Custom Credit Corporation Limited v Cenepro Pty Limited

[1991] HCATrans 282

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sll2 of 1991

B e t w e e n -

CUSTOM CREDIT CORPORATION

LIMITED

Applicant

and

CENEPRO PTY LIMITED

First Respondent

WILLIAM JOHN JAMIESON

Second Respondent

GLENN STEWART PEARSON

Third Respondents

Application for special

leave to appeal

BRENNAN J

DAWSON J TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 4 OCTOBER 1991, AT 11.14 AM

Copyright in the High Court of Australia

Custom(2) 1 4/10/91

MR D.F. JACKSON, QC:  May it please the Court, I appear with

my learned friend, MR P.R. WHITFORD, for the

applicant. (instructed by Gadens Ridgeway)

MR P.G. HELY, QC: If the Court pleases, I appear with	MR D.P. ROBINSON for the respondent. (instructed
by Freehill, Hollingdale & Page).

BRENNAN J: Yes, Mr Jackson?

MR JACKSON:  Your Honours, may I hand to the Court copies of

our outline of submissions, together with some

cases to which reference may be made?

BRENNAN J: Yes, Mr Jackson?

MR JACKSON:  Your Honours, as is apparent from the outline

of submissions, there are two matters which, it is

submitted, merit the grant of special leave; one

concerning liability, the other damages. May I go

immediately to the question relating to liability?

Your Honours will see the issue set out in

paragraph 1.1 of the outline of submissions.

May I say a couple of basic things before

getting to it? The circumstances were of the

simplest kind. The applicant financier was held

liable in contract for failure to provide the funds

necessary to carry out a redevelopment of a site at

Bellevue Hill in Sydney. The contract was

constituted by the adoption by the parties with

some not presently material variations of the terms

in which an offer in writing of funds had been made

by another financier.

The terms in which the contract was made or

said to have been made contemplated the execution

of further documents and the method by which those

further documents were to be decided upon was

expressed to be as appears at page 212 about

line 42. Your Honours will see the heading,

"Documentation": 

Subject to -

and where it says "Devreal", one reads "Custom

Credit" -

and its lawyers total satisfaction.

DAWSON J:  Why it this not just a Masters v Cameron sort of

situation?	How can we improve on that or should we
attempt to?

MR JACKSON:  Your Honour, one gets to a situation where one

can have, of course, a variety of situations: call

them Masters v Cameron or something else.

Custom(2} 2 4/10/91

DAWSON J: Well, no one has ever said that Masters v Cameron

is exhaustive but it provides the framework for

consideration of a problem like this.

MR JACKSON:  Yes. Your Honour, I accept what Your Honour

says in terms of getting one to the area, if I may

say so with respect. Having got to the area, it is

a question then whether there is a further, in

effect, division or subdivision or another approach

within the Masters v Cameron area. The particular

point, Your Honour, is simply this: assuming one

has a situation falling within a Masters v Cameron

general area, what is the situation when the

document which is said to amount to the contract

requires the execution of documents in

circumstances where there is the person who is to

decide upon their term is identified but the

identification provides no basis for determination

what the term should be.

DAWSON J: Well, that is a Masters v Cameron situation. Do

you construe the contract or what you have as being

subject to contract or do you say, "Well, we have

agreed now but we will attempt to put our agreement

in more formal terms at a later stage"?

MR JACKSON: Well, Your Honour, if I can say so with

respect, one is in that area but it is really a

question of saying, having got to a provision of

this kind, which is a of a relevantly common kind

one would think, what does that mean? Its terms

are clear.

DAWSON J: That depends on the whole of the circumstances

but it does not raise any question of general

importance.

MR JACKSON: Well, Your Honour, in our submission it does in

the sense that a provision saying that an offer of

funds is one which is subject to the lender's total

satisfaction in relation to the documentation is,

as the affidavit suggests, a provision of

relatively common application and, if that is so,

the question which then arises, in our submission,

is that when it says that and leaves it entirely to

the total satisfaction of the lender without

providing any further criterion, does that have the

consequence that a contract has been made?

DAWSON J:  That would depend on the circumstances. You

would not be asking this Court to say that in every

circumstance wherever the words "Documentation

subject to" one of the parties "and it lawyers

total satisfaction" means that there is no

contract, would you?

Custom(2)	4/10/91
MR JACKSON:	No, no, Your Honour, I would not suggest that

for a minute but we would at least seek to put it

on a level of abstraction slightly higher than

that. But saying that when one has provisions

which set out the bare bones of the agreement, as

the contract does in the present case, but does

really no more than that, does one arrive at a

concluded contract where the filling in of the rest
of the terms is left entirely to the satisfaction
of one of the parties? Your Honour, that is a

question of common and general application, not

decided by Masters v Cameron and really not decided

except, I should say, to the extent to which two

members of the Court were of that view or expressed

that view in a sense in passing in Godecke v

Kirwan.

DAWSON J: Were not decided by Masters v Cameron because,

when one is expressing general legal principle, one

cannot descend to that degree of particularity.

MR JACKSON:  Your Honour, Masters v Cameron does not descend

to that degree of particularity but the issue that

is raised by the case, in our submission, is one

which can be expressed as a matter of principle,

the matter of principle being is an agreement which

leaves to the determination of a party, without

there being any means for fixation other than the

choice of that party, the detailed terms of the

contract, does that give rise to a concluded

agreement? Now, Your Honour, that is a question of

principle, with respect.

BRENNAN J:	Mr Jackson, I notice that in the judgment of the President Godecke v Kirwan was relied on to reach
the conclusion on this point which was adverse to
you.
MR JACKSON:	Yes, Your Honour.

BRENNAN J: And that in your notes you state that

Justice Gibbs expressly left the question open.

MR JACKSON:  Your Honour, His Honour was, on this point, in

a minority, I hasten to say. Your Honour, might I
go to Godecke v Kirwan, 129 CLR 629, for just a

moment to indicate this. There were three members

of the Court: Justice Walsh, the present
Chief Justice and Justice Gibbs, and at page 634

about point 7 of the page, paragraph 6 of the

document is referred to:

shall execute a further agreement to be

prepared at my costs by his appointed

Solicitors containing the foregoing and such

other covenants and conditions as they may

reasonably require.

Custom(2) 4 4/10/91

Now, Your Honours will see that in that case there was a provision saying "such other terms" et

cetera "as they shall reasonably require". What

had been held at first instance was that the terms

of the contract had not been settled because of

that provision and were thus not binding. The

majority held to the contrary. They held there

were two features which had the consequence that

the contract was certain. The first was that the

clauses should not be inconsistent with those

contained in the offer but the second and important

one was that they should be objectively reasonable.

