Griffin Energy Group Pty Limited (Subject to Deed of Company Arrangement) v ICICI Bank Limited

Judgment

1. THE COURT: This appeal concerns the proper construction of: (a) a Sale Agreement by which the appellants (Griffin and Carpenter respectively) sold to the fourth respondent (Lanco) shares in two companies which owned and operated a coal mine near Collie in Western Australia; and (b) three standby letters of credit (Letters of Credit) issued by the first respondent (ICICI Bank), a bank based in Singapore, naming Griffin as the Beneficiary.
2. The Letters of Credit were apparently intended to secure to Griffin payment of the final instalment of the purchase price due to it by Lanco under the Sale Agreement. The purchase price was $740 million (subject to certain adjustments). After payment of a portion of what the Sale Agreement referred to as the "Deferred Consideration", the final instalment due to Griffin was $150 million.
3. The questions of construction arise because of three fortuitous circumstances. The first is that, in the events which have occurred, the scheduled date under the Sale Agreement for the payment of the Deferred Consideration is agreed to be either Saturday 28 February 2015 or Sunday 1 March 2015, neither of which is a business day. The second is that each of the Letters of Credit is expressed to expire on Sunday 1 March 2015. The third is that Monday 2 March 2015 is a public holiday in Western Australia. Thus on that day banks in Western Australia will not be open for business, although banks elsewhere in Australia and in Singapore will operate as usual.
4. The outcome of the appeal depends on the interaction between provisions in the Sale Agreement and the Letters of Credit that extend the time within which certain events are to occur, if those events would otherwise have to occur on a non-business day (using that term in a non-technical sense). If the appellants are right, Griffin as the Beneficiary will be entitled on Tuesday 3 March 2015 to require ICICI Bank in Singapore to pay $50 million pursuant to each of the Letters of Credit (a total of $150 million). If ICICI Bank is right, Griffin will be unable to require ICICI Bank to make any payments because each Letter of Credit will have expired on Monday 2 March 2015. According to ICICI Bank, Griffin cannot demand payment under the Letters of Credit until the final instalment is due and payable under the Sale Agreement and that will not happen until 3 March 2015 (the first business day after Western Australia's long weekend), by which date the Letters of Credit will have expired.

The Proceedings

1. Griffin commenced proceedings in the Commercial List in the Equity Division on 8 December 2014 (Credit Proceedings). In its Summons, Griffin sought declaratory relief in respect of the first of the three Letters of Credit (First Credit), as follows: "1 A declaration that presentation of a draft under letter of credit number 882BG911 issued by [ICICI Bank] (First Credit) at the counter of the second defendant [Standard Charted Bank (SC Bank)], 6 Battery Road, Level 4 Singapore, on or before 1.30pm Singapore time on 3 March 2015 is timely presentation for the purpose of that letter of credit. 2. A declaration that clause 2(E) of the First Credit does not apply to a draft presented under the First Credit which is dated 2 March 2015 or 3 March 2015." Equivalent declarations were sought in respect of the second and third Letters of Credit (Second Credit and Third Credit respectively).
2. The reference in Prayer 2 of the Summons is to a provision in each of the Letters of Credit (cl 2(E)) which exempts Griffin from declaring in the draft to be presented to the Issuing Bank or its agent that the export of coal has commenced. However, the exemption only applies if the draft is dated 1 March 2015. By an amended Commercial List Statement, Griffin sought alternative relief to the declaration sought in Prayer 2 (and equivalent Prayers in relation to the Second and Third Credits). It is not necessary to set out the details of the alternative relief here (see at [42] below).
3. The parties to the Credit Proceedings were as follows: Plaintiff: Griffin Vendor under the Sale Agreement Beneficiary under each Letter of Credit First Defendant: ICICI Bank Issuer of each Letter of Credit Second Defendant: SC Bank Confirming Bank under the First and Third Credits Third Defendant National Australia Bank (NAB) Reimbursing Bank under the First and Third Credits Fourth Defendant Lanco Purchaser under the Sale Agreement Account Party under each Letter of Credit

(NAB entered a submitting appearance both in the Commercial List proceedings and on the appeal.)

1. Separate proceedings were commenced by the appellants in Western Australia on 10 December 2014 (Sale Agreement Proceedings). The defendants were Lanco, Lanco Infratech Pty Ltd (Lanco Infratech) (a guarantor under the Sale Agreement) and Lanco International Pte Ltd (Lanco International), also a party to the Sale Agreement. The appellants claimed a declaration that upon the proper construction of the Sale Agreement, the sum of $150 million referred to in cl 6.1 of the Agreement will fall due and be payable by Lanco to the appellants on 28 February 2015 and will remain due and payable on each day after 28 February 2015 until paid.
2. It appears that the Sale Agreement Proceedings were commenced in Western Australia because the parties to the Sale Agreement had submitted to the jurisdiction of the Western Australian courts. In any event, the Sale Agreement Proceedings were promptly cross-vested to the Supreme Court of New South Wales and were heard by the primary Judge together with the Credit Proceedings.
3. Both Proceedings were heard in the Commercial List as a matter of urgency. The hearing took place on 3 and 4 February 2015 and the primary Judge (Hammerschlag J) delivered judgment on 20 February 2015. His Honour dismissed Griffin's summons: Griffin Energy Group Pty Ltd (Subject to Deed of Company Arrangements) v ICICI Bank Ltd (Singapore Branch) [2015] NSWSC 87 (Primary Judgment). His Honour also dismissed a cross-summons filed by SC Bank. The cross-summons had been filed by SC Bank to protect its position if the Court made the declarations sought by Griffin.
4. The cover sheet to the Primary Judgment refers only to the Credit Proceedings. The orders recorded there make no reference to separate orders dismissing the Sale Agreement Proceedings. However, orders entered on JusticeLink on Friday 20 February 2015 include an order dismissing the Sale Agreement Proceedings.
5. The appellants filed a notice of appeal on 22 February 2015 appealing from the orders in both Proceedings. The notice of appeal challenges the primary Judge's construction of the Sale Agreement and the Letters of Credit. The respondents to the appeal are all the parties (other than the appellants) to the Credit Proceedings and the Sale Agreement Proceedings. Thus all relevant parties have been joined and will be bound by the orders made in the appeal.
6. SC Bank filed a notice of cross-appeal on 23 February 2015 in order to preserve its position should the appeal succeed. However, SC Bank did not wish to be heard on the issues debated between the other parties.
7. Directions were made to enable the appeal and cross-appeal to be heard as a matter of extreme urgency on 24 February 2015. At the conclusion of argument the Court announced that, in order to ensure that the Proceedings in this Court were concluded before 2 March 2015, judgment would be delivered at 4.30 pm on Friday 27 February 2015. Since this judgment has been prepared under time pressures, it is less thorough (although not necessarily shorter) than otherwise might have been the case. However, the appeal, although involving a considerable amount of money, does not present any significant issue of legal principle.

