal appear on their face to confine the appeal to a single question of law: whether the Court below had misapplied its own findings in reading the ultimate judgment: Chamseddine v R [2017] NSWCCA 176 at [11]. ISSUES OF APPEAL 1. However, it became tolerably clear from the plaintiff's submissions on the appeal (and more particularly from the joinder of issues by the defendant) that the appeal was not confined to that subject manner. There appeared, in fact, to be three issues raised, all of which significantly added to the grounds of appeal, even if they fell, in an ill-defined way, into the catchment area of the single ground. That is plainly an unsatisfactory situation because there was an absence of precision in the identification of the questions of law agitated on the appeal, which made for unnecessary obscurity of the issues or the appeal (whilst this matter is not caught by a practice direction, such as Practice Note No SC CA 1 at [10], some level of precision in the grounds is necessary – see r 50.4(2) of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") and also, by illustration, Issa v Australian Alliance Insurances Co Ltd t/as Shannons Insurance [2017] NSWCA 87 at [5] (per Beazley ACJ and Basten JA)). The difficulty was complemented by the absence of clarity in the contentions made by the plaintiff. 2. Nonetheless, I will adjudicate upon the apparent questions of law as no issue of the competency of the appeal was raised by the defendant and the defendant joined in argument as to the merit of the appeal in terms of issues raised in the plaintiff's submissions, albeit with complaint as to the lack of clarity as to the ground of appeal and contentions developed in support thereof (the defendant also contended, with respect to the third issue below, that the appeal essentially involved questions of fact). 3. Bearing in mind these limitations, the issues on the appeal were: 1. Did the Court below misconstrue the pleadings as being confined a claim bound to a written contract constituted by the 27 July email, rather than a contract entered by that document and its acceptance by conduct (which the plaintiff contended had been found by the Magistrate? The related question is whether it was necessary then (as stated in the ground of the appeal) for the Court below to enter judgment for the plaintiff? (An incidental issue which received little attention was whether the Magistrate had erred in not finding another document concerning terms of business had formed part of the contract). This compilation of issues shall collectively be described as "the first issue", with the first two questions being described as the first and second limbs, respectively, and the final question as "the incidental question". 2. A related question was whether the Court below misunderstood that there was common ground that a contract had been entered and that the only issue the Court below was required to adjudicate upon was the terms of the contract? A related issue was whether the consideration by the Court as to whether the contract was entered by acceptance by conduct was irrelevant. (This compilation of issues shall be collectively described as "the second issue"). 3. Irrespective of the absence of an appeal against the interlocutory judgment as to an amendment of the pleading (or any challenge to the correctness of that judgment) the third issue raised was whether, in the event that the first and second issues were answered adversely to the plaintiff, the Court's judgment for the plaintiff was erroneous because it failed to do justice as between the parties? Did the Court err in law by refusing to allow the plaintiff to exceed the scope of the pleadings? It was contended that, in the absence of a denial of procedural fairness (the plaintiff submitted that none had been raised) and the conduct of the proceedings being consistent with the Court's ultimate findings as to the existence of a contract, the Court below should, in this context, have entered judgment for the plaintiff (It may be noted that the defendant faintly contended that this issue did not constitute a question of law but the issue was not further pressed). PLEADINGS 1. The statement of claim relevantly pleaded: 4. On or about 27 July 2015, the Plaintiff and the Defendant entered into an agreement wherein the Plaintiff agreed to provide a temporary employee to the Defendant to fill the position of Team Assistant/PA (the Agreement), 5. It was an essential term of the agreement that the charge out rate for the employee would be $46.70 per hour, excluding GST (the Agreed Rate), PARTICULARS Confirmation of Assignment email sent by the Plaintiff to the Defendant dated 27 July 2015 6. The employee commenced work with the Defendant on or about 28 July 2015. 7. Between 7 September 2015 and 9 November 2015, the Plaintiff erroneously invoiced the Defendant for the employee at a rate of $27 plus super per hour (the Incorrect Rate), … 8. In or about late November 2015, the Plaintiff became aware of the error and issued revised invoices to the Defendant for the difference between the Incorrect Rate and the Agreed Rate, amounting to $14,973.80 (the Revised Invoices). … 1. The defence filed by the defendant in this respect was: 4. In respect of paragraph 4 of the statement of claim, the Defendant: a. admits that the Plaintiff and the Defendant entered into an agreement wherein the Plaintiff agreed to provide a temporary employee to the Defendant to fill the position of team assistant/PA; b. denies that any such agreement was entered on or about 27 July 2015; and c. says that the agreement between the Plaintiff and Defendant was made verbally in or about the week commencing 20 July 2015 (the Verbal Agreement). PARTICULARS Conversations between Andrew Mayo for the Defendant, and Michelle Barrett for the Plaintiff, held in the Defendant's office and later by telephone. 5. In respect of paragraph 5 of the statement of claim, the Defendant: a. denies that it was an essential term of the agreement that the charge out rate for the employee would be $46.70 per hour exclusive of GST; and b. says that pursuant to the Verbal Agreement the charge out rate for the employee whilst employed on a temporary basis was agreed to be the equivalent of $50,000 per annum. PARTICULARS Michelle Barrett indicated that the temporary employee would prefer a salary equivalent to $75,000 per annum. In reply Andrew Mayo indicated that the Defendant would initially be prepared to pay a charge out rate equivalent to $50,000 per annum whilst employed on a temporary basis, and if the employee became permanent may consider a higher charge out rate; Michelle" Barrett then contacted the employee, and later phoned Andrew Mayo and confirmed that a charge out rate equivalent to $50,000 per annum was acceptable. c. says that to the extent to which the email dated 27 July 2015 is inconsistent with the Verbal Agreement, the Verbal Agreement prevails. 6. The Defendant admits paragraph 6 of the statement of claim and further says that: a. the employee's commencement was initially on a temporary basis; and b. pursuant to the Verbal Agreement the charge out rate was the equivalent of $50,000 per annum. 7. In respect of paragraph 7 of the statement of claim, the Defendant: a. admits that the Plaintiff invoiced the Defendant for the employee at a rate of $27 per hour; b. says that the Defendant paid those invoices in the belief that the invoices were in accordance with the Verbal Agreement; and c. otherwise denies the remaining allegations 8. In respect of paragraph 8, the Defendant: a. admits that the Plaintiff issued revised invoices to the Defendant; and b. denies that it is liable for the Revised invoices because it has paid all amounts due and owing under the Verbal Agreement; c. otherwise denies the remaining allegations. … THE CONDUCT OF THE PROCEEDING BELOW Statement of Agreed Facts and Issues 1. Both of the parties made reference in this appeal to a "Statement of Agreed Facts and Issues" (hereinafter referred to as "SAFI"), which was said to be before the Court below. It should be noted, however, there is no record of the Court below receiving the document into evidence or otherwise receiving it, although it was apparently filed as part of the case management process of that Court: the Local Court Rules 2009 (NSW) made provision for the filing of such a document: r 4.3(2)(f). 