Only The Sangfroid

Mark is of fair average intelligence, who is neither perverse, nor morbid or suspicious of mind, nor avid for scandal. He does live in an ivory tower.

These are his draft thoughts…

Let’s talk about sex baby… And contractual theory (a response to @katgallow) #auslaw

It’s rare for somebody to begin a blog post with ‘I’m probably incorrect but I can’t work out why…’ and yet here we are, folks.  Here is a bit of contract theory where I’m sure I must be wronger than wrong and yet I can’t work out why.

On Sunday, Kate Galloway wrote about the NSW Supreme Court’s decision in Ashton v Pratt.  The details of the case are pretty much of the ‘Lifestyles of the Rich and the Famous’ kind.  The story goes: Richard Pratt is fabulously wealthy and travels about the place sans his wife.  He meets an escort, Ms Ashton, and — in a supposed exchange read into the decision which definitely needs to be poorly acted by Home and Away starlets — says to her: ‘If you stop being an escort and “concentrate on my needs and wants” (mistress), I will give you a swag of cash.’

The best line of that exchange: ‘after all, I am Richard Pratt, one of the richest men in Australia’.

The court found:

Ms Ashton’s case in contract fails – although the terms of those arrangements were not too uncertain and incomplete to amount to a contract – first because Mr Pratt and Ms Ashton did not intend to enter into binding and enforceable legal relations, and secondly because public policy denies enforceability to any such contract as alleged. [At 88]

The second part of this decision is what interested Galloway:

Although the Court found there were insufficient indicia of a contract (ie the arrangement lacked intention to create legal relations) Brereton J nonetheless turned his mind to whether such an arrangement could theoretically be enforceable, or whether it would be against public policy. The public policy in question was rendering void and illegal, contracts that are ‘sexually immoral and/or prejudicial to the status of marriage’.  [Source: Galloway, ‘Sex & Immorality: The Court’s Take

Public policy is a weird bit of contract law.  It basically says that there are some contracts which would be repugnant to community standards to enforce.  Ordinarily, public policy problems shouldn’t arise because people don’t really make a habit of entering into contracts which offend standards of decency.

It’s such a weird area of contacts that I had to go back to the textbooks to make sure I had all my ducks in a row.  There are some great quotes about public policy because the idea of courts being able to determine whether a contract was, when it gets down to it, immoral spooked a lot of judges.  In an 1824 English case, Richardson v Mellish, Burrough J calls public policy ‘a very unruly horse, and when once you get astride it you never know where it will carry you’.  Public policy takes away the autonomy of people to enter into agreements which they find accord with their moral values and surrenders that decision to the courts.  Over time, judges became so spooked by the idea that they halted its development in common law.  In another English case, Janson v Driefontein Consolidated Mines, Halsbury LC rejected the view that ‘any court can invent a new head of public policy.’  This reasoning led to a decision by an Australian judge, Windeyer J, in Brooks v Burns Philp Trustee Co Ltd:

The House of Lords has said that it is not for courts to create new heads of public policy.  […]  The proposition continues to excite controversy among those who doubt whether the fertility of courts in the 19th century has now given way to sterility, resulting from senility, in the common law.’  [Source: Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432; quoted in Paterson, et al. Contract: Cases and Materials]

And yet here we are in 2012 with a case which shows public policy considerations are alive and well.  In this instance, the contract was considered unenforceable because it was sexually immoral.

Galloway argues that prohibiting contracts which are deemed sexually immoral by the courts is problematic.

A feminist reading of this case might identify that the Court framed its inquiry around the ‘social’ and sexual (ie private) nature of the arrangement. In positioning Ms Ashton’s claim as private, it existed outside the law. This reveals how contract law privileges the so-called objective, rational, autonomous public face of the market place – for it is these arrangements that will be enforced by the law while others within the domestic or social sphere will not.  [Source: Galloway, op. cit.]

But I’m a bit worried by this reasoning.  There’s already a shaky understanding in contract law that courts don’t like to mess about in family matters: Balfour v Balfour ran with this idea that, because a contract is formed when the parties intend to create a legally enforceable agreement, agreements between spouses (and, by extension, family members) weren’t obviously contracts.  If I say to my brother, ‘Hey, Ian.  You can crash on my floor when you visit’, I don’t expect him to sue me if, for whatever reason, it turns out that him crashing on my floor is impractical.  When I go about my social interactions with my family, I don’t think that it’s obvious I’m creating all kinds of legal obligations.  I might create moral obligations.  I might be considered to be a terrible person if I let my brother down by forcing him to stay at one of the many Canberran hotels when he comes to visit.  But I don’t think I’m a legally culpable person.

At the heart of this, I don’t like the idea of my life being reduced to legal interactions (in the same way, I worry when libertarians tell me that my life is merely a collection of economic interactions).