Now, Your Honours, the second of those, of course,

is not present in this case. There was simply

nothing stated. But the critical aspect for

present purposes is what appears at page 642 about
point 5 in the judgment of Justice Walsh.

His Honour was referring to a decision of

Chief Justice Bray in Powell v Jones, which is referred to at page 641 point 7, and then goes on

to say:

It is clearly established that a binding

agreement may be made which leaves some

important matter, e.g. the price, to be

settled by the decision of a third party. I

agree with respect with the view of Bray C.J.

that, subject to the qualifications to which

he refers, there is no reason in principle for

holding that there cannot be any binding

contract if some matter is left to be

determined by one of the contracting parties.

Now, Your Honours, if one goes to the judgment

of Justice Gibbs, at page 645 about point 6,

Your Honours will see that he says:

Clause 6 does not require that the

additional terms should be the subject of agreement between the parties. The inclusion of additional terms depends on the unilateral	requirement of the solicitors for the vendor,	subject to the qualification that the
requirement must be reasonable.

Now, Your Honours, could I refer Your Honours to

the whole of that paragraph and then on page 646 in

the first four or five lines in the new paragraph.

His Honour said he:

should perhaps make it clear that it does not

necessarily follow from what I have said that

an agreement which left further terms to be

settled by one of the parties, rather than by

his solicitors, would be treated as a

concluded contract.

Custom( 2) 4/10/91

The ultimate reason, Your Honours, no doubt being

that one arrives at a situation where, as here, it

really essentially leaves the party whose ability

it is to determine the terms of the contract in

terms of such an agreement an option or discretion

whether to proceed or not with the agreement at

all.

TOOHEY J: But that rather depends, does it not, Mr Jackson,

upon the degree to which the parties have already

agreed?

MR JACKSON:  Your Honour, I would accept that and the case

referred to by Justice Gibbs, that is Axelsen v

O'Brien, is really a case which, although it provided for the terms to be decided by a party's

solicitor, was really a case where, for example, 11

major clauses had been decided upon and the

remaining matters were to be decided by the

solicitor.

TOOHEY J: But in the present case it is documentation which

is said to be:

Subject to Devreal and its lawyers total

satisfaction.

MR JACKSON:  Yes, Your Honour.

TOOHEY J: It is your contention, is it, that within the

scope of that provision the document itself left

outstanding a number of important matters to be

agreed?

MR JACKSON:  Yes, Your Honour. Could I indicate what I mean

by that? If Your Honours look, and I will ask

Your Honours to do so very briefly, at page 211 and

page 212, Your Honours will see that it is right to

say the amount and the term and the occasion for

the first draw down and the rates of interest, and

there were some oral amendments but they do not

matter for present purposes, were agreed upon as

was the security but, Your Honours, really what was

done was to have something that was, in those

respects or in respects of the terms of the

securities and other documentation conceptual.

Now, I do not suggest for a moment, of course,

that the documentation could have differed from

those parts of it but, having said that, one then

had to arrive at documentation such as, for

example, the times when there might be default

other than in simply a non-payment of money

pursuant to a mortgage, and what events would give

rise to default, for example? Would it be

possible, for example - and, Your Honours, I just

raise it as one instance - for the financier to say

Custom(2) 6 4/10/91

that the work must proceed at a certain rate, a

subject never agreed upon, the subject of

particular agreement.

Your Honours, would it be possible for the lender to include in the documentation such things

as other occasions that might give rise to events

of default, for example, if there were some action

taken against the borrowing company by way of a

petition from someone else to put it in liquidation

even if the petition was not of any substance.

Provision for accelerating the payment of the

moneys back to the lender. Now, Your Honours, all

those things are matters that might well be the
subject of documentation and, Your Honours, those

matters just are not agreed.

TOOHEY J:	I was going to ask you precisely what is the point involved here. Is it the absence of
agreement upon a variety of matters such as you have indicated or is it the fact that any agreement
on those matters is subject to the arbitrary
acceptance or rejection by one party?

MR JACKSON:  Your Honour, if I can put it this way: it is

the absence of agreement because the agreement on

all those matters is something that has to be

derived really purely from the expression,

"Documentation subject to" - - -

TOOHEY J: Well, let us say that provision was not there.

Would your argument still hold good?

MR JACKSON: In the particular case the answer, I think, is

no. The second argument to which Your Honour

adverted was one that was not taken at first instance. It was not allowed to be taken on appeal. So, the case turns, really, on the

argument which I am advancing.

BRENNAN J:  I do not quite follow that, Mr Jackson, could

you put that again?

MR JACKSON:  Yes. What His Honour put to me was, as I

understood it, if the clause was not there about

documentation, would our argument be any different?

Your Honour, our argument would be different, I

suppose, but the problem is that the question

whether there was or was not a concluded agreement

as distinct from the effect of such agreement as

was arrived at was one that was not permitted to be

taken on appeal in the Court of Appeal because of

the approach that had been taken at the trial.

Now, Your Honour, that is something that is not the

subject of this application. It may not be a

direct answer to what His Honour put to me but the

question whether there was or was not a concluded

Custom(2) 7 4/10/91

agreement, whatever its precise legal effect, is

one that would be difficult to raise at this point.

DAWSON J: In other words, there was either an agreement on

these terms or not at all?

MR JACKSON:	Yes.
DAWSON J:	Would your argument be different if that clause

had said, "Subject to Devreal and its lawyers
reasonable satisfaction"?

MR JACKSON: Well, Your Honour, it would be very difficult.

We would fail on that, yes, Your Honour. That is

really at the heart of it. It provides no

criterion. Reasonableness is something - - -

DAWSON J:  You say, really, it binds one side not at all.

MR JACKSON: That is right, Your Honour, yes.

BRENNAN J:  I must confess I have some difficulty

conceptually in distinguishing your present

argument from that which you say you are precluded

from raising. Either there was an agreement or

there was not. If there was an agreement, then the

terms of it are or the operation of it is to be

ascertained as a process of construction.

MR JACKSON:  Yes.

BRENNAN J: And one of the things that would have to be

construed is the meaning of that clause headed

"Documentation". If, on a proper construction of

that it is discovered that there were essential

terms which remained to be agreed before an

agreement was constituted, we are back to square

one that there was no agreement.

MR JACKSON: Well, Your Honour, there is some over-lapping,

of course, but in the end we would submit there is

no particular difficulty in dealing with the case

in the way in which it was in fact conducted in the

Court of Appeal, namely, that it is accepted that

there was an agreement upon the terms of that

letter with some variations that do not matter.

BRENNAN J:  I appreciate that pro tanto there was an

agreement but I perhaps need not bother you with

that. Could I ask this question: what was the
state of the acquisition of the sites which were to

go into this development at the time at which this

"agreement" was reached?

