Redowood Pty Ltd v Mongoose Pty Ltd [2005] NSWCA 32 (4 March 2005)

CITATION: Redowood Pty Ltd v Mongoose Pty Ltd [2005] NSWCA 32

FILE NUMBER(S):

40196/04

HEARING DATE(S): 9 December 2004

JUDGMENT DATE: 04/03/2005

PARTIES:

Redowood Pty Limited

Mongoose Pty Limited

JUDGMENT OF: Spigelman CJ Tobias JA Bryson JA

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): SC 50045/03

LOWER COURT JUDICIAL OFFICER: Einstein J

COUNSEL:

A: V Gray

R: A Diethelm

SOLICITORS:

A: Gye Associates, Lawyers, Sydney

R: Blake Dawson Waldron, Sydney

CATCHWORDS:

CONTRACT - Offer and acceptance - Coincidence of offer and acceptance - Evidence of circumstances surrounding transaction - Strict compliance with requirements for valid acceptance - Large public offer to purchase all rights in publicly listed company - Mistake in acceptance form completed by offeree - Whether a contract came into existence - Whether offeree's acceptance corresponded with offeror's offer - Whether offeree complied with requirements for valid acceptance.

LEGISLATION CITED:

[None]

DECISION:

Appeal dismissed

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40196/04

CL 50045/03

SPIGELMAN CJ

TOBIAS JA

BRYSON JA

Friday 4 March 2005

REDOWOOD PTY LIMITED v MONGOOSE PTY LIMITED

On 21 January 2003, Mongoose Pty Ltd (Mongoose) announced a public offer to purchase all Anaconda Nickel Ltd (ANL) rights. On 10 February 2003, Mr Grant, the company secretary of Redowood Pty Ltd (Redowood) completed and returned to Mongoose's agent a rights acceptance form (the first rights acceptance form) in which Redowood accepted Mongoose's offer in relation to 65,087,000 ANL rights, with a Security Holder Reference Number (SRN) of 130002997, of which Redowood was the owner. A binding contract for the sale and purchase of these rights came into existence.

On 11 February 2003 Redowood completed its purchase of an additional 55 million rights in ANL. On the same day, following a conversation with Mongoose's agent, Mr Grant faxed to the agent another rights acceptance form (the second rights acceptance form) purporting to accept Mongoose's offer in relation to this additional parcel of rights. In the space on the second rights acceptance form designated for "SRN" Mr Grant inserted the SRN applicable to the 65,087,000 rights the subject of the first rights acceptance form. In fact, at that time, the additional 55 million rights had not yet been allocated an SRN. Those rights were subsequently allocated an SRN of 130005244.

Redowood contended that, despite the insertion of an incorrect SRN, it had validly accepted Mongoose's offer in relation to the additional 55 million rights. Mongoose, on the other hand, denied that Redowood had validly accepted its offer in relation to these rights and submitted that no contract for their sale and purchase had come into existence.

HELD by Bryson JA, Spigelman CJ agreeing, Tobias JA dissenting, dismissing the appeal:

(1) No contract had come into existence for the sale and purchase of the 55 million rights which were acquired by Redowood on 11 February 2003 and which it intended to sell by means of the second rights acceptance form. The objective meaning of the second rights acceptance form was that Redowood accepted the Mongoose offer in respect of 55 million of the 65,087,000 rights, with SRN 130002997, for which the offer had already been accepted by means of the first rights acceptance form.

(2) There was no ambiguity in the terms of the second rights acceptance form which admitted resort to evidence of the prior communications between the parties.

(3) By inserting the incorrect SRN, Redowood failed to comply with the requirements for valid acceptance of the Mongoose offer in relation to the 55 million rights which Redowood intended to sell.

HELD by Spigelman CJ:

Where, as in the present case, offer and acceptance occurred in the context of the acquisition of widely held publicly listed securities, and in circumstances of urgency, strict compliance with the requirements of the contractual documentation was necessary.

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40196/04

CL 50045/03

SPIGELMAN CJ

TOBIAS JA

BRYSON JA

Thursday 3 March 2005

REDOWOOD PTY LIMITED v MONGOOSE PTY LIMITED

Judgment

1 SPIGELMAN CJ: I agree with the reasons of Bryson JA. I add brief observations in one respect.

2 The context in which the offer and acceptance occurred was the acquisition of some thousands of millions of rights from, no doubt thousands and, possibly, tens of thousands of rights-holders, in circumstances of urgency because the rights would expire two weeks after the offer. Considered solely as a matter of contract law, this context strongly indicates that determinative effect must be given to precise compliance with the requirements of the documentation. The processing of acceptances, in such a situation, is intended to be largely mechanical.

3 This was not a case in which the representatives of Mongoose Pty Ltd were dealing, and dealing only, with one other party. The communications between them occurred in the context of the overall scheme. In such a context, the reasons of Bryson JA, which focus on the requirements of the standard form of documentation applicable to all right-holders, are to be preferred to the reasons of Tobias JA, which focus on the particular communications between the parties.

4 Where takeover offers are made for widely held publicly listed securities, as in the scheme under consideration, it is essential that all parties know precisely where they stand as soon as the takeover period is over. The approach of Bryson JA to the construction of the offer documents is more likely to have that effect.

5 It would introduce an unintended level of uncertainty and scope for disputation if ad hoc communications, whether oral or written, with such representatives of an offeror who happen to be allocated the task of receiving them in the course of dealing with thousands of pieces of paper in a short period of time, could have the effect that non-compliance with the requirements of the documentation could be set aside.

6 I agree with the orders proposed by Bryson JA.

7 TOBIAS JA: On 11 February 2003 the appellant, Redowood Pty Ltd (Redowood), became the owner of 55 million renounceable rights in Anaconda Nickel Ltd (ANL) which Mongoose Pty Ltd (Mongoose) then offered to purchase for the price of $0.01 cash per right. Redowood purported to accept that offer in accordance with its terms. However, Mongoose denied that Redowood had validly accepted its offer and maintained that no contract for the purchase of the rights had come into existence.

8 In 2003 Redowood instituted proceedings by way of summons in the Commercial List of the Equity Division of the Supreme Court claiming that it had validly accepted Mongoose's offer to purchase the 55 million rights and claiming damages in the sum of $550,000 for breach of contract. Alternatively, it claimed that Mongoose was estopped from denying that Redowood had validly accepted Mongoose's offer to purchase the rights.

9 The proceedings were heard by Einstein J who, in a judgment delivered on 3 March 2004, held that there was no valid acceptance by Redowood of Mongoose's offer and that consequently no contract had been entered into with respect to the rights. His Honour further held that Redowood's case in estoppel failed. Accordingly, on 19 March 2004, his Honour ordered that Redowood's amended summons be dismissed with costs. It is against that order that Redwood appeals to this Court.

The background facts

10 On 20 January 2003 ANL was a company whose registered office was in Perth and whose shares were listed on the Australian Stock Exchange. Redowood was a registered holder of 6 million ANL shares with its address recorded as

Suite 13A

35-37 Railway Parade

Engadine NSW 2233.

The shares were held on an issuer-sponsored sub-register and had been allocated by ANL the Security Holder Reference Number (SRN) I00030002997. The above address was the business address of Mr Bruce Robert Grant (Mr Grant) who was the company secretary of Redowood.

11 On 20 January 2003, ANL announced that it would issue to all its shareholders, registered as such at 5.00pm on 28 January 2003 (Perth time), the renounceable right to subscribe for 14 ordinary shares in ANL for each 1 share held by the shareholder at the price of $0.05 per share. ANL issued 6,461,031,402 such rights. Redowood's entitlement was 84 million such rights. It received from ANL an Entitlement and Acceptance Form which relevantly recorded the number of rights to which it was entitled as well as SRN I0030002997.

12 On 21 and 22 January 2003 Redowood sold on the Australian Stock Exchange 18,913,000 of its entitlement of 84 million rights leaving it with a balance of 65,087,000.

13 On 21 January 2003, Mongoose announced an on-market bid (commencing 30 January 2003) for all ANL rights at an offer price of $0.01 cash per right. The offer had to be accepted by midnight on 13 February 2003, Sydney time. The terms of the offer were contained in a 50-page document (the Rights Offer Document).

14 On 22 January 2003, Mongoose lodged with the Australian Securities and Investments Commission a public offer to purchase all shares on issue in ANL as at 28 January 2003 at the price of $0.12 per share.

15 Mongoose appointed ASX – Perpetual Registrars Ltd (ASX-Perpetual) to provide share registry services in respect of the Mongoose rights offer. Ms Nicole Ooi (Ms Ooi) of ASX-Perpetual was the person primarily responsible for receiving documents transmitted by fax to ASX-Perpetual relating to the Mongoose offer and ensuring that they were correctly dealt with upon receipt.

16 On 6 February 2003, Redowood contracted to purchase 55 million ANL rights on the Australian Stock Exchange through its stockbrokers Salomon Smith Barney (the Brokers) who on that day sent to Redowood a Buy Contract Note on its letterhead recording the transaction (the Buy Contract Note). On the Buy Contract Note the buyer was recorded as

Redowood Pty Limited

C/- Mr Bruce Grant

PO Box 22

Engadine NSW 2233

The purchase of these rights was to be completed by the Brokers on behalf of Redowood on 11 February 2003.

17 On 10 February 2003, Mr Grant faxed to ASX-Perpetual a rights acceptance form dated 9 February 2003 in respect of the 65,087,000 rights Redowood had retained from its original allocation of 84 million rights (the first rights acceptance form). It was not suggested that that acceptance was other than valid and constituted a binding contract for the sale and purchase of the rights to which it related.

18 On 11 February 2003 Redowood completed its purchase of the 55 million rights and the Brokers sent notification of this transaction to ANL.

19 On 11 February 2003 Mr Grant informed Miss Ooi by telephone that:

(a) Redowood had mailed to ASX-Perpetual a rights acceptance form for 65,087,000 rights;

(b) it had purchased an additional 55 million rights; and

(c) he needed a second rights acceptance form so that Redowood could accept the Mongoose offer to acquire these further 55 million rights.

20 Ms Ooi informed Mr Grant that he should fax the Buy Contract Note with respect to the 55 million rights to ASX-Perpetual upon the receipt of which ASX-Perpetual would fax a rights acceptance form to Redowood.

21 At about 8.39am on 11 February 2003 Mr Grant faxed to Ms Ooi a message which enclosed copies of:

(a) the Buy Contract Note; and

(b) the ANL Entitlement and Acceptance Form relating to the original 84 million rights.

22 At about 1.43pm on 11 February 2003 ASX-Perpetual faxed to Mr Grant a rights acceptance form (the second rights acceptance form) which had been partially completed by it to record the number of rights which Mongoose was offering to purchase as 55 million and the accepting vendor as

Mr Bruce Grant

PO Box 22

Engadine NSW 2233

23 Mr Grant immediately amended the second rights acceptance form to record as the accepting vendor

Redowood Pty Limited

PO Box 22

Engadine NSW 2233

(Suite 13A

35-37 Railway Parade

Engadine NSW 2233)

which alteration, as required by the instruction on the form, he had initialled.

24 In the space designated for "SRN/HIN" which was blank, Mr Grant inserted the number "I003002997" and in the space designated "Subregister", which was also blank, he inserted the words "Issuer Sponsored". These additions to the document were not initialled.

25 Shortly after its receipt Mr Grant faxed the second rights acceptance form executed by Redowood under its common seal, together with a further copy of the ANL Entitlement and Acceptance Form in respect of the original 84 million rights, to ASX-Perpetual and posted the original documents to ASX-Perpetual by express post.

26 ASX-Perpetual treated the second rights acceptance form as applicable to 55 million of the 84 million rights recorded under SRN I00030002997 which had already been fully accepted on 10 February 2003. Accordingly, it did not process the second rights acceptance form further. Nor did it make any enquiry of Redowood concerning the second rights acceptance form; nor did it inform Redowood that it was not processing that form.

27 On or before 12 February 2003 ANL recorded Redowood as the holder of the 55 million ANL rights purchased on 11 February 2003 and allocated to it the SRN I30005244. ASX-Perpetual became aware of that SRN on 13 February 2003 when it received a copy of the ANL register updated to 12 February 2003.

28 On 14 February 2003 the 55 million rights purchased by Redowood on 11 February 2003 (the subject of the second rights acceptance form) lapsed and became valueless.

The terms of the Mongoose Rights Offer

29 Clause 8 of the Rights Offer Document was headed "FORMAL TERMS OF THE OFFER". Clause 8.1 detailed "The Offer" and clause 8.2 identified the "Offer Period". Clause 8.3 was headed "Acceptance".

30 Of particular relevance for the present purposes is clause 8.3(d) which was applicable to those rights holders who had Issuer Sponsored Holdings as distinct from CHESS Holdings or who had unregistered holdings. I set it out in full:

"If your Acceptance Rights are in an Issuer Sponsored Holding or if at the time of your acceptance you are entitled to be (but are not yet) registered as the holder of your Acceptance Rights, to accept you must complete and sign the Acceptance Form in accordance with the instructions on it. Once completed and signed, you need to return the Acceptance Form together with your Prospectus Entitlement and Acceptance Form and all other documents required by the instructions on the Acceptance Form to one of the addresses specified on the form so that they are received before the end of the Offer Period." (emphasis added)

31 The expression "Acceptance Rights" was described in the Glossary to the Rights Offer Document to mean:

"Those of your ANL Rights that are the subject of an acceptance of the Offer."

The word "Offer" was defined to mean the offer constituted by clause 8 of the Rights Offer Document and the expression "Acceptance Form" was defined to mean the form with that title that accompanied the Offer.

