QUESTION 1: ILLEGALITY

(i) Is the Children of the Future (COTF) invalid under the doctrine of illegality

First of all, the court must determine the meaning and application of the statue which affect

the COTF contract, as per Fitzgerald v FJ Leonardheardt.1 Therefore, before examining the

different aspects of illegality a proper construct of the act must be determined

(a) Statutory construction of the ART s44(1)

There are three possible readings of s 44(1) of the Assisted Reproductive Treatment Act

(ART).2

Material benefits of advantages received by surrogate mothers from a contract is restricted as

per s 44(1) of the ART act.3 These are the expansive, narrow and purposive readings. The

expansive reading would likely be avoided, as it may produce unjust results unintended by

the statute. Courts are also likely not to use a narrow reading as it may contradict the purpose

of the act. Thus, this leaves the purposive reading to ascertain the mischief of the act.

(b) Is the payment to Anusha of $160,000 considered material benefit?

To determine whether Anusha can be prosecuted under s 44(1) of the ART, the words

material benefit must be defined. As it is not defined specifically in the act, it is required that

extrinsic materials be used to obtain the meaning of the term. The second reading speech

provides valuable insight into what is considered material benefit. It states that, cost

incurred by the surrogate mother due to the surrogacy may be reimbursed. Thus, expenses

like medical and travel would be not be considered material benefit.

1 Fitzgerald v FJ Leonardt Pty Ltd (1997) 189 CLR 215.

2 Assisted Reproductive Treatment Act 2008 (Vic) s 44(1).
3 Ibid.
The legislation seems to have been put in place to protect surrogate mothers from being

exploited. Applying that to this case, it would seem Anusha not receiving any payment could

be considered as an injustice, which directly goes against the purpose of the statue. The

VLRC Report further reinforces this, stating that surrogate mother(s) should be protected

from exploitation or coercion.4

Thus, the court may decide that the $160,000 is no material benefit when considering the

purpose of the ART act, which is to prevent exploitation of the surrogate. However, it is s44

(1) clearly states that commercial surrogacy contracts are barred and public policy discretion

issue arises.

(ii) Is the contract illegal?

There is a presumption that Victorian statute does not operate extraterritorially as per the

Interpretation of Legislations Act.5 Since the COTF contract was constructed and made

legally binding in India, Victoria has no jurisdiction over the contract. Therefore, the contract

is not prohibited in Victoria.

(iii) How should the court exercise its public policy discretion?

When a contract is prohibited by statute, it is not necessarily illegal or void as it is subject to

contrary intention as per Mason J in Yango Pastoral Company Pty Ltd v First Chicago

Australia Ltd.6 The court must take into regard the language, scope and purpose of the act

4 Victorian Law Reform Commission, Assisted Reproductive Technology

and Adoption (2007)
5 Interpretation of Legislations Act 1984 (Vic) s 48
6 Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 139
CLR 410.
when interpreting it and conclusions may be made appropriately in the courts discretion.7

This rule is further enforced by the rulings in the cases Nelson v Nelson8 and Fitzgerald.9 The

proportional analysis approach was supported to determine the validity of a contract where

competing factors are present.. Therefore, determining the purpose of the ART act and from

the facts of the case, again, the aim of the act is to protect surrogate mothers from any form of

exploitation

As per Holman v Johnson 10 the court will not support any illegal acts and thus prevent the

victimisation of innocent parties. Before determining whether the contract is void or

unenforceable the court must consider public policy. Illegality is summed up well by Lord

Mansfield when he says the principle of public policy is this no court will lend its aid to a

man who founds his cause of action upon an immoral or an illegal act.11 Reviewing the

facts, Pierce purposely did not disclose to Rajiv that under Victorian law he was not legally

bound to pay COTF or Anusha and there is no evidence that Rajiv was aware of the ART act.

In Ting Siew May v Boon Lay Choo12, Phang JA stated, [t]he defence of illegality and public

policy is not always a meritorious one when viewed from the perspective of the individual

parties. The Victorian Department of Public Prosecutions clearly stated that the ART act was

put in place to protect surrogate mothers and that this whole case is a civil matter. Thus, when

comparing the purposive reading of the statue and public policy it can be seen that they are

complimentary.

7 Ibid.
8 Nelson v Nelson (1995) 184 CLR 538.
9 (1997) 189 CLR 215.
10 Holman v Johnson (1775) 1 Cowp 341.
11 Holman v Johnson (1775) 1 Cowp 341.
12 [2014] SGCA 28, [23].
If the court were to exercise its discretion to consider COTFs contract unenforceable, this

would fall One of the three exceptions from Nelson is that the presence of fraud, oppression

or undue influence by one party against the other will prevent the defrauding party from

relying upon the illegality defence13 and this would apply if the court were to deem the

COTF contract unenforceable due to the conversation Pierce has with Britta before the birth.

QUESTION 2: PROMISORY ESTOPPEL

13 (1995) 184 CLR 538.
(i) Can Pierce retract his claim to pay COTF and thus Anusha $80,000?

Firstly, it must be assumed that the statue of the ART act does not prohibit the commercial

surrogacy contract. Thus, the doctrine of estoppel prevents the promisor from precluding a

promise where the promisee has acted to their detriment induced by the promisors

representation14 and in this case perhaps prevent Peirce from retracting his promise.

(a) Is ambiguity in the representation?

