Case: Zhu v Treasurer of NSW [2004] HCA 56 ; (2004) 218 CLR 530 
Outcome: cited
A commercial purpose of the SMS licences was to enable APRA and AMCOS to receive a percentage of the earnings of those seeking to exploit copyright works over which they had rights. The SMS licences authorized Monster to use telecommunications networks to communicate and reproduce the copyright ringtone. In ordinary English usage, 'retail price' is the amount paid by the customer for the goods or service. It is not the net amount the retailer receives after paying a sum not disclosed to the customer for the right to sell the goods or service. The term 'retail price' should be construed so as to avoid it making commercial nonsense or working commercial inconvenience, as Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ said in Zhu v Treasurer of NSW [2004] HCA 56 ; (2004) 218 CLR 530 at 559 [82] . They also said that the commercial purpose of reasonable persons in the position of the parties was relevant, as were the genesis of the transaction, the background, the context and the market in which the parties were operating, as known to each of them (218 CLR at 559 [82]). 68 A significant commercial purpose of the SMS licences was to enable the whole download procedure to be authorised by the licensors and for the money generated by the exploitation of the rights they granted to be used as the basis for calculating the royalty fee due respectively to each of APRA and AMCOS. 69 Moreover, it would be a very odd construction of the ordinary English language term 'retail price' to divorce the price advertised by Monster to the public as the price payable for the download, from the price on which Monster was liable to account for royalties. Monster organised through its various telecommunication contracts and licences with APRA and AMCOS, a situation in which members of the public could use their own telephones to obtain a service Monster had for sale. Monster contracted with the public by offering to sell the SMS download to them for the price of $3.50 in its advertisements. That involved Monster becoming an agent, or using agents, to ensure that the transaction was carried out so the consumer received that for which he or she paid. Monster needed to charge its customer a price to cover its costs of delivering the download. 108 It is necessary to construe an agreement so as to avoid making it commercial nonsense or working commercial inconvenience. The commercial purpose of the definitions, that is to say the purpose of a reasonable person in the position of the parties to the contract, is relevant. That in turn requires attention to the genesis of the transaction, the background, the context, the market in which the parties were operating, as known to both parties: Zhu v Treasurer of New South Wales [2004] HCA 56 ; (2004) 218 CLR 530 at 559 [82] . 109 Accordingly, the $0.003 per second and non-telecommunications service charges should not be deducted from net call revenue. 110 APRA and AMCOS say they were entitled to terminate the IVR licences because the interim fees invoiced after the audit were not paid within 14 days. By cll 6.2 and 6.3 of the APRA IVR licence (cll 7.2 and 7.3 of the AMCOS one) Monster had to pay any invoice issued by the licensor within 14 days after the date of the invoice. An invoice for additional licence fees issued after APRA received information under cl 8 (cl 9 of the AMCOS IVR licence) had also to be paid within this time (cll 6.3 and 7.3 respectively).