Sale Agreement

1. The Sale Agreement was entered into on 14 December 2010. By the Sale Agreement, Griffin and Carpenter, each acting by its administrators, agreed to sell to Lanco as Purchasers 11,390,685 shares in The Griffin Coal Mining Company Pty Ltd (Griffin Coal) and one share in Carpenter Mine Pty Ltd (Sale Shares). Lanco Infratech and Lanco International were also parties to the Sale Agreement, the former as guarantor of Lanco's obligations.
2. Clause 3.4 of the Sale Agreement provides that the Purchase Price payable by the Purchaser to the Vendors comprises the "Initial Consideration" of $490 million (less "Employee Entitlements") and the "Deferred Consideration" of $250 million. The Deferred Consideration is payable in accordance with cl 6.1 (reproduced below at [21]).
3. Clause 5 of the Sale Agreement deals with Completion relevantly as follows: "5.1 Date, time and place Completion will take place at 11.00 am on the Completion Date at the office of KordaMentha, Level 11, 37 St Georges Terrace, Perth, Western Australia or any other time, date and place agreed in writing by the Vendors and the Purchaser. 5.3 Purchaser's obligations On Completion, in consideration for the transfer of the Sale Shares, the Purchaser must: (a) pay the Initial Consideration to each of the Vendors in Immediately Available Funds in the proportions to be advised by the Vendors no later than 30 days prior to Completion. … (c) provide the letters of credit to the Vendors in accordance with clause 8.2; and (d) pay to the Vendors in Immediately Available Funds any amount to be paid under clause 4.10(c). 5.5 Interest If a party fails to pay any sum payable by it under this document at the time, and otherwise in the manner provided in this document, that party must pay interest on that sum from the due date of payment until that sum is paid in full at the Default Interest Rate. Interest will accrue from day to day and will be payable on demand. The payment of interest in respect of any late payment under this clause 5.5 is in addition to any other remedies which the other party or parties may have in respect of such late payment."
4. The following definitions (cl 1.1) are relevant to cl 5: "Completion means completion of the sale and purchase of the Sale Shares in accordance with clause 5. Completion Date means the date that is 5 Business Days after the date on which the last of the conditions set out in clause 2.1 is satisfied or waived, as the case may be, or such other date as may be agreed between the Vendors and the Purchaser in writing. … Immediately Available Funds means bank cheque or telegraphic transfer of cleared funds to an account nominated by the recipient."
5. Clause 2 of the Sale Agreement specifies a number of conditions precedent to the obligations of the parties on Completion. These include provision by the Purchaser of: "(t) the Letters of Credit in a form satisfactory to the Vendors (acting reasonably)." The term "Letters of Credit" is defined (cl 1.1) to mean: "Letters of Credit means one or more letters of credit from each of Australia and New Zealand Banking Group, Westpac Banking Corporation and ICICI Bank Limited for in aggregate the full amount of the Deferred Consideration on terms satisfactory to the Vendors (acting reasonably), including that such letters of credit must reflect clause 6 and must otherwise be unconditional."
6. Clause 6 of the Sale Agreement is headed "Deferred Consideration and Letters of Credit". Clause 6 relevantly provides as follows: "6.1 Deferred Consideration The Purchaser will pay the Deferred Consideration to the Vendors in Immediately Available Funds in consideration for the transfer of the Sale of Shares in the following manner: (a) $100 million payable on the date which is the earlier of: (i) two years from the Completion Date; and (ii) the date of receipt of the requisite approvals (including environmental approvals) for the development and operation of a railway line from the mining operations of GCMC to the export facilities at the Port of Bunbury; and (b) $150 million payable on the date which is the earlier of: (i) four years from the Completion date; and (ii) the date of first export of coal produced by GCMC via the newly constructed facilities and/or berth at the Port of Bunbury. 6.2 Letters of Credit (a) The Purchaser must provide the Letters of Credit to the Vendors at Completion, (b) The Vendors will notify the Purchaser at least one Business Day prior to calling on, or drawing down on, any of the Letters of Credit, (c) As soon as reasonably practicable after the execution of this document, the Vendors must provide the Purchaser with a draft Letter of Credit for each bank counterparty on terms which are satisfactory to the Vendors (acting reasonably), …"
7. Clause 1.2(g) of the Sale Agreement is important. It appears in cl 1.2, which is headed "Construction": "(g) if the date on or by which any act must be done under this document is not a Business Day, the act must be done on or by the next Business Day …" Clause 1.1 defines "Business Day" to mean: "a day which is not a Saturday, Sunday or bank or public holiday in Perth, Western Australia".
8. It is common ground that the Completion Date of the Sale Agreement was 28 February 2011. It is also common ground that:

• the sum of $100 million payable by the Purchaser under cl 6.1(a) of the Sale Agreement has been paid;
• four years from the Completion Date (as specified in cl 6.1(b)(i) is either Saturday 28 February 2015 or Sunday 1 March 2015 (nothing turns on whether it is the Saturday or the Sunday); and
• no coal produced by Griffin Coal will be exported before the expiration of four years from the Completion Date (cl 6.1(b)(ii)).