Legione v Hateley rules that representation must be sufficient and does not necessarily

entirely unambiguous and clear to form estoppel.15 Applying such rule to Pierces promise of

an extra $80,000 for transporting Anusha to Australia, the court would rule that there is not

sufficient ambiguity. The amount to be paid and accommodation was specified, Although,

which hospital in particular and the time frame is not described, this is not sufficient as the

time of birth cannot be specifically determined. Therefore, there is not sufficient ambiguity in

the representation to deny estoppel.

(ii) Elements of Estoppel

Although the court did not approve of the six elements of estoppel presented in Walton Stores

v Maher16 by Brennan J, it is still widely used. The six elements of estoppel are comprised of

assumption, inducement, detrimental reliance, knowledge, reasonableness and

unconscionability.17

14 Grundt v Great Boulder Mines Pty Ltd (1937) 59 CLR 641.

15 Legione v Hateley (1983) 152 CLR 406.
16 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.
17 Ibid.
(a) Assumption

Brennan J affirmed that equitable estoppel consists of the element of assumption which rises

due to the existence of a legal relationship or presumption that the representor will perform in

a particular way in the future.18 The element of assumption is satisfied by Pierces statement,

we will pay the COTF an extra $80,000 if Anusha comes to Australia, due to the

assumption COTF adopted as they were in a legal relationship with Pierce.

(b) Inducement

The assumption adopted by the relying party must have been induced by the conduct of the

representor. Since, Rajiv went to great lengths to acquire a passport and travel visa as well

as paying extra to Anushas family it is clear that Rajiv was induced by Pierces promise

(c) Detrimental Reliance

As per Dixon J in Thomson v Palmer, the relying party must have acted on the assumption in

such a way that he or she will suffer detriment if the Representor is allowed to depart from

the assumption.19 In the case COTF suffered detrimental reliance upon the assumption that

Peirce would pay an extra $80,000; a financial detriment. Thus, there is detrimental reliance

present.

(d) Knowledge

In Walton Stores v Maher20 and Commonwealth v Verwayen21, it was ruled that the

representor; Pierce, must be aware that the relying party; COTF or Rajiv, will has acted to

18 Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.

19 (1933) 49 CLR 507.
20 (1988) 164 CLR 387.
21 (1990) 170 CLR 394.
their detriment. As Pierce requested Anusha to travel to Australia, it can be concluded that he

had knowledge it would be detrimental for Rajiv to organise such a request.

(e) Reasonableness

Sullivan v Sullivan held that the party in reliance must have taken actions which would seem

reasonable in the situation.22 Council for Peirce may dispute that Rajiv committing extra

money to Anusha may be excessive and unreasonable however, based on the amount which

would be paid the court would likely disagree.

(f) Unconscionable Conduct

Commonwealth v Verwayen establishes that for unconscionable conduct to exist, it must be

shown that in the circumstances, it would be unfair or inequitable for a party to insist on their

legal rights.23 In the current case it would be deemed by the court that if Pierce retracts his

promise to pay $80,000, it would be unconscionable given the amount of effort Rajiv made to

get Anusha to Australia

(iii) Conclusion

As all six elements of to establish estoppel is satisfied, thus Pierce cannot retract his promise

and the contract is deemed valid and he must pay COTF and thus Anusha.

QUESTION 3: UNCERTAINIY

(i) Is the fee contemplated under clause 14 of the commercial surrogacy contract void

for uncertainty?

22 Sullivan v Sullivan [2006] NSWCA 312

23 Commonwealth v Verwayen (1990) 170 CLR 394,500.
For any agreement to serve as a contract it requires the obligations within an agreement to be

adequately precise,24 and clearly set out.25 A court may regard a clause void for uncertainty

when the clause is vague or unclear.26 Clause 14 states that Pierce and Britta will pay a

substantial fee to COTF. As the term substantial fee is not specified, there is obviously an

issue of uncertainty. As it is unclear the definite amount of payment cannot be determined.

When Pierce claimed that he will pay a similar amount of $80,000, this could potentially be

substantial. Although this is a large amount of money it is impossible to determine if this is

considered substantial and the definition of substantial cannot yet be determined.

Contrary to this, in Upper Hunter Country District Council v Australian Chilling & Freezing

Co Ltd held that; a clause may not necessarily be ambiguous even though there may be more

than one meaning, if the intention of the parties suggests a precise meaning.27 Thus, if a

precise meaning can be determined via the intentions of the party, the contract may not be

deemed void and unenforceable. In this case, Clause 14 may be argued to be uncertain as the

term substation fees to be paid to COTF is very vague. Similarly, in Meehan v Jones, a

clause of a financial nature was not deemed unclear and uncertain as the parties intentions

determined the precise meaning of it.28

On review of the facts of the case, it would not be remiss to say that the Pierce and Britta had

originally intended to pay COTF an amount similar to what Anusha was receiving, in spite of

24 Upper Hunter County District Council v Australian Chilling & Freezing

Co Ltd (1968) 118 CLR 429.
25 Thorby v Goldberg (1964) 112 CLR 597.
26 Whitlock v Brew (1968) 118 CLR 445.
27 Upper Hunter County District Council v Australian Chilling & Freezing
Co Ltd (1968) 118 CLR.
28 Meehan v Jones (1982) 149 CLR 571.
the vagueness of clause 14. Thus, it cannot be concluded the clause 14 renders the clause void

for uncertainty. As Pierce and Britta intended to pay an amount similar to Anushas payment.