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[2014] NSWCA 123
Court of Appeal (NSW)
2014-04-14
Barrett JA, Emmett JA, Bergin CJ, Hammerschlag J
Original judgment source is linked above.
headnote In 2002 Aztec Resources Limited (Aztec) retained Carlow Castle Pty Ltd (Carlow Castle) to advise it on corporate strategy, including takeover advice. Under the retainer Carlow Castle was entitled to a success fee of 5% of Aztec's enterprise value upon takeover of Aztec. In October 2005 Aztec terminated its retainer with Carlow Castle, whereupon a dispute arose about Carlow Castle's entitlements. In February 2006 the parties executed a deed which relevantly provided (in cl 11.5(a)) that Carlow Castle was entitled to be paid a success fee of 2% when: a bidder acquires 50% or more of the shares in Aztec pursuant to or after the Initial Offer where the acquisition was recommended by a majority of the Aztec board (that is to say, the bidder formally acquires a controlling interest) In July 2006 Mount Gibson announced a hostile off market takeover bid for Aztec. The Aztec Board recommended that shareholders reject this offer. On 22 November 2006 Mount Gibson acquired a controlling interest in Aztec. On 28 November 2006 the Aztec board recommended that shareholders accept the offer. On that day Carlow Castle invoiced Aztec for the payment of the success fee. Aztec refused to pay on the basis that the conditions for payment of the success fee had not been met. On 3 August 2012 Carlow Castle commenced proceedings in the Commercial List of the Supreme Court's Equity division seeking a declaration that it was entitled to the Success Fee, or alternatively, rectification of the Deed to read: In respect of an Initial Offer, a bidder achieves a level of acceptances in respect of more than 50% of Aztec ordinary shares and at any time during the offer period for the Initial Offer the Aztec board recommends acceptance of the offer. Carlow Castle also sought an order for specific performance. The Commercial List Judge, Justice Hammerschlag, dismissed the proceedings on 12 March 2013. On 12 June 2013 Carlow Castle filed a Notice of Appeal that contended that the primary judge erred by: (i)Misinterpreting the deed; or (ii)Declining to rectify it. The Court held, dismissing the appeal: In relation to (i) 1.Consideration of the ordinary meaning of cl 11.5(a) and the context of other provisions of the Deed and related documents, as well as the Corporations Act 2001 (Cth) makes clear that Carlow Castle was only entitled to a Success Fee if the Aztec board's recommendation occurred before Mount Gibson acquired a controlling interest. This interpretation also accords with commercial common sense: [1], [16] - [25], [79] - [99]. 2.The principles in Fitzgerald v Masters (1956) 95 CLR 420 do not apply to alter the wording of the Deed because there was nothing absurd or inconsistent about the words used: [1], [96] Fitzgerald v Masters (1956) 95 CLR 420, distinguished 3.There was no error by the primary judge in construing the Deed. In relation to (ii) 4.In order to demonstrate the need for rectification, Carlow Castle needed to establish by clear and convincing proof that the hypothesis arising from the execution of the Deed, that it reflected the true agreement of the parties, should be displaced. This involved showing that at the date of executing the Deed the parties had a concurrent intention that is not reflected in the Deed: [1], [26], [100] Joscelyne v Nissen [1970] 2 QB 86, applied Maralinga Pty Limited v Major Enterprises Pty Limited (1973) 128 CLR 336, applied Slee v Warke (1949) 86 CLR 271, applied 5.The absence of any evidence from the lawyers involved in negotiating the Deed supporting the existence of such a concurrent intention was a relevant factor in determining whether such a concurrent intention in fact existed: [1], [26], [110] Anfrank Nominees Pty Limited v Connell (1989) 1 ACSR 365, considered 6.Carlow Castle failed to put forward sufficient evidence to establish such a concurrent intention. The evidence it relied upon did not provide clear and convincing proof of the intention of the guiding minds of Aztec at the time of executing the Deed: [1], [26], [127] 7.There was no error by the primary judge in declining to rectify the Deed.
Judgment 1BARRETT JA: I agree with Bergin CJ in Eq. 2EMMETT JA: This appeal is concerned with the proper construction of a Deed of Settlement and Release bearing the date 14 February 2006 (the Deed), between the appellant, Carlow Castle Pty Limited (Carlow), and the respondent, Aztec Resources Limited (Aztec). Carlow sued Aztec for recovery of a success fee in the sum of $5,850,570, which it said was payable under the Deed. It sought rectification of the Deed in the event that the construction contended for by it was rejected. A Judge of the Equity Division sitting in the Commercial List dismissed Carlow's claims. Carlow has now appealed from the determination made by the primary judge.
The Dispute 3By letter dated 12 November 2002 (the Carlow Engagement Letter), Aztec engaged Carlow to assist it in developing and implementing its corporate strategy. Under the terms of that engagement, corporate strategy included funding the development of an iron ore project in Western Australia, takeover advice, joint venture or strategic alliance with partners, and other corporate transactions. 4On 22 March 2005, Aztec retained Macquarie Bank Limited (Macquarie Bank) to provide advice and assistance to Aztec, initially in relation to formulating a response strategy, and then subsequently executing that response strategy, in the event of a takeover offer or merger proposal being put to Aztec. By letter of retainer from Macquarie Bank (the Macquarie Letter) on that date, Aztec agreed to pay various fees to Macquarie Bank, including a performance fee that was to become payable "upon success". "Success" was defined as follows: I) A bidder acquires 50% or more of the shares in [Aztec] under an Offer which has been recommended by a majority of the Aztec Board (ie. formally reaches a controlling interest); or II) The Offer is not recommended or is rejected by a majority of the Aztec Board and a bidder does not acquire greater than 50% of the shares in [Aztec]; or III) Shareholders of Aztec received or are presented with some other course of action (eg. scheme of arrangement, reconstruction, merger, reduction of capital or liquidation) on terms acceptable to a majority of the Aztec Board and recommended by them and all pre-conditions for completion have been satisfied. By letter dated 24 March 2005 (the Carlow Amending Letter), Aztec proposed an amendment of Carlow's "existing mandate" to provide for a "Success Fee" to be payable to Carlow based on "Success" as set out and defined in the Macquarie Letter. 5In October 2005, Aztec proposed to terminate the engagement of Carlow. However, a dispute arose about Carlow's entitlements upon such termination. After negotiations between the solicitors for Carlow and the solicitors for Aztec, Aztec and Carlow entered into the Deed. 6The Deed recited the following background: Aztec had engaged Carlow to provide certain services under the terms of the Carlow Engagement Letter, as amended; Aztec wished to terminate that engagement and Carlow had no objection to the proposed termination; The parties were in dispute as to Carlow's entitlements upon termination; Whereas Carlow claimed that it was entitled to a Success Fee if a "Success Fee Event" occurred any time during the period of 18 months from 30 June 2006, Aztec said that the Success Fee was payable only if a Success Fee Event occurred any time during the period of 18 months from October 2005. 7Clause 2 of the Deed relevantly provided that, in full and final settlement of the claims made by the parties, the parties agreed that Carlow's engagement terminated immediately upon the parties executing the Deed and that the Success Fee was only payable if the Success Fee Event occurred at any time during the period of 18 months from 1 January 2006. There was thus a compromise between Carlow and Aztec as to the period during which a Success Fee Event might occur so as to give rise to an entitlement to the Success Fee. 8Clause 11 dealt with the Success Fee. Clause 11.1 provided that the succeeding provisions of cl 11 "amplify" the entitlement of Carlow to the Success Fee envisaged by cl 2.1(b)(ii) in the context of: the Carlow Amending Letter; and relevant parts of the Macquarie Letter. 9Clause 11.2 of the Deed defined the term "Initial Offer" as a proposal to make an offer to take over or merge with Aztec made or announced by a bidder. Clause 11.2 provided that where an Initial Offer is made or announced, Aztec must pay Carlow an "Announcement Fee" of $150,000. Clause 11.3 then provided that, "on Success", Aztec must pay Carlow the balance of the Success Fee, less the Announcement Fee. "Success Fee" was defined in the Deed as the Success Fee referred to in the Carlow Amending Letter "as amplified" by cl 11. 10Clause 11.5 of the Deed provided as follows: For the purpose of clause 11.3, "Success" occurs when: (a) a bidder acquires 50% or more of the shares in Aztec pursuant to or after the Initial Offer where the acquisition was recommended by a majority of the Aztec board (that is to say, the bidder formally acquires a controlling interest); or (b) the Initial Offer is not recommended or is rejected by the majority of the Aztec board and the bidder subsequently does not acquire more than 50% of the shares in Aztec; or (c) shareholders of Aztec receive or are presented with some other course of action (for example, scheme of arrangement, reconstruction, merger, reduction of capital or liquidation) on terms acceptable to the majority of the Aztec board and recommended by the majority with all preconditions for completion having been satisfied. 11The present dispute was triggered by takeover offers made by Mount Gibson Iron Limited (Mount Gibson) to the shareholders of Aztec, which were announced by Mount Gibson on 24 July 2006. As at the announcement of its bid, Mount Gibson had an interest in 19.9 percent of the issued shares of Aztec. Section 635 of the Corporations Act 2001 (Cth) sets out a table providing for the steps that a bidder must take to make an effective market bid and the steps that a target must take when a market bid is made. In the present circumstances, Mount Gibson was the bidder and Aztec was the target. 12Relevantly, Aztec was required to prepare a target's statement and send a copy to Australian Securities Exchange and to Mount Gibson. Aztec was also required to send each holder of securities that were the subject of the bid a copy of that statement. The effect of s 638(3) was that Aztec's statement was required to contain a statement by each director of Aztec either recommending that offers made under the bid be accepted or not accepted, and giving reasons for the recommendation, or, alternatively, giving reasons why a recommendation was not made. 13Aztec prepared a target's statement on 8 September 2006 and sent it to its shareholders in accordance with the Corporations Act. Aztec's statement said that its directors unanimously recommended that shareholders reject Mount Gibson's "unsolicited and opportunistic takeover offer". Reasons for that recommendation were set out in Aztec's statement. 