The Terms

1. ICICI Bank issued the Letters of Credit on 25 February 2011. (The primary Judge recorded that all three were issued on 28 February 2011, the Completion Date, but nothing turns on the precise dates of issue.)
2. The First Credit and the Third Credit incorporate the same provisions. They nominate Griffin as the Beneficiary, Lanco as the Account Party, SC Bank as the Confirming Bank and NAB as the Reimbursing Bank. The Second Credit is different, in that the sole obligor is ICICI Bank.
3. The First Credit incorporates the following narrative: "ICICI Bank Limited, 9 Raffles Place 50-01 Republic Plaza, Singapore 048619 (Issuing Bank) issues an irrevocable stand-by letter of credit as follows: Stand-By Letter of Credit No: 882BG911 Dated: 25 February 2011 Account Party: Lanco Resources Australia Pty Ltd, ACN 147 835 452 Address: Allen and Overy, Level 27, Exchange Plaza, 2 The Esplanade Perth WA 6000 Beneficiary: Griffin Energy Group Pty Ltd ACN 008 681 696 (Deed Administrators appointed) Kordamentha Level 11, 37 St Georges Terrace Perth WA 6000. Issued in connection with: The obligations of the Account Party under a sale agreement between the Beneficiary, Carpenter Mine Management Holdings Pty Ltd ACN 122 080 684 having its office at Kordamentha Level 11, 37 St Georges Terrace, Perth, the Account Party, Lanco Infratech Limited having its office at Lanco House, Plot 397, Phase-3, Udyog Vihar, Gurgaon - 102 016, India and Lanco International Pte Ltd having its office at 8 Shenton way HEX32-03, Singapore 068811 dated 14 December 2010 (Agreement). Maximum Liability: AUD 50,000,000.00 (Australian Dollar Fifty Million) Expiry date: 1 March 2015 Confirming Bank: Standard Chartered Bank, Trade Services, 6 Battery Road, Level 4, Singapore 049909. SWIFT SCBLSGSG Available at: Confirming Bank's counters By Draft on: Issuing Bank Payable at: Sight Reimbursing Bank: National Australian Bank Limited, Melbourne, Victoria (Swift: NATAAU33033) Business Day: Any day (other than a Saturday or a Sunday) on which banks are open for general business in Singapore and Australia. Enfaced: 'Drawn under stand-by letter of credit no. 882BG1311 dated 25 Feb 2011' 1. Drafts drawn under this stand-by letter of credit are payable to the credit of the Beneficiary's account as nominated by the Beneficiary, and may be drawn for any amount not exceeding in aggregate the Maximum Liability specified above. 2. Drafts must be delivered to the Confirming Bank at the address at which this stand-by letter of credit is expressed to be available by no later than 1:30 pm (Singapore time) on or before the Expiry Date specified above, with a declaration stating that: (A) The Declarants are two officers (which will include any Administrator, Deed Administrator, Receiver or Liquidator) of the Beneficiary and are making the declaration on behalf of the Beneficiary. (B) The Declarants have authority to make the declaration on behalf of the Beneficiary. (C) The Declaration is made under stand-by letter of credit No 882BG1311. (D) The amount claimed is not more than the maximum liability under stand-by letter of credit No. 882BG1311. (E) The first export of coal produced by the Griffin Coal Mining Company Pty Limited ACN 008 667 285 via the newly constructed facilities and/or berth at the Port of Bunbury has occurred. If the draft is dated 1 March 2015 then this clause 2(E) does not apply, and (F) The amount claimed is due and payable to the Beneficiary by the Account Party. 3. Upon receipt of credit compliant documents as stipulated in clause 2 above at the counters of the Confirming Bank, the Confirming Bank will pay the Beneficiary within 4 Business Days. 4. Confirming Bank is authorised to add its confirmation to this standby letter of credit and advise the same to the Beneficiary through Second Advising Bank. 5. Confirming Bank is authorised to claim reimbursement from Reimbursing Bank upon receipt of credit compliant documents at its counters on or before the Expiry Date. Confirming Bank will be reimbursed within 3 Business Days of receipt of a notice by the Issuing Bank via authenticated swift at its Swift Address ICICSGSG to the attention of the Bank Guarantee Department and a claim to the Reimbursing Bank at its Swift Address NATAAU33033. 6. The Issuing Bank and the Confirming Bank need not investigate the authenticity or correctness of any matter stated in any declaration purportedly given under this stand-by letter of credit or of the capacity or entitlement of the Beneficiary or its relevant officers (including any Administrator, Receiver or Liquidator) to give and execute such declaration. 7. This stand-by Letter of credit is: (A) Subject to the International Standby Practices - ISP98 (International Chamber of Commerce Publication No 590) except provisions of Article 3.14 and (B) Governed by the laws applicable in New South Wales, Australia, and the Issuing Bank, Account Party and Beneficiary submit to the non exclusive jurisdiction of the courts in New South Wales, Australia. 8. The Confirming Bank engages with the Beneficiary that drafts drawn under and in compliance with the terms of this stand-by letter of credit will be paid within 4 Business Days after presentation to the Confirming Bank. We have added our confirmation to this credit. We shall accordingly honour your draft on due presentation if accompanied by documents as stipulated by and in compliance with the credit terms and conditions. This undertaking takes effect from the Issuance Date of the credit and is valid up to 01 March 2015 only and does not cover any subsequent amendment issued or received by us unless with our Swift consent. This letter must be presented with all drafts and/or documents drawn under the attached Letter of Credit for negotiation/payment/acceptance. Regards LC Confirmation Desk" (Emphasis added.) The definition of "Business Day" in the First Credit (which also appears in the Second and Third Credits) has been referred to by the parties as the "bespoke definition".
4. The terms of the Second Credit are not materially different to those of the First and Third Credits, other than the absence of the Confirming and Reimbursing Banks. Nonetheless it is convenient to set out the relevant portions of the narrative of the Second Credit: "ICICI Bank Limited, 9 Raffles Place, 50-01 Republic Plaza, Singapore 048619 (Issuing Bank) Issues an irrevocable Stand-by Letter of Credit as follows: Stand-by Letter of Credit No: 882BG1111 Dated: 25 Feb 2011 Account Party: Lanco Resources Australia Pty Ltd ACN 147 835 452 Address: Allen and Overy, Level 27, Exchange Plaza, 2 The Esplanade, Perth WA 6000 Beneficiary: Griffin Energy Group Pty Ltd ACN 008 681 696 (Deed Administrators Appointed) Kordamentha Level 11, 37 St Georges Terrace, Perth WA 6000 Issued in connection with: the obligations of the Account Party under a sale agreement between the Beneficiary, Carpenter Mine Management Holdings Pty Ltd ACN 122 080 684 having its office at Kordamentha, Level 11, 37 St Georges Terrace, Perth, the Account Party, Lanco Infratech Limited having its office at Lanco House, Plot 397, Phase - 3, Udyog Vihar, Gurgaon -102 016, India and Lanco International Pte Ltd having its office at 8 Shenton Way HEX32-03, Singapore 068811 dated 14 December 2010 (Agreement). Maximum Liability: AUD 50,000,000.00 (Australian Dollar Fifty million). Expiry date: 1 March 2015 Available at: Issuing Bank's counters By draft on: Issuing Bank Payable at: Sight Business Day: Any day (other than a Saturday or a Sunday) on which banks are open for general business in Singapore and Australia. Enfaced: 'Drawn under Stand-by Letter of Credit No 882BG1111 dated 25 Feb 2011' 1. Drafts drawn under this stand-by letter of credit are payable to the credit of the Beneficiary's account as nominated by the Beneficiary, and may be drawn for any amount not exceeding in aggregate the Maximum Liability specified above. 2. Drafts must be delivered to the Issuing Bank at the address at which this stand-by letter of credit is expressed to be available by no later than 1.30 pm (Singapore time) on or before the Expiry Date specified above, with a declaration stating that: (A) The Declarants are two officers (which will include any Administrator, Deed Administrator, Receiver or Liquidator) of the Beneficiary and are making the declaration on behalf of the Beneficiary. (B) The Declarants have authority to make the declaration on behalf of the Beneficiary. (C) The declaration is made under stand-by letter of credit No 882BG1111. (D) The amount claimed is not more than the Maximum Liability under Stand-by Letter of Credit No 882BG1111. (E) The first export of coal produced by the Griffin Coal Mining Company Pty Ltd ACN 008 667 285 via the newly constructed facilities and/or berth at the Port of Bunbury has occurred. If the draft is dated 1 March 2015 then this clause 2(E) does not apply, and (F) The amount claimed is due and payable to the Beneficiary by the Account Party. 3. Upon receipt of credit compliant documents as stipulated in clause 2 above at the counters of the Issuing Bank, the Issuing Bank will pay the Beneficiary within 4 Business Days. 4. The Issuing Bank need not investigate the authenticity or correctness of any matter stated in any declaration purportedly given under this stand-by letter of credit or of the capacity or entitlement of the Beneficiary or its relevant officer (including any Administrator, Receiver or Liquidator) to give and execute such declaration. 5. This Stand-by Letter of Credit is: (A) Subject to the International Standby Practices - ISP98 (International Chamber of Commerce Publication No 590) except provisions of Article 3.14 and (B) Governed by the laws applicable in New South Wales, Australia, and the Issuing Bank, Account Party and Beneficiary submit to the non exclusive jurisdiction of the courts in New South Wales, Australia. 6. The Issuing Bank engages with the Beneficiary that drafts drawn under and in compliance with the terms of this Stand-by Letter of Credit will be paid within 4 Business Days after presentation to the Issuing Bank." Regards ICICI Bank Limited Singapore" (Emphasis added.)
5. Clause 7(A) of the First Credit and the Third Credit (and cl 5(A) of the Second Credit) state that (with one exception) the Letter of Credit is subject to ISP98. ISP98 contains private rules of practice (Rules) which are intended to apply to standby letters of credit. The official text of ISP98 was issued by the International Chamber of Commerce in 1998.
6. The relevant provisions of ISP98 are as follows: "1.01 Scope and application (a) These Rules are intended to be applied to standby letters of credit (including performance, financial, and direct pay standby letters of credit). (b) A standby letter of credit or other similar undertaking, however named or described, whether for domestic or international use, may be made subject to these Rules by express reference to them. (c) An undertaking subject to these Rules may expressly modify or exclude their application. … 1.03 Interpretative principles These Rules shall be interpreted as mercantile usage with regard for: (a) integrity of standbys as reliable and efficient undertakings to pay; (b) practice and terminology of banks and businesses in day-to-day transactions; (c) consistency within the worldwide system of banking operations and commerce; and (d) worldwide uniformity in their interpretation and application. 1.04 Effect of the Rules Unless the context otherwise requires, or unless expressly modified or excluded, these Rules apply as terms and conditions incorporated into a standby, confirmation, advice, nomination, amendment, transfer, request for issuance, or other agreement of: (i) the issuer; (ii) the beneficiary to the extent it uses the standby; (iii) any advisor; (iv) any confirmer; (v) any person nominated in the standby who acts or agrees to act; and (vi) the applicant who authorizes issuance of the standby or otherwise agrees to the application of these Rules. General principles 1.06 Nature of standbys (a) A standby is an irrevocable, independent, documentary, and binding undertaking when issued and need not so state. (b) Because a standby is irrevocable, an issuer's obligations under a standby cannot be amended or cancelled by the issuer except as provided in the standby or as consented to by the person against whom the amendment or cancellation is asserted. (c) Because a standby is independent, the enforceability of an issuer's obligations under a standby does not depend on: (i) the issuer's right or ability to obtain reimbursement from the applicant; (ii) the beneficiary's right to obtain payment from the applicant; (iii) a reference in the standby to any reimbursement agreement or underlying transaction; or (iv) the issuer's knowledge of performance or breach of any reimbursement agreement or underlying transaction. (d) Because a standby is documentary, an issuer's obligations depend on the presentation of documents and an examination of required documents on their face. … 1.07 Independence of the issuer-beneficiary relationship An issuer's obligations toward the beneficiary are not affected by the issuer's rights and obligations towards the applicant under any applicable agreement, practice, or law. Terminology 1.09 Defined terms In addition to the meanings given in standard banking practice and applicable law, the following terms have or include the meanings indicated below: (a) Definitions 'Applicant' is a person who applies for issuance of a standby or for whose account it is issued, and included (i) a person applying in its own name but for the account of another person or (ii) an issuer acting for its own account. 'Beneficiary' is a named person who is entitled to draw under a standby. … 'Business day' means a day on which the place of business at which the relevant act is to be performed is regularly open; and 'Banking day' means a day on which the relevant bank is regularly open at the place at which the relevant act is to be performed. 'Confirmer' is a person who, upon an issuer's nomination to do so, adds to the issuer's undertaking its own undertaking to honour a standby. … 'Demand' means, depending on the context, either a request to honour a standby or a document that makes such request. 'Document' means a draft, demand, document of title, investment security, invoice, certificate of default, or any other representation of fact, law, right, or opinion, that upon presentation (whether in a paper or electronic medium), is capable of being examined for compliance with the terms and conditions of a standby. … 'Expiration date' means the latest day for a complying presentation provided in a standby. … 'Presentation' means, depending on the context, either the act of delivering documents for examination under a standby or the documents so delivered. … 1.11 Interpretation of these Rules (d) (i) Use of the phrase 'unless a standby otherwise states' or the like in a rule emphasizes that the text of the standby controls over the rule; (ii) Absence of such a phrase in other rules does not imply that other rules have priority over the text of the standby; … RULE 2: OBLIGATIONS 2.03 Conditions to issuance A standby is issued when it leaves an issuer's control unless it clearly specifies that it is not then 'issued' or 'enforceable'. Statements that a standby is not 'available', 'operative', 'effective', or the like do not effect its irrevocable and binding nature at the time it leaves the issuer's control. 2.04 Nomination (a) A standby may nominate a person to advise, receive a presentation, effect a transfer, confirm, pay, negotiate, incur a deferred payment obligation, or accept a draft. RULE 3: PRESENTATION 3.01 Complying presentation under a standby A standby should indicate the time, place and location within that place, person to whom, and medium in which presentation should be made. If so, presentation must be so made in order to comply. … 3.02 What constitutes a presentation? The receipt of a document required by and presented under a standby constitutes a presentation requiring examination for compliance with the terms and conditions of the standby even if not all of the required documents have been presented. … Closure on expire date 3.13 Expiration date on a non-business day (a) If the last day for presentation stated in a standby (whether stated to be the expiration date or the date by which documents must be received) is not a business day of the issuer or nominated person where presentation is to be made, then presentation made there on the first following business day shall be deemed timely. 3.14 Closure on a business day and authorization of another reasonable place for presentation (a) If on the last business day for presentation the place for presentation stated in a standby is for any reason closed and presentation is not timely made because of the closure, then the last day for presentation is automatically extended to the day occurring thirty calendar days after the place for presentation re-opens for business, unless the standby otherwise provides. … 4.06 Date of documents The issuance date of a required document may be earlier but not later than the date of its presentation. … Standby document types 4.16 Demand for payment (a) A demand for payment need not be separate from the beneficiary's statement or other required document. (b) If a separate demand is required, it must contain: (i) a demand for payment from the beneficiary directed to the issuer or nominated person; (ii) a date indicating when the demand was issued; (iii) the amount demanded; and (iv) the beneficiary's signature. (c) A demand may be in the form of a draft or other instruction, order, or request to pay." (Emphasis added.)

