10 Mr D M Loewenstein of counsel, for the developers, accepts that the liability alleged in the relevant paragraphs of the third cross-claim is a liability in respect of the "Services" to be provided (and in fact provided) by George Floth under the contract. However, Mr Loewenstein submits, that liability is not one "under the law of contract, tort or otherwise".
11 Mr Loewenstein accepts further that what is "pleaded" in the cross-claim falls within the description "any action or claim whatsoever...in respect of the Services". However, he submits, those words are referable back to, and impose no greater limitation on liability than, the earlier words of cl 4.3 to which attention is drawn by the first of the two separate questions.
The approach to construction
12 The parties accepted that, in general, the court's approach to the construction of commercial contracts is that identified by Gibbs J in Australian Broadcasting Commission v Australasian Performing Right Association Limited (1973) 129 CLR 99 at 109-110. It is not necessary to set out what his Honour there said.
13 Further, and specifically in relation to clauses excluding or limiting liability, it was common ground that the approach to construction is (with a possible exception to which I will refer) that described by the High Court of Australia in Darlington Futures Limited v Delco Australia Pty Ltd (1986) 161 CLR 500 at 510. At that reference the Court, having reviewed the authorities, said that the interpretation of an exclusion clause is to be determined by giving the words in it their natural and ordinary meaning read in the light of the contract as a whole. It was important, their Honours said, to give due weight to the contractual context, including the nature and object of the contract as a whole. Finally, their Honours said, it might be necessary "where appropriate" to construe "the clause contra proferentem in case of ambiguity". The possible exception to which I referred earlier is that later decisions, including of the High Court, suggest that the contra proferentem rule is really a rule of last resort.
Decision
14 In the present case, there is no suggestion that the contract between the developers and George Floth was negotiated other than on equal terms, by parties each in a position to bargain for what they thought to be appropriate contractual protection.
15 There are two examples that show this. First, for the purposes of cl 4.2, the limit of liability is specified at $5 million rather than the sum of $300,000 stated in the clause. Secondly, for the purposes of cl 4.3, the period of time after which a claim is not maintainable is stipulated to be two years rather than the one year specified in that clause.
16 Going back to the decision in Darlington for a moment: as is apparent from the authorities reviewed by the High Court before stating the principles as I have paraphrased them above, one of the matters with which their Honours were concerned was whether application of the clause in question would have the effect of denying substantially to one party the entire benefit of the contract. This is not such a case. On the contrary, it is a case where the objects of the contract have been substantially achieved. George Floth has (so I think I can assume) provided the relevant services under the contract. With the exception of the question as to misleading or deceptive conduct which is sought to be agitated by the third cross-claim, it appears to have performed those services, at least for the most part, in a satisfactory fashion. Giving the clause in question the effect for which George Floth contends will not deprive the developers of the benefit, or a substantial part of the benefit, of the contract.
17 When one turns to the words of Part 4, it will be seen that the words "whether under the law of contract tort or otherwise" appear in cls 4.1 and 4.2 as well as in cl 4.3. Clause 4.1 seeks to limit the monetary extent of loss for which George Floth might be liable, and cl 4.2 seeks to achieve the same result. In each case, the prospective liability is one that might arise "out of the performance or non performance of the services". To divert a moment from the language of the clauses, it is convenient to note that there is no particular consistency of punctuation, or, indeed, the use of initial capital letters. In cl 4.1, there is no comma between "contract" and "tort" and the word "services" does not have an initial capital letter. However, in cls 4.2 and 4.3, the comma is present as is the initial capital letter.
18 When one goes to cl 4.5, it may be seen that George Floth is making it clear that it does not give any warranty nor accept any liability in relation to the performance or non performance of the Services except to the extent required by law or specifically provided for in the agreement.
19 A construction of the relevant words in cl 4.3 must take account of the balance of Part 4, and in particular (although I do not suggest that this is determinative) the introductory words of cl 4.5. When one looks at the clause as a whole, the impression that is given is that George Floth is saying:
(1) we will accept liability, in relation to the performance or non performance of the Services, for a specified time and in a specified amount; but
(2) we will not accept liability outside those limits unless required to do so by some law, the effect of which cannot be excluded.
