MEMORANDUM OF ARGUMENTS FOR THE RESPONDENT

ORDERS SOUGHT BY RESPONDENT

ISSUE 1

1. The contract was intended to be wholly in writing, thus the parol evidence rule applies to negate any conversation that took place between the parties. Accordingly, the signature rule applies, and in the absence of an exclusive tenancy clause, there has been no breach by the Respondent.

2. Alternatively, an exclusive tenancy clause does not exist as Bolt’s statement cannot be construed as a contractual term but rather a representation.

ISSUE 2

1. A collateral contract does not arise as there was no promissory statement between Bolts and Piper's alleged agreement. The oral and written statements made were merely representational and did not show contractual intention.

2. The alleged collateral contract does not meet the element of certainty and completeness. The alleged agreement was too vague and uncertain to amount to a collateral contract.

3. The alleged collateral contract is incompatible with the rules of construction. The exclusive clause does not uphold the presumptions of contracting.

SUMMARY OF FACTS

A. In 2020, Piper agreed to lease a retail premises in Hammertown Mall from Mall Busters Ltd (‘Respondent’) for his hardware business. The lease was for five years with an option to renew. Terms relating to rent, rent review, and daily trading hours were negotiated and intended to be formalised in a written lease.

B. Before signing, Piper reviewed a draft lease with his niece. She suggested requesting an exclusivity clause to prevent other hardware stores from operating in the mall. Piper relayed this to Bolt, the Respondent’s agent, who stated the Respondent does not plan on getting another hardware store, and would instruct the solicitor to include the clause. Bolt later confirmed he had requested for the amendment via email.

C. Piper signed the lease at the mall office without verifying its contents. He was provided a copy but did not read it. The final lease did not contain any exclusive tenancy clause, nor did it restrict the Respondent from leasing to competitors.

D. 18 months later, a competing hardware store, Denning’s Man Shed, opened in the mall. The new tenant operated at a much larger scale, leading to a sharp decline in Piper’s business. When Piper confronted Bolt, Bolt said he had passed on the instruction but did not know what followed.

E. Piper obtained legal advice confirming the lease contained no exclusivity clause. However, his lawyers advised he may have a reasonable claim based on Bolt’s assurances prior to signing.

F . In 2022, Piper gave notice that he would vacate the premises due to ongoing losses. Although Mall Busters initially suggested seeking specific performance, no such order was pursued, and the premises were liquidated to another business.

G. Piper commenced proceedings seeking damages, arguing there was either an exclusive term in the lease or a collateral contract based on Bolt’s statements. The Supreme Court dismissed both claims. Piper now appeals to the NSW Court of Appeal.

ISSUE 1: A LEASE TERM THAT GRANTED EXCLUSIVITY DOES NOT EXIST

1. The lease agreement between Piper and the Respondent contains no exclusive tenancy clause. As the agreement was intended to be wholly in writing, the parol evidence rule excludes all extrinsic material (I). Alternatively, an exclusive tenancy clause does not exist in the lease agreement (II).

I. THE PAROL EVIDENCE RULE PRECLUDES INCORPORATION OF THE VERBAL CONVERSATION BETWEEN PIPER AND BOLT

2. The parol evidence rule applies as the lease agreement was intended to be wholly in writing (A).

Thus, the signature rule applies as Piper signed the lease agreement (B).

A. The Lease Agreement Was Intended to be Wholly in Writing

3. When an oral agreement is reduced to a written document that appears complete, it is strongly presumed to embody the entire agreement between the parties.1 Whether the lease was wholly in writing is a question of fact to be determined objectively. 2 However, extrinsic evidence may be considered to determine whether the agreement was intended to be partly oral.3

4. The lease agreement with Piper is complete, as it contains all the essential elements including the agreed term, the parties, and terms of the rent, and is therefore presumed to be wholly in writing. 4 In any case, the oral conversation supports the conclusion that the parties intended the lease to be wholly in writing, as Piper specifically requested whether an exclusivity clause can be included in the written lease. 5 Accordingly, the parol evidence rule stands, and evidence outside the contract cannot be considered.6

B. Thus the Signature Rule Applies, and Piper has Agreed to the Contents of the Lease

5. Signing a document signifies acceptance of its terms, whether read or not.7 The signature removes any obligation on the other party to illustrate that the signatory was properly notified of those terms. 8

6. Piper signed the lease and is bound by its terms, regardless of whether he read it.9 He had ample opportunity to review the lease, which he kept.10 Bolt had no duty to disclose further.11 As the lease contains no exclusive tenancy clause, the Respondent has not breached the agreement, and no damages are claimable.