The Dispute

1. The primary Judge recorded (at [31]) that by the Public and Bank Holiday Act 1972 (WA) "Monday on or first Monday following 1st March" is a public and bank holiday in Western Australia, designated as Labour Day. Thus: "Monday 2 March 2015 will be a public and bank holiday in Perth, Western Australia, but it will not be a public or bank holiday in any other state or territory of Australia or in Singapore".
2. His Honour noted (at [33]) that all types of letters of credit require the beneficiary to comply strictly with the terms in order to invoke the issuing bank's commitment. (As to this principle see M Brindle and R Cox (eds), Law of Banking Payments (3rd ed 2004, Sweet & Maxwell) at [8-009]-[8-011]). Accordingly, the Beneficiary in this case (Griffin) is obliged to comply strictly with the requirements for the draft set out in cl 2 of each of the Letters of Credit.
3. The primary Judge explained the nature of the dispute as follows. Clause 2(F) of each Letter of Credit requires Griffin to declare that the amount claimed is "due and payable to [Griffin] by [Lanco]" (at [35]). Because Monday 2 March 2015 is a public holiday in Western Australia, the effect of cl 6.1(b) of the Sale Agreement, when read with cl 1.2(g), is that the final instalment of the Deferred Consideration must be paid on 3 March 2015 (rather than the Completion Date of 28 February or 1 March 2015) (at [36]). It is common ground that by virtue of Rule 3.13(a) of ISP98, presentation will be timely if it occurs on the "first following business day", within the meaning of that Rule. If the first following business day is 2 March 2015, but the amount specified in cl 6.1(b) of the Sale Agreement only becomes "due and payable" on 3 March 2015, Griffin will not be able to provide a declaration on 2 March 2015 that the amount claimed is due and payable on that date. In other words, by 3 March 2015, when Griffin is able to declare that the amount claimed is due and payable, the Letters of Credit will have expired (at [38]).

First Issue

1. The first issue identified by his Honour (at [40]) is the date the amount to be paid under cl 6.1(b) of the Sale Agreement becomes "due and payable". Griffin submitted to the primary Judge that cl 6.1(b) obliges Lanco to pay on the date which is four years from the Completion Date (28 February 2015 or 1 March 2015). Griffin contended that cl 1.2(g) does not displace Lanco's obligation, but merely shields it from the contractual consequences of failing to pay on the Completion Date itself.
2. Lanco submitted to his Honour that, where the Completion Date is not a "Business Day" (as defined in cl 1.1 of the Sale Agreement), the effect of cl 6.1(b) is to prevent any enforcement action by Griffin until the next Business Day. On this basis, the amount specified in cl 6.1(b) is not due and payable until 3 March 2015.
3. The primary Judge accepted Lanco's submission: "[43] The declaration which [Griffin] must deliver on presentation has to state that the debt is both due and payable. [44] This means that the time for payment has arrived and action to enforce it may be maintained; see Mack v the Commissioner of Stamp Duties (New South Wales) (1920) 28 CLR 373 at 383 (Isaacs J). That is not this case. The clear effect of cl 1.2(g) is that no action for payment could be maintained before the next Business Day. It follows that the final instalment under the [Sale] Agreement will not be payable until the next Business Day in Perth which is 3 March 2015."

Second Issue

1. The second issue is whether the so-called "bespoke definition" of "Business Day" in the Letters of Credit applies to Rule 3.13(a) (which states that if the last day for presentation stated in a standby is not a business day of the issuer where presentation is to be made, presentation made there on the first following business day shall be deemed timely). If the bespoke definition applies, on one view the effect is to extend the date for timely presentation to Tuesday 3 March 2015. If, however, the relevant definition of "business day" for the purposes of Rule 3.13(a) is that contained in Rule 1.09(a) (a day on which the place of business at which the relevant act is to be performed is regularly open), the date for presentation can be no later than Monday, 2 March 2015. This is because the relevant act (presentation) under each of the Letters of Credit is to be performed in Singapore and the Issuing Bank's place of business in Singapore will be open on Monday, 2 March 2015.
2. The primary Judge held (at [59]) that the definition in Rule 1.09 applies to Rule 3.13(a), for the following reasons: "[60] In cl 7, the Letters of Credit expressly provide that they are subject to the Rules. Rule 1.04 provides that unless the context otherwise requires, or unless expressly modified or excluded, the Rules apply as terms and conditions incorporated into a standby. A standby includes a standby Letter of Credit. [61] The Letters of Credit include a bespoke definition of Business Day but do not expressly exclude the Rule 1.09 definition, in particular, as it applies to the expression 'not a business day of the issuer or nominated person', in Rule 3.13(a). The context is inimical to the conclusion that the Rule 1.09 definition should be excluded. [62] Rule 3.13(a) is the only provision which caters for extension where the last day for presentation occurs on a non-business day. [63] The provision is not directed to non-business days simpliciter, but to a non-business day only of the issuer or a nominated person. This is because the place of business of the issuer or nominated person is where presentation must be made, but on a non-business day of that person, that object cannot be achieved. Hence, the Rule provides that presentation may be made there on the first following business day. [64] The phrase in Rule 3.13(a) to be construed is not 'not a business day', but rather "not a business day of the issuer or nominated person". [65] Neither commercial sense nor convenience necessitates an extension of the time for presentation where there is no obstacle to that act taking place. Both constructions contended for by the plaintiffs and ICICI's suggested revision leave open the possibility that a date which is 'not a business day of the issuer or nominated person' can transpire to be a date which is in fact a business day of that person. This is no doubt why the insertion of the bespoke definition into Rule 3.13(a) results in a nonsensical reading of the provision. There is force in the fourth defendant's submission that the bespoke definition was intended to only apply to Business Day where it appears in the Letters of Credit themselves."

