mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 30
Outcome: cited
principle of election operates to hold a party to a position it has communicated to the other party as the choice that it has made between two inconsistent rights. Communication of the choice cannot occur in a factual vacuum. The circumstances and context of the communication affect how a reasonable person in the position of the other party would understand it. A landlord accepting rent ( Matthews v Smallwood [1910] 1 Ch 777 per Parker J) or a fire insurer, exercising rights to take possession of the insured's damaged premises ( Craine v Colonial Mutual Fire Insurance Co Ltd [1920] HCA 64 ; (1920) 28 CLR 305 per Knox CJ, Isaacs and Starke JJ) acting unilaterally, could not say that it was acting 'without prejudice'. Allphones also argued that cll 15 and 16 operated to prevent Hoy Mobile relying on any election, by Allphones to keep the franchise agreement on foot, which was not in writing. Because of my findings above it is not necessary to consider the application of R v Paulson [1921] 1 AC 271 at 282-283 to cll 15 and 16 on which Hoy Mobile relied. However, their Lordships indicated that the issue depends on the facts for they said, as Owen J pointed out in Owendale Pty Ltd v Anthony [1967] HCA 52 ; (1967) 117 CLR 539 at 610, that '[i]t may well be that many cases may occur to which the clause as to waiver would be applicable' before saying that, in that case, it was not: see too Owendale 117 CLR at 590 per Taylor J with whom Barwick CJ agreed on this issue at 569; per McTiernan J at 581; per Kitto J at 581-582. And, in any event, contractual provisions like cll 15 and 16 are strictly construed: Craine 28 CLR at 325-326; affirmed in Yorkshire Insurance Co Ltd v Craine [1922] 2 AC 541 at 546; (1922) 31 CLR 27 ; see too Melbourne Harbour Trust Commissioners v Hancock [1927] HCA 26 ; (1927) 39 CLR 570 at 584 per Knox CJ and Gavan Duffy J; 589 per Isaacs J; 590 per Rich J; and 594 per Starke J.
Case: Duncan v Koster; The Teutonia (1872) LR 4 PC 171
Outcome: applied
course, at common law the courts cannot make a contract for the parties which they did not make for themselves (cp: s 87(2) of the Trade Practices Act ). But commercial contracts '... ought to be construed fairly and liberally for the purpose of carrying out the object of the parties': Duncan v Koster; The Teutonia (1872) LR 4 PC 171 per Mellish LJ at 182, applied by Isaacs J in Cohen &amp; Co v Ockerby &amp; Co Ltd [1917] HCA 58 ; (1917) 24 CLR 288 at 300. Isaacs J went on to hold that expressions in a mercantile contract are not to be read narrowly, but as the Court would suppose two honest business people would understand the words they actually used with reference to their subject matter and the surrounding circumstances: Cohen &amp; Co 24 CLR at 300. And the Court construes a commercial contract to avoid it making commercial nonsense or working commercial inconvenience: Zhu 218 CLR at 559 [82] per Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ.
