Wynton Stone Australia Pty Ltd (In Liquidation) v MWH Australia Pty Ltd

[2011] HCATrans 146

[2011] HCATrans 146

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M158 of 2010
  No M159 of 2010

B e t w e e n -

WYNTON STONE AUSTRALIA PTY LTD (IN LIQUIDATION) (ACN 065 625 498)

Applicant

and

MWH AUSTRALIA PTY LTD (FORMERLY MONTGOMERY WATSON AUSTRALIA PTY LTD) (ACN 007 820 322)

Respondent

FRENCH CJ
HEYDON J
CRENNAN J
KIEFEL J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 8 JUNE 2011, AT 10.19 AM

Copyright in the High Court of Australia

MR D.J. O’CALLAGHAN, SC:   If the Court pleases, I appear with MR C.M. ARCHIBALD for the applicant.  (instructed by Norton Rose Australia)

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friends, MR I.H. PERCY and MR J.R.M. TRACEY, for the respondent.  (instructed by Monahan & Rowell)

FRENCH CJ:   Yes, Mr O’Callaghan.

MR O’CALLAGHAN:   If the Court pleases, we propose first to turn to the issue of what we have called “inferred reliance”.  In our respectful submission, it has been clear since at least ‑ ‑ ‑

FRENCH CJ:   Well, perhaps before you do, can we just ask about the issue of abandonment and the extent to which that is a threshold issue in this application.  Do you have to succeed on the abandonment issue?

MR O’CALLAGHAN:   In order to overturn the finding that our client was liable for the breach of warranty pleaded in the fifth amended statement of claim, yes, we do, your Honour.

FRENCH CJ:   Yes.

CRENNAN J:   But if you succeed on that issue, you have still got the construction issue, have you not, in relation to the orders?

MR O’CALLAGHAN:   Yes, your Honour.

CRENNAN J:   So you have to succeed on both.

MR O’CALLAGHAN:   We do.

FRENCH CJ:   If you fail on the abandonment issue, there is no basis then for interference with the final order, is there?

MR O’CALLAGHAN:   The abandonment issue, your Honour, only relates to the ‑ ‑ ‑

FRENCH CJ:   Warranty.

MR O’CALLAGHAN:   The warranty, then the construction issue ‑ ‑ ‑

FRENCH CJ:   Terms of the outcome, though.

CRENNAN J:   But if you lose the abandonment issue, it will not matter what happens, particularly in terms of utility, in relation to your other points, will it?

MR O’CALLAGHAN:   I think it matters, as senior counsel for the respondent explained to the Court of Appeal below, it matters for reasons that have to do with insurance.

CRENNAN J:   Yes.

MR O’CALLAGHAN:   So things can matter in one sense but not in another, your Honour.

HEYDON J:   It matters for the sake of insurance?  There is a judgment for $4 million‑odd.  What does it matter what the path is that leads to that judgment?

MR O’CALLAGHAN:   The respondent will be able to be the benefit of a payment under an insurance policy with respect to claims other than breach of warranty claim, including ‑ ‑ ‑

HEYDON J:   Will be able to recover a verdict which your client should pay by recourse to some insurer?

MR O’CALLAGHAN:   Yes, your Honour.

HEYDON J:   An insurer behind your client or ‑ ‑ ‑

MR O’CALLAGHAN:   Yes, your Honour.  Insurance exists with respect to the trade practices claim and the negligence claim.

HEYDON J:   Not the warranty claim?

MR O’CALLAGHAN:   Not the warranty claim.

HEYDON J:   When you say the trade practices claim, of course, it is really Mr Jackson’s trade practices claim. 

MR O’CALLAGHAN:   It is.

HEYDON J:   He contends that clause 2 of the deed of novation is either void or should be set aside because of an alleged breach of section 52.  So really your case turns, strictly speaking, in‑chief only on the meaning of clause 2 and the breach of warranty claim in clause 4.

MR O’CALLAGHAN:   That is so, your Honour, yes.

HEYDON J:   Does it not follow that we should not be bothering about inferred reliance at this stage?

MR O’CALLAGHAN:   That would be one way of viewing it, your Honour, and we are obviously content to proceed perhaps in reverse order of our outline and to start with abandonment.

HEYDON J:   Yes, that is a good idea, I think.

MR O’CALLAGHAN:   The breach of warranty claim that we say the respondent abandoned is at application book 83.  It is the three paragraphs in the respondent’s fifth amended statement of claim.  It is paragraphs 33I, J and K of that fifth amended statement of claim that we say is the pleaded cause of action that was abandoned.  By way of distinction, the respondent’s Trade Practices Act claim which the trial judge rejected and declined to revisit is in the respondent’s amended reply, which is application book 110 to 112.  That is the Trade Practices Act claim.  The fact of the matter, in our respectful submission, is that the respondent’s breach of warranty claim, the claim that is pleaded in paragraphs 33I to K of its fifth amended statement of claim, was not mentioned, run, pressed, whichever word one chooses to adopt, in the respondent’s final oral submissions or its final written submissions.

CRENNAN J:   I think Justice Nettle mentioned the claim in, I think, paragraph 34 of some draft reasons of his Honour Justice Byrne.  Where do we find that in the application book?

MR O’CALLAGHAN:   I will tell you that in a moment, Your Honour.

CRENNAN J:   I am sorry, I do not want to take you off course.

MR O’CALLAGHAN:   May I come back to that page in a minute?

CRENNAN J:   Yes, certainly.

MR O’CALLAGHAN:   It is certainly true that his Honour mentioned the warranty claim and we would say that the fact that his Honour mentioned it makes all the more stark the fact that counsel for the respondent did not.  That is the significance we make of that.

HEYDON J:   Just while it is fresh in our minds, paragraph 34 of the draft judgment is on page 461, lines 10 to 19. 

MR O’CALLAGHAN:   I am indebted to your Honour.  Thank you:

In this reply, Montgomery Watson seeks to avoid the impact of the release by contending in the alternative:

(a)the release was conditional upon the performance by Wynton Stone of the warranty contained in the deed of novation and that this warranty was not fulfilled;

(b)the unfulfilled warranty constitutes misleading and deceptive conduct. 

HEYDON J:   That is the reply and the statement of claim is paragraph 34.

MR O’CALLAGHAN:  Yes, your Honour.

HEYDON J:   Can I come straight to a point that worries me, Mr O’Callaghan. 

