Two quick points. First, the NSWCA actually found no ambiguity AFTER considering the extrinsic evidence. So, it had its own novel version of the principles of interpn, and one inconsistent with the version espoused by the same court in its various epiphanies on several quite recent occasions. Secondly, the court acknowledged that the 'plain' meaning was uncommercial or unbusinesslike but held that it was not 'absurd' and therefore the parties were stuck with it (rectification having questionably been denied in the NSWSC). I am pretty certain that an English appellate court would have reached a different result. In fact, contrary to the HCA's view that the result below was plainly correct, I think there was a gross miscarriage of justice. But what does this upstart from little ol NZ know!



David McLauchlan
Professor of Law
Victoria University of Wellington
________________________________________
From: Gerard Sadlier [gerard.sadlier@gmail.com]
Sent: Saturday, November 05, 2011 3:54 AM
To: Carmine Conte
Cc: Andrew Dickinson; GP McMeel; Jason Neyers; obligations@uwo.ca
Subject: Re: Contract Interpretation

The High Court concludes its special leave decision in Western Export as
follows:

"However, the result reached by the Court of Appeal in this case was
correct. Further, even if, as the applicant contends, cl 3 in the Letter of
Agreement should be construed as understood by a reasonable person in the
position of the parties, with knowledge of the surrounding circumstances and
the object of the transaction, the result would have been no different.
Accordingly, special leave is refused with costs."

I can claim no expertees in Australian law but doesn't their finding that
even the broader approach would have yielded the same result make the
refusal of special leave justifiable and inevitable, as much as some on this
list would disagree with their view?

As I read the decision it did 3 things:

1 identify the question e.g. is their a need for ambiguity before
extrinzic evidence is admissible
2 Point out what the Court took to be precedent in the HCA and
restate the need for lower courts to follow the HCA in a manner which
is surely not contravertial? Certainly it is no stricter than the rule
in Ireland or England.
and
3 Hold that even if the law was as argued for by the appellant, their
construction still failed, so that the case did not justify a grant of
special leave.

whether it goe's further and give's a steer on what members of the
court think about current Australian principles of contractual
interpretation is a question on which I obviously amn't qualified to
comment.

