Royal Botanic Gardens & Domain Trust v Sth Syd City Cncl

[2000] HCATrans 449

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S11 of 2000

B e t w e e n -

ROYAL BOTANIC GARDENS & DOMAIN TRUST

Applicant

and

SOUTH SYDNEY CITY COUNCIL

Respondent

Application for special leave to appeal

McHUGH J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 OCTOBER 2000, AT 2.16 PM

Copyright in the High Court of Australia

MR J.T. GLEESON:   May it please the Court, I appear for the applicant.  (instructed by Minter Ellison)

MR A.J. MEAGHER, SC:   May it please the Court, I appear for the respondent with MR P.J. BRERETON.  (instructed by Pike Pike & Fenwick)

McHUGH J:   Yes, Mr Gleeson.

MR GLEESON:   Your Honours, the decision in this Court in Codelfa Constructions in 1982 is usually treated as providing guidance on when extrinsic material can be taken into account in construing a written contract.

McHUGH J:   I must say I have always had some difficulty in understanding how you can construe any contract without looking at the whole of the factual matrix and not merely where it is said to be ambiguous or there is some other problem.

MR GLEESON:   Yes.  In the present case two very different approaches were taken by the trial judge, on the one hand, and the Court of Appeal, on the other hand, as to the use of the 20 years of dealings by the parties leading up to the written contract in 1976.

KIRBY J:   Does that mean that if we granted special leave we would be bound to plough through 20 years of dealings between the parties? 
It is not a very happy prospect.

MR GLEESON:   Yes, your Honour.  Our contention is that the reasons which Justice Hodgson gave, and there were three powerful reasons for not going to that material, were correct and that that disposes of the material.

McHUGH J:   That is a factual matter.  The problem about this case seems to me to be this.  On the one hand, if the Court was to take the whole case on, it could not avoid looking at numerous documents to come to a particular conclusion and, therefore, it is not a suitable vehicle.  On the other hand, there is lurking in the case a very important principle, namely, whether a duty to act fairly should be implied in all contracts or, at all events, government contracts where one party has a power that can be exercised.  That is a very important point.

Speaking for myself, you might have some prospects of getting leave on that point if you could persuade me that that could be isolated in some way, Mr Gleeson, so that it could be decided fairly narrowly without the necessity to explore all the facts of the case.

MR GLEESON:   Yes.  What I wish to put on that matter ‑ ‑ ‑

McHUGH J:   Because, if I understand it correctly, the Court of Appeal, in effect, said if you get up on that point, then that is really the end of the exclusivity of clause 4(b).  Is that ‑ ‑ ‑

MR GLEESON:   That is correct, and that is at page 159 to 160 of Chief Justice Spigelman.  What we wish to put on that point was that there is such a term implied in law either in all contracts or all government contracts, and this meets that test, and if that ‑ ‑ ‑

McHUGH J:   It is an important point, but I am more interested at this stage to see whether we can deal with that without having to plough through 200 documents and 20 years of practice.

MR GLEESON:   Yes.  Could I take your Honour to page 160 where Chief Justice Spigelman quotes from the joint judgment in Byrne v Australian Airlines, in particular, the second paragraph that is quoted, and that judgment, which included your Honour, said that if one had a term implied by law then it could be:

excluded by express provision made by the parties and also as a result of inconsistency with terms of the contract.

Our argument will be that that term is implied by law and once that occurs you cannot find in this case express terms or inconsistency with the contract which would exclude the implied term.  That, we suggest, is a second and very important point which has not been dealt with, except perhaps in that passage, as to whether, if there is a term implied by law, if you seek to exclude it, will it only be by express terms or inconsistency, or can you have an inquiry into pre‑contractual dealings to find the exclusion of that term implied by law.  Could I say on the question of the 200 pages and the difficulty or the like ‑ ‑ ‑

KIRBY J:   Two hundred documents.

MR GLEESON:   The documents.

KIRBY J:   If there is only 200 pages, we are quite used to 200 pages.  Every day of our life we have to get through thousands of them.

MR GLEESON:   Yes.  Those facts are clearly stated in Justice Hodgson’s judgment and I can say that on appeal there was no attempt to take the court in any great detail to anything other than Justice Hodgson’s statement of the facts.  So that the material is essentially there and the argument that we would seek to put would be on those two legal matters.

McHUGH J:   One problem is that you have not a ground of appeal in respect of this unfairness point.  You have it in your written submissions but, as such, it is not raised as a separate ground, is it, if my recollection is right?

MR GLEESON:   On page 220 of the draft notice of appeal, paragraph 10, it raises the contention “that by implication of law” the appropriate duty should have been found.

McHUGH J:   So it is a duty, not to act fairly, but to act bona fide, is it?

MR GLEESON:   Bona fide for the purpose for which the power has been conferred on you, you being the trustees, having a governmental flavour, having a statutory backing, but also entering a commercial contract of setting a rent.

McHUGH J:   There is a world of difference between an obligation to act fairly and an obligation to act bona fide.

MR GLEESON:   Yes.

McHUGH J:   In your written submissions it is put in terms of an obligation to act fairly, is it not?

MR GLEESON:   I think in the written submissions both are taken up and I think the fairness concept in paragraph 10 was intended at least to be embraced by the words “for the purposes of determining a reasonable rent” and, your Honour, we may need to define that precisely, but that is the ground that was meant to take up this point.

McHUGH J:   Yes.  What do you want to say upon the more general grounds which I have suggested to you that, prima facie, do not appear to be a suitable vehicle?

MR GLEESON:   The second best point in order of importance is the point about the Minister’s consent and that point has no factual component.

McHUGH J:   Your opponent says the short answer to that is that the Minister can set it at whatever ‑ however you construed it.  What is wrong with that proposition?

MR GLEESON:   What is wrong with that is that if you are construing it by reference to extraneous material and if that comes to govern the written text - in this case essentially, in Chief Justice Spigelman’s words, a 1956 letter governed the 1976 agreement, then as a statutory matter the Minister is there consenting to a particular lease.  There is a little difficulty consenting to the lease unless he is given the 1956 letter.

McHUGH J:   At least the other argument is, whatever it means, he has given his consent to it and that must be the case, even on your argument, must it not?  I mean, assume that you are right that you are confined to the document itself, the fact that the Minister had some view about what it meant is irrelevant, is it not?

MR GLEESON:   Can I simply touch on the two other matters, your Honour, and then I can finish?

McHUGH J:   Yes.

MR GLEESON:   The third matter that we sought to raise was what we took to be the misapplication of Codelfa in terms of what we put as the rectification point.  If I could just explain what that was.

McHUGH J:   Yes.

MR GLEESON:   Chief Justice Spigelman says there was a pre‑contractual agreement that the cost factors would be exhaustive.  All judges agreed that that pre‑contractual agreement could not found rectification.

McHUGH J:   Found rectification.  Nevertheless, the Chief Justice Justice Fitzgerald reached the same result by a process of construction.  That is your point, is it not?

MR GLEESON:   Yes.  The final point, and then I can conclude, is the clause 4(l) point, which was we agree in 1976 our lease should read as if this governed our obligations ‑ ‑ ‑

McHUGH J:   I understand that, but did any of the judges in the Court of Appeal go beyond 1976?  All that they have done, is it not, is look at the events between 1958 and 1976 to construe what document X accuses in 1976 but relating back to 1958 meant.

MR GLEESON:   That is correct, your Honour, and the point we sought to raise was if you do agree that this document will govern our relations back to that earlier time when we, in fact, commenced relations and you have a question of construction, some difficulty there, how do you treat your actual conduct for the intervening period?  Do you treat that as the factual matrix which governs construction or do you say that more naturally should be treated like post‑contractual conduct?  That is the necessary step in our argument.

McHUGH J:   Yes, I understand how you put it and I think I understand how your opponent puts it.

MR GLEESON:   That step is what is in issue.

McHUGH J:   Yes.

MR GLEESON:   If that step were made, it then does raise squarely the question which this Court has not definitively considered as to how you deal with that material in a construction process.

KIRBY J:   On the question of the duty to act fairly, assuming that is tendered in an appropriate vehicle, would one not have in a case like this then to decide what was fair by reference to all of the events that took place between the parties?

MR GLEESON:   I can relieve your Honour of that burden because Justice Hodgson raised that question squarely for us at trial and that was a contention that was not raised.  There was no doubt that what the Trust had done was fair and reasonable.  The only problem with what the Trust had done was if the other contention was correct and they had taken into account irrelevant, impermissible matters.  So that I think that matter is not a question that is opened up by a consideration of the term.

It comes back to the question on which Justice Spigelman and Justice Hodgson both agreed, in effect:  there are two resolutions to this lease which does not on its face clearly determine the point.  One is, is it governed by that term, perhaps implied by law, which resolves all issues?  If not, is it governed by a different form of implication that those cost factors are intended to be, although not clearly stated, the only matters you may have regard to.  So I suggest the decision of that would resolve the matter.

