Civil & Allied Technical Construction Pty Ltd v A1 Quality Concrete Tanks Pty Ltd [2015] VSCA 75

Court of Appeal (Vic)|2015-04-30|Before: Santamaria JA, Kyrou JA, Ferguson JA

A1 Quality Concrete Tanks Pty Ltd v Civil & Allied Technical Constructions Pty Ltd [2014] VCC 1239

CONTRACT - Subcontract for construction of two concrete clarifier tanks - Email communications between the parties - Counteroffer made by email - No reference in email to detailed methodology to be used to construct tanks - Parties intended to enter into immediately binding contract expecting to make a further written contract in substitution - All necessary terms contained in counteroffer - Counteroffer accepted by conduct communicated to offeror by organising and attending subsequent meeting - Open to trial judge to accept some parts of witness' evidence whilst rejecting other aspects - Judge's findings not inconsistent with facts incontrovertibly established, glaringly improbable or contrary to compelling inferences - ; , , , ; ,

1 CATCON[1] was one of two head contractors for the upgrade of the Aldinga waste water treatment plant for United Water in South Australia. Some of the works to be carried out entailed the construction of two concrete clarifier tanks. Those works were to be subcontracted. The question on this appeal is whether there was a binding subcontract between CATCON and A1 Quality Concrete Tanks Pty Ltd ('A1 Tanks')[2] arising out of a counteroffer contained in an email and the subsequent conduct of the parties. The judge determined that there was.[3] CATCON has appealed from his Honour's orders on the basis that:

(1) there was no intention to enter into contractual relations, including because not all the essential terms had been agreed, particularly a term as to the methodology to be used to construct the tanks; and

(2) there was insufficient evidence to conclude that, by its conduct, A1 Tanks accepted the counteroffer and that its acceptance was communicated to CATCON.

2 For the reasons which follow, CATCON's appeal should be dismissed.

3 As we have mentioned, the task of constructing the concrete tanks was to be subcontracted. The plan was that work on the tanks would start in late July 2010. CATCON first approached A1 Tanks about constructing the tanks in late June 2010. On 23 June a CATCON engineer, Mr Matti Tuokko, sent an email to A1 Tanks. He said that the works for the tanks were planned to start in late July and Mr Tuokko asked A1 Tanks to submit a price for the works together with references and photographs of previous similar projects. Attached to the email were some construction drawings. This is one of the drawings that was sent with the email:

4 Essentially, formwork is erected and concrete poured into it to create a tank. The concrete is then cured with a curing process involving the application of a liquid product. An issue (to which we will come later) is whether the methodology to be used to construct the tanks was an essential term to be agreed before any contract could be concluded; in particular, whether it was necessary to agree that a method could be used that would produce a construction joint horizontally in the middle of the vertical tank wall (depicted on the left hand side of the bottom diagram in the drawing above).

5 A1 Tanks' project manager responded to the 23 June email later the same day with its company profile.

6 A few days after the emails, Mr Tuokko met on the project site with the director of A1 Tanks, Mr Peter Geaboc and with other representatives of CATCON. They discussed the works, methods of construction and the experience of A1 Tanks in the industry. Mr Geaboc was asked whether A1 Tanks had experience with a proprietary formwork system known as 'PERI'. Mr Geaboc said that he had worked with both 'RND' and PERI systems, and he recommended PERI.

7 On 1 July 2010, A1 Tanks emailed a quote of $450,000 plus GST for the construction of the tanks. The quoted price included PERI formwork.

8 Another meeting took place on 5 July attended by Mr Geaboc, Mr Tuokko and other CATCON representatives. The CATCON representatives said that the price was too high. Mr Geaboc said that a cheaper option would be for A1 Tanks to use its own formwork rather than hiring the PERI system. The PERI formwork is longer (5.2 metres) than A1 Tanks' own formwork (2.2 metres). If the PERI formwork was used then it would only be necessary to have construction joints at the top and bottom of the tank walls. If A1 Tanks' formwork was used, there would be an additional construction joint midway up the tank walls.