Third Issue

1. The third issue arises if, contrary to the primary Judge's view, the bespoke definition of "Business Day" applies to Rule 3.13(a). On this assumption, the primary Judge held (at [66]) that Monday, 2 March 2015 is a day on which "banks are open for general business in Australia".
2. Griffin submitted to his Honour that "open for general business in Singapore and Australia" means open for general business in Singapore and everywhere in Australia. On this basis Griffin contended that Monday, 2 March 2015 will not be a "Business Day" within the bespoke definition because it is a public holiday in Western Australia and banks will not be open on that day in the State. By contrast, ICICI Bank submitted that "open for general business in Australia" means open for business anywhere in Australia.
3. The primary Judge held that Monday, 2 March 2015 satisfies the bespoke definition of "Business Day": "[67] In my view, the ordinary meaning of the words 'open for general business in Australia' means open for business in Australia, not at every physical location in Australia. I do not consider it to be a sensible construction that banks must be open in every Australian locality. [68] ICICI makes the point that the nature of modern banking practice is such that banks open anywhere in Australia are capable or transacting business for and on behalf of all of the bank's customers, wherever located. There was evidence that there are 25 Australian owned banks and over 40 foreign banks authorised to take deposits in Australia. Some bank holidays and public holidays are limited to single localities and shires (see for example Victoria Government Gazette, No S190, 30 May 2013, which appoints 31 October 2014 as a public holiday in the municipal district of Colac Otway Shire to celebrate Colac Show Day). [69] On 2 March 2015 banks are open for general business in Singapore and everywhere in Australia except Western Australia. I consider that this meets the requirement of the bespoke definition of Business Day." Accordingly, even if the bespoke definition of "Business Day" applies to Rule 3.13(a) Monday 2 March is a business day for the purposes of the Rule and the Letters of Credit expire on that day.

Fourth Issue

1. The fourth issue is whether Griffin can claim exemption from the requirement in cl 2(E) of the Letters of Credit. Clause 2(E) requires the Beneficiary's declaration to state that the first export of coal produced by Griffin Coal has occurred, but exempts Griffin from the requirement if the draft is dated 1 March 2015. It was and is common ground that Griffin will not be able within the next few days to declare that the first export of coal has occurred.
2. Griffin submitted to his Honour that the drafts required under the Letters of Credit may be dated 1 March 2015, but can be delivered on 2 or 3 March 2015. For that reason Griffin sought an alternative declaration that delivery in Singapore on 3 March 2015 of a draft dated 1 March 2015, together with a declaration stating the matters required by cl 2 of the Letters of Credit, will be a valid presentation.
3. The primary Judge rejected Griffin's submission: "[76] [Griffin] puts that cl 2 of the Letters of Credit contemplates the draft (or drafts) and the declaration being separate instruments. It puts that the declaration is aimed at ensuring honest presentation and that this object will be met if at the time of presentation the declaration correctly states that the debt is due and payable (even if the accompanying draft is earlier dated). [77] The obstacle standing in [Griffin's] way is Rule 4.16(b)(ii). Drafts are demands within the Rule 1.09 definition of that term. Rule 4.16(b)(ii) requires a demand to contain a date indicating when the demand was issued. Under Rule 2.03, a standby is issued when it leaves an issuer's control unless it clearly specifies that it is not then issued or enforceable. In my view, "issued" in Rule 4.16(b)(ii) is to be construed accordingly. A demand is issued when it is delivered and in any event not before it leaves the issuer's control. A demand which bears a date before it is issued does not comply with Rule 4.16(b)(ii). [78] Delivery on 2 or 3 March 2015 may otherwise be timely but the recipient could appropriately examine it and conclude that there has not been compliance with the Letters of Credit. In these circumstances there will not have been timely presentation. The declaration sought by [Griffin] must be refused."

Cross-Summons

1. As the summons had to be dismissed, the cross-summons also had to be dismissed.

Matters Not in Dispute

1. We have referred to some factual matters that are common ground (at [23] above). Two matters going to the consideration of the Letters of Credit and the Sale Agreement were also common ground.
2. Mr Hutley SC, who appeared with Mr Giles for the appellants, accepted that the primary Judge was correct to observe (at [58]) that the Letters of Credit are stand alone instruments. Thus in determining the rights of the Beneficiary (Griffin) to call on the Letters of Credit and the obligations of the Issuing Bank (ICICI Bank) to pay under them, regard is not to be had to any provision of the Sale Agreement between Griffin and the Account Party (Lanco). This principle is stated, in the context of performance guarantees, in Wood Hall Ltd v The Pipeline Authority [1979] HCA 21; 141 CLR 433 at 450-451 (Gibbs J, Barwick CJ and Mason J agreeing); 457 (Stephen J); 461 (Murphy J). The principle is founded on the importance of a letter of credit being the equivalent of a cash payment: see S McCracken and A Everett, Everett and McCracken's Banking and Financial Institutions Law (7th ed, 2009, Lawbook Co) at [14.060].
3. Secondly, both the Sale Agreement and Letters of Credit must be construed by reference to what a reasonable business person would have understood the terms to mean. Subject to the principle stated in the previous paragraph, this requires 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: Electricity Corporation v Woodside Energy Ltd [2014] HCA 7; 251 CLR 640 at [35] (French CJ, Hayne, Crennan and Kiefel JJ). It is to be noted that the language, surrounding circumstances and commercial purpose or objects of the Sale Agreement are different from those of the Letters of Credit.

Submissions

1. The appellants submit that the reference to "due and payable" in cl 2(F) of the Letters of Credit means that the debt exists. An issuing bank, they argue, is not concerned with the existence of an obligation, but only with the beneficiary's statement that the obligation exists. That justifies drawing a distinction between the time at which the parties to a contract have agreed to create an obligation and the time at which the obligation can be enforced by the obligee. In his oral submissions, Mr Hutley pointed out that a debt may be payable on a weekend, yet in a practical sense be incapable of enforcement on that day because, for example, the court registry is closed.
2. The appellants contend that cl 6.1 of the Sale Agreement distinguishes between the manner of payment and the existence of the debt. They say that cl 6.1 expressly states that $150 million is payable (in the events which have occurred) on the date being four years from the Completion Date (that is, either Saturday 28 February 2015 or Sunday 1 March 2015). This has the effect of creating the debt on the nominated date even though cl 1.2(g) may permit Lanco to defer the actual payment until 3 March 2015.
3. Mr Hutley submitted that cl 1.2(g) is directed only to altering the manner of payment and does not destroy the underlying obligation. The clause simply permits performance on the next Business Day without penalty. The Beneficiary is relieved from the obligation to pay interest under cl 5.5 of the Sale Agreement in the meantime because interest is payable only if payment is not made "in the manner provided in this document". Payment on the next Business Day is "in the manner provided" in the Sale Agreement for the purposes of cl 5.5 and thus interest does not begin to run until the next Business Day.
4. The Lanco parties support the reasoning of the primary Judge. ICICI Bank makes no submission on the First Issue.

