Personnel Concepts WA Pty Limited v Adam & Ors, t/as Marsdens Law Group

Supreme Court of NSW|2019-02-26|Before: Wright J

Solicitors: Somerville Legal (Plaintiffs) Marsdens Law Group (Defendants) File Number(s): 2018/290008 Decision under appeal Court or tribunal: Local Court of New South Wales Jurisdiction: Civil Date of Decision: 21 June 2018 Before: Huntsman LCM File Number(s): 2016/342065

Judgment

By an amended summons filed on 1 November 2018, the plaintiffs, Personnel Concepts WA Pty Limited (PC WA) and Personnel Concepts Group Pty Limited (PC Group), seek: an extension of time in which to file their summons commencing an appeal; leave to appeal, where necessary; an order setting aside the orders of the Local Court made on 21 June 2018; and consequential costs orders.

Background

The fundamental dispute in this matter concerned whether Marsdens entered into a contract with the plaintiffs, or one of them, to receive and pay for personnel recruitment services.
The plaintiffs contended that the contract was entered into by Marsdens as a result of an offer contained in an email dated 18 March 2016, which was accepted by conduct in the period from 18 March 2016 to late May 2016. Marsdens denied that any contract had been entered into and refused to pay the amount claimed by the plaintiffs.
On 15 November 2016, PC WA commenced proceedings in the Local Court seeking to recover $22,506 plus interest and costs. Eventually, PC Group was joined as a second plaintiff in those proceedings. The matter was heard in the Local Court on 9 and 10 May 2018.
On 21 June 2018, Huntsman LCM handed down judgment giving a verdict for the defendants and ordering the plaintiffs to pay the defendants' costs, subject to any application for a different costs order that might be made.
On 18 September 2018, her Honour made further orders that the plaintiffs pay Marsdens' costs on an ordinary basis from the commencement of the proceedings to 11 July 2017 and thereafter on an indemnity basis. These specific costs orders have not been the subject of any discrete appeal.
On 21 September 2018, the plaintiffs filed a summons commencing an appeal in this Court.

The appeal

An amended summons was filed on 1 November 2018 appealing from the whole of Huntsman LCM's decision. In the amended summons, the plaintiffs seek: 1. an extension of time for filing the summons to 21 September 2018; 2. if the question raised by the plaintiffs on appeal is a question of mixed fact and law, leave to appeal under s 40(1) of the Local Court Act 2007 (NSW); 3. orders that the appeal be allowed, the decision of the Local Court be set aside and judgment for the plaintiffs of $22,506 plus interest; 4. orders that the defendants pay the plaintiffs' costs of the proceedings in the Local Court and in this Court.
An appeal relevantly lies as of right from a judgment of the Local Court to the Supreme Court on a question of law, and by leave on a ground that involves a question of mixed law and fact: ss 39(1) and 40(1) of the Local Court Act.
The making of such appeals is governed by Pt 50 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). Rule 50.3(1) of the UCPR requires, in a case such as the present, a summons commencing an appeal to be filed within 28 days of the "material date" or within such further time as this Court may allow. Rule 50.12(1) establishes a similar requirement for applications for leave to appeal. It was not in dispute in this case that the material date was 21 June 2018 and that the summons should have been filed by 19 July 2018. In fact, it was filed some three months after the relevant material date. The solicitors for the plaintiffs acknowledge that they require an extension of time in which to file their summons.
It is appropriate to deal first with the question of whether an extension of time in which to appeal should be granted.

