CONSIDERATION
20 It has been objected by Findlays that the ground now sought to be raised on the appeal was not raised before the primary judge. It is said, first, that pars 9 and 17 of the defence admit an agreement with Findlays; and, secondly, that the appeal now raises an agency argument in relation to "disclosed" principals, not "undisclosed" ones, in contradiction of par 18 of the defence.
21 We consider it unnecessary to deal with this objection, as it is clear that, howsoever put, the appeal must be dismissed.
22 The contract issue raised a simple question as to who, objectively considered, were intended to be the parties to the contract under which the monetary advances were to be made. There is no question here as to (i) whether Findlays entered into a contract collateral to one contract between TPM or Trans Pacific and the client-investors: cf Yeung Kai Yung [1981] AC 787; or (ii) whether, though acting as an agent, Findlays became a principal on the contract by virtue of some trade custom: see the many examples referred to in Bowstead and Reynolds on Agency, [9-016] fn 2.
23 Ascertaining whether Findlays entered into a personal engagement with TPM or Trans Pacific and, if so, whether to the exclusion of its principals, or jointly and severally with them, raises a question of objective intention. As Brandon J said in The "Swan" [1968] 1 Lloyd's Rep 5 at 12:
"Where A contracts with B on behalf of a disclosed principal C, the question whether both A and C are liable on the contract or only C depends on the intention of the parties. That intention is to be gathered from (1) the nature of the contract, (2) its terms and (3) the surrounding circumstances: see Bowstead on Agency, (12th ed.) (1959), at pp. 257 and 258, par. 113, and the authorities there cited. The intention for which the Court looks is not the subjective intention of A or of B. Their subjective intentions may differ. The intention for which the Court looks is an objective intention of both parties, based on what two reasonable businessmen making a contract of that nature, in those terms and in those surrounding circumstances, must be taken to have intended.
Where a contract is wholly in writing, the intention depends on the true construction, having regard to the nature of the contract and the surrounding circumstances, of the document or documents in which the contract is contained. Where, as in the present case, the contract is partly oral and partly in writing, the intention depends on the true effect, having regard again to the nature of the contract and the surrounding circumstances, of the oral and written terms taken together."
It should be added that a like enquiry is required when the question is whether the contract is one to which the agent alone is a party, notwithstanding the agent is known by the other contracting parties to be acting as an agent for disclosed but unidentified principals: see Hichens, Harrison, Woolston & Co v Jackson & Sons [1943] AC 266 at 274; Maritime Stores Ltd v H P Marshall & Co Ltd [1963] 1 Lloyd's Rep 602 at 608; Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471 at 483 [33]-[35]; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 466-467 [36]-[38]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 178-182 [36]-[47]; Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 627A-E per McLelland J; GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 at 636F-637A per McHugh JA, Kirby P and Glass JA agreeing.
24 Little attention has been given in this matter to the question whether, if Findlays was a party to the contract, it was so to the exclusion of its principals or was so jointly and severally with its principals. The assumption made appears to have been that it alone was a party.
25 Was an oral contract made in mid-December (as found by the primary judge) and who were the parties to it? The evidence clearly establishes that at that time, Findlays was intending to raise the funds for both the seed capital and the loan from client investors and that it would be in an agency relationship, for some purposes at least, with the participating clients. While the expected principals came from a known class, i.e. clients of Findlays, they were not only not then identified, they also were not ascertained. This factor of itself points strongly in favour of a conclusion that, if a contract was entered into at that time, it was entered into by Findlays as the principal, albeit the raising of the relevant sums from clients may have been a condition precedent to performance of the obligations to lend: cf Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537.
26 Also pointing to the same end is the inherent improbability (a) of each investor assuming joint, or joint and several, responsibility for the entire advance to which that investor would make a contribution; or (b) of each investor entering into a several contract with TPM/Trans Pacific in respect of his or her contribution only. The latter conclusion becomes the more obvious when regard is had to the contract's stipulation that security was to be granted for the loan and to the plethora of documentation that would have been required if there were several contracts with the investors.