14By 22 November 2006, despite the contents of Aztec's target's statement, Mount Gibson had acquired an interest in 50.52 percent of the issued capital of Aztec. On 28 November 2006, the chairman of directors of Aztec wrote to each Aztec shareholder saying that the board had revised its recommendation in relation to the takeover offer from Mount Gibson. The letter said that, having seen Mount Gibson's ownership increase to 54.14 percent, and after considering recent developments, the Aztec board believed, on balance, that shareholders should accept Mount Gibson's offer. The letter said that, based on Mount Gibson's current level of ownership and changes in a number of circumstances surrounding the bid, Aztec's directors had considered the benefits and risks to Aztec shareholders remaining a minority shareholder in Aztec as compared to the benefits and risks of accepting the offer or selling on market while the bid remained open. 15On 28 November 2006, Carlow sent to Aztec an invoice claiming payment of the success fee, less the initial payment of $150,000. Aztec declined to pay the success fee. Carlow then commenced proceedings in the Commercial List for recovery of the amount that it claimed to be owing by Aztec. The Construction of the Deed 16The drafter of the Deed should not be particularly proud of his or her drafting. The language used in it exhibits a degree of confused thinking, although part of that might be the result of endeavouring to give effect to the language of the Macquarie Letter and confused instructions. 17There are three events that constitute Success under cl 11.5 of the Deed. The first is that a bidder acquires 50 percent or more of the shares in Aztec pursuant to or after the Initial Offer. It is by no means clear when that occurs. In the present circumstances, it could not be said that the initial 19.9 percent of the share capital of Aztec was acquired by Mount Gibson pursuant to or after the proposal announced on 24 July 2006 (which proposal constituted the Initial Offer), because Mount Gibson had already acquired 19.9 percent by 23 July 2006. On the other hand, it may be fair to construe that phrase as meaning that it would be satisfied by Mount Gibson having become the owner of more than 50 percent of the shares at some time after the Initial Offer, including any shares that it had acquired before the Initial Offer. That construction is arguably supported by the parenthetic clause at the end of cl 11.5(a): "(that is to say, the bidder formally acquires a controlling interest)". 18However, a further pre-requisite for Success under cl 11.5(a) is that the acquisition have been recommended by a majority of the Aztec board. That raises a question as to what is meant by the word "acquisition". The board of Aztec did not at any time recommend an acquisition of shares by Mount Gibson. The most that could be said is that, on 28 November 2006, the directors recommended that those shareholders who had not accepted offers from Mount Gibson should accept the offers made to them. Thus a possible reading of cl 11.5(a) is that Success occurs, inter alia, when, at some time after an announcement has been made by a bidder, the bidder has become the owner of more than 50 percent of the shares in Aztec and a majority of the directors of Aztec has recommended that remaining shareholders accept the offers made to them. That is Carlow's contention. 19That would be a curious construction, since it would contemplate that Success could occur even if 90 percent of shareholders accepted offers, contrary to a recommendation by the board that they reject the offers, if, after that time, the board recommended that the remaining 10 percent of shareholders accept the offers made to them. It is difficult to see what commercial rationale there would be for such an arrangement. 20Some light is to be thrown on cl 11.5(a) by the language of cl 11.5(b). Thus, the second circumstance in which Success occurs is where the majority of the Aztec directors do not recommend acceptance by shareholders of offers made by a bidder and the bidder fails to acquire more than 50 percent of the shares in Aztec pursuant to or after the Initial Offer, during the period in which the offers remain open in accordance with the Corporations Act. The two latter requirements must be read in, in order to make sense of (b). 21There is then a third circumstance in which Success occurs, namely, when shareholders are presented with some other course of action that is recommended by the majority of the Aztec board and all pre-conditions for completion of that course of action have been satisfied. The course of action could be a scheme of arrangement, a reconstruction, a merger, a reduction of capital, or liquidation. The rationale appears to be that Success would occur when an approved course of conduct was adopted, under which the shareholders of Aztec would realise their investment in Aztec. 22Thus, there were certainly three eventualities contemplated by cl 11.5. One is where a bid is announced, the majority of the directors recommend acceptance of offers made by the bidder and the bidder at some time after the announcement becomes the holder of more than 50 percent of the issued shares. The second is where a bid is successfully resisted, such that control does not pass to the bidder. The third is where the shareholders realise their investment by some means other than acceptance of offers to buy their shares. 23It is necessary to consider the circumstances of the present case against that scheme. In the present case, the majority of the directors recommended to all shareholders that they not accept offers made by a bidder, but the shareholders rejected that recommendation and accepted the offers. The consequence was that, at some time after the Initial Offer, the bidder became the owner of more than 50 percent of the shares in Aztec. In those circumstances, if Carlow's contentions were to be accepted, a Success Fee Event would occur and the Success Fee would become payable by Aztec simply because the directors fortuitously recommended to the remaining shareholders that they accept the offers made to them. 24That would be a most anomalous result. The criterion in cl 11.3(a) of the Deed and para (I) of the Macquarie Bank Letter is the acquisition by the bidder of 50 percent or more of the shares in Aztec. The criterion is not the acquisition of at least 90 percent, such that the compulsory acquisition provisions of the Corporations Act would be triggered. 25It would be contrary to common sense to construe the provisions as giving rise to an entitlement to the Success Fee simply because the directors made a recommendation after the contingency referred to in cl 11.5(b) of the Deed or cl (II) of the Macquarie Bank Letter had failed to occur. That is to say, the Success Fee was to be paid where the Initial Offer was recommended by the directors and it succeeded or where the Initial Offer was rejected by the directors and failed. The Success Fee was not to be payable where the Initial Offer succeeded notwithstanding its rejection by the directors. That construction also reflects commercial common sense in that the Success Fee was to be payable where the shareholders accepted and acted on the advice of the directors who had themselves been receiving takeover advice from Carlow, at least prior to 14 February 2006 on the execution of the Deed and the termination of its engagement by Aztec. Rectification 26In those circumstances, it is necessary to consider Carlow's claim for rectification of the Deed. I have had the advantage of reading in draft form the proposed reasons of Bergin CJ in Equity. I agree, for the reasons given by her Honour, that Carlow has not established that there was clear and convincing proof that the documentation did not reflect the true agreement of the parties. In particular, I agree that the primary judge was justified in reaching the conclusion that there was insufficient evidence of a common intention at the time of the execution of the Deed that would displace a presumption that it reflected the agreement reached between the parties. There was no error on the part of the primary judge in dismissing Carlow's rectification suit. Conclusion 27It follows that the appeal must be dismissed. Carlow must pay Aztec's costs of the appeal. 28BERGIN CJ IN EQ: This is an appeal from the judgment and orders of Hammerschlag J pursuant to which the claim by the appellant, Carlow Castle Pty Ltd trading as Greenhill Capital Partners, against the respondent Aztec Resources Limited, for payment of a Success Fee was dismissed. The appellant's alternative claim for rectification of the Deed under which it claimed entitlement to the success fee was also dismissed. Background 29The respondent retained the appellant on terms confirmed by letter dated 12 November 2002 that included the following (Blue 63): We wish to confirm your request for Carlow Castle Pty Ltd ("Carlow Castle") to assist Aztec Resources Limited ("Aztec") in developing and implementing its corporate strategy which may include funding, the development of the Koolan Iron Ore Project ("Koolan"), full or partial sale of Koolan, takeover advice, joint venture or strategic alliance with partners or other corporate transactions which enhances shareholder value (the "Transactions"). 30The Koolan Project involved iron ore deposits north-west of Derby, Western Australia in respect of which the respondent had acquired exploration leases (Blue 313). The retainer letter included a description of the exclusive role that the appellant would play with a notation that Richard Shemesian, the principal of the appellant, would undertake the assignment. Section 3 of the letter included the following in relation to the appellant's professional fees (Blue 64): 3. In the event the Transaction involves a sale or partial sale of Koolan or a full or partial acquisition of Aztec by way of a takeover or acquisition of shares in Aztec a success fee of 5.0% of the enterprise value of Aztec on a fully diluted basis is payable. Twenty five percent (25%) of this fee is payable on the signing of any agreement or announcement of takeover offer/bid, twenty five percent (25%) when a takeover offer or agreement becomes unconditional and the remainder of the fee is payable on completion of the Transaction or when the company announces to the company's stock exchange that the Transaction is complete whichever is the earlier. 31The Standard Terms and Conditions included a clause in relation to the termination of the appellant's engagement which provided relevantly (Blue 68): In the event of termination by Client, Carlow will be entitled to its full fee under section 3 if after 18 months from the date of termination a Transaction is consummated or Aztec enters into an agreement which contemplates a Transaction and any such Transaction is later consummated. 32The Terms and Conditions also provided that the provisions of section 3 of the retainer letter survived the termination of the Agreement (Blue 68). 33In 2005 the respondent decided to retain Macquarie Bank Limited (Macquarie) to provide services similar to those that the appellant had been providing to it. Macquarie confirmed the terms of its retainer in a letter to the respondent dated 22 March 2005 (the Macquarie Letter). It recorded that Macquarie had been engaged to assist the respondent in relation to a project that was code-named Project Spear, defined as the "Transaction". Macquarie was to assist the respondent in its response to any "takeover offer or merger proposal" defined as the "Offer". 