Submission 037 - Attachment - Stewart - Australian Law of Contract - Journal of Contract Law 29 2012 - 31 July 2012

Electronic copy available at: http://ssrn.
com/abstract=2121101

University of Adelaide Law School
University of Adelaide Law School Research Paper No. 2012-15

Electronic copy available at: http://ssrn.com/abstract=2121101
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Whats Wrong with the Australian
Law of Contract?
Andrew Stewart
*
The Australian Government is in the process of reviewing the law of contract,
with codication being one option under consideration. This article explains
the background to the review and considers the case for codication. Two
major problems are identied with the current law: inconsistent or
overlapping statutory regulation, both between and within the various
jurisdictions; and the inability or unwillingness of the judiciary (especially the
High Court) to resolve uncertainty on issues such as the evidence
admissible for the interpretation of contracts and the recognition of a general
duty of good faith and fair dealing. Some observations are offered on what
form any new code might take, and who should be drafting it.
On 10 June 2011 a story appeared in the Legal Affairs section of the
Australian Financial Review, headed National Contract Law Well
Received. It revealed a federal government plan to introduce a national set
of laws governing contracts, to clarify discrepancies between the states and
make it easier to do business across borders. The then Attorney-General,
Robert McClelland, was quoted as saying that the idea had been raised at a
business roundtable, and that he hoped to circulate a draft contractual code
which would be bedded down by mid-2012. This might be enacted in a
government-controlled jurisdiction such as Jervis Bay, either for adoption by
the States or, failing that, by parties as the law governing their agreement.
Although conceding that contract law was not by any means broken, the
Attorney did see it as tremendously complex and suggested that there was
some merit in drawing it together. He specically referenced the moves
already made to update Australias laws on international arbitration,
1
as well
as overseas examples such as the US Uniform Commercial Code and the
Principles of International Commercial Law promulgated by the International
Institute for the Unication of Private Law (UNIDROIT).
2
He commented
that Australias increasing engagement with the global economy made this the
right time to be looking at a national contract law: the easier we make it to
do business with Australia and Australian businesses, the better it is for the
long-term prospects of the country.
This was a distinctly odd way to announce so important an initiative and
the suggested timetable for reform was ambitious, to put it mildly. That wiser
* John Bray Professor of Law, University of Adelaide; Consultant, Piper Alderman. This
article is a revised version of a paper originally presented at the Advanced Contract Law
Conference organised by the Law Society of South Australia and the Adelaide Law School
in November 2011.
1 See the International Arbitration Amendment Act 2010 (Cth), giving effect to the
UNCITRAL Model Law on International Commercial Arbitration.
2 The UNIDROIT Principles were rst published in 1994, then updated in 2004 and 2010. The
current version is available online at http://www.unidroit.org/english/principles/contracts/
main.htm, or in book form: see UNIDROIT Principles of Commercial Law 2010,
UNIDROIT, Rome, 2010.
74
Electronic copy available at: http://ssrn.com/abstract=2121101
counsel has now prevailed inside the federal government is evident from the
release, in March 2012, of a discussion paper that is far more neutral in tone.
3
It does not propose codication, but simply calls for submissions on any
costs, difficulties, inefficiencies or lost opportunities experienced with the
present law of contract, and on how (if at all) the law might be reformed to
address those problems. The declared purpose is to stimulate discussion
among businesses, legal practitioners, academics and other stakeholders about
whether Australian law is t for its purpose and prepared for the challenges of
the future.
4
Although the government has plainly backed away from any commitment
to codify Australian contract law, it remains useful to consider the case for
moving in that direction. After all, contract law codes are hardly unknown
around the world. Contract law is a standard inclusion in the Civil Codes
found throughout continental Europe, as well as Japan, while China adopted
a single Contract Law in 1999. On the other hand, it has generally been a
different story in the common law countries. This is despite the example set
by the United States, which besides the Uniform Commercial Code has the
American Law Institutes inuential (if not strictly binding) Restatement of
the Law of Contracts, the second edition of which was released in 1979. In the
UK, the English and Scottish Law Commissions devoted several years in the
1960s and 1970s to the codication of contract law, but eventually abandoned
the project despite producing a detailed draft Code that was only published
many years later.
5
It remains to be seen whether the European Commissions
recent proposal for a Common European Sales Law fares any better.
6
Where the Law Commission draft ran to over 500 sections, the authors of
what remains to date the only Australian equivalent went to the opposite
extreme with the emphasis on extreme. The Australian Contract Code
published in 1992 by the Victorian Law Reform Commission comprised just
27 short articles.
7
According to the authors, academics Fred Ellinghaus and
Ted Wright, the high level of generality of their chosen propositions was
justied by the central role played by a single concept that of
unconscionability.
8
Many existing doctrines and principles were expressed by
reference to this term. For instance, the entire law on termination for breach
or repudiation was encapsulated as follows:
12. A party may be excused from performance of a contract to the extent that it
would be unconscionable for the other to insist on it.
13. It may be unconscionable for a party to insist on performance if
13.1 that party has breached the contract . . .
3 Improving Australias Law and Justice Framework: A Discussion Paper to Explore the
Scope for Reforming Australian Contract Law, Attorney-Generals Department, Canberra,
2012.
4 Above, n 3, p 2.
5 See S M Waddams, Codication, Law Reform and Judicial Development (1996) 9 JCL
192.
6 See European Commission Proposes an Optional Common European Sales Law to Boost
Trade and Expand Consumer Choice, press release, Brussels, 11 October 2011. The text of
the proposed Law can be found at
http://ec.europa.eu/justice/contract/les/common_sales_law/regulation_sales_law_en.pdf.
7 An Australian Contract Code, Discussion Paper No 27, VLRC, Melbourne, 1992.
8 Above, n 7, p 6.
Whats Wrong with the Australian Law of Contract? 75
Article 27 also stipulated as an overriding principle that Aperson may not
assert a right or deny an obligation to the extent that it would be
unconscionable to do so. Unconscionability was apparently to be judged by
reference both to the values of the wider community and to the accepted
morality of the particular environment in which it occurs.
9
The authors contention was that the apparent certainty produced by
detailed rules was a delusion, given the tendency of courts to interpret, apply
and modify those rules by open reference to what is fair, reasonable, just or
equitable, or conforms with good faith or conscience, in the particular case.