Extension of time

The principles to be applied when considering whether an extension of time in which to appeal should be granted, under provisions such as r 50.3(1)(c) or r 50.12(1)(c), are well established. The party seeking the extension must establish that strict compliance with the rules will work an injustice upon that party: Gallo v Dawson [1990] HCA 30; 64 ALJR 458 at 459. The relevant considerations when the institution of an appeal is concerned are: the length of the delay, the reasons for the delay, the strength of the case of the party seeking to appeal, and whether the other party or the administration of the court's business would be prejudiced by granting the application: Jackamarra v Krakouer (1998) 195 CLR 519 at [3]-[5]; [1998] HCA 27; Tomko v Palasty (No. 2) [2007] NSWCA 369 at [55]; Nanschild v Pratt [2011] NSWCA 85 at [38]-[43].
The delay was approximately 2 months after the period for filing an appeal expired.
The evidence established that the plaintiffs' then solicitor filed a notice of intention to appeal under UCPR r 51.6 on 17 July 2018. This was inappropriate as appeals to the Supreme Court from the Local Court are not assigned to the Court of Appeal and, as a result of r 56.1(1), Pt 56 of the UCPR does not apply to them. Nonetheless, it can be noted that this notice of intention to appeal was filed within 28 days of the material date in this case.
The solicitor then advised the plaintiffs that, as a consequence of his filing the notice of intention to appeal, the time in which they were allowed to appeal against the Local Court's judgment was extended to 21 September 2018. Relying on that advice, the plaintiffs took no steps to institute proceedings until 19 September 2018 when they retained their current solicitors.
The original summons commencing an appeal was filed on 21 September 2018, a delay of about two months. While this is a considerable period, it was not such as to cause practical problems for any parties.
The plaintiffs have provided a reasonable explanation for the delay. It was not something for which the plaintiffs or their current solicitors were responsible.
Having heard full argument on the appeal, I am of the view that the plaintiffs' case was arguable, even if it has proved to be unsuccessful in the event.
Finally, no significant prejudice was identified by Marsdens in the circumstances and I do not perceive that there is any prejudice to the administration of the Court's business if the extension is granted.
Given that the appeal has been fully heard and the plaintiffs have been unsuccessful, it is somewhat incongruous to consider whether they would suffer an injustice if the appeal were not allowed to proceed.
Nonetheless, because the issue remains outstanding and in order to regularise the position, I propose to grant an extension of time in which to file the summons commencing appeal to 21 September 2018.

Ground of appeal

The sole ground of appeal, identified in par 8 of the amended summons, was: "Her Honour erred in finding that there was not a legally binding agreement between the first and/or second plaintiff and the defendant in particular: a. the plaintiffs email to the defendant dated 18 March 2016 constituted an offer by the plaintiffs to provide recruitment services to the defendant; b. the defendant's conduct from 18 March 2018 [should be 2016] to late May 2016 constituted acceptance of the plaintiffs offer."
The issue then arises whether this ground involves a question of law or a question of mixed fact and law.

A question of law

During oral submissions, the question of law that is the subject matter of this appeal was effectively formulated as being: on the facts, as found by the learned Magistrate, was there a legally binding contract between PC WA and/or PC Group and Marsdens arising out of an offer, constituted by the email of 18 March 2016, which was accepted by conduct between 18 March and late May 2016?
The questions of whether statements or conduct have the quality which the law requires for the formation of a contract and whether, objectively, they could be said to be intended to be contractually binding are questions of law: Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1 at [24] and [27] (French CJ, Kiefel and Bell JJ) and at [131] (Keane J); [2016] HCA 26; Red Pepper Property Group Pty Ltd v S 3 Sth Melb Pty Ltd [2019] VSC 41 at [60].
I note that Adamson J reached a different conclusion when dealing with an earlier application in this matter: Personnel Concepts WA Pty Ltd v Adam [2018] NSWSC 1616 at [8]. It does not appear, however, that her Honour's attention was drawn to the authorities referred to in the preceding paragraph.
Accordingly, I accept that the plaintiffs are seeking to appeal on a question of law under s 39(1) of the Local Court Act and thus may do so as of right. Leave to appeal under s 40(1) of that Act is not required.
In order to understand and consider the parties' submissions it is necessary to set out the relevant facts. The learned Magistrate in the court below reviewed the evidence, resolved inconsistencies between the evidence of various witnesses and made findings of fact in her reasons for judgment (Reasons).

