In cross‑examination Smith accepted this meeting felt in the light of the way he had been conducting negotiations with vendors by having preliminary meetings and sending letters to them, it was necessary to obtain some confirmation of understanding of where the applicants finally stood in the matter. He agreed it was known de Groot would take the additional zone if it was offered to him and the respondent would have no objection if that was the way it worked out.
Archibald's evidence-in-chief was the suggestion recorded had been made on the basis Nagy had suggested he did not want to enter into a contract with the respondent.
In cross‑examination Schryver testified the handwritten word "out" had possibly been written by him when the minutes were before him at the next Committee meeting.
Archibald testified to telephoning the applicants and speaking to Nagy on 14 December 1994 in the presence of Schryver ("the December telephone conversation"). Archibald accepted that the call was made against the background that if the applicants did not take up the zone, it would be offered to de Groot. Archibald also accepted the meeting had not intended to offer the zone to de Groot without again checking to see if the applicants wanted it and that if the applicants had wanted it they would have received it.
Nagy's evidence accepted Archibald telephoned him a week or two before Christmas, inquiring when the applicants were going to come in and sign the Distribution Agreement. Nagy replied he was 90 per cent sure they might take the DAAS ("the December response"). He had not conveyed any definite decision. He also told Archibald he was fed up with the Government giving the business to the respondent and, unless there was improvement in the proposed conditions, the applicants might think of leaving the industry.
From the evidence of Nagy, Archibald and Schryver it is apparent nothing was said to Nagy about the zone being offered to de Groot in the event he did not take it up. Archibald denied this was because he and his colleagues had reached a position where they wanted the zone to go to de Groot and that if the true position had been put to him he would have accepted a contract for the applicants. He had thought in the circumstances it was reasonable to assume "90 per cent" meant "no". He considered this was reasonable given the failure of the applicants to reply to the April letter and the August letter as well as the adherence by Nagy to the 90 per cent surety of not continuing. Schryver could not offer any explanation why Nagy had not been told of the impending loss of the applicants' opportunity to contract even though the December response was unclear.
On 16 December 1994 a further deregulation meeting took place. The minute records with respect to the "trouble region" of Maddington the typed word "out".
A further deregulation meeting was held on 23 December 1994. No reference is made to the applicants or Maddington in the minutes of the meeting.
On 5 January 1995 the Dairy Industry Amendment Act received assent. That was known to the applicants.
In January the respondent had a product launch which was attended by the applicants and de Groot in common with other milk vendors.
On 24 January 1995 the Authority wrote to the applicants advising amendments to the DIAA would be finalised and implemented in February so licences currently issued by the Authority would no longer be effective. The letter continued:
"With the finalisation of licensing, the dairy companies will assume full responsibility for milk distribution and will be
entering into contracts with selected milk vendors and distributors. The transition to company contracts will occur on Sunday, 19 February 1995.
For those vendors who do not enter into a contract, the Distribution Adjustment Assistance Scheme (DAAS) may be available. Documentation for DAAS is currently being revised to accommodate those vendors not entering a contract and can be obtained by registering with Mr Bill Owers of the Authority's offices."
On 2 February 1995 the Dairy Industry Amendment Act 1994 (WA) came into effect implementing the restructure and deregulation.
On 10 February 1995 an inquiry was made on behalf of the applicants to obtain a copy of the terms and conditions of DAAS in order they could check whether it was available during and after three years. Nagy denied the applicants had been thinking about DAAS in February 1995, stating only they were curious to know what the conditions were.
On Friday 10 February the applicants attended a meeting of the Small Business Association at which they learned the Government would not change its declared policy. Nagy went immediately to the Authority and discussed the position with Mr W Owers. Nagy realised there now was no option but to enter into a Distribution Agreement.
On Saturday 11 February a milk vendor told Nagy the zone was being allocated to de Groot. Nagy was upset by this rumour.
Accordingly, on the morning of Monday 13 February he obtained an appointment with the respondent and saw Smith, Archibald and Schryver. He stated he had come "to see about signing the contract". He was told by Archibald "Well, George, we thought you are leaving the industry and we gave your business to somebody else". Nagy replied he considered the applicants had plenty of time to respond as the respondent knew they had been involved in the fight to obtain better conditions or change the position. Archibald or Smith suggested he meet with de
Groot. Being upset, he then departed. When he departed he knew he did not have an agreement.