MR JACKSON:  Yes. Your Honour, one of the respondents owned

one of them. A second one was to be the subject of

the initial draw down which, in fact, was to be

Custom(2) 4/10/91

480,000 rather than the figure referred to in the

document. There had been, Your Honour, I think, an

acquisition of a further one but there was at least

one which had not been acquired.

BRENNAN J: When you say, "not acquired" and the first one

"to be subject to the draw down", were these - - -

MR JACKSON:	To settle.
BRENNAN J:	To settle?
MR JACKSON:	Yes.

BRENNAN J: There was a contract concluded in relation to

it?

MR JACKSON:  Yes.

BRENNAN J: In relation to the last one, was there a

contract or was there no more than - and I am

looking here at (2) under "Security" - an option

agreement?

MR JACKSON:  Your Honour, at the most there was an option

agreement because one of the matters to which I

will refer in dealing with damages is the fact that

it was difficult to get - and the difficulty was

sought to be blamed on us for not further funding -

the agreement of the remaining tenant in order to

get them out. May I just check, Your Honour,

precisely? Your Honour, at the time of this

agreement 23A, which is the one referred to in the

document at page 211 under the heading "Amount",

was the second property, the first one being the

one he owned. There was an option over a third

property and at that point that was it, as I

understand the position.

Your Honours, it appears really, I think, at

the bottom of page 14 and the top of page 15. About

line 25 on page 14: 

at the time of the meeting with Custom Credit,

Cenepro was in a position to c.ontrol four of

the five frontage allotments.

And Your Honours will see the finding as to the

expectation set out on page 15.

BRENNAN J:  Was there any agreement reached between the

parties, either orally or by writing, with respect to the giving of any security by the borrower over

the property which had not then been acquired?

MR JACKSON:  Your Honour, I think the answer is no. The

properties are identified under the heading

Custom(2) 9 4/10/91

"Security" at page 212 and do not, I think - I will

have that checked - include the last property.

BRENNAN J: Although the agreement was for the advancing of

money which was to include an amount for the

acquisition of the last property?

MR JACKSON:  Yes, Your Honour. Your Honours, that is the

nature of the issue. May I submit that that it is

an issue on which two views are open, in our

submission, is manifest from the principal

judgment, if I can put it that way, in the Court of

Appeal, that of the President. Could I take

Your Honours very briefly to that? Page 101,

commencing at about line 6 and going through to

line 11, His Honour sets out the commencement of

the argument and then he goes on to set out the

indicia one way or the other.

The indicia, in effect, in support of our

ultimate case commence at page 101, about line 14,

and they go through to page 104, about line 5. I

wonder, Your Honours, if I could refer particularly

to item 3 or ask Your Honours to note item 3,

commencing at the bottom of page 102. Now,

Your Honours, at page 104, commencing at about

line 6, going through to page 107, line 10, he sets

out the considerations the other way and could I

refer Your Honours in that regard to item 2 at the

bottom of page 104.

Now, Your Honours, His Honour's conclusion

appears at page 109 commencing about line 3 and it

goes through to page 110, line 6. Also,

Your Honours, page 111, line 16, to the top line on

the next page. Your Honours will note that

His Honour has imported a criterion of

"reasonableness" into the considerations. That

appears at page 109, line 26 and, Your Honours, of

course, that does not appear in the agreement of

the parties.

DAWSON J:  You cannot have reasonable total satisfaction?

MR JACKSON: Well, Your Honour, I suppose total satisfaction

can be reasonable but total satisfaction is not

always reasonable. Indeed, the emphasis upon the

totality of it or the reference to totality is

something which really militates against the notion

that it will be reasonable or necessarily be

reasonable because it says, "We want to be

satisfied whatever you say."

DAWSON J: Or a reasonable man would be totally satisfied?

Custom(2) 10 4/10/91

MR JACKSON:  Your Honour, one can say it and one can put it

as an adjective or an adverb or do it any way one

likes but they are not, with respect, synonymous.

Now, Your Honours, I perhaps do not need to go

in detail to the judgment of the other two members

of the court on the point. May I say,

Your Honours, that so far as Mr Justice Mahoney is

concerned - and it is relevantly at about page 135

and page 136 - His Honour seems to draw a

distinction between a ministerial power under a

clause such as this and an operative power under

such a clause. If it is merely ministerial, which,

presumably, he held it to be in this case, then

there would be no difficulty. And by "ministerial"

he appears to mean giving effect to something. If

it is operative, that is putting in further clauses and adding to the agreement of the parties, then it

is not.

Your Honours, Mr Justice Clarke, at page 164

deals with the issue commencing at about line 21

and going through to page 167, about line 12. The

view that he takes appears to be that the parties

had not arrived at an agreement whereby we were in

a position pursuant to which we could determine

whether or not to proceed with the transaction.

That is the approach he adopted.

TOOHEY J:  Mr Jackson, one difficulty I have with this

documentation provision and the reference to "total

satisfaction" is that, in a sense, it ebbs and

flows with the balance of the document and you

could imagine a situation in which so much had been

set out that a provision of this sort really left

nothing effectively to be agreed. At the other end
of the spectrum, you could imagine something that
was so bereft of detail that clearly it could not

be said that the parties had reached agreement.

What is it that determines the operation of a

provision such as this? In other words, do you

need to look at the balance of the document and see

to what extent it can stand on its own feet?

MR JACKSON:  Your Honour, one cannot look at a provision

like this in the abstract, of course. One starts

from a situation where it is part of a document

which might be described as a letter of offer or

agreement in principle or something of that kind.

Now, Your Honour, if it is that the - and there is a question of degree involved, I entirely accept

that with respect, Your Honour. But if what one

has, really being the common situation, that the
basic terms of the transaction are set out, for

example, such things as the ones one sees here,

things like "Term", "Interest Rate", "Loan

Purpose", and so on, and then in relation to any

Custom(2) 11 4/10/91

question of the detail of it, it goes on to say,

"Subject to" the parties "total satisfaction", then

we would say, Your Honour, that is the ordinary

case and the case in which it is a question of

whether that is effective.

Now, Your Honour, I am conscious in saying

that that the decision in one case will not

necessarily affect every other case but this is

really the common situation where the basic
proposal of the loan or the financing is set out,

the types of transactions identified and then the

documentation of that left to, in effect, a party.

TOOHEY J: When you put it that way you are almost taking it

into the other argument which you said was - in

effect, you have precluded from advancing. In

other words, you look at the balance of the

document and see whether you can construct a

contract from it.

MR JACKSON: Well, Your Honour, I do not want to trip over

the edge.

TOOHEY J:  No, but it points up the difficulty of a

provision such as this and perhaps the inability of

a court to answer it in a way that resolves the

question for all contracts of this type.