The relevant factual findings

In the first half of 2016; 1. Marsdens was a law firm operating in and around Sydney, while PC WA and PC Group both conducted a business in personnel recruitment. Although they were separate companies, PC WA and PC Group, at times, worked together; (Reasons [1]) 2. Mr De Bruyn was employed by PC Group and was based in Sydney. Ms McManus was employed by PC WA as a law recruiter in Perth; (Reasons [2] and [25]) 3. Mr Leith, a solicitor, was working in Western Australia but was searching for employment in Sydney, with a view to relocating there. (Reasons [3])
On or about 22 February 2016, a position as a commercial litigation solicitor at Marsdens in Sydney was advertised on the recruitment website Seek.com. The advertisement had been placed by the human resources department of Marsdens at the direction of Mr Johnson, one of the partners. (Reasons [4])
During February 2016, Mr De Bruyn had also placed advertisements for commercial litigation positions on Seek.com, under the name "Lawjobs.Go", including in Sydney. (Reasons [6] and [24])
On 23 February 2016, Mr Leith saw, on Seek.com, the Lawjobs.Go advertisement for a commercial litigation position in Sydney and contacted Mr De Bruyn. Mr Leith was told that Mr De Bruyn was a recruiter and was recruiting for a position with a law firm in Sydney. As part of the conversation, Mr De Bruyn requested a copy of Mr Leith's CV, which Mr Leith subsequently sent by email on 24 February 2016. (Reasons [6] and [24])
Mr De Bruyn said that he became aware of the commercial litigation position at Marsdens on 25 February 2016 because he saw that firm's advertisement on Seek.com. (Reasons [4] and [24])
Mr De Bruyn forwarded the information concerning Mr Leith and a link to the Marsdens advertisement to Ms McManus by email on 25 February 2016. She replied on 29 February 2016 indicating that she would call Mr Leith. (Reasons [24])
On 17 March 2016, Mr De Bruyn made an unsolicited telephone call to Mr Butterfield, who was a senior partner at Marsdens in charge of the relevant section. At this time, Mr Butterfield was on leave in the Snowy Mountains region of New South Wales on a family holiday. Mr Butterfield took the call on his mobile telephone while he was driving. The purpose of Mr De Bruyn's call was to introduce a candidate for positions advertised at Marsdens. (Reasons [5], [7] and [28])
The contents of that conversation were the subject of a dispute in the court below and the learned Magistrate decided that Mr Butterfield's version should be accepted for the reasons she gave at [59], [61], [62] and [65] of her reasons for judgment.
During that conversation on 17 March 2016, Mr De Bruyn, whose first name was Albert, said that he worked for "Personnel Concepts", and had seen a number of advertisements that Marsdens had placed, and was calling about some potential candidates. Mr Butterfield replied "Albert, I'm on leave at the moment and am driving, so I can't speak freely. We have a policy of not engaging recruiters because I've had some bad experiences in the past." Mr De Bruyn replied "Yes. Grant [Mr Butterfield], I've got two candidates for you, one for the employment role…and one for the commercial litigation role." Mr Butterfield said "if you want to send me a CV that's up to you, but to be very clear, I'm not paying you and I don't engage recruiters." Mr Butterfield cut off Mr De Bruyn's reply, saying that his partner, Mr Johnson, would look at it. Mr Butterfield restated that Marsdens would receive the CV, and that the candidates could deal with Mr De Bruyn, but that Marsdens were not engaging the recruiters. (Reasons [28], [62])
On 18 March 2016, Ms McManus had a conversation with Mr Leith about a litigation role with Marsdens. Following this conversation, Ms Mikayla Stone, of PC WA, at 2:28pm sent an email to Mr Leith confirming that Mr Leith authorised "Personnel Concepts" to assist him in finding suitable employment, and consented to have the recruiter "exclusively represent [him] and release [his] resume to the following prospective employers including: Brown Wright Stein and Marsdens." (Reasons [30])
On 18 March 2016 at 2:46pm, Mr De Bruyn sent an email to Mr Butterfield, which read as an email introducing Mr Leith, summarising his work experience, and proposing a time for further contact by concluding "Joseph [Mr Leith] is available to speak 4 or 5pm Tuesday, if that suits". "Personnel Concepts" was not mentioned at all in the text of the email. It was all about Mr Leith. The only reference to "Personnel Concepts" was at the sign off part under Mr De Bruyn's name, and also in the subject box of the email, which read "Personnel Concepts - Joseph Leith - Commercial Litigation Solicitor". The email itself made no reference to any fee structure. Nor was any reference made in the text of the email to any offer or agreement to act for Marsdens in recruiting a solicitor. Nowhere in the text of the email is any mention made of anyone other than Mr Leith, nor are the attachments to the email referred to in the text of the email. The attachments were: 1. a two page letter from "Personnel Concept.com.au" to Marsdens marked "Attention Grant Butterfield", the second page of which included the words "Attached find the Curriculum Vitae plus our companies fee structure, which contains all our terms and conditions of business"; 2. Mr Leith's CV; 3. a document headed "Fee Structure - Contingency Basis - Effective 9 April 2011". The attachments to the email were identified in the attachment section of the email as "image001.jpg; ATT00001.htm; Butterfield - Marsdens Law Group - Leith.pdf; ATT00002.htm;CV Leith Joseph.pdf; ATT00003.htm; Marsdens Law Group Fee Structure.pdf; Att00004.htm". (Reasons [8], [27], [31], [51], [52], [55] and [56])
The email of 18 March 2016 read as a recruiter introducing one of the recruiter's clients for a job, and did not read as a recruiter seeking an agreement with an employer to act for the employer to fill a position. Nowhere in the email was set out any offer by PC WA or PC Group to act for Marsdens as a recruiter, and in particular, nowhere in the email is any offer made to act as Marsdens' recruitment service for a fee. (Reasons [76] and [77])