KIRBY J:   I am just wondering what sort of notice of contention we might get on the fairness point.

MR GLEESON:   Could I say this:  I think it may be in the books that after Justice Hodgson found his implied term, there was an attempt to reopen the case on that question of the fairness.  That was dismissed by Justice Hodgson and I do not believe that was pursued further.  Certainly, your Honour, the fight has not been about whether we acted fairly.  The fight has been about whether we were confined by such a term, on the one hand, or, on the other hand, by the 1956 cost factors.

KIRBY J:   The legislation was once changed with retrospective effect.  There is no prospect that that is going to happen again to solve this en passe between these two governmental parties.

MR GLEESON:   I think what occurred, your Honour, was that when the initial arrangement was made there was no ‑ ‑ ‑

KIRBY J:   The doubt was erased and then the statute was changed to resolve that doubt.

MR GLEESON:   Not changed, your Honour.  There was ‑ ‑ ‑

KIRBY J:   Why would one not say here there is doubt and maybe the government could solve it by getting the Parliament to ‑ ‑ ‑

McHUGH J:   That was done because the Crown Solicitor said you ‑ ‑ ‑

MR GLEESON:   The Crown Solicitor said no power and there was a first conferring of powers on the trustees to enter this lease and, similarly, specifically prior to that their only powers were under a 1916 proclamation which, when the land was given, dedicated to public purposes and they were appointed for the purpose of carrying out the public function.

McHUGH J:   Yes.  Around that period, as I well remember, there was a lot of argument about powers of bodies such as your client to allow land to be used for bowling clubs and all sorts of things and a lot of arguing about it.

MR GLEESON:   Yes.  Your Honour may have been referring to in 1980 the trustees, who up until then were unincorporated, were by a new statute made a statutory corporation, but in terms of the power to give this lease to the Council, that goes back to the 1961 Domain Leasing Act on the Crown Solicitor’s advice.

KIRBY J:   It just seems a little odd that a State governmental body and a local government authority of the State are coming to the courts to resolve this, but in default of any legislation that just has to be done.

MR GLEESON:   In default of legislation and can I say, your Honour, the issue of construction is, as the history of this matter shows, one of the most thorny issues one could contemplate.  The history was that in 1976, as the papers show, the Council’s solicitor provided advice to the lease on them which is what destroyed the rectification case because he said, “I read this lease.  You have no power to object to the rents they set.”  What happened was that, as in the 1980s government required authorities to earn a bit more money, the rent demands went up.

This issue was raised in 1988 and Mr Grieve’s advice to the Council in evidence was our position was correct.  The matter went to sleep.  It was raised again in 1994 - new advice - and then we have the current case.  That is the history.  It is a 50‑year lease.  We have, I think, 11 more years on the lease.  We have a substantial claim for repayment by my client since 1994 because of what has been held to be an overpayment and that is the position we face.  May it please the Court.

McHUGH J:   Thank you, Mr Gleeson.  Yes, Mr Meagher.

MR MEAGHER:   Your Honours, in our submission, what might be described as this question as to the implication of an obligation of fairness or good faith does not arise in this case and, in our submission, this case would certainly not be a suitable vehicle for addressing that question.  Could I explain why?

Could I take your Honours first to page 230 of the application book which is the way the applicant puts the argument with respect to this point.  It is said in paragraph 15 that Justice Hodgson found that the difficulties of uncertainty and incompleteness were overcome by the implication of a term:

that the Trustees would act bona fide for the purpose of determining a fair and reasonable rent.

In this case the term implied is not a term implied to act in good faith or to act fairly with respect to the exercise of an express function or express power conferred by the contract.  Here the provision for the determination of the rent on one view – that is the view propounded by the applicant – was silent as to the formula which would be used to determine the rent.

If I could take your Honours to the way Chief Justice Spigelman puts the alternative contentions between the parties at page 156.  The Council contended that the certainty was provided by the provision in clause 4(b)(iv) which said that in determining the rent, the trustees could have regard to certain matters.  We said that the lease, by conferring the function or power to determine the rent and by specifying the matters, provided sufficient certainty for the way in which the rent was to be determined.  The alternative argument was that the matters laid out in 4(b)(iv) were not exhaustive and that in order to overcome difficulties of uncertainty which otherwise arose, it was necessary to imply a term that the rent that be determined be a fair and reasonable rent.

