The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signalling to the offeror that his offer has been accepted." (emphasis added)
119 In each case "the inference from silence, if any, must depend on the facts of the case and on common sense": Barrier Wharfs (at 661-662) per Higgins J.
120 In Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 (at 326) Mahoney JA identified three questions to consider in determining whether parties have made a binding contract: "…did the parties arrive at a consensus?; (if they did) was it such a consensus as was capable of forming a binding contract?; and (if it was) did the parties intend that the consensus at which they arrived should constitute a binding contract?"
121 I turn to the first of the questions identified by Mahoney JA: Did the parties arrive at a consensus? Having regard to the evolution of attitudes to traditional offer and acceptance analysis reflected in the above authorities, the first question Mahoney JA posed can be re-framed in accordance with Heydon JA's model in Brambles (at [81]):
"… [I]n all the circumstances can an agreement be inferred? Has mutual assent been manifested? What would a reasonable person in the position of the [appellant] and a reasonable person in the position of the [respondent] think as to whether there was a concluded bargain?"
122 The starting point for consideration of this question is the relationship between the parties which pre-dated the exchange of the alleged contractual correspondence. From 19 July 2000 they were parties to the Rehab Shareholders' Deed. Secondly, on and from 29 October 2001 they were defendants in the Supreme Court proceedings, a "relationship" of sorts. The question whether they agreed by the exchange of correspondence to enter into a legally binding agreement which would amount to an arrangement between them as to the manner in which the rights conferred by the Rehab Shareholders' Deed would be exercised and the Supreme Court proceedings would be conducted has to be considered against this background.
123 It is necessary first to make some reference to the restrictions on share transfers in the Rehab Shareholder's Deed bearing in mind the intimation in Mr Roth's initial communications (12 March conversation, 21 March 2002 letter, 9 April 2002 conversation) that the appellant needed EML's co-operation and/or consent to acquire the Kitas shares.
124 The appellant and Mr Kitas held "A", "B" and "D" Class Shares, while EML held "C" and "D" Class Shares. Insofar as the "A" and "B" Class Shares were concerned, pursuant to cl 4.1 Mr Kitas could only sell etc those shares to a person acting as his nominee and over whom he continued to exercise effective control, a person who it appears to have been contemplated would be, or would become, a party to the Deed. Insofar as the "D" Class Shares were concerned, pursuant to cl 4.2 Mr Kitas could only sell etc those shares to the appellant.
125 It was the "A" and "B" Class Shares which carried, in substance, the rights of management on the Board (Class "A") and exclusive use to the Property, excluding the gymnasium area (Class "B").
126 Rehab's constitution was not in evidence, however it might be assumed that it contained a provision entitling the directors to refuse to register a transfer of shares which breached the Rehab Shareholder's Deed. It might also be inferred that the directors could register such a transfer notwithstanding the Deed, if all parties to the Deed agreed and, in any event, if it was in the best interests of Rehab.
127 EML, Mr Kitas and the appellant were the only directors of Rehab. Thus it appears that if the appellant wished to acquire Mr Kitas' "A" and "B" Class Shares, independently of Mr Kitas' control (a desire which might readily be inferred), he needed EML's consent to the waiver of the cl 4.1 inhibition on his acquisition of Mr Kitas' "A" and "B" Class Shares.
128 The disposition of the Supreme Court proceedings also had the potential to affect the parties' interests in the Rehab shares. The primary relief sought in those proceedings was the appointment of a Receiver and Manager of the Property, alternatively the appointment of a provisional liquidator. The proceedings were brought pursuant to s 232 of the Corporations Law. In addition to the orders Mr Kitas sought, the Court also had a discretion, if satisfied one of the grounds in s 232 was established, to make an order for the purchase of any shares by any member: s 233(1)(d) Corporations Law. In deciding whether to make such an order, the Court would no doubt take into consideration the restrictions on the transfer of shares in the Rehab Shareholder's Deed, although such a restriction could not bind the exercise of the discretionary power. The presence of such a restrictive provision could be relevant to the valuation of the shares for the purpose of determining the price to be paid for the court-ordered transfer: see Rambaldi; in the matter of Philip Charles Weeden, a bankrupt v Weeden [2008] FCA 1597 (at [39] - [46]) per Heerey J.