MR JACKSON:  Your Honour, that is a problem that almost

inevitably arises with contract cases unless one

has a situation where it is a question of the

operation of, for example, a statute law on a

particular contract. So, one will never have, in

suppose the Court takes the ones that are in the middle band and the fringes, of course, are cases

the ordinary course of the common law of contract,
cases that are really entirely pure in the sense

that the decision will affect every case.

that are on the fringe.	Your Honour, I do not know
that I can say any more about that than that, but

that is something that follows, we would submit.

Your Honours, those are our submissions on the question of liability.

BRENNAN J:  Mr Jackson, have you formulated any additional

grounds of appeal?

MR JACKSON:  Your Honour, I wish Your Honour had not put it

that way. We have, Your Honour, formulated new

grounds of appeal and Your Honours should have

those because they were provided to the Court as an

annexure to a supplementary affidavit.

TOOHEY J: They are an attachment to the affidavit.

Custom(2)	12	4/10/91
MR JACKSON:	The second affidavit of Mr Fuller, yes.	Do

Your Honours have that? If not, I have some

further copies here. Your Honours will see it is

shorter than the document that, for some reason or

another, became a draft notice of appeal.

Your Honours, could I just say that the - I

have not said anything about what is set out in

paragraph 2 of that draft, of course. The reason:

what occurred in the case was that there were

findings that there had been a contravention of
section 52 of the Trade Practices Act and also a
finding as to estoppel but because there was a

finding on the breach of contract issue, it was not

necessary for the judge to proceed further to

attempt to assess damages on those bases. But

those findings themselves were findings based on

the assumption that there had been a concluded

agreement entered into and, Your Honours, whilst I

think it would be right to say that in relation to

section 52 we would not contest that there was

conduct that was capable of giving rise to

misleading and deceptive conduct under section 52,

the findings that the judge made are really

findings based on an assumption that is not, in our

submission, correct, namely, that there had been a

concluded agreement in that sense. So that is why

those -

DAWSON J: Well, what would you be asking the Court to do if

you succeeded on the first?

MR JACKSON:  On the first point, Your Honour: the case

would have to go back and the effect of going back
would be that it would go back to the trial judge

to make findings based on the conclusion arrived at

by the court.

BRENNAN J:	Go back for what purpose?
MR JACKSON:	Your Honour, the findings of the judge are

based - could I say, first of all, in relation to

damages: all the assessment of damages is based on

the assumption of there being a concluded

agreement. Now, secondly, in relation to the other

possible bases of liability, namely, the

contravention of section 52, and also a finding

based on estoppel, the findings that have been made

contrary to us are findings which are made in the

context that there was a concluded agreement. Now,

Your Honour, if that not be so, the result would be

the judge would have to make further findings and

an assessment of damages under section 52. A

question would then arise whether there was capable
of being an estoppel in circumstances where the

subject-matter of the estoppel was a contention

that we were bound to the terms of an agreement

Custom(2) 13 4/10/91

which is contained in those documents and which, ex

hypothesi, is not such an agreement. So, Your

Honour, the case would need to go back.

BRENNAN J: There would still be some evidence available to

found an adverse verdict to you on section 52?

MR JACKSON: 

Your Honour, I accept that, but there would

need to be an assessment of damages on that basis
which has not taken place.

TOOHEY J: And there would also be evidence, I take it, to

found a conclusion that although no contract had been entered into, no binding contract, you were

estopped from denying that fact. Is that how the

estoppel arises or not?

MR JACKSON:  Your Honour, if that finding had been made,

that, itself, in a sense, would be a special leave

question. It is an issue that has been dealt with

in a case in the Court of Appeal - it is referred

to in the reasons - where what was held by the

Court of Appeal was that where parties had been in

negotiation and it was found that they had not

arrived at a concluded agreement but that conduct

of one of the parties was relied on to found an

estoppel, the effect of the estoppel being - and,

Your Honour, I am sorry, I have to put this in a

convoluted way - but the effect of the alleged

estoppel being to prevent the party from denying

that it had arrived at a concluded agreement, that

such an estoppel could not be made out because what

the estoppel was seeking to do was simply to get

one to the position of_ saying there was a concluded

agreement by a particular document when the

document did not amount to a concluded agreement.

The conduct, if performed, would not have given a concluded agreement any way.

TOOHEY J: But would you be asking the Court, if special

leave were granted, to deal with the matters in

paragraph 2?

MR JACKSON:  Your Honour, only in the sense of saying - we

would simply be asking the Court to say, look at

what has occurred. It is obvious that no relevant

findings have been made in relation to those
matters if our other contentions are correct and

the case would have to go back to the primary

judge. That is what we would be saying on that

point. That is why that ground is included.

Your Honours, could I move then to the question of damages.

BRENNAN J: You need to amend then your redrafted notice of

appeal in relation to the second order, do you?

Custom(2) 14 4/10/91

There would be a new trial on all issues raised by

the respondent's claim.

MR JACKSON:  I am sorry, Your Honour?

BRENNAN J: If you succeed on your principal case, then the

respondent's claim against you in contract falls to

the ground finally.

MR JACKSON:  Yes.

BRENNAN J: So you would not want a new trial on that issue.

MR JACKSON:  No, Your Honour. I am sorry, Your Honour is

correct, yes, I take the point.

BRENNAN J:  You would want a new trial on issues raised by

the respondent's claim other than the respondent's

claim in contract.

MR JACKSON:	Yes, Your Honour.
TOOHEY J:	If you are estopped from denying that there was a

contract, then a suppose there is a claim in

contract to be disposed of?

MR JACKSON:  It is a claim in a kind of fictional contract

but another question that follows from that is what

is the relief? Is the relief in such a case the

same as if there were a contract or is the relief

that would be appropriate only such as would have

the effect of preventing, in effect, reliance loss,

rather than giving rise to expectation loss.

BRENNAN J: Then perhaps I need to understand a little

better what this claim in estoppel is. What is it?

Is it to assert your liability in contract?

MR JACKSON:  I think so, Your Honour, yes. When I say "I

think so", I do not mean that facetiously but

because it was not necessary to arrive at damages

based on estoppel, that part of the case has not	really been gone into. What we would understand
the position to be would be a contention that if there was no contract in fact arrived at, we are
yet prevented from taking that position with the
consequence that the courts should deal with the
matter on the assumption that there had been such a
contract, giving rise to expectation loss essentially, Your Honour.

BRENNAN J: Your argument, as I understand it, is that on

the facts of the case as they either are or must be
taken to be, there was in truth no contract in law,

so it is based solely upon a legal argument.

MR JACKSON:  Yes.

Custom(2) 15 4/10/91

BRENNAN J:	Then I am not sure that I understand the estoppel point, but perhaps Mr Hely can identify
that for us better.
MR JACKSON:	Our submission would be that that is the

fundamental difficulty in estoppel in circumstances

like this.