32 It will be apparent that clause 8.3(d) was applicable to the 55 million rights which Redowood had purchased on 11 February 2003 and in respect of which it was entitled to be, but had not at that stage been, registered as the holder thereof. Relevantly, in order to accept the offer with respect to those rights, Redowood was required to

"complete and sign the Acceptance Form in accordance with the instructions on it."

I shall refer to those instructions later in these reasons.

33 Clause 8.4 of the Rights Offer Document is headed "Your Agreement resulting from acceptance". Relevantly, it provides as follows:

"(a) Effect of Acceptance Form

By completing, signing and returning the Acceptance Form, you will have:

(i) accepted the Offer in respect of your Acceptance Rights;

(ii) authorised Mongoose and each of its officers and agents to correct any errors in, and complete any omissions from, the Acceptance Form necessary to:

(A) make it an effective acceptance of this Offer in relation to your Transfer Rights which are not in a CHESS Holding; or

(B) enable the registration of the transfer of your Transfer Rights to Mongoose,

or both; and

(iii) if any of your Transfer Rights are in a CHESS Holding, authorised Mongoose and each of its officers and agents to:

...

(c) Your agreement

By accepting this Offer in accordance with clause 8.3, you:

(i) have accepted this Offer in respect of your Acceptance Rights;

(ii) represent and warrant to Mongoose that:

(A) Mongoose will acquire good title to and beneficial ownership of your Transfer Rights free from encumbrances at the time of their transfer to Mongoose; and

(B) you will have good title to and beneficial ownership of your Exercise Rights free from encumbrances at the time of their exercise by Mongoose on your behalf.

...

(d) Validation of otherwise ineffective acceptances

... Mongoose may in its absolute discretion (but is not obliged to) treat the receipt by it of the Acceptance Form as a valid acceptance although it does not receive the other documents required by the instructions on the Acceptance Form or any of the other requirements for acceptance have not been complied with ..."

34 The expression "Transfer Rights" referred to above was defined in the Glossary to mean

"Those Acceptance Rights which, subject to the terms of the Offer, are to be transferred to Mongoose."

35 Clause 8.5 is headed "Mongoose's obligations to provide consideration". It relevantly provides as follows:

"(a) Timing – payment of cash consideration

Subject to this Offer, if you have accepted this Offer and this Offer (or the contract resulting from your acceptance) becomes unconditional, Mongoose will pay to you, in accordance with clause 8.5(d), any cash consideration which is payable to you in respect of your Acceptance Rights under clause 8.1(d), on or before the earlier of: ...

(b) ...

(c) Acceptance Form requires additional documents

Where documents are required to be given with your acceptance to enable Mongoose to become the holder of your transfer rights (such as a power of attorney):

(i) ...

(ii) ...

(iii) ...

(iv) if the documents are not given before the end of the Offer Period, your acceptance will be invalid and any contract arising from your purported acceptance of the Offer will be void.

36 Clause 8.6 is headed "Conditions of the Offer". The following sub-clauses are relevant:

"(a) Condition

The transfer of your Transfer Rights to Mongoose and Mongoose's obligations with respect to the provision of the consideration under this Offer (including exercising your Exercise Rights (if any) on your behalf) are conditional upon all conditions which apply in respect of the Share Offer being fulfilled or waived before the end of the Offer Period.

(b) Nature of condition

The condition in clause 8.6(a) does not prevent a contract resulting from your acceptance of this Offer but breach or non-fulfilment of it has the consequences set out in clause 8.6(d).

(c) ...

(d) Contract void if condition not fulfilled

If the Condition is breached or not fulfilled at the end of the Offer Period, the contract resulting from your acceptance of this Offer is automatically void and this offer will lapse.

The rights acceptance form

37 The rights acceptance form was double-sided. The front side set out some five steps to be completed. Step 1 at the top of the form was headed "Check your details below". The left-hand side of the page provided for the insertion of the name and address of the holder of the rights. The right-hand side of the page had printed the following:

"SRN/HIN

Subregister

Number of your

ANL Rights"

At the end of Step 1 below the words "Check your details below" were printed the following words:

"If any of the above details are incorrect, please amend them and initial the alterations."

38 Step 2 was headed "Choose Your Offer Alternative(s)". It is not relevant for present purposes.

39 Step 3 headed "For Issuer Sponsored Holdings" is relevant. It provided as follows:

"Step 3 – For Issuer Sponsored Holdings

If your ANL Rights are held on the Issuer Sponsored Subregister (shown above) or if at the time of your acceptance you are entitled to be (but are not yet) registered as the holder of your ANL Rights, to accept the Offer you must sign in the box below and return this form, so that it is received by midnight (Sydney time) on 13 February 2003 (unless the Offer is withdrawn or extended)."

40 Step 4 is irrelevant for present purposes and Step 5 was headed "Sign in the Box Below". Relevantly, it provided as follows:

"By signing in the box below, you accept the Offer on and subject to the terms and conditions of the Offer, and you acknowledge the effect of your acceptance as set out in clauses 8.4 and 8.9 of the Offer."

41 The reverse side of the rights acceptance form was headed "How to accept the offer". Under the sub-heading "Issuer Sponsored Holdings", the following appeared:

"If your ANL Rights are in an Issuer Sponsored Holding, or if you are not yet registered as the holder of your ANL Rights, then to accept the Offer, you must fill out this Acceptance Form overleaf and return it to the one of the addresses shown below. You must return your Entitlement and Acceptance Form from the ANL Rights Issue Prospectus with this Acceptance Form."

42 Then followed the sub-heading "Additional Notes". Paragraph 3 of those notes was in the following terms:

"Bought or sold any ANL Rights? – If you have recently bought or sold any ANL Rights, your holding may differ from that shown on the front of this form. If so, please alter the number of ANL Rights shown as your registered holding on the front of this form to the number of ANL Rights you now hold (including any ANL Rights of which you are entitled to become registered as holder), initial the alteration and indicate the name of the stockbroker who acted for you."

The form then provided for the postal delivery address of ASX-Perpetual and advised that if the recipient had any questions about how to complete the acceptance form, they could telephone the "Offer information line" which, for Australian callers, was given as 1300 650 230. It was that number which Mr Grant had called to set up his conversation with Ms Ooi referred to in [19] above.

The decision of the primary judge

43 The primary judge accepted (at [100]-[103]) that on its true construction, clause 8.3(d) of the Rights Offer Document contemplated that an ANL rights holder who was entitled to be registered but was not in fact registered at the time he or she accepted Mongoose's rights offer (and who therefore did not have an Entitlement and Acceptance Form in respect of those rights), could nevertheless accept the offer by completing, signing and returning a rights acceptance form so that clause 8.4(a) would then apply to his or her acceptance.

44 However, it was contended by Mongoose that as Redowood had recently acquired ANL rights in respect of which it was not yet registered, paragraph 3 of the "Additional Notes" on the reverse side of the rights acceptance form required Redowood, if it was validly to accept the offer with respect to those rights, to:

· alter the number of ANL rights shown as Redowood's registered holding on the front of the form to the number of rights it then held (including any rights in respect of which it was entitled to become registered as holder);

· initial the alternations; and

· indicate the name of the stockbroker who had acted for it in relation to the rights recently purchased.

45 Relevantly, the only "alteration" which, it was submitted, was made by Redowood to the second rights acceptance form was the insertion by Mr Grant of an SRN which was incorrect in several respects. Firstly, it was not the SRN applicable to the 55 million rights which Redowood had acquired on 11 February 2003 and which were the subject of the rights acceptance form faxed to him by Ms Ooi on 11 February 2003. Secondly, although it was no doubt intended to refer to the SRN with respect to the 84 million rights to which Redowood had been originally entitled, it omitted two zeros. Thirdly, Mr Grant had not written the name of the stockbroker on the form as allegedly required by paragraph 3 of the Additional Notes. It was therefore submitted that the second rights acceptance form purported to accept rights which were not the parcel of 55 million rights which were the subject of the offer: rather, it purported to accept 55 million of the original 84 million rights which were the subject of the SRN which Mr Grant had inserted into the form. Accordingly, there was no correspondence between acceptance and offer as required by law with the result that there was no valid acceptance of the offer and, therefore, no contract.

46 The primary judge found (at [115]) that the second rights acceptance form, although signed, did not conform with the "How to accept the offer" instructions endorsed on its reverse side. Firstly, the form omitted the name of the stockbroker acting for Redowood on its purchase of the 55 million rights and, secondly, the completed form referred to an incorrect SRN. His Honour considered (at [117]) that clause 8.4(a)(i) and (ii) of the Rights Offer Document dealt with two different situations. That contemplated by clause 8.4(a)(i) was where the offeree had completed the rights acceptance form correctly and had signed and returned it to the offeror. That contemplated by clause 8.4(a)(ii) was where the offeree had signed and returned the rights acceptance form containing errors and/or omissions. Whereas in the first situation the offeree will have validly accepted the offer in respect of its ANL rights, it will not have done so in the second situation.

47 The primary judge considered that the present case was governed by the second situation referred to above. His conclusion was in the following terms:

"121. The offer and acceptance case fails because what was returned by Redowood by way of its second rights acceptance form simply did not conform with the Mongoose rights offer document. It failed to furnish the name of the stockbroker who had acted for Redowood upon its recent purchase. Further, it gave an incorrect SRN number. The materiality of the proper supply of the necessary information had been pointed up in the '[h]ow to accept the offer' instructions:

'Information you supply on this Acceptance Form will be used by Mongoose and ASX Perpetual...for the primary purpose of processing your acceptance of the Offer and to provide you with the consideration payable under the Offer... If you do not supply this information, your acceptance may not be processed and you may not receive the consideration payable.' [emphasis added]

122. Subject to the estoppel issue which is examined below, it follows that in terms of the pleaded situation 2 case, the finding [applying strict offer and acceptance principles] is that there was no contract entered into upon the receipt by Mongoose of the second rights acceptance form."

48 The primary judge then turned to the case made by Redowood in estoppel. That case was based upon certain conversations between Mr Grant and Ms Ooi. According to his Honour the case was advanced in the following three segments:

Segment 1

Proposition 1: In the Mongoose rights offer document Mongoose nominated specific telephone numbers as "Mongoose offer information lines" for persons enquiring about the rights offer to use.

Proposition 2: On 10 February 2003, on behalf of Redowood, Bruce Grant telephoned the number specified for calls within Australia.

Proposition 3: The persons who responded to Mr Grant's telephone enquiry to the Mongoose offer information line were clothed by Mongoose with ostensible authority to give answers to questions in connection with the procedures for acceptance of the Mongoose rights offer which would be binding on Mongoose if the circumstances were in doubt and the answers given were prima facie reasonable.

[This conclusion was said to arise by operation of law.]

Proposition 4: As a result of Mr Grant's telephone enquiry to the Mongoose offer information line, Mr Grant came into telephone communication and then communication by means of facsimile transmissions with Ms Ooi of ASX-Perpetual.

Proposition 5: Mr Grant's enquiries of and dealings with Ms Ooi were in connection with the procedure to be followed by Redowood to accept the Mongoose rights offer in respect of the 55 million ANL rights and the answers given to his enquiries by Ms Ooi were prima facie reasonable and such as to entitle Mr Grant to act upon them.

Proposition 6: The effect of the aforesaid advice and information given by Ms Ooi to Mr Grant was that if Mr Grant acted in accordance with that advice and information, Mongoose would conduct its dealings with Redowood on the conventional basis that Redowood had done all it had to do to accept the Mongoose rights offer in respect of the 55 million ANL rights.

[This conclusion was said to arise by operation of law.]

Segment 2

Proposition 7: Alternatively, Mr Grant relied upon the advice and information given to him by Ms Ooi to act as he did and by so doing he acted to the detriment of Redowood in that he was led to believe that there was no other requirement to be satisfied for Redowood to accept the Mongoose rights offer in respect of the 55 million ANL rights.

Proposition 8: By reason of these facts and matters Mongoose is now estopped from denying that the actions taken by Mr Grant were effectual to constitute a valid acceptance by Redowood of the Mongoose rights offer in respect of the 55 million ANL rights.

Segment 3

Proposition 9: If and so far as it was otherwise a requirement for Redowood validly to accept the Mongoose rights offer in respect of the 55 million ANL rights that it deliver to ASX-Perpetual an Appendix E form applicable to those rights, such requirement was waived by Mongoose, or alternatively, Mongoose acquiesced in the failure of Redowood to fulfil such a requirement by accepting in lieu of that form a copy of the Broker's Buy Contract Note dated 11 February 2003.

49 In relation to segments 1 and 2, the primary judge found that propositions 1, 2, 3 and 4 had been made good. After considering the competing versions of the relevant conversations between Mr Grant and Ms Ooi, his Honour accepted Mr Grant's evidence as reliable. Consequently his Honour, at least impliedly, accepted as being made good propositions 5, 6 and 7. His Honour rejected proposition 9.

50 After considering the cross-examination of Ms Ooi, the primary judge found (at [137]) that although she knew perfectly well that the Buy Contract Note relating to the 55 million rights and the Entitlement and Acceptance Form relating to the 65,087,000 rights related to two quite distinct parcels of rights, she did not tell anyone at the Registry Management Group, who were the people charged with processing acceptance forms, that this was the case. His Honour also referred (at [140] and [142]) to the evidence of Ms Ooi that she was primarily responsible for receiving documents transmitted by fax to ASX-Perpetual relating to the Mongoose offer and ensuring that they were correctly dealt with on receipt. Further, in the case of the second rights acceptance form received from Mr Grant, Ms Ooi agreed that had it been correctly dealt with the 55 million rights to which the form referred would have been linked to the rights the subject of the Buy Contract Note.

51 Ms Ooi agreed that she was fully aware that Redowood had acquired the 55 million rights and that she had directed one of her staff to send Mr Grant a rights acceptance form with respect thereto because she was satisfied that that was the proper thing to do.