2. Overall, the SAFI appeared to receive little attention by the parties below, save for a short submission made by the plaintiff near the end of submissions when issues were raised by Magistrate Pearce about the difficulties faced by the plaintiff given the limitations of its pleadings. 3. The document contained two headings: "The Agreed Facts" and "The Agreed Issues". Under the first heading, the following statements were introduced by the words, "The following facts are not in dispute": 2. The plaintiff and the defendant entered into an agreement by which the plaintiff agreed to provide a temporary employee to the defendant to fill the position of Team Assistant / PA (Agreement). 3. The name of the temporary employee was Lauren MacCauley. She was the replacement for a previous temporary employee provided by the plaintiff to the defendant, Mary Angland. 4. The terms of the Agreement are in dispute. The relevant term in these proceedings is the amount that the defendant was to pay the plaintiff in relation to Ms MacCauley. 5. The plaintiff alleges that the terms of the Agreement were as set out in an email sent by the plaintiff to the defendant on 27 July 2015, and that the applicable hourly rate was therefore $46.60 plus GST. 6. The defendant alleges that the terms of the Agreement were as verbally discussed between Andrew Mayo for the defendant and Michelle Barett for the plaintiff on 24 July 2015 and that the applicable charge out rate the defendant agreed to pay the plaintiff was the equivalent of $50,000 per annum. 7. Ms MacCauley commenced work on 28 July 2015. She was paid by the plaintiff based on an hourly rate of $27 plus superannuation. 8. Between 7 September 2015 and 9 November 2015 the plaintiff invoiced the defendant based on a rate of $27 plus superannuation plus GST (ie. The same hourly rate as the plaintiff was paying Ms MacCauley). The plaintiff says that was done in error. The defendant says that was done in accordance with the terms of the Agreement. 1. Under the heading "The Agreed Issues" the following appeared: "What were the terms of the Agreement between the plaintiff and the defendant as to the amount the defendant wants to pay the plaintiff in respect of Ms MacCauley". Relevant Aspects of the Evidence 1. This Court is not here considering issues of fact (or merit) on this appeal. However, it is necessary to consider one aspect of the evidence of the defendant in order to provide the necessary context for the adjudication of the second and third issues above, which invite an examination of the conduct of the proceedings by the parties. 2. The defendant filed an affidavit of Andrew Gerard Mayo. Mr Mayo was a director of the defendant. 3. Objections were taken to paras 7-11 of his affidavit. These were overruled. The submissions as to those objections are, as I have noted, important to the disposition of the second and third issues. I will, therefore, briefly recount the contents as to what Mr Mayo deposed within those paragraphs of the affidavit (I note that he was not required for cross-examination). 4. Mr Mayo attested that on 24 July 2015, he received an email from Michelle Barrett, described as a recruitment specialist for the defendant, after interviews with a number of persons with a view to finding a temporary replacement. 5. Following the receipt of that email there was a conversation between Mr Mayo and Ms Barrett in which the salary for various candidates was discussed. The salary expectation for the person who ultimately was selected for the position ("the employee") was nominated at $75,000 per annum, inclusive of superannuation, as a permanent position. Mr Mayo deposed, he indicated that the defendant was prepared to pay "$50,000 for a temp" and asked if the employee was prepared to accept a relevant salary in the short term. It was agreed, in that light, that a communication would be made with the employee by Ms Barrett. 6. An email was received by Mr Mayo on the afternoon of 24 July confirming the salary expectations of the employee at the higher amount. That document had attached to it another document bearing the title "Cox Purtell – Terms of Business, January 2015" ("the Terms of Business document"). Clause 4 of that document bore the heading "Temporary Placement Fees". In cl 4.1, thereof, it stated: The fee payable by the Client to [the defendant] for temporary Candidates is the hourly rate (plus GST) agreed to at the time of confirming Assignment. This rate will include superannuation, workers' compensation, insurance and payroll tax (where applicable). Additional expenses may be payable in accordance with Summary of Assignment Conditions provided to the Client for each new temporary Assignment. 1. Clause 16.1 of the Terms of Business document defined "Summary of Assignment Conditions" as meaning: [T]he specific terms and conditions agreed between [the defendant] and the Client which were relevant to each temporary Assignment and provided to the Client, usually by email, prior to the commencement of each new Assignment. 1. Later on the evening of the same day, Mr Mayo deposed that Ms Barrett contacted the plaintiff and said: "I told Lauren that you were only willing to pay a salary equivalent to $50,000 per annum in the short term. Lauren was not happy with the proposal but she said she was prepared to commence work on a trial period on that basis that the temp position could become permanent in the short term and that if the position does become permanent you will pay her a higher rate. Lauren can start work on Tuesday 28 July is that okay for you?" Mr Mayo recorded that an affirmative answer was given by him. 1. Paragraph 12 of the affidavit was not objected to by the plaintiff or the subject of submissions during the course of the hearing of objections. It is nonetheless useful to recount the contents of that paragraph to inform the first issue. In paragraph 12, Mr Mayo deposed, that by an email dated 27 July 2015 from Ms Barrett to him bearing the subject "Confirmation of Assignment" and an attachment described as "Summary of Assignment Conditions", there was a confirmation that the temporary employee would commence on 28 July 2015. The document stated: "Please see the confirmation details below and the assignment conditions attached. This forms the basis of your agreement with [the defendant] for the particular assignment". Under that entry appeared the words, "Charge Rate" adjacent to which was the entry "$46.70 p/h excluding GST". Course of the Proceedings 1. As mentioned, during the course of submissions as to objections to paras 7-11 of Mr Mayo's affidavit at the commencement of the hearing of the claim. The following exchange occurred between the Court and counsel for the plaintiff and the defendant: PHILLIPS: The objections are based on the application of the parol evidence rule and they are the paras 4 through 11 and then 14 and 15. … HIS HONOUR: I see, so you say I suppose that the agreement, it was written, was it? PHILLIPS: It was, it's the email referred to in para 12 of this affidavit. HIS HONOUR: You say that's the agreement and you say what went on beforehand is covered by the parol evidence rule? PHILLIPS: Indeed, your Honour. HIS HONOUR: Yes, do you dispute that? GERARD: I do, your Honour, in its entirety. It's based on a premise which the defendant disputes. One has to go and start with the statement of claim then go to the defence to see what the actual dispute is. The statement of claim of course contends an agreement between the plaintiff and the defendant reached on or about 27 July which is a Monday. The defendant denies that. The defendant denies any agreement reached on 27 July. The defendant says the agreement that was reached in relation to the provision of Ms McCauley was a verbal agreement reached on 24 July and your Honour has seen the evidence of the conversations that go to that verbal agreement. HIS HONOUR: I haven't paid much attention to the dates but they're a bit earlier. You say there was an oral agreement? GERARD: That's correct. The nub of the dispute is (1) if there's an oral agreement what are its terms and one of course receives evidence of the conversations spoken...; [2] whether there's assent on the part of the defendant to what the plaintiff asserts is the written agreement or the terms of the written agreement. HIS HONOUR: You say there's no evidence you agreed with the email? GERARD: That's right, the assent to the email is disputed and the defendant's entire case is that the contract that made provision for Lauren McCauley to the defendant was the oral contract of the Friday ..." 1. The defendant made a number of submissions regarding the joinder of issues arising from this exchange which, in my view, were correct. They were as follows: 1. The contract asserted by the plaintiff was limited to a written contract constituted by the 27 July email; 2. The defendant denied that a written agreement was entered into on 27 July or in terms of the 27 July email. Further, the defendant denied accepting or assenting to the 27 July email; and 3. The defendant contended there was an oral contract made on 24 July. 1. The defendant also submitted, again correctly, there was an absence of any contention by the plaintiff, in this exchange, that the 27 July email was accepted by the defendant's conduct. 2. During the course of final submissions, the defendant maintained there was no evidence of assent or acceptance on the part of the defendant to the 27 July 2015 email. The defendant submitted, "there's no proper evidence or none at all of any assent on the part of the defendant to the terms of that email". The defendant consistently asserted the existence of a prior oral agreement and resisted the formation of a contract predicated upon the 27 July email. 3. In final submissions, the plaintiff advanced three primary contentions in support of its case. They were as follows: 1. The discussions the defendant relied on did not found an oral contract and the only agreement was the written agreement reached on or about 27 July 2015 via the 27 July email; 2. Even if there was an earlier oral agreement the later written agreement superseded the oral agreement; and 3. Even if the only agreement was the oral agreement contended for by the defendant, properly construed, that agreement supported the plaintiff's case. 1. The plaintiff addressed the Magistrate in respect of those three contentions and maintained that approach until various difficulties with the plaintiff's case were raised by the Court below. Specifically, up until that point, the plaintiff had not made submissions as to whether any contract may have arisen by the acceptance of the defendant, which was to be implied from any conduct of the defendant. 2. Towards the close of the plaintiff's submissions, the Court below had a series of exchanges with the parties in which potential deficiencies with the plaintiff's (and the defendant's case) were identified as follows: 1. The plaintiff had not pleaded that that the Terms of Business document formed part of the contract; 2. The plaintiff had not pleaded or said that the contract was asserted to be constituted, in part, by conduct. The Court expressed a preliminary view that "if there is an agreement it is partly by conduct and partly by reference to the terms of business, partly by reference to the July 27th email"; 3. The following exchange occurred between his Honour and counsel for the plaintiff as follows: HIS HONOUR: It is set out in the particulars of para 5 of the claim, particulars are not the claim, although they can confine the claim, the actual pleading is that there is an agreement in paras 4 and 5. If there is an agreement it is partly by conduct and partly by reference to the terms of business, partly by reference to the July 27th email. I am inclined to think, I will hear from your friend in a moment, unless you want to add something, I am inclined to think you will get away with that because although it is not pleaded well, I am sorry to sound critical, I do not mean to be unnecessarily critical, I have just got no other way out but to be critical of that, but your friend is essentially on notice of what you are saying. PHILLIPS: Yes, and just in relation to that, I would say the defendant must be on notice because of para 5 of the statement of agreed facts and issues, where the agreement is described in slightly different terms. 1. Shortly thereafter his Honour observed the defendant had "[made] the point that there is no acceptance; he has made that point and as I say what arguably is the case is he is right in terms of technical rules of pleading ..."; 2. Immediately following that observation, the defendant contended, with the apparent concurrence of the Court, that acceptance by conduct had not been pleaded; and 3. It was submitted that, if it was proposed that conduct become part of the proceedings with a view to the formation of the contract then notice of what was relied upon in that respect would need to be given to the defendant. Counsel for the defendant stated: "so if it is proposed in some way that conduct is part of the mosaic that is giving to form the contract or establish the contract… I would need to know what it is". It was also disputed that the pleadings or the SAFI, contained therein, made reference to the Terms of Business document. 1. His Honour identified that, even though he was not sitting as a court of strict pleading, proper notice had to be given to the defendant if it was to be contended that the contract was constituted partly in writing and partly upon conduct. His Honour also noted, whilst the defence case was "riddled with problems", the plaintiff had the difficulty that its "whole case [had] been run on the basis that the email of 27 July is the agreement". 2. As to conduct, the defendant submitted that the fact it was agreed that the temporary employee commenced work did not solve the contractual issue because the engagement was equally consistent with an oral contract made on the 24 July. Counsel for the defendant submitted, "Well it goes to the heart of the actual dispute between the two parties. The conduct issue is intrinsically related to the defendant's entire case; that it acted on an oral contract from the 24th". It was also submitted that "conduct is a question of fact". 3. After further submissions by the plaintiff, his Honour stated, "you have effectively said this email of 27 July is the agreement, and it is not, obviously it is not". Counsel for the plaintiff replied, "it's the terms, yes, or some of the terms" to which his Honour replied, "it includes some of the terms and some of the rest of the terms are the terms of business, particularly cl 4 and the conduct shortly thereafter including the next day…you have not pleaded a case that includes the terms of business and conduct which you arguably need to do". 4. In a similar exchange the plaintiff contended it was not necessary to plead "the terms of business" because they were not in dispute. 5. Following this exchange, the plaintiff made an application to amend the pleadings in the statement of claim. It was contended that the defendant's application to put on further evidence should be disregarded because "the defendant wasn't taken by surprise by the way the case had been run". The Court queried why, at least, the defendant would not be entitled to put on an amended defence. 6. Counsel for the defendant submitted in that context: "Your Honour, I'm not prepared because I'm just not clear ultimately what, and [no] I'm not taken by surprise by or what is, would be pleaded in an amended claim". It is clear from the context in which that submission was made and those that followed that the bracketed word was incorrectly transcribed and should be read "so". Immediately before that submission Mr Phillips for the plaintiff stated, "despite my friend having said that the defendant has been taken by surprise by the way the case had been run". The plaintiff's submission was given in response to a statement by the Court below as follows: "But it means the matter going over unless your friend is willing to say he can cope with it now". The plaintiff's response is clearly an indication that the defendant could not do so. 7. After an observation by the Court below, counsel for the defendant further stated: "Well it's the conduct aspect that I have the difficulty with, so to deal with it now, I'm just not sure that I can, I haven't even taken any instructions. So I'm not sure where that leaves us, but I'm not prepared to say now that I can deal with the point that [I'm not taken by surprise by], which I don't yet know what the full parameters are. It is not entirely clear how the bracketed section of the extract from the defendant's submission should be understood. However, in the light of the entirety of that submission and its immediate proximity to the earlier submission referred to in [41] above, it is plain enough, that the defendant was indicating that he was not in a position to respond, at that point, to the change in the plaintiff's case vis-à-vis conduct. Further, counsel for the plaintiff submitted that the defendant could not express a view about any amendment until he could "see it". 