9 A couple of days later, Mr Tuokko sent revised drawings for the tanks to A1 Tanks.

10 On 9 July 2010, A1 Tanks sent an email to Mr Tuokko proposing a 'final' price of $382,000 plus GST for each tank. The email went on to say:

The price includes the following;

- supply of labour

- formwork (being our own, not PERI or any other)

- accommodation

- four more men than allowed for in previous quotation so as to meet time constraint.

CATCON to supply the following:

- Cranes as required by A1 Quality Tanks

- Concrete pumps as required by A1 Quality Tanks

- Scaffolding

- Supply of reinforcement

- Supply of concrete.

Please note that in order to begin quickly, a purchase order must be provided ASAP so that the inside cone forms can be ordered.

Also, with the purchase order we will require a deposit of $130,000 plus GST and all payments must be prompt if we are to keep our schedule.

11 There were then some further emails. On 12 July 2010, A1 Tanks sent an email to Mr Tuokko with a final price of $370,000 plus GST for each tank and stating that all other conditions were to remain as set out in the previous quotation. Mr Tuokko responded the same day by email ('12 July email'). That email (which was copied to Mr David Baker, the CATCON Project Manager and a director of CATCON) read:

We accept your price for this project. Please proceed with the following details given below;

- Proceed with formwork manufacturing/modification and mobilization to site

- commencement date on site is 26/7/10

- provide details for all personnel as follows -

o name/address and DOB

o copy of white card (or equivalent)

o copy of all licences

- construction period is 12 weeks in total from 26/7/10.

- Delays to completion date upon inclement weather are applicable. Costs associated with inclement weather are not claimable

- Draft subcontract will be sent for your review during this week

- No deposit is applicable

- Meeting is to be set up as soon as possible to discuss mutually beneficial payment terms.

Please call myself to discuss any of the above items.

12 A few minutes after this email, Mr Tuokko sent another email with some updated drawings which included modifications to the formwork required.

13 On 23 July 2010, Mr Tuokko sent an email to A1 Tanks with a draft subcontract attached 'for your review.' The email stated that details and payment terms etcetera were to be discussed the following Monday (26 July) on site. The schedule to the draft subcontract listed liquidated damages as not applicable.

14 Later the same day, Mr Tuokko sent a further email to A1 Tanks attaching a schedule of reinforcement bars which were to be inserted into the concrete tanks. Mr Tuokko said that the schedules were for approval by A1 Tanks and he asked for comments by the end of Monday (26 July 2010) 'to enable production in time.' The reinforcement bars were to be supplied by Best Bar Reinforcements. The trial judge found that Mr Geaboc had a meeting with Mr Charlie Vella of Best Bar and that all of the dimensions submitted by Mr Tuokko on behalf of CATCON were satisfactory except for the vertical bars of the tank wall which were proposed to be 5.2 metres long. As the trial judge noted, vertical bars of that length would have been suitable if PERI formwork was used as that would permit the tank walls to be poured in one go. However, the shorter length of A1 Tanks' formwork would not accommodate this.

15 Mr Geaboc gave evidence that he took steps in preparing formwork and that he approached Smithweld Pty Ltd to prepare the metal framework for the project.

16 Mr Tuokko arranged for Mr Geaboc to come over to Adelaide on 26 July for a meeting. There is no evidence as to what was discussed when the meeting was being arranged, nor as to exactly how it was arranged. However, Mr Geaboc said that, during a telephone call before the meeting, he was told that the start date for the work had been put back from 26 July to 9 (or possibly 4) August.

17 The meeting did take place on the project site on 26 July 2010. Mr Geaboc, Mr Tuokko and Mr Baker attended the meeting. Their evidence differed as to what happened at the meeting.