A couple of days later Nagy met with de Groot at the respondent's office. De Groot would not agree to pay the applicants any compensation.
Nagy's evidence was that if he had been made aware by the respondent in the period between the December phone call and the February meeting that the respondent did not intend to deal with the applicants but to allocate their zone to another so that their business was in jeopardy, he would have contacted the respondent straight away to take a contract.
On 14 February 1995 Eastlake Holdings Pty Ltd ("Eastlake") representing the interests of de Groot, and de Groot, his wife and son as guarantors, executed a Distribution Agreement with the respondent. The zone to which the agreement related included the Maddington zone in respect of which distribution rights were formerly held by the applicants. The agreement specified company carried account customers and trade customers. The latter included two businesses formerly within the zone.
On 15 February 1995 the solicitors for the applicants wrote to the respondent asserting it was in breach of s52 of the TPA. The conduct in relation to which this assertion was made was the conduct of the respondent in trade or commerce leading the applicants to believe they had until 19 February 1995 to sign a contract in respect of their zone. It was said the conduct was misleading or deceptive in that on 13 February 1995, when Nagy requested a contract to sign it, he was told the respondent had already signed a contract in respect of the Maddington zone.
On 17 February 1995 the applicants received from the Authority a letter dated 15 February 1995 advising it was making available financial adjustment assistance for milk distributors and vendors who did not enter into a contract with a licensed dairy produce factory after 19 February 1995. In response to the applicants' request to be supplied with necessary documents the Authority forwarded an application form together with the Terms and Conditions and an Information Paper.
19 February 1995 was the cut-off date for distributorship contracts to be concluded.
On 20 February 1995 the respondent's solicitors denied the allegations stated by the applicants' solicitors and expressed the respondent's intention not to accede to the applicants' demands.
On 23 February 1995 the solicitors for the applicants asserted an additional claim in contract against the respondent and sought performance of contractual obligations.
On 8 June 1995 the Authority wrote to the applicants advising persons wishing to apply for assistance under DAAS were required to do so before 1 July 1995. An application form and other papers were enclosed.
On 20 June 1995 the applicants applied for DAAS. They did so on the basis they had no alternative. The maximum available to them under DAAS was $150,000. This amount was received by them in two equal instalments.
On 28 August 1995 the applicants executed an agreement with the Authority relating to DAAS. In cl2.1 of that agreement, in which the applicant's are described as "the borrower" it is provided:
"2.1 In consideration of the Borrower covenanting and undertaking to the Authority that it shall not be engaged in any manner nor received any payment (whether by way of salary, wages, dividends, kind or otherwise) nor have any legal or
beneficial interest, actual or contingent, in the business of milk distribution or milk vending in the State of Western Australia, the Authority shall pay to the borrower the Principal Sum on the terms and conditions specified by this Agreement."
It further provided:
"4.1 The Borrower shall repay the Money Secured in full to the Authority upon demand on or before the Date for Repayment if the Borrower, the Covenantor or any Associated Person breaches any of the terms of this Agreement.
4.2 If no demand is made by the Authority prior to the Date for Repayment, the Borrower shall be no longer obliged to repay the Money Secured and neither the Borrower nor the Covenantors shall be liable to the Authority with respect to the Money Secured."
The "Date for Repayment" was defined by cl1.1 of the Agreement to mean three years after the signing of the Agreement.
CLAIM IN CONTRACT
Offer
For the applicants it is contended the final paragraph of the August letter intimating that revised contracts were ready to sign, constituted an offer by the respondent to the applicants capable of acceptance by them. The case is that the offer was accepted by Nagy on 13 February 1995. The contention is that this was not a case where the signing of a formal agreement was a necessary precondition to agreement being reached: Masters v Cameron (1954) 91 CLR 349 at 360.
It is also submitted for the applicants that the courts have queried the rigidity of the strict concept of an offer followed by an acceptance and found a contract to exist although further formalities are contemplated. In Hillas v Arcos (1932) 147 LT 503 the House of Lords there upheld an agreement for the sale of timber "of fair specification" made between persons well acquainted with the timber trade, the standard of reasonableness being applied to make the vague
phrase certain. The option to buy timber at issue in the case was held binding even though it did not specify the price, since it provided for the calculation of the price by reference to an official price list. Neither of those instances is the present case.