MR O’CALLAGHAN:   Yes, your Honour.

HEYDON J:   I accept, or at least I understand the reasoning which leads you to say that the respondent never relied on a breach of warranty in its submissions at the end of the trial, but did not the trial judge make it plain that he was troubled by it and proposed to take it into account?  

MR O’CALLAGHAN:   It is certainly true that his Honour and I had – I made submissions in response to his Honour’s questions about the warranty.  We would not accept that his Honour was troubled by it.  I think the passages reveal that he is ‑ ‑ ‑

HEYDON J:   Page 169, line 35 after about the fourth of the encounters on the topic of the warranties, his Honour said:

I’m just testing it because this is something I will have to ponder –

Now, one answer might have been, well, you are not entitled to ponder it because you made it plain at the outset that you were not going to consider anything that was not mentioned in my opponent’s final address, and nothing has been said about this in my opponent’s final address, so your Honour should just keep out of it.

MR O’CALLAGHAN:   Yes, your Honour, that is what we say.

HEYDON J:   But you did not say it then.

MR O’CALLAGHAN:   No, and nor were we, with great respect, obliged to say anything then.  Our case ‑ ‑ ‑

HEYDON J:   This trial is a shocking, really, example of modern litigation.  The burdens placed on Justice Byrne in this trial are burdens that no Supreme Court judge, or any other judge, should have to put up with in terms of parties failing to go straight to the points in issue between them.  I am not saying it is your fault or your side’s fault, but the fact is it is something that will go down in the precedent books as a bad trial.

MR O’CALLAGHAN:   We would say, with great respect, your Honour, that that is all the more reason that when a trial judge at the commencement of a trial sets down rules for its conduct that they should be adhered to and that a party in the position of our client is entitled to invoke them.

HEYDON J:   But is that what it comes down to then really, that if one accepts that the respondent never ran this point in its final submissions, it was appealable error for the trial judge to have decided the case on breach of warranty even though he had raised it with you and even though Ms Chan had conceded a liability in damages in debate with the trial judge shortly afterwards?

MR O’CALLAGHAN:   We say yes to that question, your Honour.  Your Honour uses the expression “even though”.  We would say despite the fact that it was raised by his Honour with me and despite what Ms Chan said, the respondent here still, notwithstanding that, said nothing about it.  We say that makes all the more stark the conclusion that they must be taken to have abandoned the plan.

HEYDON J:   This sort of proposition might have been all very well and good in about 1828, but is it really satisfactory now?

MR O’CALLAGHAN:   We would say, your Honour, in the age of modern litigation, and accepting what your Honour says about this case, if rules like this are to be set out, all the more reason for them to be adhered to and enforced.  They can only be adhered to and enforced if our proposition, with respect, is correct.

BELL J:   I am not sure about that.  If one looks at it, the trial commenced on a date in October with counsel informing the judge that he might not worry too much about the 750 pages of pleadings.  As the trial progressed, his Honour concluded that that might not be the way to approach the matter.  His Honour pointed out to the parties that he proposed to have regard to the pleading and not to some looser approach to it.  This is as I understand the way the trial progressed.

On 7 November, senior counsel for the respondent opened this aspect of the case, making clear that the breach of warranty was part of the case consistently with the pleaded claim.  Thereafter, in the course of final submissions there was the exchange between the trial judge and yourself, and between the trial judge and counsel appearing for TTW, this in a context in which the judge had reduced the 750 pages to a comprehensible account of what he understood the issues to be and invited parties to tell him if he was wrong in that respect.

Your submission invites the consideration that in the midst of this extremely complex litigation it was necessary for the judge, after dealing with the pleaded matters consistently with the draft that he had circulated, to go back and check, “Did X say this?” in final submissions.  That seems to me to not necessarily be the most useful way to approach the question.  Another way might be to ask why you did not draw to the judge’s attention at the conclusion of Mr Levin’s closing submissions that, contrary to the way the case was pleaded, contrary to the contents of the draft and contrary to Mr Levin’s opening, this claim had been abandoned.

MR O’CALLAGHAN:   Well, your Honour, as to the first point your Honour made with respect to the opening, in our respectful submission, the breach of warranty claim was not opened.  As to your Honour’s ‑ ‑ ‑

BELL J:   Can I take you to page 133 of the application book.

MR O’CALLAGHAN:   Yes, your Honour.

BELL J:   I had in mind there, one has the pleaded case to which you have taken us, Mr O’Callaghan, then you have the exchange commencing at about line 13 on 133 and following, with his Honour raising:

It’s like a warranty.

and Mr Levin saying –

Like a warranty but they are matters of law we can come to later.

MR O’CALLAGHAN:   Yes, and the fact of the matter is, your Honour, that they never did come back to it later.

BELL J:   Neither did you draw to attention that the pleaded claim that was set out in the draft that was circulated and which had been open to the extent that is indicated at application book 133 appeared to have been abandoned.

MR O’CALLAGHAN:   We did not, your Honour.  Our case rests on the proposition that the claim for breach of a warranty can only be taken to have been abandoned when senior counsel for the respondent sat down, having completed all his submissions with respect to the case as a whole.  At that point the abandonment crystallises.  In our respectful submission, there was no obligation upon us to jump up and say to his Honour they have forgotten the breach of warranty claim or they have abandoned the breach of warranty claim.  Forensically, we would say that that would neither be desirable nor a necessary thing for us to have done.

BELL J:   So it was necessary for his Honour to get the transcript of counsel’s closing submissions in respect of each claim and go through them against his draft?

MR O’CALLAGHAN:   Necessary and, we would say with great respect, your Honour, desirable and consistent with his Honour’s admonition at the beginning of the trial, that he would only decide the claims that were run, pressed, whichever word one uses.  It is a comfort to the judge to know that despite the 700 pages of pleadings and the morose detail, that I think it has been referred to that, the pleadings generated, but despite all of that, it is a comfort to a judge consistent with his ruling that he should only need to decide those issues which were run or pressed in final submissions.  It alleviates a burden that would otherwise exist to trawl through the 700 pages of morose detail.

BELL J:   I think his Honour had done that and circulated the draft with a view to, as it were, making clear what his understanding of the issues was with a view to being told if that understanding was incorrect.  Is not that a way of viewing it?