18 So far as Mr Geaboc was concerned, pretty much everything had been agreed once the 12 July email was received. According to him, the purpose of the meeting on 26 July was to discuss what issues there were that were still outstanding and to sign the subcontract. He gave evidence that he explained how they were going to build the tanks and the methodology (because this was the first time that Mr Baker had been present at any discussion) and that they also discussed when the first payment would be made and payment retention. He wanted to render an invoice as soon as they went on site for the site establishment costs and estimated amount for two weeks work. Mr Geaboc gave evidence that at the meeting it was confirmed that there would be a delay so that work would start in August. Mr Geaboc also gave evidence that a written subcontract was signed at the meeting.

19 Mr Tuokko's evidence was that there were outstanding issues discussed at the 26 July meeting (some of which had been discussed at the earlier meetings he had with Mr Geaboc) and that no contract was signed. According to Mr Tuokko, no agreement was reached on the outstanding issues at the 26 July meeting. He said that one such issue was the invoicing and timing of the first payment. Another was as to the methodology to construct the tanks. He also gave evidence that there was discussion about whether the work could be finished in the projected time of 12 weeks and, if not, whether liquidated damages would be payable.

20 Mr Baker gave evidence that he wanted to understand a bit more about the formwork system that Mr Geaboc was proposing and he wanted to understand the costs to CATCON if there were variations to the contracted works. He also said that there was no agreement reached at the meeting about the timing of the first payment nor was a contract signed. According to Mr Baker, they worked through how long it would take to complete the work on the tanks and he was concerned that the proposed timeline was 10 weeks yet CATCON was to pay a price based on 12 weeks work. Mr Baker said that there was also discussion about the construction joints. Mr Baker said in evidence:

I know we discussed construction joints and, look, introduction of a construction joint with the system the way I've heard it, that would be a concern amongst many. It's not a show stopper, don't get me wrong, but it certainly would be a concern, and by not being a show stopper what I mean by that is technically you can introduce additional joints, but I know the creature that was SA Water.

21 Later on Mr Baker gave evidence that construction joints were not the 'end of the world' and were not 'a deal breaker.' The tenor of Mr Baker's evidence was that he had concerns about how the work would be done by A1 Tanks, how long it would take and the amount that CATCON had agreed to pay. Whilst the question of price was discussed, he seemed to want to think the other things through. Indeed, his evidence was to the effect that he wanted to keep most of his concerns to himself rather than confronting Mr Geaboc with them. He gave evidence as follows:

I was getting increasingly nervous throughout the meeting with just where we sat in terms of the detail, what I was going to be getting. My whole motivation was to take some relief off our project team and to try and utilise some additional resources to accelerate the job. At the end of that meeting I went out with a clear mind that we were possibly going down the wrong path of the discussions in the first place.

22 Later Mr Baker gave evidence about tension in the meeting:

Towards the end of the meeting I do remember, and I can't remember if it was the contract or what it was, but I do remember Mr Geaboc reasonably aggressively sort of saying we have a contract, and I remember sitting back and saying, I'm sorry, we don't have a contract, we just don't have a contract. And I think this came to possibly, possibly he was getting the feeling that I was going cold on the deal. Now, I didn't necessarily feel I was at liberty to put every detail that I had concerns about on the table. You know, you say ...You tell someone, look, mate, I've got concerns with your safety, you know, look at what you're presenting as your process, I can't get this over the line. Now, I don't think I have to black and white tell someone that. It's in my mind and I'm thinking we've got a problem here, it's not going to work. So at some point it was on the table, we've got a contract, and there was silence, and I do specifically remember the silence because I thought, OK, well, what's our move here?

HIS HONOUR: Just so that we're clear. We've got a contract, you thought no, we don't. When you say there was silence does that mean you made no response to that declaration, or what did you do?---I'm clear that I had said we do not have a contract.

So you replied we do not have a contract, and then there was silence, is that - - -?---There was silence and there was a little bit of tension, and in those sort of situations you think, well, OK, well, I'll be sort of hoping to come to this meeting and, you know, I was going to leave the meeting thinking great, we've found a solution and we can get on with life. But I certainly didn't leave the meeting with that feeling.