Case: Emhill Pty Ltd v Bonsoc Pty Ltd (No 2) [2007] VSCA 108
Outcome: followed
Emhill Pty Ltd v Bonsoc Pty Ltd (No 2) [2007] VSCA 108 at [68] - [69] Warren CJ, with whom Buchanan and Ashley JJA agreed said: ' [68] N C Seddon and M P Ellinghaus state in Chesire &amp; Fifoot's Law of Contract (8th ed, 2002) [at 943]: A party need only be ready and willing to perform the contract in substance. A party who is in breach may nevertheless have the right to terminate, so long as the breach is not repudiatory or of an essential term or such as to deprive the other party of the substantial benefit of the contract. This is the view espoused by the learned judge below and supported by Roadshow Entertainment Pty Ltd v CEL Home Video Pty Ltd (1997) 42 NSWLR 462 at 470 480 [sic]. [69] The question then becomes whether Emhill had repudiated the contract, breached an essential term of the contract or deprived the other party of the substantial benefit of the contract.' (emphasis added)
Case: Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 ; (2007) 230 CLR 89
Outcome: referred to
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 ; (2007) 230 CLR 89 at 151-152 [135] , Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ said that intermediate appellate courts and trial judges in Australia should not depart from decisions in intermediate appellate courts in another jurisdiction on the interpretation of Commonwealth legislation or uniform national legislation unless they are convinced that the interpretation is 'plainly wrong': see too Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15 ; (1993) 177 CLR 485 at 492 per Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ. And, where an intermediate appellate court holds itself free to depart from an earlier decision it should do so cautiously and only when compelled to the conclusion that the earlier decision is wrong: Nguyen v Nguyen [1990] HCA 9 ; (1990) 169 CLR 245 at 250 per Brennan J, at 269 per Dawson, Toohey and McHugh JJ and at 251 per Deane J agreeing. Allphones argued that I should follow the Court of Appeal's decision in Ketchell [2007] NSWCA 161 on the construction of Commonwealth legislation in accordance with the principles in Farah 230 CLR at 151-152 [135]. However, I am of opinion that the Court of Appeal's decision should not be followed for three reasons: First, that decision was on a different legislation, namely an earlier version of the Code that was not in force at the time when Hoy Mobile and Allphones entered into the franchise agreement. The subsequent decision of the High Court in Australian Competition and Consumer Commission v Baxter Health Care [2007] HCA 38 ; (2007) 237 ALR 512 demonstrates that the approach to construction adopted by the Court of Appeal was wrong (see below). (I note that special leave to appeal from the decision in Ketchell [2007] NSWCA 161 was granted by Gummow and Crennan JJ: Master Education Services Pty Ltd v Ketchell [2008] HCA Trans 89.) I am convinced that the decision of the Court of Appeal is plainly wrong.
Case: Fitzgerald v Masters [1956] HCA 53 ; (1956) 95 CLR 420
Outcome: referred to
Fitzgerald v Masters [1956] HCA 53 ; (1956) 95 CLR 420 at 437 McTiernan, Webb and Taylor JJ said: 'It is trite law that an instrument must be construed as a whole. Indeed it is the only method by which inconsistencies of expression may be reconciled and it is in this natural and common sense approach to problems of construction that justification is to be found for the rejection of repugnant words, the transposition of words and the supplying of omitted words (cf Norton on Deeds 2 nd ed (1928), p 91)' (emphasis added)
Case: Fraser v NRMA Holdings Ltd (1995) 55 FCR 452
Outcome: cited
cognate transaction between Vodafone, through the agency of Allphones and Hoy Mobile, and the customer, involved the ultimate sale of the 'free' phone. The phone was not, in fact, 'free' to the customer but was part of the consideration provided by Vodafone under the plan it entered with its customer. The use of the word 'free' in this context is apt to mislead: cp Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 at 483B-G per Black CJ, von Doussa and Cooper JJ. Mr Nicoll's description of Allphones' internal accounting, in the absence of any documentary evidence, was also revealing of the nature of the relationship between Alllphones and Vodafone. He said that Allphones could determine what the 'rebate', or amount it attributed to the sale price of the phone, would be. That is, Allphones could determine the amount of profit made on the transactions, as between itself and Vodafone, by selecting both the phone to be supplied to the customer, and the price to be attributed to it in accounting to Hoy Mobile. Mr Lynch and Mr Bell characterised Allphones' accounting treatment of the transaction between it and Vodafone as a sale of goods. I accept their evidence and find that this was, indeed, a sale of goods. Allphones' internal accounting showed that it was treating the receipt from Vodafone as part of the calculation of the cost of goods sold, and not simply as the payment of commission by Vodafone. Allphones' gross profit would depend on the price it chose to attribute as the 'cost' of the phone in the transaction.
Case: Green v Sommerville (1979) 141 CLR 59
Outcome: referred to
three of the justices (Mason CJ in dissent, with Brennan and Dawson JJ) expressed the obiter view that where both parties were in actual (as opposed to anticipatory) breach of a fundamental term, or otherwise evincing an intention not to be bound, neither could terminate. The three justices did not confine their expression of the operation of this principle to cases of mutual or dependent obligations. Rather, they expressed the principle as deriving from a general readiness and willingness of each party to perform his obligations at the relevant time. Earlier, in Green v Sommerville [1979] HCA 60 ; (1979) 141 CLR 594 at 609 Mason J (with whom Murphy and Aickin JJ agreed) recognised that '[a]n obligation may be essential, yet not interdependent with an obligation imposed on the other party to the contract ...'
