86:
557:
a lengthy and carefully-drafted contract but have omitted to make provision for the matter in issue", because "it may well be doubtful whether the omission was the result of the parties' oversight or of their deliberate decision", or indeed the parties might suspect that "they are unlikely to agree on what is to happen in a certain ... eventuality" and "may well choose to leave the matter uncovered in their contract in the hope that the eventuality will not occur". Sir Thomas went on to say this at p 482:
507:, implication of a term in fact in a contract, by reference to what is necessary to give it business efficacy, was described as raising issues "as to the meaning and effect of the contract". Implication is not "an orthodox exercise in the interpretation of the language of a contract, that is, assigning a meaning to a particular provision". It is nevertheless an "exercise in interpretation, though not an orthodox instance".
561:
will reflect the merits of the situation as they then appear. Tempting, but wrong. t is not enough to show that had the parties foreseen the eventuality which in fact occurred they would have wished to make provision for it, unless it can also be shown either that there was only one contractual solution or that one of several possible solutions would without doubt have been preferred ...
318:
contemplates that will continuously occupy the site and therefore be liable for rates. I am further of the view that the actions of the parties and the correspondence amounted to an agreement that the agreement was at an end or, if it did not, was in fundamental breach and the rescinded the contract by its letter of 9 February 1970, inelegantly expressed though it may have been.
22:
276:
transfer was apparently so obvious to BP that it did not wait to hear the position of the Shire of
Hastings before transferring the assets to BP Australia Ltd. Under the Rating Agreement the rates would have been $ 50,000; however, the Shire of Hastings said the Rating Agreement no longer applied and assessed the rates in excess of $ 150,000.
556:
MR described Lord Simon's formulation as a summary which "distil the essence of much learning on implied terms" but whose "simplicity could be almost misleading". Sir Thomas then explained that it was "difficult to infer with confidence what the parties must have intended when they have entered into
523:
noted that the test formulated by Lord Simon was "concerned with the question whether a term should be implied in a formal contract which was complete upon its face and care should be taken to avoid an over-rigid application of the cumulative criteria which they specify to a case such as the present
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The Board considers that this list is best regarded, not as series of independent tests which must each be surmounted, but rather as a collection of different ways in which judges have tried to express the central idea that the proposed implied term must spell out what the contract actually means,
511:
also applied the test formulated by Lord Simon. His Honour was circumspect with regards to the application of the test in BP Refinery, holding that if the majority judgment had sought to derive the implication of a term from the matrix of facts in which the contract was made then it did not accord
437:
The majority held that the term found by the
Supreme Court of Victoria, that the agreement would end once BP ceased to be liable to pay rates on the property, was not necessary to give business efficacy to the Rating Agreement and that it was wholly unreasonable and inequitable to limit the ability
560:
The question of whether a term should be implied, and if so what, almost inevitably arises after a crisis has been reached in the performance of the contract. So the court comes to the task of implication with the benefit of hindsight, and it is tempting for the court then to fashion a term which
275:
BP decided to restructure its
Australian operations and on 15 December 1969 wrote to the Shire of Hastings stating "I hope I may assume that there will be no difficulty over transferring" the rights and privileges including the Rating Agreement to BP Australia Ltd. That the Rating Agreement would
608:
concurred) questioned whether Lord Simon's first requirement, reasonableness and equitableness, adds anything in that if a term satisfies the other requirements it is likely to be reasonable and equitable. Business necessity and obviousness could be alternatives, although it would be a rare case
537:
as a term of the contract would, if it were breached, support an action for damages by the employee was not a ground for saying that the term was necessary for the reasonable or effective operation of the contract. That is the proposed term went to remedies for breach and not to the question of
339:
it was unnecessary to determine the third – "wider and more difficult" – point argued on behalf of the Shire of
Hastings, namely, that there had been a repudiation or fundamental breach of the rating agreement by BP, the rating agreement having allegedly imposed on BP an obligation to remain in
317:
In the end I have come to the conclusion that not only is this a personal contract, as the
Supreme Court has already decided, but that there was a fundamental condition of continuing occupancy by the appellant. A reading of the whole of the agreement leads, in my opinion, to the finding that it
296:
the Shire of
Hastings could only validly make an agreement with a particular ratepayer for specified land, and not any person who might subsequently become the ratepayer. While the Rating Agreement applied, if at all, by statutory force, it was regarded by the parties and the court as simply a
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which summarised the test for whether a term should implied 'in fact' into a contract, to give effect to the intentions of the contracting parties. While the formulation of the test is not without criticism, it is usually accepted as setting out the tests for the implication of a term into a
370:
in which Lord
Wilberforce said "In order for the agreement ... to be understood, it must be placed in its context. The time has long passed when agreements, even those under seal, were isolated from the matrix of facts in which they were set and interpreted purely on internal linguistic
532:
held that the implication of a term in fact is based upon the presumed or imputed intention of the parties. It is necessary to arrive at some conclusion as to the actual intention of the parties before considering any presumed or imputed intention. That the inclusion of a term of an
375:
Their
Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied:
609:
where only one of those two requirements would be satisfied. Lord
Neuberger thought "to speak of construing the contract as a whole, including the implied terms, is not helpful, not least because it begs the question as to what construction actually means in this context."
