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[2011] NSWSC 381
Supreme Court of NSW
2011-02-21
Harrison J, Davies J, Hulme J
Original judgment source is linked above.
Grammatical analysis, or syntactical analysis, of a sentence is one of the steps that a judge can go through in that process of construction. It aims to divide the sentence into constituent parts, and identify those parts according to the functions that each of them plays in the sentence.
It can be seen that under the Workplace Agreement of 23 July 2007 Dr Nair was apparently only employed as Managing Director whereas before he had been employed as Chief Executive Officer and Managing Director. However, it is apparent from subsequent documents (and it does not appear to be disputed by the Company) that Dr Nair was also appointed as Chief Executive Officer under the Workplace Agreement. It was from that position he resigned in November 2007." 2The parties produced a document entitled "Agreed Issues". I have no doubt that in doing so they intended to refine the matters that now fall to me for determination. Whilst I intend no criticism of that intention, I have found the document to be of only limited assistance. I do not propose to treat it as either a substitute for the parties' respective pleaded cases or as a statement of discrete and separate issues for decision. In my opinion it is clear that the matters that arise for consideration by me are as follows:
The implied term issue 3The defendant contended that it was "unclear" at the time Dr Nair resigned whether or not the Employment Deed remained on foot. This is significant because Dr Nair had no claim to be paid the termination entitlement for which he now sues under that agreement. The defendant contended that the Workplace Agreement was only to commence if and when what is referred to as the Kedrion deal came into effect. That was a proposal, in general terms, for the acquisition by a European company of the defendant's operations or part of it, or for some form of joint venture between them. 4The issue is identified in the pleadings in the following way. Paragraph 19 of the statement of claim is in these terms: "19. On 23 June 2007 the plaintiff, as employee, and the defendant, as employer, entered into an employment agreement. Particulars (a) Workplace Agreement Life Therapeutics Limited between the defendant and the plaintiff executed by the plaintiff on the one part and Dr Brown and Mr Manusu on behalf of the plaintiff (Workplace Agreement)." 5Paragraph 19 of the Further Amended Defence, so far as it is still relied upon by the defendant, is in these terms: "19. In answer to the allegations in paragraph 19 of the claim, the defendant: (a) says that it was an implied term of the Workplace Agreement that it was only to operate in circumstances where the proposed restructure with Kedrion came about and the plaintiff became the managing director of LTI with responsibilities for LTI and Newco; (b) says that the implied term was not satisfied; (c) ..." 6Dr Nair resigned on 28 August 2007 with effect from 28 November 2007. The defendant submitted that the Workplace Agreement "was, as a result of an implied term, conditional upon its commencement from an agreed date which seemed to be aligned with the finalisation of the Kedrion deal". The defendant's written submissions on this point then continued as follows: "15. ... This is unclear because of the failure to include a date in the Workplace Agreement, or to clearly set out when it was to commence. Indeed, the Board minute approving the entry by the defendant into the Workplace Agreement...makes it clear that it was being entered into in the context of a proposed deal with Kedrion, in circumstances where Dr Nair was to be the Chief Executive Officer and Managing Director of the new entity to be formed post-completion of the transaction with Kedrion. This never occurred and thus the new entity was never formed... 16. Unless Dr Nair can demonstrate that the Workplace Agreement was on foot as at the date his resignation took effect, he must fail. This is because the Employment Deed contained no provision entitling him to a termination payment of the kind now sought." 7Mr Pike of counsel, who appeared for the defendant, made various oral submissions on this topic. First, he submitted that the Employment Deed did not have the equivalent of special condition 9.4 that appears in the Workplace Agreement. The significance of this difference was not immediately apparent to me and upon further discussion Mr Pike offered the following submission: " PIKE: If that was the intention of the parties in the workplace agreement one would expect to find very clear words to evidence that. So putting it another way if there had been a like provision in an antecedent agreement and this was a roll over that would be one thing, but in circumstances where it's not there and it's now said to be there and have such a dramatic effect, one would expect to see the clear words to give the right. That's the short point." 8The short point would appear to be that the absence of any explanation for the difference between the two agreements somehow served to support the implication of the term in the way proposed by the defendant. The point was not elaborated upon in submissions. Mr Pike conceded, in fact, that it was not " the biggest point" but simply requested that I note it. 9Secondly, the defendant submitted that there was no date inserted in Item 1 of the Schedule as the commencement date of the Workplace Agreement. This was said to be significant even though the agreement was uncontroversially accepted as having been executed by both parties on 23 June 2007, and the job description was also not completed. Mr Pike made some other submissions to which it is unnecessary in detail to refer. 10The transcript finally contained a discussion about this issue, which included the following: "PIKE: ... All of those points simply go to the submissions that we have made in the written submissions about whether the agreement came into effect or not and whether as your Honour put it there was a condition precedent. I quite frankly accept it's difficult to satisfy in the circumstances of this case the test for the implication of a term along the lines that we have contended for. I don't have instructions, as it were, to abandon the points but I don't want to take up more of your Honour's time apart from than what we've said in our submissions ...
