JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: SCANLAN -v- 2-4 MCCABE PTY LTD [2023] WASCA 135
CORAM: BEECH JA
HALL JA
LUNDBERG J
HEARD: 8 AUGUST 2023
DELIVERED : 13 SEPTEMBER 2023
FILE NO/S: CACV 2 of 2023
BETWEEN: PAUL ANTHONY SCANLAN
Appellant
AND
2-4 MCCABE PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: MASTER SANDERSON
File Number : CIV 1877 of 2022
Catchwords:
Practice and procedure - Appeal against refusal of pre-action discovery application - Contract to purchase a lot on a survey-strata scheme - Contract terminated by respondent seller - Whether appellant buyer may have a cause of action - Whether on a proper construction the termination power was arguably exercised in an ineffective manner - Whether termination power arguably subject to implied limits of reasonableness and good faith - Whether in the interests of justice to allow appellant to raise fresh construction argument on appeal - Whether appellant has been able to obtain sufficient information - Scope of discovery which should be ordered - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 26A r 4
Supreme Court Act 1935 (WA), s 60(1)(f)
Result:
Leave to appeal granted
Appeal allowed
Category: B
Representation:
Counsel:
| Appellant | : | Ms R R Joseph |
| Respondent | : | Mr T Darbyshire and Ms G Lindsay |
Solicitors:
| Appellant | : | Siera Legal Pty Ltd |
| Respondent | : | McWilliams Davis Lawyers |
Case(s) referred to in decision(s):
Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Brimstone Resources Ltd v Empire Resources Ltd [2018] WASCA 107
Bundanoon Sandstone Pty Ltd v Cenric Group Pty Ltd [2019] NSWCA 87
Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187; (2001) 69 NSWLR 558
BWS v ARV [No 2] [2021] WASCA 62
Central Exchange Ltd v Anaconda Nickel Ltd [2002] WASCA 94; (2002) 26 WAR 33
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Electricity Generation Corp v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640
Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [No 2] [2023] WASCA 108
Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14; (2016) 49 WAR 374
Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 6] [2015] FCA 825
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104
North West Pilots Pty Ltd v Daniel [2023] WASCA 122
NRW Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [2020] WASCA 107
Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234
Revill v John Holland Group Pty Ltd [2022] FCAFC 178; (2022) 295 FCR 269
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- AGLC
- Scanlan v 2-4 McCabe Pty Ltd [2023] WASCA 135
- Case
- [2023] WASCA 135
- Decision Date
CaseChat Overview and Summary
The court faced the task of determining whether a particular construction of a clause in the contract was arguable. This involved examining not only the wording of the clause in question but also the overall context and purpose of the contract. The principles of construction of commercial instruments, as outlined by the High Court and this court in previous cases, were applied to guide the interpretation. The court needed to assess whether the appellant's proposed interpretation of the clause was sufficiently plausible to warrant further exploration.
In its reasoning, the court found that the appellant's construction of the clause was indeed arguable. This conclusion was reached by considering both the specific language of the clause and broader elements of the contract. The court noted that the clause's language provided some support for the appellant's interpretation, and that other clauses in the contract suggested a limited right to terminate, reinforcing the argument that the clause in question should not be interpreted to grant an unfettered right to terminate. Therefore, the court held that the appellant's interpretation was sufficiently arguable to merit further investigation.
The court's decision did not resolve the dispute on the merits but rather determined that the appellant's construction of the clause was arguable enough to proceed with further proceedings. This finding paves the way for the case to continue, with the interpretation of the contract clauses being further explored in subsequent stages of the litigation.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
As to the merits of this ground, it is not necessary to express a final view as to whether the appellant's construction is the true construction of the clause. For present purposes, this court need only assess whether the construction is arguable. In doing so, the court must have regard to the principles of construction of commercial instruments as expressed by the High Court in Electricity Generation Corp v Woodside Energy Ltd[66] and Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd.[67] Those principles were distilled by this court in Black Box Control Pty Ltd v Terravision Pty Ltd[68] and we adopt the summary therein without repeating it. Whether the appellant's construction is arguable thus requires analysis not only of the text of the particular provisions within the Contract, but the context and purpose of the Contract as a whole. [66] Electricity Generation Corp v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35].[67] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] ‑ [52].[68] Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219 [42]. In our view, the appellant's construction is at least arguable. We have reached this view for the following reasons. First, the appellant's construction finds a degree of support in the text of cl 2.1. The chapeau to cl 2.1 states that the power arises 'if the Seller … considers that'. The appellant submits, and we agree, that the court must give effect to these words. The appellant's construction can be seen to be consistent with the additional words, 'in the Seller's absolute discretion', in that that phrase qualifies the manner in which the respondent undertakes the assessment, not whether it must do so at all. The construction advanced by the appellant thus does not ignore these words, nor does it undermine their effect. In these respects, the language of cl 2.1 provides arguable support for the appellant's construction. Second, there are additional features of the Contract which provide arguable support for the appellant's construction. These additional features, which are found in cl 5 and cl 6.4, demonstrate the parties' carefully circumscribed their rights to terminate the Contract for default as well as to vary the Contract, such that it would be, arguably at least, incongruous if cl 2.1 was construed so as to afford the respondent seller an unfettered right to terminate the bargain. By its terms, cl 6.4 authorises the respondent to vary the Construction Documents, Scheme Plan, and the specifications in Annexure A, as necessary, in certain circumstances. These circumstances include where there is some matter or circumstance the respondent could not reasonably have foreseen,[69] or where the costs of materials or products in the specifications have risen so that it is reasonable for the respondent to substitute them with similar materials or products that are in the respondent's opinion of no lesser quality.[70] [69] Clause 6.4(a)(iii).[70] Clause 6.4(a)(v).