Mr Butterfield received the email on his mobile phone, while still on holidays. At 2:48pm, that same day, he forwarded the email to Mr Johnson without having regard to, or viewing the attachments. Mr Johnson was an employed partner of Marsdens. The forwarding email indicated that Mr Butterfield agreed to Mr Johnson following up on the CV which had been sent. (Reasons [8], [26], [29] and [32])
Neither Mr Johnson nor Mr Butterfield observed the terms and conditions that were in the "Fee Structure" attachment to Mr De Bruyn's email of 18 March 2016. (Reasons [65])
On 18 March 2016, at 4:21pm, Mr Butterfield sent an email to Mr De Bruyn and Mr Johnson which said "Albert … My partner will contact you re Tele hook up", apparently in response to the invitation to speak on Tuesday set out in Mr De Bruyn's earlier email. (Reasons [32])
On 20 March 2016, Mr Johnson sent an email to Mr De Bruyn and Mr Butterfield which said "4-5pm on Tuesday is suitable Albert, can you advise the number I shall call". (Reasons [33])
On 22 March 2016, Mr De Bruyn sent an email to Mr Johnson confirming an interview would take place on 22 March 2016 with Mr Leith at 5pm. (Reasons [34])
That same day, Mr Johnson had a telephone interview with Mr Leith. Mr Johnson contacted Mr Leith directly. Towards the close of the conversation, which lasted around 40 minutes, Mr Johnson discussed with Mr Leith issues in respect of his application and advised him that he might wish to find out what fee the persons who had put his name forward to Marsdens were seeking to charge him because he might need to factor that into the salary that he wished to be paid if given the position by Marsdens. Mr Leith stated "to be honest I do not know, they told me they were acting on an exclusive basis in respect of all roles that Marsdens have and that they are on a retainer". Mr Johnson told Mr Leith "we advertised this role on Seek. I do not know who these people are, you should speak to them". Mr Johnson went on to advise Mr Leith that he would need to obtain his academic transcript and referees and Mr Leith responded he would arrange for those to be forwarded. Mr Johnson was of the view that he was dealing directly with Mr Leith in respect of his potential placement at Marsdens. (Reasons [8], [34], [38] and [65])
Almost as soon as the interview was over Mr Leith received a telephone call from Ms McManus who asked him how the interview had gone. At this time, Mr Leith said to Ms McManus that as far as he was aware he had not engaged their firm but had only provided a CV. Ms McManus said that their recruitment firm had been engaged by Marsdens and that she had written confirmation in that respect from Mr Butterfield. She said that the recruiter is always acting on behalf of the employer. Mr Leith agreed to provide his references to Ms McManus in response to a request from her to do so. Mr Leith suggested that there was a need to clarify the position with Marsdens and requested a copy of her retainer agreement with Marsdens, which she indicated she would forward. (Reasons [38] and [65])
On 23 March 2016, Mr Leith forwarded his academic transcript and a reference to Ms McManus. On or about 23 March 2016, Mr Johnson received an email from Ms McManus, which attached the reference and Mr Leith's academic transcript. The email stated "I have been working with Albert and Joseph in securing a new role for Joseph. Joseph's feedback was positive and he enjoyed the time spent talking to you. As requested please find the first reference and transcript attached." (Reasons [9], [35] and [36])
On 30 March 2016, Ms McManus sent a second reference to Mr Johnson by email. (Reasons [37])
On around 31 March 2016, Mr Johnson had a further telephone conversation with Mr Leith. In the discussion, concerns were raised about contradictions in the information in his written references that had been forwarded by Ms McManus to Mr Johnson. Mr Johnson indicated to Mr Leith that Marsdens had not engaged the recruiter. Mr Johnson confirmed that he had only asked for names so that Marsdens could directly contact the referees and was happy to take Mr Leith's word concerning the references being incorrect. Mr Johnson advised Mr Leith that they would be interested in offering him a position, subject to salary negotiations. (Reasons [9], [35] and [39])
In April 2016, a further telephone conversation took place between Mr Johnson and Mr Leith about the proposed employment at Marsdens. (Reasons [9] and [35])
Also in April 2016, Mr Leith had a conversation with Ms McManus in which he expressed concern that she had misrepresented the recruiters' position in relation to Marsdens and that Marsdens had stated that they were not engaged to act for Marsdens. He said to her that she had never provided proof of the written agreement with Marsdens, and that he was not comfortable with the recruiters continuing to possess his information, and requested that they destroy his records. (Reasons [41] and [65])
Mr Leith's salary was subsequently agreed and he commenced employment with Marsdens in late May 2016. (Reasons [9] and [35])
Neither PC WA nor PC Group brought to Marsdens' attention the terms upon which PC WA and PC Group proposed to supply recruitment services to Marsdens. (Reasons [76])
On 14 June 2016, Ms McManus sent an email to Mr Butterfield which, among other things, had attached to it a tax invoice in the name of PC WA for $22,506.00. (Reasons [46])
Mr Johnson became aware of this invoice seeking payment, said to be owing to PC WA. He had not been made aware of any terms and conditions concerning the placement of Mr Leith as a result of any correspondence from Ms McManus. Mr Johnson did not ever speak with her. (Reasons [35], [65])
On 6 June 2017, almost a year after the earlier invoice, Ms McManus sent to Mr Johnson another invoice for $22,506.00 but this time in the name of PC Group. (Reasons [46])

