Placer Development Ltd v The Commonwealth [1969] HCA 29

Placer Development Ltd v The Commonwealth [1969] HCA 29

Clause 14 did not impose on the Commonwealth a legally enforceable obligation either to pay a subsidy equal to the customs duty paid and not remitted or to determine and pay any particular amount or rate of subsidy; the determination of subsidy was wholly at the Commonwealth's discretion, subject only to a maximum cap, and the clause was not sufficiently certain to constitute an enforceable obligation. The Commonwealth's promise was not to pay a specific or reasonable subsidy, but only such amount (if any) as it might determine from time to time, thereby failing to create a contract enforceable by the plaintiff.

Jurisdiction
Australia
Procedural Posture
Special Case Stated / High Court Judgment and Orders
Outcome
Questions 2, 3, and 4(a) answered No; plaintiff ordered to pay defendant's costs of and incidental to the case stated.
Legal Topics
['government Contracts' 'subsidy Agreements' 'discretion in Performance of Contract' 'illusory Promises' 'remedies for Breach']
['contract Law' 'constitutional Law' 'administrative Law'] ['government Contracts' 'subsidy Agreements' 'discretion in Performance of Contract' 'illusory Promises' 'remedies for Breach']

Case Brief

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Procedural Posture

Special Case Stated / High Court Judgment and Orders

Legal Issues

  1. 1 ['Whether cl. 14 of the New Guinea Timber Agreement imposed a legal obligation on the Commonwealth to determine and/or pay a subsidy equivalent to customs duty not remitted upon timber products imported into Australia by the Timber Company.' 'Whether a promise to determine and pay a subsidy, where the determination of amount is wholly discretionary and subject to a maximum cap, creates an enforceable contractual obligation.' 'Whether the wording of cl. 14 renders the promise illusory and void for uncertainty or lack of enforceability.']

Ratio Decidendi

Clause 14 did not impose on the Commonwealth a legally enforceable obligation either to pay a subsidy equal to the customs duty paid and not remitted or to determine and pay any particular amount or rate of subsidy; the determination of subsidy was wholly at the Commonwealth's discretion, subject only to a maximum cap, and the clause was not sufficiently certain to constitute an enforceable obligation. The Commonwealth's promise was not to pay a specific or reasonable subsidy, but only such amount (if any) as it might determine from time to time, thereby failing to create a contract enforceable by the plaintiff.

Court Disposition

Questions 2, 3, and 4(a) answered No; plaintiff ordered to pay defendant's costs of and incidental to the case stated.

Orders

  • ['Questions 2, 3 and 4(a) raised by the case stated answered: No.' "Order that the plaintiff pay the defendant's costs of and incidental to the case stated."]