34Macquarie confirmed the fees payable to it at various phases of the Transaction including a Performance Fee that was to become payable upon "Success" (Blue 79). The Letter defined "Success" as follows (Blue 81): For the purposes of this clause 3, "Success" would be: i) A bidder acquires 50% or more of the shares in the company under an Offer which has been recommended by a majority of the Aztec Board (ie, formally reaches a controlling interest); or ii) The Offer is not recommended or is rejected by a majority of the Aztec Board and a bidder does not acquire greater than 50% of the shares in the company; or iii) Shareholders of Aztec receive or are presented with some other course of action (eg. scheme of arrangement, reconstruction, merger, reduction of capital or liquidation) on terms acceptable to a majority of the Aztec Board and recommended by them and all pre-conditions for completion have been satisfied. 35After Macquarie was retained, the respondent wrote to the appellant on 24 March 2005 amending aspects of the appellant's retainer (Second Amending Letter). It suggested that a proposed way forward would involve "amendment to the existing mandate" to include the following (Blue 88): 3. A success fee of 2.0% payable to Greenhill or its nominee on Initial Bid Capitalisation or value of the Transaction based on Success as defined by Macquarie with $150,000 of the fee payable on announcement [of] the transaction and the remainder on Success as set out and defined in Macquarie's letter dated 22 March 2005 (paragraph 3). 36In October 2005 the respondent decided to terminate its relationship with the appellant. By letter dated 13 October 2005 it advised the appellant as follows (Blue 90): In consideration for Greenhill's engagement being terminated with immediate effect, Aztec will deliver a cheque made payable to Carlow Castle Pty Ltd in the amount of $90,000 immediately upon receipt of a tax invoice from Greenhill for that amount. This payout includes October's retainer and is intended to compensate Greenhill for the loss of its monthly retainers to June 2006 on the basis that this settles in full all of Aztec's obligations to Greenhill in connection with the engagement. 37A dispute arose in relation to the appellant's entitlements on termination. Between October 2005 and early January 2006 Mr Burston, the executive chairman and CEO of the respondent, discussed proposed terms of the settlement of the dispute with Mr Shemesian. On 4 January 2006 the solicitors for the respondent, Blake Dawson Waldron, forwarded a draft Deed to the solicitors for the appellant, Kanjian & Company. On 13 January 2006 Kanjian & Company responded enclosing a further draft of the Deed and advising as follows (Blue 100): I have now had an opportunity to take instructions from Richard about the deed which you sent me the other day. I attach to this email a marked up version of the deed containing amendments which Richard believes are necessary to give proper effect to the negotiated settlement. You will see that I have added a new clause 11 dealing with the "success fee". Richard believed that a reference merely to the second amending letter was insufficient to enable the parties to know precisely how the fee was to be calculated if it ever arose. My instructions were therefore to import into the deed such parts of the Macquarie Bank letter (also referred to in the second amending letter) as fleshed out the proper basis for calculation - I endeavoured to confine clause 11 within the scope of paragraph 3 of the second amending letter. For your convenience I attach a copy of the MBL letter. 38On 24 January 2006 Blake Dawson Waldron responded in terms that included the following (Blue 121): Aztec has agreed to the insertion of clause 11 only to the extent that it fleshes out the terms of the Macquarie Bank letter and no more. The Deed 39The Deed was executed on 14 February 2006. The Recitals recorded that the parties were in dispute as to the appellant's entitlements upon termination and that they had agreed to settle the dispute pursuant to the Deed (Blue 126). The Recitals also recorded that: the appellant claimed that it was entitled to a Success Fee if a Success Fee Event occurred at any time during the period of 18 months from 30 June 2006; and that the Respondent claimed that the Success Fee was only payable if a Success Fee Event occurred at any time during the period of 18 months from October 2005 (Blue 126). 40Clause 2.1(b)(ii) provided that in full and final settlement of their respective claims the parties agreed that a "Success Fee" was only payable if a "Success Fee Event" occurred any time during the period of 18 months from 1 January 2006 (Blue 128). Clause 2.1(b)(iii) of the Deed recorded the agreement of the parties that the appellant had no further claims or entitlements arising from its retainer as amended by the Second Amending Letter, or the termination thereof, except as expressly provided in the Deed. 41"Success Fee" was defined as the fee of "2% referred to in the Second Amending Letter as amplified by clause 11 of this deed". "Success Fee Event" was defined as the "event or events referred to in the Second Amending Letter as amplified by clause 11 of this deed which give rise to Aztec's liability to pay the Success Fee" (cl 1.1)(Blue 127). 42Clause 11 of the Deed provided as follows: 11. SUCCESS FEE 11.1 The succeeding provisions of this clause 11 amplify the entitlement of Greenhill Capital to the Success Fee envisaged by clause 2.1(b)(ii) in the context of: (a) paragraph 3 of the Second Amending Letter, and (b) relevant parts of the letter dated 22 March 2005 from Macquarie Bank Limited to Aztec. 11.2 Where a bidder makes or announces a proposal to make an offer to take over or merge with Aztec (Initial Offer), Aztec must pay Greenhill Capital or its nominee $150,000 net of GST of the Success Fee (Announcement Fee). 11.3 Subject to clause 2.1(b)(ii), on Success, Aztec must pay Greenhill Capital or its nominee the balance of the Success Fee being 2% of the Initial Bid Capitalisation less the Announcement Fee. 11.4 For the purpose of clause 11.3, the "Initial Bid Capitalisation" is the implied capitalisation of Aztec at the Initial Offer price or the implied capitalisation of Aztec under any other course of action (for example, scheme of arrangement, reconstruction, merger, reduction of capital or liquidation) subject to the following: (a) where the Initial Offer is cash or includes a wholly cash alternative, the implied capitalisation of Aztec at the Initial Offer price or the implied capitalisation of Aztec under any other course of action (for example, scheme of arrangement, reconstruction, merger, reduction of capital or liquidation) is to be calculated on the basis of the cash value of components comprising the Initial Offer; (b) in the event that the Initial Offer has cash and/or scrip alternatives, the price for calculation is to be the higher of the cash alternative (if any) and the value of the alternative with the scrip component; and (c) the value of the scrip component for the purposes of a wholly scrip offer or and (sic) an offer with cash and/or scrip alternatives outlined in the preceding subparagraph (b), is to be calculated based on the volume weighted at the average price of those securities on the home exchange applicable to those securities over the three full trading days before the announcement by the bidder of the Initial Offer. 11.5 For the purpose of 11.3, "Success" occurs when: (a) a bidder acquires 50% or more of the shares in Aztec pursuant to or after the Initial Offer where the acquisition was recommended by a majority of the Aztec board (that is to say, the bidder formally acquires a controlling interest); or (b) the Initial Offer is not recommended or is rejected by the majority of the Aztec board and the bidder subsequently does not acquire more than 50% of the shares in Aztec; or (c) shareholders of Aztec receive or are presented with some other course of action (for example, scheme of arrangement, reconstruction, merger, reduction of capital or liquidation) on terms acceptable to the majority of the Aztec board and recommended by the majority with all pre-conditions for completion having been satisfied. 11.6 With respect to calculating the Success Fee in instances where the Initial Offer is wholly scrip, partly scrip or has a scrip alternative, if the securities are not then quoted then their value is to be determined by agreement between Greenhill Capital and Aztec. In the absence of agreement, their value is to be determined by a valuer retained by Aztec for the transaction. If there is no such valuation by an expert, then one must be appointed by Aztec and Greenhill Capital for this purpose. 11.7 If part of the Initial Offer incorporates a dividend, capital return or other distribution of cash or securities by Aztec, the value of each component including the full value of any franking credits must be included in the overall value of the transaction for the purpose of calculating the Success Fee. 11.8 Where any component of the Initial Offer price is denominated in currency other than Australian dollars, such amount must be converted to Australian dollars at the relevant closing exchange rate/cross rate as reported by Bloomberg on the day the bidder announces the making of the Initial Offer. 11.9 If the Initial Offer involves a change to the board of Aztec, a tax invoice in respect of the Success Fee must be delivered by Greenhill Capital to Aztec before the change in the composition of the board and must be paid by Aztec before that change takes effect. 11.10 The Success Fee must be paid by Aztec to Greenhill Capital or its nominee in Australian dollars free and clear of and without any deduction or withholding of any kind so that the net amount received by Greenhill Capital is the same as the gross amount payable if no withholding or deduction was made. 11.11 The Success Fee and the Announcement Fee are to be calculated on a net of GST basis so that Aztec must pay any GST referable to the Success Fee and the Announcement Fee at the time each is paid. 11.12 Aztec must pay the Success Fee and the Announcement fee within seven days of receipt from Greenhill Capital of a tax invoice in respect of the same. In default of payment within seven days, interest is to accrue on a tax invoices from the date raised to the date of payment at a rate of interest equal from time to time to the standard variable lending rate charged by Macquarie Bank Limited. The Offer 43A hostile off market takeover bid was announced by Mount Gibson on 24 July 2006. The appellant invoiced the respondent for the $150,000 announcement fee under cl 11.2 of the Deed and the respondent paid this fee (Blue 9-10). The respondent issued the Target's Statement on 12 September 2006 recommending that the shareholders reject Mount Gibson's "unsolicited and opportunistic takeover offer". By 10 October 2006 Mount Gibson had secured 33.05% of the shareholding of the respondent (Blue 470). 44Mr Shemesian flew to Perth on or around 16 October 2006 to meet with Mr Burston and Mr Bilbe, the managing director of the respondent. Mr Shemesian was accompanied by his accountant, Vince Fayad, of PKF Chartered Accountants. During the meeting Mr Shemesian asked whether the respondent would be paying the appellant's Success Fee in the event that Mount Gibson obtained 50% or more of the respondent. Mr Shemesian's evidence was that Mr Burston said that there was "no problem" and that the Success Fee would be paid in the event of a takeover by Mount Gibson. Mr Shemesian said that Mr Bilbe advised that the bank facility that was being negotiated would include an amount sufficient to pay both the respondent's and Macquarie's takeover fees in full. 45By 19 October 2006 Mount Gibon's relevant interest in the respondent was 33.30%. Mount Gibson extended the offer period to 3 November 2006. 