8. Following further argument, the Court rejected an application for an amendment by the plaintiff. SUBMISSIONS BY PARTIES Submissions for the Plaintiff 1. In describing, the judgment below, the plaintiff contended: However, rather than entering judgment for the plaintiff in that amount (or any other amount), the Magistrate found that it "was not possible for the plaintiff to succeed". The reasons for that conclusion can be found at TD 28.18 - 28.26 and were that the plaintiff had pleaded "an agreement which is the email of 27 July"; the email itself was not the agreement; and the terms of the contract included the terms of business but they had not been pleaded. 1. Under the heading "Errors Relied Upon" in the plaintiff's written submission, it was contended there were two "errors" (of law) in the judgment of the Court below as follows: 1. It was incorrect that the plaintiff had pleaded the 27 July email as the agreement. Paragraph 4 of the statement of claim pleaded the existence of an agreement entered into 'on or about 27 July 2015'. Paragraph 5 of the statement of claim pleaded that it was an essential term of that agreement that the charge out rate was $46.70 per hour excluding GST, and referred in the particulars to that paragraph to the 27 July email. What was pleaded was therefore entirely consistent with the findings made as to the nature of the agreement. The closest the pleadings and findings went to being inconsistent was that his Honour found the contract may have been formed on 28 July 2015 when the temporary employee started work, whereas the pleadings pleaded a contract formed "on or about 27 July 2015"; and 2. Even if there had been an inconsistency between the contract that had been pleaded and that which the Court found to have existed, the Court below should still have entered judgment for the plaintiff in the amount sought. Such an order was required in order to do justice as between the parties based on the findings that had been made. At most, the effect of any such inconsistency was that the Court should have taken such steps as were necessary to afford the defendant procedural fairness. However, no such steps were required in this case because: 1. as explained above, the way the case had been pleaded and run by the plaintiff was entirely consistent with the findings made; and 2. the defendant made no complaint about any lack of procedural fairness as a result of the way the proceedings had been conducted. To the contrary, when his Honour raised the potential inconsistency between the way the claim had been pleaded and run, the defendant fairly conceded that the way the case had been run by the plaintiff did not take the defendant by surprise. 1. The plaintiff further submitted: 14. As to the second of those errors, his Honour seems to have considered that he was bound by a decision of Garling J in International Fashion Group Pty Ltd v Jonco Imports Pty Ltd [2014] NSWSC 608. However, the situation considered by Garling J in that case was one in which the cause of action which led to an award in favour of the cross-claimant was one that had not been pleaded and had not been the subject of submissions, whereas in this case: a. there was at most a small discrepancy between the facts as alleged and the facts as found; and b. in any event, both parties had made submissions as to the terms of the Agreement. 15. In addition, Garling J did not find in that case that such an inconsistency necessarily required judgment for the cross-defendant. As made clear by his Honour at [87], the inconsistency required that outcome in that case only because judgment for the cross-claimant based on a cause of action not pleaded was a failure to accord the cross-defendant procedural fairness. In this case, the fact that the terms of the Agreement were the subject of submissions; and that the defendant had conceded that the case had not been run by the plaintiff in a way that took the defendant by surprise meant that there was no denial of procedural fairness. Accordingly, any inconsistency between the facts as pleaded and those as found did not require judgment for the defendant. 1. In oral submissions, the plaintiff further submitted: 1. Having found that the 27 July email constituted the contract, the Court below should have found for the plaintiff. It was common ground that there was a contract for the supply of the services of the temporary employee. The only question was as to the terms of the contract. 2. It was unnecessary for the Court below to import into the assessment of the claim the question of whether there had been conduct by acceptance because it was agreed that the contract had been formed. For this same reason, it was strictly unnecessary for the plaintiff to seek an amendment of the pleadings. 3. This case is clearly different from any case where the existence of a contract was in dispute. "There had to be a contract because the employee was provided and she worked there for months and there was payment in respect of her services". 4. There was no principle that required entry of judgment in favour of the defendant in the circumstances of this matter merely because the plaintiff had diverged in some way from the pleadings in the statement of claim. The Court below erred in concluding that, in circumstances where the case presented exceeded the scope of the pleadings, that the application must fail and judgment entered for the defendant. The Court below should have determined that it was in a position to determine the matter outside the scope of the proceedings having regard to the common ground by the parties as to the matters requiring adjudication. 5. It was necessary for his Honour to do justice between the parties which, in the circumstance of the proceedings below, having regard to what was common ground, would have permitted determination by the Court, without amendment to the pleadings (noting that the Court below had found there was a contract constituted by the 27 July email and conduct by acceptance). Submissions for the Defendant 1. In short summary, the defendant made the following submissions: 1. The defendant pleaded an entirely different contract to that pleaded by the plaintiff. The mere fact that the defendant pleads a "positive case about an agreement" does not result in the conclusion that the defendant accepted the contract pleaded by the plaintiff. This was denied at all relevant times. 2. There was an absence of evidence of express consent to the 27 July email. The defendant did not plead that the contract was formed in whole or in part by an implied acceptance by conduct. An amendment was sought to the pleadings to introduce such a basis in contract but the amendment application was refused by the Court below. 3. The refusal by the Magistrate to allow a departure from the proceedings was, in the circumstances of the matter, sound. It was necessary to expressly plead implied acceptance by conduct. The plaintiff had misunderstood the reasoning of the Court below in giving judgment for the defendant. That judgment expressly relied upon the failure by the plaintiff to plead acceptance by conduct. 4. A number of submissions were advanced as to why the "evaluative judgment" of the Court below to hold the plaintiff to its pleaded case did not demonstrate error. Three components of those submissions were as follows: 38. Fourth, at all times, a central feature of the Defendant's case was that the Defendant did not expressly accept or assent to the terms of the 27 July 2015 Email and there was no evidence of any express assent or acceptance on the part of the Defendant to the 27 July 2015 Email. The circumstances in which a case may be decided on a basis different from that disclosed by the pleadings, are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities: Banque Commerciale at 286-87. The Defendant did not chose or acquiesce in fighting a case based on acceptance by subsequent conduct or choose or acquiesce in its rights and liabilities be determined on the basis of assent/acceptance by conduct. Indeed, the Defendant resisted an amendment be permitted in respect of impleaded acceptance by conduct: see T21.28- 21.35; see also T30.27 - 30.44. 