10
A general principle of the type expressed in Art 27 would not, they argued,
entail the substitution of palm-tree justice for the rule of law.
11
Rather, it
would remove the veil of complexity and abstraction which traditional
doctrine places over the process of applying contract law, thereby increasing
certainty, not diminishing it.
12
There would be few practitioners, I suspect, who would agree that courts
invariably (as opposed to sometimes) resolve contractual disputes by
reference to the dictates of conscience, rather than by endeavouring to apply
what they regard as the relevant set of rules. At any event, it was scarcely
realistic that either the business community or the lawyers that advise them
would have been prepared to take the leap of faith required by so radical a
reworking of the law. It is true that we should never overestimate the
importance of the law of contract. As various empirical studies have shown,
it is largely irrelevant in practice to the way in which many people and
organisations conduct their affairs. Contractual disputes are far more likely to
be resolved by reference to matters of trust, reputation, pressing need, cost or
convenience, than according to the strict letter of the law.
13
But nor by the
same token should we underestimate its signicance to the planning and
drafting of transactions, especially those involving substantial sums of money.
It is hard to imagine parties involved in a major resource project, property
development or nancial transaction feeling very condent about applying an
entire law of contract barely longer than a set of recitals and a fraction of
the size of their own written contracts.
14
In the end, it was no surprise to see
the VLRC proposal sink without a trace.
15
For a codication project to succeed, it clearly needs not just to garner
political support, but preferably also to persuade those who will ultimately use
it and advise on it that codication is necessary, and that the resulting
instrument will be framed in a way that as far as possible facilitates rather than
9 Above, n 7, p 9.
10 Above, n 7, p 10.
11 Above, n 7, pp 78.
12 Above, n 7, pp 1011.
13 See eg the studies cited in J Gava, Can Contract Law be Justied on Economic Grounds?
(2006) 25 University of Queensland Law Journal 253 at 2545.
14 This is not to defend the use of unnecessary (or unnecessarily prolix) boilerplate terms in
commercial contracts, which often cause more problems than they solve.
15 This has not stopped the authors from seeking to convince sceptics of the soundness of their
approach: see M P Ellinghaus, E W Wright and M Karras, Models of Contract Law: An
Empirical Evaluation of Their Utility, Themis Press, Sydney, 2005; and see also the research
project summarised at http://www.newcastle.edu.au/school/law/research/global-law-of-
contract/.
76 (2012) 29 Journal of Contract Law
hinders the conduct of commerce. This is not to say that we should rewrite
every rule of contract law to suit business. As John Gava has cogently
argued, that is neither necessary nor desirable. Business people, as he points
out, tend to make use of contract law as a form of insurance, or as a last
resort mechanism when their preferred tools for resolving disputes are not
available. From that perspective, law is attractive only because of its
formalist nature, not because of the specic nature or usefulness of particular
doctrines.
16
Given the value likely to be attached to the maintenance of
established rules, we might draw the conclusion that a codied law of contract
is more likely to be a viable proposition if it is largely consistent with, though
still an improvement upon, the existing regime.
What that might imply for the type of code to be developed is a question to
which I will return. But for now, I wish to offer some preliminary thoughts on
the need for a code in the rst place. In answering the question posed by the
title what is wrong with the Australian law of contract? I will rst of all
make some observations about the patchwork framework of legislation that
governs contracting in Australia. I will then go on to examine some
deciencies in the common law of contract, focusing on the inability or
unwillingness of the High Court to play what might be thought to be its proper
and natural role as a clarier of uncertainty. Finally, I will consider what form
a new code might take and who should be drafting it.
A Statutory Patchwork
There are few, if any, types of contract today that are not regulated by statute.
In many cases, the regulation is extensive, as with the sale of goods,
17
employment,
18
insurance,
19
consumer credit,
20
bills of exchange,
21
and both
residential and retail leasing.
22
But even where there is no general statutory
scheme, as remains the case for most type of agreements for the provision of
services, it is hard to escape parliamentary attention in one form or other. In
particular, any transaction entered into in trade or commerce will be subject
to some of the general rules laid down by what is now the Australian
Consumer Law (ACL),
23
notably the proscription in s 18 on misleading or
deceptive conduct.
In recent years there has been a notable shift to national or at least
harmonised regulation, especially under the aegis of the Council of Australian
Governments (COAG). This has reduced the extent to which different rules
apply in different jurisdictions. Besides some of the examples given above,
such as employment and consumer credit, the ACL has given us at least
broadly consistent laws on consumer protection. There are also national
16 Can Contract Law be Justied on Economic Grounds?, above n 13, at 264.
17 See eg Sale of Goods Act 1895 (SA); Sale of Goods (Vienna Convention) Act 1986 (SA).
18 See eg Fair Work Act 2009 (Cth).
19 See eg Insurance Contracts Act 1984 (Cth).
20 See eg National Consumer Credit Protection Act 2009 (Cth).
21 See Bills of Exchange Act 1909 (Cth).
22 See eg Residential Tenancies Act 1995 (SA); Retail and Commercial Leases Act 1995 (SA).
23 See Competition and Consumer Act 2010 (Cth) Sch 2. The ACL is extended by State
legislation to persons not otherwise subject to the federal statute: see eg Fair Trading Act
1987 (SA) Pt 3.
schemes as to the enforceability of agreements to resolve commercial disputes
by arbitration,
24
as well as the treatment of electronic communications and
processes.
25
Nevertheless, important differences between jurisdictions remain. This is
not just a matter of inconsistent regulation of particular types of agreement,
such as building contracts or (domestic) contracts for the sale of goods. Each
State and Territory has a statute that is nominally concerned with property or
conveyancing, but which in fact contains important provisions that apply to all
types of contract, on matters such as the assignment of rights, the effect of a
time stipulation, and so on.
26
Most of these provisions are similar across
jurisdictions, but by no means all. The most dramatic exceptions are the
provisions in Queensland, Western Australia and the Northern Territory that
create signicant exceptions to the common law principle of privity of
contract, in favour of third party beneciaries.
27
The enforceability of
agreements entered into by minors is another area of general signicance in
which uniformity is utterly lacking, with only New South Wales enacting
comprehensive legislation
28
and other jurisdictions relying on a varying
mixture of common law and limited statutory provisions.