PIKE: ... Each of those matters we say gives rise to an issue whether the parties did intend this to come into effect on 23 June or whether it was conditional upon the Kedrion deal taking effect. I have made some submissions on that in our written submissions. As I've said I don't wish to take any further time on that.
PIKE: On one view the subsequent conduct is consistent with the agreement being in effect. So can we come back to what is the real issue. HIS HONOUR: The construction point." 11This last concession, properly made, appears to me to be fatal to the defendant's contentions, even assuming that the implied term point were otherwise viable. The defendant itself dealt with Dr Nair's resignation in a formal and solemn way at a meeting of its remuneration committee on 5 November 2007. The minutes of that meeting, a portion of which is reproduced below, are clearly based upon recognition of the fact that the Workplace Agreement was in force when the meeting took place and upon the related acceptance of the fact that the resignation with which they deal was a resignation pursuant to the Workplace Agreement. Those minutes are relevantly as follows: " LIFE THERAPEUTICS LIMITED MINUTES OF THE REMUNERATION COMMITTEE MEETING Held at 9:12pm Monday 5 th November 2007 736 PARK NORTH BLVD, CLARKSTON, GA Attendees: Directors: Mr. J Brown (Chairman/JB), Mr. J Cooper (JC) Assistant Company Secretary: Rachel Freeman (RF) By invitation: Mr. S Sarda (CFO); Dr. H Nair (HN/MD/CEO)
The construction issue 14Clause 8 of the Workplace Agreement is in the following relevant terms: " 8. TERMINATION (a) ... (b) Subject to the provisions of Workplace Relations Act 1996 (Cth) , this agreement may be unilaterally terminated: (i) by LFE without notice if the Executive: A. engages in any act or omission amounting to a serious breach of any of the provisions of this agreement; B. engages in serious or wilful misconduct, C. commits any act which may detrimentally affect LFE or any Group Company, including an act of dishonesty, fraud, wilful disobedience, unauthorised disclosure of the Confidential Information or misconduct; D. is of unsound mind or becomes liable to be dealt with under any law relating to mental health; or E. is convicted of an indictable offence (provided LFE may only terminate under this paragraph (d) within 3 Months of it becoming aware of such conviction); and (ii) by LFE with not less than 1 Month's notice in writing if the Executive: A. becomes incapacitated by illness or accident for an accumulated period of 6 Months in any 12 Month period; B. is advised by an independent medical officer that the Executive's health has deteriorated to a degree that it is advisable for the Executive to leave LFE; or C. commits any act of bankruptcy or compounds with creditors; or (iii) or by LFE or the Executive upon the provision of 1 Months' notice in writing." 15Dr Nair contends that he resigned pursuant to clause 8(b)(iii) and became entitled to be paid the amount referred to in special condition 9.4(b). A termination pursuant to clause 8(b)(iii) was not a termination pursuant to clause 8(b)(i) or (ii) and so was, in the opening words of special condition 9.4, a termination by him for a "reason other than a reason specified in clauses 8(b)(i) or (ii)". Clause 8(b)(iii) and special condition 9.4 are said not to be in tension and work together as terms dealing with Dr Nair's unilateral right to terminate the agreement in the first place and his entitlements upon doing so in the second place. 16The defendant submitted that the two provisions were, in effect, alternatives. They operated separately and independently and dealt with different situations. They did not work together to produce the result contended for by Dr Nair. The defendant contended that on its proper construction, special condition 9.4 does not apply to a "resignation" by Dr Nair. The argument proceeded as follows. 17Dr Nair resigned of his own volition. A unilateral act of resignation by one party to an employment agreement is something fundamentally different to a termination. That is said to be clear from the terms of special condition 9.4 itself, and in particular the words "for any reason other than a reason specified in clauses 8(b)(i) or (ii) (for instance in the event of a dispute in respect of any aspect of the operation or management of LFE and the parties are unable to resolve their differences despite good faith discussions and negotiations between them)" (defendant's emphasis added). The defendant submitted that it was clear that the parties intended, by the use of these words, that there should be a " reason " for the termination, other than one of the reasons specified in clause 8(b)(i) and (ii). The defendant submitted that a unilateral act by one party did not amount to a " reason ". This was said to be clear when regard is had to the example provided in the opening words of special condition 9.4, which refer to a dispute that cannot be resolved without good faith negotiations. The defendant submitted that these words could not be ignored but that Dr Nair's argument does so. The defendant submitted that if the right to terminate were "at large" as Dr Nair contends, there would have been no need for the parties to have gone to the trouble of providing an example of the " reason " that would bring the Workplace Agreement to an end. On this analysis, the introductory words of special condition 9.4 would simply have read, "[i]f either party wishes to terminate this agreement". 