46On 20 October 2006 Mr Bilbe, wrote to Mr Fayad by email (with the time recorded as 5.59 pm) in the following terms (Blue 50): As promised please find attached our calculation/s of the success fee $5.4687 million that may be payable to Carlow Castle as a result of the takeover bid for Aztec by Mt Gibson. The second calculation assumes that all of the 21,150,000 options currently on issue are exercised and fall into the bid by the closing date. In reality not all of the options are likely to be exercised so the second success fee amount would be less than $5.5795 million. If you have any queries please don't hesitate to contact me. 47On 20 October 2006 Mr Fayad responded by email (with the time recorded (curiously) as 5.01pm) as follows (Blue 49-50): Thank for your email. The calculation looks fine and I agree that the lower amount of $5.4687 million, plus GST is likely payable by Aztec. As discussed when we meet at your offices, the only other issue that we should clarify is the meaning of "Success". It is in everyone's interest to ensure that the circumstances in which the Success fee is payable is clearly understood. In short, if Mt Gibson achieves a level of acceptance above 50% and at any time during the offer period, the Aztec board recommends acceptance of the offer, the Success Fee is payable to Greenhill/Carlow Castle. Of course, if the Aztec does not recommend acceptance of the offer and Mt Gibson does not achieve 50%, the Success fee is also payable. I would be grateful if you could confirm your agreement to the above. Call me if you would like to discuss. 48Mr Bilbe responded to Mr Fayad by email (with the time recorded as 8.09 pm) as follows (Blue 49): Yes, that is our understanding of the meaning of success. 49Mr Fayad forwarded that email to Mr Shemesian that evening by email (with the time recorded as 8.18 pm) with the message "FYI" (Blue 49). 50On 27 October 2006 and 1 November 2006 the respondent's directors sent letters to shareholders continuing to recommend rejection of Mount Gibson's "inadequate offer". 51On 6 November 2006 Mr Bilbe wrote to Mr Shemesian in the following terms (Blue 609) : We refer to the deed of settlement and release between Aztec Resources Limited (Aztec) and Carlow Castle Pty Limited trading as Greenhill Capital Partners (Greenhill Capital) date 14 February 2006 (Deed). Terms defined in the Deed have the same meaning in this letter. Aztec is presently the subject of a takeover offer from Mount Gibson Iron Limited (Mount Gibson) (Offer). You have asked Aztec's board of directors (Aztec Board) to confirm its interpretation of the operation of clause 11.5 of the Deed in the context of the Offer and, in particular, the point at which Aztec considers that Success will have occurred for the purposes of that clause. At this juncture, the Aztec Board does not consider it appropriate for the Aztec Board to express a view on the circumstances in which Success might or might not occur for the purposes of clause 11.5 of the Deed, nor to otherwise offer any opinion in respect of the circumstances in which any amount might or might not be payable to Greenhill Capital. This letter supersedes all previous correspondence (both oral and written) in respect of this matter. Acquisition of controlling interest 52On 22 November 2006 Mount Gibson acquired the controlling interest in the respondent. It filed a Form 604, Notice of Change of Interest of Substantial Holder, on that date which recorded that it had 50.52% voting power (Blue 368). It acquired additional shares and filed a further Form 604 on 23 November 2006 in which it was recorded that it had 52.73% voting power (Blue 374). 53On 23 November 2006 the respondent issued a "Takeover Update" noting that Mount Gibson "this morning has announced a relevant interest in Aztec of 50.52% of Aztec shares". That Takeover Update included the following (Blue 380): As a result of Mount Gibson obtaining a relevant interest in Aztec of greater than 50%, the Mount Gibson Offer has been automatically extended by two weeks and is now scheduled to close at 5 pm (Western Standard Time) on Wednesday 6 December 2006. Aztec directors will be in contact with Mount Gibson at the earliest opportunity to discuss this development. Aztec will keep shareholders fully informed and will make a further announcement with advice to shareholders well in advance of the new scheduled close of the Mount Gibson Offer on Wednesday 6 December 2006. In the meantime, Aztec shareholders are advised to take no action until the Aztec Board makes a further announcement. 54On 24 November 2006 Mount Gibson filed a Form 604 in which it was recorded that it had 54.07% voting power (Blue 381). Offer recommended 55On 28 November 2006 the respondent and Mount Gibson issued a Joint ASX and Media Release which included the following (Blue 387): AZTEC DIRECTORS UNANIMOUSLY RECOMMEND MOUNT GIBSON OFFER MOUNT GIBSON DECLARES OFFER FINAL AS TO PRICE Mount Gibson Iron Limited (Mount Gibson) (ASX Code: MGX) is pleased to announce that the board of Aztec Resources Limited (Aztec) has today unanimously agreed to recommend acceptance of Mount Gibson's offer for all the ordinary shares in Aztec (Offer). In addition the Aztec directors have confirmed they will accept the Offer in respect of their own Aztec shares. The recommendation follows discussions between the boards of Mount Gibson and Aztec and their advisers, subsequent to Mount Gibson's announcement last week that it had secured acceptances in excess of 50% of Aztec. 56On 28 November 2006 the respondent wrote to the shareholders in terms that included the following (Blue 527-529): SHAREHOLDER UPDATE - REVISED RECOMMENDATION The Board of Aztec Resources Limited (Aztec) has revised its recommendation in relation to the take over offer from Mount Gibson Iron Limited (Mount Gibson). Having seen Mount Gibson's ownership in Aztec increased to 54.14% and after considering recent developments, on balance, the Aztec board believes that shareholders should accept Mount Gibson's offer. It is noted that, while the current market price of Aztec shares is less than the implied price under the Mount Gibson offer, shareholders can elect to sell their shares on market while the offer remains open after having regard to their individual circumstances. Aztec directors have previously recommended to Aztec shareholders that they should reject the Mount Gibson offer based on a number of factors which are set out in Aztec's Target's Statement and Supplementary Target Statements. However, based on Mount Gibson's current level of ownership and changes in a number of circumstances surrounding the bid, Aztec directors have considered the benefits and risks to Aztec shareholders of remaining a minority shareholder in Aztec as compared to the benefits and risks of accepting Mount Gibson's offer or selling on market while the bid remains open. ... Aztec shareholders should be aware that the Mount Gibson offer is currently scheduled to close at 5 pm on Wednesday, 6 December 2006. 57On 28 November 2006 the appellant sent an invoice to the respondent for payment of the Success Fee in the amount of $5,850,570 including GST (Blue 389). On 29 November 2006 Macquarie submitted its invoice to the respondent for a Performance Fee of $4,316,933.44 (Blue 397). 58The minutes of a meeting of the board of the respondent on 29 November 2006 record the following (Blue 391-392): The Directors noted that the main criteria for payment of the performance fee (as had been previously discussed with Macquarie) had been met, namely: Mt Gibson Iron had acquired more than 50% of the issued capital of Aztec, and The Directors of Aztec had recommended that the Company's shareholders accept the offer. It was RESOLVED that the performance fee be paid to Macquarie, subject to the calculation of the fee being checked and agreed by the Company. 59On 15 December 2006 the respondent wrote to the appellant in relation to its invoice for its Success Fee in terms that included the following (Blue 403): Aztec Resources Limited does not consider that the conditions required for payment of the "success fee" under the Deed of Settlement & Release executed with Carlow Castle Pty Ltd earlier this year have been met. As a result, the invoice attached to your e-mail is invalid. 60The appellant commenced proceedings in the Commercial List of the Equity Division of this Court on 3 August 2012 seeking a declaration that it was entitled to the payment of the Success Fee calculated in accordance with cl 11.3 of the Deed (Blue 2). The alternative order sought in the Summons was for rectification of cl 11.5(a) of the Deed by amending it to read: In respect of an Initial Offer, a bidder achieves a level of acceptances in respect of more than 50% of Aztec ordinary shares and at any time during the offer period for the Initial Offer the Aztec board recommends acceptance of the offer. 61The appellant also sought an order that the respondent specifically perform the agreement. 62The appellant's rectification suit as outlined in its Commercial List Statement, alleged that it was the common intention of the parties that the appellant would be entitled to be paid the Success Fee in the event that a bidder who had made a takeover offer for the respondent, achieved a level of acceptances above 50% and "at any time during the offer period" the respondent's board recommended acceptance of the offer (Red 11 [26]). The particulars of the contention in respect of the common intention included a claim that it was confirmed in Mr Bilbe's email dated 20 October 2006 to Mr Fayad of PKF Accountants, and also in discussions between Mr Burston and Mr Shemesian and discussions between Mr Fayed and Mr Bilbe. It was also alleged that the common intention in so far as it was held by the respondent was to be inferred from the payment by the respondent to Macquarie of the success fee pursuant to the Macquarie letter (Red 12). 63The respondent denied the appellant's entitlement to the Success Fee and contended (Red 18): Success did not occur within the meaning of the Deed. Mount Gibson acquired 50% or more of the shares in a takeover offer which was not recommended or which was rejected by the majority of directors and no Success Fee Event occurred. The condition precedent to the plaintiff's entitlement to receive the Success Fee has not been satisfied. 64The proceedings were heard on 28 February 2013. The appellant/plaintiff relied upon Mr Shemesian's affidavit sworn on 21 September 2012. Mr Shemesian was not required for cross-examination. The respondent/defendant tendered two letters: the respondent's letter to Mr Shemesian of 6 November 2006 (Exhibit 1); and a letter from Mount Gibson to the ASX dated 19 October 2006 (Exhibit 2) (Black 40). The primary judge's reasons 65The primary judge delivered judgment on 12 March 2013: Carlow Castle Pty Limited trading as Greenhill Capital Partners v Aztec Resources Limited [2013] NSWSC 188. His Honour identified the issues as follows (Red 24-25): 5. The parties are divided first as to whether the Success Fee is payable only if (as Aztec contends) at the time of the acquisition of 50% or more of Aztec, a majority of its board had recommended acceptance of the bid, or (as the plaintiff contends) it suffices that the Aztec board, at some time before the offer closed, recommended acceptance of it even though the Aztec board did not recommend acceptance of the bid at the time the controlling interest passed to the bidder. Resolution of this issue involves determining the proper construction of the terms of the Deed. 6 The parties are divided secondly as to whether, if the Deed does not operate as the plaintiff contends, it should be rectified so to operate. 