International Construction Law Review
RETROSPECTIVITY AND THE DOCTRINE OF FRUSTRATION
RACHEL ONG*
I. INTRODUCTION
It has been over 30 years since the High Court authoritatively accepted frustration in Australia1. Nevertheless, judicial opinion remains divided about when and why frustration is invoked. One commentator attributes the controversy to “[t]he confused language, the frequent use of catch phrases in place of reasoning, and the absence of argument upon general principles of contract law”2.
The paper proposes to examine frustration through two case studies: laws with retrospective effect and contracts with retrospective effect. The reason is two-fold. Firstly, the case studies are novel. This presents a fresh opportunity to test the limits of frustration. Secondly, the case studies are appropriate given that retrospectively has become a topical issue. Retrospective law has recently been introduced in Queensland in respect of mining exploration permits3. Furthermore, there is ongoing uncertainty as to whether retrospective law will be introduced in connection with the East West Link.
The paper shall proceed as follows: Part II shall set the context by canvassing the theoretical debate about the juridical basis of frustration. It has been widely assumed that it is fictional to rationalise frustration on the basis of parties’ intentions4. However, this assumption shall be challenged based on recent theories that suggest intention is more than “what crossed the communicator’s mind”5. Part III shall use the case studies to highlight the difficulties inherent in frustration.
126BA, LLB (Melb), Graduate Diploma in Legal Practice. This article is based on a paper which was awarded a High Commendation in the Student Division of the 2015 Brooking Prize by the Society of Construction Law Australia. The author thanks Mr Wayne Jocic for his comments on an earlier draft that was submitted for assessment in the Melbourne Law Masters subject “Remedies in the Construction Context” at the University of Melbourne.
1Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (“Codelfa”) (1982) 149 CLR 337; [1982] HCA 24; (1982) 41 ALR 367.
2John M Hall, “The Effect of War on Contracts” (1918) 18(4) Columbia Law Review 325, 344.
3Duties Act 2001 as amended by the Fiscal Repair Amendment Act 2012.
4See eg, Leon E Trakman, “Frustrated Contracts and Legal Fictions” (1983) 46 Modern Law Review 39–55; William Herbert Page, “The Development of the Doctrine of Impossibility of Performance” (1920) 18(7) Michigan Law Review 589, 598–600.
5Adam Kramer, “Common Sense Principles of Contract Interpretation (and how we’ve been using them all along)” (2003) 23(2) Oxford Journal of Legal Studies 173, 191. See also Brian Langille and Arthur Ripstein, “Strictly Speaking – It Went Without Saying” (1996) 2(1) Legal Theory 63–81.
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