Conclusion on "Due and Payable"

1. The argument on the appeal proceeded on the basis that Griffin cannot properly deliver a declaration stating that the amount claimed is "due and payable" to it by Lanco (as required by cl 2(F) of the Letters of Credit) if the amount claimed is not in fact due and payable under the Sale Agreement. However, the appellants seek to give a particular meaning to the expression "due and payable" when used in cl 2(F) of the Letters of Credit.
2. There is in our view no reason why the expression "due and payable" in cl 2(F) should not be given its ordinary meaning. If cl 2(F) merely used the word "due", the appellants' submission might have some force. As Gibbs CJ observed in Clyne v Deputy Commissioner of Taxation [1981] HCA 40; 150 CLR 1 at 8: "[t]he word 'due' is ambiguous; can mean owing, although not payable until some future date or it can mean presently payable". But cl 2(F) uses the compound phrase "due and payable".
3. As Gibbs CJ's observation in Clyne v DCT implies, a debt may be due without being payable: see also at 15 (Mason J). A debt is payable if the time for payment has arrived and an action to recover it can be maintained by the creditor: Mack v Commissioner of Stamp Duties (New South Wales) [1920] HCA 76; 28 CLR 373 at 383 (Isaacs J, Rich J agreeing). This means that an amount is payable if the creditor has a legal entitlement to maintain an action for recover. It does not mean that a debt is payable only if, as a matter of practicality, the creditor can gain access to a court registry to initiate proceedings for recovery of the debt. (We leave to one side the fact that in cases of genuine urgency, it is always possible to gain access to a court to initiate proceedings.)
4. Because the Letters of Credit require the Beneficiary (Griffin) to declare that the claimed amount is due and payable to it by the Account Party (Lanco), it is necessary to look to the terms of the Sale Agreement to determine whether, on a particular day, the claimed amount can properly be said to be due and payable. There is no dispute that cl 1.2(g) of the Sale Agreement is intended to have substantive effect, notwithstanding that it appears in a clause headed "Construction". The sub-clause applies if the day by which an act must be done under the Sale Agreement is not a Business Day. In that circumstance, cl 1.2(g) provides that the act must be done on the next Business Day.
5. Clause 6.1 of the Sale Agreement provides that the Purchaser (Lanco) "will pay" the Deferred Consideration in the specified manner. The expression "will pay" in cl 6 clearly imposes an obligation on Lanco; the words in this context mean "must pay". The act which must be done under cl 6 is the payment of $150 million on the date being four years from the Completion Date. It is on that date that the sum of $150 million is "payable". As it happens, that date is a non-Business Day.
6. The effect of cl 1.2(g) is that the required act, instead of having to be done on the non-Business Day, now must be done on the next Business Day. The next Business Day, having regard to the definition of that term in cl 1.1 is Tuesday 3 March 2015. The sum of $150 million, instead of being payable on 28 February 2015 or 1 March 2015, is now payable on 3 March 2015.
7. Prior to 3 March 2015, Griffin has no legal entitlement to maintain an action against Lanco to recover the sum of $150 million. Any suit filed on 2 March 2015 seeking payment of that sum as due and payable (for example in New South Wales, courts in that State being open on that day), could be met by a defence that the amount was not payable on the date the proceedings were commenced. It may be arguable that the sum of $150 million becomes due on 28 February 2015 or 1 March 2015. But it is not due and payable until 3 March 2015.
8. This conclusion fits comfortably within the language of other provisions in the Sale Agreement. The reason interest does not begin to accrue under cl 5.5 until the next Business Day is not because Lanco, if it pays $150 million on 3 March 2015, has paid "otherwise in the manner provided in this document" (as Mr Hutley contends). Interest does not begin to accrue under cl 5.5 because if Lanco pays $150 million on 3 March 2015, it has not "fail[ed] to pay any sum payable by it … at the time … provided in this document". The time provided, in the events which have occurred, is 3 March 2015.
9. The appellants submit that this conclusion is inconsistent with the decision of the House of Lords in Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia [1977] AC 850. That case involved a charterparty the terms of which bear little resemblance to the provisions of the Sale Agreement. The decision is of no assistance on the question of construction raised by the First Issue.
10. The challenge to the primary Judge's conclusion that the sum of $150 million is not "due and payable", within the meaning of cl 2(F) of the Letters of Credit, until 3 March 2015 must be rejected.

Submissions

1. The appellants submit that the primary Judge erred in concluding that the bespoke definition of "Business Day" in the Letters of Credit does not apply to Rule 3.13(a). They advance five reasons.
2. First, they say that (as the primary Judge recognised) each of the Letters of Credit must have the same meaning and effect. The primary Judge overlooked the fact that the only party with an obligation under the Second Credit is the Issuing Bank (ICICI Bank), there being no Confirming or Reimbursing Bank. ICICI Bank's obligations under the Second Credit are confined to Singapore. On the primary Judge's construction, the bespoke definition has no work to do as there is no act which is to be performed in Australia. In particular, the Second Credit does not incorporate cll 5 and 8 of the First and Third Credits, which specify the obligations of the Confirming Bank (SC Bank) and the Reimbursing Bank (NAB) by reference to Business Days.
3. Secondly, the primary Judge took too narrow a view of the purpose of the bespoke definition. The parties recognised in the Letters of Credit that weekends and public holidays constitute an impediment to performing acts required by the Letters of Credit, whether those acts are to be performed by the Issuing Bank, the Beneficiary or the Confirming and Reimbursing Banks. The Letters of Credit contemplate acts and payments to be made in places in both Singapore and Australia. The point of the bespoke definition is to remove the potential impediment created by non-Business Days to the performance of obligations by all parties.
4. Thirdly, the primary Judge overstated the grammatical difficulty of reading the bespoke definition into Rule 3.13(a). Mr Hutley contends that even if the definition of "Business Day" in the Rules is applied to Rule 3.13(a) some surgery is required.
5. Fourthly, the primary Judge's construction fails to give effect to Rules 1.04 and 1.11(d), which emphasise that the text of the Letters of Credit prevails over the Rules. This emphasis is consistent with the usual principle that greater weight is to be given to express terms adopted by the parties than to standard terms.
6. Fifthly, the expression "Business Day" should be given a uniform meaning throughout each Letter of Credit (including the Rules). There is no commercial purpose in having different definitions of the same term within the same instrument.
7. Lanco supports the primary Judge's construction. It advances four reasons.
8. First, the bespoke definition makes perfect sense in the context of the obligations of the Confirming and Reimbursing Banks in the narrative of the Letters of Credit. But Rule 3.13(a) is intended to operate by reference to its own definition of "Business Day" in Rule 1.09(a).
9. Secondly, the primary Judge was correct to point to the difficulties of applying the bespoke definition to Rule 3.13(a). By contrast, the definition in Rule 1.09(a) can be read into Rule 3.13(a) without difficulty.
10. Thirdly, to apply the bespoke definition to Rule 3.13(a) requires rewriting or omitting parts of the Rule, particularly the words "of the issuer or nominated person where presentation is to be made".
11. Fourthly, the purpose that can be attributed to the bespoke definition is narrower than that suggested by the appellants. The most obvious purpose to attribute is that presentation is not required to occur on or by a date when the branch of the bank at which presentation is to be made is closed for business.
12. ICICI Bank's written submissions are neutral on the question of whether the bespoke definition of "Business Day" applies to Rule 3.13(a). However, in his oral submissions Mr Young QC, who appeared with Mr Williams for ICICI Bank, submits that the preferable construction is that the bespoke definition should be read into Rule 3.13(a). Mr Young points out that Letters of Credit are necessarily shorthand in their expression and there is therefore nothing surprising about the instruments not explaining in detail the precise application of the bespoke definition. He also points out that if the bespoke definition does not apply to Rule 3.13(a), the date of presentation would be assessed by one definition (Rule 1.09(a)), while the timing of the obligation to pay on the Confirming and Reimbursing Banks would be assessed by a different definition (the bespoke definition).

