Lloyd's Maritime and Commercial Law Quarterly
Belize Telecom: a reply to Professor McLauchlan
JW Carter* and Wayne Courtney**
In Attorney General of Belize v Belize Telecom the Privy Council reconceptualised the process of implying terms “in fact” into contracts. Until then, the conventional understanding had been that factual implication was a matter of contract doctrine. A term was implied when it satisfied certain well-known tests such as the business efficacy test or the “officious bystander” test. In Belize Telecom, factual implication was said to be a matter of elucidating the meaning of the contract: that is, it is merely part of the ordinary process of “construction”. That approach has been controversial. Professor David McLauchlan has forcefully defended Belize Telecom against various criticisms, including some made by us. We respond to that defence, principally by identifying what we regard as insuperable flaws in the reasoning in the case.
I. INTRODUCTION
Background
We are grateful to the editor for allowing us the opportunity to respond to Professor David McLauchlan’s recent article in the Quarterly1
which defends the analysis of implied terms made by the Privy Council in Attorney-General of Belize v Belize Telecom Ltd.2
In his spirited, exhaustive defence of Belize Telecom, Professor McLauchlan suggests3 that criticisms of Lord Hoffmann’s judgment are “based on a misunderstanding of what his Lordship said or are otherwise misconceived or unconvincing”. We are not sure which part (if not all!) of this suggestion he intended to apply to the aspects of our discussions of the case4 with which he expresses disagreement. Although we have no quarrel with the views attributed to us, or the way in which McLauchlan has presented them, we do not believe that he has overcome our principal objection to Lord Hoffmann’s analysis. That
114. Professor Emeritus, University of Sydney; General Editor, Journal of Contract Law ; Consultant, Herbert Smith Freehills.
115. Associate Professor, University of Sydney.
1. David McLauchlan, “Construction and Implication: In Defence of Belize Telecom” [2014] LMCLQ 203 (“[2014] LMCLQ 203”).
2. [2009] UKPC 10; [2009] 1 WLR 1988.
3. [2014] LMCLQ 203, 204.
4. JW Carter, “The Implication of Contractual Terms: Problems with Belize Telecom” (2013) 27 CLQ 3 (“Carter (2013) 27 CLQ 3”); Wayne Courtney and JW Carter, “Implied Terms: What Is the Role of Construction?” (2014) 31 JCL 151 (“Courtney & Carter (2014) 31 JCL 151”).
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