66After setting out the background that is earlier recorded in this judgment the primary judge referred to the relevant principles of construction and said (Red 36-37): 53 The plaintiff contends that cl 11.5(a) describes two events, which if both occur have the consequence that the Success Fee becomes payable. Those events are the acquisition of a controlling interest by a bidder and a recommendation in favour of the bid by a majority of the Aztec board. The plaintiff puts that the acquisition of control plus a positive recommendation, whenever it occurs, represents Success from Aztec and its shareholders' point of view. This construction, it puts, is commercially the more sensible one. It points out that its functions and those of Macquarie Bank continued under its Engagement, that the Macquarie letter did not terminate on a change of control and that the board of Aztec remained under a continuous obligation to act in the interests of shareholders while a bid remained open, even once a change of control had occurred. 54 In my view, the plaintiff's construction is untenable and does not accord with the plain meaning of the words used in cl 11.5(a). 55 Where cl 11.5(a) refers to "the acquisition", this is a reference to the bidder's acquisition of 50% or more of the shares in Aztec. The words in parenthesis "acquires a controlling interest" are also a reference to 50% or more of the shares. 56 It is this acquisition which must be recommended by a majority of the board of Aztec, something which never occurred. 57 If it were necessary to have resort to which is the more commercially sensible construction, Aztec's plainly is. Underlying the notion of Success in each of the three cases described in cl 11.5 is that the outcome is one which had the support of the board (presumably being advised by the corporate advisor). 58 Hence, cl 11.5(a) has in mind a takeover where the passing of control has the support of the Aztec board. Correspondingly, cl 11.5(b) has in mind the successful repulsion of a bidder rejected by the board. Clause 11.5(c) contemplates other types of transactions occurring with the imprimatur of the board. 59 What occurred here was the passing of a controlling interest despite the bid being hotly rejected by the Aztec board. As evinced by the circular dated 28 November 2006, the board capitulated but only after the battle had been lost. At that point the board may well have considered it in the interests of shareholders to sell into the takeover. But a commercially sensible approach would equate this more with failure than with the type of success the Deed had in mind. 60 Success is conditioned on the passing of a controlling interest which accords with the recommendation of the board, not on acquisition of shares beyond that. 67The primary judge set out the applicable principles in a rectification suit and the appellant's contentions (Red 38-39 [61]-[64]). His Honour then said (Red [39]-[40]): 65 For the reasons which follow, in my view, the plaintiff's evidence falls well short of the clear and convincing proof required to establish rectification. 66 At the outset it may be observed that the plaintiff did not suggest that its evidence extended to establishing that any subjective intention was relevantly disclosed by one party to the other at the time the Deed was made so as to prove that there was a common intention. If this is what is required by Ryledar v Euphoric, the plaintiff's rectification claim fails at the first hurdle. However, for the reasons which follow, the plaintiff's claim for rectification fails in any event. 67 I record the plaintiff put a "formal submission" that to the extent that the decision in Ryledar v Euphoric appears to require disclosure by each party to the other of its subjective intention, it is wrong and should not be followed, presumably on the basis that such a requirement is inconsistent with other judicial statements to the effect that outward expression of the accord is not required, see for example Pukallus v Cameron (1982) 180 CLR 447 at 452. 68 The Deed was signed on behalf of Aztec by Mr Clifford, a director, and Mr Edwards, Aztec's secretary. There is insufficient evidence of any relevant subjective intention held by those people, or indeed the other persons who were the guiding minds of Aztec at the relevant time. 69 The Deed was negotiated with the assistance of lawyers, neither of whom gave evidence to support any such common intention, which would be heavily at odds with what I consider to be one of the main commercial rationales of the Deed, that is, to provide for a Success Fee when an acquisition of a controlling interest occurs or fails, or some other transaction occurs, in each case at a time at which that outcome accords with the recommendation of a majority of the Aztec board. 70 Mr Bilbe's expression of a present understanding on 20 November (sic) 2006 falls well short of evidence of any subjective intention or understanding on his part, let alone on the part of other persons who were the guiding minds of Aztec at the time of the Deed. Moreover, Mr Bilbe, for reasons which the evidence does not disclose, refused in his letter dated 6 November 2006 to confirm Aztec's interpretation of the operation of cl 11.5 of the Deed and went on to add that the letter "superseded all previous correspondence (both oral and written) in respect of this matter." 71 At the meeting on 29 November 2006, the directors of Aztec noted that "the main criteria for payment of the performance fee (as had previously been discussed with Macquarie) had been met". The implication is that not all such criteria had been met, but the Court did not have the benefit of any evidence of the board's motivations. The board's motivations for paying Macquarie Bank may have been many and varied. Macquarie Bank's letter of 29 November 2006 referred to subsequent discussions and correspondence in relation to the payment of the fee to Macquarie Bank. The Court did not have the benefit of any evidence disclosing the nature and content of those matters, which for all the Court knows may have involved a conscious decision to pay notwithstanding the absence of any legal liability to do so. 72 The evidentiary material does not reflect subsequent conduct on the part of Aztec from which any conclusion can, either safely or at all, be drawn that it had a subjective intention at the time of the Deed as the plaintiff suggests. Grounds of Appeal 68By its Notice of Appeal filed on 12 June 2013 the appellant contends that the primary judge erred in two respects in the construction of the Deed: by failing to conclude that on the proper construction of the Deed it was entitled in the circumstances to be paid a Success Fee (Ground 1); and by failing to conclude that, on its proper construction, the Deed entitled it to be paid a Success Fee where, in the 18 months from 1 January 2006; (i) a bidder acquired 50% or more of the shares in the respondent under an offer to takeover or merge with the respondent; and (ii) the offer was recommended by the respondent's board, whether or not that recommendation occurred before or after the time at which the bidder acquired 50% or more of the shares in the respondent (Ground 2). 69The appellant also claims that the primary judge erred in the following respects in dismissing the appellant's rectification suit. First, it is contended that his Honour erred in concluding that there was insufficient evidence to establish the common intention between the parties that at the time of entering into the Deed the Success Fee would be paid in the event that a bidder achieved a level of acceptances above 50% and at any time during the offer period the respondent's board recommended acceptance of the offer (Ground 3). Secondly, the appellant contended that the primary judge erred in concluding that there was insufficient evidence of any relevant subjective intention of persons who were the guiding minds of the respondent at the relevant time (Ground 4). Thirdly, it was contended that the primary judge erred in concluding that it was necessary to call the evidence of the lawyers who assisted in negotiating the Deed to support the common intention alleged by the appellant (Ground 5). Fourthly, the appellant contended that the primary judge erred in failing to conclude that the appellant had established that its subjective intention was relevantly disclosed to the respondent (Ground 6). Finally the appellant contended that the primary judge erred in failing to conclude that disclosure by each party to the other of its subjective intention was not a requirement for rectification of an instrument (Ground 7). Construction of the Deed 70There is no issue that the primary judge correctly identified the applicable principles in the construction of commercial contracts (Red 35 [50]-[52]). Those principles include that the meaning of the words in the Deed is to be determined objectively, with attention to be given to the language of the contract, the commercial circumstances the contract addresses, the purpose of the transaction and the objects intended to be secured by it. The issue is whether, having regard to those principles, the primary judge fell into error in construing the Deed. 71The appellant submitted that the primary judge made the fundamental error of construing the wrong contractual provision. It submitted that clause 11 of the Deed was intended to "amplify" or "flesh out" its entitlement to a Success Fee as set out in the Second Amending Letter, which relied on the definition of Success in the Macquarie letter. It was submitted that his Honour failed to recognise the primacy of the definition of "Success" in clause 3 of the Macquarie letter and that the Deed was plainly not intended to narrow or constrict the circumstances in which a Success Fee was payable. 72The appellant also submitted that the parties could not have intended that the recommendation of the respondent's board had to occur prior to the acquisition of a controlling interest because such a construction would: (a) cut down the definition of "Success" in the Second Amending Letter; and (b) place an almost impossible hurdle in the appellant's path because it is difficult to conceive of a circumstance in this context where a board would recommend an acquisition by a bidder of shares in a target. 73The appellant placed emphasis on the relationship between the parties prior to its termination and the parties' entry into the Deed. It was submitted that the appellant had always been entitled to a Success Fee, originally 5%, reduced to 2% at the time that Macquarie was retained. The dispute that arose in relation to the payment of the Success Fee was in respect of the period, post termination, during which the mechanism for the payment of a Success Fee (the occurrence of a Success Fee Event) might be triggered. The appellant claimed that the period should be 18 months from 30 June 2006. The respondent claimed that the period should be 18 months from October 2005. The parties compromised and agreed that the period would be 18 months from 1 January 2006 (cl 2.1(b)(ii)). 74The appellant submitted that the language used by the parties in the context of the settlement of the dispute (when it was always envisaged that the appellant would be entitled to a Success Fee for "Success" as defined in the Macquarie letter) does not support the primary judge's construction of cl 11.5(a) of the Deed. The appellant also submitted that the primary judge's construction of the expression "the acquisition" in cl 11.5(a) was illogical. It was submitted that there was no intention that 50% of the shares had to be acquired under the offer subsequent to the time it was recommended by the majority of the board of the respondent. An essential aspect of this submission is the necessity to read the words "the acquisition" to mean "the offer" under which the acquisition occurs. The appellant submitted that this approach is consistent with the decision in Fitzgerald v Masters (1956) 95 CLR 420 and the Court should replace the words "the acquisition" in cl 11.5(a) of the Deed with the words "the Offer". 