18The defendant also argued that this was a case for the application of the ejusdem generis principle. The words "any reason" in the opening words of special condition 9.4 should be construed by reference to the examples that follow them. The defendant submitted that if the parties had intended to pick up in special condition 9.4 the unfettered right to terminate in clause 8(b)(iii), as Dr Nair asserts, they could easily have said so. They did not. On the contrary, the parties used what the defendant submitted were clear words to show that a "reason" must exist for a termination before the special condition 9.4(b) entitlement will apply. 19Furthermore, the defendant contended that the proper construction of special condition 9.4 was reinforced by the inclusion of special condition 9.3, which gave Dr Nair an entitlement to terminate the agreement if more than 50 per cent of the issued capital in LFE was acquired by a third party. The termination entitlement in such circumstances is the same as that in special condition 9.4. On Dr Nair's construction of special condition 9.4, special condition 9.3 would be completely superfluous: it would have no work to do. Dr Nair would not need an express entitlement to terminate in the event of a change in effective control, because he could do so whenever he chose for no reason at all. The defendant submitted that the parties could not have intended such a result or to have included special condition 9.3 for no reason whatsoever. 20The defendant submitted in general and contextual terms that the principal purpose of special condition 9.4 was to protect Dr Nair where the termination comes about as the result of some joint action resulting in disagreement - for example, where the parties get into a dispute about the future direction of the company, which cannot be resolved. The special condition has no application to a unilateral act of resignation. 21Finally the defendant submitted that, on Dr Nair's case, he could have resigned on 24 June 2007, the day after the Workplace Agreement was executed and immediately have become entitled to his termination entitlement. In the context of an employment agreement with a two year term, and the existence of the earlier Employment Deed, which did not expire before 22 November 2007, with no similar termination entitlement, this was said to be an unusual result, for which there are no express words in the agreement, but for which the clearest, presumably express, words would have been necessary.
Principles of construction 22It is convenient and apposite to refer to what was said by Newnes JA in his judgment in Condor Developments Pty Ltd v Helsby [2010] WASCA 16 at [42] - [44] as follows: "[42] The principles to be applied in the construction of a contract are well-known. The court is required to ascertain the common intention of the parties, by reference to what a reasonable person would understand the contract to mean having regard not only to the text, but also the surrounding circumstances known to the parties and the purpose and object of the transaction: Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [40].
It is part of the process of construction for the judge to come to a view about which of those meanings is most likely to be understood by a reasonable person in the position of the parties. The grammatical structure of the sentence in which the disputed phrase occurs is not something that is indisputable and apparent, and thus capable of providing a firm starting point for the process of construction. Rather, the grammatical structure is something that comes to be understood as part of the process of construction." 24In that case the Court was required to examine the meaning to be given to the phrase [i]f the employee ceases employment with Macquarie". Macfarlan JA said this about that expression at [13] as follows: "[13] I agree with the orders proposed by Whealy JA and with the reasons that he gives. In particular, I agree that the condition '[i]f the employee ceases employment with Macquarie' did not require the employee to have brought about the cessation of employment. In its ordinary meaning the phrase is a reference to a state of affairs that might come about, not to who might bring it about. It operates similarly to a phrase such as 'if the man ceases to be married'. The example given in [46] in Whealy JA's judgment well makes the point: in answer to a question of 'When did you cease employment with Macquarie?', Mr Byrne would in ordinary parlance have been expected to say something to the effect of 'December 2008', not 'I did not cease employment with Macquarie, it terminated my services'.
