Oliveri Legal Pty Ltd v Cassegrain Tea Tree Oil Pty Ltd

At the commencement of the hearing Mr Wilson SC for the plaintiff, told me that one of the issues in the matter was whether or not a conversation that occurred on 28 January 2016 could amount to ratification of the Guarantee and Indemnity Agreement which is central to the dispute between the parties.

The agreement had been signed on 19 December 2008 by the plaintiff and by Mr Claude Cassegrain, on his own behalf and purportedly on behalf of the defendant. The defendant denies that Mr Cassegrain had authority to bind the company.

The plaintiff asserts that Mr Cassegrain was able to bind the company to the agreement but, in addition, wishes to raise as an alternative that there was ratification on behalf of the company in the conversation that occurred on 28 January 2016.

When Mr Wilson SC raised the matter, he properly told me that ratification was not included in the pleadings, in particular in the Reply, and that reliance upon ratification would be opposed by the defendant. This stance was confirmed by Mr Sirtes SC, for the defendant.

Mr Wilson SC then said that he proposed to make an application to allow him to pursue the issue. I adjourned for a few hours to enable him to prepare the application and to give the defendant time to consider it, especially as it might entail the calling of evidence that had not otherwise been planned.

Mr Wilson SC did prepare an application which I gave him leave to file; an affidavit was also filed on behalf of the defendant.

There are three versions of the conversation that occurred on 28 January 2016. There were three participants; Mr Oliveri, Mr Thomas Cassegrain and Mr Graham Lockett. Mr Thomas Cassegrain and Mr Lockett were then directors of the defendant and capable of acting on behalf of the defendant.

Mr Oliveri’s recollection of the conversation begins with Mr Thomas Cassegrain saying:

Mr Thomas Cassegrain’s version of the conversation contains no acknowledgement but rather has Mr Lockett stating:

Mr Lockett has yet another version. His recollection includes him saying:

If Mr Oliveri’s version was ultimately accepted, it might be put forward in favour of the finding of ratification. If Mr Thomas Cassegrain’s version was favoured then an argument in favour of ratification could perhaps be advanced, but at this stage, I think that argument would be weak.

Mr Lockett’s version, if accepted, obviously would not permit a conclusion of ratification.

In his opening remarks Mr Wilson SC carefully explained to me how the plaintiff asserted the defendant became bound by the agreement when it was made. The ratification argument is strictly an alternative. It is to be remembered that ratification does not rely upon the events that occurred when the agreement was made but rather on the adoption of the agreement at a later stage. This was clearly stated by Barrett AJA in Bennett v Strauss (2016) 341 ALR 141; [2016] NSWCA 324 when setting out the conditions for ratification:

In Shao v Crown Global Capital Pty Limited [2023] NSWSC 820, at [72], Ball J referred to this definition of ratification:

This “general principle” expressed in this way illustrates the complete reversal of the plaintiff’s case if reliance is placed upon ratification.

On 4 August 2023 the matter came before Henry J when the plaintiff sought, by notice of motion, leave to rely upon an Amended Reply. Ratification formed no part of the application. Clearly that motion would have been the proper time to ventilate ratification, rather than on the first day of the hearing.

The defendant, through its solicitor’s affidavit, has said the case would have been prepared in a different way. I am not in a position to doubt that assertion.

There is another reason that I think the application should be refused. It is not unusual for cases to be put in the alternative, however the alternative (ratification) in this matter involves an acceptance of a fact that it is entirely contrary to the plaintiff’s case, namely that the agreement with the defendant did not come into place on 19 December 2008, but rather occurred retrospectively on 28 January 2016.

I raised in argument a distinction between ratification and an admission made by Mr Thomas Cassegrain if Mr Oliveri’s version of the conversation was accepted. In other words, it might be open to me to form a conclusion that Mr Thomas Cassegrain was admitting that his father, Mr Claude Cassegrain, had bound the defendant to the agreement in December 2008 as opposed to any ratification occurring in January 2016.

In summary, I think the plaintiff’s application to argue that a ratification had occurred should be refused because it is simply too late and too diametrically opposed to the plaintiff’s primary case. However, if the plaintiff chooses to do so, I do not think I should prevent the plaintiff from arguing that the above quoted words spoken by Mr Thomas Cassegrain amounted to an admission as I have described in the previous paragraph. I cannot see any prejudice flowing to the defendant in taking this approach.

Accordingly, I make the following orders: