Petricevic & Anor v St Clair

[1989] HCATrans 27

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sll7 of 1988

B e t w e e n -

RODNEY MICHAEL PETRICEVIC and

MARY JUDITH PETRICEVIC

Applicants

and

LORRAINE DAWN ST CLAIR

Respondent

Application for special leave

to appeal

MASON CJ

Petricevic

DEANE J

TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 17 FEBRUARY 1989, AT 11.25 AM

Copyright in the High Court of Australia

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MR D.E. GRIEVE, QC:	May it please Your Honours, I appear

with MR G. McVAY for the applicant. (instructed

by Greaves Wannan & Williams)

MR B.W. RAYMENT, QC:  May it please Your Honours, I appear

with my learned friend, MR N. HUTLEY, for the

respondent. (instructed by Clayton Utz)

MR GRIEVE:	As appears, Your Honours, from page 2 of the
leave papers, the proceedings arose out a suit for
specific performance by the applicant of a contract
made in April 1987 for the sale of property at resisted by the respondent to this application, putting it in broad terms, on the footing that the
contract was unjust within the meaning of the
CONTRACTS REVIEW ACT.

The primary judge posed the question in the

proceedings, at the foot of page 20 and on to page 21,
and resolved that question at the top of page 31
by finding that the evidence did not establish

that the defendant, that is the respondent to

this application, was overborne by a threat which

he had found to have been made by the present

applicants prior to entering into the contract.

Your Honours, the Court of Appeal in reversing

the trial judge's conclusion placed, in our

submission, central reliance on what was said by

the majority in the Privy Council in BARTON V

ARMSTRONG. This appears from Mr Justice Hope's

judgment at page 54 and,-similarly, from

Mr Justice McHugh's concurring judgment at page 58.

In short, Their Honours considered that if a

threat has had some, that is, any influence at all

on the making of a contract, duress at law is made

out and it must follow that injustice within the

meaning of the Act is established.

In our submission, that approach taken by the

Court of Appeal exposes a dichotomy on the topic
of duress at law and thus exposes what we would

submit to be a dichotomy, so far as the application

of this Act is concerned. In BARTON V ARMSTRONG

the minority took the view, we respectfully submit,

correctly, that the essential question was whether

or not the conduct complained of vitiated consent.

That was the approach taken in the same case by

Your Honour the Chief Justice as a member of the

Court of Appeal. We submit that what the court

here has done is to say if there has been a threat
during the course of negotiations, that is of itself
enough to invoke the application of the Act

regardless of whether or not, in point of fact, the

threat has had any operative effect on the mind of

the contracting party. In our submission, the

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question of general importance which thus arises

is what limits are properly to be placed as a matter

of construction on the operation of the CONTRACTS

REVIEW ACT?

DEANE J:  Have they said ''regardless of any operative effect"

or have they said "regardless of whether it has had

decisive effect"?

MR GRIEVE:  We submit that in substance they have said the

former in that when one has regard to the findings

of fact by the primary judge which appear to have

been accepted by the Court of Appeal, they can only

have reached the latter conclusion when faced, as

the respondent to this application was, with the

undoubted evidence that subsequent to the making of

this threat she had access to and availed herself

of independent advice. It could not be gainsaid

that the threat, in the ultimate, had no bearing

on her eventual decision to enter into the bargain.

DEANE J: Well then, that would be in conflict or different

from what the Privy Council majority said in that

passage because the Privy Council majority are

talking of an"operative" as distinct from a

"decisive" effect.

MR GRIEVE: That is so, Your Honour, yes.

TOOHEY J: Certainly the way Justice Hope put it is in terms

of the need to have some influence even if that influence falls short of an overbearing effect,

if you look at page 51, line 22.

MR GRIEVE:  Yes, Your Honours. His Honour puts it this way:

it is sufficient ..... sufficient for a

party seeking relief ..... that the pressure

or tactics had an influence upon what

took place.

irifluence in the making of the eventual contract" In our submission, if by that he meant "had an	then there would be little that we could do about
the matter or complain about but, in our submission, when one has regard to the events which happened,
namely, that in this instance, bet'vl.een the time of the threat and the making of the contract, the respondent to this application availed herself of what might
be called "remedial assistance" in obtaining advice,
it could not be said that the threat bore on the contract itself. It may have borne on the course of negotiations but it did not bear on the contract.

MASON CJ: But that is a mistake of fact, not a mistake in

principle. You can only succeed in saying there was

a mistake as a matter of principle - - -

MR GRIEVE:	Of course.
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MASON CJ:	- - - if you can demonstrate that His Honour was,
as it were, paying lip-service only to a principle.
MR GRIEVE:	Yes and, in our submission, one can either put it

that way or can put it, as we would primarily put

by way of submission, that the error of principle

that His Honour has made, with respect, was to

have regard to conduct which may have had an impact

or bearing on negotiations as distinct from conduct

which had an impact or bearing on the ultimate

contract. In our submission, conduct of the former

kind is simply irrelevant to the application of

this Act and that the Act should be construed

accordingly and that, we submit, to have been
the error of principle which vitiated the

conclusion reached by the Court of Appeal.

MASON CJ:	What do you say about the sentence on page 54 cormnencing about five lines down from the extract
from BARTON V ARMSTRONG? His Honour certainly
seems there to be saying that some operative effect
in inducing acceptance is required before the section
will come into operation.
MR GRIEVE:	Yes, yes, I take the force of Your Honour's

observation, with respect, but that sentence, in

our submission, also exposes what we submit to be

the inherent error, namely, that His Honour is

saying that threat had an impact on her negotiating

position where he uses the expression "a price

lower than that which she was asking". We submit

that what the court has really done - I am

probably offending the rule against repetition by

putting it in this way - is to say well, if,

during the course of dialogue something is said

which alters a party's view of his or her freedom

to contract and with that greater appreciation,
if I can put it that way, of the limits within
which the party may thereafter deal, the party does deal,

Their Honours seem, in our submission, to have

concluded that that is of itself sufficient to

bring the Act into operation and we submit that that

is the error or principle exposing a point of

general importance. Those are out submissions,

Your Honours.

MASON CJ:  The Court need not trouble you, Mr Rayment.

We are not persuaded that the point sought

to be raised by the applicant reflects any

error in principle upon the part of the

Court of Appeal.	The application is therefore
refused.

MR RAYMENT:	We ask for costs, if Your Honours please.
MASON CJ:	You do not oppose costs, Mr Grieve?

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MR GRIEVE:  No, Your Honour.

MASON CJ: The application is refused with costs.

AT 11.36 AM THE MATTER WAS ADJOURNED SINE DIE

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