Case: Fitzgerald v Masters [1956] HCA 53 ; (1956) 95 CLR 420
Outcome: applied
In my view, counsel for the respondent's contention cannot be accepted. It is clear that the contractual intention was to provide the applicant with a termination payment of a minimum of six months, regardless of whether the relationship between the parties ended by the non renewal of the term of the consultancy agreement on the expiry of the existing term or by the termination of the agreement (other than for a reason set out in cl 8.1) during the currency of the term, of the consultancy agreement. This construction is consistent with the presence in the clause of the words 'or the Term (as extended or renewed) is not renewed '. The construction contended for by the respondent is inconsistent with the presence of those words in the clause and renders those words otiose. In my view, it is obvious that there was a mistake by the draftsman in using the word 'lesser' when the word 'greater' should have been used to give effect to the obvious intention of the parties. Where there is an obvious mistake the Court can give effect to the true contractual intention of the parties without there being any need for rectification. The principle was expressed thus by Santow J in the case of Spunwill Pty Ltd v BAB Pty Ltd (1994) 36 NSWLR 290 at 299: '...Where a court can discern the intent of the parties from an examination of the document as a whole, words may be supplied, omitted or corrected in the instrument, where it is clearly necessary in order to avoid absurdity or inconsistency: Fitzgerald v Masters [1956] HCA 53 ; (1956) 95 CLR 420 at 426-427. In such cases rectification of the document is not required: Re United Pacific Transport Pty Ltd [1968] Qd R 517; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (at 346).' 126 In the case of Fitzgerald v Masters [1956] HCA 53 ; (1956) 95 CLR 420 the word 'inconsistent' was read to mean 'consistent'. 127 I have found below that, on the expiry of the term of the consultancy agreement on 30 June 2001, the term was not renewed. I am of the view that on the non-renewal of the consultancy agreement, the applicant became entitled to a termination payment under cl 8.6 of the consultancy agreement. It follows that, in my view, on the expiry of the term of the consultancy agreement on 30 June 2001, the applicant became entitled to a termination payment in a sum equal to six months' fee measured by reference to the annual consultancy fee of $190 000 (exclusive of GST). I will hear the parties on whether a GST component is to be included in that sum, as I apprehend the applicant to contend. 128 The evidence of Mr Hayes and Mr Brand established that there was an agreement by conduct that the consultancy fee of $190,000 per annum payable to the applicant under the consultancy agreement was from the date of the introduction of GST to be a fee that was to be free of GST. In other words, the applicant was entitled to earn that fee exclusive of GST and so it could add the amount of GST payable on the fee to the invoice furnished to the respondent. Such an agreement can also be inferred by the respondent's practice in paying the invoices rendered by the applicant and other consultants after 1 July 2001 which invariably included an additional amount in respect of GST.