The Court in Hillas also considered the effect of a clause in the document under consideration reading:
"buyers shall also have the option of entering into a contract with sellers for the purchase of one hundred thousand standards for delivery during 1931. Such contract to stipulate that, whatever the conditions are, buyers shall obtain the goods on conditions and at prices which show them to be a reduction of five per cent on the FOB value of the official price list at any time ruling during 1931".
In considering this clause Lord Wright said at 505:
"...it is said that this is merely a contract to enter into a contract, whereas in law there cannot be a contract to enter into a contract. The phrase is epigrammatic, but may be either meaningless or misleading. A contract de praesenti to enter into what in law is an enforceable contract, is simply that enforceable contract, and no more and no less; and if what may, not very accurately, be called the "second contract" is not to take effect till some future date, but is otherwise an enforceable contract, the position is as in the preceding illustration, save that the operation of the contract is postponed. But in each case there is eo instanti a complete obligation. If, however, what is meant is that the parties agree to negotiate in the hope of effecting a valid contract, the position is different. There is then no bargain except to negotiate, and negotiations may be fruitless and end without any contract ensuing; yet even then, in strict theory, there is a contract (if there is good consideration) to negotiate..."
He considered the words in the clause simply meant the appellants had the option of accepting an offer in the terms of the clause so that when it was exercised a contract at once came into existence unless the terms of the option embodied in the clause were not sufficiently certain and complete.
The opinion there expressed by Lord Wright was declared to be bad law by the Court of Appeal in Courtney and Fairbairn Ltd v Tolaini Bros (Hotels) Ltd [1975] 1 All ER 716 at 720, per Lord
Denning MR and Lord Diplock with Lawton LJ agreeing. Denning MR said at 720:
"That tentative opinion by Lord Wright does not seem to me to be well founded. If the law does not recognise a contract to enter into a contract (when there is a fundamental term yet to be agreed) it seems to me it cannot recognise a contract to negotiate. The reason is because it is too uncertain to have any binding force. No court could estimate damages because no one can tell whether the negotiations would be successful or would fall through; or if successful, what the result would be. It seems to me that a contract to negotiate, like a contract to enter into a contract, is not a contract known to the law. We were referred to the recent decision of Brightman J about an option, Mountford v Scott [[1973] 3 WLR 884]; but that does not seem to me to touch this point. I think we must apply the general principle that when there is a fundamental matter left undecided and to be the subject of negotiation, there is no contract..."
Although this was the view expressed by the Court of Appeal it is accepted as representative of the state of authority: see for example Treitel, The Law of Contract, 8th ed, (1991) at 57-8.
The differing views in Hillas and Courtney came before the Court of Appeal of New South Wales in Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1. There a statement in heads of agreement for a proposed complex joint venture for a coal mine which stated the parties would "proceed in good faith to consult together upon the formulation of a more comprehensive and detailed Joint Venture Agreement" was held not to be binding as a contractual promise. In the context of the overall arrangement it was found to be too illusory or too vague and uncertain to be enforceable.
Kirby P, with whom Waddell A-JA agreed, disagreed with Courtney and held a promise to negotiate in good faith may, in particular circumstances, be enforceable, the enforceability depending on the precise terms as construed from the particular contract. Handley JA held a promise to negotiate in good faith is illusory and cannot be binding. Special leave was refused by the High Court on the ground there was insufficient reason to doubt that the relevant events could not have amounted to a breach if the agreement was enforceable.
In his reasons Kirby P referred to the small number of cases in which, by reference to a readily ascertainable external standard, the court may be able to add flesh to a provision which is otherwise unacceptably vague or uncertain or apparently illusory. He said that in many cases, the promise to negotiate in good faith will occur in the context of an "arrangement" (to use a neutral term) which by its nature, purpose, context, other provisions or otherwise makes it clear
that "the promise is too illusory or too vague and uncertain to be enforceable": see McHugh JA in Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 at 156. It was this category into which all the members of the Court in Coal Cliff considered the matter at issue in that case fell.
In his reasons in Coal Cliff Kirby P discussed the authorities in Australia in which the conflict between Hillas and Courtney had arisen. The conflict remains unresolved by the highest courts in both Australia and England.