Consideration 25So what did the parties intend? What would a reasonable person understand the contract in this case to mean having regard not only to the text, but also the surrounding circumstances known to the parties and the purpose and object of the transaction? The defendant contends that something in the nature of fault on one side, or the breakdown of the relationship between the parties, was what the parties intended in this case. It says that a reasonable person would understand the contract to mean that Dr Nair had to establish or point to a precipitating event or cause, and that the opening words of special condition 9.4 indicate or point to what the nature of that event or cause should be. This argument would appear to have as its impetus the not unreasonable underpinning wisdom that it is at least unfair for Dr Nair to be able to resign or terminate the agreement at any time for any reason (or for no reason) and still expect to receive a not insignificant termination payment. The defendant maintains that the text of the agreement, the surrounding circumstances and the purpose and object of the transaction all point in the opposite direction. 26By analogy with the reasoning adopted by his Honour Macfarlan JA in Byrne , I do not consider that there is any helpful distinction to be drawn between a resignation and a termination. If Dr Nair had the benefit of a clause that permitted or entitled him to bring a contract of employment to an end, it is no more than a semantic distinction to insist that he did not resign because he terminated the agreement unilaterally or that he did not terminate the agreement unilaterally because he resigned. It may be different if the agreement in question used the terms in different ways or in different contexts so that the distinction became significant. That does not seem to me to be the case here. 27The text is not altogether helpful but it is clear enough. Clause 8(b)(iii) on its face permits termination without cause or fault. The heading to the clause is simply " TERMINATION ". In contrast, the heading to special condition 9.4 speaks in terms of "termination for reason other than a breach". Breach or fault are cognate terms and contemplate the same idea. The opening words of special condition 9.4 appear to describe the breaches that are contemplated as those falling within or specified in clauses 8(b)(i) or (ii). Clause 8(b)(iii) is obviously excepted from this group. There is therefore clear scope for the two provisions to work together. If either party wishes to terminate the agreement for any reason other than a reason specified in clauses 8(b)(i) or (ii), which for presently relevant purposes means clause 8(b)(iii), then special condition 9.4 applies, providing as it does the details of Dr Nair's entitlement if he has unilaterally terminated the agreement pursuant to clause 8(b)(iii). That is what happened here. 28A unilateral right to terminate the agreement upon the giving of a specified period of notice does not need to be accompanied by a " reason " for its exercise before it can operate. There may be scope for speculation about what Dr Nair's reason was. The obvious reason would appear to be that Dr Nair wanted to resign and take his termination entitlement. In my opinion, he did not have to point to a reason, in the sense of a cause for making or coming to his decision to resign or to terminate the agreement, before he could do so. The expression "any reason other than a reason specified in clauses 8(b)(i) or (ii)" is clear and unambiguous. It means any reason not specified in those sub-clauses. That quite literally encompasses no reason at all beyond the desire of either party unilaterally on one month's notice to bring the agreement to an end. To adopt the rhetorical technique referred to by the Court of Appeal in Byrne , if Dr Nair were asked in the course of a hypothetical discussion, what was his reason for ceasing employment with LFE, a valid reply may well have been, "the reason I resigned was because I no longer wished to continue my employment there". 29A reading of the Workplace Agreement as a whole leads me to conclude that special condition 9.4 means that if Dr Nair's employment ceased for any reason other than one of the reasons encompassed by clause 8(b)(i) or (ii), he would be entitled to receive the termination payment for which the special condition provides. Special condition 9.4(b) also makes it clear that the defendant's obligation to pay the termination entitlement to Dr Nair applies "notwithstanding anything else in this agreement". In my opinion, the words or phrases in the special condition that the defendant relies upon do not mandate or require the identification of the terminating party or the circumstances leading to the cessation of the employment relationship, in particular any fault arguably or allegedly attributable to either party that has led to that result. As Whealy JA said in Byrne at [55]: "[55] I am, in the end, persuaded ... that the relevant phrase in the particular sentence is simply neutral as to who is to initiate the outcome of the cessation of the employment. It is, as senior counsel submitted, a reference to a resultant status. One would ask, "has the employee ceased employment?" If the answer is that the bilateral relationship between the employer