23 The trial judge concluded that there was no subcontract signed at the 26 July meeting.[4] The trial judge otherwise preferred Mr Geaboc's account of the meeting.

24 After the meeting, Mr Baker gave Mr Geaboc a lift to the airport. During the course of that journey, Mr Baker attempted to re-negotiate the agreed price from $740,000 to $680,000.

25 A few days after the meeting, CATCON informed A1 Tanks that it would not proceed with A1 Tanks for the construction of the tanks. A1 Tanks responded by email claiming a loss of about $180,000. Subsequently, on 2 August 2010, Mr Baker sent an email to A1 Tanks in the following terms:

Further to our recent meeting and telephone discussions regarding the Aldinga Clarifier tank works we formally notify you that we are unable to agree contract conditions between us and accordingly we withdraw our acceptance of your price.

Consequently we herewith end negotiations with you in regards to these works.

Thank you for your participation to date.

26 As noted above, the trial judge rejected the evidence of Mr Geaboc that a written agreement had been signed by the parties at the 26 July meeting. He concluded that Mr Geaboc's evidence on this point was inherently improbable.[5] The trial judge also rejected Mr Geaboc's evidence about whether A1 Tanks had acquired from Smithweld and paid for metal formwork that it had intended to use on the project for the tanks. The judge concluded that he must treat Mr Geaboc's evidence with some caution. In relation to Mr Baker he said:

whilst I accepted Mr Baker, generally, as a witness of truth and a good historian, his interpretation of where matters were left after the meeting of [26] July 2010, and the subsequent discussions on the way back to the airport, has a measure of implausibility and I treat that, likewise, with caution. Regrettably, therefore, the process of making findings on the key disputed issues will be a difficult one.[6]

27 His Honour accepted that one could envisage a situation where Mr Baker sat in the meeting of 26 July feeling increasingly uncomfortable about using A1 Tanks as the sub-contractor without saying much about his concerns to Mr Geaboc.[7] The judge noted Mr Baker's evidence about his concerns and that he wanted to explore things in his own mind about A1 Tanks' submission with 'the devil being in the detail.'[8] His Honour also referred to Mr Baker's evidence about the proposed $60,000 reduction in price.[9] In response to a question by the judge about whether he would have accepted A1 Tanks as subcontractor if that had been agreed, Mr Baker said:

I don't know which way it would have necessarily folded. If Mr Geaboc in that instance hypothetically had have said rightio, we'll give you a credit, I would still have some concerns, most definitely I would still have some concerns, and I don't think it would be reasonable for me to, within the moment of that meeting or certainly within the car that I've just made a decision. I think it needs a little bit more consideration. The formula that we came to of coming up with $60,000 was on the back of a shoestring, it just wasn't, it wasn't anything formal, it was just a discussion.

28 The judge noted Mr Baker's subsequent evidence that if the price had been reduced, he probably still would not have embraced A1 Tanks as the subcontractor.[10]

29 His Honour also referred to Mr Baker's evidence that he was uncertain how things were left when he dropped Mr Geaboc off at the airport after the meeting and that he could not recall a subsequent telephone conversation with Mr Geaboc.[11]

30 His Honour then considered Mr Geaboc's evidence and said:

Mr Geaboc's account of the meeting on 26 July was, in comparison to Mr Baker's, relatively straightforward. He said that matters were generally agreed, and the only uncertainty was created by Mr Baker's request or demand for a $60,000 cut in A1's price made during the trip back to the airport. This was the note on which the meeting closed when he boarded his aircraft to return to Melbourne. Mr Baker was waiting for a response to his request or demand for a cut in price. I have already explained why I cannot uncritically accept the evidence of Mr Geaboc. The findings that I have made on certain contentious matters explain why this should be. Nevertheless, as to the upshot of the meeting I find his account intelligible and plausible, in contrast to the account given by Mr Baker, which is neither.