75The respondent submitted that the appellant's exclusive focus on the definition of "Success" in cl 3 of the Macquarie Letter is flawed. It was submitted that the definition of "Success" in cl 3 of the Macquarie letter cannot be construed in isolation, particularly where the parties have chosen to "amplify" or flesh out its meaning through cl 11.5 of the Deed. It was also submitted that the two other situations that constitute Success as identified in cl 11.5(b) and cl 11.5(c), assist in revealing the meaning of Success in cl 11.5(a) of the Deed. 76The respondent submitted that each of the situations in cl 11.5 exhibits the following common features. First, an approach to the respondent's shareholders by a third party with a proposal for takeover (ie voting control by acquisition of 50% or more of the respondent's shares) or merger; and secondly, whether or not the proposal is supported by the majority of the members of the board will dictate whether or not the relevant event of Success has occurred. 77The respondent submitted that if the reference to "the acquisition" in cl 11.5(a) of the Deed was not intended to be related in some causal sense to the acquisition by the bidder of 50% or more of the shares in the respondent, it is difficult to see what function is served at all by any reference to the recommendation by the majority of the board members. It was also submitted that if the acquisition of a controlling interest is an occurrence wholly distinct from the recommendation, then the provision in respect of the board's recommendation would appear practically otiose, a conclusion not likely to be reached when textually it is an element of a condition precedent to the appellant's entitlement. The respondent also submitted that a change in the recommendation by the majority of the respondent's directors after a bidder had acquired 50% or more of the shares could not sensibly enliven clause 11.5(a) of the Deed in any event. If, after the change in the recommendation, no further shares in the respondent were acquired at all, there could hardly be any basis for claiming Success, even though voting control had already passed. 78The respondent submitted that Fitzgerald v Masters does not apply to the circumstances of this case and that the appellant's contention that the Court could read the words "the acquisition" in cl 11.5(a) of the Deed as "the offer" should be rejected. Consideration 79The commercial circumstance of the entry into the Deed was the settlement of the dispute about the appellant's entitlements on termination of its relationship with the respondent. It had been an adviser to the respondent in implementing its corporate strategy and its services included the provision of "takeover advice" (Red 25 [7]). In those circumstances it is clear that both during the course of their commercial relationship and at the time of the execution of the Deed the parties would have been conscious of the statutory requirements under Chapter 6 of the Corporations Act 2001 (Cth) governing takeovers (the purposes of which include ensuring that the acquisition of control over voting shares in relevant companies takes place in an efficient, competitive and informed market: s 602). No doubt the parties would have been conscious of the requirement for the directors of the respondent to provide a statement (in the Target's statement) in response to a bidder's statement, recommending that offers under a takeover bid be accepted or not accepted and giving reasons for the recommendation: s 638(3)(a). It is this language of "recommendation" that the parties used in the Deed. 80Notwithstanding that the appellant would not be providing any advice in respect of any takeover attempts that might be made after the termination of the relationship, the parties agreed that the appellant would be entitled to payment of a Success fee in the circumstances set out in the Deed. 81When it was retained on an exclusive basis the appellant's entitlement to a Success Fee was dependent upon either: (a) a sale or partial sale of the Koolan project; or (b) a full or partial acquisition of the respondent by way of a takeover or acquisition of shares in the respondent (Blue 64). After the appellant's retainer was no longer exclusive and Macquarie was also retained, the appellant's entitlement to a Success Fee was based on "Success as set out and defined in" the Macquarie letter (Blue 88). 82When the parties entered into the Deed to settle their dispute they agreed to "amplify" the appellant's "entitlement" to the "Success Fee envisaged by clause 2.1(b)(ii)" of the Deed (that the Success fee was only payable if the Success Fee Event occurred any time during the period of 18 months from 1 January 2006) in the context of paragraph 3 of the Second Amending Letter and the "relevant parts" of the Macquarie letter (cl 11.1) (Blue 131). 83A Success Fee Event was defined to mean the event or events referred to in the Second Amending Letter "as amplified by clause 11 of this deed" "which give rise" to the respondent's liability to pay the Success fee (cl. 1.1) (Blue 127). The Second Amending Letter did not expressly refer to any "event or events". Rather it provided for payment of the Success Fee "on Success" as defined in paragraph 3 of the Macquarie letter. 84The Macquarie letter provided relevantly: For the purposes of this clause 3, "Success" would be: (a) A bidder acquires 50% or more of the shares in the company under an Offer which has been recommended by a majority of the Aztec Board (ie formally reaches a controlling interest). 85The Deed provided relevantly: 11.1 The succeeding provisions of this clause 11 amplify the entitlement of Greenhill Capital to the Success Fee envisaged by clause 2.1(b)(ii) in the context of: (a) paragraph 3 of the Second Amending Letter, and (b) relevant parts of the letter dated 22 March 2005 from Macquarie Bank Limited to Aztec. ... 11.3 Subject to clause 2.1(b)(ii), on Success, Aztec must pay Greenhill Capital or its nominee the balance of the Success Fee being 2% of the Initial Bid Capitalisation less the Announcement Fee. ... 11.5 For the purpose of 11.3, "Success" occurs when: (a) a bidder acquires 50% or more of the shares in Aztec pursuant to or after the Initial Offer where the acquisition was recommended by a majority of the Aztec board (that is to say, the bidder formally acquires a controlling interest); 86The expression "'Success' would be" in the definition in the Macquarie letter was changed in the Deed to "'Success' occurs when". The plain meaning of the word "when" in this context is "at the time": The Macquarie Dictionary Federation Edition, Macquarie Library (2001). This temporal element was important having regard to the parties' agreement that the appellant was "only" entitled to a Success Fee if the "Success Fee Event" occurred within the period of 18 months from 1 January 2006 (cl 2.1(b)(ii)). It was necessary to have a mechanism by which the parties could determine whether the relevant event of "Success" had occurred within that period. 87This expression made clear the parties' intention that the Success Fee was payable: at the time a bidder acquired 50% or more of the shares in the respondent in the circumstances set out in cl 11.5(a) of the Deed; at the time a bidder did not acquire more than 50% of the shares in the respondent in the circumstances set out in cl 11.5(b) of the Deed; and at the time the majority of the respondent's board recommended some other course of action (the preconditions for completion of which had been satisfied) that had been received or presented to the shareholders as set out in cl 11.5(c) of the Deed. 88The words in parentheses in cl 11.5(a) of the Deed make clear that the parties intended that the expression "50% or more of the shares" meant "a controlling interest" in the respondent. 89The language of the Corporations Act connects the recommendation to the "offers" (s 638(3)(a)). The language of the Macquarie letter also connected the recommendation to the "Offer". However, when the parties chose to amplify what they intended at the time of the termination of their relationship, they chose to connect the recommendation to the "acquisition" rather than to the "offer" in cl 11.5(a) of the Deed. Success under cl 11.5(a) of the Deed was agreed to occur when: (a) a bidder acquired a controlling interest in the respondent pursuant to or after the Initial Offer; where (b) "the acquisition" was recommended by the majority of the respondent's board. It is understandable that the parties focused upon the acquisition of a controlling interest. The appellant had been retained to advise the respondent in respect of that very matter. The compromise reflected in the Deed provided for the appellant to be paid a Success Fee if there was a successful takeover bid (the acquisition of a controlling interest in the company) that the respondent board recommended, notwithstanding that the appellant no longer had any obligation to provide the takeover advice. 90To suggest, as the appellant does in this appeal, that the parties envisaged the payment of the Success Fee where (presumably on advice) the respondent's board recommended against the takeover (the acquisition of a controlling interest) and the acquisition occurred in any event is to my mind lacking in commercial common sense. 91The fact that on 28 November 2006 the respondent's board recommended to the remaining minority that they should take up the shares pursuant to the Offer that was then available to them, after Mount Gibson had already acquired a controlling interest, is not a recommendation in respect of or connected to the acquisition of a controlling interest and is not success within the meaning of cl 11.5(a) of the Deed. 92The provisions of cl 11.5(b) of the Deed reinforce this construction. The parties agreed that success under cl 11.5(b) of the Deed was to occur when a bidder did not acquire a controlling interest in the respondent after the Initial Offer was not recommended or was rejected by the majority of the respondent's board. The success envisaged was that the acquisition of a controlling interest in the respondent would be repelled on the recommendation of the majority of the respondent's board. Success in this instance could be measured at the time the offer period had closed and the bidder had not achieved or secured a controlling interest. However if the bidder secured a controlling interest prior to the close of the offer period (as occurred here) it would be clear at that time that success as envisaged in cl 11.5(b) of the Deed was not achievable. 93Success under cl 11.5(c) of the Deed was agreed to occur when, inter alia, a merger (with all preconditions for completion satisfied) acceptable to and recommended by the majority the respondent's board, was presented to the shareholders. This was to be measured at the time the course of action was presented to the shareholders. 