39. Fifth, and connected to the requirement to expressly plead an allegation of implied acceptance by conduct in conjunction with identifying the conduct said to constitute the implied acceptance (see Kriketos), all conduct possibly confirming or denying the implied acceptance and the character and circumstances of that conduct would have been relevant and potentially the subject of evidence: see analysis in Laidlaw at [5]-[9] citing Brogden at 678, 680 and 686. That is so because for conduct to amount to an acceptance of an offer the character and circumstances of the conduct must indicate unambiguously that no explanation can be given of the conduct unless it refers to the alleged contract in question: Laidlaw [5]-[6]. 40. Sixth, and connected to the considerations above, and as identified by the Defendant in final submissions, had the Defendant known or been put on notice that the Plaintiff sought to (or would eventually seek to) rely on acceptance of the 27 July 2015 Email being implied from conduct, the Defendant "might have needed to do something about that with a particular witness": T21.33 - 21.35. 41. Developing that proposition and the combined significance of the first to fifth propositions more fully, were the Defendant on notice from the Statement of Claim that the Plaintiff would seek to advance an implied acceptance by conduct case, the Defendant may have prepared or run its case entirely differently. The Defendant may have made forensic decisions differently and: lead different evidence (i.e further, or less, evidence); cross-examined on different topics; not cross-examined at all; taken a different attitude to objections to evidence; raised a different defence and/or generally put itself in a position to defend an acceptance by conduct case in light of the law in respect of whether an implication of acceptance by conduct can be reached. Those considerations were correctly in the forefront of the Magistrate's mind in refusing leave to the Plaintiff to amend the Statement of Claim: see T29.31-T30.18. Those considerations are equally apposite considerations in thereafter making an evaluative judgment to hold the Plaintiff to its pleaded case. 1. The defendant also contended that the SAFI did not constitute a basis upon which it may be concluded that the parties had agreed to conduct the proceedings outside of the pleadings as to a wider class of issues including that of implied acceptance by conduct. CONSIDERATION General Principles 1. The issues raised in this appeal concern the formation of the contract for services as between the plaintiff and the defendant and the rules associated with adherence to pleadings. I will address the general principles associated with those questions before dealing with the three issues raised by the plaintiff, incorporating as they do, issues associated with the formation of contract via the acceptance of an offer through conduct. 2. The essential condition for the formation of a conduct contract is mutual consent to be bound one to the other by one agreement. However, there is a clear distinction between the terms of an agreement and whether a contract has been made. As McColl JA (with whom Macfarlan JA agreed) observed in Kriketos v Livschitz (2009) 14 BPR 26,717; [2009] NSWCA 96 ("Kriketos") at [106]: [106] It is trite law that there is no contract unless two parties mutually consent to be bound one to the other by one agreement. However, as Higgins J thought it necessary to add to that statement of the law, "it is one thing for two parties to settle what are to be the terms of an agreement, if it should be made; and quite another thing to make the agreement": Barrier Wharfs Ltd v W Scott Fell & Co Ltd [1908] HCA 88; (1908) 5 CLR 647 (at 650), approved on appeal per Griffith CJ (at 666); O'Connor J (at 671); Isaacs J (at 671). 1. The essential question in determining the formation of contract, otherwise than in the paradigm of offer and acceptance, is whether the parties conduct reveals an understanding of agreement or a manifestation of mutual assent, which portrays an intention to be legally bound to the essential elements of the contract: Kriketos at [14] (per Allsop P with whom Macfarlan JA agreed). 2. The conventional approach to the question of whether a contract has been formed involves a determination as to whether there has been offer and acceptance. An acceptance of an offer is a communication to the offeror of a final and unqualified assent to the terms of the offer: Day Morris Associates v Voyce [2003] EWCA Civ 189 at [35] (see also, Kriketos at [110]). In some circumstances, even in the absence of a specific assent by an express verbal or written acceptance of an offer, an offer may, by proof from objective facts, be impliedly accepted by the offeree by the offeree's conduct and thus a contract can be constituted by acceptance inferred from conduct: Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 ("Brogden"); Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 ("Empirnall") at 528-531 (per Kirby P with whom Samuels JA agreed). 3. Silence may indicate rejection of an offer after a reasonable period of time. However, the silence of an offeree in conjunction with other circumstances may include acceptance; such as where the offeree knows the terms of an offer and the offeror's intention to enter into a contract and the offeree has taken the benefit of the offer. This is a question of fact which may be stated as: "where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that offer was accepted according to its terms." [Emphasis added]: Empirnall at 535 (per McHugh JA, with whom Samuels JA agreed). 4. For conduct to amount to an acceptance of an offer "the character and circumstances of the conduct" must indicate unambiguously that the parties intended to contract and that "no explanation can be given of it unless it refers to the contract in question" [emphasis added]: Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 ("Laidlaw") at [5]-[6] per Macfarlan JA (citing Lord Cairns LC in Brogden at 678 and 680). Not only must the conduct, which is asserted to amount to the implied acceptance of the relevant offer, point to the existence of a contract "it must point to the existence of the contract in the terms alleged in the proceedings" [emphasis added]: Laidlaw at [9]. (See also Brogden at 680 per Lord Cairns LC; Orio Holdings Pty Ltd v Costi & Co (No 1) [2007] SASC 403 at [26]). 5. Further, the passage of the judgment of McHugh JA in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 97,326 referred to be McColl J in Kriketos at [115] is important. That passage from Kriketos is as follows: McHugh JA (Hope and Mahoney JJA agreeing) discussed the approach to the inference of a contract from conduct in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 [sic] (at 11,117-11,118) as follows: "… [A] contract may be inferred from the acts and conduct of parties as well as or in the absence of their words…The question in this class of case is whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement… The conduct of the parties, however, must be capable of proving all the essential elements of an express contract… Care must also be taken not to infer anterior promises from conduct which represents no more than an adjustment of their relationship in the light of changing circumstances..… Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled. Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties' subsequent conduct become sufficiently specific to give rise to legal rights and duties. In a dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed." (emphasis added) See also Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 (at [369]) per Allsop J (Drummond and Mansfield JJ agreeing); Laidlaw v Hillier Hewitt Elsley Pty Ltd [2009] NSWCA 44 (at [5] – [9]) per Macfarlan JA; (at [58]) per Handley AJA. [Original emphasis.] 