However, I do not consider the conflict is material to the resolution of this case because there is no evidence here that the parties had reached an agreement to negotiate in good faith nor has it been contended they have done so. If, however, the August letter in all the circumstances could be construed to amount to such an agreement, I consider, subject to what follows, it would fail for uncertainty in essential terms.
In the course of his speech in Hillas Lord Wright said at 514:
"Business men often record the most important agreements in crude and summary fashion; modes of expression sufficient and clear to them in the course of their business may appear to those unfamiliar with the business far from complete or precise. It is accordingly the duty of the court to construe such documents fairly and broadly, without being too astute or
subtle in finding defects; but, on the contrary, the court should seek to apply the old maxim of English law, [words are to be understood in such a manner, that the subject-matter may be preserved rather than destroyed]."
This passage is frequently relied upon to support such an approach by a court to an issue of construction of commercial documents: see for example, Leadenhall Australia Limited v Digicall Group Limited (1996) 14 ACLC 407 at 414. It leads on to the issue of the extent to which implication of terms by a court is appropriate to bring business efficacy to an agreement reached by the parties. See the discussion of this by Ormiston J in Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32 at 67-71.
However, Lord Wright in the passage immediately above continued:
"That maxim, however, does not mean that the court is to make a contract for the parties, or to go outside the words that they have used, except insofar as there are appropriate implications of law, as for instance, the implication of what is just and reasonable to be ascertained by the court as matter of machinery where the contractual intention is clear but the contract is silent on some detail."
In my view the present case is one in which there is not the necessary contractual base upon which the court can proceed to find implications; it is not a case where the alleged agreement is silent on detail only; it is a case where the court is called on to make a contract for the parties. It is not a case where the essentials have been worked out by the parties: cf Terrex Resources NL v Magnet Petroleum Pty Ltd [1988] 1 WAR 144 at 149 per Kennedy J.
In Thorby v Goldberg (1964) 112 CLR 597 at 605 Kitto J said "...an agreement is not void for uncertainty because it leaves one party or group of parties a latitude of choice as to the manner in which agreed stipulations shall be carried into effect, nor does it for that reason fall short of being a concluded contract". In his opinion that case was one where the parties "have agreed upon all that they intend to be the subject of agreement between them". Kitto J found that provisions of the agreement there in issue were lengthy and detailed and left nothing for future agreement between the two groups. He was required to consider the effect of a provision for reconsideration of articles as to rights of occupancy and the right of the company to make levies on shareholders to cover charges and expenses in respect of a building. It was alleged the uncertainty of this provision infected the whole document.
Menzies J at 607 accepted the statement of the law made in the dissenting judgment of Sugerman J in the Full Court of the Supreme Court of New South Wales, in which he said:
"It is a first principle of the law of contracts that there can be no binding and enforceable obligation unless the terms of the bargain, or at least its essential or critical terms, have been agreed upon. So, there is no concluded contract where an essential or critical term is expressly left to be settled by future agreement of the parties. Again, there is no binding contract where the language used is so obscure and incapable of any precise or definite meaning that the court is unable to attribute to the parties any particular contractual intention."
The evidence in this case, particularly that of Smith, shows that this is a case where there were essential or critical terms expressly left to be settled by future agreement of the parties. Those terms included the choice of the relevant Distribution Agreement; the identification of the parties, of the zone and of the customers.
There was uncertainty in a number of respects. Firstly, it was not clear from the August letter which of the two draft contracts sent with the April letter was referred to in the August letter. The evidence is that two contracts had been sent out with the April letter so that neither of the applicants would have been certain to which the acceptance related.
Secondly, the identification of the parties had not been made by the applicants. The draft sent out with the April referred to Wesfarmers not the respondent. The August letter was address to "George" but the business was operated by the applicants as partners. There was the question whether the applicants' son, who was not a partner, should be a party. Additionally the applicants' expert suggested they should have conducted their business as a company.
Thirdly, there was no negotiation about the schedule of customers which was central to the formation of the agreement. This was not a case where the respondent could rely on the information contained in the schedules to the applicants' previous licences because differences emerged in those from time to time.
Fourthly, there was no agreement as between the parties on the zone and boundaries to be referred to in the agreement.