331:
it was an implied condition of the rating agreement that it should continue in operation only so long as BP should be the occupier of the refinery site and rateable as such; so that on BP going out of occupation on 1 January 1970, the rating agreement came to an
618:
The criterion of "necessity" has been described as "elusive" and "somewhat protean". It has been suggested that "there is much to be said for abandoning" the concept of necessity. As for the projected 40-year life of the refinery, it closed in 1985.
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593:
1173:
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if the agreement had not come to an end by the operation of such an implied term, the letter from BP and the Shire of
Hastings amounted to "a mutual acquiescence between the appellant and the Shire that was to be treated as discharged";
470:
The argument which the majority upheld, was not put forward in either court below and was inconsistent with the decision of the Full Court in the 1973 case concerned with BP, and involved contending that that unappealed decision was
304:
or to the Privy Council, but did not do so. Instead it took steps for BP to resume its occupation of the refinery site in September 1973. The Shire of Hastings again assessed the rates as in excess of $ 150,000.
580:... t is not enough for a court to consider that the implied term expresses what it would have been reasonable for the parties to agree to. It must be satisfied that it is what the contract actually means.
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The majority found that what was obvious to the County Court, the judges of the Supreme Court and indeed two of their colleagues, was wrong and that those judges had missed what should have been obvious.
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accepted and applied Lord Simon's formulation, holding that "he fact that such a provision would provide a greater protection for the respondent is not a sufficient reason for implying it".
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Instead they found implied an entirely different term, said to make the Rating Agreement accord with the Refinery Agreement to permit the assignment of the rights within the BP group.
438:
of the BP group to make changes in its corporate structure. The identity of the particular member of the BP group could not have been of the least importance to the Shire of Hastings.
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168:
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567:
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and BP entered into a Rating Agreement, which set out the rates payable for the following 40 years, and was approved by the Governor ("the Rating Agreement").
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dissented. The difference of opinion was not on the question of principle, but rather on the application of those principles. Their Lordships noted that:
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occupation of the site and to maintain, operate and use the refinery for the purpose, inter alia, of enabling the rates to be calculated.
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it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;
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58:
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the Rating Agreement was set within the framework of the Refinery Agreement, not only by implication but also by express reference.
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where the contract is oral or partly oral and where the parties have never attempted to reduce it to complete written form."
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BP appealed to the Supreme Court of Victoria. On 5 May 1976, the Full Court dismissed the appeal, holding that
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136:
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The test for the implications of terms was not controversial, citing three well known cases for its authority
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BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (Victoria)
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In applying these principles, the majority took into account the surrounding circumstances, including that:
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the investment by BP was irrevocable in that once the refinery was built, it was not practical to move it.
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The definition of Company adopted by the majority contradicted the definition in the Rating Agreement.
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a term should be implied in the contract to permit the assignment of the rights within the BP group.
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The decision has been adopted and applied in numerous decisions, both in Australia and England.
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1958 to allow local councils to agree on the rates payable for industrial land. In 1964 the
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the Refinery Agreement contained provision for assignment within the BP group in Australia.
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General contractual principles, Construction and interpretation of contracts, Implied terms
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BP refinery was unsuccessful in its appeal to the County Court, where the judge held:
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Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd
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Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd
605:
249:
881:
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd
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Judicial Committee of the Privy Council cases on appeal from Australia
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or in which they have explained why they did not think that it did so.
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Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd
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The 1973 decision of the Supreme Court was not the subject of appeal;
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who would change his shape to avoid having to yield a true prophecy.
1010:
Philips Electronique Grand Public SA v British Sky Broadcasting Ltd
550:
Philips Electronique Grand Public SA v British Sky Broadcasting Ltd
31:
provides insufficient context for those unfamiliar with the subject
264:, on the same day it ratified the Refinery Agreement, amended the
15:
237:
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Codelfa Construction Pty Ltd v State Rail Authority of NSW
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Codelfa Construction Pty Ltd v State Rail Authority of NSW
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Codelfa Construction Pty Ltd v State Rail Authority of NSW
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BP could have sought leave to appeal the decision to the
43:, especially: which country or countries this applies to.
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it must not contradict any express term of the contract.
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366:, cited with approval a passage from the judgement in
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BP Refinery (Westernport) Pty Ltd v Shire of Hastings
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BP Refinery (Westernport) Pty Ltd v Shire of Hastings
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BP Refinery (Westernport) Pty Ltd v Shire of Hastings
1116:(13th ed.). Sweet & Maxwell. p. 231 .
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it must be so obvious that "it goes without saying";
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1138:Westernport (Oil Refinery) (Further Agreement) Act
732:. AAP. 29 July 1977. p. 3 – via Trove.