Parties' submissions

PC WA's and PC Group's submissions generally referred to "PC", which was a reference to both companies (see par 18 of PC's written submissions). The submissions did not seek specifically to differentiate the position of one company from the other.
Mr Hemsworth, solicitor, who appeared for PC WA and PC Group, emphasised that the approach to be adopted in discerning whether a contract has been entered into must be based on the objective theory of contract. He relied in particular upon the High Court's decision in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 (Toll v Alphapharm), particularly at [40] where it was held: "What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe."
PC's position was summarised at pars 23 and 24 of their written submissions as follows: "23. In the in the present case, then, the success of the action by PC against Marsdens rests on an affirmative answer being furnished to two simple questions: (1) Would the conduct of PC have led a reasonable person in the position of Marsdens to believe that PC had made an offer to Marsdens to recruit an employee for Marsdens for a fee stipulated in its schedule of fees? (2) Would the conduct of Marsdens, in response to the making of such an offer (if such be found to have been made) by PC, have led a reasonable person in the position of PC to believe that Marsdens had accepted that offer? 24. An affirmative answer to both questions would ensure the success this appeal; a negative answer to either one would means the appeal must fail." (emphasis in original)
Based on the sole ground of appeal, PC contended that the first of those questions should be answered 'yes', because objectively Mr De Bruyn's email to Mr Butterfield of 18 March 2016 was an offer by PC to provide recruitment services to Marsdens. As to the second, it was submitted that Marsdens' conduct from 18 March 2016 to late May 2016 objectively constituted acceptance of PC's offer.
In relation to the 18 March 2016 email, which was said to constitute an offer by PC to Marsdens, PC submitted in substance that whether Marsdens subjectively understood the contents and attachments to the email to constitute an offer, or whether the email and contents were even read at all, was irrelevant in terms of the objective theory of contract. It was contended that all that mattered was whether the conduct of PC in sending the email and attachments would have led a reasonable person in the position of Marsdens to believe that such an offer had been made. It was said in oral submissions: "The fact that Mr Butterfield was on holidays, the fact that Mr Butterfield says he didn't read it we say are irrelevant. They are subjective considerations."
In determining what a reasonable person "in the position of Marsdens" would have believed, PC contended that a reasonable person would have read not only the email but also each of the attachments. If that were done, it was submitted, it would have been clear that an offer to provide recruitment services, by way of introducing Mr Leith to Marsdens and organising contact, was being made in return for the payment of a fee in accordance with the fee structure attached to the email. PC also contended that the fact that Mr Butterfield had said in his conversation with Mr De Bruyn on 17 March 2016 that Marsdens would not pay, and did not engage, recruiters did not prevent the email of 18 March 2016 and attachments from being an offer.
As to the issue of whether, objectively viewed, that offer had been accepted, PC submitted that the following conduct of Marsdens constituted acceptance: 1. Mr Butterfield emailing Mr De Bruyn and Mr Johnson stating "My partner will contact you re Tele hook up"; 2. Mr Johnson's email to Mr De Bruyn and Mr Butterfield saying "4-5 PM on Tuesday is suitable. Albert, can you advise the number I shall call"; 3. Mr De Bruyn's email to Mr Johnson on 22 March 2016 confirming the interview with Mr Leith; 4. Mr Johnson's interview with Mr Leith on 22 March 2016; 5. Ms McManus's emails to Marsdens attaching references and an academic transcript for Mr Leith; 6. the employment contract between Marsdens and Mr Leith entered into in late May 2016.