MR O’CALLAGHAN:   It is a way of viewing it, your Honour, but in light of what the judge said at the outset of the trial, all parties were on notice that whatever his Honour said in his draft reasons and whatever that amounted to, it was necessary nonetheless to run the point, and they did not.  We say in those circumstances there was no justiciable issue because the issue was not in dispute and courts cannot decide issues that are not in dispute.  It is a fundamental matter of judicial power, we would say.  Did I address your Honour’s questions?

BELL J:   I think so.

MR O’CALLAGHAN:   Thank you, your Honour.  We do say that that passage in the opening, your Honour, at 133, is not opening the warranty claim.  To say that, paragraph 4, the acknowledgement in the deed is like a warranty and to say they are matters of law and we will come back later and never to do so is neither to open nor run nor press a case.  It is also put against us that the written closing submissions at 232 of the application book have something to do with the warranty claim.  These are the closing submissions of the respondent.  In our respectful submission, nothing on page 232 has anything to do with a warranty.  It certainly does not mention ‑ ‑ ‑

HEYDON J:   That has to do with the reply.

MR O’CALLAGHAN:   Yes, that is how we read it, your Honour.

HEYDON J:   That seeks to set aside clause 2 of the release because of misleading conduct.

MR O’CALLAGHAN:   That is how we read it.

HEYDON J:   I agree.

MR O’CALLAGHAN:   At 252 of the application book headed “Montgomery’s Submissions In Reply” – there is a heading on 253 “Novation”.  One would have thought that that would have been a fairly obvious place for the breach of warranty claim to have been mentioned.  We say that it was not.  We say none of those pages mentions or has anything to do with the warranty claim at 33I to 33K of the fifth amended statement of claim.  Under the heading “Misrepresentation” one of course sees the word “warranty”, but of course again, as his Honour Justice Heydon just said in a different context, those claims deal with the pleading in the respondent’s reply, the Trade Practices Act claim.  So they do not do the work.  In oral submissions in closing, which appear at application book 180 to 181, the respondent below and in this Court seeks to make something of this.  At the bottom of page 180 at application book senior counsel says:

Your Honour, we have addressed the issue in relation to misrepresentation at paragraph 7 –

He is talking about his written document –

and we have referred to the Sellars case that was referred to earlier day.

HIS HONOUR:   This is the misrepresentation contained in the acknowledgement?

MR LEVIN:   Indeed.

HIS HONOUR:   In clause 4 of the novation agreement?

MR LEVIN:   Indeed.  Your Honour, we stress that the warranty or term of the agreement may amount to conduct contrary to section 52 of the Trade Practices Act.

We say, as her Honour the Chief Justice identified below, that can only be read as a reference to the TPA claim contained in the reply.  It has nothing to do with the breach of warranty claim in the fifth amended statement of claim.  His Honour says:

HIS HONOUR:   Not much has been said about that; do you press that?

MR LEVIN:   Not much has been said but, Your Honour, we do press it.  We certainly haven’t resiled from it.

HIS HONOUR:   You have to show loss under the Trade Practices Act, don’t you, and that’s actual loss not speculative loss?

MR LEVIN:   We don’t believe, your Honour, that is the correct statement of the law.

So, in our respectful submission, that passage manifestly is not talking about the breach of warranty claim and we raised the fact of abandonment, and what we say was the first practical available opportunity to us.  The fact that the delay was 15 months is regrettable, but it is not something, in our respectful submission, that the parties can be held responsible for.

HEYDON J:   Well, I am sorry to join issue with that.  When the Court of Appeal delivered its first set of reasons for judgment, which your side regarded as unsatisfactory in various respects, and perhaps the respondent did too, it did not take very long to send a letter to the Court of Appeal complaining about it and it did not take very long for the Court of Appeal to respond to the letter.  Could not the same have been done with Justice Byrne while the matter was fresh in everyone’s mind?

MR O’CALLAGHAN:   Well, it could have been done, your Honour, it could have been done.  We sent a letter to the Court of Appeal, we could have sent a letter to Justice Byrne, but ‑ ‑ ‑

HEYDON J:   Or had a notice or motion or whatever, a summons, something like that to get it back before Justice Byrne so he could be confronted with this great breach of the judicial duty.

MR O’CALLAGHAN:   Well, your Honour, whether it had been confronted more promptly or less promptly we say should not tell against the breach of judicial duty.  It remains so nonetheless and if our client was responsible for delay, that should not, in our respectful submission, count against the point.

HEYDON J:   It perhaps counts against the credibility of the point.  The only reason you lost in front of Justice Byrne was this breach of warranty claim.  If it had not have been for that, you would have been totally victorious against the respondent.

MR O’CALLAGHAN:   That is so, your Honour.

HEYDON J:   It is something which must have shocked those on your side who read the judgment.

MR O’CALLAGHAN:   It is perhaps for not for me to say what emotional reaction the judgment caused, your Honour, and I mean that with great respect.  The point remains either a good or a bad one and the fact that we raised it at the first opportunity we had when the judge was in the courtroom ‑ ‑ ‑

HEYDON J:   I cannot accept that.

MR O’CALLAGHAN:   ‑ ‑ ‑ should not, in our respectful submission, count against it in any fashion, with respect.

BELL J:   Can I just take up this breach of the judicial duty with you a little further?   In circumstances in which the trial judge had made clear to the parties that contrary to any view that the matter might be dealt with on a more informal basis he proposed dealing with the matter on the basis of the pleaded claims and the parties should be on notice of that - to the extent they sought to advance a contention that was not property pleaded, it would be necessary to apply to amend and so forth.  Then in the context of the complexity of the pleadings he circulates a draft setting out his understanding of the pleaded case at a point where the trial is well advanced and he invites the parties to comment on that.

He raises an aspect of the respondent’s pleaded claims with you and with Ms Chan, making clear that consistently with his draft document he is considering the merits of that aspect of the claim.  Does the suggestion that Mr Levin did not in fact address that in his closing submissions mean that in the event that the judge had not dealt with that claim, contrary to the statements he had made to the party, the respondent would have not been entitled to assert that the judge was in breach of his duty to decide the case in the way that he had indicated he intended to?

MR O’CALLAGHAN:   No, your Honour.  The respondent may have had a difficulty if it had failed to point out to his Honour defect in the draft reasons but, in our submission, focusing at that point of time is premature because the judge and any other party can only know – according to the rules of conduct that the judge set down at the beginning of the trial – whether those rules have been complied with or not when final submissions had been finished and the fact that the judge refers, we would say, in passing to the fact of a pleaded claim heightens the burden on the respondent to say something about it in closing submissions.  It does not alleviate from the burden at all. 