29
Even where there has been an attempt to harmonise, this has not necessarily
ended the problems. The ACL is the perfect example. While plainly an
improvement on the previous mix of federal, State and Territory consumer
laws,
30
the drafting of some of its key provisions leaves much to be desired.
As John Carter has forcefully pointed out, the term consumer continues to be
used or dened in many different ways throughout the ACL, and often
confusingly and/or counter-intuitively.
31
As for the provisions in ss 2022
concerning unconscionable conduct in relation to the commercial supply of
goods or services, they remain, as Dan Svantesson has observed, useful
examples of Australian legal drafting at its worst.
32
Running to over 2000
words between them, their scope and effect remains uncertain at best.
Recently passed amendments tinker with the drafting, but clarify very little.
33
The key problem with the ACL, drafting issues aside, is that it is not truly
an Australian Consumer Law. It is a measure that largely seeks to protect
consumers in their dealings with businesses, but that includes generally
worded provisions that have come to regulate dealings between businesses,
whether through contested interpretations,
34
or incremental amendments.
35
24 See eg Commercial Arbitration Act 2011 (SA); International Arbitration Act 1974 (Cth).
25 See eg Electronic Transactions Act 1999 (Cth); Electronic Transactions Act 2000 (SA).
26 See eg Law of Property Act 1936 (SA).
27 See Property Law Act 1974 (Qld) s 55; Property Law Act 1969 (WA) s 11; Law of Property
Act 2000 (NT) s 56; and see eg Jaddcal Pty Ltd v Minson (No 3) [2011] WASC 362.
28 See Minors (Property and Contracts) Act 1970 (NSW).
29 See eg Minors Contracts (Miscellaneous Provisions) Act 1979 (SA).
30 See Productivity Commission, Review of Australias Consumer Policy Framework, Inquiry
Report No 45, 2008.
31 The Commercial Side of Australian Consumer Protection Law (2010) 26 JCL 221.
32 Codifying Australias Contract Law Time for a Stocktake in the Common Law Factory
(2008) 20 Bond Law Review 92 at 113.
33 See Competition and Consumer Legislation Amendment Act 2011 (Cth) Sch 2.
34 Notably Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre
Ltd (1978) 140 CLR 216, where the High Court refused to conne the generality of what
This is likely to create difficulties in determining the scope of any Contract
Code, as will be discussed later.
The Common Law of Contract and the Quest for
Guidance
Despite the inroads made by legislation, the common law remains an
important source of contract law. Even where particular types of agreement
are heavily regulated by statutes (or statutory instruments), gaps often remain
to be lled by judge-made law.
36
Furthermore, common law principles and
values continue to be important in shaping the interpretation of legislation.
37
The High Court has insisted in recent years that there is a single common
law of Australia.
38
Indeed it has suggested that each intermediate court of
appeal should generally follow any other such courts rulings on the common
law, unless persuaded the other courts view is plainly wrong.
39
As it happens,
it is hard to think of recent examples in which there has been a clear division
of opinion between jurisdictions on a matter of general contract law. If
anything, the divisions have tended to be between different judges, both
beyond and within a single jurisdiction as the discussion below of the issue
of good faith and fair dealing reveals.
To anyone raised on the common law method, there is nothing surprising or
especially perturbing about judges disagreeing on the formulation or
application of legal principles. Indeed we can accept that at any point there
will be unresolved issues, most obviously because the right case has not yet
arisen to test out a particular proposition. Two issues that bear upon electronic
forms of contracting provide examples: the question of whether an emailed
acceptance takes effect on despatch or receipt;
40
and the far more fundamental
(and practically important) issue of whether clicking I agree on a website
represents assent to a set of terms presented on that site, without further
inquiry into whether reasonable notice has been given.
41
Nevertheless, it remains important that some mechanism be available for
resolving differences. At least in the absence of a general code, we cannot
was then s 52 of the Trade Practices Act 1974 (Cth) now s 18 of the ACL by reference
to its inclusion in a set of provisions headed Consumer Protection.
35 See especially the introduction in 1998 of what was originally conceived as a provision
dealing only with unconscionability in small business transactions, s 51AC of the Trade
Practices Act 1974, though the monetary cap placed on its application was set at a
whopping $3 million. Under the current provision, s 21 of the ACL, the only bar is on
complaints involving a listed public company as consumer or client.
36 As in the case of employment contracts, for example: see B Creighton and A Stewart,
Labour Law, 5th ed, Federation Press, Sydney, 2010, pp 2369.
37 For an interesting example, see P Gillies, Non-Disclosure: Trade Practices Act, s 52 (2004)
78 ALJ 653; and see further A Stewart and L McClurg, Playing Your Cards Right:
Obligations of Disclosure in Commercial Negotiations [2007] AMPLA Yearbook 36.
38 See eg Lipohar v R (1999) 200 CLR 485 at [43][59]; PGA v R [2012] HCA 21 at [25].
39 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [135].
40 See E Mik, The Effectiveness of Acceptances Communicated by Electronic Means, or
Does the Postal Acceptance Rule Apply to Email? (2009) 26 JCL 68.
41 See E Macdonald, Incorporation of Standard Terms in Website Contracting Clicking I
Agree (2011) 27 JCL 198. Cf eBay International AG v Creative Festival Entertainment Pty
Ltd (2006) 170 FCR 450, where the issue was subjected to cursory and inconsistent analysis.
reasonably expect the time and attention of our parliaments to be devoted to
resolving what many in the community would regard as minor points of law.
So in a common law regime, much depends on the willingness and ability of
the judges who sit at the apex of the court system to do what they can to clarify
uncertainties and resolve differences of opinion. As Justice (and formerly
Professor) Paul Finn notes, it is unreasonable and unrealistic to expect the
High Court systematically to renovate Australian contract law. Yet at the
same time, he argues, it is reasonable to expect the Court, when suitable
opportunities are presented, to rise above the making of mere doctrinal
adjustments and to provide appropriate bearings for our contract law in the
modern world.
42
Opinions will legitimately differ on just how creative judges
can or should be in performing that role. But at the very least, we would surely
want the group of jurists funded by the public to sit in judgment on all other
courts to use that position to issue rulings that improve the clarity and
consistency of the law they are administering. That need not involve going out
of their way to nd excuses to formulate new doctrine. But when the chance
is there to put an issue to rest, they should do so.