52 In light of the evidence, the primary judge found (at [144]) that the failure of ASX-Perpetual to process the second rights acceptance form was due to its internal failure to connect the Buy Contract Note with that form. His Honour further found that the effect of Ms Ooi's evidence permitted the inference that if she had retained control of all relevant pieces of paper, the rights acceptance form would have been duly processed.

53 Nevertheless, his Honour rejected Redowood's case in estoppel. He expressed his conclusion in the following terms (at [145]):

"The matter stands on the need for unequivocal conduct in order to sustain a claim for estoppel. Whilst I readily accept that the relevant conversation with Mr Grant did treat with how Redowood would have to support its claim, and it was said that in order to do so it would have to produce a brokers contract note showing the purchase which, when received, would result in the forwarding to it of a new rights acceptance form to reflect its new rights, I do not see that this unequivocally went outside the parameter of what was necessary to be done to receive the new rights acceptance form. I do not see the communication as unequivocally indicating that, in the case of Redowood, what had been said to it in answer to its query displaced and replaced its anterior otherwise obligations [of the type imposed upon all putative offerees], being the obligations to strictly comply with the terms of the Mongoose rights offer document vis a vis stipulating a mode of acceptance."

54 As I understand the thrust of his Honour's reasons in rejecting Redowood's case in estoppel, it was that neither the conversations between Mr Grant and Ms Ooi nor the faxing to Mr Grant of the second rights acceptance form contained a representation that it was not necessary for Mr Grant and/or Redowood to comply with the instructions relating to the requirements for a valid acceptance of which they had previously been made aware on receipt of the first rights acceptance form. In other words, there was no representation that Redowood's acceptance of Mongoose's offer to acquire the 55 million rights should be regarded as a special case whereby Mongoose waived the requirements for a valid acceptance including, in particular, those mandated by clause 8.3(d) of the Rights Offer Document.

The appellant's submissions on the appeal

55 Redowood submitted that, contrary to the finding of the primary judge, it had completed the relevant steps set out on the front of the second rights acceptance form in that it had amended the details set out on the top left hand side of the form under Step 1, initialled the alterations, chosen the appropriate alternative under Step 2, signed in the box as required by Step 3 and returned the form so that it was received by ASX-Perpetual prior to midnight on 13 February 2003.

56 So far as any requirement of paragraph 3 of the Additional Notes to provide the name of its stockbrokers was concerned, this had been done when a copy of the Buy Contract Note which identified the Brokers had been faxed by Mr Grant to Ms Ooi on 11 February 2003. It was unnecessary, so it was submitted, for the name of the relevant stockbroker who acted on the purchase of the 55 million rights to be included on the second rights acceptance form, there being no place on the form for the provision of that information (apart from the boxes in Step 3 which were irrelevant as they related only to CHESS Holdings). In any event, paragraph 3 of the Additional Notes had no application as it only applied where the purchase of rights in respect of which the holder had not become registered altered the number of rights shown as the registered holding on the front of the form. As it was unnecessary to alter the number of rights which ASX-Perpetual had itself inserted in the second rights acceptance form, namely 55 million, paragraph 3 of the Additional Notes was irrelevant.

57 As to the insertion by Mr Grant of the SRN I003002997 in the second rights acceptance form, Redowood submitted firstly, that there was no instruction in the Rights Offer Document for the offeree to specify an SRN on the rights acceptance form; secondly, that ASX-Perpetual were aware that the 55 million rights did not belong to the SRN inserted by Mr Grant into the second rights acceptance form because the offer to acquire the balance of the rights the subject of that SRN (65,087,000) had been accepted by the first rights acceptance form received by ASX-Perpetual on 10 February 2003; thirdly, that the "request" to amend the "above details" under Step 1 if they were incorrect and to initial the alteration did not extend to the SRN, sub-register and number of rights set out on the top right-hand side of the front page of the form; fourthly, that this was so is supported by paragraph 3 of the Additional Notes which contained the only instructions relating to altering the number of rights shown as the offeree's registered holding on the front of the form; fifthly, that SRNs were not of particular importance as some security holders would not have one (they are only a numerical filing reference), the name and address of the security holder being more important; and, sixthly, that inevitably security holders would make transcription errors as had happened in the present case.

58 So far as the Redowood's estoppel case was concerned, it was submitted that in the circumstances Mongoose represented to Redowood that if the second rights acceptance form was perceived by Mongoose or ASX-Perpetual to be in any way defective and could not be processed as a valid acceptance, then Mongoose or ASX-Perpetual would contact Redowood to notify it of the defect and would rectify it. Given that after the second rights acceptance form was faxed to ASX-Perpetual on 11 February 2003 no attempt was made to contact Redowood in relation to it, there was an unequivocal representation by or on behalf of Mongoose that that form as delivered on 11 February 2003 did constitute a valid acceptance by Redowood of the rights offer in respect of the 55 million rights to which the form related.

The respondent's submissions on the appeal

59 Mongoose submitted that the insertion of an incorrect SRN was fatal for the reason that it made the acceptance form non-correspondent with the relevant offer. That offer was to acquire 55 million rights but what was accepted by the second rights acceptance form were the rights which had been given the SRN I00030002997. However, Mongoose's offer in respect of the rights the subject of that SRN had been fully accepted at the time the second rights acceptance form was received by ASX-Perpetual and, accordingly, that offer was incapable of further acceptance.

60 It was further submitted that clauses 8.3(d) and 8.4(a) of the Rights Offer Document required the form to be "completed, signed and returned" and that in that context "completed" must mean "completed correctly".

61 Furthermore, clause 8.4(d) reserved an "absolute discretion" to Mongoose to treat the receipt of an acceptance form where its requirements had not been complied with as a valid acceptance. Unless that discretion was in fact exercised, the receipt of the rights acceptance form unaccompanied by other required documents or where some other requirement had not been complied with, could not amount to a valid acceptance.

62 It was then submitted that clause 8.4(a)(ii) had the effect that unless errors in or omissions from the second rights acceptance form had actually been corrected pursuant to the authority given to Mongoose and its agents by that provision, there could be no "effective acceptance" of the offer.

63 So far as the failure to provide the name of the relevant stockbroker was concerned, Mongoose submitted that the instruction in paragraph 3 of the Additional Notes clearly required the provision of the name of that stockbroker on the acceptance form itself. The provision of the stockbroker's name on some other document would not comply with that instruction.

64 So far as Redowood's case in estoppel was concerned, Mongoose submitted that the case now sought to be made by Redowood in its written submissions was not made at trial and should not be permitted to be made on appeal. The only estoppel claim made at trial was based on a conventional estoppel to the effect that if Redowood returned the second rights acceptance form it would have done all that it was required to do to accept Mongoose's offer to acquire to the 55 million rights. It submitted that the primary judge was correct to find that the conversations between Mr Grant and Ms Ooi (as accepted by his Honour) and the faxing of the second rights acceptance form relating to the 55 million rights to Mr Grant did not constitute a statement by or on behalf of Mongoose that Redowood's obligations to comply strictly with the acceptance requirement of the Rights Offer Document would not apply to that transaction.

The question of the coincidence of offer and acceptance

65 To my mind this is the critical issue in the appeal. It relates to the effect of Mr Grant inserting into the blank space designated for "SRN/HIN" at the top right hand side of the front side of the second rights acceptance form, the number I003002997. According to Mongoose and the primary judge, the effect of so doing was that there was a lack of correspondence between the subject matter of the offer and the subject matter of the acceptance: that is, whereas Mongoose offered to purchase 55 million rights in respect of which no SRN had been allocated, Redowood purported to accept 55 million rights the subject of the SRN applicable to its original 84 million rights in respect of which the offer to acquire had already been accepted. The issue, therefore, was whether the insertion of the SRN into the second rights acceptance form had the effect contended for.

66 It is trite law that offer and acceptance must precisely correspond and that any departure by the acceptance from the terms of the offer results in the purported acceptance being ineffective. The primary judge set out the relevant principles in [84] and [85] of his judgment. Commonly, offer and acceptance fail to correspond where the offeree in purporting to accept the offer attempts to restate the terms of the offer in such a way that, whether mistakenly or otherwise, it fails to reflect accurately what was originally offered. Unless it can be reasonably established that the offeror ignored any such restatement as a misdescription, the failure to accept exactly what was offered results in the purported offer being cast as a counter-offer and there is no acceptance of the offer. However, where an offeree in error misdescribes what is being offered, the misdescription is not fatal if it is clear that the offeree really intended to accept the terms and conditions contained in the offer.

67 In Carter v Hyde [1923] HCA 36; (1923) 33 CLR 115, the High Court considered the question of correspondence between offer and acceptance. Carter offered to sell the lease, licence and furniture of a hotel to Hyde. The offer was made on 1 February such that the furniture, the subject of the offer, was that which was in the hotel as at that date. On 22 April, Hyde's personal representatives purported to accept the offer. However, their acceptance was said to be tainted in that it expressly related to the furniture in the hotel as determined by an inventory dated 22 April. Accordingly, in purporting to accept the offer, Hyde's personal representatives were said to have misstated the terms of the offer they were accepting. Carter argued that this amounted to a counter-offer which he was not bound to accept.

68 It was held that the offer and acceptance did coincide. The misdescription was to be treated as an error which was not enough to have affected a reasonable person's understanding of the acceptance as being a full and unconditional acceptance of the offer. This was because the acceptance, although misdescribing the furniture the subject of the offer, also stated that it referred to the offer made on 1 February. Higgins J held that the reference to the inventory dated 22 April was a mere misdescription of the offer which was otherwise clearly identifiable and identified, namely, the offer of 1 February. It was that which was expressly accepted.

69 His Honour tested the matter in the following way (at [133]):

"The best way, perhaps, to test this is by supposing the position to be reversed, by supposing Carter to be seeking to enforce the contract against Hyde's executors: could Hyde's executors deny successfully that they had 'accepted' the 'option'? In my opinion, they could not; the option, identified, was accepted although in one respect it was misdescribed; as if one said 'I offer you the horse Bucephalus for £100' and the other replied 'I accept the horse Bucephalus 16 hands high for £100' and the horse was actually 15 hands high."

70 The High Court in Quadling v Robinson [1976] HCA 31; (1976) 137 CLR 192 further considered whether a purported acceptance can still be characterised as an acceptance notwithstanding that (at least seemingly) it involved a misdescription, or qualification, of the original offer. In that case a lease contained an option enabling the lessees to purchase a farm the subject of the lease. The granting of the option was conditional upon two factors: firstly, that requisite government approval be granted and, secondly, that a deposit be paid within one month of the exercise of the option. The offerees (i.e. the lessees) in purporting to accept the offer stated they would pay the deposit upon receipt of the governmental approval. It was argued that this amounted to a variation of the terms of the option and that the lessees were essentially stating that they would not comply with the one month timeframe where the approval was not forthcoming.

71 The Court held that a reasonable recipient of the notice of exercise would have regarded the statement about payment of the deposit as merely a statement of intention and not a declaration that the lessees would not pay at an earlier date if the option required it. At 201 Gibbs J observed:

"However, it is not always easy to determine whether the purported exercise of an option should be understood as attempting to vary the terms of the option or as intending to accept its terms without modification, notwithstanding that they may have been misdescribed, or notwithstanding that the grantee of the option may have indicated that he intends to perform the contract in a manner for which the terms of the option do not provide. Thus although a notice misstates the terms of the option which it purports to exercise, it may nevertheless amount to an unqualified and unconditional exercise of the option: see Carter v Hyde. On the other hand, if the grantee of an option sets out his own erroneous understanding of the option, and then purports to exercise the option as so understood, there will (speaking generally) be no effective exercise of the option ... It must of course depend upon the proper construction of the document by which the grantee purports to exercise an option whether it amounts to an absolute and unqualified acceptance of the rights and liabilities conditionally created by the option."

72 In the present case, the second rights acceptance form faxed by Ms Ooi to Mr Grant on 11 February 2003 invited acceptance of the offer to acquire the 55 million rights referred to therein. The designated space for the SRN was left blank, no doubt because it was then understood that an SRN had not been allocated by ANL in respect of that parcel. Subject to the stockbroker point, it was common ground that if Mr Grant had left the SRN blank, there would have been a valid acceptance of the offer. The reason for this, it would seem, is that in the absence of an SRN the reference to the 55 million rights would need to be identified from the surrounding circumstances known to both parties at the time the document was faxed to Mr Grant. Those circumstances were that the 55 million rights were those which Redowood had recently acquired and were different from the 65,087,000 rights which had been the subject of the first rights acceptance form received by ASX-Perpetual on 10 February 2003. The 55 million rights were also those identified in the Buy Contract Note which had been faxed to ASX-Perpetual by Mr Grant earlier on 11 February 2003.

73 There is no doubt that Mongoose's offer was to acquire the 55 million rights recently purchased by Redowood. It inserted that number in the designated space for the number of rights in respect of which the offer to acquire could be accepted. The second rights acceptance form faxed back a few hours later to ASX-Perpetual by Mr Grant did not alter that figure. It quoted an SRN which was incorrect. In my opinion the position is no different from the example given by Higgins J in Carter. That example was:

"I offer you the horse Bucephalus for £100', and the other replied 'I accept the horse Bucephalus 16 hands high for £100' and the horse was actually 15 hands high."

74 To adopt and adapt that example to the present case, Mongoose offered to acquire 55 million ANL rights at $0.01 per right. Redowood replied that it accepted the offer for 55 million ANL rights SRN I003002997 for $0.01 per right. Like the horse Bucephalus, the 55 million rights the subject of the offer and acceptance did not have the SRN inserted by Mr Grant into the second rights acceptance form, but (ultimately) a different SRN. Nevertheless, there was correspondence between what was offered to be purchased, namely, 55 million ANL rights and what was accepted, namely, the offer to sell the same number of rights. Importantly there was no alteration to the number of rights inserted by ASX-Perpetual into the form. Thus, in my opinion, the primary judge erred in concluding that there was insufficient correspondence between offer and acceptance.

