Trinity Point Hotel Pty Ltd v State of Queensland

[1994] HCATrans 210

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B53 of 1993

B e t w e e n -

TRINITY POINT HOTEL PTY LTD

Applicant

and

STATE OF QUEENSLAND

Respondent

Application for special leave

to appeal

MASON CJ

TOOHEY J

McHUGH J

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TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA ON FRIDAY, 11 FEBRUARY 1994, AT 9.33 AM

Copyright in ·the High Court of Australia

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

my learned friend, MR B.W. WALKER, SC for the

applicant. (instructed by Thomson Redhead Boyd)

MR P.A. KEANE, OC, Solicitor-General for Queensland: I

appear with my learned friend, MR M.W. FORDE, for

the respondent. (instructed by K.M. O'Shea, Crown

Solicitor, (Queensland))

MASON CJ: Yes.

MR JACKSON:  Your Honours, the contention which we wish to

advance is that the approach taken by the majority
in the Court of Appeal, although expressed as an

application of established principle, represents in fact a shift of emphasis from the cases relied upon

by that court in determining what conduct is

repudiatory in a contractual sense, and a shift of

emphasis, Your Honours, which is likely to apply to

a significant number of cases in the future and

which, for the reasons set out in
paragraphs 19 and 20 of our submissions, in our

submission should not be adopted.

Your Honours, we would also urge that if the

Court is not of the view that there is a point of

sufficient importance to merit the grant of special

leave, it is yet a case which merits special leave

on the injustice ground. May I proceed to develop

those submissions, and first, if I could go for

just one moment to what we would submit are

ultimately the essential facts of the case, and

they are these.

An agreement was entered into on

1 December 1989 and it consisted of acceptance of

the terms of the letter which appears at page 25 of

completion provided for by it was expressed to be	that. Your Honours will see that the time for the application book. May I take Your Honours to
at page 26 in paragraph (b):

some 30 days from ..... acceptance;

MR JACKSON:  Now, pursuant to the agreement the State was

given an option to terminate the agreement if the

applicant did not perform by that time. That

appears at the top of page 27, paragraph (f).

Your Honours, the offer was accepted on

1 December 1989, on that basis the time for
completion was the end of that month. Well before
the end of that month, namely on 7 December, the
applicant contended that it was entitled to be paid

the money which was the subject of the agreement.

Your Honours, it was wrong in so doing; it did not

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say in the document, the letter, that it would not

perform the contract, rather it said, we will go to

court to enforce the contract.	The letter appears
at page 55.

Now, Your Honours, the terms of the letter

were picked up, perhaps seized on - no doubt one

can put it with different degrees of emotion - by

the respondent as a repudiation and as entitling

the respondent to rescind. That appears from the

Crown Solicitor's letter referred to at page 57,
commencing at the bottom of the page and going

through most of the next page.

Your Honours, the basis upon which it was put

in that letter appears on page 58 at about line 19,

the sentence commencing there, and also on the same

page, about line 37. The majority in the Court of

Appeal gave, in our submission, an extended

operation to the principle determining what may

amount to conduct which is repudiatory and a

diminished operation to the principles identifying
conduct which is not.

Your Honours, the former principles are

summarized by Mr Justice Fitzgerald at pages 168

and 169 in the reference commencing at the bottom

of page 168, the quotation from Shevill v Builders'

Licensing Board. May I refer particularly to the

passage about half-way through that passage
immediately preceding the reference to Freeth v

Burr and the three lines following it and also the

reference to Laurinda v Capalaba Park, the

commencement of the passage from Justices Deane and

Dawson and also the end of that passage.

Your Honours, those are the former principles.

The latter principles showing the obverse, or

perhaps the other side of the coin, are quoted on

decision of which Your Honour the Chief Justice was	the next page, page 170, from an extract from the
part in DTR Nominees v Mona Homes, where there is
the reference in the first paragraph of the quotation to the cases in which the assertion of an
incorrect interpretation of the contract is not
fatal.

Could I refer also to page 189 where

Your Honours will see set out in the reasons for judgment of the other member of the majority,

Mr Justice Pincus, about half-way down the page, a

reference to Braidotti v Queensland City Properties

paraphrasing what had been said in DTR. The

reasons why the application of those principles

adopted by the Court of Appeal, or adopted by the

majority, has extended one and diminished the

other, in our submission, appear from the reasons

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for judgment of the dissenting member of the Court

of Appeal, Mr Justice McPherson, in the passage

which commences at page 197 and goes through to

page 203.

I wish to refer to some particular matters in

support of our submission arising from those paragraphs. First, at page 197 in the first

paragraph on the page, His Honour refers to the

fact that the letter relied on to constitute the

repudiation contains no express repudiation, so it
has to come from implication. Your Honours will
see the way in which he analyses the letter in the

next paragraph, and then the conclusions which he

proceeds to draw from that.