129 Thus it is apparent that although the restrictions on the transfer of the "A" and "B" Class Shares may have restricted the appellant from acquiring the shares in a private transaction without EML's concurrence, those restrictions would not be an insuperable obstacle in the Supreme Court proceedings. Moreover, as Master Macready (as he then was) observed in a costs judgment in those proceedings the share buyout agreed in the Short Minutes of Order were "not unusual" in such proceedings, indeed was "a result which often occurs when there has been a falling out": Kitas v Eisman & Anor, Supreme Court of New South Wales, Master Macready, 27 February 2004, unreported,
130 Ironically, it is apparent from Mr James' conversation with Mr Roth on 22 March 2002 that EML believed the appellant had pre-emptive rights to acquire the Kitas shares. It is an available inference in that light that once the appellant expressed a desire to purchase the Kitas shares as part of the resolution of the Supreme Court proceedings, EML injected into the negotiations allegations that the appellant was implicated in the complaints they proposed to raise against Mr Kitas in defending the proceedings - presumably intending those allegations to be perceived as a potential impediment to the appellant purchasing the shares whether by way of settlement or obtaining a favourable s 233(1)(d) order - an impediment he would need to overcome by "buying" their co-operation.
131 Returning to the factual history, the appellant was initially disinterested in defending the Supreme Court proceedings. He so informed Mr James in January 2002 and that attitude persisted until early March 2002. EML, on the other hand, actively defended the Supreme Court proceedings, including preventing Rehab being liquidated in November 2001.
132 The appellant's disinterest extended to his shareholding in Rehab. As late as 28 February 2002 his position was that he would essentially remain on the sidelines and would not intervene if EML wished to purchase the Kitas shares (28 February 2002, James' file note).
133 For reasons not disclosed by the evidence, that position changed within a week. By 5 March 2002 the appellant wanted to hold either 50 per cent of the Rehab shares or none at all. However, at that stage, EML also wanted to buy both the Kitas shares as well as the appellant's (5 March 2002, James' file note).
134 By the time Mr Roth commenced to act as the appellant's solicitor, and by 12 March 2002, the appellant's position had firmed to one where he was prepared to choose between two courses of action: supporting the Kitas claim and the order to wind up Rehab or securing EML's cooperation not to oppose his purchase of the Kitas shares (James' affidavit, 30 November 2007, par 28).
135 According to Mr James his 12 March 2002 conversation with Mr Roth was the first intimation by the appellant that he would choose as to whether he would sell his Rehab shares or acquire the Kitas shares. Mr James' response was to recite what he asserted had transpired at the 5 March 2002 meeting, about which Mr Roth appeared to be ignorant. It was in response to his inquiry as to why EML would not "just allow my client to buy Kitas' shares?", that Mr James first indicated to Mr Roth that the appellant would have to give "some consideration" to EML in response to which Mr Roth invited him to put his clients' "proposal" (James' affidavit, 30 November 2007, par 28).
136 Mr James did not immediately put any proposal in writing to Mr Roth. On 22 March 2002 at a meeting with, inter alia, the appellant and Mr Roth, Mr James made the point to the latter at least, that EML should be compensated for giving up the opportunity to proceed against the Kitas/Kriketos interests and "for assisting your client to acquire the shares at a price that is likely to be very attractive". He said he would seek instructions and give consideration as to how EML could be compensated.
137 This did not apparently sway Mr Roth who, on 9 April 2002, again informed Mr James that the appellant could go "either way with this" and asked for information as to EML's proposal as his client had to "make a decision quickly" (James' affidavit, 30 November 2007, par 33). The need for speed no doubt arose from the guillotine order to which the appellant was subject in relation to filing any affidavit evidence in the Supreme Court proceedings.
138 A proposal from Mr James only emerged after Mr Roth's 16 April 2002 communication that unless there was a "written agreement" between the appellant and EML by noon on 18 April, the appellant would not oppose the orders Mr Kitas sought in the Supreme Court proceedings.
139 Mr James' first draft (18 April 2002) was met immediately by a clear rejection on Mr Roth's part and an assertion that Mr James' letter was not in the form the appellant could rely upon as "an enforceable agreement".
140 The next letter, the first of the three alleged contractual letters, did not differ substantially in form from the 18 April 2002 draft. It omitted the offending proposal that EML and the appellant be joint shareholders in Rehab but, otherwise, it essentially restructured the draft letter. Mr James described its contents in the first and last paragraph as a "proposal". The letter was vague on critical issues. Thus, in paragraph 1(b), it was proposed that an agreed value for the Kitas shares "is to be reached". That value was to be reached "based on the shares being valued without discount and without reference to the issues in dispute". The "issues in dispute" were not identified.