Case: Highmist Pty Ltd v Tricare Ltd [2005] QCA 357
Outcome: referred to
Highmist Pty Ltd v Tricare Ltd [2005] QCA 357 at [61] - [62] , Keane JA (with whom Jerrard JA at [1] and Cullinane J at [66] agreed) expressed the obiter view that it did not make much commercial sense to say that where both parties had expressed a firm resolve not to perform the contract, the contract continues 'in existence in some legal limbo' for the reason that neither party is ready, willing and able to perform. His view is similar to that of Deane J in Foran 168 CLR at 438. Keane JA said that in such circumstances, the case could be characterised as one of termination by mutual consent, although he recognised that his was a tentative view and that the issue did not need to be resolved in order for him to decide the case: Highmist [2005] QCA 357 at [62] . Keane JA did not examine the authorities.
Case: Hilditch Pty Ltd v Dorval Kaiun KK (No 2) [2007] FCA 2014
Outcome: cited
this sum I will deduct $32,000, the amount which I have found fairly reflects the benefit obtained by Hoy Mobile over the period in which it was committing the fraud. That leaves a net sum of $43,169.75 in damages. Interest will need to be added to this sum at the pre-judgment rates of interest used by the Supreme Court of New South Wales: cf Hilditch Pty Ltd v Dorval Kaiun KK (No 2) [2007] FCA 2014 at [110] .
Case: Horrocks v Lowe [1975] AC 135
Outcome: referred to
Diplock made the telling observation in his classic speech in Horrocks v Lowe [1975] AC 135 at 150C-E that in ordinary life it is rare indeed for people to form their beliefs by a process of logical deduction from facts ascertained by rigorous search for all available evidence and a judicious assessment of its probative value. He pointed out that, in greater or less degree, according to their temperaments, training and intelligence, men and women are swayed by prejudice, rely on intuition instead of reasoning and leap to conclusions on inadequate evidence. People tend not to recognise the cogency of material which might cast doubt on the validity of the conclusions they reach. And, he said, that despite the imperfection of mental processes by which a belief is arrived at, it may still be 'honest', that is, a positive belief that the conclusion reached is true. He said this in the context of assessing whether a person may or may not have been malicious for the purpose of the law of qualified privilege. But it is an observation about human behaviour. What Lord Diplock said can be applied as well to the way in which people act in contractual relationships. As I have found, Mr Donnellan sought to give Hoy Mobile an opportunity to explain its conduct from 7 July 2006. He was the person within Allphones who made the decision issue the notice of intention to terminate. I am satisfied that he honestly believed that Allphones should terminate the franchise agreement because it was not in Allphones' interest to have a franchisee which had engaged in the fraud which Hoy Mobile had. The fraud was serious and, having seen and heard Mr Donnellan, I am satisfied he decided to terminate the franchise agreement because of the undesirability of having a relationship with Hoy Mobile as a party which had committed that fraud. No doubt other factors, including some irritation at the way Hoy Mobile was behaving, may have been a part of Mr Donnellan's thinking processes, but I am quite unpersuaded that he acted, and thus Allphones acted, otherwise that in good faith in exercising the power to terminate. I reject this ground of Hoy Mobile's case.
Case: Hughes v Metropolitan Railway Co (1877) 2 App Cas 439
Outcome: cited
position is analogous to the situation in which parties to a contract enter into a course of negotiation which has the effect of one leading the other reasonably to suppose that the strict legal rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, pending the outcome of the negotiation. Here, Hoy Mobile's request of 10 July that Allphones hold a meeting on its terms, can be seen as such a suspension. In those circumstances equity would not allow the parties' strict legal rights to be enforced so as to deprive Allphones of a right to terminate the franchise agreement because it acted on Hoy Mobile's request to delay doing so: cp Hughes v Metropolitan Railway Co (1877) 2 App Cas 439 at 448 per Lord Cairns LC (explaining the doctrine of equitable estoppel). Although no equitable estoppel was alleged here, a reasonable person in the position of the parties would have understood that nothing Allphones did after the exchange of emails on 10 July 2006 and until the meeting of 22 August 2006 amounted to an unequivocal election involving a choice between inconsistent rights.