Kind regards

Ger


On 11/4/11, Carmine Conte <carmine.conte@law.ox.ac.uk> wrote:
> I post of behalf of Albert Monichino SC of the Victorian Bar:
>
> 'The only thing that can be said in favour of the 'new' Australian approach
> is that to allow parties to have automatic resort to extrinsic materials in
> interpreting a contract (ie. the UK contextual approach) often leads to the
> unsatisfactory situation where the court is bombarded with material, often
> irrelevant and mostly of only peripheral relevance. That is, the Australian
> approach provides a useful filter - only if there is an ambiguity on the
> face of the written contract are the parties able to have resort to
> extrinsic materials for the purposes of interpreting the contract. The
> reality is that it is not difficult to establish an ambiguity (as the Royal
> Botanic case illustrates), so that the difference between the Australian and
> the UK position may be more theoretical than real.
>
> Personally I found the recent statement by the High Court to be
> disappointing. We live in a globalised world where others have no
> difficulty in having resort to prior negotiations or subsequent conduct in
> interpreting contracts. Indeed, the CISG (adopted in over 70 countries)
> permits such an approach (for the interpretation of international contracts
> for the sale of goods) and is part of Australian domestic law. In that
> context, the 'new' Australian approach appears quite antiquated and out of
> step with the rest of the world.'
>
> Best wishes,
>
> Carmine
>
> -----Original Message-----
> From: Andrew Dickinson [mailto:andrew.dickinson@sydney.edu.au]
> Sent: 04 November 2011 9:37 AM
> To: GP McMeel
> Cc: Jason Neyers; obligations@uwo.ca
> Subject: RE: Contract Interpretation
>
> I owe Gerard the courtesy of spelling his name correctly, and resubmit the
> message below:
>
> ***
>
> Gerard's last point is highlighted by Thorpe LJ's (rather too frank)
> concurring judgment in Rainy Sky, making up the majority overturned by the
> SC:
>
> "I find myself in the invidious position of expressing a decisive opinion in
> a field that is completely foreign. With considerable trepidation I support
> the judgment of Patten LJ. I found that Mr Philipps' submissions had turned
> me from my preliminary position that Simon J was right for the reasons he
> gave. I would allow the appeal for the reasons stated by Patten LJ."
>
> That's all folks.
>
> Kind regards
> Andrew
>
> -----Original Message-----
> From: GP McMeel [mailto:Gerard.McMeel@bristol.ac.uk]
> Sent: 03 November 2011 11:46
> To: David McLauchlan
> Cc: Jason Neyers; obligations@uwo.ca
> Subject: RE: Contract Interpretation
>
> The news from England and Wales is better. The unanimous and relatively
> predictable decision of the UK Supreme Court in Rainy Sky S.A v Kookmin
> Bank [2011] UKSC 50 (introduced by Jason below) to reverse the decision of
> the Court of Appeal re-affirms a commitment to a more more commercial and
> common sense approach, rejecting the more literal (and distinctly
> uncommercial) approach of the majority of the Court of Appeal.
>
> Ghosts of the past may linger in that in the lower courts the (former)
> Commercial Court judges (Simon J and Sir Simon Tuckey) favoured the more
> commercial approach, whereas the principal judge of the majority in the CA
> had sat in the Chancery Division (Patten LJ, with Thorpe LJ a former Family
> Division judge agreeing) favoured a stricter reading.
>
> Most usefully (at para [20]) Lord Clarke rejected Patten LJ's more
> traditional approach at [2010] EWCA Civ 582, para [42].
>
> Formally there is no difference between the legal and equitable approach in
> E & W (BCCI v Ali [2002] 1 AC 251), but one does not have to be a fully paid
> up legal realist to appreciate that the constitution of the court may affect
> the parties' entitlements.
>
> Gerard McMeel
>
> On Thu, November 3, 2011 8:45 am, David McLauchlan wrote:
>> Neil
>>
>>
>>
>> As a non-Australian, not surprisingly I am unaware of similar
> instances.
>> What is particularly alarming to me is that the High Court has refused
> to
>> take an ideal opportunity to clarify the most practically important
> area
>> of contract and commercial law. In a nutshell, the lower courts have
>> simply been instructed yet again - the same message was delivered a
> few
>> months earlier in Byrnes v Kendle [2011] HCA 26 - to follow Codelfa
> until
>> they are told otherwise. And, contrary to what is said in the leave
>> judgment, the appeal had considerable merit. Indeed, in my not
>> particularly respectful view, a substantial miscarriage of justice has
>> been done. I am not alone in this view. When I covered the NSWCA
> decision
>> in an LLM class in Sydney earlier this year, the students were shaking
>> their heads in astonishment. Not that everything is rosy with the more
>> enlightened UK ICS principles. There are signs in some recent English
>> cases of a retreat from those principles to an approach not all that