141 The "agreed value" was to be paid by the appellant in exchange for mutual releases of obligations under "cl 3.8" of the Rehab Shareholders' Deed. I have already pointed out that this appears to have been an erroneous reference, presumably intended to refer to "cl 3.7". Clause 3.7 bound Mr Kitas as well as the appellant and EML. The letter did not explain how a release might be obtained from Mr Kitas, but presumably it was contemplated that by the time mutual releases were to be exchanged, the appellant would have acquired Mr Kitas' interest in Rehab and, as the 6 May letter proposed, accepted Mr Kitas' liability under the joint Kriketos-Kitas loan referred to therein.
142 Mr Roth's response pursued paragraph 1(b). He asked for a "$ figure". He made no comment, one way or the other, about the balance of the 19 April 2002 letter, however it might be inferred from his letter of 2 May 2002 (following his conversation with Mr James) seeking confirmation that "$1.5m" was the "maximum liability" the appellant would bear if he acquired the Kitas shares, that Mr Roth did not object to those terms as forming part of some ultimate agreement.
143 The "$ figure" was finally given in Mr James' 6 May 2002 letter. However, that letter did not, as Mr Roth asked in his 2 May letter, confirm the telephone conversation of 1 May 2002. Rather, it stated that the acquisition costs for the Kitas shares "is to be agreed to be $1,500,000.00". It also introduced the new subject of the appellant "accepting the total liability of the joint loan of $1,500,000.00 of the KK Shareholders". A calculation was then set out which used as its starting point the proposed "agreed value" of $1.5 million, but deducted from it 50 per cent of the KK joint loan.
144 Mr Roth never responded to that letter.
145 As I understand the primary judge's reasons, his Honour concluded consensus had been reached through the exchange of the three letters essentially for the following reasons. First, it is apparent that his Honour construed the letters in the light of his finding (at [43]) that once the appellant decided he wanted to acquire the Kitas shares, he realised he had to reach an accommodation with EML. Next, in his Honour's view (at [47]), the reference in Mr Roth's 18 April 2002 facsimile to "the agreement" meant a "provisional agreement" had been reached prior to the 19 April 2002 letter. He appears then, to have concluded that the "better proposal" in the 19 April 2002 letter recorded the provisional agreement, subject to a "monetary evaluation of the undiscounted value of the [Kitas] shares" being provided. In his view, that figure was provided by the 6 May 2002 letter, leading (at [51]) to "consensus ad idem".
146 I cannot, with respect, agree with the primary judge's conclusion that, in all the circumstances, that a reasonable person in the parties' position would have thought consensus had been reached once the 6 May 2002 letter was sent.
147 It is relevant to take into consideration that the three letters were written by solicitors. They were not written in terms indicating the correspondence itself would constitute agreement. Mr Roth had early indicated he wanted a "written agreement", presumably meaning a final document which recorded with precision any agreement reached. Secondly, Mr James' first letter described its contents as a proposal. It was not a clear indication of willingness to be bound on certain terms. Furthermore it omitted what a reasonable person would consider a critical issue, the price the appellant was to pay for the Kitas shares.
148 The respondent submitted that the primary judge's conclusion that Mr Roth's 2 May 2002 facsimile was provisional acceptance of the EML proposal, subject to written confirmation - a confirmation, which he argued, was given in the 6 May 2002 letter - of the price for the Kitas shares was correct. In my view the 2 May 2002 facsimile does not bear the construction for which the respondent contends. It was another request from Mr Roth for the detail of the EML proposal to be recorded in writing so that the appellant could consider it as a whole. It did not communicate even qualified assent to the EML proposal.
149 The 6 May 2002 letter was the first written manifestation of the "$ value" EML proposed for the Kitas shares. It was a substantial expansion of paragraph 1(b) of the 19 April 2002 "proposal" but it was nevertheless, in my view, still part of the proposal, rather than the final term in a provisional agreement left only awaiting a "price". Furthermore it introduced, as I have said, the new subject of treatment of the KK Joint Loan.