Sadly, however, this is an area in which our highest court has been found
wanting in recent years, at least in relation to the law of contract. The problem
is one that John Carter and I have previously highlighted in two studies of the
High Courts contracts jurisprudence. The original article was written in 1993
and surveyed the preceding 30 years, effectively spanning the Barwick, Gibbs
and Mason courts.
43
Its follow-up considered the ensuing decade, under the
stewardship of Chief Justices Brennan and Gleeson.
44
The rst piece generally
applauded the courts willingness after 1982 to develop a distinctively
Australian law of contract after many years of deference to the English courts.
Even so, we remarked that there was room for criticism both as to the extent
to which [the Court] has chosen not to deal fully or nally with various issues,
and as to its frequent failure to speak with one voice.
45
We noted in particular
the courts tendency in certain instances to raise doubts about established
doctrine, but either to fail to indicate the full extent of its desire to change the
law, or to adopt a new principle but refuse to give at least a workable outline
of it.
46
By our second article, that concern had deepened:
[T]here continues to be no lack of examples of the court frustrating consumers of
its judgments by (a) refusing to take opportunities squarely presented to it to resolve
42 Internationalisation or Isolation: The Australian cul de sac? The Case of Contract Law in
eds E Bant and M Harding, Exploring Private Law, Cambridge University Press,
Cambridge, 2010, p 41 at p 64.
43 J W Carter and A Stewart, Commerce and Conscience: The High Courts Developing View
of Contract (1993) 23 University of Western Australia Law Review 49.
44 A Stewart and J W Carter, The High Court and Contract Law in the New Millennium
(2003) 6 Flinders Journal of Law Reform 185.
45 Commerce and Conscience, above n 43 at 70.
46 Above, n 43 at 71, instancing in particular Trident General Insurance Co Ltd v McNiece
Bros Pty Ltd (1988) 165 CLR 107, where members of the court indicated a willingness to
create a much broader exception to the privity doctrine than the limited one recognised for
insurance contracts; and Taylor v Johnson (1983) 151 CLR 422, where the court refused to
elaborate on the breadth of the jurisdiction it was recognising to set aside contracts for
unilateral mistake.
a longstanding issue of concern; or (b) saying just enough on a particular point to
call established principles into question, without going on to take a denitive
stance.
47
It is clear, looking back, that since 1995 there has been a distinct change in
the High Courts approach to the identication and resolution of legal
controversies. As Finn observes, where the Mason court had openly
acknowledged policy considerations and embraced a species of legal
realism,
48
the following era has featured a largely untheorised form of
legalism.
49
The hallmarks of this approach have been:
50
(i) a marked preoccupation with doctrine and close doctrinal analysis not overtly
inuenced by policy considerations; (ii) a corresponding retreat from open
consideration of values . . . (iii) a varying but diminished regard for
consequentialist considerations in shaping doctrine; and (iv) affording greater
weight to precedent . . .
[T]he renewed emphasis upon doctrine has not precluded innovation. But given
innovation is [now] rooted in doctrine, it has a particular orientation which is
contrived by doctrinal analysis. The perceived potential of individual doctrines
themselves provides the impetus to development. Gone are the imperatives of
inspiring ideas: popular sovereignty, good administration, fairness, unjust
enrichment and the like. To the extent that policy informs judicial reasoning, it is
left unspoken.
All that is true. And yet, from my perspective, it is not the most important
feature of the approach that has prevailed for the past 16 years. Judicial
creativity will always have both its proponents and its detractors. But judicial
clarity would surely be universally welcomed. Set against that standard, the
High Court has frequently disappointed, by confusing rather than clarifying,
negating rather than affirming. Take, for instance, its last two decisions on the
doctrine of restraint of trade, in which it carefully explained which principles
for determining the scope of the doctrine were incorrect, but refused to reveal
what principles it thought should be used.
51
Or the unnecessary questioning of
the well-established presumptions as to intention to create legal relations,
52
or
of the reasonable expectation test for determining whether a non-disclosure
47 The High Court and Contract Law in the New Millennium, above n 44 at 213. As an
example of the latter tendency, see Concut Pty Ltd v Worrell (2000) 75 ALJR 312. In that
case Gleeson CJ, Gaudron and Gummow JJ rejected the generally accepted view of the
House of Lords decision in Bell v Lever Bros Ltd [1932] AC 161, but hinted that the
proposition for which it had been thought to stand that an employee is under no implied
contractual duty to disclose their own misconduct might still rest on a duciary analysis.
This was in a case where, on the courts view of the facts, the point did not actually arise.
48 Internationalisation or Isolation, above, n 42, p 45.
49 Above, n 42, p 46, quoting R Gray, The Constitutional Jurisprudence and Judicial Method
of the High Court of Australia: The Dixon, Mason and Gleeson Eras, Presidian Legal
Publications, Adelaide, 2008, p 78.
51 See Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; Maggbury Pty Ltd v Hafele
Australia Pty Ltd (2001) 210 CLR 181.
52 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at 106. For an
unsuccessful attempt by a trial judge to acknowledge the High Courts caution about
presumptions and then effectively ignore it, see Evans v Secretary, Department of Families,
Housing, Community Services and Indigenous Affairs [2012] FCAFC 81.
of information can be considered misleading or deceptive.
53
Or the now
lengthy line of confusing and irreconcilable decisions on the assessment of
compensation for misleading or deceptive conduct.
54
Without question though, the High Court has been at its worst in dealing
with one of the most fundamental issues in modern commercial law the
evidence that may be admitted to determine the meaning of terms in a written
contract. In one respect, to be fair, the law has been claried. The courts
observations in Agricultural and Rural Finance Pty Ltd v Gardiner
55
have
removed any doubt about the inadmissibility (at least for the purpose of
construction) of the parties conduct after making the contract,
56
much as
some might like to argue that it is frequently the best evidence available as to
their intentions.
57
But it has been a different matter with the question of
evidence as to the factual matrix.
The problems can be traced to the judgment of Mason J in Codelfa
Construction Pty Ltd v State Rail Authority of NSW.
58
Having supported the
general idea of interpreting written contracts by reference to their factual
context, his Honour rather confusingly went on to express the true rule as
being that evidence of surrounding circumstances is admissible to assist in
the interpretation of the contract if the language is ambiguous or susceptible
to more than one meaning. But it is not admissible to contradict the language
of the contract when it has a plain meaning.