1. Post contractual conduct may be relevant in contractual disputes both to the formation of contract and other contractual issues. Post contractual conduct can be evidence of contractual performance, relevant to whether a contract was formed (see Kriketos at [100]); itself constitute acceptance of an offer (in Empirnall at 528-531 (per Kirby P) and 534-535 (per McHugh JA)); or lead to an inference as to the existence of a contract between the parties. This context underlines the importance of expressly pleading with proper particulars acceptance by conduct including the conduct asserted to have established the implied acceptance. I will return to that question after considering principles associated with adherence to pleadings. 2. Notwithstanding the proceedings will often be less formal in the Local Court, it has been found by this Court that, particularly in the case of a hard fought battle in the proceedings below, parties will be bound to their pleadings: Hoist-up Pty Ltd v Heartland Motors Pty Limited [2015] NSWSC 903 ("Hoist-up") at [49]-[59] (per Button J) and International Fashion Group Pty Ltd v Johnco Imports Pty Ltd [2014] NSWSC 60 ("International Fashion Group") at [83]-[87] (per Garling J). 3. In Hoist-up Button J referred to the relevant principles as follows: [49] First, it is well established that the general rule is that pleadings must be the subject of adherence. In Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658 at 664, it was said that: Pleadings and particulars have a number of functions: they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it (Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In liq.) [1916] HCA 81; (1916) 22 CLR 490, at p 517; they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial (Miller v. Cameron [1936] HCA 13; (1936) 54 CLR 572, at pp 576-577; and they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court. Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings (Gould and Birbeck and Bacon (1916) 22 CLR, at pp 517, 518; Sri Mahant Govind Rao v. Sita RamKesho (1898) LR 25 Ind App 195, at p 207). [50] More recently, in Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 247 CLR 486 at [26], a plurality of the High Court referred to what had been said by Isaacs and Rich JJ in Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in Liquidation) [1916] HCA 81; (1916) 22 CLR 490 at 517; namely, that "the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him" requires that "pleadings should state with sufficient clearness the case of the party whose averments they are". [51] Secondly, whilst I accept that proceedings will often be less formal in the Local Court than in this Court, it is clear that this was a hard-fought battle over a relatively small sum of money. In those circumstances, it was not inappropriate for her Honour to apply the above principles with a degree of rigour. 1. In International Fashion Group, Garling J referred to Banque Commerciale SA, (In liq) v Akhill Holding Ltd (1990) 169 CLR 279; [1990] HCA 11 ("Banque Commerciale") at 286-287 (per Mason CJ and Gaudron J). His Honour also observed that the underlying question in relation to adherence to pleadings is whether there is a breach of procedural fairness. 2. The passage from Banque Commerciale to which Garling J referred and the immediately following paragraph of that judgment is applicable to the second issue and, therefore, will be extracted below: [286] The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 per Isaacs and Rich JJ at 517. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities. See, for example, Browne v Dunn at 76; Mount Oxide Mines at 517–18. [287] Ordinarily, the question whether the parties have chosen some issue different from that disclosed in the pleadings as the basis for the determination of their respective rights and liabilities is to be answered by inference from the way in which the trial was conducted. It may be that, in a clear case, mere acquiescence by one party in a course adopted by the other will be sufficient to ground such an inference. In the present case, the Bank not having been present at the hearing, there could be no acquiescence by it in such course, if any, by which Akhil might have attempted to extend the issues at the hearing to encompass a case of fraud as against the Bank. 1. A passage from the judgment of Dawson J in Banque Commerciale is also relevant in the present proceedings but sufficient reference to that judgment will be obtained in the following extract from the judgment of Ipp J (which, in terms of relevant principles, was accepted by Giles and Hodgson JJA) in Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (2008) 73 NSWLR 653; [2008] NSWCA 206 ("Ingot Capital") at [424]-[428] (the judgment of Dawson J being referred to at [427]). Ipp J stated the following principles regarding pleadings: [424] The following propositions may be extracted from these authorities: (a) The rule that, in general, relief is confined to that available on the pleadings secures a party's right to a basic requirement of procedural fairness. (b) Apart from cases where the parties choose to disregard the pleadings and to fight the case on additional issues chosen at the trial, the relief that may be granted to a party must be founded on the pleadings. (c) It may be that, in a clear case, mere acquiescence by one party in a course adopted by the other will be sufficient to ground an inference that the parties have chosen a different basis to the pleaded issues for the determination of their respective rights and liabilities. (d) Acquiescence giving rise to a departure from the pleadings may arise from a failure to object to evidence that raises fresh issues — it is in this sense that "cases are determined on the evidence, not the pleadings". (e) While cases are to be decided upon a basis that embraces the "real controversy" between the parties, the real controversy has to be determined in accordance with the principles stated. [425] The next point is that a departure from the pleaded issues is a matter for the discretion of the trial judge. In Mummery v Irvings Pty Ltd Dixon CJ, Webb J, Fullagar J and Tayor J said (at 112): "There is, of course, no doubt that the question of extending the issues [on the pleadings] at the trial was peculiarly within the discretion of the trial judge." [426] In Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2001) 203 CLR 194 at 204 [19], Gleeson CJ, Gaudron J and Hayne J said: "[19] 'Discretion' is a notion that 'signifies a number of different legal concepts'. In general terms, it refers to a decision-making process in which 'no one [consideration] and no combination of [considerations] is necessarily determinative of the result'. Rather, the decision-maker is allowed some latitudes to the choice of the decision to be made." (Footnotes omitted) [427] The High Court has occasionally used the language of "duty" in speaking of circumstances under which a trial judge should allow a case to be decided on the basis of issues not revealed by the pleadings. In Leotta v Public Transport Commission of New South Wales (1976) 50 ALJR 666 at 668; 9 ALR 437 at 446, Stephen J, Mason J and Jacobs J spoke of "the duty of the trial judge to leave the issue of negligence to the jury". In Banque Commerciale SA (In Liq) v Akhil Holdings Ltd (at 297), Dawson J said: "It is incumbent upon the trial judge to see that the pleadings or particulars are amended so that the record reflects the proceedings as they have been conducted, but his failure to do so will not result in the invalidity of those proceedings." [428] These observations have to be seen in the wider context of the well-settled rule that the question whether cases are to be resolved by reference to issues beyond those pleaded is a matter for the discretion of the trial judge. The statements of the kind to which I have referred in the preceding paragraph were made in a context where, not to go beyond the pleadings, would be "unreasonable or plainly unjust": House v The King (1936) 55 CLR 499 at 504–505. See also State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 173, per Kirby J. (See also Kriketos at [102]). The First Issue 1. It is plain from the pleadings of the plaintiff that the plaintiff pleaded the parties had entered into a written contract constituted by the 27 July email. Clause 4 of the pleadings by the plaintiff in its statement of claim pleaded that a contract had been formed which was in writing constituted by the 27 July email. Whilst cl 4 referred to a time frame of "on or about 27 July 2015" that abstraction was controlled by the particulars. By cl 5, it was particularised that an essential term of the contract was the 27 July email. No other particular of the agreement was provided. 