150 The respondent argued, somewhat faintly, that the reference to the KK loan in the 6 May 2002 letter was not really a new topic. He submitted that accepting, as Mr James said, that the proposed value of the Kitas shares 25 per cent of $1.5 million was based on a valuation of the building, it was to be expected that to reach an agreed value (equity) of those shares acceptable to the appellant, Mr Kitas' liability for the KK loan had to be deducted from the $1.5 million. I cannot accept that submission. There was apparently a valuation of the building of $6 million, but there were also lower valuations. There was no evidence that any of the valuations came to either the appellant's or Mr Roth's attention. On this basis Mr James's proposal that the Kitas shares were worth 25 per cent of $1.5 million was, in itself, new information. There was no mention prior to the 6 May letter of the Kitas share of the KK loan being brought to bear in the proposed value of the Kitas shares. Although its inclusion reduced the bottom line from the parties' point of view, it was nevertheless a new topic, whether or not EML perceived it as a logical step in the process of agreeing a value for the Kitas shares.
151 In my view the appellant's submission that, in the circumstances, the 6 May 2002 letter was a new offer should be accepted. Mr Roth never responded to it and, in my view, a reasonable person in the parties' positions would regard his silence in that respect as consistent with the appellant rejecting the EML proposal once it was laid out in its entirety: Empirnall (at 534). Read as a whole, and taking the circumstances into account, the correspondence did not manifest the mutual assent necessary to establish the parties had reached a consensus.
152 The primary judge also appears to have inferred (at [52]) that the appellant had reached agreement with EML because by doing so he obtained their agreement not to raise what he described as "the four outstanding issues". This appears to have been a reference to paragraph 8(b) of the particulars his Honour permitted the respondent to add to his pleading of performance of the agreement over objection and during closing submissions. I assume he regarded that as a relevant surrounding circumstance. However, with respect, none of those matters was expressly referred to in any of the three letters, save possibly to the extent that para 1(b) referred to the value of the Kitas shares being determined "without reference to the issues in dispute". More significantly, it was never part of the respondent's pleaded case, or even that as varied in argument or by amendment, that it was a term of the EML proposal that EML would not pursue those issues in the Supreme Court proceedings. While EML "agreed" in the 6 May 2002 letter to "negotiate the shares down", their proposal left silent the manner in which they would do so.
153 The primary judge also concluded (at [52]) that if EML had raised those issues "the likely result would have been a liquidation of … Rehab". It is not clear whether he attributed that perception to the reasonable observer seeking to determine whether consensus had been reached. However, on the assumption that he did so that conclusion was, in my view, inconsistent with the overwhelming evidence that EML would have done nothing which risked Rehab being wound-up. The respondent gave evidence that it was always his intention to defend the Supreme Court proceedings because he had "so much to lose if a liquidator was appointed to Rehab". It might be inferred that Mr Eisman and Mr Matthews were also of that view having regard to the strenuous efforts they had made in late 2001 to oppose the company being wound up and other matters referred to in Mr James' communications to Mr Roth in March 2002.
154 The primary judge also appears to have been influenced in reaching his conclusion by his interpretation of Mr Roth's reference, in his 18 April 2002 letter, to "the agreement" as "referring to some agreement in principle which was yet to be adequately expressed in writing". Unlike the primary judge, I draw no inference from Mr Roth's use of that word. Although written by a lawyer, in my view, objectively considered, that expression was not used to indicate a "provisional agreement" had been reached but, rather, in a popular sense to refer to a general understanding (i.e. the previous discussions) as to how the matter might proceed: cf Barrier Wharfs (at 657). That indeed is how his Honour appeared to regard that reference in the earlier part of his judgment when he accepted (at [22]) that nothing in Mr Roth's 18 April 2002 letter communicated acceptance of Mr James' first draft.
155 At the time Mr Roth wrote the 18 April 2002 letter, he had just seen, for the first time, EML's proposal in writing. He rejected it as "totally inconsistent with our discussions to date". His 9 April 2002 letter sought the EML proposal so the appellant could make a decision. It is not, in my view, a reasonable interpretation of the 18 April 2002 reference to "the agreement", to conclude that there was an agreement in principle which merely had to be recorded in writing. Rather the 9 April 2002 letter made it clear that the appellant had not made any decision, and would not before seeing the EML proposal in writing.
156 In my view the primary judge erred in concluding that the respondent's pleaded case of an agreement constituted by the three letters had been established.