75 In the foregoing circumstances, it could not be suggested (nor was it) that Redowood was attempting to alter the terms of the offer: it only had 55 million rights to sell and that number was what Mongoose was prepared to purchase. Furthermore, it would be difficult to posit coherently a sensible construction whereby Redowood's mistake or misdescription could be considered a counter-offer. That would have involved Redowood counter-offering to resell to Mongoose rights which it had already, to the knowledge of both parties, acquired.

76 There is something distinctly unappealing about the argument advanced by Mongoose that it understood the acceptance to be an attempt by Redowood to accept Mongoose's offer to purchase rights which offer had already been accepted. In Carter the High Court stated that what must be determined is whether a reasonable recipient of the acceptance would have regarded it as corresponding to the offer or whether they would have taken the acceptance to be qualifying the original offer such that it would amount to a counter-offer or, at any rate, not an unconditional acceptance of that which was originally offered. Thus Isaacs J (at 126), referring to the circumstance where the offeror had not objected to the offeree's purported acceptance (bearing in mind that in Carter the acceptance was personally delivered), observed:

"In those circumstances the appropriate question is that of Romer J in Jones v Daniel, namely 'Now what would anybody when he received that letter fairly understand to be the meaning of it?' and I add, of course, 'in the circumstances of its receipt'. His own attitude shows that he understood it, and I think reasonably so, as adding nothing to the conditions."

77 In Quadling, Gibbs J determined upon a reasonable construction of the acceptance that it did not purport to introduce or vary any terms. Accordingly, the determinative issue for present purposes is the reasonable construction of the acceptance: what was the offeror (Mongoose) entitled to make of it?

78 Mongoose would be entitled to succeed if it could be shown (or if Redowood was unable to establish to the contrary) that it was a reasonable construction of the second rights acceptance form to treat it as being an acceptance of an offer to acquire rights which had already been the subject of a previous acceptance. Redowood on the other hand, was required to demonstrate that the insertion of an incorrect SRN, which was mutually treated as referring to the rights previously the subject of a valid acceptance, while being a misdescription or mistake, was not such as to entitle or enable Mongoose reasonably to consider that Redowood was attempting to vary or alter its offer to acquire the 55 million rights the subject of the Buy Contract Note. In my opinion, Redowood has so demonstrated.

79 The conversation between Mr Grant and Ms Ooi boiled down to two salient points: firstly, that Redowood had already accepted Mongoose's offer in respect of the 65,087,000 rights being the balance of its original entitlement; and secondly, that Redowood had recently acquired a further 55 million rights which it desired to sell to Mongoose. The reference in the second rights acceptance form to those 55 million rights was settled between the parties as being a reference to the rights identified both in the conversation between Mr Grant and Ms Ooi and confirmed in the Buy Contract Note which, at her request, had been forwarded to her after the conversation earlier on 11 February 2003. By not altering the figure of 55 million which had been inserted by ASX-Perpetual into the second rights acceptance form and by completing, signing and returning the form after altering the name and address of the offeree and initialling the alternation, Redwood was, on the face of the document, accepting Mongoose's offer with respect to those 55 million rights.

80 The SRN inserted into the document by Mr Grant was obviously incorrect and known to be so because it was common ground that the rights the subject of that SRN had already been the subject of the first rights acceptance form. To construe the second rights acceptance form as giving the SRN precedence over the reference to the unaltered number of 55 million leads, in my respectful opinion, to an absurdity that Redowood could not reasonably have intended and Mongoose could not reasonably have understood. Accordingly, in my opinion there was correspondence between offer and acceptance.

81 I have not hitherto referred to the following well-known statement of Mason J in Codelfa Constructions Pty Limited v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 at 352 where his Honour said:

"The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract where language is ambiguous or susceptible to more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although as we have seen, if the facts are notorious knowledge of them will be presumed."

82 In Royal Botanic Gardens & Domain Trust v South Sydney City Council [2002] HCA 5; (2002) 76 ALJR 436 at 445 [39], Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in a joint judgment, made reference to several decisions of the House of Lords delivered since Codelfa where their Lordships may have taken a broader view of the admissible "background" than was taken in Codelfa but without making reference to Codelfa itself.

83 In their learned article, "Interpretation, Good Faith and the 'True Meaning' of Contracts: The Royal Botanic Decision" (2002) 18 Journal of Contract Law 182 at 187, Professors J W Carter and A Stewart make reference to the English cases referred to by Mason J in Codelfa as establishing that evidence of surrounding circumstances is admissible in all cases not just in those cases in which there is ambiguity. Their Honours in Royal Botanic Gardens thought it unnecessary to determine whether this was so and, if so, which view was to be preferred. Until such a determination was made, Codelfa was to be followed. After referring to a passage from the speech of Lord Wilberforce in Prenn v Simmonds [1971] 1 WLR 1381 at 1383-4 cited by Mason J in Codelfa (at 348-9), the learned authors note:

"In effect, these cases establish a very simple point. The process of interpretation cannot begin until the context in which the words in the document were used has been identified. Moreover, since virtually every word in the English language is susceptible to more than one meaning, if it is not first put in context, the 'exception' to which Mason J referred in Codelfa must apply in virtually every case ... It is hardly surprising that trial courts usually pay little more than lip-service to the requirement of 'ambiguity'. In practice, evidence of context is virtually always received and relied upon with a minimum of fuss."

84 In Trawl Industries of Australia Pty Limited v Effem Foods Pty Limited (1992) 27 NSWLR 326 at 358, Clarke JA after referring to Codelfa and the requirement that the language of the contract be ambiguous before extrinsic evidence can be admitted in aid of the construction of the terms of the written contract, observed (at 358) that:

"[i]n many, if not most, cases in which the court is seeking to construe a particular term or terms of a contract there would be sufficient uncertainty as to the meaning of the relevant term as to enable the admission of evidence of surrounding circumstances. This was recognised by McHugh JA, as he then was, in Manufacturer's Mutual Insurance Limited v Withers (1988) 5 ANZ Insurance Cases 60-853 at 75,343. There his Honour said:

'... few, if any, English words are unambiguous and not susceptible to more than one meaning or have a plain meaning. Until a word, phrase or sentence is understood in light of the surrounding circumstances, it is rarely possible to know what it means'. "

85 In Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 78 ALJR 1045, the High Court was concerned to construe some letters of indemnity. The nature of the obligations undertaken by BNP who signed and transmitted the letters of indemnity to the appellant (Pacific), depended, so the Court in a joint judgment said, upon the meaning of the documents. At 1050 [22], their Honours observed:

"The case provides a good example of the reason why the meaning of commercial documents is determined objectively: it was only the documents that spoke to Pacific. The construction of the letters of indemnity is to be determined by what a reasonable person in the position of Pacific would have understood them to mean. That requires consideration, not only of the text of the documents, but also the surrounding circumstances known to Pacific and BNP and the purpose and object of the transaction. In Codelfa Constructions Pty Limited v State Rail Authority of New South Wales, Mason J set out with evident approval the statement of Lord Wilberforce in Reardon Smith Line Ltd v Hansen-Tangen:

'In a commercial contract it is certainly right that the court should know the commercial purpose of a contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating' . "

86 In the present case, the genesis of the transaction and its commercial purpose were known to both parties. Redowood was originally entitled to 84 million ANL rights and had accepted Mongoose's offer in respect of 65,087,000 of those rights by completing, signing and returning the first rights offer acceptance form on 11 February 2003. Because it had then acquired a further 55 million rights, Redowood through Mr Grant enquired of Ms Ooi of ASX-Perpetual as to how Redowood could accept the offer for those rights. Upon faxing to ASX-Perpetual at Ms Ooi's request a copy of the Buy Contract Note with respect to those further 55 million rights together with a copy of the Entitlement and Acceptance Form with respect to the original 84 million rights, ASX-Perpetual faxed to Mr Grant the second rights acceptance form with respect to the 55 million rights. That document was then signed, alterations made to correct the name and address of the vendor and faxed back to ASX-Perpetual within hours of its receipt.

87 In the foregoing circumstances, it was known and understood to both parties that what Mongoose was offering to purchase was 55 million rights the subject of the Buy Contract Note and what Redowood accepted was that offer. It was also known that the offer to acquire the rights the subject of the SRN which Mr Grant had inserted into the second rights acceptance form, had already been validly accepted by the signing and return by Redowood of the first rights acceptance form.

88 In my opinion, even accepting what has been referred to as the narrow view in Codelfa, there was at least some ambiguity or uncertainty as to which 55 million ANL rights were the subject of the second rights acceptance form signed by Redowood and faxed back to ASX-Perpetual. That uncertainty was resolved by reference to the mutual knowledge of the parties as to the identity of those 55 million rights and to the fact that they were different to the 65,087,000 rights which had already been validly accepted on 10 February. In these circumstances, on its true construction the second rights acceptance form as completed, signed and returned to ASX-Perpetual related to the same 55 million rights which were the subject of the offer to acquire that same number of rights contained in the same form faxed by ASX-Perpetual to Mr Grant on 11 February 2003. There was, therefore, complete identity and correspondence between offer and acceptance.

The alleged failure to comply with Additional Note 3

89 In my opinion, Redowood's submission should be accepted that paragraph 3 of the Additional Notes has no application to the present case. The provisions of that paragraph assume that as a consequence of having either bought or sold ANL rights, the number of such rights shown as the registered holding on the front of the rights acceptance form required alteration to include any rights to which the offeree was entitled to become registered as holder. It is only in those circumstances that there was a requirement to "indicate the name of the stockbroker who acted for you".

90 In the present case, there was no necessity to alter the number of ANL rights shown on the front side of the second rights acceptance form as it corresponded exactly with the number of rights which Redowood had then purchased as evidenced by the Buy Contract Note. Accordingly, as a matter of construction of paragraph 3, it had no application to the present case.

91 However, even if it did, in my opinion the requirement of the note had been complied with when the Buy Contract Note was faxed to ASX-Perpetual on 11 February 2003. I would reject the submission of Mongoose that the note required the name of the stockbroker to be inserted on the front of the form. In my opinion the note would have been satisfied if, for instance, the second rights acceptance form had been returned with a covering note in which the name of the stockbroker was identified. In the present case, the Buy Contract Note identified the relevant stockbroker and was already held by ASX-Perpetual. In my view paragraph 3 of the Additional Notes was either inapplicable to the present circumstances or complied with.

The Rights Offer Document: clauses 8.3(d) and 8.4(a)

92 Clause 8.3(d) of the Rights Offer Document mandated that Redowood complete and sign the second rights acceptance form "in accordance with the instructions on it". In my opinion, this requirement was fulfilled and the appellant's submissions referred to in [55] above should be accepted. I have already expressed the view that paragraph 3 of the Additional Notes had no application to the present case or, if it did, that it was complied with. So far as the insertion of the SRN was concerned, there was no instruction on the form for the designated space for the SNR/HIN (which was blank) to be filled in. Step 1 stated: "Check your details below". There then appeared the name of Mr Grant and his post office address. Underneath that were the words "If any of the above details are incorrect, please amend them and initial the alterations". The details appearing above those words were incorrect but were then amended and initialled by Mr Grant. Accordingly, in my opinion Redowood completed the second rights acceptance form "in accordance with the instructions on it". There was no breach of clause 8.3(d).

93 For ease of reference I repeat the relevant part of clause 8.4(a)

"8.4 Your agreement resulting from acceptance

(a) Effect of Acceptance Form

By completing, signing and returning the Acceptance Form, you will have:

(i) accepted the Offer in respect of your Acceptance Rights;

(ii) authorised Mongoose and each of its officers and agents to correct any errors in, and complete any omissions from, the Acceptance Form necessary to:

(A) make it an effective acceptance of this Offer in relation to your Transfer Rights which are not in a CHESS Holding; or ..."

94 Contrary to the finding of the primary judge, in my opinion sub-paragraph (i) and sub-paragraph (ii) do not refer to two different situations. It will be recollected that his Honour considered that sub-paragraph (i) referred to an accurately completed acceptance form which thereby validly accepted the offer whereas sub-paragraph (ii) referred to an incomplete form containing errors or omissions in respect of which Mongoose and its agents were authorised to correct so as to make it "an effective acceptance" of the offer. Until corrected there was, according to his Honour, no valid acceptance.

95 In my respectful opinion, the primary judge's construction of these provisions was in error. It is clear that sub-paragraphs (i), (ii) and (iii) of clause 8.4(a) are cumulative. Sub-paragraph (i) is not an alternative to sub-paragraph (ii). This construction is supported by the fact that both sub-paragraphs (i) and (ii) are subject to the opening words of clause 8.4(a) – "By completing, signing and returning the Acceptance Form, you will have". In other words, once the form has been completed, signed and returned two consequences follow. The first is that the offeree will have, in terms of sub-paragraph (i), accepted the Offer in respect of the offeree's Acceptance Rights. The second is that it will have authorised Mongoose and its agents to correct any errors in, and complete any omissions from, the form necessary to make it an effective acceptance of the Offer. It is noteworthy that the expression used is "effective acceptance" and not "valid acceptance", an expression used in clause 8.4(d).

96 In my opinion, therefore, the opening words of clause 8.4(a) contemplate an Acceptance Form which is complete but nonetheless contains errors or omissions. Furthermore, the correction of such errors or omissions is only required in order to make the Acceptance Form an effective acceptance of the Offer in relation to the holders "Transfer Rights" which is defined in the Glossary to the Rights Offer Document to mean those Acceptance Rights which, subject to the terms of the Offer, are to be transferred to Mongoose.