The respondent in its written submissions says that it was clearly open to the judge to find that the respondent had pursued its claim for breach of warranty.  It says the Court of Appeal was also correct in taking that view.  Two things need to be said about those statements.  First, the trial judge never did find that the respondent pursued its case for breach of warranty.  On the contrary, when we put to him the submission that – I think I used the expression “Not a single solitary word” was said about the claim by the respondent in its closing – the judge said at application book 184:

That surprises me but I don’t have the recollection.  You may be right.

At 183 of the application book at line 6, I made the submission to his Honour:

but the answer to the question is that I mentioned the Wynton warranty but one can scour the submissions written and oral, and every word of that transcript, and one cannot find any mention of any reliance on the warranty claim by Montgomery Watson.

HIS HONOUR:   That’s a finding that I’ve made though.

MR O’CALLAGHAN:   Indeed, Your Honour.

HIS HONOUR:   So you can tell that to the Court of Appeal, isn’t it?  I mean, I may be right or I may be wrong, but it’s really for them to look into this and I’m sure they’ll enjoy reading the transcript, or you reading it to them.

MR O’CALLAGHAN:   Yes, I’m sure I’ll make myself very popular . . . 

HIS HONOUR:   I may be right or I may be wrong, but that’s what I found and so that’s against you.

MR O’CALLAGHAN:    . . . Your Honour warned the parties that Your Honour would only decide questions that were pressed.  This question was not pressed.  In our respectful submission it must be taken to have been abandoned.

HIS HONOUR:   The fact of reliance?

MR O’CALLAGHAN:   The fact of this – the warranty claim itself, Your Honour, was abandoned.  Your Honour warned everyone in this courtroom that Your Honour would only consider ‑ ‑ ‑

HIS HONOUR:   Are you saying that there was no – in the final addresses the warranties didn’t get a run?

MR O’CALLAGHAN:   They didn’t get a run at all, Your Honour, by Montgomery Watson.

HIS HONOUR:   Didn’t they?

MR O’CALLAGHAN:   Not a single solitary word of it, but if Your Honour’s point is I should be telling somebody else ‑ ‑ ‑

HIS HONOUR:   That surprises me but I don’t have the recollection.  You may be right.

In our submission, it is readily apparent that the trial judge never found that the respondent had pursued its claim for breach of warranty.  As to the suggestion that we make the point to the Court of Appeal, what we say about that, with great respect, is that we endeavoured to do so and our complaints about the Court of Appeal’s finding in that regard, which is the single sentence said about it at page 533AR where their Honours Justices Buchanan and Nettle say at paragraph 112 of their reasons:

That contention –

the abandonment contention –

is unfounded.  The claim was pleaded, opened, pursued in evidence at trial and dealt with in written submissions and final addresses.

We say, with the greatest of respect to their Honours, that statement is wrong as a matter of fact and no reasons are given for it in any event.  When I say “it”, I mean no reasons are given in relation to what we would say on any view was a serious and substantial contention that required reasons to be given, reasons along the Soulemezis and Oil Basins principles, but, we would say with great respect, that whatever principles one applies about the standard of reasons that is required, paragraph 112 would not satisfy them.

HEYDON J:   Just as a footnote, of course, that section is headed “Cross‑appeal”.  You did not actually have a cross‑appeal, you had your own freestanding amended notice of appeal?

MR O’CALLAGHAN:   That is so, your Honour, yes.  The respondent in its written submissions at paragraph 19 makes the contention that the pleaded claim for breach of warranty was in issue because the construction of clause 4 and the possible operation of the acknowledgement was a live issue.  We would say that that is a mistaken contention.  The judge’s concern from the outset was to identify pleaded causes of action and for the court not to be burdened by the morose detail that leaving questions as vague as that would encourage, we would say.

FRENCH CJ:   What is the context of the discussion about warranty at pages 166 and 167 of the application book?  Is that sort of feeding back into the construction of the deed?

MR O’CALLAGHAN:   In our respectful submission, your Honour, the context was the general construction of clause 4 of the deed as a whole.  The context most assuredly was not the breach of warranty claim at paragraphs 33I to 33K.  In our submission, the nature of that discussion makes it clear.  It is true that at 166 his Honour mentions the word “warranty”, line 26:

What I’m wondering, if the word “acknowledges” had been written there, “warrants” and then there may create a fresh obligation.  So on the one hand they have released and discharged you and on the other you have assumed or given them a warranty.  That’s not something which comes as a shock, however inconsistent because in the conventional building contract the final certificate releases and discharges all sorts of people and yet there are warranties provided customarily as a matter of the documentation ‑ ‑ ‑

FRENCH CJ:   Over the page at line 11 at 167, you say that the primary judge ought not to construe it as a warranty.

MR O’CALLAGHAN:   I do, your Honour, yes.

FRENCH CJ:   What proposition are you answering there?

MR O’CALLAGHAN:   I may not be answering any proposition.

FRENCH CJ:   Is it a pre‑emptive strike?

MR O’CALLAGHAN:   Yes.

KIEFEL J:   I suppose it raises the question of what you were going to do if the judge did construe it as a warranty.  It must have been a matter which occurred to your side.  You must have been watchful, not you personally, but all lawyers on your side during the course of submissions at the close of the trial to see which issues were getting a run or not.

MR O’CALLAGHAN:   We would say, with great respect, your Honour that there is nothing inappropriate or ‑ ‑ ‑

KIEFEL J:   Absolutely not, but there is a danger, and it is the matter to which Justice Bell has referred.  If it looks like something may not have been directly addressed there is a point at which a decision has to be made whether to draw that to the attention to the trial judge and have a debate about it, and that is really the forensic decision to make, is it not?

MR O’CALLAGHAN:   Yes, your Honour, and one can imagine the realities of such a situation that ‑ ‑ ‑

KIEFEL J:   I am sorry to interrupt you.  The forensic decision is made in the context of the extant pleadings which have not been abandoned, and which his Honour has summarised.  That is really where the obligation comes from, I think.