In The Hidden Gender of Law, Graycar and Morgan cite Atkin LJ: ‘Each house is a domain into which the King’s writ does not seek to run, and to which his officers do not seek to be admitted.’

But people disagree with this idea.

Again in Graycar and Morgan:

[T]raditional feminist arguments raise concerns about the private sphere as notionally unregulated, for example, in suggestions that ‘the legal system’ has traditionally failed to respond to violence against women in their homes.  Not only has this approach meant an over-reliance on an analytical tool that fails to encompass the experiences of many women […] but Lacey suggests that some feminist critiques imply that privacy ‘has nothing to recommend it to women.’  [Source: Graycar and Morgan, The Hidden Gender of Law, p 20]

Unpacking the gist of the argument: if there’s an area of social interaction ungoverned by law, then there’s an area of social interaction where the socially disempowered have a means of redress for wrongs.  This seems to be where Galloway’s argument is heading here:

The law reveals its gendered nature in presuming that a person will delineate their life in a work/home dichotomy. In contrast, in the private sphere a person might see work and family as mutually defining. This would however fall outside the consideration of the law. In this way, the processes of contract law subtly privilege that which inhabits the public domain to the exclusion of inhabits the private.  [Source: Galloway, op. cit.]

As I’ve mentioned at length elsewhere, I don’t identify as a feminist.  Although I can see Galloway’s point — that people in the private sphere might have a need to seek legal remedies to problems, and that the law does not empower people in the private sphere to overcome differences in power — I’m still not sure legalism should creep into private interactions.  Then again, I might just be intuiting this because I’m in a privileged position as a conservative white male.

But more to the point, are we sure we want to argue that contracts which establish ‘mistress contracts’ should be enforceable in the courts?

In this example, Ms Ashton would have benefited from the contract being enforced.  She was the mistress and held up her end of the contract; therefore, Mr Pratt’s estate should fulfil its end.

But what if Ms Ashton did not benefit from the contract?  The agreement between Ashton and Pratt didn’t include an exclusivity arrangement, but it might have.  The agreement might have been: ‘I am Richard Pratt, one of the richest men in Australia, and I want you, Ms Ashton, to be my mistress.  When I’m in Sydney, you will provide me with sex.  You won’t have any other partners beside me.  In return for sex and exclusivity, I will give you a swag of cash.’  It would be strange if Pratt tried to have the contract enforced if Ms Ashton had extra-extra-marital affairs.  It feels like it would offend basic norms of morality for the court to enforce the contract.

Because the contract seems to favour Ms Ashton in the original example, we might be tempted to think that the court is imposing its ye olde morality into contract law.  But I think we would be appalled if the contract didn’t favour Ms Ashton and Pratt’s estate were trying to have it enforced by the courts.  I think it’s the same revulsion we feel when people try to restrict access to divorce to permit ‘at fault’ divorces only: it’s not really the court’s role to get involved in people’s sex life.  These ‘mistress contracts’ invite the court in for a ménage a trois of contractual bondage.

I quite like that last sentence.

I feel as though something is wrong with my reasoning.  Am I relying too heavily on my intuition of the private as a justifiably unregulated space?  Am I too quick to think that mistress contracts are repugnant, and that more people would agree with me if the contract disadvantaged the woman?

If nothing else, am I correct that the ‘fertility of courts has now given way to sterility, resulting from senility, in the common law’ quote is really awesome?

One response to “Let’s talk about sex baby… And contractual theory (a response to @katgallow) #auslaw”

  1. Thanks for this considered analysis. It seems that you focus on the intention to create legal relations and the capacity of the Court to intervene in the domestic or social – and this was indeed a head of argument in the decision. The Court found, as you note, that there was no contract because there was no intention to create legal relations. I accept your reservations about the Court’s interference in the normal day-to-day negotiations that characterise personal relationships. (Though there were aspects of the specific reasoning in this decision that I found problematic.)

    What interested me in my post (and I accept that it does intersect with the aspect of intention) was the Court’s finding that the arrangement was ‘immoral’.

    Is this true? Is it really immoral? Is it really up to a 21st century Australian court to say that this woman’s or this man’s arrangement was immoral? Against what standard? While I accept that some would indeed find it immoral, there are plenty of issues before the Courts that demonstrate a far more contemporary view of what is ‘acceptable’ eg profane language, blasphemy and I would suggest, sexual mores. Even prostitution is sanctioned by the law, yet the arrangement in this decision was labelled ‘meretricious’ and thus immoral. It doesn’t make sense to me. I note also that the Court did not address the issue of the threat to marriage represented by the arrangement – arguably a more open and shut case?

    Your scenario of the contract representing an abuse of power against the woman is a really good point. Yet the Courts have never hesitated to strike down terms that represent an abuse of power – such as an exclusivity clause.

    I agree with your final paragraph. That is indeed an awesome quote.

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