97 Accordingly, the completion, signing and returning of the Acceptance Form constitutes the acceptance of the Offer in respect of the offeree's Acceptance Rights as a consequence whereof a contract comes into existence. A term of that contract is that Mongoose and each of its agents is authorised to correct any errors in, and complete any omissions from, the Acceptance Form necessary to make it an effective acceptance in relation to the offeree's Transfer Rights. In other words, what comes into existence is an executory contract which is finally executed when the rights, the subject of the contract, are transferred to Mongoose. This construction is, in my view, supported by clause 8.6(a) and (b) of the Rights Offer Document: see [36] above.

98 In my opinion, clause 8.4(a)(ii) is intended to authorise Mongoose and its agents to correct errors and omissions in the acceptance form necessary to enable any such transfer to be effected. However, the existence of those errors or omissions does not prevent the coming into existence of a contract constituted by the completing, signing and returning of the Acceptance Form upon the occurrence of which the offeree will have "accepted the Offer in respect of your Acceptance Rights" within the meaning of clause 8.4(a)(i).

99 It follows from the foregoing that in my opinion, the insertion of SRN I003002997 into the second rights acceptance form by Mr Grant did not prevent the provisions of clause 8.4(a)(i) of the Rights Offer Document applying to constitute on the completion, signing and return of that form, a valid acceptance of Mongoose's offer to acquire Redowood's 55 million ANL rights.

The failure of Mongoose to correct the SRN in the second rights acceptance form

100 Mongoose submitted that it had an absolute discretion to refuse to treat the receipt by it of the second rights acceptance form as a valid acceptance pursuant to clause 8.4(d). In this respect it is to be noted that that provision is wider in its terms than clause 8.4(a)(ii) which is confined to errors in, and omissions from, the Acceptance Form. Clause 8.4(d) relates to the non-receipt of other documents required by the instructions on the Acceptance Form as well as non-compliance with "other requirements for acceptance".

101 In my opinion, clause 8.4(d) has no application to the present case. In the first place, no other documents were required by the instructions on the Acceptance Form to be provided. Secondly, there were no other requirements for acceptance which had not been complied with. The insertion by Mr Grant of an erroneous SRN in the second rights acceptance form did not involve any non-compliance with a requirement for acceptance. In my opinion, the provisions of clause 8.4(d) of the Rights Offer Document do not provide any assistance to Mongoose.

Conclusions

102 For the foregoing reasons, in my opinion, the relevant provisions of the Rights Offer Document were complied with including those instructions upon the Acceptance Form which were relevant and applicable to the offer by Mongoose to acquire 55 million ANL rights from Redowood. Further, in my view there was no requirement for Redowood to provide the name of its stockbroker through whom it purchased the 55 million rights although it is clear that it in fact did so by providing ASX-Perpetual with a copy of the Buy Contract Note.

103 Finally and critically, the insertion by Mr Grant in the second rights acceptance form of an erroneous SRN in what was otherwise the designated space for that number but which was blank, did not detract from there being an acceptance by Redowood of Mongoose's offer to acquire the 55 million ANL rights which Redowood had purchased on-market.

104 Accordingly, in my opinion there was correspondence between the relevant offer and acceptance as a result of which a binding contract came into existence pursuant to which Mongoose was obligated to purchase Redowood's 55 million ANL rights at $0.01 per right, for a total purchase price of $550,000.

105 As I am of the opinion that a contract came into existence between the parties, it is unnecessary to determine Redowood's case based on conventional estoppel.

106 I would therefore propose the following orders:

(1) Appeal allowed;

(2) Set aside orders 1 and 2 made by Einstein J on 19 March 2004;

(3) In lieu thereof the respondent to pay to the appellant the sum of $550,000 together with interest at the rate from time to time prescribed under s 94 of the Supreme Court Act from 6 March 2003 to 19 March 2004 being the date of judgment at first instance;

(4) The respondent to pay the appellant's costs of the proceedings at first instance and of the appeal but to have with respect to the latter a certificate under the Suitor's Fund Act 1951, if otherwise qualified.

107 BRYSON JA: Redowood, the plaintiff and now the appellant, sued Mongoose, the defendant and now the respondent, in the Commercial List. After amendments the Summons claimed this declaration. (Red Appeal Book 6)

(iA) a declaration that Redowood accepted the offer dated 30 January 2003 made by Mongoose to purchase all rights on issue in Anaconda Nickel Ltd on issue as at 30 January 2003 in respect of 55 million rights referred to in the Rights Acceptance Form dated 11 February 2003 delivered by Redowood to ASX-Perpetual Registrars on that day

Redowood also claimed judgment for $550,000, costs and interest. The proceedings were heard before Einstein J who made orders on 19 March 2004, for reasons which his Honour published on 3 March 2004; the Summons was dismissed, with an order for costs. A cross-claim was also dismissed, without its being determined on the merits.

108 Mr Bruce Robert Grant has been the Company Secretary of Redowood since 1990 and all actions now relevant were taken by him on the company’s behalf. The registered office of Redowood is and has been at Suite 13A, 35-37 Railway Parade, Engadine, New South Wales. From about July 2002 onwards Redowood was the beneficial and registered owner of 6 million shares in Anaconda Nickel Ltd (ANL); earlier these shares had been held for Redowood by a nominee company. ANL issued to its shareholders a prospectus dated 20 January 2003 for a Rights Offer of fourteen New ANL shares for each one existing share, at the issue price of $0.05 per share. Redowood became entitled to renounceable rights to 84 million New ANL shares because Redowood owned 6 million existing shares on 28 January 2003. Redowood was registered as the holder of the ANL renounceable rights from the time when the rights came into existence. The rights had to be exercised on or before 14 February 2003; otherwise they would lapse. To exercise the rights it was necessary to deliver Notice of Exercise to ANL’s office in Perth.

109 It is necessary to distinguish Issuer Sponsored Holdings, in which a holder of securities is identified by an SRN, in a register maintained by the corporation which issues the securities and deals directly with the holder of the securities, from entries in the CHESS system which follow transactions on the Stock Exchange, are identified by an HIN and are made only by stockholders. Entries in a corporation’s own register of securities which occur without the intervention of a stockbroker do not appear in the CHESS system. If a holding of securities was issued by the issuer corporation itself the holding will have an SRN; if it was purchased on the Stock Exchange through a stockbroker the holding will have an HIN. There was never a CHESS holding for Redowood’s shares or any of its Rights. An SRN is an identification code (typically a capital letter and a number) allocated by an issuer corporation, in this case by ANL, to every security holder who is not sponsored by the CHESS system; the SRN so issued is unique to the security holder and to that particular holding. If the security holder acquires a further holding of securities in the same issuer corporation, the SRN allocated by the issuer will be the same if all identifying details of the existing security holder and the incoming holder are identical, but there will be a new SRN if there is some difference, however small, in detail.

110 On 30 January 2003 Mongoose issued two offer documents: one related to an offer to ANL shareholders to purchase all or any ANL shares at $0.12 each, and the other was a Rights Offer document which contained an offer to purchase all or any ANL rights for one cent each renounceable right; the Rights Offer was open for acceptance during the period 30 January 2003 to 13 February 2003. The offer was in two alternatives, the one now significant being Alternative 1, the cash offer of $0.01 for each ANL right. Copies of the two offer documents were delivered to Mr Grant by courier on or about 30 January 2003. ASX-Perpetual performed registry functions for Mongoose in relation to its offers. For acceptance it was necessary for a Rights Acceptance Form to be delivered to ASX-Perpetual on or before 13 February 2003.

111 In the Rights Offer document (Blue Appeal Book 2/237) material information about ANL appears at sub-paragraph 7.4(b) ANL Rights Issue:

ANL Rights Issue

On 20 January 2003, ANL announced a 14 for 1 pro-rata renounceable rights issue. The exercise price for the ANL Rights is $0.05 for every new ANL Share. The ANL Rights Issue is fully underwritten by Glencore International AG. The ANL Rights Issue Prospectus was lodged with ASIC on 20 January 2003. ANL will commence dispatch of the ANL Rights Issue Prospectus on 29 January 2003. The offer period under the ANL Rights Issue will currently end on 14 February 2003. The current timetable (as at the date of this Rights Offer Document) for the ANL Rights Issue is set out below:

ANL Rights Issue Timetable

Date

Lodgement of ANL Rights Issue Prospectus with ASIC

20 January 2003

Ex Date

Trading in ANL Rights starts

21 January 2003

Record date for determining entitlements for ANL

Rights Issue

28 January 2003

Dispatch of ANL Rights Issue Prospectus to

shareholders

29 and 30 January 2003

Last day for dispatch of ANL Rights Issue Prospectus to

shareholders.

ANL Rights Issue Offer Period opens

31 January 2003

ASX trading in ANL Rights ends

7 February 2003

ANL Rights Issue Offer Period closes (ie, last day to

exercise ANL Rights)

Last day to transfer ANL Rights off-market

14 February 2003

ANL allots and issues new ANL Shares and dispatches holding statements

25 and 26 February 2003

ASX quotes new ANL Shares

27 February 2003

112 Redowood disposed of its 6 million ANL shares in ways which did not give rise to any dispute in this litigation. It sold 3,600,000 of the shares on the Australian Stock Exchange (ASX), and accepted Mongoose’s Share Offer for the remaining 2,400,000 existing shares. On 21 and 22 January 2003 Redowood sold 18,913,000 of its renounceable rights on the Stock Exchange; so that when Mongoose’s Rights Offer was made on 30 January 2003 Redowood was still entitled to 65,087,000 rights.

113 Addresses given for delivery of Rights Acceptance Forms were addresses of ASX-Perpetual. ASX-Perpetual sent Redowood a partly-completed Share Acceptance Form and a partly-completed Rights Acceptance Form, which Mr Grant received about 8 February 2003. The Acceptance Forms appear to have been in the same form as the Acceptance Forms which form part of the Rights Offer documents. The Share Acceptance Form when sent out was partly completed by showing Redowood’s name and the address of its registered office, and references to the shares in the following terms (Blue Appeal Book 2-325):

SRN/HIN I00030002997

Subregister Issuer Sponsored

Number of your 6,000,000

ANL Shares

114 Mr Grant drew a line through the figures 6,000,000 so as to strike them out, hand-wrote 2,400,000 immediately to their right, initialled the alteration, and completed the form at the space for signatures by having a director sign in one box as director, by signing himself as Secretary and by placing Redowood’s common seal on the document. He also wrote the date 9/02/03 and the telephone number of Redowood’s office, and sent the Share Acceptance Form to ASX-Perpetual.

115 The Rights Acceptance Form when sent out was partially completed by showing Redowood’s name and the address of its registered office, and reference to the rights in the following terms: (Blue Appeal Book 2/326)

SRN/HIN I00030002997

Subregister Issuer Sponsored

Number of your 84,000,000

ANL Rights

116 Mr Grant drew a line through the figures 84,000,000 so as to strike them out, hand-wrote 65,087,000 immediately to their right, initialled the alteration, completed the form by ticking a box to elect Offer Alternative 1. He also had a director sign in one box as director, signed himself as Secretary, placed Redowood’s common seal on the document, wrote the date 9/02/03, and sent the form to ASX-Perpetual. Mr Grant posted both the Share and Rights Acceptance Forms on 10 February 2003. Both these forms were received by ASX-Perpetual, and in due time Mongoose paid Redowood the consideration in accordance with the Offer Documents. After ASX-Perpetual had received and processed the Acceptance Forms, which probably happened on or about 11 February 2003, Redowood no longer had any entitlement to the shares and rights which it was recorded as owning in ANL’s register.

117 Under the heading “How to accept the offer” on the back of the Rights Acceptance Forms were a number of directions and notes including the following: (Blue Appeal Book 2/322 H)

Issuer Sponsored Holdings

If your ANL Rights are in an Issuer Sponsored Holding, or if you are not yet registered as the holder of your ANL Rights, then to accept the Offer, you must fill out this Acceptance Form overleaf and return it to the one of the addresses shown below. You must return your Entitlement and Acceptance Form from the ANL Rights Issue Prospectus with this Acceptance Form.

This direction applied to the acceptance by Redowood of the Rights Offer for its 65,087,000 rights because the ANL rights were in an Issuer Sponsored holding. Mr Grant did not in fact comply with this direction as he did not return the Entitlement and Acceptance Form from the ANL rights issue prospectus with the acceptance which he forwarded on 10 February for 65,087,000 rights. The fact that he did not do so caused no difficulty in the transaction relating to the 65,087,000 rights.

118 On 6 February 2003 Redowood bought, on the Stock Exchange, 55 million rights; Redowood’s broker was Mr Sam Chapman of Smith Barney City Group Australia Pty Ltd, formerly Salomon Smith Barney Private Clients Pty Ltd. The purchase of 55 million rights proceeded in a regular way towards settlement and registration. Mr Chapman’s Contract Note (Blue Appeal Book 2/342) showed the settlement date as 11/02/2003: at that time Mr Chapman already held sufficient money on behalf of Redowood to effect settlement. A message (Blue Appeal Book 2/381) appears to show that settlement took place on 11 February 2003. When settlement took place Mr Chapman communicated with CHESS, and CHESS thereafter communicated with the share registrars of ANL.

119 ASX-Perpetual received from ANL a copy of ANL’s register of holders of rights on 7 February 2003; this copy showed the state of the register at 6 February 2003 meaning, I understand, at the close of business on 6 February 2003. ASX-Perpetual received a further copy of the register on 13 February 2003 showing the state of the register at the close of business on 12 February. In ANL’s register the 55 million rights are entered against holder category I and holder No. 30005244. The entry appeared on 12 February 2003. (Red Appeal Book 2/373).