and the employee has come to an end (no matter who initiated the cessation), the consequences stipulated in the sentence come into play." 30Does a consideration of the surrounding circumstances known to the parties or the purpose and object of the transaction lead to a different result? In my opinion the words of the Workplace Agreement are unambiguous and I am required to give effect to them. The defendant presumably contends that in doing so the result that is produced is capricious or unreasonable or both. It would presumably also contend that it might be guessed or suspected that the parties intended something different and that my conclusion leads to a result that is both inconvenient and unjust. However, these considerations are beside the point unless the language of the agreement is open to two (or more) constructions. I do not think that it is. Nor do I consider that there is any inconsistency between the provisions in question and the rest of the agreement. 31The surrounding circumstances include the fact that Dr Nair was and had been for some time an important and valuable employee, whose services were held in high regard by the defendant and whose contribution to the company had a corresponding value. Indeed, there is a specific acknowledgment by the employer that the agreement has been entered into in order to procure the services of Dr Nair, which are described as "critical to the successful transition of the Life Sera business to the merged business with Kedrion". The cost of retaining Dr Nair's services and the beneficial nature of the termination provisions are a reflection of these things. The object of the transaction presumably therefore included the provision of beneficial conditions of employment that were capable of attracting and retaining Dr Nair in the designated role. In this context it is not without significance that the defendant was also able on one month's notice itself without reason or fault to terminate the agreement. There was to that extent a degree of mutuality in the way in which clause 8(b)(iii) operated. The cost to the defendant of utilising the sub-clause was the corresponding obligation to pay a termination benefit for which special condition 9.4 provides.
The res judicata / issue estoppel / Anshun issue 32It follows from what I have said earlier that I consider that Dr Nair is entitled to be paid a termination benefit. In its original defence, the defendant relied upon s 200B of the Corporations Act to plead that the special condition 9.4 termination entitlement was void because member approval had not been obtained. The defendant filed a motion and Davies J determined three separate issues that were ultimately identified as arising from it. Dr Nair contends that his Honour's decision entirely forecloses the defendant's ability to revisit any of the issues determined by his Honour. However, despite the decision of Davies J on the separate issues, the defendant continues to assert that Dr Nair's entitlement remains subject to approval by the members of the defendant at a general meeting. 33The three questions that his Honour was asked to decide were as follows: "(a) Whether, assuming the Termination Entitlement referred to in paragraph 23 of the Statement of Claim (Termination Entitlement) is otherwise payable by the Defendant, it was required to be approved by the members of the Defendant at a general meeting, pursuant to section 200B of the Corporations Act 2001 (Cth) (Act); (b) Whether the Termination Entitlement was approved by the members of the Defendant at the Annual General Meeting of the Defendant held on 28 November 2007; (c) Whether, assuming the Termination Entitlement is otherwise payable by the Defendant, it is prohibited for the purposes of section 200B of the Act, because member approval has not been obtained." 34His Honour answered the first two questions "No" and did not need to answer the third. At [26] of his judgment his Honour said this: "[26] In my opinion, the termination entitlement was exempt from the requirements of s 200B by reason of being a benefit that fell within s 200F(2)(a)(ii)." 35Mr Pike submitted that his Honour dealt with s 200F(2)(a) but did not deal with s 200F(2)(b). The transcript of the proceedings before me reveals that he put the matter in the following way: "PIKE:...It is clear that his Honour determined under (2)(a)(ii) that the benefit in clause 9.4 was given to Dr Nair in consideration for Dr Nair agreeing to hold the office that he held under the 23 June 2007 agreement. I have to accept that that issue is estopped in respect of that. I can't seek to reagitate that and I don't seek to reagitate that. That is obvious. What his Honour did not determine was whether (2)(b), which is the quantum of the benefit requirement, his Honour did not determine whether that had been exceeded such that shareholder approval was required for that reason. No matter how hard one tries to look at Davies J judgment, his Honour did not determine the (2)(b) issue so there is no reason why, given we are still in the same proceedings, I ought not be permitted to agitate the point now." 36A little later in the proceedings the following exchange occurred: "HIS HONOUR: You say in effect that (a) and (b) are, if you like, cascading factors. PIKE: Yes. HIS HONOUR: Each has to be established. Davies J was called upon only, for the reasons that can be either assumed or speculated about, was asked only to determine the first issue. PIKE: I would more accurately say only determine the first issue. HIS HONOUR: Didn't I say that? PIKE: You said only asked to determine the first issue. I don't necessarily agree that the way the case was conducted below, accepting that I was not there; I don't accept that his Honour was only asked to consider the (2)(a) issue. Perhaps it is not relevant on my case to your Honour making a decision about that. What is clear is that he hasn't determined the (2)(b) issue." 