MR O’CALLAGHAN:   Leaving aside a question of the timing question that his Honour Justice Heydon raised with me, but the obligation cannot exist until senior counsel for the respondent, in this case, sat down, because it – I am repeating myself, the fact of abandonment cannot be apparent until that point, because until that point it was always open for senior counsel to say, “Your Honour, just before I sit down, I forgot” or whatever reason is ascribed to it, before he finishes he invokes the plea and says, “This is how we put the case.  I want to run the point and I want to run it by making these submissions with respect to it”.  But if ‑ ‑ ‑

KIEFEL J:   But once it is clear, at least from the perspective of your side, once you believe that the point may no longer be pursued, for clarity after a trial of this length it is incumbent upon you, I would have thought, to make certain that the judge has that clearly in mind when he proceeds to approach his judgment, and you have from the time that that thought first enters your mind until the time he delivers judgment to do so.  You did not do it any point.

MR O’CALLAGHAN:   No, we did, not your Honour, and of course, the other point ‑ ‑ ‑

KIEFEL J:   But you want to put it beyond doubt.

MR O’CALLAGHAN:   The forensic reality is that it is always then open for another party to seek to reopen its case and that again leads to the prolixity and length of hearings and proceedings and we say that is not to be encouraged either.

KIEFEL J:   This is just risky behaviour, I think.

MR O’CALLAGHAN:   I am sorry, your Honour?

KIEFEL J:   This is just risky behaviour in the context of a long trial and its conclusion.

MR O’CALLAGHAN:   We, with great respect, your Honour, would not say it is risky.  It may be said to be tactical, but not risky and not inappropriate, in our submission.  The burden fell on the respondent in this case to do what the judge asked him to do, ie, run its case, declined to do so, the issue was not in dispute and the judge ought not to have decided it.

KIEFEL J:   I understand your submission.

MR O’CALLAGHAN:   Thank you, your Honour.  I think the last point we wanted to make on the abandonment point was the respondent seeks to make something out of a distinction between running a point and pressing it and drawing the distinction between what the judge said in one place and another, but we, with great respect, say that is a distinction without a difference and whatever word is used ‑ ‑ ‑

FRENCH CJ:   I suppose the question relevant to the grant of special leave is whether the kind of exercise which you are undertaking at the moment is – as we are poking around in the factual entrails, if you like, of what happened at trial and who said what and so forth, I suppose the fundamental question is, whether you might have some doubts or otherwise about the factual conclusions drawn by the Court of Appeal on the question, is this a proper vehicle for the grant of special leave?

MR O’CALLAGHAN:   We would say, with great respect, that it is, your Honour, because the issue is of great importance in the management of an increasingly large number of large and complex trials and if parties can, having heard, we have called them, admonitions from a judge about how a case is to be conducted, not have to worry about them because it does not matter whether I run the point or I do not run the point, I can revive it on appeal in any event, I have still got my pleading and whatever the judge has said about running or pressing issues, if I have pleaded it, he has got to decide it, it really makes the judge, we would say, powerless effectively to make rules and enforce them.

KIEFEL J:   On another view, though, a grant of special leave might encourage people not to co‑operate fully with the trial judge in the disposition of a complex and difficult matter by identifying the issues to be addressed in the reasons for judgment.

MR O’CALLAGHAN:   Well, your Honour, we would say that the sort of rules that were applied here would never encourage parties not to co‑operate, but at the end of the day ‑ ‑ ‑

KIEFEL J:   Co‑operate fully I said.

MR O’CALLAGHAN:   Well, to co‑operate fully, your Honour, at the same time, with respect, it is not for a party in our position to run our opponent’s case and if they choose not to run a point for whatever reason, it is a matter that affects them and only them.  It should not affect the court and making of its rules for running trials and it should not affect parties in the position of our client.

BELL J:   The judge understood that the point was being run because after Mr Levin opened it, the judge included it in his draft and invited responses to whether there was in that draft material that was inappropriate and neither side said so.  Your contention would place considerable further burdens on a judge dealing with complex litigation of this character given the tactical approach that you say was well open to your camp.

MR O’CALLAGHAN:   We say not, your Honour, for the reason that I adumbrated before, that the relevant time for assessing the burden on the trial judge is when his Honour writes his or her reasons and at that point, when the court is in possession of reams of pages of written closing submissions and, as in this case, hundreds and hundreds of pages of closing transcript pages, that his Honour is entitled to say, “I have said I will only decide the issues that I see here in those closing submissions and that is all I shall decide.  That is all I am empowered to decide because no other issue is in dispute.”  So it is at that point in time, your Honour, we say that the relevant question of the burden should be assessed not at the point of time when a judge is distributing draft reasons and so forth.

BELL J:   That was a wasted exercise on the judge’s behalf on your approach to the way the litigation should have been conducted.  It would be no value for the judge to go back to the draft that he had circulated and upon which he had invited the parties to comment.  It was necessary for him to go through all the closing submissions and, as it were, distil the case from there.  It was of no value to have endeavoured to focus the parties by the circulation of the draft on the submissions that you make.

MR O’CALLAGHAN:   We would accept that, your Honour, yes.  By the judge’s own ground rules that it may have been a little wasted effort, but it was an easier task to compare the closing submissions with the pleading and one with the other, which claim is run and which is not and I will only decide the ones that are.  That is our point, in essence, your Honour.  But those are our submissions on the abandonment point, your Honour.

FRENCH CJ:   Yes, Mr O’Callaghan.

MR O’CALLAGHAN:   Shall I continue in reverse order?

FRENCH CJ:   I think that is a good idea.

MR O’CALLAGHAN:   On the question of contractual construction, in our submission, the Court of Appeal’s approach to the question of how to construe the deed was wrong as a matter of principle because the court rejected the plain meaning of words – and here I mean clause 2 of the deed – chosen by contracting parties and it preferred an alternative meaning, merely because to use the expression that the court used four times, the alternative meaning struck the court as being more likely.

CRENNAN J:   It went to the whole text, did it not, rather than concentrate just on clause 2?  It looked at clauses 3 and 4.

MR O’CALLAGHAN:   It did, your Honour, and we agree that the court gave a nod of the hat to Pacific Carriers and IATA and a nod of the hat to – I mean that with respect – the principle that one construes a deed as a whole but no one would take issue with that proposition.  The Chief Justice, who agreed with Justices Buchanan and Nettle on this point, she says a little about it at 533J and at line 42 her Honour the Chief Justice says:

The release provided by clause 2 is not ambiguous on its face.  It is expressed in the broadest language available to parties drafting clauses of this nature.  Viewed in isolation, it could only have been regarded by reasonable business people in the position of the parties as operating both prospectively and retrospectively, and as covering liability under both contract and tort.  This was the approach adopted by the trial judge.