120 The ANL register identified Redowood and its original holdings of shares and rights by reference to SRN I30002997. The entry of the 55 million recently acquired rights did not appear under SRN I30002997 because of some small discrepancy between the way the address of Redowood was stated and the way it was stated in the earlier entry.

121 On or by 10 February 2003 Mr Grant decided to accept the Rights Offer for the 55 million rights recently purchased. Mr Chapman told him that the broker’s firm could not advise ASX-Perpetual of the acceptance, and the reason Mr Chapman gave was “... as you are not CHESS registered. You will need to advise the acceptance yourselves.” On the afternoon of 10 February 2003 Mr Grant telephoned ASX-Perpetual’s question line and spoke to a person named Alex; he told Alex that he needed to complete a further Rights Acceptance Form and asked to speak to someone who could assist him; Alex said he would get someone to call back. Mr Grant received no call back and telephoned again about 9.15am on 11 February 2003; he again explained what he required to a man named Brian Wade who said he would get someone to call back. Later in the morning of 11 February 2003 Ms Nicole Ooi of ASX-Perpetual telephoned Mr Grant and they had the following conversation: (Blue Appeal Book 2/386)

"[Mr Grant]: Yesterday morning I mailed to ASX an amended Acceptance Form in relation to the Mongoose Takeover Offer for 65,087,000 Rights. However, I need to complete another Acceptance Form for an additional 55,000,000 ANL Rights, which our company, Redowood Pty Limited, has purchased on the market

Nicole Ooi: I am aware of the Acceptance Form that you sent to us yesterday. However you will need to support your claim by producing a Broker’s Contract Note, showing your purchase of the 55,000,000 ANL Rights. Please fax that to me on my fax number which is 02 8280 7473 and when I receive it I will forward to you a new Acceptance form, which will reflect the 55,000,000 ANL Rights."

122 Soon afterwards on the morning of 11 February 2003 Mr Grant sent to ASX-Perpetual by fax a copy of the Broker’s Contract Note for the purchase of 55 million rights (as Ms Ooi had requested) and also a copy of the ANL Entitlement and Acceptance Form relating to the 84 million ANL rights. Later that day, at about 3.30pm and after a further message from Mr Grant, Mr Grant received by fax from ASX-Perpetual a Rights Offer document with a corresponding Rights Acceptance Form relating to 55 million rights. The Rights Acceptance form was partly completed. It showed Mr Grant, not Redowood, as the person who was to accept the Rights offer, and showed his post office box address and not Redowood’s registered office as the address of that person. The particulars of the Rights were as follows (Blue Appeal Book 2/348)

SRN/HIN

Subregister

Number of your 55,000,000

ANL Rights

123 Notwithstanding the form of the second Rights Acceptance Form in evidence, an exchange with counsel during the hearing on appeal established that the form transmitted by fax to Mr Grant on 11 February 2003 was in two pages and that the reverse page was transmitted. Whether or not the reverse page was so transmitted, the form including the reverse page appeared in and was part of the Rights Offer which Mr Grant had received about 30 January 2003, and it could not reasonably have been thought otherwise than that the conditions on the back applied.

124 Mr Grant made a copy of the Rights Acceptance Form and made alterations on the copy, during which he struck out his own name and post office box address, and hand-wrote the name of Redowood and the same post box office address, and in brackets added the address of the registered office of Redowood. He initialled these alterations. He completed the reference to the rights as follows: (Blue Appeal Book 2/349)

SRN/HIN I003002997

Subregister Issuer Sponsored

Number of your 55,000,000

ANL Rights

He ticked the box for Alternative 1, had the document signed by a director, signed it himself as Secretary, affixed the company seal and wrote in the date 11/02/03 and the telephone number. At about 4pm he sent the form, together with copies of the ANL Entitlement and Rights Acceptance Form and the Broker’s Contract Note for the 55 million rights by fax message to Ms Ooi at ASX-Perpetual. He also, on 11 February 2003, despatched both forms by express post to ASX-Perpetual.

125 On 11 February 2003 the 55 million ANL Rights which Redowood had purchased on 6 February 2003 were not identified by the reference SRN I003002997, or any similar reference with variations in the numbers and positions of zeros, in the register of ANL or anywhere else. When a SRN number appeared in ANL’s register on 12 February 2003 the reference given was I30005244. SRN I00030002997, with varying numbers of zeros, was used in ANL’s register and in records derived from them only for Redowood’s long-standing holding of 6 million ANL shares and for rights issued in respect of them. SRN I30005244, in any variant as to numbers and positions of zeros, first appears in entries in ANL’s register entered on 12 February 2003 a copy of which was received by ASX-Perpetual on 13 February 2003. ASX-Perpetual had information about the state of ANL’s register showing registered ownership of rights; from 7 February 2003 onwards the copy register showed that Redowood was the owner of 65,087,000 rights, and on 13 February the copy register showed an entitlement to a further 55 million rights. However those further 55 million rights were not identified by the number Mr Grant had given in the Rights Acceptance Form, that is SRN/HIN I003002997; that number pointed, completely unmistakably, although not completely accurately, to the entries in the register relating first to the original 84 million rights and, by 12 and 13 February 2003, to the remaining 65,087,000 of those rights, correctly identified by the SRN I0030002997. There are discrepancies in the numbers of zeros. Mr Grant wrote two groups of two zeros. According to the Entitlement and Acceptance Form (Blue Appeal Book 2/343) the reference is SRN I0030002997. In the ANL register the first group of two zeros is not recorded; it appears to be taken for granted. Although Mr Grant put two zeros and not three zeros in the second group, his reference was entirely unmistakably a reference to the rights appearing in the register under SRN I30002997.

126 After sending off the Rights Acceptance Form Mr Grant did not communicate with ASX-Perpetual again during the period to midnight on 13 February 2003 which was available for acceptance. Of course Mr Grant and Redowood did not exercise the 55 million rights by any acceptance directed to ANL.

127 It is clear enough that Ms Ooi of ASX-Perpetual knew on 12 February 2003 that Redowood wished and intended to accept the offer for 55 million rights which it had recently purchased. Although the Rights Acceptance Form sent to Mr Grant on 11 February 2203 shows that someone at ASX-Perpetual got the impression that Mr Grant himself was to be the party to accept the offer, ASX-Perpetual had available to its officers on 12 February 2003 an array of information which could well have been interpreted so as to show what Redowood instead of Mr Grant wished to do. ASX-Perpetual had information showing that Redowood had accepted the Rights Offer for 65,087,000 rights, and had a copy of the ANL Entitlement and Acceptance Form which shows that Redowood had had an initial entitlement from the beginning of the Rights Offer to 84 million rights. A copy of the Entitlement and Acceptance Form was sent by fax on 11 February 2003, and the form itself was received in the post on 13 February 2003. (It may seem confusing that that form was enclosed with the Rights Acceptance Form for 55 million rights, but confusion of that kind does not seem to have had any influence on events.) ASX-Perpetual also had a copy of the Broker’s Contract Note for 55 million rights.

128 On 12 and 13 February 2003 it would not have been difficult for some person in the office of ASX-Perpetual to review the information available and decide that there were apparent anomalies and that it was open to doubt whether Redowood really intended to duplicate its earlier acceptance or intended to make another acceptance, in view of the fact that it had a Broker’s Contract Note for another parcel of 55 million rights; and then to decide to refer to Mr Grant for clarification, or to make a small leap of assumptions and assume that the acceptance really was intended to relate to the recently purchased parcel. This is not a negligence case, and I am not called on to decide whether ASX-Perpetual owed any duty of care to Redowood, or whether there was any negligence; and no ready answer presents itself to either question.

129 Remedies claimed by Redowood were based first on contract law and secondly on estoppel. I deal first with contract law.

130 Formation of contract is based upon concurring intentions of parties to enter into a contract; and the existence of their intentions and what it is that they intended are judged on the objective meaning of their communications or other relevant behaviour; in the present case, of their express communications. The present case does not involve complexities which often arise where contractual intention is inferred from behaviour, or is imputed. It is enough to interpret the parties’ express communications, which take the simple form of an offer which contains indications of the available manner of acceptance, followed, as Redowood alleges, by a conforming acceptance. It is necessary that the acceptance should correspond with the offer. The learned trial judge gave the following account of the law which I respectfully adopt for the purpose of this appeal: (Red Appeal Book 39-40)

84 The matter is put as follows in Carter on Contract [at 8246-8247]:

“The offer and acceptance must precisely correspond and any departure from the offer will result in the purported acceptance being ineffective. The position is obvious in relation to a counter offer. However, the rule is a strict one, and is not limited to material deviations from the terms of the offer.

Even if it is worded as an acceptance, an acceptance which does not correspond to the offer will normally amount to a counter offer...

Acceptance must be unequivocal. This means that the language used by the offeree must be such as would convey to a reasonable person in the position of the offeror a clear and definite decision by the offeree to be bound by the terms of the offer, leaving nothing further to be negotiated [Appleby v Johnson (1874) LR 9 CP 158; Spencer’s Pictures Ltd v Spencer Cosens (1918) 18 SR (NSW) 102; Ballas v Theophilos (No 2) [1957] HCA 90; (1957) 98 CLR 193].”

85. To the same effect, Anson’s Law of Contract, 27th edition, puts the matter as follows at 38:

“If a contract is to be made, the intention of the offeree to accept must be expressed without leaving room for doubt as to the fact of acceptance or as to the coincidence of the terms of the acceptance proposed and those of the offer. These requirements may be summed up in a general rule sometimes called the mirror image rule.”

86. These principles have been treated with many times by the courts; see, for example: Carter v Hyde (1923) CLR 115; Cavallari v Premier Refrigeration Co Pty Ltd [1952] HCA 26; (1952) 85 CLR 20; Quadling v Robinson [1976] HCA 31; (1976) 137 CLR 192; Parbury Henty & Co Pty Ltd v General Engineering & Agencies Pty Ltd (1973) 47 ALJR 336; George Hudson Holdings Ltd v Rudder [1973] HCA 10; (1973) 128 CLR 387 at 395 per Menzies J.

131 As all commercial documents do, the second Rights Offer exists in a matrix of facts known to the parties, which must always be resorted to, for example to identify the subject matter of a document. If the contents of the document are ambiguous, the matrix of facts and a wider range of facts including the previous communications between the parties may be resorted to resolve the ambiguity.

132 The present case is not about the meaning of a contractual document, but about whether a contract was formed at all. There is no context of a previous course of dealings, or of any existing relationship at all, between the parties. The object of construction of the second Rights Offer document is not to ascertain what it objectively indicates was a common contractual intention, but what it indicates was the intention of Mongoose as offeror as to the manner in which an acceptance of its offer was to be binding. There is also a question of fact whether what Redowood did complied with Mongoose’s intention about what was to be done to bring about an acceptance.

133 Authorities which speak of the ascertainment of the meaning of contractual documents and refer to the common intention of the parties are not literally in point but can, in my opinion, be looked to while keeping in mind that what is to be ascertained is the intention of the offeror, in respect of the Rights Offer document, as it would objectively appear to a person such as Redowood to which it was directed, and the intention of Redowood expressed in the Acceptance Form as it would objectively appear to the offeror. The approach is generally the same as that taken to the construction of contractual documents except that no question of ascertainment of a common intention arises.

134 If it were lawful to bring the terms of Mr Grant’s conversation with Ms Ooi under consideration to ascertain the meaning of the Rights Acceptance form, in a context in which it had been established in some way that a contract had been formed between the parties, there could be little doubt that the contract related to the 55 million recently purchased rights. See Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337, particularly the passages approved in Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5; (2002) 76 ALJR 436 by Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ at 439 [10]:

"[10] In Codelfa, Mason J (with whose judgment Stephen J and Wilson J agreed) referred to authorities [in particular, speeches of Lord Wilberforce in Prenn v Simmonds [1971] 1 WLR 1381 at 1383–5; [1971] 3 All ER 237 at 239–41; L Schuler AG v Wickman Machine Tool Sales Ltd [1973] UKHL 2; [1974] AC 235 at 261[1973] UKHL 2; ; [1973] 2 All ER 39 at 53; and Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 at 995–7; [1976] 3 All ER 570 at 574–6] which indicated that, even in respect of agreements under seal, it is appropriate to have regard to more than internal linguistic considerations and to consider the circumstances with reference to which the words in question were used and, from those circumstances, to discern the objective which the parties had in view. In particular, an appreciation of the commercial purpose of a contract: [Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 at 995–6; [1976] 3 All ER 570 at 574.]

... presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.

Such statements exemplify the point made by Brennan J in his judgment in Codelfa: [1982] HCA 24; [(1982) 149 CLR 337 at 401[1982] HCA 24; ; 41 ALR 367 at 416.]

The meaning of a written contract may be illuminated by evidence of facts to which the writing refers, for the symbols of language convey meaning according to the circumstances in which they are used."

135 See too Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 at [40]:

"[40] This court, in Pacific Carriers Ltd v BNP Paribas, [2004] HCA 35; [(2004) 208 ALR 213; 78 ALJR 1045] has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. 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. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. [Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 208 ALR 213 at 221 [22]; [2004] HCA 35; 78 ALJR 1045 at 1050–1]"

136 See too Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 78 ALJR 1045 at 1050-1051 [22]

137 In my view there is a distinction of some importance and of some width between ascertaining the meaning of a document by considering whether its recipient could reasonably have perceived, having regard to earlier communications between the parties, that what the sender of the document was trying to say was probably different to what the sender had said, and construing a document according to what objectively it meant to a person who knew the matrix of facts relating to the transaction within which the parties acted. If all the information available to ASX-Perpetual had been brought together at the one time and considered with the second Rights Acceptance Form, it would have been seen that Redowood was possibly trying to accept for its recently purchased parcel of 55 million rights, and that in spite of what the Rights Acceptance Form said the possibility was worth looking into by enquiring of Redowood for what was really intended. However this does not demonstrate what the Rights Acceptance Form objectively meant. The objective meaning of the words in the Rights Acceptance Form is not the product of anything explained to Ms Ooi on the telephone, or anything which she knew; and the same is true for anything known by any person attending to this piece of business in the office of ASX-Perpetual. The method of acceptance which the offer required was not making Mongoose or ASX-Perpetual know or understand something, but completing and delivering a Rights Acceptance Form at a time and otherwise in accordance with a number of explicit requirements. The objective meaning of the Rights Acceptance Form appears without intuitive detective work, without referral back to its author, and without a careful survey of all available information.