94I should say something about the appellant's submission that this was a case to which the principles in Fitzgerald v Masters apply. That was a case in which the parties had set out in writing an agreement for the purchase of an interest in a farm to be worked as a partnership. However cl 8 of the agreement provided that the usual conditions of sale in use or approved by the Real Estate Institute of NSW "shall so far as they are inconsistent herewith be deemed to be embodied herein". The judge at first instance made a decree for specific performance at the suit of the purchaser. On appeal, Dixon CJ and Fullagar J said at 426-427: No real difficulty, however, is created. Words may generally be supplied, omitted or corrected, in an instrument, where it is clearly necessary in order to avoid absurdity or inconsistency. Here it would be indeed absurd to suppose that the parties, having expressed their agreement on a number of special and essential matters, should intend to incorporate by reference terms inconsistent with what they had specially agreed upon. What they must clearly have intended is to incorporate a set of general conditions except so far as they were inconsistent with what they had specially agreed upon, and cl. 8 must be read as if it said "consistent" or "not inconsistent". 95McTiernan, Webb and Taylor JJ had no doubt that the only way in which the provisions of the clause could be reconciled with the intention of the parties as disclosed by their agreement was to supply the word "not" before the word "inconsistent". Their Honours referred to the trite law that an instrument must be construed as a whole said at 437: Indeed it is the only method by which inconsistencies of expression may be reconciled and it is in this natural and common sense approach to problems of construction that justification is to be found for the rejection of repugnant words, the transposition of words and the supplying of omitted words (cf. Norton on Deeds, 2nd ed. (1928), p. 91). 96There was nothing absurd or inconsistent about the inclusion of the words "the acquisition" instead of the words "the offer" in cl 11.5(a) of the Deed. The clear intention of the parties was to expand or to flesh out the appellant's entitlement to a Success Fee in the circumstances in which they found themselves after their relationship ended. This is not a case to which the principles in Fitzgerald v Masters apply. 97The appellant made an alternative submission that, although at the time the respondent's board recommended acceptance of the Offer Mount Gibson had acquired 50% or more of the shares in the respondent, it had only acquired 34.17% by reason of the Initial Offer because it had commenced from the usual strategic position of ownership of 19.9% of the shares in the respondent. Accordingly it was submitted that the acquisition of 50% or more of the shares had occurred after the board's recommendation and this was "Success" within the meaning of cl 11.5(a) of the Deed. 98I am of the view that this submission should not be accepted. The words in parentheses in cl 11.5(a) of the Deed made clear that it was the acquisition of the "controlling interest" pursuant to or after the Initial Offer, not the acquisition of 50% of the shares in addition to the shares owned by the bidder prior to the Initial Offer, that was a requirement for Success. 99There was no error in the primary judge's construction of the Deed. Rectification 100The primary judge set out the legal principles applicable in cases of rectification (Red 37-38: [61]-[63]). The appellant had to establish by clear and convincing proof that the hypothesis arising from the execution of the Deed that it reflected the true agreement of the parties should be displaced: Joscelyne v Nissen [1970] 2 QB 86 at 98; Maks v Maks (1986) 6 NSWLR 34 at 36; Maralinga Pty Limited v Major Enterprises Pty Limited (1973) 128 CLR 336 at 350-351 per Mason J. It was necessary to show that there was a concurrent intention of the parties at the date of the execution of the Deed and that the Deed did not reflect that concurrent intention: Slee v Warke (1949) 86 CLR 271 at 281 per Rich, Dixon and Williams JJ. 101Three of the appellant's grounds of appeal relate to the primary judge's findings that the evidence fell well short of the clear and convincing proof required to establish rectification (Grounds 3 to 5); these include contentions that his Honour should not have concluded that "it was necessary" to call the lawyers involved in the negotiation of the Deed to prove the common intention (Ground 5). It is convenient to deal with these three grounds together. The other two grounds relate to the disclosure of the respective subjective intentions (Grounds 6 and 7) and it is convenient to deal with those two grounds together. Grounds 3 to 5 - Insufficient Evidence to Establish Common Intention 102The appellant relied upon Mr Shemesian's unchallenged affidavit evidence in support of its contention that the primary judge fell into error in concluding that there was insufficient evidence to establish the concurrent or common intention of the parties (Red 39 [65] [68]). 103Mr Shemesian claimed that it was his understanding and intention that the appellant would be entitled to payment of a Success Fee in the event the bidder acquired more than 50% of the respondent's shares and the respondent's board recommended the bid. He claimed that he understood that "success" was not dependent on the timing of the respondent's board's recommendation (Blue 8 [26]). He also claimed that in signing the Deed he did not intend to restrict the appellant's right to a Success Fee to circumstances in which the respondent's board's recommendation preceded the bidder reaching the 50% acceptance level. He claimed that the timing of the respondent's board's recommendation was irrelevant and so long as it recommended the bid and the bidder acquired control of the respondent, the bid was successful from the respondent's point of view (Blue 8-9 [27]). He also claimed that he would not have signed the Deed had he been told that its effect was to deny the appellant a Success Fee if the respondent's board recommended a takeover bid after the bidder had acquired 50% of the respondent's shares. He said that he understood that a Success Fee would be payable if the board made a recommendation "at any time during the offer period" (Blue 9 [28]). 104Mr Shemesian also gave evidence that it was never his intention, nor did he believe it was the intention of the parties at the time the Deed was executed, that the Success Fee would not be paid if a bidder acquired 50% or more of the shares in the respondent and the respondent recommended the bid after the bidder had acquired those shares (Blue 9 [29]). He also claimed that at the time of the execution of the Deed, no director of the respondent indicated to him that the recommendation had to precede the bidder achieving 50% or more of acceptances (Blue 9 [29]). 105It was submitted that the primary judge failed to take this evidence into account in considering the appellant's rectification claim. It was submitted that the primary judge should have accepted that the appellant had proved that it had the subjective intention described by Mr Shemesian in his affidavit evidence. 106The appellant also relied upon the content of the email of 20 October 2006 as evidence of the concurrent or common intention of the parties. It was submitted that the primary judge fell into error in failing to conclude that this email was clear and convincing proof of the subjective intention of the respondent concurrent with the subjective intention of the appellant at the time that the Deed was executed. The appellant submitted that this email was an admission of that subjective intention and could not be withdrawn. In this regard it was submitted that the respondent's attempt to withdraw this admission by its letter of 6 November 2006 (which it claimed "supersedes all previous correspondence") was ineffective. 107The primary judge referred in his reasons to the abovementioned detail of Mr Shemesian's evidence (Red 34 [47]-[48]). It is true that his Honour did not make a finding that this evidence established the appellant's subjective intention at the time of the execution of the Deed. However the absence of such a finding is explicable on the basis that his Honour was clearly of the view that irrespective of (or even accepting) Mr Shemesian's evidence in relation to the appellant's intention, there was insufficient evidence of any common intention at the time the Deed was executed. In this regard the primary judge recorded that neither the director (Mr Clifford) nor the secretary (Mr Edwards) of the respondent who signed the Deed gave any evidence of the respondent's intention at the time the Deed was executed. His Honour also referred to the absence of any evidence from either party's lawyers who assisted in negotiating and drafting the Deed (Red 39 [68]-[69]). 108The primary judge did not, as the appellant contends, find it was "necessary" to call the lawyers. His Honour was considering the strength of the evidence that was before him for the purpose of deciding whether there was clear and convincing proof such as to warrant the rectification of the Deed. One factor that his Honour took into account was the absence of any evidence from the lawyers who negotiated and drafted the Deed. Even if Mr Shemesian's evidence established the appellant's subjective intention at the time of the execution of the Deed without any evidence from the appellant's lawyer, the primary judge was entitled to take into account the absence of any evidence from the lawyers in support of the common intention at the time of the execution of the Deed. 109His Honour concluded that the common intention for which the appellant contended "would be heavily at odds with" what his Honour considered to be "one of the main commercial rationales of the Deed". That commercial rationale was that a Success Fee was to be paid "when an acquisition of a controlling interest" occurred or failed at a time at which such outcome accorded with the recommendation of the respondent's board (Red 39 [69]). It was in respect of this matter that his Honour observed that neither the appellant's nor the respondent's lawyers had been called to give evidence that would support the common intention propounded by the appellant. 110The appellant submitted that evidence from the lawyers would have been irrelevant or duplicative (Orange 24-25). The respondent submitted that such evidence would have been both highly relevant and corroborative and it would be expected that the appellant would call that evidence. The respondent submitted that there have been many cases in which lawyers who were involved in negotiating an agreement in question have been called to give evidence in a suit for rectification to displace the hypothesis arising from execution of the written instrument, that it is the true agreement of the parties. The respondent referred by way of example to Anfrank Nominees Pty Limited v Connell (1989) 1 ACSR 365 in which the respective solicitors gave evidence in relation to their relevant instructions at the time the agreement (in that case, a debt subordination agreement in respect of which rectification was ordered) was signed. The respondent submitted that the absence of any corroborative evidence from the lawyers involved in negotiating the Deed was a relevant factor properly taken into account by the primary judge in reaching the conclusion that the appellant's evidence fell well short of the clear and convincing proof required in a suit for rectification. I agree. 