At the beginning of his evidence Mr Baker recited his career in the construction industry. He presented himself, and I accept accurately, as a seasoned businessman and operator in the construction industry with extensive experience throughout Australia and internationally. This persona simply does not accord with the account of his performance at the meeting on 26 July. On Mr Baker's account he approached the entire exercise in an angst-ridden manner, prey to a host of concerns and worries. The meeting closed on an entirely ambiguous note, with no clarity as to what was to happen next or in whose court the ball was; that is, who had the responsibility of taking the next step. A1 had neither been confirmed as sub-contractor nor rebuffed - all this in the face of a looming deadline where it was essential that immediate and urgent action be taken.[12]

31 The judge concluded that despite his misgivings as to the reliability of Mr Geaboc's evidence generally, he preferred his account as to the upshot of the 26 July meeting to that of Mr Baker.[13]

32 The judge then turned to the issue of construction joints. He observed that the plans depicted a construction joint at the base of the wall for each tank and two construction joints in the channel running around the inside rim of the tanks near their top. The judge concluded that as a result of discussions with Mr Geaboc, Mr Tuokko must have known that A1 Tanks' methodology would have resulted in at least one intermediate construction joint. His Honour declined to place too much emphasis on whether there was agreement about construction joints because of Mr Baker's evidence that this was not a deal breaker.[14]

33 The judge dealt with other matters that may be necessary for a concluded contract to be formed in the following way:

(a) whilst desirable, a schedule of rates was not necessary;[15]

(b) industry-wide practices, industry customs or the need to give business efficacy to the sub-contract filled any deficiency that there might otherwise be about retention amounts;[16]

(c) the mere fact of there being a dispute as to the timing of the first payment did not exclude the possibility that there was a sub-contract;[17] and

(d) the mere fact that the parties envisaged that there would be a detailed contract executed in due course did not exclude the possibility that the parties immediately committed to an agreement.[18]

34 The judge then dealt with CATCON's submissions that there was no intention to commit to a contractual arrangement and that all that had been intended was that A1 Tanks proceed as to the construction of formwork and mobilisation. Given the impending start date for the construction of the tanks, his Honour concluded that it was unrealistic to think that formwork would be prepared and a crew put on-site to begin on some preliminary basis.[19] The judge rejected a submission that Mr Tuokko was in too junior a position in CATCON to be involved in the contractual arrangements.[20] Whilst the head contract provided for registration of the sub-contractors with InSkill, that was not a term of any sub-contract and, in any event, could be regarded as a detail of limited significance.[21] The judge concluded that the purpose of the 26 July meeting was to discuss payment terms and that, as there was an industry standard in this regard, the fact that the meeting was held did not preclude a conclusion that there was a final contract agreed.[22]

35 The judge found that the 12 July email was a counteroffer because it stipulated different terms in some respects to those contained in the earlier correspondence. As to acceptance, his Honour said:

A1 fell in with the proposal put by CATCON in the 12 July email. Mr Geaboc made arrangements with Mr Tuokko to attend the meeting to discuss payment terms in the evidence of Mr Tuokko. (T202, L1-2) Even in the absence of direct evidence to this effect, the occurrence of the on-site meeting on 26 July would lead one to infer that there had been a communication between Mr Geaboc and Mr Tuokko for the parties to have met on-site, as they did. In my view, the steps which Mr Geaboc took in preparing formwork, approaching Smithweld and so forth, and in arranging the meeting, constituted acceptance of the offer. The communication of acceptance was entailed in making the appointment for the on-site meeting.[23]

36 The judge held that there was an enforceable contract falling within the fourth Masters v Cameron[24] category; that is 'where the parties may intend to be bound immediately by the terms they have agreed upon whilst expecting to make a further contract in substitution for the first contract containing, by consent, additional terms.'[25]

The key features of the arrangement were to be found in the email of 12 July, including the work to be done, the price, the commencement date and so on. Mr Elliott drew attention to the contrast between three months to do the work, which was the period mentioned by A1, and the 12 weeks stipulated by CATCON. This is a distinction without a difference. Rules of Court and interpretation legislation customarily state that a month means a calendar month, but in normal speech a month can also mean four weeks. Three four-week or lunar months equals 12 weeks. In attending the meeting on-site and preparing to perform, if there were a distinction between three months and 12 weeks, A1 was accepting the counter offer of a 12 week construction period.