Conclusion on Bespoke Definition

1. The question of whether the bespoke definition applies to Rule 3.13(a) is not easy to resolve. The difficulty in part rests on provisions in the Letters of Credit and the Rules which, to some extent, appear to cancel each other out.
2. Rule 1.04 states that unless the context otherwise requires or unless expressly modified the Rules apply as terms and conditions imported into a standby letter of credit. Rule 1.11(d) states that "use of the phrase 'unless a standby otherwise states' or the like in a Rule emphasises that the text of the standby letter of credit controls over the Rule". The priority of the text of the letter of credit is reinforced by Rule 1.11(d)(ii). In the light of these provisions, the bespoke definition of "Business Day" in the Letters of Credit, in the absence of any other indication, would seem to prevail over the different definition of the same term in the Rules. However, cl 7(A) of the Letters of Credit (cl 5(A) of the Second Credit) provides that the Letter of Credit is subject to the Rules, except Rule 3.14. There is no exception for Rule 3.13(a) or for the definition of "Business Day" in Rule 1.09(a).
3. Clause 7(A) does not necessarily prevent the text of the Letters of Credit from prevailing over the Rules. There is no doubt that if the Letters of Credit expressly excluded the application of a particular rule, cl 7(A) would not prevent that exclusion being effective: see Rule 1.01(c). However, as we have noted, the Letters of Credit do not expressly exclude the definition of "Business Day" in Rule 1.09(a). Even so, cl 7(A) does not prevent a provision in the Letters of Credit from displacing a rule if the intention of the parties, objectively expressed, is that the rule should not apply.
4. We accept that the presence of cl 7(A) in the Letters of Credit makes it somewhat more difficult to construe the bespoke definition of "Business Day" as excluding the definition in Rule 1.09(a). Nonetheless, there are a number of considerations which tip the balance in favour of construing the Letters of Credit as intended to apply the bespoke definition to Rule 3.13(a).
5. The first consideration is that the parties have expressly included a definition of "Business Day" in the text of the Letters of Credit, despite the same term being defined in the Rules. This suggests that the parties intended the bespoke definition to apply to the entirety of the rights and obligations created by the Letters of Credit and the Rules incorporated into the Letters of Credit. It is of course by no means impossible to include two separate definitions of the same term in a single agreement, for example where a particular definition is expressly adopted for the purposes of a discrete part of the agreement. It is not readily to be inferred, however, that the parties to a commercial arrangement intend to adopt two separate general definitions of the same term, at least in the absence of a clear indication of their respective spheres of operation. Particularly is this the case where, as Mr Young points out, the commercial agreement is expressed in short form.
6. The second consideration is that there is force in Mr Hutley's submission that the effect of the bespoke definition must be the same in each of the Letters of Credit. It would be very strange if the bespoke definition and Rule 3.13(a) had a different operation as between the First and Third Credits, on the one hand, and the Second Credit on the other. Since cll 5 and 8 of the First and Third Credits do not appear in the Second Credit, the bespoke definition can have only a very limited operation in the Second Credit, unless the bespoke definition applies to the Rules, including Rule 3.13(a). It is true, as Mr Archibald QC (who appeared with Mr Izzo for the Fourth, Fifth and Sixth Respondents) submits, that the bespoke definition makes perfect sense in the context of cll 3, 5 and 8 of the First and Third Credits. But the only work for the bespoke definition to perform in the Second Credit (unless it applies to the Rules) is to govern the time within which the Issuing Bank has to pay the Beneficiary (cll 3, 6). It is difficult to see what point there is to the bespoke definition (which refers to banks being open for general business in Australia) controlling the obligation of the Issuing Bank, given that the obligation is to be performed by a bank in Singapore.
7. The third consideration is that the grammatical difficulties of incorporating the bespoke definition into Rule 3.13(a) have less significance than ICICI Bank's submissions suggest. Mr Archibald accepts that some grammatical surgery is required even if the definition in Rule 1.09(a) applies. (There are also grammatical difficulties in applying the definition in Rule 1.09(a) to other Rules which use the expression "business days": see, for example, Rules 5.01(a)(i), 5.06(c)(iv).) In any event, there are circumstances in which incorporating the words of a definition into a substantive provision is not easy. In such a case, the process of construction has to address the logical or grammatical infelicities that arise: Tovir Investments Pty Ltd v Waverley Council [2014] NSWCA 379 at [13]-[17] per curiam; cf Kelly v R [2004] HCA 12; 218 CLR 216 at [103] (McHugh J). This observation has particular force where, for good commercial reasons, the Letters of Credit are drafted in short form.
8. The fourth consideration is that Rule 3.13(a) is concerned with precisely one day - the last day for presentation. That day is a critical day, because any difficulty in presentation on that day may not be able to be cured by presentation on the following day. The issuing bank's obligations are thereafter spent: North Western Shipping & Towage Co Pty Ltd v Commonwealth Bank of Australia (1993) 118 ALR 453 at 458 per curiam (Full Fed Ct). Although the physical act of presentation on that last day is to occur at the place where the Issuing Bank carries on business, it is apt to involve decisions made by the Beneficiary (Griffin) in Australia. It is reasonable to impute an intention that where the last day falls on a weekend, Rule 3.13(a) is intended to extend the last day for presentation to a day on which banks are open for general business in both Australia and Singapore.
9. Applying the bespoke definition of "Business Day" to rule 3.13(a) gives rise to some further questions of construction. The expression "business day" is used twice in Rule 3.13(a). When first used, the expression is "business day of the issuer or nominated person where the presentation is made". On the second occasion, the expression is simply "the first following business day".
10. It is clear that "business day" must have the same meaning where it is used in Rule 3.13(a). On one view, however, the bespoke definition replaces the whole of the expression "business day of the issuer or nominated person where the presentation is made". A second possible construction is to regard the bolded words as qualifying "business day" so as to confine the first part of Rule 3.13(a) to a day which is a non-business day of the Issuing Bank.
11. It is not necessary for present purposes to resolve this additional question of construction. For reasons that will appear, on either view cl 3.13(a) is not engaged so as to extend the date for presentation until Tuesday 3 March 2015.

Third Issue

1. The consequences of resolving the First and Second Issues are:

• the amount to be claimed by Griffin pursuant to each of the Letters of Credit will not be due and payable until 3 March 2015;
• but in determining the last day for the presentation Rule 3.13(a) must be construed by reference to the bespoke definition of "Business Day" in the text of the Letters of Credit. Notwithstanding their success on the Second Issue, the appellants cannot obtain the relief they seek unless they can establish that the primary Judge erred in concluding that Monday 2 March 2015 is a "Business Day" within the bespoke definition. Unless his Honour erred in that respect, the last day for presentation under the Letters of Credit is Monday 2 March 2015, but Griffin cannot make a declaration that the amount claimed is due and payable until the next day, Tuesday 3 March 2015.

Submissions

1. In their written submissions, the appellants contend that the bespoke definition, namely "any day (other than a Saturday or Sunday) on which banks are open for general business in Singapore and Australia", means "everywhere in Singapore and Australia" or "in Singapore and everywhere in Australia". The appellants note that ICICI Bank's argument at the trial was that the bespoke definition would be satisfied if banks are open for general business "anywhere in Australia".
2. The appellants say that their construction is more consistent with the language of the bespoke definition, since the definition does not expressly state that it will be satisfied if a bank is open anywhere in Australia. The appellants also say that their construction gives effect to the purpose of the definition. They identify that purpose as being to ensure that all acts and payments required by the Letters of Credit take place on a day on which all banks are open for business. This purpose, so they argue, recognises that the acts to be done and the payments to be made by the various parties are likely to take place in different parts of Australia, as well as in Singapore.
3. In his oral submissions, Mr Hutley confronted the difficulty identified by the primary Judge, namely that legislation of the Australian States allows for public holidays in parts only of a State and even for particular classes of persons. His answer was that the expression "in Australia" is directed to public holidays in States or Territories, rather than portions of States or Territories. This led Mr Hutley to modify the appellants' written submissions. He contended that a day would be a Business Day within the bespoke definition if "in substance banks are open throughout Australia". That test is not satisfied, so Mr Hutley argued, if all banks in one State are not open for business, at least if that State has some connection with the obligations to be performed under the Letters of Credit.
4. ICICI Bank makes submissions on the Third Issue. It submits that on the proper construction of the bespoke definition, banks do not have to be open everywhere in Australia for a day to be a "Business Day". It contends that banks are open for general business in Australia if they are open in any part of Australia. In any event, so ICICI Bank says, it is enough if banks are open for general business everywhere in Australia other than Western Australia. This construction is said to accord more closely with the language in the bespoke definition.
5. ICICI Bank points to the need for a bank officer in Singapore faced with presentation of a draft to determine whether banks are generally open for business in Australia. That will be more easily done if a construction is adopted which allows the definition to be satisfied if banks are open for general business somewhere in Australia. In practice, except for national public holidays, banks will be open for general business.
6. ICICI Bank disputes the appellants' characterisation of the purpose of the bespoke definition. It says that the more natural inference is that the purpose of the bespoke definition, which is couched in terms of whether banks are open for business in two countries, is to excuse performance where a demand or payment cannot be made or received by a bank at one of those places. In other words, the parties were concerned in drafting the Letters of Credit to excuse performance under the Letters of Credit on a particular day if performance on that day is impossible.
7. Lanco's submissions are to the same effect in this issue as those of ICICI Bank. However, in his oral submissions Mr Archibald submitted that the bespoke definition is "delineating … a class or category of enterprise so that one is looking for whether, within that class or category of enterprise there are member enterprises open for business."