37Although I was not referred to it at the time, the transcript of the proceedings before Davies J on 19 April 2010 is instructive on this topic. Mr Silver of counsel, who appears now and who appeared then for Dr Nair, said the following things to his Honour: "SILVER: The defendant says that it was the agreement that was approved, not the payment. So that is what your Honour has to decide on that point. The first issue is whether the exception applies, and there are two aspects to that. I will read the section briefly. The exemption is s 200F(2), and the relevant portion of that is (a)(ii), there doesn't seem to be a dispute that we qualify (b), in other words the dollar amounts [sic] seems in order. So that your Honour will be asked to make a decision under s 200F(2)(a)(ii), and that reads...
Moving to the formula, that is the second part of the exemption in the s 200F(2), and that's under s 200F(2)(b), that has not been put into contention in the submissions but the dollar figures, if one fills them into the formula, we say fulfil the requirements of the exemption. If there's any argument about that, we can address it but it hasn't been raised." 38Nor was any voice raised at that time by counsel then appearing for the defendant in opposition to anything that Mr Silver said on the topic. Although Mr Pike indicated that he does not accept that Davies J was only asked to consider the s 200F(2)(a) issue, the position seems to be that that was because the s 200F(2)(b) issue was not put in contention. Mr Silver's offer to argue it before his Honour would appear not to have been taken up by the defendant's counsel and the transcript suggests that the defendant accepted that it was not in dispute. If that were so, a very strong case arises in favour of Dr Nair that the Anshun principles should now prevent the defendant from seeking to agitate the issue again before me. 39Mr Silver provided me with written submissions on the Anshun point. However, they do not in terms address the detail of what occurred before Davies J in the way exposed by the transcript I have quoted. The submissions were relevantly in these terms: "67. If it is found that res judicata or issue estoppel do not apply, then the defendant is estopped because the defence under consideration was so relevant to the subject matter of the separate question that it was unreasonable not to rely on it in the proceedings: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 602. 68. The principle is that parties should bring forward their whole case and not seek to reopen issues in subsequent litigation, not only to avoid the possibility of inconsistent decisions but also to make efficient use of court resources and judicial time. 69. Some guidance as to what is meant by "unreasonable" is found in Port of Melbourne to the effect that generally it would be unreasonable not to raise a defence in prior proceedings if, having regard to the nature of the plaintiff's claim and its subject matter, it would be expected that the defendant would raise it and thereby enable the relevant issues to be determined in the one proceeding: Port of Melbourne at 602. 70. In regard to the notion of conflicting judgments - conflict arises where judgments appear to declare rights which are inconsistent in respect of the same transaction ( Port of Melbourne at 603), or where one judgment contradicts an assumption which was fundamental to an earlier decision in the sense that if the assumption had not been made, the decision would have been different: Woodson Sales v Woodson (1996) 7 BPR 14,685. 71. The separate question concerned whether membership approval was required for the termination entitlement, as defined, taking into account the (two legs of) the statutory test. 72. The purpose of the determination of separate questions was obvious. If the answer to the questions favoured the defendant, a much longer hearing would be avoided. The questions were able to be determined because they were discrete and could be disposed of on some basic facts. 73. The two legs of the exemption test could have been addressed on the evidence, and could have been addressed at the same time. The test and the questions were intimately linked. The extra argument would not have taken much time. (All of this is on the assumption that the matter was not before the court which is somewhat artificial because the plaintiff did raise and argue the point.) Also one wonders why the court would have allowed a separate question to be decided on one part of the necessary statutory test. 74. In the circumstances it would be expected that the defendant would raise both issues in one proceeding. 