However, it is equally clear that a release which operated both prospectively and retrospectively is inconsistent with the broader, commercial purpose expressed by the remainder of the Deed.

Her Honour does not identify any particular provision and her Honour says –

That purpose was to substitute TTW for Wynton Stone from the date of its execution, such substitution being a direct result of the merger or acquisition of Wynton Stone by TTW.

Therefore, the court is faced with two possible approaches to construing the disputed release:  either to regard clause 2 as a complete release, and thereby render the intention displayed by the Deed as a whole subservient to the intention displayed by the terms of clause 2; or to regard clause 2 as a prospective release only, and thereby construe the intention displayed by clause 2 as subordinate to the objective intention displayed by the entire document.

We say with great respect to her Honour that posing the question that way is wrong as a matter of principle because it determines the answer.  It admits of no other answer than the answer arrived at and we say that is not a proper approach to construing contracts.  At 533AB and following we get the crux of what their Honours Justices Buchanan and Nettle have to say about the deed.  In paragraph 74, their Honours say:

Assuming that ‘normally’ means ‘in the absence of contrary indication’, we would agree that a release ‘from all claims and demands whatsoever in respect of the contract’ would extend to future claims . . . But, for the purposes of construing clause 2, the release must be read in context –

And this is your Honour Justice Crennan’s point:

in our view a critical part of that context consists in the concluding words of the clause:  ‘as if TTW was named in the contract in place of WS’.  As we read those words, they govern each of the three preceding stipulations –

And in 75, over the page, their Honours say:

Perforce of clause 3 of the deed, one must then overlay –

They use the word “overlay”:

the stipulation that ‘the effective date for the substitution of TTW for WS and the acceptance of such substitution and transfer by [MWH] is the date of this deed’.  In the result, clause 2 of the deed should in our view be read as having the effect that –

a), b), c).  Now, we would say that three things, three propositions, need to be made about that paragraph.  The first is, the words in bold do not appear in the deed.  Secondly, if overlaying stipulations is to be regarded as an acceptable method of contractual construction then we would say that the non‑bolded, italicised words would more accurately read “effective today”.  I am sorry – the bold, italicised words would more properly read “effective today” because that is what clause 3 of the deed says.  The effective date for the substitution is today.  Thirdly, we would say, adding the words:

as if TTW was named in the contract in place of WS –

has no correlation or relationship with Wynton Stone being released or discharged.  They are concepts that do not in any, we would say with respect, logical way fit together.  There is no connect between releasing and discharging “as if” and tellingly, we would say, in paragraph 76, the court having acknowledged that syntactically our constructions of the words would be open says:

The effect of clause 2 would thus be that MWH -

a), b), c).  Now, with great respect to their Honours, that is to do no more or less than repeat the words of clause 2.  That is not the effect of clause 2.  They are the words of clause 2 – admittedly, broken up into three subparts, three subparts that make it, we would say with great respect, abundantly clear that the italicised words in paragraph 76c) can only be read as relating to what their Honours called the third stipulation. 

Having said we reject that syntactically open construction and we adopt the construction, the overlaying of the stipulations in 75, their Honours go on – and this is in answer to your Honour Justice Crennan’s question – to explain why they prefer 75 over 76 and they say that 76 would not appear to make a great deal of sense.  It would produce what the court says is a remarkable lack of symmetry and then ask over the pages a series of rhetorical questions.  At 78 the court makes clear that what it was doing – this is the last sentence of paragraph 78, 533AD:

Approached from a commonsense business point of view, it seems more likely that the two stipulations were intended to correspond and so to operate only as and from the date of the deed.

We, of course, say that 76 is the only way you can read it as a matter of English, but as a matter of principle, it is wrong for a court to approach the question of what a common sense business point of view is by reference only – and this is what the court does – only by reference to what it thinks is the more likely of the two propositions.  The fact that that is what the court does is clear from paragraphs 78 through to 85.  So it not just a case where we are unhappy with the result of the construction that the court has entertained and adopted, although of course we are unhappy about it, it is the process that they arrived at in achieving the result that we say was wrong as a matter of principle. 

Conveniently, last week the New South Wales Court of Appeal decided a case called Jireh International Pty Ltd v Western Exports Services Inc [2011] NSWCA 137.  That was a case that we referred to the Court as soon as we became aware of it.  That is the advantage of diligent juniors.  We would direct the Court’s attention to paragraphs 52 and following and, in our respectful submission, the principles and the application of those principles to the facts of that case are an accurate – those paragraphs are an accurate statement of the proper principles and they are the principles that should have been applied in this case.  At paragraph 52, Justice Macfarlan, with whom Justices Young and Tobias agreed – and the facts are apparent from this paragraph – said:

The primary judge considered, correctly in my view, that the reference in the second sentence of Clause 3 to Jireh was not ambiguous and that there was “no warrant to read in the words ‘or an associated entity’ in cl 3 where they do not appear”.  On this literal meaning of the words, commission was thus only payable upon sales by the corporate entity Jireh International Pty Ltd effected by its officers, employees or agents on its behalf.  WES did not challenge his Honour’s finding that the sales by JIWD (and implicitly, those by GJCI) were no effected as agent for Jireh.

In 55 Justice Macfarlan say:

In my view the primary judge erred in taking this approach.  So far as they are able, courts must of course give commercial agreements a commercial and business‑like interpretation.  However, their ability to do so is constrained by the language used by the parties.  If after considering the contract as a whole and the background circumstances known to both parties, a court concludes that the language of a contract is unambiguous, the court must give effect to that language ‑

Of course, in this case the court did not identify any background circumstances going to the parties – in our case, I mean.  His Honour goes on to say:

In the case of absurdity, a court is able to conclude that the parties must have made a mistake in the language that they used and to correct that mistake.  A court is not justified in disregarding unambiguous language simply because the contract would have a more commercial and businesslike operation if an interpretation different to that dictated by the language were adopted.

We adopt that statement, with respect, as an accurate statement of the law.  His Honour then goes on to say why the primary judge departed from those reasons in paragraph 56:

There is no suggestion in his Honour’s judgment that he considered that the contract would have an absurd operation if it were given its literal meaning.

Pausing there, we say, in our case, there is nothing absurd about the notion that from the date of the deed of novation Montgomery Watson, the respondent, was to look and only to look to TTW for relief.  We would say that is a perfectly sensible commercial proposition.