710:"Victorian Government Gazette No 48, 3 June 1964"
1026:Attorney General of Belize v Belize Telecom Ltd
957:Hospital Products Ltd v US Surgical Corporation
784:"The Privy Council - an Australian Perspective"
695:Local Government (Decentralized Industries) Act
576:
568:Attorney General of Belize v Belize Telecom Ltd
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517:Hospital Products Ltd v US Surgical Corporation
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467:BP Australia paid rates on the ordinary basis;
284:An appeal against the assessment by BP to the
198:— Viscount Dilhorne, Lord Simon and Lord Keith
1072:, the shape-shifting old man of the sea from
323:The decision of the Supreme Court of Victoria
8:
1087:Crossley v Faithful & Gould Holdings Ltd
1005:
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59:Learn how and when to remove this message
868:"Adversarial anniversaries – 29 January"
743:BP Australia Ltd v The Shire of Hastings
669:(on appeal from Vic, Australia).
292:. The Supreme Court held that under the
850:Shirlaw v Southern Foundries (1926) Ltd
628:
571:, a case decided by the Privy Council,
417:Shirlaw v Southern Foundries (1926) Ltd
389:it must be capable of clear expression;
288:was dismissed, as was an appeal to the
248:and construction of port facilities at
724:"BP wins rate appeal to Privy Council"
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1094:, 4 All ER 447; ICR 1615 at 1627 ,
41:providing more context for the reader
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895:(Australia) at p. 605-6 per Mason J.
380:it must be reasonable and equitable;
354:The majority of the Privy Council,
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833:Reigate v Union Manufacturing Co
410:Reigate v Union Manufacturing Co
309:The decision of the County Court
260:("the Refinery Agreement"). The
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1164:1977 in United Kingdom case law
982:Byrne v Australian Airlines Ltd
943:337 at p. 403-4 per Brennan J,
529:Byrne v Australian Airlines Ltd
345:The Appeal to the Privy Council
1179:English implied terms case law
699:(Vic), inserting section 390A.
680:Westernport (Oil Refinery) Act
297:contract between the parties.
240:reached an agreement with the
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1037: (on appeal from Belize).
244:for the establishment of the
71:Judgment of the Privy Council
1159:Australian contract case law
917:337 at p. 345 per Mason J,
866:Ash, D. (29 January 2016).
803:[1971] 3 All ER 237
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789:. High Court of Australia.
290:Supreme Court of Victoria
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659:[1977] UKPCHCA 1
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280:The first set of appeals
133:[1977] UKPCHCA 1
1092:[2004] EWCA 293
1068:This is a reference to
1013:[1995] EMLR 472
854:[1939] 2 KB 206
837:[1918] 1 KB 592
747:[1973] VicRp 17
661:, (1977) 180
302:High Court of Australia
135:, (1977) 180
1169:1977 in Australian law
1031:[2009] UKPC 10
987:[1995] HCA 24
961:[1984] HCA 64
937:[1982] HCA 24
911:[1982] HCA 24
885:[1979] HCA 51
655:[1977] UKPC 13
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262:Parliament of Victoria
242:Government of Victoria
128:[1977] UKPC 13
1053:[2015] UKSC 7
753:(Vic, Australia).
614:Criticism of the test
512:with sound principle.
350:The majority decision
1098:(England and Wales).
294:Local Government Act
266:Local Government Act
246:Westernport Refinery
1114:The Law of Contract
37:improve the article
554:Sir Thomas Bingham
800:Prenn v. Simmonds
371:considerations."
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782:(18 June 2008).
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479:Significance
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116:27 July 1977
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35:Please help
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749:, VR 194,
665: 266,
600:(with whom
458:Lord Morris
164:Lord Morris
1153:Categories
1108:Peel, E.;
995:High Court
969:High Court
945:High Court
919:High Court
893:High Court
856:at p. 227.
839:at p. 605.
623:References
606:Lord Hodge
543:In England
364:Lord Keith
360:Lord Simon
250:Crib Point
232:Background
228:contract.
179:Lord Keith
174:Lord Simon
49:March 2024
822:at p. 68.
767:s 73
509:Brennan J
236:In 1963,
139: 266
121:Citations
1112:(2011).
258:Victoria
221:judgment
203:Keywords
1070:Proteus
521:Deane J
496:Mason J
223:of the
113:Decided
1142:(Vic).
1120:
765:(Cth)
684:(Vic).
471:wrong;
1090:
1059:(UK).
1051:
1029:
993:410,
985:
959:
935:
909:
891:596,
883:
787:(PDF)
745:
653:
575:said:
535:award
252:, in
194:(3:2)
93:Court
1140:1985
1118:ISBN
967:41,
697:1963
682:1963
604:and
456:and
362:and
332:end;
991:CLR
965:CLR
941:CLR
915:CLR
889:CLR
663:CLR
591:In
548:In
515:In
501:In
336:and
137:CLR
39:by
1155::
1055:,
1033:,
1002:^
726:.
657:;
631:^
552:,
519:,
358:,
256:,
238:BP
1126:.
870:.
769:.
62:)
56:(
51:)
47:(
33:.
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