157 The second basis on which the primary judge concluded that consensus had been reached by the exchange of the three letters lay in his analysis of the parties' conduct after 6 May 2002, including the appellant filing an affidavit in the Supreme Court proceedings, which conduct he concluded was consistent, and "not inconsistent", with the agreement the respondent propounded. His Honour also found he could more readily draw inferences from the subsequent conduct and the lack of response to the 6 May 2002 letter because neither the appellant nor Mr Roth gave evidence.
158 In my view, the appellant and Mr Roth's silence was, with respect, irrelevant. His Honour identified (at [50]) the principle he relied upon as being that "a failure of a relevant party to give evidence makes it much easier for a court finding facts to draw a conclusion more easily when the contrary conclusion could have been the subject of evidence by the adverse party". He referred to Insurance Commissioner v Joyce, an action for damages for personal injuries sustained by a passenger in a motor vehicle accident. It appeared the accident was due to the driver's intoxication, but neither the passenger nor the driver gave evidence. The passenger's appreciation of the extent to which the driver was intoxicated was relevant to the issue of contributory negligence which, in 1948, constituted a complete defence. In agreeing with Latham CJ that the passenger had not established his claim, Rich J said (at 49): "[W]hen circumstances are proved indicating a conclusion and the only party who can give direct evidence of the matter prefers the well of the Court to the witness box a Court is entitled to be bold."
159 Rich J's statement had no relevance to the present case. Evidence as to why neither Mr Roth nor the appellant responded to the 6 May 2002 letter and why the appellant filed an affidavit opposing the winding-up order may have disclosed their respective subjective beliefs but, as I have already pointed out, such subjective beliefs are irrelevant in the objective exercise of determining whether a consensus had been reached.
160 Turning to the subsequent conduct, the first point to make is that neither its consistency or lack of inconsistency with the pleaded agreement was sufficient to support a finding that consensus had been reached on or about 6 May 2002. The test his Honour ought to have applied was whether the parties' conduct after 6 May 2002 "necessarily" led to the inference that consensus had been reached, or that that conduct was referable only to the agreement the respondent propounded: see the authorities collected above (at [117]).
161 In my view the conduct of the parties after the 6 May 2002 letter did not support the conclusion that there had been mutual assent to the EML proposal.
162 I do not accept that a reasonable observer would conclude, as did the primary judge, that Mr Roth's failure to respond to the 6 May letter indicated that "some accommodation" had been reached. Rather, as I have said, Mr Roth's silence was consistent with rejection.
163 Next, the fact that the appellant filed an affidavit opposing the relief Mr Kitas sought in the Supreme Court proceedings and propounding his desire to purchase the Kitas shares was, in my view, equivocal on the question whether a concluded agreement had been reached.
164 The appellant was a party to the Supreme Court proceedings and despite his apparent early disinterest as to their outcome had, by 21 March 2002, appeared reasonably determined to acquire the Kitas shares, presumably by persuading the Court to make a s 233(1)(d) order. I say "reasonably" because on 9 April 2002, Mr Roth re-iterated that the appellant could still "go either way".
165 Filing the affidavit was a course the appellant could take independently of reaching any consensus with EML as to the price he might pay to acquire the Kitas shares. The appellant's desire to purchase the Kitas shares was inconsistent with supporting the winding up of Rehab. Filing the affidavit was, accordingly, not conduct which pointed unequivocally to a consensus having been reached on the EML proposal, in circumstances where he could reasonably have formed the view, presumably on legal advice, that whether by strategic negotiation, or cost order, he could achieve his goal without paying a large amount of money to EML on top of whatever he had to pay Mr Kitas to acquire his shares.
166 The primary judge also appears to have regarded the Short Minutes of Order as consistent with the agreement EML propounded. The Short Minutes, however, did no more than reflect the appellant's and EML's desires respectively to acquire the Kitas shares and, I infer, keep Rehab from going into liquidation. While the appellant, in substance, obtained the first option to purchase the Kitas shares for the value disclosed in the Referee's Report, if he did not do so, EML obtained the second option to do so.
167 The Short Minutes of Order also worked a suspension on any provision in the Rehab Shareholders' Deed or the Variation Deed which might impede either the appellant or EML's acquisition of the Kitas shares. That suspension is, again, in my view, neutral on the question of whether or not a concluded agreement was reached on 6 May 2002. It worked in favour of whichever of the appellant and/or EML ultimately acquired the Kitas shares. As is apparent from the earlier discussion, any restrictions on the appellant acquiring Mr Kitas' "A" and "B" Class Shares would also have inhibited EML's acquisition of them. There was no restriction on the appellant acquiring Mr Kitas' "D" Class Shares, but an absolute prohibition on EML doing so.