II. ALTERNATIVELY, A TERM GRANTING EXCLUSIVE TENANCY DOES NOT EXIST

7. In any other event, Bolt’s statement was a mere representation rather than a contractual term (A). Additionally, the surrounding facts support the conclusion that there was no exclusive tenancy clause (B).

A. Bolt’s Statement to Piper is a Mere Representation rather than a Contractual Term

8. Bolt’s statement that ‘[they] don’t plan on getting another hardware store,’12 is characterised as a representation rather than a contractual term. To determine whether a statement made beforethe contract is a contractual term or a mere representation, some contentious factors include:13 (i) the importance of the statement, and (ii) whether it was later omitted from the written contract. If omitted, it is more likely to be a representation only. 14 These factors assist in identifying the main test: the parties’ contractual intention and whether a reasonable person would view the statement as a binding promise. 15

9. The exclusive tenancy clause was objectively not of great importance. Piper gave the initial lease to his niece, not a legal counsel before requesting the clause. 16 There was no acceptance that the clause would be included,17 and Piper did not seek to ask whether the term was included by the solicitors. Additionally, its omission from the final lease indicates it was not intended as a binding term.18

10. Thus, a reasonable person would regard Bolt’s statement as a representation, not a binding term.

B. Additionally, Surrounding Facts Confirm No Exclusive Tenancy Clause Was Intended

11. The surrounding circumstances indicate the exclusive tenancy clause is not a term of the contract.19 This must be considered alongside the objective evidence and the apparent logic of 20 events.

12. Bolt, a mere agent of the Respondent, had no authority to amend the lease, and sent an email to the solicitors requesting the possible amendment.21 There was never an acceptance to the request.22 Piper had the opportunity to ask over the phone, and check the contents of the lease.before signature.

23 Accordingly, the apparent logic of events does not support the inclusion of

the clause.

ISSUE 2: A COLLATERAL CONTRACT DOES NOT ARISE

13. There is no collateral contract that excludes tenancy. The alleged collateral contract lacks a promissory statement (I). Alternatively, the alleged collateral contract is not certain and complete (II). Alternatively, the alleged collateral contract is incompatible with the presumptive principles of construction (III).

I. THERE IS NO STATEMENT PROMISSORY IN NATURE TO SATISFY A COLLATERAL CONTRACT

14. A collateral contract requires a statement to be promissory in nature. 24 No collateral contract arises as Bolt’s alleged agreement with Piper was not promissory. 25

15. A promissory statement exists if it is reasonably considered as an intended contractual promise. These intentions are judged objectively and the statement must be sufficiently certain.26 By an objective standard, the conversation between Bolt and Piper does not provide any sufficient certainty on an exclusive clause. It is very vague and conditional in nature. 27 Bolt had merely requested for the amendment to include an exclusive clause in the lease. 28 He did not intend a contractual promise. He did not confirm such an amendment went through. Thus, no sufficient certainty can be established.29

16. Bolt’s statement was merely representational,30 and only vaguely encouraging.31 It did not show clear intention to enter into a binding contract.32 Furthermore, words which allow for discretion or an option to carry out a statement do not create a contract.33 A mere telephone call to Bolt who provided no clarity are not sufficient words. The inclusion of the exclusive clause was not within Bolt's discretion.

17. Oral statements which are relied on as a collateral contract must be clearly promissory in nature. 34 The exclusive clause was requested to be put ‘in the lease. ’35 Representations do not constitute a collateral contract where it is expected to be incorporated into the principal contract.36 It should be established that writing is only intended to contain part of the agreement.37 This is not established between Piper and Bolt.

II. The ALLEGED COLLATERAL CONTRACT IS NOT CERTAIN AND COMPLETE

18. The alleged collateral contract is not complete as the essential and critical terms are not present (A). The alleged collateral contract is not certain as the statement by Bolt is obscure and incapable of attributing a contractual intention (B). Consequently the exclusive clause is too vague and ambiguous to amount to a collateral contract. (C)

A. The Essential and Critical Terms of the Agreement Are Not Present

19. To amount to a contract, the agreement must be sufficiently certain and complete. 38 For completeness the essential and critical terms of the agreement must be present.