For the applicants it is argued there was in reality no uncertainty because the parties were in truth known; the zone was identifiable; the customers were identifiable; and the benefits referred to in the August letter as requiring negotiation were not relied on for the respondent to establish any uncertainty. I accept that the broad parameters of these matters were known. However, precise identification of the parties had not occurred; the zone had certainly not been discussed with the applicants; and it is apparent from examination of the contract concluded with de Groot that it was not simply a matter of transferring the applicants' previous customers. What remained to be concluded went beyond what a court should be asked to do to conclude the terms of a bargain between parties. Matters of conjecture were involved, and hence of relevant uncertainty.
This was a case where essential or critical terms were left to be settled. It follows the August letter was an invitation to treat and not an offer.
Acceptance
In addition to Nagy's evidence that on the morning of 13 February 1995 he told Smith, Archibald and Schryver he had come to see about signing the contract, there was his further evidence that, after they had advised him it had been allocated elsewhere, he was so upset he did not raise with them the position that he had reached that the applicants had to accept the contract from the respondent. In cross‑examination he accepted "there was no mention of not to get an agreement or getting an agreement. It was the suggestion that we will get an agreement". Later he accepted that he had not negotiated a schedule of customers, necessary for the agreement, with the respondent.
Nagy's subsequent conduct supports the inference that he did not consider the applicants had a Distribution Agreement. Nagy attended the meeting on 15 February 1995 on the basis that de Groot had the Distribution Agreement for the zone which had previously been the applicants. He accepted that if de Groot paid him some money with respect to the zone there would be no problem.
Nagy instructed his solicitor to write a letter and in it the solicitor stated that the respondent had refused to make a contract with the applicants in respect of the Maddington zone. The applicants wrote to their customers on 17 February 1995 and stated that the applicants had not been given a contract. These matters are important and give clear guidance there was no contract: cf Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68 at 78; Spunwill Pty Ltd v Bab Pty Ltd (1995) 36 NSWLR 290.
Consideration of this evidence leads me to the finding that it is not open to conclude that, even if there had been an offer in the terms contended for on behalf of the applicants, it had been accepted.
Uncertainty
Reference has already been made to what was said by Menzies J on uncertainty in Thorby (supra).
The matter may be tested by asking what would have resulted if the alleged acceptance by Nagy on 13 February 1994 had resulted in a contract. The evidence shows only that the resulting contract would have been in the form of one of the circulated Distribution Agreements without reference to parties, zone or customers.
There was no certain contract capable of enforcement.
The applicants cannot make out their claim in contract. It is therefore unnecessary to consider the defences based on the application of s4 of the Sale of Goods Act 1895 (WA) and on the alleged election by the applicants to take DAAS.
TRADE PRACTICES CLAIM
The other main pillar to the case brought for the applicants is that the respondent's failure to inform them prior to 13 February 1995 that it was negotiating with de Groot was a deliberate failure to disclose the true state of affairs or, alternatively and in any event, constituted misleading conduct contrary to s52 of the TPA. The misleading character of the omission is alleged to derive from the inconsistency of silence with the reasonable expectation which the applicants had of negotiating with the respondent in good faith. The expectation is said to have arisen from the nature of the relationship between the applicants and the respondent in all the circumstances.
The pleadings contend that the relevant "conduct" is the knowledge of the respondent of the restructure proposal; the entry by it into negotiations with the applicant, the April letter and Schryver statement. It is said this conduct (and a representation to which reference will be shortly made) were misleading or deceptive because the respondent (a) had discussion with de Groot from April 1994; (b) did not inform the applicants of the discussions; (c) entered into a Distribution Agreement with de Groot; and (d) did not give the applicants any notice of variation of terms of negotiation or of its intention to negotiate or contract with another party.
As to (a), I find that any discussion with de Groot prior to 12 December was on a hypothetical basis only. Formal negotiations with him occurred in late January. As to (b), that is found as a fact. As to (c), the agreement was entered into and included the Maddington zone and some of the customers previously in that zone when licensed to the applicants.
As to (d), the case for the applicants as argued at trial was an expectation had been raised in the mind of the applicants that they had the opportunity to enter into a Distribution Agreement and the failure to disclose the intention to negotiate or contract with another (that is, the opportunity to contract was about to end) was silence which in all the circumstances of the pleaded conduct constituted misleading or deceptive conduct. The conduct is said to have commenced from the time when the respondent gave consideration to de Groot taking over the Maddington zone, although it is most significantly supported by the contents of the December telephone conversation. The case was argued on the basis that the silence constituted by the non-disclosure of the impending loss of opportunity could either alone or as part of the relevant conduct be misleading or deceptive or likely to be so.
