2017 WA Lee Lecture: The Australian Law of Contractual Penalties

Abstract

In 2005, in Ringrow Pty Ltd v BP Australia Pty Ltd,[1] the High Court (Gleeson CJ, Gummow, Kirby, Hayne, Callinan and Heydon JJ) observed that Lord Dunedin’s formulation in Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd,[2] of the principles governing the identification, proof and consequences of penalties in contractual stipulations had endured for 90 years and had been applied countless times in the High Court and other courts. (The Court cited, as examples, O’Dea v Allstates Leasing System (WA) Pty Ltd,[3] Acron Pacific Ltd v Offshore Oil NL,[4] AMEV-UDC Finance Ltd v Austin,[5] Stern v McArthur,[6] and Esanda Finance Corporation Ltd v Plessnig.[7]) The Court proceeded on the basis that Dunlop continued to express the law applicable in Australia, leaving any more substantial reconsideration for a future case where reconsideration or reformulation might be in issue.

[1] (2005) 224 CLR 656 [12].

[2] [1915] AC 79, 86–8.

[3] (1983) 152 CLR 359, 368, 378, 399, 400.

[4] (1985) 157 CLR 514, 520.

[5] (1986) 162 CLR 170, 190.

[6] (1988) 165 CLR 489, 540.

[7] (1989) 166 CLR 131, 139, 143, 145.