Case: Hunter BNZ Finance v GC Maloney Pty Ltd (1988) 18 NSWLR 420
Outcome: cited
Tropical Traders Ltd v Goonan [1964] HCA 20 ; (1964) 111 CLR 41 at 55 Kitto J said that the person with the choice might keep the question open '... so long as it did nothing to affirm the contract and so long as the [other party's] position was not prejudiced in consequence of the delay'. He said that when the vendor in that case told the purchaser that it would not rescind a contract for the sale of land before a particular date if the purchaser paid an additional sum for interest, costs and expenses, the vendor was doing no more than promising that it would not elect to rescind the contract before that date if the conditions were complied with. Kitto J said that in that case a grant of an extension of time was not an election to affirm but, rather, amounted to an announcement of an intention to refrain from electing either way until the money had been paid or the extended time for performance had elapsed: see too Champtaloup v Thomas [1976] 2 NSWLR 264 at 268C-269B per Glass JA; 273D-274D per Mahoney JA; Street CJ agreeing with both at 266: Hunter BNZ Finance v GC Maloney Pty Ltd (1988) 18 NSWLR 420 at 435C-436B per Giles J: GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50 ; (2003) 128 FCR 1 at 89-92 [356] - [364] per Finn J. And, as the judgment of the Exchequer Chamber written by Blackburn J (see Scarf 7 App Cas at 360) established, this principle applies to a party to a contract who discovers his entry into it was induced by the fraud of the other: Clough v London &amp; North Western Railway Co (1871) LR 7 Ex 26 at 34-35. 22.2 Consideration
Case: Hurley v McDonald's Australia Ltd [1999] FCA 1728 ; (2000) ATPR 41-741
Outcome: referred to
Finn and Conti JJ held that the analogue of s 51AC required the Court to focus primarily on the unconscionable conduct of the corporation and to determine whether that conduct was contrary to the norm of conscientious behaviour. They held that the conduct in that case insisted of a carefully formulated and systematic approach which clearly offended against basic notions of good conscience and fair play: National Exchange at 148 FCR at 143 [44]. Although their Honours were speaking of s 12CC of the ASIC Act , their remarks apply equally to the notion of 'unconscionable conduct' in its analogue, s 51AC: Cannon Australia Pty Ltd v Patton [2007] NSWCA 246 at [43] per Campbell JA, with whom Harrison J agreed. Campbell JA had referred ([2007] NSWCA 246 at [40]) to the earlier decision of a Full Court of this Court in Hurley v McDonald's Australia Ltd [1999] FCA 1728 ; (2000) ATPR 41-741 at [21] - [22] . There Heerey, Drummond and Emmett JJ said that for conduct to be regarded at an unconscionable, serious misconduct or something clearly unfair or unreasonable had to be demonstrated. They found that the term carried with it the meaning given by the Shorter Oxford English Dictionary, namely '... actions showing no regard for conscience, or that are irreconcilable with what is right or reasonable', relying on Qantas Airways Ltd v Cameron [1996] FCA 1483 ; (1996) 66 FCR 246 at 262.
Case: International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3 ; (2008) 242 ALR 47
Outcome: cited
reasonable person in the position of the parties here would reject as inappropriate a construction of their franchise agreement that it had no territory at all. The task of construing 'N/A' as the description of the territory must be approached in the manner described by Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 at 179 [40] ; applied in International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3 ; (2008) 242 ALR 47 at 63 [53] per Gummow, Hayne, Heydon, Crennan and Kiefel JJ. That requires the Court to put to one side the subjective beliefs or understandings of the parties about the rights and liabilities that govern their contractual relations, and to concentrate on the principle of objectivity for the ascertainment and definition of those rights and liabilities. Their Honours said that what mattered was what each party, by words or conduct, would have led a reasonable person in the position of the other party to believe. They continued: '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 agreements. The meaning of the terms of the 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 Limited v BNP Paribas [2004] HCA 35 ; (2004) 218 CLR 451 at 461-462 [22] .)'
