I do not regard the imminent trial as determinative of the purpose of the plaintiffs' offer conveyed to the defendants. The imminent trial was a contextual factor that would, in the absence of some accommodation between the parties, and from the court, tend to require expedition if an agreement was to be executed within a few days. The defendants were no doubt anxious to avoid the cost and inconvenience of preparation for a trial that could be avoided. Their subjective concerns and aspirations do not, of course, inform the question whether a concluded agreement existed by reason of Mr Roberts' responding email to terminate the litigation forthwith.
The email exchange between the parties was not merely bringing a proceeding to an end. It was not as if the email exchange was terminating a claim, as between ordinary litigants, for a debt or for damages. The liquidators are not in the same position as private litigants, who might agree to sell or transfer an asset as part of a settlement. Liquidators are officers of the court, and subject to statutory duties. The orders sought by them in the course of the liquidation of Legend, were sought in a proceeding brought on behalf of creditors. Any agreement for the sale of shares, and a sale process, would require the approval of the committee of creditors or the court. It is not to the point to contend that such approval may be granted nunc pro tunc. What is important is that the defendants would reasonably have understood, and anticipated such a requirement, having regard to the role of the liquidators and the nature of the proceeding.
Furthermore, the plaintiffs' offer was in the nature of a counter offer, responding to an offer which included an express stipulation for a deed of settlement and releases. It would go without saying that directors (and the defendants) would have expected, and I conclude did expect, a deed of settlement to include formal releases. The defendants would not reasonably have interpreted the plaintiffs' offer to involve termination of the proceedings before formal releases were exchanged.
The plaintiffs' proposal for a sale of Legend's shares in Paradise 'in an open market process' would necessarily involve a sale regime to ensure that the liquidators were, and were seen to be, properly discharging statutory duties. The terms upon which Queensland Phosphate would forego any rights it had under the transaction documents, and receive some priority, would require further elaboration to ensure that the objective set out in the letter of 19 April 2017 was achieved. The same may be said of the requirements that the Feldmans and Queensland Phosphate not challenge intercompany loan positions. The undertakings that had been given would require adjustment, depending upon the performance of other obligations, the timing of any sale and such matters. In my view, a reasonable person in the position of the defendants would have understood that the offer contained in the letter was framed in broad principle, absent the necessary detail both parties would reasonably expect in the context of the proceeding brought by liquidators.
I have no doubt that the defendants, through their solicitor, understood that the liquidators were not proposing, upon acceptance of their offer, to abandon their proceeding without an executed deed of settlement. Thus, I would construe the words of Mr Roberts, in his email of 25 April 2017, when he accepted the offer, to acknowledge that more detailed terms were necessary before a final settlement was achieved. He concluded with the words 'we will correspond with your firm tomorrow in respect of the agreed terms'. He knew, at that time, that further negotiation was necessary.
The question whether, or at what point, a contract is complete does not depend upon what the parties themselves may think. Having regard to the text of the email exchange between the parties, the context in which that exchange took place, and the purpose of the proposed settlement (which was to resolve a wide range of issues involving the discharge by the liquidators of their statutory duties, with corresponding and profound consequence for the defendants and their directors) I am persuaded that the parties did not intend that, as a consequence of the mere exchange of emails, the proceedings were to be immediately terminated in the absence of a formal deed of settlement executed by all parties.[6]