Commercial contracts

Rockment Pty Ltd v AAI Limited [2020] FCAFC 228

This contract case looks at the duty to strive for a commercial result and ‘businesslike interpretation’13. Notions of commerciality ‘must be confined to their proper place’ (at [54]), and an interpretation ‘is commercial if it is not commercially absurd’14.

No comparative financial analysis is called for, nor is any external standard of fairness to be applied.  Objective purpose may assist, but often the purpose will be unclear and/or highly contested.  This case shows the difficulties in seeking to use commerciality to leverage interpretation.  Often, as in this case, the enquiry ‘will start, and usually finish, by asking what is the ordinary meaning of the words used’15.

This principle is from Episode 71 of interpretation NOW!


13 Woodside [2014] HCA 7 (at [28]), Onley [2018] FCAFC 119 (at [33]).

14 Mount Bruce [2015] HCA 37 (at [50]), Wonkana [2020] NSWCA 296.

15 Charter [1997] AC 313 (at 384), cf Evolution [2020] FCA 1690 (at [73]).