Case: Jones v Dunkel (1959) 101 CLR 29
Outcome: applied
conversation that he denied was the one in which Mr Hoy had asserted that Mr Donnellan agreed to a 5 km radius territory. Mr Donnellan was then pressed about what he now claimed had occurred. He gave this evidence: 'Now, what do you say Mr Hoy said to you on this occasion in 2003 when he raised the subject of territory? Was it him who raised it or you who raised it? --- He raised it with Mark McClennan. I was walking past; asked how things were going, and he said, "What about territories?" I said, "We don't give them, mate."' I do not believe Mr Donnellan's evidence that such a conversation occurred. Mr Hoy was not cross-examined about any such conversation when he first gave evidence. I infer that this was because the conversation was first raised by Mr Donnellan in his cross-examination. When he was recalled at the end of the trial, Mr Hoy denied the conversation asserted by Mr Donnellan. Mr McClennan was available. He had a position as a consultant with Allphones, but was not called to give evidence. I infer that nothing Mr McClennan could have said would have assisted Allphones' case: Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298. Allphones contended, based on the assertions initially made, but later disavowed by Mr Donnellan, that at the time the franchise agreement with Hoy Mobile was entered into, the only territory which Allphones was prepared to grant was limited to the physical shop in which the franchise was conducted. I reject this argument. Such a result does not fit within the matrix of mutually known facts or the very terms of the franchise agreement itself. First, Mr Donnellan never told Mr Hoy, prior to signing the franchise agreement, words to the effect that the territory was the area of the shop lease. There is no evidence that Mr Hoy was informed to that effect prior to Hoy Mobile's entry into the franchise agreement.
Case: Koompahtoo Local Aboriginal Land Council v Sanpine [2007] HCA 61 ; (2007) 241 ALR 88
Outcome: referred to
Koompahtoo Local Aboriginal Land Council v Sanpine [2007] HCA 61 ; (2007) 241 ALR 88 at 101 [44] Gleeson CJ, Gummow, Heydon and Crennan JJ said that unwillingness or inability to perform a contract often is manifested most clearly by the conduct of a party when the time for performance arrives. They said: 'In contractual renunciation, actions may speak louder than words.' Their Honours held that it was important to classify whether the obligation with which there had been a failure to comply had been agreed by the contracting parties to be essential, or whether there had been a sufficiently serious breach of a non-essential term enlivening the right to terminate: Koompahtoo 241 ALR at 101 [47] and 102 [49]. They held that the interests of justice were promoted by limiting the right to rescind the contracts (i.e. terminate for breach) to instances of serious and substantial breaches of contract: Koompahtoo 241 ALR at 104 [52]. I am of opinion that the cumulative effects of Allphones' deliberate and secretive underpayments of commissions were of such seriousness that, had it wished to do so and been itself an innocent party, Hoy Mobile could have terminated the franchise agreement. 29.3 Entitlement to terminate: Interdependency and repudiation It was an essential term under the franchise agreement that the franchisee (Hoy Mobile) be paid the commissions to which it was entitled arising from its performance of its obligations. The evidence established that Allphones was not paying commissions earned by Hoy Mobile in full, and sometimes at all. Just as Hoy Mobile's conduct in relation to the fraud evinced an intention not to be bound, Allphones' conduct in respect of the short payment of the commission can be described as conduct which evinced an intention no longer to be bound by the franchise agreement or to fulfil it in a manner substantially inconsistent with Allphones' obligations: Koompahtoo 241 ALR at 100 [44] per Gleeson CJ, Gummow, Heydon and Crennan JJ applying; Laurinda 166 CLR at 634 per Mason CJ.
Case: Kyrwood v Drinkwater [2000] NSWCA 126
Outcome: considered
Kyrwood v Drinkwater [2000] NSWCA 126 at [154] Powell JA (with whom Meagher JA agreed at [1]; see also the dissenting view of Fitzgerald JA at [231]-[251]) said: 'In Nina's Bar Bistro Pty Ltd v MBE Corporation (Sydney) Pty Ltd [1984] 3 NSWLR 613 it was held by this Court that, if non-compliance with a contractual obligation is to take away the defaulting party's right to terminate, there must be a direct causal relationship between the non-compliance and the failure to complete, the onus of proving which lies on the non-defaulting party, and there must be an absence of repudiation by the defaulting party prior to that time . The same approach was taken by this Court in Roadshow Entertainment Pty Ltd v CEL/Vision (ACN 053 006 269) Pty Ltd (1997) 42 NSWLR 462 at 479-480.'