75. The possibility of conflicting judgments also arises, because: a.Different courts might come to different views about whether member approval was necessary; b.It was a necessary part of the first judgment to decide that the second part of the test had been satisfied." 40Mr Pike did not deal with the Anshun point in his written submissions. His argument was entirely encapsulated in the following oral submissions before me: "PIKE: If one then deals with Anshun , again I haven't found any authority that deals with the point. I thought there was some authority for the proposition that says an Anshun can't arise out of an interlocutory decision but I can't find that. But if one looks at what Anshun is, again, it is, proceedings A dealt with to their finality, then later proceedings one of the parties seeking to agitate a point, that for whatever reason was so inextricably linked with what was at issue in the earlier proceedings that the Court determines it is reasonable to have a second go and generally the touchstone is because of the prospect of inconsistent judgments and the like. Posited that way it doesn't neatly fit into an answer to a separate question type analysis as we are dealing with here. In my submission Anshun does not supply either. If there is to be any attraction for Mr Silver, it is in the notion of issue estoppel." 41I am concerned in these circumstances that I have not had the benefit of an informed debate on this aspect, and correspondingly that the parties have not had notice from me that there is an issue, which is potentially very significant that requires consideration in the light of what transpired before Davies J. There should be further submissions from the parties on this aspect before I finally dispose of it. 42It will also be convenient to postpone a consideration of the so-called issue estoppel and res judicata points until that has occurred. There is some prospect that the manner in which the case proceeded before Davies J may also bear upon further submissions that the parties may wish to direct to these questions as well. Conclusions 43It will be apparent that my answers to the first two questions favour Dr Nair. I consider that the Workplace Agreement came into effect and was not subject to a condition precedent that was not met. I have also found that upon a proper construction of that agreement, Dr Nair was entitled to be paid a termination benefit upon his resignation. Having regard to the concerns that I have expressed about the third issue, I will invite the parties to furnish me with further submissions, or to relist the matter for further argument at some convenient time to be arranged in consultation with my Associate. I will also hear the parties at that time on the question of costs if required.
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The approach to be taken in construing the language of a written contract was discussed by Gibbs J in the following, oft-cited passage, in Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109 - 110: 'It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, 'even though the construction adopted is not the most obvious, or the most grammatically accurate', to use the words from earlier authority cited in Locke v Dunlop (1888) 39 Ch D 387 at 393, which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley's Case (1880) 16 Ch D 681 at 686. Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas & Co Ltd v Arcos Ltd [1932] UKHL 2; (1932) 147 LT 503 at 514, that the court should construe commercial contracts 'fairly and broadly, without being too astute or subtle in finding defects', should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance (cf Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429 at 437).'
It must be said at once that the agreement is very poorly drafted. Apart from a number of places where words have obviously been inadvertently omitted, and what appears to be an inadvertent omission of a cl 2.3.8, the agreement is replete with obscure and, in some cases apparently inconsistent, provisions. In the parts with which this appeal is concerned it is difficult to give the agreement any coherent meaning. The agreed facts provide no real assistance in ascertaining the parties' intentions. Nevertheless, it is into this Serbonian Bog that the court must wade to do its best to make some sense of the agreement." 23Recently in Byrne v Macquarie Group Services Australia Pty Ltd [2011] NSWCA 68, Campbell JA made the following comments at [2], [3] and [9]: " [2] Construction is a process of coming to understand the meaning of a text whose meaning is disputed. It involves a consideration of the disputed text in itself, both as a whole, and in its constituent parts. It also involves a consideration of the context in which it occurs, meaning by that the entire text in which disputed portion occurs, and any relevant matters of the wider context and purpose of the disputed text: cf Thomas v State of New South Wales [2008] NSWCA 316; (2008) 74 NSWLR 34 at [22]. It involves using all of these factors as a means of throwing light on the others, so that eventually an understanding of the disputed text is arrived at.
Nair
Arturus Capital Limited
[2010] WASCA 16
(2001) 53 NSWLR 153
(2004) 218 CLR 451
(2004) 219 CLR 165
(1973) 129 CLR 99
(1968) 118 CLR 429
(2008) 74 NSWLR 34
(1981) 147 CLR 589
[2004] HCA 52