The way that Justice Hodgson approached the matter, if I could take your Honours to that, is at the bottom of page 95.  His Honour said:

Accordingly, it is necessary to consider whether or not, leaving aside for the moment the plaintiff’s contention about the effect of cl.4(b)(iv), there would be implied into this lease some limitation upon the lessor’s power to determine a rental.

Then his Honour identified a possible limitation, which was that the rent that be determined be “a fair and reasonable rent” and then also that the trustees act bona fide in seeking to achieve that object.  His Honour noted at page 96 that the limitation could be implied in one or more of three ways:  a matter of construction, ad hoc implication or implication of law.  Then over the page at page 97 his Honour concluded that:

a term would be implied either by a process of construction, or as an ad hoc implication to give the contract business efficacy.

If one returns to the issue which the applicant says arises at page 230 of the application book, the real issue between the parties is whether, in order to overcome problems of uncertainty which the applicant says arise, it is necessary to imply a term that the rent that be determined be no more than a fair and reasonable rent.  There was no issue between the parties before the Court of Appeal that if it was appropriate in the circumstances of this case to imply such a term, which, in our submission, would be applied ad hoc, it would also go without saying that the power which would be given would be exercised in good faith or bona fide.  But the real question between the parties here is whether as a matter of ad hoc implication the way of resolving the question which arose was to either imply this term or to read the relevant provision as stating exhaustively the matters to which reference could be had.

McHUGH J:   Yes, I know, but you want to put the point on the basis of an ad hoc implication because then you would argue that is not a suitable vehicle, but supposing that such a term is implied by law.

MR MEAGHER:   If I could go back to the passage from your Honour’s judgment in Byrne, the short point is that such a term would only be implied if it was not inconsistent with the contract as properly construed.  Our submission to the Court of Appeal and to the trial judge was that on its proper construction this provision laid out the matters to which reference could be had.  We called in aid the fact that for 30 years before the point was taken, the parties had conducted themselves on that basis and there had been an antecedent agreement which made it plain that that was the basis on which the rent was to be reviewed.

McHUGH J:   But the failure of parties to perceive their rights over a long period may be a reason why a court should proceed with caution, but it can hardly be conclusive.

MR MEAGHER:   That is so, your Honour.  The way that the Chief Justice approached it was different from the way in which Justice Fitzgerald approached it.  Justice Fitzgerald looked at the surrounding circumstances up to 1958, which was the commencement of the term.  The Chief Justice principally looked at the fact, which we would submit is an objective fact, that there was an antecedent agreement between the parties which provided for the way in which the rent was to be determined.  He looked at the fact that in the period between 1958 and 1976 when the lease was executed, the parties had conducted themselves on that basis and no other basis and he looked at the fact that there was in this lease that was executed in 1976 a term, clause 4(l), which had the effect that the parties were saying that their rights and obligations were to be governed by the terms of the lease as if it had been executed in 1958.

In circumstances where there was no suggestion in the objective facts that the parties had sought to depart, he construed the relevant provision in the way we submitted, which was plainly an available construction.  The alternative construction requires one to imply a term into this particular contract, having regard to all the circumstances of this case.  In our submission, it would not be possible to extract that question – that is the question whether there should be an obligation of good faith – and deal with that without dealing with all of the other issues which arise in the case.

McHUGH J:   Assuming Codelfa represents the law, which it must be accepted that it does – where was the ambiguity here that enabled you to go beyond the document?  In the document it says “may”, but you want - the effect of your argument is “may only”.

MR MEAGHER:   If I could take your Honours to the lease perhaps to identify the way in which the question arises.  It can be found at page 177 extracted in the judgment of Justice Fitzgerald.  Clause 1 is set out and if your Honours go about two‑thirds of the way down the clause, line 36:

YIELDING AND PAYING thereof after the first three years of the term and during and in respect of each of the fifteen periods each of three years and the remaining period of two years comprising in all the residue of the said term a yearly rent which shall be determined by the Trustees…..as in hereinafter in Clause 4(b) provided –

The $2,000 was equivalent to the 1,000 pounds.  If one goes to clause 4(b) on the following page, it provided:

That the yearly rent payable during and in respect of each of the fifteen periods…..may be determined by the Trustees at the commencement of each of the affected periods and the yearly rent so determined shall be payable during and in respect of the then succeeding three years of the term PROVIDED that –

(i) the Trustees shall notify…..

(ii) any necessary adjustment of rent shall be made…..