In particular, PC drew attention to Mr De Bruyn's email of 22 March 2016 to Mr Johnson, confirming the interview between Mr Johnson and Mr Leith. It was submitted at par 44 of PC's written submissions that: "[a] reasonable person in Mr Johnson's position would, … when receiving the email of 22 March setting out the details of the interview, have taken note of the very clear, prominent and conspicuous statement insisting on the payment of a fee and requesting the prospective employer to direct all 'negotiation' directly through PC itself. The lengthy passage beneath the very large PC logo clearly contains terms and conditions. Any reasonable person would see it and recognise this. An experienced partner in a commercial firm of lawyers, with many years' experience, would know this with much more force and certainty. To argue that a reasonable person in Mr Johnson's position would not have read this or would not have understood it is untenable."
In summarising PC's submission, it was said at par 46 that: "[a]ny reasonable recruiter, faced with this series of transactions and communications, would have been led to believe that the offer made by it had been accepted by Marsdens."
As to the conversations between Mr Johnson and Mr Leith concerning who, if anyone, had retained PC to act, it was submitted that these were entirely irrelevant if not communicated to PC. It was said that Mr Leith was not acting as PC's agent and if Marsdens did have any concerns about the role played by PC, they would have known to take these up with PC itself and it was significant that this never happened.
PC sought to distinguish what were called the "ticket cases" and contended that they did not preclude a finding that there was a binding contract in the present case.
It was also submitted that if PC's characterisation of what occurred was not accepted, then the only inference was that PC was acting in a gratuitous, charitable way. They were doing all that they did for nothing. This, it was effectively submitted, would be commercially nonsensical.
Finally, PC contended that the learned Magistrate had made a number of errors in her consideration of whether, on her findings, there was a concluded contract between the parties. In this regard, it was submitted that acceptance may take place by conduct and by implication, relying on Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523.
In their submissions, Marsdens contended at par 59 that a correct application of the principle in Toll v Alphapharm did not support the proposition that "whether the statements were even read at all, is irrelevant in terms of the objective theory of contract". It was submitted that Toll v Alphapharm essentially restated the well-recognised rule that in the absence of fraud or misrepresentation or some other circumstance that would lead to the intervention of a Court of Equity, a party signing a contractual document is bound by its terms, and it was noted that here there was no signed contract.
Marsdens also drew attention to the terms that PC identified as forming part of the contract on which they relied. These terms were contained in the fee structure attachment to the email of 18 March 2016. They were set out at par 29 of PC's written submissions as follows: "a. Clause 1, the 'INTRODUCTION', states: 'Your company becomes liable for an immediate payment of a fee once a candidate, represented by PERSONNEL CONCEPT commences employment, becomes an agent or business partner within 12 (TWELVE) months of referral date…'. b. Clause 4, the 'GUARANTEE OPTION', states: 'On the day the successful candidate commences, whether on a permanent or casual basis, your company will be invoiced and the full fee is immediately DUE AND PAYABLE'; and c. Clause 5, the 'TERMS OF BUSINESS', states: 'The engagement of the PERSONNEL CONCEPT'S candidate will be deemed to be acceptance of all our terms and conditions of business stated in this document'."
In addition, Marsdens relied in particular upon Mr Butterfield's rejection of any offer by PC WA or PC Group in his conversation with Mr De Bruyn of 17 March 2016, and contended that these circumstances distinguished the present case from those where there was no rejection of an offer or where the conduct could be regarded as being only consistent with acceptance because of the manner and mode of that conduct.
It was also submitted, in par 68 of Marsdens' written submissions, that PC WA's and PC Group's appeal must fail "as there can be no acceptance if an offer is not communicated".