TOOHEY J:  He appears to be saying, Mr Jackson, that if no

more appears than the three matters which he

describes at present relevance, then there is not

enough to evidence repudiation of the contract.

MR JACKSON:	Yes, Your Honour, but it is right to say, if I may say so, with respect, that he goes a little
beyond that, and these are the particular matters
to which I wish to draw attention.  Your Honours
will see on the next page, page 198, that what he
is saying there is that it is really very much the
normal thing that one tends to see in contractual
disputes, that one party is asserting that it has
performed its contractual obligations. I will come
back to that if I may in just a moment. But it
really is the normal situation that a debt, for
example, will only become payable in exchange for performance by the party to whom it is payable of
some other obligation. The approach taken by the
majority in this case will mean that, in a sense, every expression of view that such conditions have
been satisfied if held to have been wrong, is
likely to justify termination by the other party.
taken by the majority in the Court of Appeal bends
It will not in every case, of course, but the view
the tests in that direction.

McHUGH J: But is it any more than the application of

principle? The view that the majority were
entitled to take surely was that your client said,

"Well, we have performed all our obligations and what is more we want our money and if you do not

give us your money we are going to institute an

action for specific performance". In those

circumstances, why could not a court properly take the view that your client was saying, well, it was

not going to do anything more.

MR JACKSON:  Your Honour, if one took the, what I might

describe if I may, as the test that has been

indicated by the Court in, for example,

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DTR Nominees, one has to bear in mind that one is

dealing with a situation where the time for

performance was several weeks away. What we had

done was to say, "We are entitled to the money

now". We were wrong. And we said we would go to

court to enforce the contract. There is

nothing - - -

McHUGH J: There is a difference, is there not, between

cases where parties have different interpretations

and cases where somebody says, "I have performed

all my obligations"?

MR JACKSON: 

Your Honour, that itself is really the question

of interpretation because in every case the
question whether there has been performance of the

contract or not will involve either a question of

the meaning of a contractual term or the question

whether there has been performance in accordance

with the dispute about factual performance or a

combination of both sometimes. But, Your Honour,

the -

McHUGH J: But there is no dispute as to what you had to

perform, was there? I mean, your client just

simply insisted it had performed all its

obligations.

MR JACKSON:  It said it had, Your Honour, and claimed the

money. That is all that had happened. We said we

are entitled to the money and in the event we are

wrong.

TOOHEY J:  Mr Jackson, did the majority make a finding in

terms of bona fide belief or non bona fide belief?

MR JACKSON:  Your Honour, what they seem to say was this,

that no one contends now that the conduct that was

engaged in was something justified by the contract.

What I was going to say in relation to that was

that even Mr Justice McPherson assumed, for the

purposes of his reasons for judgment in our favour,

that we could never have been justified and, even

if we knew we were not justified, it still did not

matter.

MASON CJ:  Mr Jackson, for my part, I just see the case as a

case that turns on the proper interpretation, the

proper legal effect to be attributed to a letter.

I can see that the answer that a court gives to a

question of this kind may provide some sort of

focus in terms of the approach to be adopted by

courts in construing letters of a similar kind

where it is suggested that they give rise to a

repudiation of contractual obligations. But it

does not seem to me that that question is the kind

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of question of g~neral principle that ordinarily

attracts the grant of special leave.

MR JACKSON:  Your Honour, if it were just that then it would

not be a case that - on that test, I am not
speaking about the injustice case - would attract

the grant of special leave but it is a little more

than that and that is something, we would submit,

that is really pointed up by looking at the

decision of the minority judge in the Court of

Appeal, Mr Justice McPherson. What I wanted to say

to Your Honours in that regard was that if one

goes, for example, to page 201, and he speaks there

of what is the test: is it a question of definite

and unequivocal.manifestation or is it just

something which is a rather lesser test than that.

It goes on also to page 202.

What we would submit is that the decision

given by the majority in the Court of Appeal

certainly is one which, of course, turns on its

particular facts but the approach underlying the
decision of the Court of Appeal is one which will,

in the future, not just be an instance of how the

principles are applied but will itself be one in

which what is said is that if one makes a claim, in

effect, for something to which one is not entitled

but requires the performance of conditions, then
prima facie that is something which will constitute

repudiatory conduct. The precedent effect of it

will be, in our submission, considerable in a

practical way because Mr Justice McPherson was

right, Your Honour, in saying it is a very common

thing for there to be either claims for money or

claims that there has been performance of a

contractual obligation based on a misconstruction

of the contract or a misunderstanding of the facts

or simply a wrong statement of the facts in

circumstances where no intention to repudiate the

contract could be inferred.