20. If there is no agreement on the essential terms there is no binding contract.39 In relation to the lease of land, the essential terms considered are the ascertainable period for its duration, ascertainable rent, and ascertainable point of commencement.40

21. There have been no details given on the time the exclusive clause applies from and how long it will apply for. The ascertainable period of duration and commencement are missing. The ascertainable rent is also missing. Thus, the alleged collateral contract cannot be applied due to its lack of essential terms and novel nature. There has been no reached agreement between Bolt and Piper to the essential terms of an exclusive tenancy clause. 41 Therefore a collateral contract cannot arise.

B. No Contractual Intention Can Be Interpreted From The Obscure Language

22. To be certain, the language must not be obscure and incapable of any precise meaning that no contractual intention can be attributed.42

23. The alleged contract is not sufficiently certain, thus void. If no sufficient certainty of the essential terms is attainable, it is linguistically uncertain.43

C. The Exclusive Clause is too Vague and Ambiguous to Amount to a Collateral Contract

24. The alleged collateral contract has a broad meaning and an ambiguous construction. Thus, it is unenforceable.44

25. Where a contract gives complete discretion to an essential term, the contract will be void for uncertainty. 45 An exclusive clause that limits a category of businesses illustrates complete discretion.46 Due to the lack of restraint and discretionary nature of this term, it is void for uncertainty. The term is too broad.

26. The absence of terms and conditions on the exclusive clause renders the collateral contract too uncertain to be enforceable. 47 The terms of the oral contract should be considered in interpretation of whether a valid collateral contract exists. 48 This cannot be done if no terms in the oral contract exist.

27. Subsequently, this makes the obligation of the exclusion clause illusory and unenforceable due to its lack of detail.49

III. THE ALLEGED COLLATERAL CONTRACT IS INCOMPATIBLE WITH THE

PRINCIPLES OF CONSTRUCTION

28. Unless the contrary is proven, the presumptions of construction are upheld to maintain the written terms of the contract. An unreasonable result arises from the alleged collateral contract (A). It is also not in favor of business common sense (B).

A. Unreasonable Results are Not Intended

29. There is a presumption that unreasonable results are not intended. Even if there is no ambiguity, the clause or term of the contract should be declined if it leads to an absurd result,50 or if the meaning makes no commercial sense. 51 An exclusive clause that would enable Piper to operate as the only hardware store in the mall would lead to an irrational result as it would dismantle marketing competition.52 Restricting a popular business form (hardware stores), and obstructingsuch businesses to run via a personal lease would abuse the core necessity for commercialism and competitive marketing in public. 53

30. Subsequently, the disputed clause impinges and impairs the main contract.54 Its enforcement would constrain the lessor’s leasing authority and financial interests.

B. The Term is Not in Favour of Business Common Sense

31. There is a presumption in favour of a businesses commercial sense. Business commercial sense encourages not only profit to Piper, but fair marketing competition.55 If a contract is inconsistent with having commercial sense, the business commercial sense will always yield.56 The alleged exclusive clause is inconsistent with business commercial sense, as it undermines principles of market competition. Thus, business commercial sense yields in disfavour of the exclusive clause.

32. Commercial contracts should be given a business interpretation.57 The nature of commercial aims in such contracts are part of the essential matters. 58 The exclusive clause should avoid commercial inconvenience and fails to do so. 59 The clause is not fair as it fails to consider the adverse impact on the Respondent.60 In understanding the business interpretation it is important to consider the circumstances addressed by the contract.61

IV FOOTNOTES53

1 S & K Investments Pty Ltd v Cerini [2016] WASC 223 at [37] (Martin CJ); Masterson Homes Pty Ltd v Pal Assets Pty Ltd (2009) 261 ALR 382, 401–2 [90] (Campbell JA) (‘Masterson Homes v Pal Assets’). See also Whitlock v Brew (1968) 118 CLR 445, 454 (McTiernan J) (‘Whitlock v Brew’); Roehlan v Mikhail [2018] VSC 121 at [16] (T Forrest J).2 Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471, 483 [34] (Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ).

3 State Rail Authority of NSW v Heath Outdoor Ltd (1986) 7 NSWLR 170, 191 (Kirby P) (‘SRA v Heath’); Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45, 62 [43] (Kirby J).