Your Honours, may I come then to the question

of damages and this, essentially, is a point which
depends on the particular case. In that regard, we
would say that the damages have not been properly
assessed in either court because it has proceeded

on a misconstruction of the agreement which was

found to exist. I can put it shortly: it was common ground that the correct approach to the

assessment of damages was to calculate the amount
of profit or loss which would have been occasioned

had there not been a breach of contract and if the

project had been completed and sold.

The terms of the contract, Your Honours have

seen, provided for the money to come in, in effect,

one first amount and then later amounts. The first

amount was a sum which was $480,000 for the sole

purpose of acquisition of No 23A and, Your Honours,

that that is so appears - and I do not think I need

to take Your Honours to the particular passage - in

the findings of the primary judge at page 13 line 3

and the quantum of it appears at page 211, line 23.

The further advances, as appears from

page 211, were to be subject to various things,
including the development application approval from

the local council. Your Honours, there was no

default in performance of the obligation to provide

the initial $480,000 and any breach in failing to

provide funds occurred, in our submission, at the

earliest after development approval had been

obtained, because that was when we were to provide

the funds.

Could I take Your Honours in that regard to

Mr Justice Clarke at page 177, line 14, where

His Honour said:

It was not suggested, however, the the
appellant defaulted in compliance with the
obligation or provide the initial tranche. If

it complied with that obligation then the

breach occurred in the failure to provide

later installments, the first of which became

due, at the earliest, after the development

approval had been granted.

An important background factor in the

assessment of damages consisted of two matters: the

Custom(2) 16 4/10/91

first was that the market for property of the kind
in question had collapsed by at least mid-1990; the

second was that there was a finding that the

development would have been finished before that

collapse if we had provided the necessary funding.

Could I in that regard refer Your Honours to

page 173, in the first paragraph on the page,

Mr Justice Clarke; Mr Justice Kirby at page 126,

line 6, in the passage that goes through to about
line 16; and Mr Justice Clarke at page 182,

lines 13 to 17.

Now, Your Honours, fundamental to the

assessment of damages was the finding that failure

to obtain development consent prior to 14 March was

a consequence of our breach of contract and the two

material features which were relied on were that it

was said that we had not provided the funds and so

it was not possible to do the work necessary to

proceed to get building approval and development

approval. The second thing was that it was said

that we had not provided the funds necessary to

provide the incentive for the tenant to get out.

But, Your Honours, our obligation to provide funds was only once the development approval had been

obtained.

Could I refer to Mr Justice Clarke who

dissented on this point in our favour at page 173,

commencing at line 1 on that page, the passage to

which I referred earlier. He then, at page 174,

line 1, through to page 175, about line 19, sets

out the conclusions of the primary judge. The

critical passage is one which I am afraid goes for

two pages, but it commences at page 175 about

line 20 and goes through to page 177, line 19. May I refer Your Honours, in that passage, particularly to page 176, line 22, through to page 177, line 10. Finally, Your Honours, page 177, line 20, through

to - again, Your Honours, it is a lengthy passage -

but it goes through to page 180, about line 7.

The contrary view is really dealt with by

Mr Justice Mahoney at page 145, line 3, through to

page 147, line 25. The submission we would make

about it is that the view really disregards the

fact that there was no obligation to provide funds

at the time of the two events.

TOOHEY J:  Mr Jackson, would your criticisms of the

majority's approach on the question of damages

apply to an assessment for breach of the Trade

Practices Act?

MR JACKSON: Yes, it would, Your Honour, in this sense. If

it be assumed that the relevant breach of the Trade

Practices Act was to represent that funds would be

Custom(2) 17 4/10/91

made available at a time when it was not the

intention to provide them, even though there was no

concluded agreement to provide them, the situation

which would emerge from that is that there would be

an entitlement to damages flowing from that. Now,

the damages may be a little difficult to assess,

but the one thing that one could not assess them on

would be on the basis that there was an obligation

to provide them at a time earlier than the time

provided for by the representation, which would be

that contained in the document.

TOOHEY J: Because unless those criticisms held good you can

foresee a situation which perhaps, if leave were
granted, the appeal might succeed; the Court deal

with the question of damages; the matter would go

back to the primary judge to deal with questions of

estoppel, breach of the Trade Practices Act, and

you might end up with an assessment on a different

foundation.

MR JACKSON:  Your Honour, could I say two things about that:

the same underlying issue would arise in relation

to an assessment of damages under the Trade

Practices Act. But the second thing about it would

be that the manner of assessment of damages in

contract was - the basis of the assessment was to

work out what the profit or loss from the venture
would have been, that is a kind of expectation

basis. Now, that basis really would not be open,

one would think, under the Trade Practices Act,

except perhaps - some of it would, of course, but

the result should not be the same.

BRENNAN J:	Mr Jackson, looking at your amended draft notice of appeal, the grounds which are advanced as, "The
Court of Appeal erred:" in four respects, in
respects (a), (b), (c) and (d), is it possible for
you to formulate a ground which incorporates a
question of principle?
MR JACKSON: It is, no doubt. I suppose that the principle

we are seeking to elicit from it is really that

which is involved in paragraph l(c), although it is

right to say it is framed in terms of the

particular case. One does have some difficulty,

with respect, in endeavouring, because of the

matters to which I adverted when I was answering

Your Honour Justice Toohey before, in framing it as

an absolute issue of principle, because it must

vary to some extent, depending on the particular

contract.

DAWSON J:	You would say that the decision in Masters v Cameron depended on its own particular facts, the
ultimate decision?

Custom(2) 18 4/10/91

MR JACKSON:	Yes, Your Honour.
DAWSON J:	You cannot formulate -
MR JACKSON:	Your Honour, one has to express the principle,

for example, as being one that does have some

relationship to the particular contract. I do not

know that one can avoid doing that, but in a case

such as the present where one is talking about the

effect of a particular clause, it is impossible to

remove it entirely from the contract.

BRENNAN J: But does that throw up this problem, that at the

end of the day, if the Court were to grant special
leave to appeal, what it would be saying is this:
in some contracts where language of this kind

appears, dependent upon the extrinsic

circumstances, the apparent contract is no real
contract; in other circumstances, the apparent

contract is a real contract and the distinction

between the two depends upon the areas for

agreement yet to be reached?

MR JACKSON:  Your Honour, that would represent the decision of the Court in any case of this kind.

BRENNAN J: But is that the principle for which you contend?

MR JACKSON:  Your Honour, that I suppose is not really a

principle, in a sense, but - - -

BRENNAN J: Except that in order to determine whether a

clause, which reposes in one party the power to

determine the clauses thus far not expressed in
writing between them, will or will not give rise to
a binding contract dependent upon the matters still

awaiting agreement.

MR JACKSON:  It is right to say that expresses a principle.