The need to take urgent action to meet the very tight deadlines is the actual context in which all of these events took place. That factual context leads me to the conclusion that, whilst in other circumstances the parties may have been settling in for an extended period of negotiation and discussion in the context of which they were then operating, it was necessary to make an immediate commitment, subject, of course, to the intention to embody it in a formal sub-contract document, including perhaps additional and different terms if they were negotiated.[26]

38 CATCON's grounds of appeal are that the trial judge erred:

(1) in finding that a completed contract had been formed between the parties because the 12 July email was not a counteroffer capable of acceptance as not all terms necessary for a contract had been discussed nor were they included in the email;

(2) in finding that the counteroffer was accepted by conduct and that that acceptance was communicated to CATCON; and

(3) in accepting the evidence of Mr Geaboc.[27]

Grounds 1 and 3: Intention to enter contractual relations

39 The parties accepted that the trial judge had correctly identified the relevant principles espoused in Masters v Cameron and in the subsequent cases dealing with a fourth type of situation that may arise in addition to the three Masters v Cameron categories.

40 CATCON submitted that his Honour erred in concluding that the facts in the present case constituted a fourth category binding agreement. First, CATCON contended that all that was intended was that A1 Tanks would start preparatory work and that it was not the intention of the parties (ascertained objectively) to enter into an agreement to construct the two tanks. In this regard, CATCON contended that the judge's finding that Mr Geaboc's evidence was that 'matters were generally agreed' by the time of the 26 July meeting was not an accurate conclusion to be drawn from his evidence. In our view, when regard is had to the whole of Mr Geaboc's evidence, what his Honour said is not only open, but rather is an accurate summation.

41 The 12 July email must, as the judge did, be put into the context of a start date that was fast approaching. The construction which CATCON would have the Court give to that email is simply not commercial. What could possibly be the purpose of only proceeding with formwork manufacture and mobilising workers? Those steps only make sense if the parties intended to use the formwork and the workers in fulfilment of the contract to construct the tanks. Further, the price that was agreed was a price for the complete construction of the tanks. There was no division of the price for the various components of work so that one could say that A1 Tanks would be paid a particular portion of the total price for the initial work to be undertaken.

42 CATCON also submitted that because the judge had found that Mr Geaboc's evidence should be rejected in some respects, his Honour should not have accepted his evidence about the 26 July meeting in preference to the evidence given by Mr Baker and Mr Tuokko. In particular, according to CATCON, the trial judge should not have accepted Mr Geaboc's evidence that by the 26 July meeting everything had basically been agreed. As we will discuss below, CATCON argued that the methodology to be used by A1 Tanks in the construction of the tanks had not been agreed and at the time of the meeting, CATCON did not know that there would be construction joints midway up the side of the tanks if A1 Tanks' formwork was used. CATCON remarked that Mr Geaboc's evidence about the matters that were agreed was enmeshed with his evidence (which was rejected by the judge) that a sub-contract was signed at the meeting.