2. Further, I do not consider that the plaintiff pleaded the Terms of Business document as constituting a term of contract. There was no pleading that the Teams of Business document also constituted the contract. The reference to the "Confirmation of Agreement" in the particular of cl 5 was merely a description by the plaintiff of the email it had sent. There was no pleading that any part of the formation of the contract occurred before 27 July or that any prior conduct may influence its terms (it may be noted that the Terms of Business document was sent to the plaintiff on 24 July). In any event, that term required express particularisation if it was said to form part of the terms of contract. 3. There was no pleading or particular as to the acceptance of the agreement by conduct. The pleadings in cll 6 and 7 did not constitute such a pleading. The pleading in cl 6 was as to a material fact and the pleading in cl 7 was impermissible evidence (see r 14.7 of the UCPR). If a pleading as to acceptance by conduct was to be relied upon, it must be pleaded expressly: Kriketos at [101] and [105] (per McColl JA) (and see also the discussion of authority above and r 14.14 of the UCPR). 4. The defendant did not plead a defence based upon a disagreement as to the terms of the contract pleaded by the plaintiff, but rather, denied such a contract was entered into by the defendant. The defendant pleaded a separate contract, which was distinguished from the contract pleaded by the plaintiff in three respects: the date entered (the week commencing 20 July 2015 and, by later contentions, 24 July 2015); the nature of the contract (that is, an oral contract) and the terms of the contract (a charge out rate equivalent to $50,000 per annum). 5. Contrary to the submission of the plaintiff, the learned Magistrate found, correctly in my view, that the plaintiff had pleaded a written contract constituted by the 27 July email. His Honour was also correct to find the Terms of Business document was not pleaded as a term of the contract pleaded by the plaintiff. 6. Nor, as submitted by the plaintiff, were the pleadings of the plaintiff "entirely consistent with the findings made [by the Court below] as to the nature of the agreement". That is so for two reasons. First, his Honour found that the contract made "in part by the email and part by the conduct". As I have observed, there was no pleading that the contract was accepted by conduct (or for that matter a submission to that effect made until the close of the proceedings below). 7. Secondly, it must be at least implicit in his Honour's reasoning in that respect that there was no evidence of any express or specific assent, in writing or words, by the defendant of the 27 July email (consistently with the pleading of the defendant). His Honour was concerned that the silence of the defendant accompanied by conduct may have constituted the formation of a contract but no such pleadings had been made by the plaintiff. There was no appeal from that implicit finding. To the contrary, the plaintiff contended, as one part of its case on appeal, that the Court below should have found the parties had agreed that a contract had been entered and confined their dispute to the terms of the contract. 8. The three questions raised by the first issue (the first and second limb and the incidental question) must be answered in the negative. 9. It also follows that the stated ground of appeal, so far as it concerned the pleadings in the proceedings, must also fail as there was a dispute by the pleadings as to the existence of any contract arising out of or in relation to the 27 July email which required the Court below to make findings as to whether the pleaded contract was entered into. Further, in substance, the Court found such a contract may only be found upon the basis of implication of acceptance which had not been pleaded (as there was no express or specific communication of acceptance) and hence the claim predicated upon the written contract alone must fail unless the parties conducted the proceedings below so as to incorporate a contest outside of the pleadings (the second issue) or the plaintiff was permitted by the Court below to advance its case outside of the pleadings (the third issue). The Second Issue 1. The determination of this question depends upon the "real controversy" between the parties in accordance with the relevant principles discussed at the outset of these considerations regarding adherence to pleadings. 2. That requires a consideration as to whether or not the parties had deliberately chosen below some different basis for the determination of their respective rights and liabilities other than the pleadings. Mere acquiescence may result in such a conclusion. Otherwise the question of such a disposition may be gleamed from the way the trial was conducted. 3. Without more, the statement of agreed issues in the SAFI would tend to indicate the parities had directed their attention to the terms of the contract rather than formation of contract. Similarly, cl 4 of the "Agreed Facts" refers to the "terms of the Agreement [being] in dispute". The relevant terms, so described, were said to be the amount to be paid to the plaintiff for the services of the employee. 4. However, cll 5 and 6 reflect the very dispute as to the formation of the contract referred to in the discussion of the first issue. In those clauses, the dispute is identified not in terms of the mutual consent of the parties to the making of a contract, but rather, that the dispute, in fact, concerned which of the respective contracts (containing different terms) contended for by the parties were made: the precise same issue in the joinder of issues in the pleadings. There is, therefore, a significant ambiguity in the SAFI as to the question of whether an agreement was made. That ambiguity was removed at the outset of the proceedings, as I have earlier found, during exchanges with Court as to objections to Mr Mayo's affidavit. Those exchanges put beyond doubt that the defendant maintained its pleadings that there was no contract entered into for the services of the employee upon the basis of the 27 July email. The defendant maintained that stance throughout the proceedings. 5. The plaintiff had the opportunity to take issue with the defendant's contentions, in this respect, at the time of the exchanges, over the objections in reliance upon the SAFI or otherwise but chose not to do so. The plaintiff eventually raised the SAFI at the close of its submissions when faced with the prospect of a finding that there had not been an unequivocal communication of acceptance of the 27 July email by the defendant. 6. It follows that I do not consider the conditions for departure in pleadings in Banque Commerciale (and other authorities earlier mentioned) were present in the proceedings below. In order to establish that exception to adherence to pleadings it was necessary to demonstrate a mutuality of the position of the parties by acquiescence or conduct. The plaintiff has failed on this appeal to demonstrate such mutuality and the Court below properly proceeded upon the basis that there was no agreement to contest the matter outside the pleadings. 7. The second question or issue must also be resolved in the negative and adversely to the contentions of the plaintiff. The Third Issue 1. The question as to whether cases are to be resolved by reference to issues beyond those pleadings, as noted by Ipp JA in Ingot Capital, is a matter for the discretion of the trial judge. It was incumbent, in that respect, for the trial judge, as he did, to determine whether an amendment to the pleadings would be granted. Button J referred to such a determination in Hoist-up as an "evaluative judgment" involving a multitude of factors which should not lightly be interfered with in any appeal under s 39 of the Local Court Act (his Honour assumed such an appeal may be characterised as a question of law) (at [56]). 2. It is tolerably clear that the plaintiff's contention in this appeal seeks to challenge the aforementioned exercise of a discretion by the Court below on House v King principles, namely, that the determination to refuse to go outside the pleadings was "unjust". However, no appeal was brought from the determination to refuse an amendment to the pleading and, as I have mentioned, the plaintiff eschewed there was any error in that respect. 