(iii) the yearly rent determined by the Trustees as aforesaid shall not in any event be less than Two thousand dollars ($2,000.00); and

(iv) in making any such determination the Trustees may have regard to additional costs and expenses which they may incur –

The question of construction which arose was whether, in saying in (iv) that in making a determination these are the matter to which the trustees may have regard, the provision was stating those matters exhaustively or simply identifying some but not all of the matters.

McHUGH J:   Yes, but on its face there is nothing ambiguous about it.  It says that they may have regard to it.  It does not say they shall have regard to it.  But then you bring in this other material and say if you look at that other material, it has a different meaning from its natural and ordinary meaning.

MR MEAGHER:   With respect, your Honour, what we submitted was that if one read it as saying that these are matters to which regard may be had but not all of the matters to which regard may be had, the question then is:  how is the rent to be determined by reference to what formula?  The answer was that there is no formula stated in the lease, no provision which tells the trustee whether the rent is to be a fair rent, a market rent, a fair and reasonable rent or any other rent, the rent meaning no more than the consideration for the right of occupation.

McHUGH J:   If you go to a case like Hillas v ARCOS, which is now 67 years old or older, one would read in those words, would they not, “fair and reasonable”, “may be determined”?

MR MEAGHER:   That is the question which arose.  If one accepts that the process of implication at that level is a process of construction, there arose two meanings.  I do not necessarily say this should persuade your Honour, but Justice Hodgson accepted that it was ambiguous, the Chief Justice and Justice Fitzgerald plainly accept that it is ambiguous.  I will take your Honours to what they say.  If your Honours go to the judgment of Chief Justice Spigelman at paragraph 18, page 161 of the application book, his Honour refers to the formulation which your Honour Justice McHugh has referred to and says:

The words themselves do not indicate one way or another whether the facts and matters which follow are intended to be exhaustive or merely indicative.

If I can indicate this to your Honours.  In the next paragraph there is reference to Rathborne v Abel.  Your Honours may be familiar with that.

McHUGH J:   No, I am more familiar with - - -

MR MEAGHER:   That was a case where ‑ ‑ ‑

McHUGH J:   That is under a particular section of the Landlord and Tenant Act which says that the Fair Rents Board - I forget whether it was “shall have regard” or “may have regard” to various factors.

MR MEAGHER:   It said “may have regard to”, but it was in the course of determining a fair rent.  So that in that case the object of the determination or the formula was specified.  The question in that context was whether “may have regard to” was exhaustive or not.

McHUGH J:   It came as a bit of a shock to the profession at the time.

MR MEAGHER:   I cannot comment on that, your Honour.  In Wallace v Stanford, which is the other decision referred to, the question was whether under the de facto relationships legislation the statement of the matters to which regard could be had was exhaustive or indicative.  The answer of the court there was it was exhaustive.  The point is that that is the basis on which the Chief Justice considered the provision to be ambiguous and he returned to the matter at paragraph 36, saying that:

Whether or not the facts and matters to which the Trust “may have regard” in determining rent are exhaustive, is ambiguous in this sense.

Justice Fitzgerald addresses the same question in paragraph 80, if I could take your Honours to that.

McHUGH J:   What page is that?

MR MEAGHER:   Page 185:

The fundamental ambiguity for present purposes concerns the meaning of the phrase “may have regard to”…..and in particular whether or not that phrase is intended to confine the matters which the Trust may consider ‑ ‑ ‑

McHUGH J:   I have some difficulty with that, how that can be seen to be ambiguous.  It says you may have regard to it.  You say the ambiguity is whether it means “may only have regard to” or “may have regard”.  So you assume what you want to decide before you determine whether or not you admit evidence.

MR MEAGHER:   With respect, no, your Honour. Could I put what might be described as a common exchange.  Somebody is given a power or a function to determine rent and the question from that party is:  what may I have regard to?  Answer:  you may have regard to these factors.  That is in effect, in our submission, what this lease does.  It confers a power or function in clause 1 and it says that the rent is to be determined in accordance with clause 4(b).

McHUGH J:   Yes, I know, but supposing you start on the basis that the opening words of clause 4 require a fair and reasonable rent to be determined.  If you start with that basis, how does clause 4(b) then become ambiguous?

MR MEAGHER:   If you start with that basis, in my respectful submission, you are approaching the question of construction by first giving the words a construction or implying a term which would be inconsistent with the construction we argue for.

McHUGH J:   I am not sure about that.  It seems to me that what is on its face subsidiary has now been elevated to govern the whole construction.  I must say I do not see any ambiguity about it at the moment.  Supposing (b)(iv) was not there at all.  One would not hesitate to read in the words “fair and reasonable” in the opening words of clause 4 because that is what you would do, as Hillas v ARCOS and other cases require you to do.

