Case: CEPU v ACCC [2007] FCAFC 132 ; (2007) 162 FCR 466
Outcome: cited
McLelland CJ in Eq said that each element of the cause of action had to be proved to the reasonable satisfaction of the Court: Watson 49 NSWLR at 319; see also s 140 of the Evidence Act 1995 (Cth) and CEPU v ACCC [2007] FCAFC 132 ; (2007) 162 FCR 466 at 479-482 [29] - [39] per Weinberg, Bennett JJ and myself. 72 The process of construction of a contract is undertaken objectively. In Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52 ; (2004) 219 CLR 165 at 179 [40] , Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said: '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.' (citations omitted) And in CEPU 162 FCR at 510 [164]-[165] Weinberg, Bennett and I said: ' In the construction of a contract, the court places itself in the commercial matrix in which the parties were at the time that the contract was made. This is so that the court can construe correctly both the express terms used by the parties and those which are included by implication in order to give effect to their presumed intention. In Royal Botanic Gardens and Domain Trust v South Sydney City Council [2001] FCA 760 ; (2002) 76 ALJR 436 ; 186 ALR 289 at [10] , Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said that it was appropriate to have regard to more than internal linguistic considerations and to consider the circumstances with reference to which the words in question in a contract were used and, from those circumstances, to discern the objective which the parties had in view. They applied what Lord Wilberforce had said, namely that an appreciation of the commercial purpose of the contract "... presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating" ( Reardon Smith Line v Hansen-Tangen [1976] 1 WLR 989 at 995-996). And, in Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70 ; (2001) 210 CLR 181 at [11] approving Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1) [1998] 1 WLR 896 at 912, Gleeson CJ, Gummow and Hayne JJ said that interpretation of a written contract involved ... the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.' See also International Air Transport Association v Ansett Australia Holdings Limited [2008] HCA 3 ; (2008) 242 ALR 47 at 51-52 [8] per Gleeson CJ, at 63 [53] per Gummow, Hayne, Heydon, Crennan and Kiefel JJ.