138 Mongoose’s express offer is found in the Rights Offer document (Blue Appeal Book 2/212), a further copy of which in evidence (Blue Appeal Book 2/265) incorporates as the last three pages a Rights Acceptance Form and a return envelope. The complexities of this document of 55 pages reflect the need to comply with statutory and other controls of offers for company securities, and the objects of these controls include making opportunities fairly available to all persons entitled to similar securities. This regulatory context makes it difficult for persons making such offers to make special arrangements or to grant concessions to particular owners of securities under offer.

139 Throughout the Rights Offer document there are many references to acceptance and to the manner of acceptance. At page 4 of the document, under the heading “Summary of the Offer” appears (from Blue Appeal Book 2/217):

How to accept To accept the Offer,

please read the summary in

clause 1.4 of this Rights Offer

Document as to what you are

required to do.

Clause 1.4 (Blue Appeal Book 2/224-225) includes the following:

(a) Accept for all or only some of your ANL rights

You may accept this Offer in respect of all or only some of your ANL Rights. If you accept this Offer for some of your ANL Rights you can still accept the Offer for more or all of your ANL Rights during the Offer Period. You will be taken to have accepted Offer Alternative 1 for all of your ANL Rights if you do not specify a lesser number or you give conflicting instructions on the Acceptance Form.

(b) CHESS Holdings ...

(c) CHESS Holdings ...

(d) Issuer Sponsored Holdings or unregistered holdings – Choosing either or both Offer Alternatives

If your Acceptance Rights are in an Issuer Sponsored Holding or if at the time of your acceptance you are entitled to be (but are not yet) registered as the holder of your Acceptance Rights, to accept you must complete and sign the Acceptance Form in accordance with the instructions on it. Once completed and signed, you need to return the Acceptance Form together with your Prospectus Entitlement and Acceptance Form and all other documents required by the instructions on it to one of the addresses specified on the form so that they are received before the end of the Offer Period.

(e) Foreign Rightholders and Foreign Laws ...

I have not set out subparagraphs (b), (c) and (e) which do not relate to Redowood.

140 Clause 8 is entitled Formal Terms of the Offer. Material parts of clause 8 are as follows: (Blue Appeal Book 2/242)

8.1 The Offer

(a) Offer for your ANL Rights

Mongoose offers to acquire all or any of your ANL Rights on the terms set out in this Offer.

(b) Offer includes Entitlements

If Mongoose acquires your ANL Rights under this Offer, Mongoose is also entitled to any Entitlements attached to those ANL Rights.

(c) Consideration

Mongoose offers $0.01 cash for each of your ANL Rights which you agree to transfer to Mongoose.

(d) Offer Alternatives

You may choose one or both of the following Offer Alternatives...

8.2 Offer Period

Unless withdrawn or extended, this Offer will remain open during the period that begins on the date of this Offer (being 30 January 2003) and ends at midnight (Sydney time) on 13 February 2003.

The Offer Period will not be extended unless the ANL Rights Issue Offer Period is extended.

If the ANL Rights Issue Offer Period is extended, Mongoose reserves the right to extend the Offer Period.

Any extension of the Offer Period will be to a day that is at least the day before the last day of the extended ANL Rights Issue Offer Period.

To extend the Offer Period, Mongoose will send notice to:

(a) ANL;

(b) ASX; and

(c) each person who was a Rightholder as at the Register Date.

If you accept this Offer, you will lose the right to trade on ASX (or otherwise dispose during the Offer Period) those of your ANL Rights for which you accept this Offer.

If the Condition is not satisfied by the end of the Offer Period, you are entitled to transfer your ANL Rights off-market to someone else on the last day of the ANL Rights Issue Offer Period. If you wish to do this, you should contact ANL's share registry whose details are shown in the ANL Rights Issue Prospectus.

Mongoose has provided the Fall-Back Subscription Facility to enable you to exercise your ANL Rights if the Condition is not satisfied by the end of the Offer Period.

If you accept this Offer for only some of your ANL Rights and you wish to exercise or transfer the remainder of your ANL Rights (other than under this Offer), you should contact ANL's share registry whose details are shown in the ANL Rights Issue Prospectus.

8.3 Acceptance

(a) Accept for all or only some of your ANL Rights

You may accept this Offer in respect of all or only some of your ANL Rights. If you accept this Offer for some of your ANL Rights you can still accept the Offer for more or all of your ANL Rights during the Offer Period. You will be taken to have accepted the Offer for all of your ANL Rights if you do not specify a lesser number on the Acceptance Form.

(b) CHESS Holdings...

(c) CHESS Holdings...

(d) Issuer Sponsored Holdings or unregistered holdings - Choosing either or both Offer Alternatives

If your Acceptance Rights are in an Issuer Sponsored Holding or if at the time of your acceptance you are entitled to be (but are not yet) registered as the holder of your Acceptance Rights, to accept you must complete and sign the Acceptance Form in accordance with the instructions on it. Once completed and signed, you need to return the Acceptance Form together with your Prospectus Entitlement and Acceptance Form and all other documents required by the instructions on the Acceptance Form to one of the addresses specified on the form so that they are received before the end of the Offer Period.

8.4 Your agreement resulting from acceptance

(a) Effect of Acceptance Form

By completing, signing and returning the Acceptance Form, you will have:

(i) accepted the Offer in respect of your Acceptance Rights;

(ii) authorised, Mongoose and each of its officers and agents to correct any errors in, and complete any omissions from, the Acceptance Form necessary to:

(A) make it an effective acceptance of this Offer in relation to your Transfer Rights which are not in a CHESS Holding; or

(B) enable the registration of the transfer of your Transfer Rights to Mongoose,

or both; and

(iii) if any of your Transfer Rights are in a CHESS Holding, authorised Mongoose and each of its officers and agents to:

(A) instruct your Controlling Participant to effect your acceptance of this Offer in respect of your Transfer Rights under rule 16.3 of the SCH Business Rules; and

(B) give to your Controlling Participant on your behalf any other instructions in relation to your Transfer Rights, which are contemplated by the sponsorship agreement between you and your Controlling Participant and are necessary or appropriate to facilitate your acceptance of this Offer.

(b) Your agreement

By accepting this Offer in accordance with clause 8.3, you:

(i) have accepted this Offer in respect of your Acceptance Rights ...

(c) Power of attorney ...

(d) Validation of otherwise ineffective acceptances

Except in relation to ANL Rights which are in a CHESS Holding, Mongoose may in its absolute discretion (but is not obliged to) treat the receipt by it of the Acceptance Form as a valid acceptance although it does not receive the other documents required by the instructions on the Acceptance Form or any of the other requirements for acceptance have not been complied with, but if it does so, subject to clause 8.5(a), Mongoose will not be obliged to make the consideration available to you until Mongoose receives all those documents and all of the requirements for your acceptance referred to in clause 8.3 and in the Acceptance Form have been met.

141 Clause 8.9 which relates to the Fall Back Subscription Facility, referred to as Alternative 2 for which Redowood did not elect, has no present relevance.

142 Statements on the Rights Acceptance Form which are relevant to questions now in issue include, at the head of the front page of the form (Blue Appeal Book 2/321), the following:

Use this form to accept Mongoose's Offer to acquire all or any of your ANL Rights.

THIS IS AN IMPORTANT DOCUMENT. IF YOU ARE IN DOUBT AS TO HOW TO COMPLETE THIS FORM, PLEASE CONSULT YOUR FINANCIAL ADVISER OR OTHER PROFESSIONAL ADVISER IMMEDIATELY.

Step 1- Check your details below...

Step 2- Choose Your Offer Alternative(s)...

Step 3- For Issuer Sponsored Holdings

If your ANL Rights are held on the Issuer Sponsored Subregister (shown above) or if at the time of your acceptance you are entitled to be (but are not yet) registered as the holder of your ANL Rights, to accept the Offer you must sign in the box below and return this form, so that it is received by midnight (Sydney time) on 13 February 2003 (unless the Offer is withdrawn or extended).

Step 4- Fall-Back Subscription Facility...

Step 5- Sign in the box below

By signing in the box below, you accept the Offer on and subject to the terms and conditions of the Offer, and you acknowledge the effect of your acceptance as set out in clauses 8.4 and 8.9 of the Offer. If you have a CHESS Holding, you authorise us to give instructions to your Controlling Participant in accordance with clauses 8.3 and 8.4 of the Offer...

The last line of the front page is:

YOU MUST RETURN YOUR ENTITLEMENT AND ACCEPTANCE FORM FROM THE ANL RIGHTS ISSUE PROPECTUS WITH THIS ACCEPTANCE FORM.

143 On the reverse of the form under the heading “How to accept the offer” is the passage under the heading Issuer Sponsored Holdings which I set out earlier. This passage is followed by additional notes: (Blue Appeal Book 2/322 G-H)

Additional notes

1. Power of Attorney - if you sign this form under power of attorney, you must send a certified copy of the power with the form, and will have declared that you have no notice of revocation of the power and are able to further delegate power under it under clauses 8.4(b)(iii), 8.4(b)(vi) and 8.9 of your Rights Offer Document.

2. Sold all your ANL Rights? - if you have sold all your ANL Rights, please send this form and your Rights Offer Document to the stockbroker who acted on your behalf.

3. Bought or sold any ANL Rights? - if you have recently bought or sold any ANL Rights, your holding may differ from that shown on the front of this form. If so, please alter the number of ANL Rights shown as your registered holding on the front of this form to the number of ANL Rights you now hold (including any ANL Rights of which you are entitled to become registered as holder), initial the alteration and indicate the name of the stockbroker who acted for you.

4. If you would like to exercise all or some of your ANL Rights in accordance with clause 8.9 of the Offer in the event that the Condition is not satisfied by the end of the Offer Period, then you must send a cheque with this Acceptance Form made payable to "Mongoose Pty Limited" for an amount equal to the subscription money for the number of ANL Rights you wish to exercise.

Information you supply on this Acceptance Form will be used by Mongoose and ASX Perpetual Registrars Limited for the primary purpose of processing your acceptance of the Offer and to provide you with the consideration payable under the Offer. This information may be disclosed to Mongoose’s professional advisers, securities brokers, printing and mailing providers and other third parties in connection with the Offer. If you do not supply this information, your acceptance may not be processed and you may not receive the consideration payable. You may have rights to access the personal information you have supplied. Please see ASX Perpetual's privacy policy on its website www.asxperpetual.com.au

If you have any questions about how to complete this Acceptance Form, please telephone the Offer information line...

144 The opening and in my understanding the principal submissions on behalf of Redowood are in the following terms: (Orange Appeal Book 14)

20. Fundamentally, the Judge was in error because he ignored the express provision in the Mongoose Rights Offer that, to accept the Offer, the rights holder need only sign and return the acceptance form before expiry of the Offer Period i.e. clause 8.4(a)(i) (para 18 above).

21. The Judge construed the Mongoose Rights Offer document as if it posed a series of obstacles, every one of which a rights holder had to navigate correctly in order validly to accept the Offer with the consequence that any deviation or error, however insignificant, would prevent an acceptance being effectual.

22. The Judge should have construed the Mongoose Rights Offer as a document setting out desired qualities of an acceptance but explicitly recognising that an acceptance of the Offer would be valid (and bring into effect a binding contract between Mongoose and the rights holder) even if all that the rights holder did was to sign and return the rights acceptance form within the Offer Period.

145 Counsel put this submission orally in these terms: (Transcript 2, lines 49-58)

GRAY: In our submission, we formed a contract with the respondent at the moment that our acceptance form was received at the ASX-Perpetual Office. Any changes that needed to be made to the form in order to have it accepted, registered by Anaconda Nickel, were matters for the respondent to do, not or not to do as it saw fit. It is not in that sense part of our complaint that they did or they did not do something. We say that the contract between us and the respondent Mongoose, was made before any question of changing the form arose.

146 In my opinion this submission gave an altogether wrong significance to clause 8.4 of the Rights Offer and to the words:

(a) Effect of Acceptance Form

By completing, signing and returning the Acceptance Form you will have

(i) accepted the Offer in respect of your Acceptance Rights;

147 In my opinion clause 8.4(a)(i) must be understood in its context. Its context showed that it spells out some provisions of an agreement resulting from acceptance, and does not say what it is necessary to do to make an acceptance. What it is necessary to do appears from an appraisal of all references to acceptance in the Rights Offer document and the Acceptance Form, and most particularly from clause 8.3(d) which spells out what is to be done in the case in which Redowood stood for its 55 million rights; on 11 February 2003, the date of the acceptance, Redowood was entitled to be but was not yet registered as the holder of the acceptance rights, and on 12 February 2003 when ASX-Perpetual received the Rights Acceptance Form Redowood’s acceptance rights were in an Issuer Sponsored Holding. In explicit language clause 8.3(d) told Redowood “... to accept you must complete and sign the Acceptance Form in accordance with the instructions on it.” The terms of the form clearly required that the SRN or HIN be given; the instructions were not complied with if the SRN for another holding were given. On 11 February 2003 it would have been a compliance to give no number as there was no SRN number. On 12 February 2003 it was a compliance to give the correct number. Redowood did not comply in either way with the instruction in clause 8(3)(d).