3. One basis relief upon by the plaintiff with respect to this ground was that "the way the case had been pleaded and run by the plaintiff was entirely consistent the findings made" (by the Court below). I have earlier rejected that submission. It was also contended that there was at most a small discrepancy between the facts as alleged and the facts found. This again has been rejected in my earlier findings, as was the further submission of the plaintiff that "both parties had made submissions as to the terms of the agreement" (that is, in contrast to submissions as to the formation of the contract). In these respects, the distinction sought to be drawn by the plaintiff with the judgment of Garling J in International Fashion Group was not properly available. 4. In substance, the plaintiff's complaint, in this respect, concerned the refusal of the Court below to enable an amendment to the pleadings so as to plead acceptance by conduct. This follows for two reasons: 1. The first and second issues are confined to contentions that the pleadings or the conduct of the proceedings were consistent with there being no issue as to the formation of a contract. In this respect, the plaintiff contended that the question of acceptance was irrelevant; and 2. It is plain from the exchange between the plaintiff's counsel and the Court below that the Court was concerned that the plaintiff had not proved an unequivocal communication of acceptance to the 27 July email or any mutuality of consent to such a contract. This is the basis upon his Honour raised with the plaintiff of the contract being formed partially by acceptance by conduct and ultimately the application for an amendment. 1. Thus, the question on the appeal (as to the third issue) then becomes whether the exercise of the discretion of the Court below to refuse the application to bring its case outside of the pleadings via acceptance by conduct was in error. (I note, as earlier mentioned, there was no challenge to the finding or intimation of the Court below that the plaintiff had not proved acceptance by communication of acceptance by an unqualified assent in writing or orally to a contract in terms of the 27 July email). 2. In my view, when understood in this light, the plaintiff has failed to establish that an affirmative answer should be given to the third issue or question for the following reasons: 1. The failure by the plaintiff to appeal the interlocutory decision to refuse an amendment to the pleading or in any way impeach the correctness of that determination must be fatal to this contention. As the authorities make clear, it was necessary for an amendment to be granted to the pleadings in order to bring the extended pleading. The fact that no complaint was made to that judgment effectively shuts out the complaint about the later and final judgment of the Court below because, in essence, that judgement was underpinned by the absence of the very pleading (as to acceptance by conduct), which had been excluded by the refusal to amend. 2. Notwithstanding the clear intimation by the defendant at the commencement of its submissions (made first in order), in the submissions taken in the proceedings the plaintiff persisted with a contention that there was no issue as to the formation of contract, but rather, only as to its terms. Indeed, the plaintiff initially resisted any amendment being permitted, even in the face of concerns expressed by the Court. It was only at the very close of the proceedings that a different tact was taken and even then (as occurred in these proceedings) upon the basis that no amendment was strictly required. The manner in which the plaintiff approached this issue in the conduct of the proceedings and the timing of its changed approach to the pleadings were relevant factors to be taken into account by the Court below in the exercise of its discretion. 3. The defendant claimed that there would be no denial of procedural fairness by permitting the adjudication of issues outside of the pleadings. It was contended that the defendant made no complaint about any lack of procedural fairness as a result of "the way the proceedings had been conducted". It was submitted that the defendant fairly conceded that, given the way the case had been run by the plaintiff, it would not be taken by surprise. These contentions sit ill with the complaints made by counsel for the defendant at the close of the proceedings to the effect that the defendant would be taken by surprise and that it would wish to amend its defence, call further evidence and/or take a different approach with respect to the evidence of the plaintiff. In these proceedings it was submitted, by the defendant, that, if it had received notice of an intention to rely upon implied acceptance by conduct, it may have prepared or run its case entirely differently, including as to forensic decisions bearing upon the conduct of the trial. Whilst the Court below did not give reasons for the refusal to amend, I consider that the defendant is correct to submit, given the exchanges between the Court below and the parties, that the Court had considerations of that kind in mind when refusing the amendment. 4. The concerns by the plaintiff as to the impact of any amended pleadings (or the conduct of the case outside of the particulars) cannot properly be described as conflated or artificial. As earlier mentioned, it was necessary to plead an allegation of implied acceptance by conduct in conjunction with identifying the conduct said to constitute the implied acceptance. All conduct possibly confirming or denying the implied acceptance and the character and circumstances of the conduct would have been relevant and potentially the subject of evidence (see Laidlaw at [5]-[9]). For conduct to amount to an acceptance of an offer the contract, the character and the circumstance of the conduct must have indicated unambiguously that no explanation can be given of the conduct unless it referred to the alleged contract in question. Conduct of the parties must be capable of proving all the essential elements of an express contract. In this case the conduct immediately preceding the 27 July email was not only the commencement of services by the employee and the failure to forward a rejoinder to the 27 July email but the engagement of the employee under terms consistent with the oral agreement pleaded by the defendant. There was later a statement by the plaintiff that there had been an error, in this respect, which was squarely rejected by the plaintiff. It was, therefore, necessary to plead the acceptance of contract and the circumstances giving rise to it with clarity. There were necessarily forensic decisions to be made in dealing with a case formulated in that way (I note there was mention of an additional communication between the parties bearing upon acceptance but it was not ventilated in this appeal). CONCLUSION 1. Having regard to the foregoing considerations the singular ground of appeal brought by the plaintiff must be rejected. Similarly, the expanded grounds or contentions raised by the plaintiff as identified by the aforementioned three issues requiring resolution in the appeal must also be rejected. 2. In the circumstances, I dismiss the appeal pursuant to s 41(1)(d) of the Local Court Act. 3. The parties have not been heard as to costs. I propose to reserve that question and make directions for the disposition of that issue in the orders made below. ORDERS AND DIRECTIONS 1. I make following orders and directions: 1. The appeal is dismissed. 2. Costs are reserved. 3. In the event that the parties agree as to orders for costs, short minutes of order should be filed reflecting that agreement within 7 days of publication of this judgment. In the absence of agreement, the defendant shall file and serve a short submission in support of any application for costs within 14 days of publication of this judgment. The plaintiff shall file any submissions in reply within a further 14 days of service of those submissions by the defendant. If a party wishes to have an oral hearing in relation to the question of costs that contention should be incorporated in their submissions. Otherwise, the Court will determine any disputed question of costs on the papers. Amendments 13 June 2018 - Typographical error on cover sheet amended. 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: 13 June 2018