[2025] VSCA 304
General information, not legal advice.
Court of Appeal (Vic)
2025-12-03
Mr J, Leish JA, Orr JA
Original judgment source is linked above.
insofar as ... earlier decisions require a finding of 'ambiguity', and proceed on the basis that it is possible to read the operative provisions without the aid of context, those decisions should not be followed. It would follow then that the recitals in a deed can be looked at as part of the surrounding circumstances of the contract without a need to find ambiguity in the operative provisions of the contract.[26]
I agree with Campbell JA that the approach to documentary interpretation which eschews the need to discern textual or other ambiguity before having resort to extrinsic material supersedes many older authorities which appear to restrict the use of recitals in the construction of operative provisions to cases where the operative provision is ambiguous.[28]
The inability of a recital to control the operation of an operative clause when the latter is clear and unambiguous was more recently reiterated in Harpur v Levy [2007] VSCA 128; (2007) 16 VR 587 [16], [63] and [102] and OneSteel Manufacturing Pty Ltd v BlueScope Steel (AIS) Pty Ltd [2013] NSWCA 27; (2013) 85 NSWLR 1 [63]. The traditional approach is criticised in JW Carter, The Construction of Commercial Contracts (Hart Publishing, 2013), 445-6, but endorsed in Perry Herzfeld and Thomas Prince, Interpretation (Lawbook Co, 2nd ed, 2020), pp 497-8.[29]
The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'. As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption 'that the parties ... intended to produce a commercial result'. A commercial contract is to be construed so as to avoid it 'making a commercial nonsense or working commercial inconvenience'.[32]
The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.[33]
[1] Carlisle Homes Pty Ltd v Nexus Office Pty Ltd [2023] VSC 753 [46] (Croft J) ('Reasons').
[2] Clause 1 defined the respondent as the 'Landlord', the applicant as the 'Tenant' and 'Landlord's Works' as the works specified set out in the Plans and Description of Works, which were in Annexure B to the AFL.
[3] Clause 1 defined the Landlord's Architect as 'the architect appointed by the Landlord from time to time'.
[4] It is apparent that the words after sub-para (b)(ii), despite their location, govern paras (a) and (b).
[5] A second notice of dispute and a reply were issued on 9 September 2021 and 22 September 2021 respectively. These notices are not relevant to the issues before this Court.
[7] Reasons [16]. The judge referred to authorities including Legal & General Life of Australia Ltd v A Hudson Pty Ltd [1985] 1 NSWLR 314; Bevendale Pty Ltd v Lucky Eights Pty Ltd [2020] VSCA 312 [256] (Kyrou and McLeish JJA); AGL Victoria Pty Ltd v SPI Networks (Gas) Pty Ltd [2006] VSCA 173; Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2013] VSCA 179; (2013) 41 VR 636, 643 [15], 645-6 [19]-[22] (Maxwell P, Ashley JA agreeing at 655 [59], Redlich JA agreeing at 655 [60]); and Schott AG v Melton Willows Pty Ltd [2023] VSC 364 [54]-[55] (Stynes J).
[9] The judge referred to a section of the respondent's submissions at [31] of the Reasons.
[12] Kennedy v Shire of Campaspe [2015] VSCA 47 [14] (Whelan and Ferguson JJA); PCCEF Pty Ltd v Geelong Football Club Ltd [No 2] [2019] VSCA 148 [41] (Whelan, McLeish and Emerton JJA).
[13] Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603, 698 [388] (Campbell JA, Allsop P agreeing at 620 [29],Giles JA agreeing at 621 [43]) ('Franklins'); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104, 135 [121] (Bell and Gageler JJ) ('Mount Bruce').
[15] The respondent referred to Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, Mount Bruce [2015] HCA 37; (2015) 256 CLR 104, 116 [46] (French CJ, Nettle and Gordon JJ) and Apple and Pear Australia Ltd v Pink Lady America LLC [2016] VSCA 280; (2016) 343 ALR 112, 139-55 [91]-[137] (Tate JA), 178-9 [229]-[232] (Ferguson and McLeish JJA); [2016] VSCA 280.
[16] Strictly speaking, the first notice of dispute and the reply were referred to in recitals to the original expert determination deed, and the third notice and the reply to it were referred to in recitals to the deed of variation, but nothing turns on the difference. The respondent relied on Adventure Golf Systems Australia Pty Ltd v Belgravia Health & Leisure Group Pty Ltd [2017] VSCA 326; (2017) 54 VR 625, 667 [114] (Santamaria JA, Kaye JA agreeing at 675 [140], Ashley JA agreeing at 675 [141]) ('Adventure Golf'), GTW Investments (Aust) Pty Ltd v Pacreef Investments Pty Ltd [2023] VSCA 291; (2023) 74 VR 290, 299 [36] (Ferguson CJ, Niall JA agreeing at 338 [203], Macaulay JA agreeing at 341 [221]) and Franklins [2009] NSWCA 407; (2009) 76 NSWLR 603, 695-6 [380] (Campbell JA), but see 620 [29] (Allsop P), 697 [384], 698 [388] (Campbell JA).
[17] Clause 9.1 required the respondent to give the applicant at least 10 business days' notice of the anticipated date upon which Practical Completion would be achieved.