27 Though Mr Salfinger and Mr Findlay clearly acknowledged that Findlays would be an agent of the principals who invested, it seems equally clear that as reasonable businessmen, in the context of the "aggregating" arrangement to be effected by Findlays with its clients' funds, they sought to have an agreement which could, in Mr Findlay's words, be rendered in a way that "will simplify the documentation" - or as Mr Salfinger put it, "we need a simple loan agreement". The mid-December contract found by the primary judge was a rudimentary one - it left further detail to be supplied, for example, the term of the loan and its repayment - but it is one which clearly was open to be found: GR Securities 40 NSWLR at 634E-636A per McHugh JA. We agree with his Honour's conclusion both as to its then terms and that it was intended to be between Findlays and TPM (whatever plans, undisclosed to Findlays, Mr Salfinger had for Trans Pacific in the arrangement, on which see Laws Holdings Pty Ltd v Short (1972) 46 ALJR 563).
28 It equally is the case that the parties intended to, and did, add to and vary their contract both as their business relationship evolved and in response to evolving circumstances. They also intended that the terms of their loan agreement would be reduced to writing, though it was not to be "subject to contract": cf Masters v Cameron (1954) 91 CLR 353 at 360-361; GR Securities 40 NSWLR at 634E-F and see LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd (2002) 18 BCL 57. The existence of the earlier contract did not preclude subsequent variations to the contractual relationship, either through varying the original agreement, supplanting it with a new one or entering into additional contracts between the same parties: Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd (2001) 201 CLR 520 at 533-534 [22]-[24] per Gleeson CJ, Gaudron, McHugh and Hayne JJ; Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at 316 [19] per Gleeson CJ, Gaudron and Gummow JJ. Thus, as his Honour found, there was agreement in early January between Mr Findlay and Mr Salfinger that the option funds would be repaid to Findlays within days from the date of listing if the IPO was successful (that date was estimated to be in early May). It was also agreed that the loan moneys would be repaid during that month if there was no IPO by May 2004. It is noteworthy that the contract as pleaded, and found to have been breached, contained terms to this effect notwithstanding they were agreed to after the December agreement.
29 We have referred to the evolving relationship as envisaged in the various versions of the draft loan agreement. We have done this to illustrate that in the agreed additions they made, Mr Findlay and Mr Salfinger remained faithful to the essential character of the December 2003/January 2004 contract. Though an evolving contract, it was, and was to remain, one contract under which Findlays alone acquired rights and assumed obligations - albeit it may well have been the case that, to the extent that Findlays had discretions to exercise, it may have been subject to the direction of its principals, or else that it held its contractual rights on trust for its principals. In Black v Smallwood (1966) 117 CLR 52 at 56, Barwick CJ, Kitto, Taylor and Owen JJ approved what Fullagar J had said in Summergreene v Parker (1950) 80 CLR 304 at 323, namely:
"… the fundamental question in every case must be what the parties intended or must be fairly understood to have intended. If they have expressed themselves in writing, the writing must be construed by the court. If they have expressed themselves orally, the effect of what they said is a question of fact." (See too Scott v Geoghegan & Sons Pty Ltd (1969) 43 ALJR 243 at 245B-C per Taylor J.)
30 It is unnecessary for us to express a view as to whether the 25 February 2004 version (signed by Trans Pacific and Arkaroola but not Findlays) merely embodied in documentary form what had already been orally agreed (on 24 February and earlier) to be the terms of the parties' then contractual relationship. Significantly Mr Findlay did not disavow the terms of the 25 February loan agreement when he failed to sign it. He did not sign because, in light of what he had ascertained about the supposed "option", there was no utility in signing.
31 The conclusion that Findlays alone was the contracting party reflected, in our view, the commercial setting and purposes of the engagement envisaged by Mr Findlay and Mr Salfinger. It carried with it the consequence that Findlays was entitled to sue upon that contract for the repayment of the loan moneys, even if it was in the circumstances trustee of that right for the benefit of its investor-principals. Likewise, for the purposes of the TP Act claims, Findlays properly could be found to have suffered substantial loss by entering into and performing its contract in reliance upon the misrepresentations found by the primary judge.
32 We would note that no issue has been taken in this appeal as to the identity or identities of the other party or parties with whom Findlays contracted but cf Laws Holdings Ltd v Short (1972)46 ALJR 563. We express no view on this matter. It seems not to have been an issue before the primary judge. In any event, it has no operative bearing upon the orders made by the primary judge which related only to the TP Act claims. The conclusion that Findlays acted as a principal in the contract was itself sufficient to give it standing to sue under s 82 of that Act.