148 To understand clause 8.4(a) it must be read in the context of the whole Rights Offer document, including clause 8.4(d). Whatever clause 8.4(a) might have meant if it were on its own, when it is read with and apposed to clause 8.4(d) in the understanding that they are both there for a purpose and not just to re-state each other, it is in my opinion clear that the terms of subclause 8.4(a) relate only to the situation which follows an effectual acceptance, and confer authorisation on Mongoose its officers and agents to correct errors and complete omissions only in the case where there has, without the correction, already been an effectual acceptance, for which it is necessary that the Acceptance Form be completed, signed and returned in accordance with requirements found elsewhere in the Rights Offer document and on the Acceptance Form. By contrast, subclause 8.4(d) may operate even if there has not been an effectual acceptance, as it authorises Mongoose to treat receipt of an Acceptance Form as a valid acceptance although other requirements (that is, other than receipt of an Acceptance Form) have not been complied with; that is to say, even though requirements about the contents of the Acceptance Form have not been complied with. I regard it as very doubtful whether clause 8.4(d) would have authorised Mongoose its officers and agents including ASX-Perpetual to alter the SRN/HIN reference in the Acceptance Form so as to delete the reference number, or, on 13 February 2003, to insert I0030005244 instead of the reference which there appeared; but whether or not Mongoose and ASX-Perpetual were so authorised, they did not do so, and neither subclause 8.4(d) nor any other provision of the Rights Offer document obliged them to do so. Mongoose made no express or implied promise, contractual or otherwise, to correct errors.

149 It was submitted that, given the commercial nature of the documents and the purpose for which they were being used, the Rights Offer document should be construed in a way which maximises opportunities for acceptance and minimises opportunities for invalid acceptance arising from minor errors. If this submission is correct, it does not avail Redowood, as what occurred cannot be spoken of as a minor error; it was a plain indication that the acceptance related to different rights to those for which Redowood was in a position to make an acceptance: that is, that it related to 55 million of the 65,087,000 rights for which the offer had been accepted with the first Rights Acceptance Form, and not to the 55 million recently purchased rights which Mr Grant actually had in mind.

150 It was contended that clause 8.4(a)(i) should be given paramountcy over clause 8.3 in order to achieve the commercial purposes of the documents. To give clause 8.4(a)(i) paramountcy over clause 8.3 would, in my opinion, be to disregard the express language of clause 8.3, the subject matter of which is acceptances. Provisions found elsewhere in clause 8 which empower but do not require Redowood to deal with incomplete acceptances in various ways either assume the existence of an acceptance (clause 8.4(a)(ii)) or empower Mongoose to overcome an incomplete acceptance (clause 8.4(d)), and would have no function if compliance with clause 8.4(a)(i) were not otherwise required. The expressions which show that action by Mongoose under these clauses was discretionary, and hence that Mongoose need not take such action, would be incomprehensible. In this I respectfully differ from the trial judge’s reading of clauses 8.4(a)(i) and (ii) (Red Appeal Book 49-50, [117]); in his Honour’s reading clause 8.4(a) applied in situations where there had not been acceptance as well as in situations whether there had. What clause 8.4 spells out is, as its heading says, “Your agreement resulting from acceptance”. What it says in clause 8.4(a)(ii) about authorisation for correction of errors depends wholly on there being an agreement resulting from acceptance. In a strong contrast, clause 8.4(d) authorises (but does not require) Mongoose to treat receipt of an Acceptance Form as a valid acceptance although any of the other requirements for acceptance has not been complied with.

151 Counsel for the appellant made submissions to the effect that providing an SRN/HIN number was objectively inessential to the process of acceptance. Counsel pointed to means available to Mongoose and to ASX-Perpetual to identify appropriate holders of rights and SRN/HIN numbers, and to the likelihood (counsel said “It is inevitable ...”) that security holders will make transcription errors. In my opinion it is not for the Court or for anyone but the offeror to say whether some requirement made by the offeror for acceptance is or is not essential. Clause 8.3(d) explicitly stated “To accept you must complete and sign the Acceptance Form in accordance with the instructions on it”, and the instructions on it required in Step 1 that the details including the SRN/HIN number be checked, and if any of the details were incorrect, the offeree was requested to amend them and initial the alterations. In the second Rights Acceptance Form as sent to Redowood there was no SRN/HIN number; and until registration on 12 February 2003 this was the correct position; there was no such number. On 11 February 2003 it was incorrect to write in any number; on 12 February 2003 it was incorrect to write in the number which was written in. In the circumstances it cannot in my opinion be concluded that the requirement of clause 8.3(d), expressed as it was in imperative language, was complied with.

152 The passage in which, after extended consideration, the learned trial judge stated the ground of disposition of the case based on contract is as follows: (Red Appeal Book 52, [121])

"121 The offer and acceptance case fails because what was returned by Redowood by way of its second rights acceptance form simply did not conform with the Mongoose rights offer document. It failed to furnish the name of the stockbroker who had acted for Redowood upon its recent purchase. Further, it gave an incorrect SRN number. The materiality of the proper supply of the necessary information had been pointed up in the "[h]ow to accept the offer" instructions:

“Information you supply on this Acceptance Form will be used by Mongoose and ASX Perpetual... for the primary purpose of processing your acceptance of the Offer and to provide you with the consideration payable under the Offer... If you do not supply this information, your acceptance may not be processed and you may not receive the consideration payable". [emphasis added]

153 As appears elsewhere it is my view that the trial judge’s conclusion was correct, although I would prefer not to express the grounds for the conclusion quite as his Honour did. To my mind the second Rights Acceptance Form conformed with the Rights Offer document, but the true meaning of the form was that it accepted the offer in respect of 55 million of the 65,087,000 rights for which the offer had been accepted with the first Rights Acceptance Form. This is its unambiguous meaning on an objective reading of what it says. There may perhaps have been a contractual obligation of Redowood to sell rights which it was not in a position to deliver, but there was no contractual obligation of Redowood to sell or of Mongoose to buy the 55 million recently purchased rights which Mr Grant actually had in mind; the Acceptance Form did not identify them as the subject of the acceptance. To say that the second Acceptance Form gave an incorrect SRN number does not, to my mind, quite express the difficulty; it was the correct SRN number for 55 million rights which were not the rights which Mr Grant in fact intended to sell, and those he intended to sell were not identified by the description on the second Rights Acceptance Form; the description pointed altogether clearly away from them.

154 In my opinion the second Rights Acceptance Form forwarded to ASX-Perpetual on 11 February 2003 was not ambiguous: on 11 February 2003 Redowood was the registered owner of a greater number than 55 million rights under an SRN which was, unmistakably, closely similar to the SRN given on the form. There is no ambiguity in the expressions on the second Rights Acceptance Form which admit resort to evidence of prior communications between the parties to identify the 55 million shares to which the document refers; its terms raise no conceivable ambiguity extending so far as possibly to mean not 55 million rights registered under SRN I30002997 but another 55 million rights which did not have that SRN and did not on 11 February 2003 have any SRN at all, although on the following day they were to be allocated a different SRN. There is no occasion to look further at the communications between the parties. In my opinion the Rights Acceptance Form sent by Mr Grant to ASX-Perpetual by fax and mail on 11 February 2003 related, with unmistakable clarity, to 55 million of the 65,087,000 rights which were shown in ANL’s register as rights owned by Redowood. The meaning of the contents of the Rights Acceptance Form is that Redowood accepted the Rights Offer for 55 million of the rights in respect of which it had earlier accepted the Rights Offer, not for the 55 million rights which it purchased on 6 February 2003.

155 I do not regard the illustration given in Carter v Hyde [1923] HCA 36; (1923) 33 CLR 115 by Higgins J at 133, to which appellant’s counsel referred, relating to the misdescribed horse Bucephalus as bearing on the interpretation of the second Rights Acceptance Form. In Higgins J’s example there was only one horse named Bucephalus, and that horse was referred to in the offer: the introduction of a misdescription of the horse in the acceptance raised no doubt about the identity of the horse referred to. In the present case the identity of the rights referred to in the acceptance can be known only from the terms of the acceptance.

156 In my respectful opinion the trial judge’s reference to failure to furnish the name of the stockbroker is not conclusive. What was required by Additional Note 3 in the Rights Acceptance Form was that Redowood “... indicate the name of the stockbroker who acted for you,” but did not clearly stipulate that the indication of the name of the stockbroker should actually be part of the contents of the Rights Acceptance Form. The Rights Acceptance Form does not indicate any particular place on the Form at which the name of the stockbroker is to be inserted, nor does it indicate any particular way by which the name of the stockbroker is to be indicated. That name had been indicated by sending by fax transmission a copy of the Broker’s Contract Note.

157 The requirement on the reverse under Issuer Sponsored Holdings “You must return your Entitlement and Acceptance Form ...” had no application to an acceptance which related to rights purchased on the Stock Exchange, for which the accepting party would not have received an Entitlement and Acceptance Form with an ANL rights issue prospectus: the trial judge found to that effect (Red Appeal Book 43) and that finding is not challenged.

158 Redowood maintained unsuccessfully at first instance, and again maintained on appeal, a contention to the effect that an estoppel limited the matters upon which Mongoose could rely. In the appellant’s contentions in the Further Amended Summons, in passages added by amendment, it was contended to the effect that Mongoose was estopped as a result of a convention, or as a result of reliance by Redowood upon representations made by Ms Ooi to Mr Grant on the telephone on 10 February 2003 to the following effect.

159 Particulars to [15] of the Further Amended Summons (Red Appeal Book 11 R-V) are:

Ms Ooi told Mr Grant that for Redowood to accept the Mongoose Rights Offer in respect of the 55 million Anaconda Rights referred to in paragraph 3 Mr Grant should forward to ASX-Perpetual before expiry of the Offer Period:

(a) A copy of the Contract Note for the 55 million Rights

(b) A Rights Acceptance Form duly completed in respect of those Rights and, by implication, no other document.

160 It was then alleged (at [18]) that Mongoose was estopped from denying that the actions taken by Mr Grant were effectual to constitute a valid acceptance and (at [19]) if it was otherwise a requirement for valid acceptance that Redowood deliver an Appendix E Form applicable to the 55 million rights should be waived, or Mongoose acquiesced in the failure of Redowood to fulfil the requirement.

161 In a Statement filed at an interlocutory stage and in her evidence at the trial Ms Ooi gave evidence that she did not say to Mr Grant to the effect that he needed to support his claim by producing a Buy Contract Note, but that she did say “In order to accept the Mongoose Rights Offer for rights purchased on market, you need to fax to ASX Perpetual your Appendix E form in respect of that holding of rights, and we will then fax you a Rights Acceptance Form. You will also need to send your originals to us.” It appears that Redowood embarked on the subject of estoppel on the basis of some view to the effect that Mongoose maintained that the purported acceptance was not effective because Redowood had not faxed an Appendix E form in respect of the holding of $55 million to ASX-Perpetual. An Appendix E form is a document which, in the practice of the ASX dealing with CHESS sponsored investors and rights acceptances handled by stockbrokers, a stockbroker is required to furnish to ASX-Perpetual with a Rights Acceptance Form. This subject was dealt with in a Participant Bulletin sent by ASX to its members in relation to the ANL Rights Offer (Blue Appeal Book 2/372). From the terms of the Bulletin it is possible that Mongoose or ASX-Perpetual had some arrangement with the ASX which gave some usual force to an Appendix E form.

162 The defence filed by Mongoose does not raise any such contention, and does not refer to the Appendix E form. The trial judge after hearing the evidence under cross-examination of Mr Grant and Ms Ooi accepted Mr Grant’s evidence and rejected Ms Ooi’s evidence about whether or not she had referred to an Appendix E form. An Appendix E form is not part of the process for acceptance of rights required by the Rights Offer document or the Acceptance Form. These circumstances deprive the supposed estoppel of any significance, because the propositions to which the estoppel is said to have related, relating to the need to send the Contract Note and a duly completed Rights Acceptance Form, did not materially depart from the requirements for a valid acceptance objectively ascertained from documents. If the supposed estoppel had existed it would not have taken the parties’ rights in any direction in which the facts did not otherwise take them. In my respectful opinion the trial judge’s conclusion that the estoppel case required to be dismissed was correct.

163 In written submissions in support of the appeal the case on estoppel found in the pleadings was sought to be developed in significant ways. It was contended that Ms Ooi made a representation which had the effect of representing to Mr Grant that on the second Rights Acceptance Form Redowood did not have to provide information which was of no importance; and that the SRN was of no importance. It was also submitted to the effect that the request in the Rights Acceptance Form for Redowood to provide a contact telephone number “so that we can contact you if necessary” was that anything perceived by Mongoose or by ASX-Perpetual to constitute a defect in the form would be something about which it would be necessary for ASX-Perpetual to contact Redowood. It was submitted that Mongoose represented to Redowood, and that there was an estoppel to the effect that if the second Rights Acceptance Form were perceived by Mongoose or ASX-Perpetual to be in any way defective, Mongoose or ASX-Perpetual would contact Redowood to notify Redowood of the perceived defect and if possible to rectify it. These last developments of the proposition relating to estoppel do not represent anything found in the appellant’s Summons. There are no indications in the judgment that the trial judge regarded any such contentions as before him for adjudication. In my opinion they do not have a reasonably arguable basis in the reference in the Rights Acceptance Form to provision of a telephone number. There were no reasonable grounds, in my opinion, for Mr Grant to come to the view that his dealings with Mongoose or with ASX-Perpetual were being conducted on the basis of the alleged estoppel.

164 In my opinion the Court should order:

The appeal is dismissed with costs.

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LAST UPDATED: 04/03/2005