MR MEAGHER:   Your Honour, with respect, and I ask this rhetorically, why necessarily “fair and reasonable”?  Why not “market”?  The authorities suggest there is a difference.  The answer to that question may be that one has to look at the context to see who the parties are and what was the basis ‑ ‑ ‑

KIRBY J:   The market is something that would be imported perhaps into a private contract, but “fair and reasonable” is something I think that we were familiar with in the implication that is generally attributed to Parliament that that is what agencies of government will do.

McHUGH J:   Particularly in 1976.  It might be different today.

KIRBY J:   It is the old notion of the Crown descended.  They are not quite the same today as they were in those days that they were then.

MR MEAGHER:   Your Honours, all of the judges who have dealt with the matter below dealt with it on the basis that it was ambiguous.  Indeed, the way in which the applicant’s argument is put accepts the ambiguity.  If I could just remind your Honours ‑ ‑ ‑

McHUGH J:   I know.  They take Codelfa.  Maybe if leave were granted, you would want to say that Codelfa does not go far enough.  You want to put on a notice of contention saying that you cannot construe any document without knowing the surrounding circumstances.  Law evolves in stages.  There was this fixed rule once that once you had a written contract, that was the end of it; you could never go outside it.  The next step, they talk about ambiguity.

MR MEAGHER:   Your Honour, the question here is not raised as starkly, in our submission, because both parties accept ambiguity, both parties accept that Codelfa permits in those circumstances reference to surrounding circumstances.

McHUGH J:   What I am putting to you is that if leave were granted, you would want to say Codelfa does not govern it.  You always have to look at the surrounding circumstances.  You cannot understand any term oral or written unless you know the surrounding circumstances.

MR MEAGHER:   We may be forced to that position, but the basis on which this case has been argued from the outset is that ‑ ‑ ‑

KIRBY J:   But that is because it was being litigated in courts that were bound by the authority of this Court as it stood.  Once special leave is granted, you have an appeal before the Court where the Court will have an opportunity to look at it conceptually.

MR MEAGHER:   But, your Honour, you had both parties contending for different constructions:  on the one hand, a party contending for an implied term that the rent which be determined be fair and reasonable and, on the other hand, a party which was contending that you could give the lease certainty and the provisions as to determining lease certainty by construing “may” in the way we have suggested.  Even on the applicant’s case it was necessary to go to surrounding circumstances because the applicant was urging the court as a matter of construction that there should be an implied term.

In our submission, this case does not raise this question of whether the manner of performance should be qualified by an obligation of good faith.  We say the real question is one which has to be answered by reference to the facts of the case which involve questions of construction which are not shown to be wrong.

McHUGH J:   I think your time is up.  Yes, Mr Gleeson.

MR GLEESON:   There is only one matter, your Honours.  There was a suggestion that our case was limited to an ad hoc implication.  Page 96 shows that we argued implication by law originally.  One timing matter I might explain.  When Justice Hodgson decided this case, Renard Constructions had been decided in New South Wales.  But Justice Finn’s decision in Hughes Aircraft ‑ ‑ ‑

McHUGH J:   Had not been decided then.

MR GLEESON:   I notice from the report it had been decided just a few weeks before, and of course we now have Scarcella in New South Wales taking Renard a little bit further.  So that legal development I think is embraced in Chief Justice Spigelman’s recognition that he would not have had much difficulty implying the term as a matter of law.  That is the only matter.

McHUGH J:   The Court will adjourn for a few moments to consider what course it will take in this matter.

AT 2.55 PM SHORT ADJOURNMENT

UPON RESUMING AT 2.57 PM:

McHUGH J:   Yes, there will be a general grant of leave in this matter.  You might amend your notice of appeal to raise that question of fairness ground, ground 10.

MR GLEESON:   Yes, your Honour.

McHUGH J:   And you may give consideration, Mr Meagher, as to whether or not you want to put on a notice of contention seeking leave to challenge Codelfa.

MR  MEAGHER:   Your Honours, not doubt, have read that judgment of Lord Justice Hoffmann a couple of years ago which deals with this subject.

KIRBY J:   It is referred to by Justice McHugh in Brown.

McHUGH J:   And some assistance might be given generally in this whole area by the development of rules of statutory construction and to what extent they apply to contractual matters.

AT 2.58 PM THE MATTER WAS CONCLUDED