[18] Clause 9.7 provided for a right of termination in the event that Practical Completion did not occur before a specified Sunset Date for Practical Completion, without reference to the existence or otherwise of a Certificate.
[19] Legal & General Life of Australia Ltd v A Hudson Pty Ltd [1985] 1 NSWLR 314, 335-6 (McHugh JA), Bevendale Pty Ltd v Lucky Eights Pty Ltd [2020] VSCA 312 [256] (Kyrou and McLeish JJA); AGL Victoria Pty Ltd v SPI Networks (Gas) Pty Ltd [2006] VSCA 173 [51] (Nettle JA, Maxwell P agreeing at [1], Bongiorno AJA at [83]).
[20] [2017] VSCA 326; (2017) 54 VR 625, 667 [114] (Kaye JA agreeing at 675 [140], Ashley JA agreeing at 675 [141]).
[21] [2023] VSCA 291; (2023) 74 VR 290, 299 [36]-[38] (Ferguson CJ, Niall JA agreeing at 338 [203], Macaulay JA agreeing at 341 [221]).
[22] See, in particular, Ex parte Dawes; Re Moon [1886] UKLawRpKQB 52; (1886) 17 QBD 275, 286 (Lord Esher MR), 289 (Lindley LJ) ('Re Moon'); see also Harpur v Levy [2007] VSCA 128; (2007) 16 VR 587, 601 [63] (Neave JA), 609 [102] (Redlich JA), Lemon v Mead [2017] WASCA 215; (2017) 53 WAR 76, 119 [176] (Buss P, Mitchell and Beech JJA agreeing at 133 [262]).
[23] [2017] VSCA 326; (2017) 54 VR 625, 667 [114] (Santamaria JA, Kaye JA agreeing at 675 [140], Ashley JA agreeing at 675 [141]).
[24] Franklins [2009] NSWCA 407; (2009) 76 NSWLR 603, 695 [380(3)] (Allsop P agreeing at 620 [29], Giles JA agreeing at 622 [43]).
[28] Ibid 620 [29]. See also Wright v Lemon [2024] WASCA 19 [536] (Buss P, Vaughan JA agreeing at [1221], Hall JA agreeing at [1229]); SAS (Vic) Pty Ltd v Urban Ecological Systems Ltd [2021] VSCA 335 [85] n 58 (Sifris and Kennedy JJA and Macaulay AJA); Great Northern Developments Pty Ltd v Lane [2021] NSWCA 150 [66] (Bathurst CJ, Leeming JA agreeing at [79], Emmett AJA agreeing at [119]); Lo v Huang [2020] QCA 97 [55] (Brown J, Fraser JA agreeing at [1], Henry J agreeing at [2]); Halikos Hospitality Pty Ltd v INPEX Operations Australia Pty Ltd [2020] NTCA 4 [127] n 52 (Southwood and Hiley JJ and Riley AJ), and compare OneSteel Manufacturing Pty Ltd v BlueScope Steel (AIS) Pty Ltd [2013] NSWCA 27; (2013) 85 NSWLR 1, 21 [63] (Allsop P, Macfarlan JA agreeing at 46 [183], Meagher JA agreeing at 46 [184]); Harpur v Levy [2007] VSCA 128; (2007) 16 VR 587, 592 [17] (Maxwell P); 609 [102] (Redlich JA).
[29] [2022] NSWCA 72; (2022) 108 NSWLR 165, 174 [34] (Leeming JA).
[30] Zhu v Treasurer (NSW) [2004] HCA 56; (2004) 218 CLR 530, 559 [82] (Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ), citing Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, 351 (Mason J).
[31] Zhu v Treasurer (NSW) [2004] HCA 56; (2004) 218 CLR 530, 559 [82] (Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ), citing Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, 350 (Mason J).
[32] [2014] HCA 7; (2014) 251 CLR 640, 656-7 [35] (French CJ, Hayne, Crennan and Kiefel JJ) (citations omitted).
[33] [2015] HCA 37; (2015) 256 CLR 104, 116 [48] (emphasis added, citations omitted).
Carlisle Homes Pty Ltd
Nexus Office Pty Ltd [2025] VSCA 304
Carlisle Homes Pty Ltd v Nexus Office Pty Ltd [2023] VSC 753 (Croft J)
Adventure Golf Systems Australia Pty Ltd v Belgravia Health & Leisure Group Pty Ltd [2017] VSCA 326; (2017) 54 VR 625; GTW Investments (Aust) Pty Ltd v Pacreef Investments Pty Ltd [2023] VSCA 291; (2023) 74 VR 290; Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603; S&C Nicola Pty Ltd v Peter Holmes Investment Pty Ltd [2022] NSWCA 72; (2022) 108 NSWLR 165; Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104, referred to.
(2017) 54 VR 625
(2009) 76 NSWLR 603
(2022) 108 NSWLR 165
(2015) 256 CLR 104
(2007) 16 VR 587
(2013) 85 NSWLR 1
(2013) 41 VR 636
(1982) 149 CLR 337
(2004) 218 CLR 530
(2023) 74 VR 290
(2014) 251 CLR 640
(2016) 343 ALR 112
(2017) 53 WAR 76