20 It is difficult to understand why George Floth would have gone to the trouble to spell out the extent of its liability in respect of causes of action that might arise under the law of contract or tort, or indeed that might arise otherwise except under the Trade Practices Act 1974 (or, perhaps, under statute more generally). One of the purposes of clauses that exclude or limit liability is to enable the party relying upon them to be able, as it were, to rule off its books once the monetary amount or the temporal limitation has been reached. There are clear commercial advantages inherent in this: including, of course, in relation to the cost of insurance. It would be strange, as I have said, to conclude that George Floth had gone to considerable trouble to exclude some but not all sources of liability.
21 The construction for which the developers contend might perhaps be understandable if it could be thought that, somehow, George Floth or its legal advisers (or, more accurately, the legal advisers of the Association of Consulting Engineers, whose standard form was used) were not aware of the terms and potential impact of the Trade Practices Act. However, it is apparent from cl 4.5 that they were all too much aware of the potential impact of that statute.
22 Mr Loewenstein drew attention to the language of exclusion clauses considered in other cases, where (he submitted) the language used was much wider, and more apt to exclude or limit liability for any possible cause of action whatsoever. He referred, by way of example, to the clauses considered in Port Jackson Stevedoring Pty Ltd v Salmond and Spraggon (Australia) Pty Ltd (1978) 139 CLR 231 and H & E Van der Sterren v Cibernetics (Holdings) Pty Ltd (1970) 44 ALJR 157.
23 I do not think that a great deal of assistance is to be obtained by reviewing exclusion clauses, in different terms, in other cases. As the decisions to which I have referred earlier make clear, what is required is consideration, in context, of the particular language chosen by the parties.
24 In this case, Mr Loewenstein submitted, the operation of what might be called the first limb of cl 4.3 was neither expanded nor informed by what might be called the second limb. Further, he submitted, an understanding of cl 4.3 was not informed (at least, in a way that extended the operation of the limitation in cl 4.3) by the introductory words of cl 4.5.
25 I do not think that it is possible to break up clause 4.3, or for that matter the whole of Part 4, into discrete chunks which should be considered in isolation from one another. To my mind, that is not the proper approach to construction. In my view, when considering the extent of the phrase "the law of contract, tort or otherwise", it is legitimate to have regard both to the following words in the same clause "any action or claim whatsoever" and to words of similar widths in the opening part of cl 4.5.
26 To my mind, looking at the matter objectively, what the parties sought to achieve was to specify precisely and exclusively, so far as the law allows, the monetary and temporal limits of any liability that George Floth might have with the developers under the contract between them.
27 To say that they did so in respect of all causes of action, apart from those that might arise under the Trade Practices Act, is, in my view, to give the contract, and in particular Part 4, an artificial and non-commercial construction. On the other hand, to construe it as George Floth submits seems to me to be, looking at it objectively, no more than an effectuation of the intent of the parties.
28 Nor do I think that the view that I have expressed requires some violence to the language of the clause as a whole. On the contrary, I think, the words "or otherwise" are wide enough in their ordinary meaning to pick up liability under statute, and nothing in what follows (either in cl 4.3 or in cl 4.5) cuts down the available width of those words.
29 There are two "footnotes" to what I have said. The first is that there is no doubt that the claims articulated in the third cross-claim, are, as Mr Loewenstein rightly conceded, in respect of or in relation to the Services. For an explanation of the width of connection envisaged by the words "in respect of" or "in relation to", see cases such as Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45.
30 The second footnote is that there was no submission to the effect that the apparent operation of Part 4 (as I have construed it) conflicted with or should be read down by reference to, the limitation period of six years provided in s 82(2) of the Trade Practices Act.
Conclusions and orders
31 For those reasons, I conclude that each of the questions proposed for separate determination should be answered "yes". It follows, as the parties are agreed, that the third cross-claim is not maintainable and that there should be judgment for George Floth on it.
32 I direct entry of judgment in favour of the cross-defendant to the third cross-claim on that cross-claim and I order the cross-claimants to pay the cross-defendant's costs.
33 The exhibits are to remain with the file for 28 days and thereafter to be dealt with in accordance with the rules.
34 The order for costs is to include any costs that have been reserved as between the cross-claimants and the cross-defendant on the third cross-claim.
35 I reserve liberty to apply in respect of any application that costs be paid on some basis other than the ordinary basis.