Ireland & Anor v Livingstone & Anor; Ireland & Anor v Pace

These proceedings involved applications for special leave to appeal to the High Court of Australia from a decision of the Court of Appeal. The applicants, Colin Leo Ireland and C.L. Ireland Holdings Pty, sought to appeal against a decision that favoured the respondents, Ian Hunter Livingstone, Ringal Valley Pty Limited, Francis George Pace, and Alimfresh Pty Limited. The core of the dispute concerned the existence and survival of an implied indemnity in favour of the respondents.

The legal issues before the High Court were whether an implied indemnity in favour of the respondents was validly implied into a deed between the parties, and if so, whether that implied obligation survived the termination of the agreement reflected in the deed. The primary judge had found that no such implied indemnity existed, reasoning that an express undertaking by the respondents to indemnify the applicants in the deed precluded any implied indemnity in their favour. However, the Court of Appeal overturned this decision, finding that the implied indemnity did arise and that it survived the termination of the agreement.

The applicants argued that the Court of Appeal erred in two key respects. Firstly, they contended that the Court of Appeal wrongly assumed the implied indemnity was incorporated into the deed. Secondly, and more significantly, they argued that the Court of Appeal failed to consider that if an express indemnity clause was rendered inoperative by a termination clause (clause 15) which extinguished rights and liabilities not yet arisen, then any implied indemnity would be subject to the same limitation. The applicants submitted that this oversight by the Court of Appeal perpetuated uncertainty regarding the implication of terms into contracts as a matter of law.