59
Since then, the High Court has
generally adopted an approach at odds with that restrictive view. Most of the
courts pronouncements have been consistent with (and indeed have often
quoted) the broad and contextual view taken by Lord Hoffmann in Investors
Compensation Scheme Ltd v West Bromwich Building Society.
60
To take just
one example, in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd
61
the court said
this:
The meaning of the terms of a contractual document is to be determined by what a
reasonable person would have understood them to mean. That, normally, requires
53 See Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010)
241 CLR 357. French CJ and Kiefel J cautioned (at [19]) that the language of reasonable
expectation is not statutory, while Heydon, Crennan and Bell JJ pointedly avoided any
reference to the test established in cases such as Demagogue Pty Ltd v Ramensky (1992) 39
FCR 31. Their observations were noted in Clifford v Vegas Enterprises Pty Ltd [2011]
FCAFC 135 by the Full Federal Court which then went on to apply the test anyway.
54 See eg Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; Murphy v Overton
Investments Pty Ltd (2004) 216 CLR 388; HTW Valuers (Central Qld) Pty Ltd v Astonland
Pty Ltd (2004) 217 CLR 640; and see generally D Wright, Remedies, Federation Press,
Sydney, 2010, pp 24871.
55 (2008) 238 CLR 570 at [35].
56 See Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603 at [10][13],
[330][332]. As to the admissibility of subsequent conduct evidence for other purposes, see
eg Lym International Pty Ltd v Marcolongo [2011] NSWCA 303.
57 See eg D McLauchlan, Contract Interpretation: What is it About? (2009) 31 Syd LR 5.
58 (1982) 149 CLR 337.
59 (1982) 149 CLR 337 at 352. The judge himself later admitted that his judgment was
imperfectly expressed: Sir A Mason, Opening Address (2009) 25 JCL 1 at 3.
60 [1998] 1 WLR 896 at 9123.
61 (2004) 219 CLR 165 at [40] (emphasis added). See also the other authorities collected and
analysed by Campbell JA in Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR
603 at [274][276], [286][297].
consideration not only of the text, but also of the surrounding circumstances known
to the parties, and the purpose and object of the transaction.
If it is normal to have regard to surrounding circumstances, then it would
seem to follow inexorably that it is no longer necessary to decide rst that the
document in question is ambiguous, before any evidence can be admitted as
to those circumstances.
62
So much has been the conclusion of both the Full
Federal Court and the New South Wales Court of Appeal, after the most
careful review of the authorities.
63
Yet astonishingly, judges of the High Court
have three times now suggested that the true rule in Codelfa is still to be
followed without once bothering to explain how that rule can be
reconciled with their other decisions.
In 2002, in Royal Botanic Gardens and Domain Trust v South Sydney City
Council,
64
Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ stated that
if anyone was inclined to discern any inconsistency between the approaches
taken by Mason J and Lord Hoffmann, they should continue to follow
Codelfa. But they did not explain what the inconsistency might be, or whether
it even existed. At least outside South Australia,
65
later decisions such as Toll
were regarded as resolving any difficulty. Yet twice in 2011 lower courts were
rebuked for treating Codelfa as having been overruled: rst by Heydon and
Crennan JJ in a footnote to their judgment in Byrnes v Kendle;
66
and then
more explicitly by Gummow, Heydon and Bell JJ in Western Export Services
Inc v Jireh International Pty Ltd.
67
In this latter decision leave to appeal was
refused against a decision by the New South Wales Court of Appeal that was
regarded as correctly interpreting a contract. Yet their Honours went out of
their way to criticise the Court of Appeal for applying the view that it was no
longer essential to identify ambiguity before the court may have regard to the
surrounding circumstances and object of the transactions.
68
Until the High
Court itself disapproved or revised what had been said in Codelfa, lower
courts should continue to follow that precedent. The binding status of Codelfa
had been made clear in Royal Botanic and, the three judges added tartly, it
should not have been necessary to reiterate the point here.
69
Crucially, they
added, they did not read anything said in decisions such as Toll as operating
inconsistently with what had been said by Mason J. And that was that.
The problems with this approach should be obvious. Once again, no attempt
was made to explain just how the true rule in Codelfa is to be reconciled with
the normal approach expressed in Toll and many other decisions besides.
70
62 It has been accepted that the circumstances in question must be reasonably known to both
parties: see eg QBE Insurance Australia Ltd v Vasic [2010] NSWCA 166.
63 See Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1 at [46], [100],
[238]; Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603. A similar view has
been adopted in Western Australia: see Oswal v Yara Australia Pty Ltd [2011] WASC 255
at [163][165].
64 (2002) 240 CLR 45 at [39].
65 See eg Quirke v Interstate Transport Services Pty Ltd (2005) 92 SASR 249; Symbion
Medical Centre Operations Pty Ltd v Thomco (No 2113) Pty Ltd (2009) 103 SASR 354.
66 (2011) 243 CLR 253 at [99], n 135.
67 (2011) 86 ALJR 1.
68 (2011) 86 ALJR 1 at [2].
69 (2011) 86 ALJR 1 at [4].
70 See McCourt v Cranston [2012] WASCA60 at [20] [26]; D Wong and B Michael, Western
Lower courts, and indeed practitioners, are apparently expected to guess the
answer. It is almost as if the High Court regards this as a private joke that need
not be shared. Such an attitude is disrespectful to the many judges that have
done their best to reconcile the High Courts conicting decisions and dicta.
And it is an abrogation of the courts responsibility to act as a custodian of the
common law.
71
Afurther example of the common law failing to resolve a fundamental point
of principle has concerned the suggestion, famously aired in 1992 by
Priestley JA,
72
that the time has come for Australian courts to fall into line
with many other legal systems and recognise the existence in all contracts of
a duty upon the parties of good faith and fair dealing in its performance. The
last two decades have seen a welter of academic commentary on this issue,
with an entirely predictable lack of consensus.
73
Yet for a time, it seemed the
point had been settled, at least in the State in which so much of Australias
commercial litigation takes place. On two occasions, in 1997 and 2001, the
New South Wales Court of Appeal endorsed the proposition that a term
imposing such a duty should be implied by law, either into all contracts, or at
least all commercial contracts.