One would add to that, of course, that that was so

in the absence of any express means for determining

what the clauses should be.

BRENNAN J: Yes. I said, reposing in one party the power,

without restriction to determine those clauses.

MR JACKSON:  Yes, Your Honour. I suppose one would have to

add a qualification, and provided that one

identifies the "without restriction" as leaving out

of account anything that might particularly be

derived from the other provisions of the contract.

BRENNAN J: If one adopts that general approach it occurs to

me that there are two problems for you to overcome:

one is that allowing for differences of

terminology, that is substantially what

Mr Justice Mahoney was saying in the Court of

Custom(2) 19 4/10/91

Appeal, so that on that basis one would not find any error of principle necessarily in the court of

Appeal's approach; the second is that if there was

an error to be derived from the facts of this case,

you would need to identify what are salient issues

which still remain for determination.

MR JACKSON:  Your Honour, if I could perhaps deal with the

second of those first. What one could identify

would be that it is not possible to derive from the

terms of the document agreed upon any event which

might be an occasion of default under a mortgage

other than the non-payment at the conclusion of the

term. It is not possible to identify such things as whether there might or might not properly be a

provision regulating the pace of development within

the confines of the time within which the money is

to be repaid. One has a time to repay and nothing

more.

Nor is it possible to determine whether there

might properly be insisted upon any term for

retention of any moneys paid on account of a

purchase price, whether by way of deposit or a part

payment of the purchase price or a full payment of

the purchase price, prior to the time for payment

back of the whole of the money advanced.

BRENNAN J: Retention by whom?

MR JACKSON: Taking by the mortgagee, taking by the

financier. Your Honours, in the ordinary course of

events, one sees documents that have some provision for there to be partial releases, for example, upon payment of some of the mortgage money. Now, there

might be numerous views of what should happen in a

case such as the present, but the way in which the

agreement was framed leaves it entirely to the

determination of the financier. Now that is in

relation to the first of those things.

So far as the question of principle is

concerned, it is right to say, no doubt, that in

some circumstances the approach taken by

Mr Justice Mahoney is one which would be

applicable, by whatever name one calls the various

steps. But what one really has, in a circumstance

like that, is that the ultimate result for which we

would contend is one of saying that one does not

import criteria such as reasonableness in unless

there is a particular occasion for doing so. If

what one has is a contract that simply allows one

party to have the determination of a clause and

there is no basis provided for in the agreement for

deciding what the clause should be, then that is

something which does not give rise to a concluded

agreement. I am putting that a little inexactly,

Custom(2) 20 4/10/91

but Your Honours will understand, I think, what I

mean.

Your Honours, those are our submissions.

BRENNAN J:  Thank you, Mr Jackson. Yes, Mr Hely. We need

not trouble you on the question of damages,

Mr Hely.

MR HELY:  If the Court pleases. On the question of

liability, when one talks in terms of certainty of

contract one has to distinguish two separate

concepts: the first is an intention to enter into

legal relations; the second is that if that

intention is present, whether the manner of

expression is such that the court is incapable of

giving effect to it, that is to say questions of

uncertainty, what the appellant was precluded from

arguing in the Court of Appeal was whether it was

the intention of the parties not to be bound until

the formal contract documentation was settled and

executed. That was the point which it sought to

agitate and which it was precluded from agitating

because the issue which had been conducted at the

trial was that the only impediment to the formation

of an intention to be bound was the execution and

handing over of the facility letter.

The various matters which Mr Jackson just articulated as being matters which had not yet been

agreed upon would be factors that would go to the

question of intention to be bound. The fact that

one cannot identify events of default and the fact

that no provision is made for the pace of

development and so on would all be factors which go

to the question of contractual intention and it is

that question which the Court of Appeal refused to

permit the appellant to argue. When one comes to

the - - -

DAWSON J:  I am not sure that I follow this, Mr Hely. I may

be being dense but there can be questions of

uncertainty which raise the question of whether

there is a contract and there can be questions of

whether there was an intention to be bound. What

was it that was not allowed to be put in the Court

of Appeal?

MR HELY:  What was not permitted to be put was that it was

the intention of the parties not to be bound until

execution of the formal documentation.

BRENNAN J:  In other words, assuming that whatever was there

was capable of binding the parties, none the less

there was no intention common to the parties that

they should be so bound until the formal

documentation was executed.

Custom(2) 21 4/10/91

MR HELY:  Yes, or if I could put it perhaps, if I may,

slightly differently, the finding of the trial

judge and of the Court of Appeal was that both

parties intended to be bound by the letter if, in

law, it was capable of amounting to a contract.	I
have not even put that properly. Both parties intended to make a contract when they had the conversation and when they spoke in terms of the
letter. There was contractual intention.

DAWSON J: And that cannot be reagitated for some reason.

MR HELY: That cannot be reagitated.

DAWSON J:	Why can it not be?
MR HELY:	It cannot be reagitated upon the basis that their

intention was not to be bound until they executed

the security documents. That cannot be agitated

because it was not in issue at the trial and was

not permitted to be raised in the Court of Appeal.

DAWSON J:  I see. So it is only a question of the parties

intending to be bound, whether they gave effect to

their intention.

MR HELY:  Whether the law is capable of giving effect to

their intention or whether their method of

expression is such that the law cannot give effect

to what they intended to do.

DAWSON J: It really comes down to a question of

uncertainty, does it not?

MR HELY: That is a question of pure contractual

uncertainty, not a question of contractual

intention. One may - - -

DAWSON J:  So it is not a Masters v Cameron situation at

all.

MR HELY:  It is not a Masters v Cameron case at all.

BRENNAN J: But it is a Godecke v Kirwan case.

MR HELY: Yes, it is, and it is a case which depends upon

the particular circumstances and the particular

document, and thus we submit is not susceptible of
being granted special leave. It is a pure case,

given that this is the piece of paper which these

parties wrote out, given that this is the
particular conversation which took place, given
that they intended to make a contract, can the law

give effect to that intention?

DAWSON J: That is a question on which different minds might

reach a different conclusion.

Custom(2) 22 4/10/91

MR HELY: Precisely, and as one substitutes one integer or

one fact or as one adds another integer or fact, so

the conclusions might differ.

BRENNAN J: But none the less the area of intended

contractual obligation is clearly defined, is it

not, by the terms of the Devreal letter?

MR HELY: Subject to amendments during the course of

discussion.

BRENNAN J:  Yes. Once one has the area of contractual

obligation thus defined, does one not need to look

at the congruence or otherwise of the terms agreed to in the letter or in the conversation on the one hand and the intended area of contractual

obligation on the other?

MR HELY:  I submit not, because that goes to the question of

contractual intention. It does not go to the

question as to whether - it goes to the Masters v

Cameron question and not to the Godecke v Kirwan question.