McHUGH J: But it has no precedent value. I mean, it is

just a question of fact, that if the issue was

tried by a jury the point would be drawn out. No

judge would be able to rely on this case in any way

to direct a jury on the question of fact.

MR JACKSON: Well, Your Honour, in one sense that is right

but, on the other hand, relatively few of these

cases are dealt with by juries.

McHUGH J:  I appreciate that but that only highlights the

fact that one has to be careful to distinguish

questions of law from questions of fact.

MR JACKSON:  Your Honour, I accept that, of course, but,

having said that, the nature of questions of law

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must be looked at, in a sense, with a factual

background all the time. It is a very, very common

thing for there to be - every contract is

different. I suspect I may have had this

discussion with Your Honour once before.

MASON CJ:	On many occasions.
MR JACKSON:	Your Honour, every contract is different.

Sometimes there are common form ones, but every

contract tends to be different and so inevitably

one can say that the decision on a particular

contractual term or a particular contractual

principle reflects only that contract. The point I

am seeking to make is that, whilst that is true in one sense, cases of this kind are the ones that do

show up what are contractual principles. It is,

Your Honours, are matter for the Court to - - -

McHUGH J: Well, it is the sort of case that should never be

reported.

MR JACKSON: Well, Your Honour, that should not, with

respect, be a test for the grant or refusal of

special leave.

McHUGH J: Well, it is not a bad working test.

MASON CJ: It may be the test for refusing special leave in

the future, Mr Jackson. Is this case likely to be

reported?

MR JACKSON:  That falls within the residue not covered by

section 35A.

TOOHEY J:  On your argument, Mr Jackson, if lack of bona

£ides had been demonstrated - whatever that means,

in the circumstances - is it a relevant

consideration, or not?

MR JACKSON:  In our submission, no, Your Honour. The

question was ultimately whether the conduct

demonstrated by the letter was repudiatory. There

was nothing else apart from the letter, so one

really had to look at the letter and see what it

asserted. It was not as if there was any conduct

dehors the letter, it was just a question of what

the letter said.

TOOHEY J: But on your argument you would have to find not

only the assertion of what the contract meant, but

some indication of an unwillingness to perform otherwise than in accordance with that party's interpretation of a contract.

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MR JACKSON:  In the absence of there being a clear statement

in the letter itself indicating an unwillingness to

proceed with the contract - - -

TOOHEY J: But that is not against you, is it?

MR JACKSON:  No, no. If it is not specifically said, one

has to infer it or imply it, one way or another.

One may imply it, perhaps, in some cases from the

terms of the letter, otherwise one would need to go

outside. Could I just say two more things. The

first is this, that so far as the frequency of

events like this occurring, one sees, indeed, an

analogous thing happening in the letter that was

the letter that accepted the repudiation.

If I could just take Your Honours to page 58

for a moment, in the second paragraph one sees the
respondent not accepting that the contract was self
enforceable. I do not use that as any more than an

instance of the fact that it is a very common

occurrence for there to be assertions of that kind

in correspondence, not always amounting to

repudiation.

The second thing is this, Your Honours, we

would urge that the view taken by the majority does

operate in a real way to take content away from the
notion that repudiation is a serious matter, not

lightly to be found or inferred, but if the Court

were not of that view and one goes to the

particular case then, we would submit, the
reasoning of Mr Justice McPherson is, with respect,
compelling on whether there was or was not

repudiatory conduct and the case merits special

leave on that ground.	Your Honours, those are our
submissions.

McHUGH J: Sorry, you are in injury time; what is your

injustice point?

MR JACKSON:  Your Honour, that is what I was seeking to say

then. I do not want to go over the facts again.

If one looks at the case overall, the reasoning of

Mr Justice McPherson on the issue, we would submit, was compelling and we have suffered a significant

injustice, we would submit.

MASON CJ: Thank you, Mr Jackson. Mr Solicitor, the Court

need not trouble you.

MR KEANE: If the Court pleases.

MASON CJ: What I am about to say reflects the view of a

majority of the Court. In the view of the majority

of the Court, the proposed appeal raises no

question of general principle.

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The point of departure between the majority

and Mr Justice McPherson in the court below related

to the effect of the applicant's letter of

7 December 1989. The question was whether the

letter evinced an intention to repudiate the

applicant's contractual obligations. That question

was by no means easy to resolve, but in the

ultimate analysis it had to be resolved, as it was
resolved, by reference to the terms of the letter

read in light of the circumstances in which it came

to be written.

The point is not a special leave point and the

application is therefore refused.

KEANE J:	May it please the Court, we ask for costs.
MASON CJ:	You do not oppose costs, Mr Jackson?
MR JACKSON:	Your Honour, there is nothing I can say in that

regard.

MASON CJ: The application is refused, with costs.

AT 9.54 AM THE MATTER WAS ADJOURNED SINE DIE

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