111The appellant's contention that the email of 20 October 2006 was an admission of the respondent's subjective intention at the time that the Deed was executed needs careful analysis. It is necessary to consider "precisely what it is that is being admitted": Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317 at 327 [25] per Gleeson CJ. 112The content of the communication is repeated here for convenience. Mr Fayad wrote to Mr Bilbe in the following terms: As discussed when we meet at your offices, the only other issue that we should clarify is the meaning of "Success". It is in everyone's interest to ensure that the circumstances in which the Success Fee is payable is clearly understood. In short, if Mt Gibson achieves a level of acceptance above 50% and at any time during the offer period, the Aztec board recommends acceptance of the offer, the Success Fee is payable to Greenhill/Carlow Castle. Of course, if the Aztec does not recommend acceptance of the offer and Mt Gibson does not achieve 50%, the Success Fee is also payable. 113Mr Bilbe responded: Yes, that is our understanding of the meaning of success. 114The primary judge concluded that what was being conveyed by these communications was a "present understanding" at the time the email was sent (Red 40 [70]). His Honour also concluded that these communications fell well short of evidence of any subjective intention or understanding on Mr Bilbe's part, let alone on the part of other persons who were the guiding minds of the respondent, at the time the Deed was executed. The primary judge also referred to Mr Bilbe's refusal (in the letter of 6 November 2006) to confirm the respondent's board's interpretation of the operation of cl 11.5 of the Deed and to the advice that the letter superseded all previous correspondence (both oral and written) in respect of this matter (Red 40 [70]). 115Mr Bilbe was appointed as the Managing Director of the respondent in February 2006. There was no evidence that he had taken part in any of the negotiations for the Deed, nor had he signed the Deed. The appellant's submission that the admission (in Mr Bilbe's email) could not be withdrawn is based in part on the fact that no evidence was called at trial to explain how the so-called admission had been made. That submission must be considered in light of the fact that when the respondent tendered the letter of 6 November 2006 there was no objection to it, nor was there any suggestion made that the use to which it could be put was limited in any way (Black 40). 116The letter of 6 November 2006 pre-dated Mount Gibson's acquisition of a controlling interest in the respondent. At the time the letter was written the respondent had issued a number of recommendations that Mount Gibson's offer should be rejected. The respondent did not recommend the acceptance of the offer until a further twenty-two days after the letter of 6 November 2006 and after Mount Gibson had acquired the controlling interest in the respondent. There was no evidence that the appellant sought any further clarification from the board of the respondent in respect of the board's understanding at the time the Deed was executed. Indeed it appears no question was ever posed to the respondent in respect of its understanding at the time that it executed the Deed. 117The appellant submitted that the obvious inference to be drawn from the letter of 6 November 2006 was that Mr Bilbe's email of 20 October 2006 had expressed the respondent's board's "intention since execution" (tr 29). The section of Mr Fayad's email of 20 October 2006 relied upon in this regard is the statement: "... if Mt Gibson achieves a level of acceptance of above 50% and at any time during the offer period, the Aztec board recommends acceptance of the offer, the Success Fee is payable ...". This does not state that the acquisition of 50% may occur "at any time". Rather it refers to the board's recommendation "at any time". It does not on its face remove the necessity for board approval of the acquisition of the controlling interest. The email was clearly referring to the provisions of the Deed and its terms would therefore have to be read with those provisions. However on the assumption that the appellant's interpretation that it means that the 50% could be acquired at any time (before or after the board's recommendation) is correct, Mr Bilbe's response was, as the primary judge found, evidence of a present understanding and is limited in the way referred to below. 118Mr Fayad's email of 20 October 2006 referred to discussions that had recently occurred between the parties. It is probable that these were the discussions in the respondent's offices in Perth. One interpretation of Mr Bilbe's statement that it was "our understanding", is that he was speaking on behalf of those of the respondent's representatives who attended the meetings to which Mr Fayad referred in his email. That was Mr Bilbe and Mr Burston. Another interpretation is that contended for by the appellant that Mr Bilbe was speaking on behalf of the board of the respondent. However, in the context in which the statement appeared, I am satisfied that it is more probable that Mr Bilbe was speaking on behalf of those at the meeting at which the "discussions" to which Mr Fayad referred in his email occurred. 119There may be cases where an implication can be drawn from circumstances demonstrating a relationship between a director or a chairman and the board of a company such that the director or the chairman may be authorised to bind the company: Hughes v NM Superannuation Pty Ltd (1993) 29 NSWLR 653 at 663 per Sheller JA (with whom Kirby P and Meagher JA agreed). Whether the intention of directors of a corporation can be found to be the corporation's intention will depend upon a number of factors. These include the directors' positions or roles, the matter in respect of which their intention has been expressed and the relevant facts and circumstances of the case: H L Bolton (Engineering) Co Ltd v T J Graham & Sons Ltd [1957] 1 QB 159 at 173. 120Neither Mr Bilbe nor Mr Burston had any legal qualifications. The only director of the respondent's board at the time with legal qualifications was Mr Michael Arnett. There was no evidence that Mr Arnett took any part in the discussions with the appellant in Perth, nor was there any evidence that he was consulted in respect of Mr Fayad's email. Mr Bilbe's communication cannot be analysed in isolation. The board's refusal to confirm its understanding of the operation of cl 11.5 of the Deed must be read with the email communications. In those circumstances Mr Bilbe's use of the term "our understanding" cannot reasonably be read as conveying the formal position of the respondent's board. The board did not stand by or acquiesce in the statement by Mr Bilbe. It made the position very clear that so far as the board was concerned, the letter superseded all prior communications on the topic. 121The circumstances of this case do not provide a proper basis for an implication that Mr Bilbe was expressing a view on behalf of the respondent's board. This is particularly so where the interpretation of the provisions of the agreement in question (the Deed) related not to the position of individual directors but to a recommendation by the majority of a board in the regulated environment under Chapter 6 of the Corporations Act. 122On the assumption that Mr Bilbe was authorised to speak on Mr Burston's behalf, it is only evidence of their then understanding, rather than that of the board of the respondent at that time and certainly not of its understanding or intention at the time of the execution of the Deed. The appellant's submission that Mr Bible's response was an admission by the respondent's board of its "intention since execution" is not accepted. 123This was evidence in a rectification suit. There was no estoppel claim, nor was there a claim that the respondent's conduct was unconscionable (Red 6). The primary judge applied the correct analysis of whether there was clear and convincing proof of the common intention of the parties at the time of the execution of the Deed such that would displace the hypothesis arising from the Deed, that it was the true agreement of the parties. 124The primary judge's conclusion that Mr Bilbe's email of 20 October 2006 expressed a "present understanding" was justified. His Honour was entitled to take into account the letter of 6 November 2006 in reaching his conclusion that the email communications fell well short of evidence of the respondent's subjective intention or understanding at the time of the execution of the Deed. 125The appellant submitted that the respondent's acknowledgment in minutes of the meeting of 29 November 2006 that the "main criteria for payment" of Macquarie's fee had been met was powerful evidence of the respondent's subjective belief in respect of the operation of the Deed (Orange 2458). The minutes of the meeting record that the "main criteria" were the acquisition by Mount Gibson of more than 50% of the issued capital of the respondent and the respondent's directors' recommendation that the shareholders accept the offer (Blue 391-392). The primary judge concluded that the board's motivations for paying Macquarie "may have been many and varied". His Honour noted the reference to the 'subsequent discussions and correspondence" between the respondent and Macquarie in relation to the payment of its fee. The primary judge also said that the use of the expression "the main criteria" implied that not all criteria had been met, noting that there was no evidence of the board's motivations in paying Macquarie. 126The relationship between the appellant and the respondent was quite separate from the respondent's relationship with Macquarie, notwithstanding that there was a link between the terms of the Deed and the definition in the Macquarie letter. The respondent's relationship with Macquarie had continued after the termination of the respondent's relationship with the appellant. The evidence did not disclose the extent of the work provided by Macquarie during the bid response phase as defined in its retainer letter, nor did it disclose the communications that may have occurred just prior to the decision of the board on 29 November 2006. Certainly the minutes of the meeting referred to a letter from Macquarie dated 14 November 2006. That letter was not in evidence at trial. The primary judge was justified in concluding that the board's motivations in paying Macquarie may have been many and varied. His Honour was entitled to take this approach in concluding that there was no clear and convincing proof to warrant rectification of the Deed. 127I am satisfied that the primary judge was justified in reaching the conclusion that there was insufficient evidence of a common intention at the time of the execution of the Deed such that would displace the hypothesis that the Deed reflected the agreement reached between the parties. I am satisfied that there was no error by the primary judge in dismissing the appellant's rectification suit. Grounds 6 and 7 - Disclosure of Intention 128The primary judge recorded the appellant's position that its evidence did not establish that either party disclosed any relevant subjective intention at the time the Deed was executed (Red 39 [66]). The primary judge also recorded the appellant's submission in respect of any obligation to make such a disclosure (Red 39 [67]). Having regard to the findings above it is not necessary to deal with these grounds of appeal or the appellant's submissions in respect of whether disclosure of the relevant subjective intention is required in a suit for rectification. Conclusion 129The orders that I propose are:
Carlow Castle Pty Ltd trading as Greenhill Capital Partners
Aztec Resources Limited
(2003) 215 CLR 317
(1956) 95 CLR 420
(1993) 29 NSWLR 653
(1986) 6 NSWLR 34
(1973) 128 CLR 336
(1949) 86 CLR 271
(1982) 180 CLR 447