BRENNAN J:	I wonder whether that is so because take the present case and the matters to which Mr Jackson
has just referred. It is, I would have thought, in
the highest degree unlikely that those matters
would not have been covered by the terms of the
documentation that were to be produced, that is the
rate of development, default under the mortgage,
partial releases and the like.  Now, if one finds
that that is an integral part of the financing
arrangements which were intended by the parties,
drawing that inference from what does appear there,
and one finds that they are not in the area of
actual consensus between them, does that not lead to a conclusion as to whether or not the agreement
is capable of being enforced?
MR HELY:	I would submit, with respect, it goes purely and

simply to the question of intention; it does not go
to the question of certainty.	The reason, it is

submitted, that it simply goes to the question of

intention is one is really saying that parties

could not have intended to have been bound unless

they had reached agreement on a range of matters,

part only of which is expressed in the latter.

DAWSON J: That can be so, can it not? You can say, well,

the parties intended to be bound but their

intention did not extend to enough to enable them

in law to be bound. In other words, they had

certainly reached the point where they intended

there to be obligations on one side, but when you

look at what they had agreed upon, there was not

Custom(2) 23 4/10/91

enough for the law to say what those obligations

were.

MR HELY:  But that presupposes there must be some other

matter or that there is some other matter which
must be agreed upon before the law can give effect

to their contractual intention.

DAWSON J: That is right, like the terms of the mortgage.

MR HELY:  No, because the law is capable of settling the

terms of the mortgage. Can I perhaps retreat a

step and put it slightly differently. Presumably the financier's solicitor would prepare a form of

mortgage. That is either in conformity with the

contractual requirement or it is not, bearing in

mind, as the President said, that one is not

documenting something in the abstract, one is

documenting an agreement which has already been

reached. So that if the document which they

produce is in conformity with the contract, then

the fact that it has been produced and the fact

that it conforms is sufficient.

If, for some reason, there is a dispute upon

that question, then that is a matter which the
court can adjudicate upon and, if necessary, settle

the form of document which is appropriate to give

effect to the contractual specification.	As
Mr Justice Mahoney said, the capacity for

documentation is essentially confined by the terms

of the agreement which has been reached.

DAWSON J: And you say even if the Court of Appeal was wrong

about that it does not raise any question of

principle, it is just a drawing of the line. 0

MR HELY:  It is just a question of is it this side or that

side of the line. Bearing in mind that one is

focusing on this question of contractual

uncertainty rather than contractual intention, the

contractual intentions unless the parties have	natural tendency of the court is to give effect to
completely made it impossible for a court to do so.
That is just not this case.

TOOHEY J: 

Do you test the matter by asking whether the

court would have granted specific performance of
the agreement sued upon, in other words see whether

you can construct something to which the court

would give effect by a positive order, rather than

simply an award of damages?

MR HELY: 

One cannot, I would respectfully submit, test the

question of the existence of the contract by

whether, if it existed, it would be specifically

Custom(2) 24 4/10/91

performed or whether there would simply be an award

of damages.

TOOHEY J:  I did not mean that. There are obviously all

sorts of considerations that go to whether specific

performance would be granted or not, but if

specific performance were to be granted, then

presumably the court's order would have to spell

out in some detail what it was that was being

specifically performed. Does that provide some

sort of touchstone by which you could answer the

question in this case or not?

MR HELY: That is essentially the approach that

Mr Justice Mahoney took. He said that it is quite

common to grant specific performance of contracts

which are perhaps skeletal in their construction

and, to the extent necessary, to flesh out the

skeleton and the court settles the documents which

are appropriate or gives directions to enable its

decree to be carried into practical effect.

DAWSON J:  I think Mr Jackson conceded that if the crucial

clause documentation had read something like "to

the reasonable satisfaction of one of the parties"

he would have no case. So then it comes down to

whether really the words "total satisfaction" - - -

MR HELY:  Import some -

DAWSON J: Well, you see, the way he put it was, there never

was any binding contract because, in fact, it left

it entirely to the discretion of one party, in

terms that Justice Gibbs spoke. What do you say

about that?

MR HELY:  The question then becomes - there become, I

suppose, two questions: firstly, is it the case

that there is no concept of reasonable - - -

DAWSON J:  I put it, half facetiously, does total

satisfaction mean reasonable total satisfaction?

What do you say about that, because if it does

leave it entirely to the discretion of one party,

then there is no certainty at all.

MR HELY:  We would submit there are two constraints: first,

that it must be documentation of the contract which

has been agreed; second, that the mortgagee must at

least act honestly in the preparation of the

contractual documents.

DAWSON J:  So that you would say that the financier would

not be allowed by a court unreasonably to withhold

his total satisfaction?

Custom(2) 25 4/10/91

MR HELY: Firstly, if I could put it in gradations, we would

submit that he would have to exercise the power for

the purpose for which it was conferred. That is to
say he must bring into existence documents for the
purpose of giving effect to the agreement and not

for the purpose of frustrating it. It is a bit

like the "subject to finance" clauses that this

Court considered in Meehan v Jones. At least the borrower must act honestly in determining whether

he is satisfied with the finance which is offered

to him.

There was, I think, a divergence of opinion

between some members of this Court as to whether

there was an additional obligation that he should

act reasonably. Whatever may be the position in

those cases, and we would submit that in this type

of case introduction of an implied requirement of
reasonable conduct is both sensible and proper, but
even if one does not get to introduction of

reasonableness, the first two constraints are

sufficient to avoid contractual uncertainty. It

may be that the mortgagor is stuck with a document

which it does not like but that does not go to the

question of uncertainty, in our submission.

BRENNAN J:  You speak about documentation being prepared, as

it were, in performance of the contract already

reached. It is not possible really to describe

documentation of the kind material here as

implementing the contract, is it, because obviously

there must be documentation which does carry the

contract into effect but the terms of that

documentation contain or might be expected to

contain conditions upon which there is no

agreement.

MR HELY:  But is this not - and I hope this is responsive to

Your Honour's question - a case in which the

principals have said, "Let us work out the matters

upon which agreement has to be reached before we
have a deal".	The expression that was used, I
think, was "locked in".	"Having reached that

agreement, let us pass the papers across to the lawyers so that they can sort out the details".

DAWSON J: That is one of the classic categories of Masters

v Cameron.

MR HELY:  It can be, if one is talking in terms of

contractual intention.

DAWSON J: Yes, that case was.

MR HELY:  And that, I think, is why Mr Justice Mahoney

referred to the latitude of choice given by this

clause as being interstitial in character. It

Custom(2) 26 4/10/91

operates in a very confined technical range and if

for some reason the machinery miscarries, the court

can sort it out for the parties.

