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State Chambers has developed an extensive monthly CPD Program. Barristers from the floor present on various topics on the last Friday of each month.
For further information about the CPD program, please contact the convener of the CPD Program Tom Dixon on 02 9223 1522.
Time: Friday, 27 April 2018 at 4pm
Place: State Chambers Foyer
The concept of ‘good faith’ has been recognised by a number of Australian courts as being “an implication or feature of Australian contract law attending the performance of the bargain and its construction and implied content”. It has also been recognised in a number of other jurisdictions. However, “the question whether a standard of good faith should be applied generally to contracts has not been resolved in Australia”. In particular, it has not been resolved by the High Court.
Where a contract provides for the exercise of a discretion by one the parties, or the formation of an opinion, some courts have taken the view that the contract requires the discretion to be exercised or the opinion to be formed reasonably or in good faith.
That approach has been applied, for example, where the discretion relates to a right of termination or a right akin to a right of termination. In Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234, a construction contract contained a clause which permitted the principal to take over or cancel the contract if the contractor failed to show cause “to the satisfaction of the Principal” why that power should not be exercised. The majority of the Court of Appeal (Priestley & Handley JJA) held that the powers conferred by the clause had to be read with the constraint of reasonable use (or good faith) as otherwise it would be “quite inconsistent with all the main contractual promises by each party to the contract to the other”.
Departure from normative standards requires more than a mere assertion of a failure to act in good faith. Decisions have variously found “good faith” to mean (eg):
Glenn Fredericks will present the next CPD on this topic. The presentation will consider:
 Paciocco v Australia and New Zealand Banking Group Limited  FCAFC 50; 236 FCR 199 at  (Allsop CJ)
 Ibid at ; Hughes Aircraft Systems International v Airservices Australia  FCA 558; (1997) 76 FCR 151 at 188-198 (Finn J).
 Commonwealth Bank of Australia v Barker  HCA 32; 253 CLR 169 at  (Kiefel J).
 Royal Botanic Gardens and Domain Trust v South Sydney City Council  HCA 5; (2002) 240 CLR 45 at  (Gleeson CJ, Gaudron, McHugh, Gummow & Hayne JJ),  (Callinan J).
 (1992) 26 NSWLR 234 at 258 (Priestly JA).
 AF Mason "Contract, Good Faith and Equitable Standards in Fair Dealing" (2000) 116 LQR 66 at 69; Sir Anthony said in the article that “I use “good faith” mainly in the sense of loyalty to the promise itself and as excluding bad faith behaviour”; see also United Group Rail Services Ltd v Rail Corporation New South Wales  NSWCA 177 at  (Allsop P).
 Paciocco v Australian and New Zealand Banking Group Ltd  FCFCA 50; (2015) 236 FCR 199 at  (Allsop CJ).
 Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd  WASCA 222, 41 WAR 318 at  (Pullin JA).
 A. Terry and C. Di Lernia, “Franchising and the Quest for the Holy Grail: Good faith or good intentions”  Melbourne University Law Review 542 at ; ; ; .
 For example, implication a matter of law or fact as a term itself: Burger King Corporation v Hungry Jack’s Pty Ltd  NSWCA 187; (2001) 69 NSWLR 558 at ; or as a principle of construction of existing terms: JW Carter and E Peden, “Good faith in Australian Contract Law” (2003) 19 Journal of Contract Law 155; Network Limited v Speck  VSC 235 at  (Pagone J).