43 The judge was alive to the need to be cautious when considering Mr Geaboc's evidence. That does not mean that he was bound to reject his evidence in its entirety.[28] Indeed, the judge took an orthodox approach to assessing the evidence about what occurred at the 26 July meeting. He considered what was the most plausible account. His assessment of Mr Baker and his evidence shows a careful consideration of the unlikelihood that a man with his business experience could not make an immediate decision about the suitability of A1 Tanks for the job. We do not see any error in his finding that Mr Baker's account was neither intelligible nor plausible. Although the judge did not specifically mention the evidence of Mr Tuokko (summarised at [19] above) he was nevertheless perfectly entitled to favour the evidence of Mr Geaboc, as would we having reviewed the evidence ourselves. This is not a case where the judge's finding is 'inconsistent with facts incontrovertibly established, is glaringly improbable, or is contrary to compelling inferences in the c[29]e.'29 It is simply a case where there are differing versions about what happened at a meeting and the judge has chosen what is the most probable.

44 Finally, CATCON contended that there were several outstanding issues as at 12 July and which were unresolved after the 26 July meeting:

(g) retention payments and liquidated damages; and

45 CATCON placed most emphasis on the first of these issues. Principally, the point at issue was how many construction joints there would be and where in the tanks they would be located. CATCON argued that it did not agree to the insertion of construction joints half way up the side of each tank. As we have noted, the PERI formwork allowed for the walls of the tanks to be made in one go in their entirety whereas A1 Tanks' formwork did not.

46 CATCON was critical of the trial judge's conclusion that methodology was not of sufficient significance to deny a binding contract because Mr Baker said in cross examination that this was not a deal breaker. In our view, his Honour did not misconstrue Mr Baker's evidence. Mr Baker used common colloquial language to describe a non-essential matter that did not have to be agreed before there could be a concluded binding contract.

47 CATCON submitted that the importance of the methodology such that it was a term to be agreed can be seen first, from the evidence of Mr Baker and Mr Tuokko as to how important the methodology was to CATCON and secondly, from the fact that A1 Tanks prepared a costing document that showed three separate line items for pouring concrete. CATCON also alluded to the discussion about curing the concrete and how long it was to take and the fact that CATCON was after a reduced price. However, in our view, none of this takes the matter very far. It does not mean that there is not an agreement. Rather, it is equally consistent with post-contractual negotiations directed either to varying the contract or to giving more detail to the terms of an agreement already made.

48 Here, A1 Tanks initially proposed the use of PERI formwork. CATCON then asked for a cheaper price. A1 Tanks obliged by offering to use its own formwork. CATCON made its counteroffer in the 12 July email accepting that A1 Tanks' formwork would be used. It made no mention of further terms to be agreed, nor of the need for the parties to iron out the details of the methodology to be employed before a contract could be concluded. CATCON's counteroffer (if accepted) contained all the relevant contractual terms. It was not necessary for the parties to agree where the construction joints would be in the tank walls before a binding agreement could be made.

49 CATCON submitted that another important item discussed at the meeting on 26 July was the start date. It contended that the change to the start date and other matters that had not been agreed (in its view the methodology and payment terms) are inconsistent with agreement having been reached on all the terms on 12 July and inconsistent with the judge's finding that all matters were agreed. We do not accept this submission. The change to the start date was a simple matter that could be altered with the agreement of both parties. CATCON proposed the alteration and A1 Tanks did not oppose a later commencement date. Similarly, the amount to be paid had been agreed. Essentially A1 Tanks was simply exploring the possibility of departing from the 30 day industry standard for payment. It does not mean that there was no concluded agreement.

50 In its written submissions, CATCON merely listed the other matters set out in [44](d)-(h) above as items not agreed between the parties. It did not develop its submissions beyond this and indeed made no submissions about the importance of those items (either in writing or on the hearing of the appeal). In our view, none of those matters give rise to any barrier to finding that there was a concluded agreement.

51 CATCON submitted that the trial judge erred in applying the principle that a counteroffer can be accepted by conduct that is communicated to the offeror. It contended that there was insufficient evidence to conclude that A1 Tanks accepted the counteroffer and that this was communicated to CATCON.