4 The Facts [1].

5 The Facts [2].6 SRA v Heath (n 3) 170, 191 (Kirby P). See generally Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Ltd) (1986) 160 CLR 226, 237 (Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ).

7 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, 180–1 [45] (Gleeson CJ, Gumow, Hayne, Callinan, and Heydon JJ) (‘Toll v Alphapharm’).

8 Ibid 165, 184 [54] (Gleeson CJ, Gumow, Hayne, Callinan, and Heydon JJ).

9 The Facts [3].

10 The Facts [3].

11 Toll v Alphapharm (n 7) 165, 184 [54] (Gleeson CJ, Gumow, Hayne, Callinan, and Heydon JJ). See also Concut Pty Ltd v Worrell (2000) 176 ALR 693, 703 (Gleeson CJ, Gaudron and Gummow JJ); Wright v Lemon (No 2) [2021] WASC 159 at [639] (Le Miere J).

12 The Facts [2] (emphasis added).

13 Elull v Oakes (1972) 3 SASR 377, 387 (Bray CJ) (‘Elull v Oakes’); Sheer v Jeffreys [2024] NSWSC 1161 at [83] (Kunc J).14 Elull v Oakes (n 13) 377, 387 (Bray CJ).

15 Elull v Oakes (n 13) 377, 388 (Bray CJ). See also Gough and Gilmour Holdings Pty Ltd v Peter Campbell Earthmoving Pty Ltd [2009] NSWCA 37 at [55] (Sackville AJA). See Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41, 61 (Gibbs CJ) (‘Hospital Products v USSC’).

16 The Facts [2].

17 See generally Kriketos v Livschitz [2009] NSWCA 96 at [110] (McColl JA) (‘Kriketos v Livschitz’); Lui v Guan [2019] NSWSC 803 at [239] (Walton J); Russel and Dunphy v Dunphy [2023] NSWSC 282 at [19] (Hammerschlag CJ).

18 The Facts [4].

19 Masterson Homes v Pal Assets (n 1) 382, 401–2 [90] (Campbell JA).

20Realestate.com.au Pty Ltd v Hardingham (2022) 277 CLR 115, 134 [45] (Gordon J). See also Fox v Percy (2003) 214 CLR 118, 129 [31] (Gleeson CJ, Gummow and Kirby JJ).

21 The Facts [2]. See also The Facts [4].

22 The Facts [2]. See Kriketos v Livschitz (n 17) 96 at [110].

23 The Facts [3].24 Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1, 76 [242] (Nettle J) (‘Crown v Cosmopolitan Hotel’)

25 JJ Savage & Sons Pty Ltd v Blakeney (1970) 119 CLR 435, 442 (Barwick CJ, Kitto, Menzies, Owen and Walsh JJ) (‘JJ Savage v Blakeney’). See also Gunns Finance Pty Ltd (in liq) v Sithiravel [2016] NSWSC 1543 at [182] (Robb J); Manning Motel Pty Ltd v DH MB Pty Ltd [2013] NSWSC 1582, [47] (Lindsay J); Cutts v Buckley (1933) 49 CLR 189, 197–198 and 201-202 (Dixon J, Evatt J); Gates v City Mutual Life Assurance Society Limited (1986) 160 CLR 1, 5 (Gibbs C J); Heilbut, Symons and Co v Buckleton [1913] AC 30, 49–51; JJ Savage v Blakeney (n 25) 435, 442 (Barwick CJ, Menzies, Owen, Kitto, and Walsh JJ).

26 ‘Crown v Cosmopolitan Hotel’ (n 24) 1, 76 [242] (Nettle J); Hospital Products v USSC (n 15) 41, 61 (Gibbs CJ).

27 The Facts [2].

28 The Facts [2] (emphasis added).

29 The Facts [2].

30 JJ Savage v Blakeney (n 25) 435, 442 (Barwick CJ, Menzies, Owen, and Walsh JJ).31 Crown v Cosmopolitan Hotel (n 24) 1, 12 [23] (French CJ, Kiefel and Bell JJ).

32 The Facts [2].

33 Crown v Cosmopolitan Hotel (n 24) 1, 22 [23] (French CJ, Kiefel and Bell JJ).

34 International Fashion Group Pty Ltd v Jonco Imports Pty Ltd [2014] NSWSC 60 at [66] (Garling J) (‘International Fashion Group v Jonco Imports’); Esanda Ltd v Burgess (1984) 2 NSWLR 139, 146 (Samuels JA).