>> different from Codelfa! But that is another story. So too is the much
> more
>> liberal view of the NZ courts, particularly to receiving evidence of
> prior
>> negotiations and subsequent conduct. On the surface at least, the law
>> relating to the mundane task of contract interpretation is
> substantially
>> different in each of NZ, Australia and the UK. It should not be so
> hard.
>>
>>
>>
>> Regards
>>
>>
>>
>> David
>>
>>
>>
>>
>> David McLauchlan
>> Professor of Law
>> Victoria University of Wellington
>> ________________________________
>> From: Neil Foster [Neil.Foster@newcastle.edu.au]
>> Sent: Thursday, November 03, 2011 6:11 PM
>> To: David McLauchlan
>> Cc: Jason Neyers; obligations@uwo.ca
>> Subject: Re: Contract Interpretation
>>
>> Dear Colleagues;
>> I must say that the approach of the UKSC does seem to commend itself
> above
>> the approach summarised as still being binding in Australia by the
> High
>> Court. But I speak of that whereof I do not know, not being across
>> contract law.
>> What does puzzle me is probably trivial but seems odd- I have not
> before
>> seen a High Court of Australia decision refusing special leave to
> appeal
>> with its "own" medium neutral citation reference. In most cases a
> decision
>> of this sort would have appeared in the HCATrans series- indeed, now
> that
>> I look I see this one does as well: Western Export Services Inc & Ors
> v
>> Jireh International Pty Ltd [2011] HCATrans 297 (28 October 2011). So
> we
>> have the somewhat odd situation that there are two separate electronic
>> references to the same decision. (The HCATrans one contains the
> comments
>> of the court on argument, so one can see what was concerning their
>> Honours, one part of which seems to have been the suggestion that
> inferior
>> courts in Australia should follow decisions in the UK which were
> arguable
>> contrary to Codelfa.) It seems that the three members of this special
>> leave bench decided that this trend to "loose" reading of contractual
>> terms was such a potential problem that their decision here needed to
> be
>> brought to the professions' attention more clearly than an "ordinary"
>> refusal of special leave. Is anyone aware of other such examples of
>> special leave decisions being highlighted in this way?
>> From a precedential point of view, a special leave decision seems
> fairly
>> clearly not binding (even one that has been "elevated" in this way.)
> But
>> from a pragmatic perspective I suppose this means that anyone wanting
> to
>> argue that a more "commercially oriented" view of interpretation
> should be
>> adopted knows they will have some strong resistance from at least some
>> members of the High Court.
>> Regards
>> Neil
>>
>> On 03/11/2011, at 7:42 AM, David McLauchlan wrote:
>>
>> And for an interesting contrast in approaches, see the High Court of
>> Australia's refusal to grant leave to appeal from the appalling
> decision
>> of the NSWCA in Jireh International Pty Ltd v Western Export Services
> Inc
>> [2011] NSWCA 137:
> http://www.austlii.edu.au/au/cases/cth/HCA/2011/45.html
>>
>>
>>
>> The traditional "plain meaning" approach is alive and well in
> Australia.
>> The High Court has ruled that the NSWCA was correct when it held that
> a
>> court must give effect to "unambiguous" language "unless to do so
> would
>> give the contract an absurd operation". It is not enough that the
>> contract has an uncommercial or unbusinesslike operation. An article
>> discussing the NSWCA's decision and other recent developments in
> Australia
>> will shortly appear in the Journal of Contract Law.
>>
>>
>>
>> David
>>
>>
>>
>>
>> David McLauchlan
>> Professor of Law
>> Victoria University of Wellington
>> ________________________________
>> From: Jason Neyers [jneyers@uwo.ca]
>> Sent: Thursday, November 03, 2011 6:52 AM
>> To: obligations@uwo.ca<mailto:obligations@uwo.ca>
>> Subject: ODG: Contract Interpretation
>>
>> Dear Colleagues:
>>
>> Those interested in contractual interpretation will be interested in
> Rainy
>> Sky S.A and others (Appellants) v Kookmin Bank
>>
> (http://www.supremecourt.gov.uk/docs/UKSC_2010_0127_Judgment.pdf)<http:/
> /www.supremecourt.gov.uk/docs/UKSC_2010_0127_Judgment.pdf>
>> which deals with the question (or so I am told) of whether when it
> comes
>> to the interpretation of express terms one should use old fashioned
>> literalism, contextualism, or common sense.
>>
>> Happy Reading,
>> <http://www.supremecourt.gov.uk/docs/UKSC_2010_0127_Judgment.pdf>
>>
>> --
>> Jason Neyers
>> Associate Professor of Law
>> Faculty of Law
>> University of Western Ontario
>> N6A 3K7
>> (519) 661-2111 x. 88435
>>
>> Neil Foster
>> Senior Lecturer
>> Newcastle Law School Faculty of Business & Law MC158, McMullin
>> Building University of Newcastle Callaghan NSW 2308 AUSTRALIA ph 02
>> 4921 7430 fax 02 4921 6931
>> http://www.newcastle.edu.au/staff/profile/neil.foster.html
>> http://works.bepress.com/neil_foster/
>>
>>
>>
>>
>>
>>
>>
>
>
> --
>
>
>
>


--
Best wishes

Gerard Sadlier