Consideration

The submission referred to in the preceding paragraph, if it is accepted, provides an answer to the whole appeal.
In the present case, PC WA and PC Group put their case at first instance and on appeal on the basis that: 1. there was an offer made by one or other of them to Marsdens in the email and attachments, sent by Mr De Bruyn to Mr Butterfield on 18 March 2016; and 2. this was accepted by Marsdens by their conduct following receipt of that email.
Examining whether an effective offer has been made and accepted is a useful tool in most circumstances when determining whether a contract has been entered into, and relying on such an offer and acceptance analysis can be described as "normal" and "conventional": Brambles Holdings Limited v Bathurst City Council (2001) 53 NSWLR 153 (Brambles) at [74]; [2001] NSWCA 61.
When an offer and acceptance analysis is applied in the present case, there is a complete answer to PC WA's and PC Group's submissions. Even if the email and attachments sent by Mr De Bruyn on 18 March 2016 constituted an offer to supply recruitment services on the terms specified in the fee schedule attachment, Marsdens' subsequent conduct could not amount to acceptance of the offer unless the offer was effectively communicated to the relevant persons at Marsdens so that they had knowledge of the offer.
The learned Magistrate's findings established as a fact that neither Mr Butterfield nor Mr Johnson was aware of the fee schedule attachment or any offer to supply services on the terms there set out. It was not PC WA's or PC Group's case that any other person on behalf of Marsdens had knowledge of the email and its attachments.
The contractual principle is clear that acceptance cannot occur if the offeree is in fact ignorant of the offer: Alpine Hardwood (Aust) Pty Ltd v Hardys Pty Ltd [2001] FCA 1876 at [260]. This principle was accepted by the High Court in The Crown v Clarke (1927) 40 CLR 227; [1927] HCA 47. In that case, Higgins J said, at 241: "The reasoning of Woodruff J. in Fitch v. Snedaker seems to me to be faultless; and the decision is spoken of in Anson (p. 24) as being undoubtedly correct in principle: - "The motive inducing consent may be immaterial, but the consent is vital. Without that there is no contract. How then can there be consent or assent to that of which the party has never heard?" … There cannot be assent without knowledge of the offer; and ignorance of the offer is the same thing whether it is due to never hearing of it or to forgetting it after hearing. ..." (footnote omitted)
The relevant facts as found by the court at first instance have been set out above. They were that Mr Butterfield received Mr De Bruyn's email of 18 March 2016 on his mobile phone. At this time, Mr Butterfield was on holidays. Two minutes after the email had been sent to him, Mr Butterfield forwarded the email to Mr Johnson, another partner, without having regard to, or viewing, the attachments (which included the fee structure attachment). Huntsman LCM also found that Mr Johnson did not observe the terms and conditions that were in the fee structure attachment to Mr De Bruyn's email of 18 March 2016. Nor was Mr Johnson made aware of any terms and conditions concerning the placement of Mr Leith at any time during his discussions with Mr Leith or in any correspondence with Ms McManus.
To put the matter beyond doubt, it can be noted that the learned Magistrate also expressly found as a fact (at Reasons [81]) that: "… Neither the offer to act as a recruiter for [Marsdens], nor the terms of the Fee agreement, were brought to the attention of [Marsdens]. …"
In these circumstances, whatever Marsdens did or did not do could not amount to an acceptance of PC WA's or PC Group's offer because Marsdens was ignorant of the offer.
The application of legal principle to the facts as found by the learned Magistrate leads to the conclusion that there was no contract between PC WA or PC Group and Marsdens for the supply of recruitment services to Marsdens, to be paid for in accordance with the fee schedule attachment. It follows that Marsdens was not in breach of contract by failing to pay the fee demanded in the invoices of June 2016 and June 2017.
It can be accepted, as PC WA and PC Group submitted, that the questions of whether a contract has been formed, and the construction of the terms of any contractual arrangement, are to be determined objectively: Equuscorp Pty Ltd v Glengallan Investments (2004) 218 CLR 471 at [34] (Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ); [2004] HCA 55; Toll v Alphapharm at [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).
Contrary to what was contended by PC WA and PC Group, it does not follow from this, however, that: 1. it was irrelevant that neither Mr Butterfield nor Mr Johnson read or was aware of the offer to supply recruitment services or the fee schedule attachment because these are "subjective considerations"; 2. in determining what a reasonable person "in the position of Marsdens" would have believed, it should be accepted that a reasonable person would have read not only the email of 18 March 2016 but also each of the attachments (including the fee schedule attachment).
Toll v Alphapharm concerned the situation of a contract in writing signed by the parties, unlike the present case. The ratio of Toll v Alphapharm can be seen as, in substance, an affirmation of the principle in L'Estrange v Graucob [1934] 2 KB 394 at 403 that: "[w]hen a document containing contractual terms is signed, then, in the absence of fraud, or, I will add, misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not."