Those are the submissions which I would seek

to put on the first point.	Your Honour threatened
me, or invited me - - -

BRENNAN J:  We do not wish to hear you on the question of

damages, Mr Hely.

MR HELY:  I was concerned as to whether Your Honours wished

to hear me on the question of estoppel.

BRENNAN J: Perhaps if you would just briefly explain how

you put the case of your client in estoppel.

DAWSON J: If you have to.

MR HELY:  If I have to. Can I, before responding to, if I

may say so, that gracious invitation, could I put

another matter to Your Honours on the special leave

question. Of course, even if special leave is

granted and if the contract case were found in my

friend's favour, one would still have to grapple

with issues of section 52 and estoppel and with the

damages consequences that flow from those matters,

before there could be final disposition of the

appeal and that, I would submit, is a factor which

the Court can take into account and to give such
weight as it thinks appropriate on the special

leave application itself.

BRENNAN J:  Why do you say this Court would have to consider those matters?

MR HELY: Because it indicates the idiosyncratic nature of

this appeal. It is a case which depends very much

upon its own facts and circumstances.

DAWSON J: But this Court would not have to consider those

matters. They would go back, would they not?

MR HELY:	Not necessarily because one does have findings on section 52 and one does have findings on estoppel.
I would not accept that those findings are
dependent upon the existence of a contract. I
would accept that the consequences in damages have
not yet been sorted out. But, briefly,
Your Honours, the way in which the estoppel case was put was this, that my clients gave guarantees
and entered into commitments to purchase property and forbore from taking up finance elsewhere upon
the basis of a representation that full funding, if
I can use that expression, for this development
would be forthcoming from the applicant.

Custom(2) 27 4/10/91

BRENNAN J: Would be?

-

MR HELY:  Would be.

BRENNAN J: Promise?

MR HELY:  A statement of f~ture intention, and we would

submit that section 52 or, alternatively, estoppel

in accordance with the Verwayen's case.

DAWSON J: With which case?	Verwayen?
MR HELY:	Verwayen v The Commonwealth.

BRENNAN J: You will specify that in some detail, no doubt.

MR HELY:  I did not bring it with me, Your Honour. I did

not expect to come to this point - would be

sufficient to make it unconscionable for the

applicant to seek to change its position. It is

essentially the argument which was upheld by

Mr Justice Cole on page 39 of the application book

between lines 10 and 25.

TOOHEY J: But, why, Mr Hely, do you suggest this Court

should deal with those matters? I understand an

argument against special leave being granted,

namely, that there are outstanding issues which

could be resolved in favour of your client anyhow
but are you suggesting that we should determine

questions of section 52 and estoppel if leave were

granted?

MR HELY:	As things stand at the moment, I have findings
from the trial judge in my favour on both

section 52 and estoppel. If my friend gets up on

his contract case he also has to get up on a case
involving setting aside those findings. So, it is

not, we would submit, sufficient for the Court just

to deal with the contract case. Somehow, if my

friend is to have ultimate victory, the favourable

findings on section 52 and on estoppel have to be

displaced.

BRENNAN J: Well then, that may be so but as I understand

what Mr Jackson says, is that let him succeed on

the cause of action and contract, it is

acknowledged that these issues of section 52 and

estoppel raise other problems, and let those
matters go back entirely to the court from which
they came so that the question of damages can be

assessed. Assessed, I should say, on the basis

that there was in fact no concluded contract.

MR HELY:  If what he is saying is that the only matter which

has to be remitted is the question of assessment, I

agree with him. If what he is saying is that the

Custom(2) 4/10/91

question of liability, in terms of section 52 or in

terms of estoppel, should also be remitted, then I

do not agree with him because we have findings of

fact in our favour upon those issues.

Those are our submissions, if the Court

pleases.

BRENNAN J:	Mr Jackson?
MR JACKSON:	Your Honours, may I say four things? First, in

relation to estoppel: Your Honours will see at

page 40 the reference that was made that was, based

on a representation that full funding would be

provided. But, Your Honours, that is no doubt full

funding in terms of the letter and agreement.	The
point we would make about estoppel is this:	no
doubt there was conduct which might give rise, perhaps, to some estoppel but the finding of

estoppel that was made was one that was made on the

assumption that the parties had entered into an

agreement of the nature in question provided for by

the terms of the letter. Now, if we were

successful on the contract issue, the findings as

to estoppel would have to be reconsidered and

further, different findings made.

Your Honours, the second thing is in relation to the reference to Meehan v Jones. That, of

course, is a quite different case.	You have got a
contract with a "subject to finance" clause.	One

of the parties is entitled to say, "Well, we won't

proceed further with the contract." The only

questions involved there were, (a), was such a

clause inherently bad? (b), if it was not, what

did it mean? What was the test? A quite different

situation.

The third thing, Your Honours, is that

Your Honour Justice Dawson said, "Total means

reasonably - totally satisfied or reasonably

means honestly." Well, Your Honours, perhaps it satisfied." My learned friend said, "Perhaps it

may in the end be the right solution to say that

"totally" does not mean "totally", it means

"honestly" or it means "reasonably", but if that is

to be the case, we would submit, it is appropriate

that five or seven Justices decide that question.

Your Honours, the final matter I would say is

this: the fact that we are not able to agitate the
absence of contractual intention raises the
uncertainty issue in a pure form.

Custom(2) 29 4/10/91

BRENNAN J:  The Court will consider this matter and will

give its decision at 2.00 o'clock.

AT 12.43 PM THE MATTER WAS ADJOURNED

UNTIL LATER THE SAME DAY

UPON RESUMING AT 2.02 PM:

BRENNAN J:  The representatives of the parties reached an

agreement which they intended to be immediately

binding for the applicant to lend to the respondent

an amount of $6,500,000 for development of several

contiguous parcels of land in Bellevue Hill.

The agreement, such as it was, contained a

clause to the effect the documentation was to be

subject to the "total satisfaction" of the lender

and its lawyers. The question is whether that

clause precluded the existence of a binding

contract.

It is common ground that, to answer that

question, the Court must have regard to the terms

of the agreement in fact reached by the parties and

to the circumstances to which that agreement

related. The answer to the question therefore

depends on the particular circumstances of the case

and they are not of so general a class as to ensure

that a decision in this case would settle a problem

of general commercial practice. Moreover, even if

the applicant were successful on appeal, issues

arising under section 52 of the Trade Practices Act

and of a liability by way of equitable estoppel

would remain for determination, possibly by this

Court but, in any event, by the court of trial.

A challenge to the basis of the assessment of

damages in this case does not warrant a grant of
special leave. Accordingly, special leave is

refused.

~ HELY:  If the Court pleases, I ask for an order for

costs?

BRENNAN J: Refused with costs.

AT 2.03 PM THE MATTER WAS ADJOURNED SINE DIE

Custom(2) 30 4/10/91