Conclusion on "Business Day"

1. It is important to focus on the precise words used in the bespoke definition, which appears in the text of all three Letters of Credit. A Business Day is "[a]ny day (other than a Saturday or a Sunday) on which banks are open for general business in Australia". The definition does not require all banks in Australia to be open for general business. Nor does the definition expressly refer to banks being open for general business in any particular State, notwithstanding that the Letters of Credit contain references elsewhere to individual States. For example, both the Beneficiary and the Account Party are recorded as having addresses in Western Australia and each Letter of Credit expressly states that that it is governed by the law of New South Wales. Yet the definition does not say that, in order to be a Business Day, banks must be open for general business in one of those States or that a named bank (such as the Contributing or Reimbursing Bank) must be open for general business.
2. It is also significant that the text of the bespoke definition uses the expression "in Australia". The language does not require banks to be open for general business throughout Australia. As a matter of ordinary English something can exist in Australia without existing in all Australian States. For example, the Great Barrier Reef, saltwater crocodiles and Tasmanian Devils are all found in Australia, but not throughout Australia. Sugar cane is grown in Australia, but not in all Australian States and Territories.
3. The construction initially advanced by Griffin effectively reads the word "all" into the bespoke definition, for which there is no warrant. Moreover, as Mr Hutley recognised in his oral submissions, the construction initially advanced creates absurdities that the parties cannot be taken to have contemplated. That construction would require a bank in Singapore to ascertain whether there is any bank in Australia that is not open for general business on a particular day in order to determine whether a demand has been made in conformity with the requirements of a Letter of Credit. That would not only require the bank to undertake an exhaustive search of all State and local public holidays that might apply to a particular day, but to determine whether any bank in the country is not open for general business for any other reason.
4. The precise scope of Mr Hutley's alternative formulation - banks in substance are open throughout Australia - is far from clear. It is not apparent why that test is not satisfied if banks are open for general business throughout the country, other than in one State. The appellants do not dispute the primary Judge's finding (at [68]) that: "the nature of modern banking practice is such that banks open anywhere in Australia are capable or transacting business for and on behalf of all of the bank's customers, wherever located". An objective observer who is asked whether banks "in substance are open for business in Australia" on a day which is a public holiday in one State only would be very likely to answer "Yes".
5. There are strong indications in the text of the bespoke definition suggesting that banks are open for general business in Australia on all days other than holidays that are observed nationally, such as Good Friday or Anzac Day. That construction has the advantage of ensuring that the task facing the relevant bank officer in Singapore on presentation is clear cut. It serves the objective of effectively extending the Expiry Date of the Letters of Credit if on the nominated date it is impossible to obtain general banking services in Australia (or Singapore). But it also recognises that as long as banks are open for general business in Australia and Singapore on a given day, the parties will have no difficulty, in accordance with modern banking practices, in complying with their obligations under the Letters of Credit.
6. For present purposes it is not necessary to go that far. It is enough to conclude, for the reasons that have been given, that Monday 2 March 2015 is a day on which banks are open for general business in Australia. On that day, on the evidence before the primary Judge, banks will be open for general business everywhere in Australia other than Western Australia. The hypothetical observer who is asked whether banks are open for general business in Australia on that day, bearing in mind the public holiday in Western Australia, is again very likely to reply "Yes".
7. There are days which are public holidays in all Australian States and Territories, except one or two. The Queen's Birthday holiday, for example, is usually celebrated on the same day in all Australian States and Territories other than Western Australia. Whatever uncertainty there may be about the application of the bespoke definition in that situation, in our view a day on which all banks in Australia, other than Western Australia, are open for business is a "Business Day".
8. It follows that Monday 2 March 2015 is a Business Day for the purposes of the bespoke definition. It is common ground that Saturday 28 February 2015 and Sunday 1 March 2015 are not Business Days. Since the last day for presentation stated in the Letters of Credit is the Saturday or Sunday, Rule 3.13(a) provides that presentation is to be made on the first following business day. That day is Monday 2 March 2015.

Fourth Issue

1. Mr Hutley pointed out that if the primary Judge's construction of cl 2(E) of the Letters of Credit is correct, Griffin's entitlement under the Letters of Credit was "doomed from the outset". This is because the Expiry Date for each Letter of Credit was always going to be on the weekend of 28 February and 1 March 2015. Consequently, presentation by the Beneficiary could never have taken place before Monday 2 March 2015. If the draft must bear the date of presentation, it was never possible for the draft to be dated 1 March 2015 as cl 2(E) appears to require. On this basis, Griffin could never secure exemption from the requirement that it declare in the draft that the first export of coal produced by Griffin Coal had occurred.
2. The appellants submit that the draft required by the Letters of Credit can be dated 1 March 2015, but presented at a later date if a later date is otherwise permitted by the terms of the Letters of Credit. The appellants rely on Rule 4.06, to which the primary Judge did not refer. Rule 4.06 provides that the issuance date of a required document may be earlier, but not later than the presentation date.
3. The appellants also contend that the primary Judge's reliance on Rules 2.03 and 4.16(b)(ii) was misplaced. They submit that Rule 2.03, which provides that a standby letter of credit is issued when it leaves the issuer's control, is concerned only with the issue of the Letter of Credit, not with the issue of a draft by the Beneficiary. They further submit that Rule 4.16(b)(ii), which provides that if a separate demand is required it must contain a date indicating when the demand was issued, does not mean that the draft must be presented on the date of its issue.
4. The appellants' alternative submission is that a draft dated 2 or 3 March 2015 can satisfy the requirements of cl 2(E) of the Letters of Credit so as to exempt Griffin from the requirement that it declare that the first export of coal by Griffin Coal has occurred. The alternative contention requires "1 March 2015" in cl 2(E) to be read as "1 March 2015 or any later Expiry Date". Such a construction is warranted, so the appellants argue, to avoid a commercially absurd result.
5. In view of the conclusions we have reached on the other Issues, it is not necessary to resolve the question of construction of cl 2(E) of the Letters of Credit. It is enough for us to indicate that the appellants' primary argument has considerable force. Its alternative argument faces the formidable obstacle of the plain words of cl 2(E).

Orders

1. The notice of appeal seeks orders setting aside the judgment and orders made by Hammerschlag J on 20 February 2015. In lieu thereof the appellants seek such declarations as are appropriate depending upon which grounds of appeal are upheld, as set out in the Statement of Relief sought in the Commercial List proceedings. The principal relief sought comprises declarations that presentation of a draft under each Letter of Credit in Singapore on or before 1.30 pm Singapore time on 3 March 2015 is timely representation for the purposes of each Letter of Credit.
2. For the reasons that have been given, each Letter of Credit will expire no later than Monday 2 March 2015. The primary Judge was therefore correct to dismiss the Commercial List summons filed by Griffin and to dismiss the proceedings cross-vested from the Supreme Court of Western Australia.
3. It is not necessary to resolve the appellants' claim to a declaration as to the operation of cl 2(E) of each Letter of Credit.
4. Accordingly, the appeal from the orders made by Hammerschlag J in each of the proceedings before him must be dismissed. The appellants must pay the respondents' costs. The cross-appeal must also be dismissed with costs.

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