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High Court of Australia

Intention to create legal relations

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AustraliaErmogenous v Greek Orthodox Community of SA Inc

(2002) 209 CLR 95


Archbishop Ermogenous made a claim for payments he thought due for annual and long service leave from the Greek Orthodox Community.  He succeeded at first instance but the Full Court of the Supreme Court of SA found there was no intention to create legal relations between the parties.  An appeal was made to the High Court.

Held (Gaudron, McHugh, Hayne and Callinan JJ)

Claimed it would be both difficult and wrong to ascribe rules to determining whether or not intention exists in any particular case.  They noted the objectivity of the requirement (the Court does not search for uncommunicated subjective reservations of intention) and that this meant that the circumstances in which intention may or may not exist could potentially be so varied that prescriptive rules were not appropriate.

"It is said that it may be presumed that there are some "family arrangements" which are not intended to give rise to legal obligations and it was said in this case that it should not be presumed that there was an intention to create legal relations because it was a matter concerning the engagement of a minister of religion. For our part, we doubt the utility of using the language of presumptions in this context. … Reference to presumptions may serve only to distract attention from that more basic and important proposition."

In this case, their Honours considered use of presumptions could (wrongly) lead to the conclusion there was no intention here (because of the nature of the employment contract) without full consideration of the circumstances surrounding this particular contract.

Their Honours considered the Full Court in error in inferring there was no intention here. 

In a separate judgment Kirby J reached the same conclusion.