74
By 2004, however, the court was beginning to have doubts. In Vodafone
Pacic Ltd v Mobile Innovations Ltd
75
Giles JA, speaking for Sheller and
Ipp JJA, rejected the view, cogently advanced by Elisabeth Peden,
76
that good
faith is a principle that informs the construction of contractual provisions,
rather than resting on a separate implied term. But at the same time he shied
away from the concept that a term requiring good faith and fair dealing should
be implied into all commercial contracts, referring to the width and
indeterminancy of such a class.
77
The following year, the Victorian Court of
Appeal went further. In Esso Australia Resources Pty Ltd v Southern Pacic
Export Services v Jireh International: Ambiguity as the Gateway to Surrounding
Circumstances? (2012) 86 ALJ 57; D McLauchlan and M Lees, Construction Controversy
(2011) 28 JCL 101.
71 An indication of the confusion generated by the High Court can be gleaned from Craig
Hargraves Investments Pty Ltd v Australian Business Insurance Advisors Pty Ltd (2011) 111
SASR 506 at [46], where Lord Hoffmanns judgment in Investors Compensation Scheme
was still being treated as an authoritative restatement of the contemporary approach to
interpretation. Both Toll and Byrnes v Kendle were cited, but no mention was made of
Western Export Services.
72 Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 at
268.
73 For a survey of some (though by no means all) of the literature, see H Munro, The Good
Faith Controversy in Australian Commercial Law: A Survey of the Spectrum of Academic
Legal Opinion (2009) 28 University of Queensland Law Journal 167.
74 Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 at 3689; Burger King Corp v
Hungry Jacks Pty Ltd (2001) 69 NSWLR 558. For recognition in other jurisdictions, see eg
Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 at 192;
Far Horizons Pty Ltd v McDonalds Australia Ltd [2000] VSC 310 at [120]; but cf Service
Station Association Ltd v Berg Bennett & Associates Pty Ltd (1993) 45 FCR 84 at 918.
75 [2004] NSWCA 15 at [204][207].
76 See eg E Peden, Good Faith in the Performance of Contracts, Butterworths, Sydney, 2003;
and see also J W Carter, E Peden and G J Tolhurst, Contract Law in Australia, 5th ed,
LexisNexis, Sydney, 2007, ch 2.
77 [2004] NSWCA 15 at [191].
Petroleum NL
78
Buchanan JA considered that at most it might be appropriate
to imply a term as a matter of fact rather than law,
79
and only where a duty of
good faith is truly necessary for the effective operation of the particular
contract. It might, he suggested, be appropriate to import such an obligation
to protect a vulnerable party from exploitive conduct which subverts the
original purpose for which the contract was made.
80
Both Warren CJ and
Osborn AJA concurred, with the former describing good faith as a nebulous
standard that threatened commercial certainty.
81
The judgments in Esso have plainly struck a chord with judges, both in New
South Wales and elsewhere, who are wary of the implications of a universally
applicable duty of good faith and fair dealing.
82
In CGU Workers
Compensation (NSW) Ltd v Garcia,
83
a case in which it rejected the notion of
tortious liability for bad faith administration of an insurance claim, a Court of
Appeal comprising Mason P, Hodgson and Santow JJAstressed that its earlier
decisions do not establish that such an implied term is to be inserted into
every contract or even into every aspect of a particular contract.
84
Despite
this, in United Group Rail Services Ltd v Rail Corp NSW
85
a differently
constituted Court of Appeal (Allsop P, Ipp and Macfarlane JJA) made no
mention of Garcia in reaffirming the proposition that good faith, in some
degree or to some extent, is part of the law of performance of contracts. Some
New South Wales judges have subsequently been content to toe that line.
86
But others continue to express doubts. For example, in Starlink International
Group Pty Ltd v Coles Supermarkets Australia Pty Ltd
87
Bergin CJ in Eq
omitted any reference to United Group Rail Services (or for that matter
Garcia) in reaffirming her disquiet about the implication of a duty of good
faith, citing her own previous decision in Insight Oceania Pty Ltd v Philips
Electronics Australia Ltd.
88
Over the past decade, therefore, the New South Wales courts have moved
from a position that was tolerably clear (if somewhat controversial), to one in
78 [2005] VSCA 228.
79 As to the distinction between terms implied in fact and in law, see Castlemaine Tooheys Ltd
v Carlton and United Breweries Ltd (1987) 10 NSWLR 468 at 48690; Byrne v Australian
Airlines Ltd (1995) 185 CLR 410 at 44752; and see further University of Western Australia
v Gray (2009) 179 FCR 346 at [135][147].
80 [2005] VSCA 228 at [25]. In Meridian Retail Pty Ltd v Australian Unity Retail Network
[2006] VSC 223 a franchise agreement was found to have these characteristics, though on
the facts it was found that any duty of good faith had not been breached.
81 [2005] VSCA 228 at [3].
82 See eg Maitland Main Collieries Pty Ltd v Xstrata Mt Owen Pty Ltd [2006] NSWSC 1235;
Tote Tasmania Pty Ltd v Garrott (2008) 17 Tas R 320 at [16]; Specialist Diagnostic Services
Pty Ltd v Healthscope Ltd [2010] VSC 443; Starlink International Group Pty Ltd v Coles
Supermarkets Australia Pty Ltd [2011] NSWSC 1154; Dura (Aust) Constructions Pty Ltd v
Hue Boutique Living Pty Ltd [2012] VSC 99.
83 (2007) 69 NSWLR 680.
84 (2007) 69 NSWLR 680 at [132].
85 (2009) 74 NSWLR 618 at [61]. The case itself concerned an express agreement to negotiate
in good faith as part of a dispute resolution procedure, which was held to be enforceable.
86 See eg AMC Commercial Cleaning v Coade [2011] NSWSC 932 at [123]; and see also
Alstom Ltd v Yogogawa Australia Pty Ltd (No 7) [2012] SASC at [595][598].
87 [2011] NSWSC 1154 at [18][33].
88 [2008] NSWSC 710 (affirmed in Philips Electronics Australia Ltd v Insight Oceania Pty Ltd
[2009] NSWCA 124 without reference to the issue of good faith).
which there are parallel and competing lines of authority. Now in practice, it
may be that the problem with determining whether there is a general duty of
good faith and fair dealing in the performance in contracts is more apparent
than real. For one thing, it is open to parties to exclude any such term, as the
court conrmed in Vodafone.