CRENNAN J:   What is the force of the warranty in that context?  Is it something that TTW has to avail itself of?

MR O’CALLAGHAN:   Your Honour, we are left with ‑ ‑ ‑

CRENNAN J:   It is clause 4 that I am talking about.

MR O’CALLAGHAN:   Yes, your Honour.  We read clause 2 as saying, release and discharge from all claims and demands whatsoever, et cetera.  Clause 4, admittedly, is there for what it is worth.  We would not necessarily say it is ‑ ‑ ‑

CRENNAN J:   In whose favour is it there?

MR O’CALLAGHAN:   We cannot cavil from the proposition, I think as a matter of language, that it is in favour of the respondent.  It may be construed as an additional – “bonus” is not quite the right word.  It can sit, your Honour, we say, with respect, plainly and as a matter of ordinary language quite consistently with the plain meaning of clause 2 and that there is no warrant for saying there is an acknowledgement in addition.  Therefore, we have to, in effect, turn the deed on its head and not have regard to what we say, with respect, is the plain and clear enough meaning of clause 2, which releases and discharges Wynton Stone, our client, from all claims and demands whatsoever in respect of the contract.

We say, rhetorically, why should those words not be accorded their plain and natural meaning? What is so absurd about the result that from that date our learned friend’s client can look only to TTW?  Certainly they have this warranty, for whatever it is worth.  Whatever our learned friend’s clients made of this acknowledgement, buried, as it is, under the inapposite heading “Client’s undertaking’, will always be a mystery, of course, because the party who signed the document was not called to testify.  As I say, that is a mystery.  That is how we interpret the deed, your Honour.  In 56, Justice Macfarlan says:

There is no suggestion in his Honour’s judgment that he considered that the contract would have an absurd operation if it were given its literal meaning.

We say likewise here.  His Honour refers to the judgment of the then Chief Justice in McCann v Switzerland Insurance Australia Ltd in 58, in 59 to the Indemnity Mutual Case and in 60 to the decision of Justice Gibbs, as he then was, in ABC v Australian Performing Right Association Ltd.  In 62 his Honour refers to the decision of this Court in Maggbury and says, quoting Lord Diplock, the well‑known words:

“if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense”.  As their Honours pointed out, minds may differ as to what comprises “business commonsense” in particular circumstances.

Of course, it was in Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 where Chief Justice Gleeson and Justices Gummow and Hayne said at paragraph 43:

It may be, as here, that there is a real contest about the appropriate commercial perspective to take from the surrounding circumstances.

In this case, we would interpolate, a contest about whether it was sensible for the respondent to no longer to be able to avail itself of an action against Wynton Stone, query the acknowledgment, and to persevere only against TTW.  There was no contest in this case about that at all.  Their Honours continued –

This may be a function of contested evidence and produce the need for findings of fact to be made in those contested areas.  It may also be a reflection of the fact that the parties brought evidently different commercial aims and purposes to the bargain.  In neither case is the evidence of the commercial aims and purposes thereby necessarily unhelpful.

In this case, the construction of clause 2 of the deed, we of course make clear in our submissions, was something never contended for by the respondent in the Court of Appeal and, perhaps not surprisingly, it did not lead evidence or make submissions about what business common sense was in this case.  Going back briefly to the decision of the New South Wales Court of Appeal in Jireh, at 63, Justice Macfarlan says:

Their Honours then adopted as the appropriate question to be addressed one of whether “something must have gone wrong with the language” . . . In effect, this question requires an inquiry as to whether the relevant provision would have an absurd operation if construed in accordance with the literal meaning of the words used.

Of course we say no such absurdity was suggested by the Court of Appeal, and no such absurdity exists on our reading of the deed.  At 65, and I will finish there:

Whilst the view could be taken that it would have been reasonable for commission to be payable in the case of sales by entities associated with Jireh, the Court does not know, and it is not relevant for the Court to know, why the parties adopted a more restrictive provision and in particular why they added a reference to “an associated entity” at the commencement of Clause 3 –

but not the critical last sentence of it –

The provision operates perfectly well when restricted in its application to sales by Jireh.  There is nothing absurd about its operation in that way.  It is not permissible for the Court to rewrite the provision to have it operate in what may be a more reasonable fashion.

We say, with great respect to their Honours Justices Buchanan and Nettle, that they did not do so in this case.

As to the proper approach to take to the construction of contracts, we refer in our written submissions, but I will not take the Court to them, to two decisions.  The first was of Lord Justice Neuberger, as he then was, in Skanska Rashleigh Weatherfoil Ltd v Somerfield Stores Ltd [2006] EWCA Civ 1732 at paragraphs 21 and 22 and the reasons of Justice Allsop in Franklins v Metcash Trading (2009) 76 NSWLR 603 at paragraph 20. 

We say that it is dangerous for courts to adopt, as this court did below, with great respect to their Honours, their own untutored idea.  Untutored, I mean not the subject of evidence, not the subject of anything other than what they themselves thought as judges, but their own untutored idea of business common sense especially in circumstances where that idea was not put by the beneficiary of it here, the respondent.  In its written submissions, the respondent does point to some paragraphs where it says it made submissions that resemble what the court said, but we would say, with great respect to our learned friends, that none of those passages remotely resembles what the court ended up finding. 

The court did cite the decision of this Court in Pacific Carriers and the decision in IATA, but, in our respectful submission, neither of those cases provide any support for the approach adopted by the Court of Appeal.  In fact, the very passage from Pacific Carriers (2004) 218 CLR 451 at 22 that the court relies on says that the construction of the commercial agreements in that case required:

consideration, not only of the text of the documents, but also the surrounding circumstances known to Pacific and BNP, and the purpose and object of the transaction.

Paragraph 53 of the decision in IATA says the same thing.  But in this case the court did not identify any surrounding circumstances or purpose or object of the transaction discernable from objective facts and we say that nothing in the passages or nothing in those cases countenances the notion that the natural or clear enough meaning of words can be put to one side merely because it would not appear to the court to make a great deal of sense.  Those were our submissions on the contractual point.

FRENCH CJ:   Yes, Mr O’Callaghan.

MR O’CALLAGHAN:   Perhaps if I now proceed on the question of inferred reliance - is that a convenient ‑ ‑ ‑

FRENCH CJ:   This is going to the trade practices claim?