Toll v Alphapharm did not establish that the actual circumstances in which an offer was made, and whether it was actually communicated, were part of the "subjective considerations". That case reiterated the objective theory of contract, which involves the proposition, among others, that "the subjective beliefs or understandings of the parties about their rights and liabilities" do not govern the contractual relations between them: Toll v Alphapharm at [40]. To this extent, it is correct that Mr Butterfield's and Mr Johnson's subjective beliefs, as to whether there was a contract between Marsdens and PC WA or PC Group, were irrelevant; just as Mr De Bruyn's and Ms McManus's subjective beliefs on that topic were also irrelevant. Hunstman LCM did not, however, rely on the subjective beliefs of the relevant actors in reaching her conclusion.
Toll v Alphapharm also did not establish that it is irrelevant whether an offer is actually communicated, as PC WA and PC Group appeared to submit. The expression "a reasonable person in the position of the other party" in Toll v Alphapharm at [40] refers to a person in the actual position of the party, and includes, for example in a case where there was no signed contract, whether the party (or its representative) actually read a document, or was aware of the contents of an attachment to an email. It is "the subjective beliefs or understandings of the parties about their rights and liabilities" that are irrelevant.
There was no error of law, in this regard, on the part of the Magistrate when she reached the conclusion that there was no contract between the parties and, thus, there was no breach of contract by Marsdens in refusing to pay the invoices purportedly issued under that contract.
Thus, the ground of appeal has not been made out.
In the present case, there are additional reasons for rejecting PC WA's and PC Group's appeal, even if Mr Butterfield or Mr Johnson had been aware of the contents of the fee schedule attachment to the email of 18 March 2016. They turn on the fact that Mr De Bruyn was put on notice by Mr Butterfield that Marsdens did not wish to engage any recruiter to act on their behalf, for the reasons Mr Butterfield gave during his conversation with Mr De Bruyn. Having made that position clear, Mr Butterfield went on to say that Mr De Bruyn could send a CV of a candidate, if he wished, but Marsdens was not requesting him to do so. These were objective circumstances relevant to determining, in the absence of a signed agreement, whether any binding contract was arrived at.
Having been so warned, a reasonable person in Mr De Bruyn's position would not have believed that equivocal conduct by Marsdens, such as arranging a telephone interview through Mr De Bruyn, receiving Mr Leith's academic transcript and references from Ms McManus, or independently negotiating and reaching an arrangement with Mr Leith, amounted to an acceptance of the terms and conditions attached to the email of 18 March 2016. A reasonable person in Mr De Bruyn's position would not have believed that such conduct amounted to an acceptance of the offer to contract, on the terms set out in the fee structure attachment, without confirmation that Marsdens also: knew of the terms of the fee structure attachment; had changed their position and intended to contract with PC WA or PC Group for the supply of recruitment services despite what Mr Butterfield had said; and was proceeding in accordance with the terms of the fee structure attachment. No one on behalf of PC WA or PC Group sought such confirmation nor was it ever obtained.
The findings of the learned Magistrate provide more than adequate factual support for these considerations and these conclusions.
I also reject the submission that if PC's characterisation of what occurred was not accepted, then the only inference was that PC was acting in a gratuitous, charitable way and they were doing all that they did for nothing, which would be commercially nonsensical. Viewing the circumstances objectively, a reasonable person could have concluded in the circumstances that: 1. PC WA and/or PC Group were acting on Mr Leith's behalf in putting his name forward to Marsdens and that he was responsible for paying them; or 2. PC WA and/or PC Group were providing their services gratuitously on this occasion, with a view to obtaining paid work from Marsdens for recruitment purposes in the future; or 3. PC WA and/or PC Group were taking a calculated risk that, despite what had been said by Mr Butterfield, if Marsdens employed Mr Leith as a result of their providing a CV and references and arranging a telephone interview, they might be able to recover a fee in accordance with their terms and conditions or on some other basis.
Accordingly, it cannot be said that the only conclusion open to reasonable persons in the position of the parties was that Marsdens had engaged PC WA and PC Group to supply recruiting services on the terms and conditions set out in the fee structure attachment to the email of 18 March 2016.
For all of these reasons, I am of the view that the appeal must fail and the summons should be dismissed.

Orders

The orders of the Court are: 1. The time for filing the summons commencing an appeal in this matter is extended to 21 September 2018. 2. The plaintiffs' amended summons commencing an appeal filed on 1 November 2018 is dismissed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 March 2019

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