It is convenient to address, the contentions for the respondent asserting why the applicants case should not succeed.
Absence of representation
It is pleaded that by reason of the conduct the respondent represented to the applicants that (a) the applicants would be able to enter into the Distribution Agreement with the respondent in relation to the zone; (b) the respondent would only negotiate with the applicants in relation to such agreement; (c) the respondent would give reasonable notice to the applicants of its intention to vary the terms of negotiation with the applicants or its intention to negotiate or enter into a contract with another party. The applicants' case is that induced by and in reliance on the conduct and representations, they did not accept the offer until 13 February 1995 and deferred acceptance of the opportunity to sign the Distribution Agreement.
Turning to the three elements of the pleaded representation: the first is supported by the April letter alone. The second and the third were not terms of the April letter. The Schryver statement arguably provides a foundation for the second. The time statement arguably provides a foundation for the third. Nevertheless I do not consider a representation in the detail of the terms pleaded can properly be inferred from these circumstances. Even if it could, each of the elements of the pleaded representation relates to future conduct and the evidence brought by the respondent shows it had reasonable grounds for making the representation: Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; James v ANZ Banking Group Ltd (1986) 64 ALR 347 at 372. The representation would not therefore have been misleading.
It is, however, not necessary that the applicants make out a representation in order to establish misleading or deceptive conduct: Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 40‑41 per Gummow J; cf Accounting Systems 2000 Developments Pty Ltd v CCH Australia (1993) 42 FCR 470 at 504.
Absence of reasonable expectation
The significance of silence falls to be considered in the context in which it occurs: Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32 per Black CJ. It is the context which must be examined to determine whether or not facts give rise to a reasonable expectation that if particular matters exist they will be disclosed: ibid. Unless the facts are such as to give rise to the reasonable expectation to that effect, mere silence may not support the inference that the fact does not exist: cf Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] ATPR (Digest) 53,193 at 53,195 per French J with which statement Gummow J agreed in Demagogue at 41. The failure to communicate may constitute conduct which is misleading or deceptive because the person who ultimately may act to his or her detriment is entitled to infer from the silence that no danger or detriment existed: Winterton Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97 at 114 per Hill J. What is reasonable falls to be decided in the context of the ordinary incidents and character of commercial behaviour: General Newspapers Pty Ltd v Telstra Corporation (1993) 45 FLR 164 at 177-8.
For the respondent it is argued there could have been no reasonable expectation of disclosure by the applicants given the clear indications of the applicants' intentions which they had given to the respondent. It is contended for the respondent the relevant class of persons against which to assess the reasonableness of the non-disclosure as an incident of commercial behaviour is that of contractors.
Then it is contended the respondent had to act quickly. Archibald testified that the applicants had to get back to the respondent as quickly as possible because time was of the essence in completing so many contracts. That was in response to a question what if anything had been said to the applicants to suggest they did not have to decide their intentions until deregulation came into place. The course of events shows that the respondent did not set a deadline in the April meeting with the applicants or the July telephone conversation. It was not until the meeting of 12 December that a decision was made by the respondent concerning an alternative to the applicants if they were not proceeding. I do not accept Archibald's evidence that time was of the essence. It did not become so until December and it was then silence was maintained in conveying to the applicants a deadline. Even after 14 December, the contract was not executed with de Groot until 14 February 1995.
It is also said for the respondent Nagy knew time was of the essence. The evidence there relied on was only to the effect that, if the applicants were not interested, then the respondent had to find an alternative contractor quickly. Nagy remained unaware until 13 February 1995 of any deadline.
I accept the submission for the respondent that the applicants could not have had any reasonable expectation there would be disclosure to them by the respondent of the identity of the persons with whom the respondent proposed to negotiate or contract concerning the Maddington zone. However, the position in relation to notice of intention to contract with another party (the identity of whom was not disclosed) requires additional consideration.
It was apparent to Archibald from the December response that Nagy had not finally determined the position the applicants would take. Archibald's evidence establishes that he chose to interpret Nagy's response on that occasion as a negative one although he appreciated the response in terms of 90 per cent was not in terms a rejection. Although the July response had been made in the same terms, Archibald had not chosen to interpret that as a rejection.