52 CATCON noted that the trial judge rejected Mr Geaboc's evidence that he paid Smithweld for the metal framework. The judge did not, however, reject the evidence that the metal framework had been ordered. In addition, Mr Geaboc gave evidence that he engaged labourers although he did not spend anything for mobilisation purposes. CATCON argued that A1 Tanks' preparatory actions were consistent with an agreement that it take steps to prepare to construct clarifiers should a final agreement be reached. For the reasons given above, we do not accept that the agreement between the parties was limited to preparatory work only.

53 CATCON submitted that there was a paucity of evidence that what A1 Tanks had done was brought to its attention. In particular, there was no evidence of any discussion (whether before or when the 26 July meeting was arranged) in which Mr Geaboc told Mr Tuokko what he had been doing by way of acquiring metal framework from Smithweld, nor of any arrangements he made for A1 Tanks' workers to be on-site to start work on the project. Although Mr Tuokko accepted that Mr Geaboc could possibly have told him about this, he did not remember such a conversation. He accepted that with the commencement date looming he would have assumed that everything was okay for the start of the project.

54 CATCON argued that the judge's reasons must be interpreted as the communication of the acceptance of the counteroffer being limited to the making of the appointment for the 26 July meeting and that the trial judge did not rely on what happened at the 26 July meeting as communication of acceptance. CATCON submitted that the arranging of a meeting is a neutral act consistent either with accepting the counteroffer or with meeting to continue negotiations. As such, CATCON contended that it could not be sufficient to communicate acceptance of an offer. As noted in [35] above, his Honour said:

A1 fell in with the proposal put by CATCON in the 12 July email. Mr Geaboc made arrangements with Mr Tuokko to attend the meeting to discuss payment terms in the evidence of Mr Tuokko. (T202, L1-2) Even in the absence of direct evidence to this effect, the occurrence of the on-site meeting on 26 July would lead one to infer that there had been a communication between Mr Geaboc and Mr Tuokko for the parties to have met on-site, as they did. In my view, the steps which Mr Geaboc took in preparing formwork, approaching Smithweld and so forth, and in arranging the meeting, constituted acceptance of the offer. The communication of acceptance was entailed in making the appointment for the on-site meeting.[30]

55 We do not read his Honour's reasons so narrowly as CATCON would have it. It attempts to isolate the concluding sentence from what preceded it. When the reasons are read as a whole, in our view, his Honour intended to convey that the consequence of the meeting being organised and held was that CATCON knew that its counteroffer had been accepted and that a binding contract was in place. Further, the totality of the evidence, particularly taking into account the earlier email exchanges concluding with the 12 July email, was sufficient for the judge to find that the agreement to go to the meeting was acceptance by conduct. Further, as senior counsel for CATCON accepted, the meeting of 26 July was part of the factual matrix that the judge could use to draw the inference of acceptance and its communication by A1 Tanks to CATCON.[31]

56 In our view, there was no error in his Honour's conclusion that in the circumstances of this case there was a binding agreement between the parties for the construction of the concrete tanks.

[1] The appellant, Civil & Allied Technical Construction Pty Ltd.

[3] A1 Quality Concrete Tanks Pty Ltd v Civil & Allied Technical Constructions Pty Ltd [2014] VCC 1239 ('Reasons').

[25] Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd & Ors (1986) 40 NSWLR 622, 628.

[27] Ground 4 (judgment given on a basis contrary to the manner in which the parties presented their cases) and ground 5 (concerning a pleaded defence under s 6 of the Building Work Contractors Act 1995 (SA)) were abandoned on the appeal.

[28] Horton v Byrne (1957) 30 ALJR 583, 584.

[29] TAC v Cuthbertson [2013] VSCA 29, [33]; Larner v George Weston Foods Ltd [2014] VSCA 62, [105]. See generally Fox v Percy [2003] HCA 22; (2003) 214 CLR 118.

[31] Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523; Vroon BV v Foster's Brewing Group Ltd [1994] VicRp 53; [1994] 2 VR 32.

Work Contractors Act 1995

At a glance

Court

Decision date

Before

Source

Judgment (89 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (5)