168 By way of elaboration of the previous paragraph, it is noteworthy that the primary judge asked, rhetorically (at [50]), if there had not been an accommodation between the appellant and EML of the sort Mr Roth had sought on 16 April 2002, how the appellant "would take up the shareholding of Kitas in Rehab if he was not ad idem with his other shareholders and other directors."
169 The answer to that question did not lie only in the conclusion that consensus had to be reached on the EML proposal in order for the appellant to acquire the Kitas shares. In the ebb and flow of litigation the parties' fortunes may change depending on a complex interplay of factors. The appellant knew that EML wanted to avoid Rehab being wound-up. To avoid that outcome someone had to take over the Kitas shares. The share transfer restrictions which inhibited the appellant's acquisition of Rehab shares operated even more unfavourably vis-à-vis EML - there was an express prohibition on them acquiring the "D" Cass Shares. If the matter had been pushed to a court determination, in my view, the appellant might reasonably have expected that he had a greater chance of securing a favourable s 233(1)(d) order in respect of the Kitas shares than EML. Indeed in the affidavit he filed he contended for that outcome so the status quo could be maintained in relation to the KK interest in Rehab.
170 Further, EML had sought the appellant's co-operation in the Supreme Court proceedings in January 2002 when Mr James took his draft statement. As a matter of commonsense it might be expected that EML saw that their defence of the Supreme Court proceedings would be strengthened if Mr Kitas' application was resisted by all other shareholders, especially one who had originally been a Kitas "ally".
171 It should also be recalled, as the appellant submitted, that the disputes which EML appeared to perceive may have an effect on decreasing the value of the Kitas shares were not straightforward. Some were directed at Mr Christopher Kitas and others at Mr Scott Kitas personally. Whether all or some of the matters EML sought to advance to diminish the value of the Kitas shares would, or could, have had that effect was a matter on which minds might differ.
172 Further, the appellant may well have been confident that he could resist any suggestion he was implicated in any alleged wrongdoing by Mr Kitas.
173 The primary judge (at [52]) also found support for his conclusion that an agreement had been concluded because by entering into such an agreement the appellant obtained the benefit of EML's endeavours to devalue the Kitas shares. This passage of his Honour's judgment is not easy to interpret because his Honour appeared to be saying that that diminution in value was achieved by EML not pursuing the outstanding issues referred too in the amended particulars. However setting that curiosity to one side, the finding that by virtue of the agreement the appellant obtained the benefit of EML's endeavours to devalue the Kitas shares does not withstand close scrutiny. The EML proposal contemplated that while the appellant would pay Mr Kitas any discounted value of his shares, he would pay the balance (subject to 50 per cent of the KK Loan), to EML. In other words the appellant would pay full value for the Kitas shares. He got no benefit from any diminution in the share value EML achieved. Under the EML proposal it was EML who obtained that benefit. In my view it was an available, and preferable, inference that the appellant would not have perceived any economic incentive for him in the EML proposal. The original lure for him to enter an agreement referred to by Mr James on 22 March 2002 that EML would "assist[] your client to acquire the shares at a price that is likely to be very attractive" was not borne out by the proposal which emerged in the correspondence.
174 Finally, so far as the evidence disclosed no release was ever sought or provided by any of EM or L or the appellant, nor was a new shareholders' agreement executed: cf par 3, 19 April 2002 letter.
175 The primary judge erred in finding that the subsequent conduct was evidence that a consensus had been reached on or about 6 May 2002.
176 Although not the subject of a ground of appeal I will deal briefly with the parties issue. In my view it was not open to the appellant to complain that any rights under the asserted contract were enjoyed jointly and not severally. Had such a point been taken in the defence or at trial, Mr Eisman and Mr Matthews could have been joined as plaintiffs and, failing their agreement to that course, as defendants. Alternatively, the respondent could have sought an order dispensing with any obligation to join them: UCPR r 6.20. The appellant's obligation to plead any matter which might take the respondent by surprise was no less than the respondent's. If he had sought leave to amend the notice of appeal to add such a ground I would not have granted it: Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1.