35 The Facts [2].

36 International Fashion Group v Jonco Imports (n 34) 60 at [67] (Garling J); Metz Holding Pty Ltd v Simmac Pty Ltd [2011] FCA 981, [635] (Barker J) (‘Metz Holding v Simmac’).

37 International Fashion Group v Jonco Imports (n 34) 60 at [67]–[70] (Garling J); Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507, 517 (Dixon CJ, Fullager and Taylor JJ).

38 Thorby v Goldberg (1964) 112 CLR 597, 607 (Kitto J) (‘Thorby v Goldberg’); Hookway v Hookway (2020) 32 Tas R 320, 327–8

[27] (Blow CJ); Crown v Cosmopolitan Hotel (n 24) 1, 21–2 [55]–[61] (French CJ, Kiefel and Bell JJ).

39 Thorby v Goldberg (n 38) 597, 607 (Kitto J).40 Whitlock v Brew (n 1) 445, 454 (McTiernan J).

41 The Facts [2].

42 Australian Goldfields NL (in liq) v North Australian Diamonds (2009) 40 WAR 191, 199 [6] (McLure JA).

43 Ibid [6]–[9] (McLure JA).

44 The Facts [2].

45 Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Ltd (2014) 45 VR 771, 779 [32]–[34] (Warren CJ) (‘Cosmopolitan’); Thorby v Goldberg (n 38) 597, 599 (Owen J); Whitlock v Brew (n 1) 445, 461(Taylor, Menzies and Owen JJ); Placer Development Ltd v Commonwealth (1969) 121 CLR 353, 369-370 (Windeyer J); Beattie v Fine [1925] VLR 363 (Cussen J).

46 The Facts [2]47 Cosmopolitan (n 45) 771, 797 [119]–[121] (Whelan JA).

48 Crown v Cosmopolitan Hotel (n 24) 1, 77 [245] (Gordon J).

49 Ibid 14 [30]–[32] (French CJ, Kiefel and Bell JJ).

50 Westpac Banking Corporation v Tanzone Pty Ltd [2000] NSWCA 25 at [19]–[20] (Priestley and Fitzgerald JJA, Foster AJA).

51 Sturesteps v HIH Overseas Holdings Ltd (in liq) (2011) 81 NSWLR 690, 697; Gloria Jean’s Coffee v Western Export Services Inc [2011] NSWCA 137, [55]; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, 657 [35] (French CJ, Hayne, Crennan and Kiefel JJ).

52 The Facts [2].

53 Competition and Consumer Act 2010 (Cth) s 45(1)(a).54 International Fashion Group v Jonco Imports (n 34) 60, [69] (Garling J); Hoyt's Pty Ltd v Spencer (1919) 27 CLR 133, 147–148 (Isaacs J).

55 Australian Competition and Consumer Commission, Competition and anti-competitive behaviour, ACCC <https://www.accc.gov.au/business/competition-and-exemptions/competition-and-anti-competitive-behaviour#:~:text=The%20Competition%20and%20Consumer%20Act,if%20they%20substantially%20lessen%20competition>.

56 Lahey Constructions Pty Ltd v State of New South Wales [2021] NSWCA 69 at [35] (Bell P); Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191, 201 (Diplock LJ); Peppers Hotel Management Pty Ltd v Hotel Capital Partners Ltd [2004] NSWCA 114 at [72] (McColl JA).

57 Franklins Pty Ltd v Metcash Trading Ltd, (2009) 76 NSWLR 603, 617 [18] (Allsop P) (‘Franklins v Metcash Trading’).

58 Ibid; Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, 350 (Mason J).

59 Franklins v Metcash Trading (n 57) 603, 617 [18] (Allsop P); Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990)

20 NSWLR 310, 313-314 (Kirby P); Zhu v Treasurer (NSW) (2004) 218 CLR 530, 559 [82] (Gleeson CJ, Gummow, Kirby,

Callinan and Heydon JJ).

60 Franklins v Metcash Trading (n 57) 603, 617 [18] (Allsop P); Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99, 109–110 (Gibbs J).

61 Franklins v Metcash Trading (n 57) 603, 673 [287]; International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151, 160 [7]–[8] (Gleeson CJ).