MR O’CALLAGHAN:   Yes, your Honour.

FRENCH CJ:   Yes.

MR O’CALLAGHAN:   Is that convenient?

FRENCH CJ:   But there is no order against you in respect to the misleading or deceptive conduct?

MR O’CALLAGHAN:   There is an order that founds equally a Trade Practices Act claim. 

CRENNAN J:   Did the Court of Appeal find that as a result of their construction of clause 2 they were not satisfied any loss or damage was occasioned to the respondent by any breach of section 52.  Is that not what they said?

MR O’CALLAGHAN:   That is so, your Honour.  That was one of the three.  I think that was the chief ‑ ‑ ‑

CRENNAN J:   And, accordingly, the trade practices point does not play any role in the order.  The Court of Appeal amended the order of Justice Byrne to add to breach of warranty, breach of contract and negligence.

MR O’CALLAGHAN:   Yes, and it is that very same order that the respondent sought before the Court of Appeal if it had succeeded instead on its claim under sections 52 and 87 of the Trade Practices Act.  It is the very same order and that much we know ‑ ‑ ‑

CRENNAN J:   But this is an appeal from the orders made by the Court of Appeal that you are seeking special leave in respect of?

MR O’CALLAGHAN:   We are and we are not appealing against reasons.  We are appealing against the order inserting the words “negligence or contract” in the order.  That is the same order that the respondent urged upon the Court of Appeal that it wanted, had it been granted the stepping stone, if I can use that expression, had it been given the stepping stone of relief under section 87.  So give me an order under section 87 that the applicant not be entitled to rely on that provision and then make an order in identical terms inserting the words “contract or negligence” in the order.

We know that from pages 484 to 485 of the application book.  So it is the same order, your Honour.  There is only one order that would have been made in any event.  The document said of relief sought by the appellant ‑ ‑ ‑

HEYDON J:   Mr O’Callaghan, though, if you lose on the first two points that you have been arguing this morning that is the end of the case, is it not?

MR O’CALLAGHAN:   Yes, your Honour.

HEYDON J:   If you win on one of those two points Mr Jackson will ask for special leave to cross‑appeal in order to contend that clause 2 did not have the effect for which you have been arguing in the last minutes and he will say that clause 4 was a breach of section 52.  You will say it is just an empty piece of air because there was no reliance.  We only get to it in your answer to his application for special leave to cross‑appeal.  We do not get to it in your appeal.

MR O’CALLAGHAN:   Yes, your Honour, but we do not accept the proposition that our appeal would be incompetent because we are appealing from an order, not reasons, and it is the same order that would have been made, in any event, had the Court of Appeal taken the Trade Practices Act, rather than the course that it did.

HEYDON J:   If your arguments so far fail, you will be left with an order to pay $4½ million, and I did not understand until you explained it this morning why these extra words about breach of warranty, breach of contract and negligence are added.  They are something to do with insurance, are they?  Because normally Mr Jackson’s client would just have got a money judgment.

MR O’CALLAGHAN:   That is right.

HEYDON J:   Now he gets a money judgment with reasons.  If he gets a money judgment with reasons from the Court of Appeal which have not been affected by what you have said this morning, there stands the money judgment.  It will have to be met.  I, with respect, cannot accept the validity of your contention that your appeal is competent in relation to the Trade Practices Act.  The issue will arise if he pursues his application for special to cross‑appeal, and I imagine he will not if he wins on the first two points, or either of them, or perhaps both of them.

MR O’CALLAGHAN:   It is perhaps not for me to say, your Honour.

HEYDON J:   I just do not quite see why we should listen to this now, though, until we see what Mr Jackson is going to do when the time comes.

MR O’CALLAGHAN:   Very well, your Honour.

FRENCH CJ:   You accept it is in the character of a pre‑emptive strike?

MR O’CALLAGHAN:   That is the second time I have been accused of pre‑emptive strike.

FRENCH CJ:   I am sorry for reusing the metaphor.

MR O’CALLAGHAN:   It may be that, your Honour.  On the other hand, one is concerned in such circumstances that down the track, if there is to be a down the track, that one is not met with the contention, well, you had your opportunity and you did not ‑ ‑ ‑

FRENCH CJ:   You abandoned it.

MR O’CALLAGHAN:   Indeed, your Honour.

FRENCH CJ:   Yes.  We will adjourn briefly to consider what course we should take at this point, Mr O’Callaghan.

AT 11.33 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.51 AM:

FRENCH CJ:   We will not need to trouble you, Mr Jackson.

These applications for special leave were referred into the Full Court by Justices Heydon and Crennan on 11 March 2011.  They concern orders made by the Court of Appeal of the Supreme Court of Victoria by Chief Justice Warren and Justices Buchanan and Nettle after construing a deed of novation which had been entered into by the parties and Taylor Thompson Whitting Pty Ltd during the course of a large construction project.

Simply stated, there are three issues arising on the deed of novation.  One, the construction of clause 2; two, the asserted abandonment at the close of a long trial of a breach of warranty claim based on clause 4; and, three, a reliance on clause 4 for the purposes of a claim for misleading or deceptive conduct pursuant to section 52 of the Trade Practices Act 1974 (Cth).

Materials added to the application book since the date of referral show that the trial judge raised the warranty issue with both counsel for the applicant and with counsel for another party in the presence of counsel for the respondent.  While the respondent may not have run the issue or pressed it in final address, the trial judge treated the issue as a live issue both in his questions to counsel during the course of proceedings and in paragraph 34 of draft reasons which he circulated thus negating any suggestion of unfairness to the applicant in respect of the warranty issue.  No issue was raised at that time, nor at any time prior to judgment, that the warranty claim may have been abandoned. 

Even if the applicant had succeeded on the abandonment issue, the order for damages would stand based on breach of contract and negligence, each of which depended on the construction issue.  As to that issue, whilst not necessarily endorsing everything said by the Court of Appeal, there is, in our opinion, insufficient reason to doubt the correctness of the conclusions it reached on the proper construction of clause 2.  The applications for special leave will be refused. 

Mr O’Callaghan, can you resist an order for costs?

MR O’CALLAGHAN:   No, your Honour.

FRENCH CJ:   Do you seek costs?

MR JACKSON:   We seek costs, your Honour.

FRENCH CJ:   All right.  Special leave will be refused with costs.

The Court will now adjourn until 2.15 pm.

AT 11.53 AM THE MATTER WAS CONCLUDED