89
For another, it has been notable just how often
an implied duty of good faith has been assumed to exist then found on the
facts not to have been breached.
90
Either it is being argued in the wrong cases
or the bar for intervention is being set so high that the concept has little
practical application.
Nevertheless, it would clearly be preferable if the issue were resolved. If
nothing else, this would stop a great deal of time and effort being wasted in
commercial litigation especially in relation to the exercise of rights to
terminate agreements.
91
In Burger King Corp v Hungry Jacks Pty Ltd
92
it was
held that a franchisor could not terminate in responses to breaches by the
franchisee that it had effectively engineered. The fact that this conclusion was
justied by reference to a duty of good faith has led to suggestions that a
party to a contract should not pretend to rely upon breaches of no importance
to him or her to achieve a collateral but desired result of bringing the
contractual relationship to an end.
93
But other judges have been less
convinced about applying or extending the concept of good faith in this way.
For example in Trans Petroleum Australia Pty Ltd v White Gum Pty Ltd
94
Allanson J observed that the courts should be cautious about implying a term
which the parties have not agreed to in circumstances where the parties have
expressly provided for termination for cause, but have chosen to express the
term of the agreement as terminable on notice and without cause.
As John Carter and I have previously pointed out,
95
the idea that
termination rights must be exercised in good faith does not sit well with High
Court authorities as to the grounds on which decisions to terminate may be
constrained. Those authorities suggest that at most there is limited scope under
equitable doctrines to restrain unconscionable conduct.
96
It seems likely that
89 [2004] NSWCA 15. It was held that an implied duty to exercise a particular power in good
faith would not have been consistent with the express terms of the relevant contract. It was
also noted that the contract contained a whole of agreement clause that purported to
exclude any implied terms. See also Central Exchange Ltd v Anaconda Nickel Ltd (2002) 26
WAR 33.
90 A point noted in Esso [2005] VSCA 228 at [2]. For recent examples, see Cordon v Lesdor
[2010] NSWSC 1073; AMC Commercial Cleaning v Coade [2011] NSWSC 932.
91 The same can be said about litigation over employment contracts: see A Stewart, Good
Faith: ANecessary Element in Australian Employment Law? (2011) 32 Comparative Labor
Law & Policy Journal 521; and see eg Shaw v NSW [2012] NSWCA 102.
92 (2001) 69 NSWLR 558.
93 Mangrove Mountain Quarries Pty Ltd v Barlow [2007] NSWSC 492 at [28]; although on the
facts of the case it was found that the termination was justied.
94 [2011] WASC 150 at [53]. See also Solution 1 Pty Ltd v Optus Networks Pty Ltd [2010]
NSWSC 1060; Fuji Xerox Australia Pty Ltd v CSG Ltd [2010] NSWSC 1258; Starlink
International Group Pty Ltd v Coles Supermarkets Australia Pty Ltd [2011] NSWSC 1154.
95 J W Carter and A Stewart, Interpretation, Good Faith and the True Meaning of Contracts:
The Royal Botanic Decision (2002) 18 JCL 182 at 1945.
96 See eg Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315. See further E Peden,
When Common Law Trumps Equity: The Rise of Good Faith and Reasonableness and the
Demise of Unconscionability (2005) 21 JCL 226.
if an appropriate case came before the High Court, and the point were allowed
to be argued, any notion of obliging parties to commercial contracts to
exercise powers of termination in good faith would be swiftly quashed, and
the primacy of the equitable doctrines reaffirmed. But this assumes of course
that the High Court would be prepared to address the issue. In their only
opportunity to date, the Royal Botanic case in 2002, the court declined to
express an opinion.
97
Much of the current uncertainty may have been avoided
had it taken the opportunity to clear the air.
The Case for a Code But What Type?
The fragmented nature of the statutory regulation of contracts in Australia,
together with the uncertainties plaguing our common law (and the apparent
unwillingness of many current judges to resolve them), would certainly
suggest that a case can be made for some form of codication. This may
seem to many practitioners a very large and radical step to take. But it need
not be. According to John Cartwright, in a recent reection on the case for
reforming the English law of contract:
98
It might be said that codication is not the way forward because that is not the way
we do things in the common law. In the essential structure of the common law, the
development of the general principles of the law through the cases, with only
targeted correction by statutory intervention, is the way our private law works, and
codication of the law of contract would disturb the complex ecosystem that is the
English common law. On the other hand, it all depends on what you mean by
codication.
It does indeed. Cartwright notes that the 1925 property legislation that
created a set of modern rules for English land law could be considered an
exercise in codication, even though it still assumed a continuity with the
common law concepts of the past and was not a complete systematic
presentation of the law of the property.
99
The same could obviously be said
in Australia of the Insurance Contracts Act 1984 or, much earlier, the Sale of
Goods Acts.
On that basis, there is scope for various types of codication exercise that
fall short of a complete restatement of the law. One might be the creation of
a single but non-comprehensive statute to regulate a number of the more
important and common types of commercial transaction. This might start with
types of contract already subject to signicant statutory regulation, such as the
sale of goods (and possibly also land), retail leases, consumer credit, bills of
exchange, insurance and so on. New titles could progressively be added over
time to deal with other contracts. Besides the separate titles on different types
of contract, such a law could also include a number of universal provisions
designed to overcome uncertainties or deciencies in the general law of
contract, but otherwise leave the common law to ll in gaps, as it does at
present.
97 (2002) 240 CLR 45 at [40].
98 The English Law of Contract: Time for Review? (2009) 17 European Review of Private
Law 155 at 170.
99 Above, n 98.
A different (and perhaps more manageable) approach could involve a
two-pronged strategy. On the one hand, a series of harmonisation projects
could be added to the COAG agenda, with work to be undertaken on the
development of uniform laws on transactions currently subject to State and
Territory regulation: sale of goods, sale of land, retail leases, building
contracts, and so on. At the same time, and as a separate exercise, drafting
could begin of a General Contract Law (GCL) to replace State and Territory
provisions that bear on contracts generally, such as those noted earlier that
appear in property and conveyancing legislation. Again, this need not codify
the entire common law, yet it could still make selected improvements or
renements. The GCL could operate alongside the more specic statutory
regimes, being displaced only to the extent of any inconsistency.
It would also of course be possible to aim for a complete restatement. A
GCL could seek to express all the basic rules of contract presently governed
by the common law. Or, on the rst approach canvassed above, the relevant
legislation could set out a comprehensive law on sales, leases, insurance, etc.
But this would add signicantly to the time and complexity of the task. Even
if a decision were made to start (say) with the UNIDROIT Principles of
International Commercial Law, and then look at possible modications, the
many differences from the existing common law some of them profound
would necessitate a lengthy process of deliberation and consultation.
Whichever approach is taken, however, one obstacle looms large the
ACL. It is a problem because it cuts across the regulation of almost every type
of contract likely to be covered by any new regime. To leave it intact would
be to sacrice any hope of having either a single law on particular types of
transaction, or a single GCL not to mention perpetuating the uncertainties
and confusion highlighted by John Carter.
100
One option could be to amend it
so that it lives up to its name and deals only with consumer transactions. It
could then become a base for a more comprehensive law on contracts for the
supply of goods or services to a consumer in the ordinary parlance (that is,
someone acquiring goods or services for personal or private use). Or it could
be cannibalised, with different parts hived off to different laws. The problem
with either approach, of course, is the political difficulty of taking an axe to a
law that was the product of so much effort and negotiation and so recently,
at that.
At any event, the what type of codication? question has a further
dimension, which goes not so much to the scope or form of any code or
restatement, but to the objectives of the exercise. In his helpful review of ideas
about codication, Svantesson identies three different exercises:
101
a stocktake a mere restatement of the law at the time of
codication;
gap lling which involves not just restating the law but
expanding it where the existing law is unclear; and
100 Above, n 31.
101 Codifying Australias Contract Law, above, n 32 at 945. Cf Improving Australias Law
and Justice Framework: A Discussion Paper to Explore the Scope for Reforming Australian
Contract Law, above n 3, pp 1819, adopting a similar taxonomy of reform options, except
for the substitution of simplication for gap lling as the second option.
reform a conscious decision to start fresh, leaving the shackles of
the existing law behind and constructing a code from scratch.
As Svantesson argues, a combination of the rst two methods is more likely
to gain acceptance from stakeholders than one with a more overt agenda of
reform. But whichever option is chosen, he suggests, the benets to be gained
from codication should include simplication, standardisation, unication,
clarication, evolution and internationalisation.
102
This last point is one that has been very strongly urged by Finn. He argues
that in a world of increasingly globalised trade, Australia is in danger of being
left behind if it continues its isolationist approach to the regulation of
contracts. It is important, he suggests, to take note of the gradual convergence
of the contract laws of the civilian and common law systems, and to consider
the guidance offered by the UNCITRAL Convention on Contracts for the
International Sale of Goods, the UNIDROIT Principles and the Principles for
European Contract Law promulgated by the Lando Commission. It is these
instruments, he argues, that seem likely in quite some degree to embody the
future with which Australian contract law will have to contend.
103
As he
notes, most (if not all) of these and other similar codes lay considerable stress
on principles of good faith and fair dealing. He goes on to contend that:
104
if contract as an institution is to have integrity, if Australian contract law is to
maintain its standing in the global arena, it must, in my view, have effective legal
safeguards against undue exploitation and advantage-taking in contract formation. It
must secure fair dealing in contract performance and enforcement. The need for such
safeguards and standards . . . is widely accepted in international instruments and in
civil and common law countries.
The fact remains, however, that many Australian lawyers are suspicious of
the concept of good faith and fair dealing, or at least are not persuaded that it
adds very much to the common law armoury for policing contractual
behaviour. The inclusion of such a concept in any new code is likely to be a
source of disquiet and opposition regardless of how well accepted it may
be overseas. This is just one of the challenges that must be met in any
codication project.
A nal issue of form concerns whether any new code or restatement
should be given direct statutory effect, or whether it should simply be put
forward as an optional regime that parties would be free to choose to govern
their contracts. If the second course were taken, a decision would need to be
made whether to legislate to give the chosen law priority over existing laws,
and if so to what extent. Would it be possible, for instance, to contract out of
the ACL? Or the Commercial Arbitration Acts?
Personally, I am not convinced that an optional law approach would be
worth the time and effort. Parties can and do already modify the common law
in various ways through express terms and to some extent it is already open
to them, especially in the context of international transactions, to adopt
regimes such as the UNIDROIT Principles. Without an effective program of
education and encouragement, it seems reasonable to suppose that for
102 Above, n 32 at 96.
104 Above, n 42, pp 578.
domestic contracts at least, take-up rates for any optional law would not be
high. The case for the reform or, more particularly, the clarication of
Australian contract law arguably demands something more.
Codication by Whom?
That, nally, brings me to the question of who should undertake the process
of restatement and codication. Once again, Finn is characteristically
assertive:
105
[T]he sensitive and successful reformation of contract is likely best to be achieved
if the task is undertaken in the rst instance by experts, subject to rigorous review
by judges and practitioners knowledgeable in the discipline . . . A signicant
reappraisal of Australian contract law is needed but it needs rst and foremost to be
systematic; the law needs to be simplied and claried; and it needs to be better
aligned with international commercial law. If the ultimate vehicle must necessarily
be national legislation because of the quirks of our federation, the process itself
should not be left simply in the hands of governments. Australian contract law as a
system is too important for that.
It is easy to agree that the ideal way of reforming Australian contract law
would be to have a body of experts, including academics, judges and
practitioners, labour away over a period of years to produce a well-crafted
restatement. The problem, as Stephen Waddams notes, is that the days are long
gone in which knowledgeable experts could condently expect to have their
recommendations enacted by a wise legislature.
106
Politics no longer works
that way, if it ever did.
Realistically, if the federal government decides to continue down the
codication path and at the time of writing that is by no means certain
it seems likely that it will be an exercise driven largely by bureaucrats, in
consultation with interested stakeholders, rather than by independent
experts. It is certainly not impossible for useful reforms to emerge from such
a process. But unless someone in government is prepared to acknowledge the
mistakes made in framing the ACL, and indeed to bite the bullet by reopening
some of its more problematic provisions, then we may doomed to another
episode of regulatory failure.
105 Above, n 42, pp 656.
106 Codication, Law Reform and Judicial Development, above, n 5 at 192.

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