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[2026] NSWSC 83
Supreme Court of NSW
2026-02-17
Muston J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Empire Securities Group Pty Limited v Novus Capital Limited [2026] NSWSC 83
Hearing dates: 4 February 2026
Date of orders: 17 February 2026
Decision date: 17 February 2026
Jurisdiction: Common Law
Before: Muston J
Decision: (1) Proceedings dismissed.
(2) The plaintiffs are to pay the defendant’s costs of the proceedings as agreed or assessed.
(3) If either party contends for a different costs order to that which is provided for in Order 2, they should make an application to my Associate by 4pm 20 February 2026, whereupon I will vacate Order 2.
(4) Should an application for a different costs order be made pursuant to Order 3:
(a) That application should include submissions of not more than 2 pages and any necessary evidence;
(b) The other party may serve and provide to my Associate responsive submissions of not more than 2 pages and any necessary evidence by 4pm 24 February 2026; and
(c) I will determine the question of costs on the papers.
Catchwords: CONTRACT – construction and interpretation of deed of release – where primary judge ruled that release clause did not operate as a bar to proceedings – whether release clause is confined to such claims as might have existed as at the date of the deed
APPEALS – appeal from a decision of the Local Court – where issue is the proper construction of a contract – whether leave is required – whether appeal raises a question of law or mixed question of law and fact
Legislation Cited: Local Court Act 2007 (NSW)
Cases Cited: Collector of Customs v Agfa-Gavaert Ltd (1996) 186 CLR 389; [1996] HCA 36
Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280; [1993] FCA 456
Director of Public Prosecutions (Cth) v JM (2013) 250 CLR 135; [2013] HCA 30
Gispac Pty Ltd v Michael Hill Jeweller (Australia) Pty Ltd [2024] NSWSC 18
Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37
Novus Capital Limited v Empire Securities Group Pty Limited and Gerald Farley (Local Court (NSW), Atkinson LCM, 29 April 2025, unrep)
Pharmacy Platform Pty Ltd v Millichamp [2025] NSWCA 213
Reid v Commonwealth Bank of Australia (2022) 109 NSWLR 149; [2022] NSWCA 134
Wardman v Macquarie Bank Ltd (2023) 322 IR 278; [2023] FCAFC 13
Category: Principal judgment
Parties: Empire Securities Group Pty Limited (First Plaintiff)
Gerard Farley (Second Plaintiff)
Novus Capital Limited (Defendant)
Representation: Counsel:
Ms S Jeliba (Plaintiffs)
Ms L Y Moussa (Defendant)
Solicitors:
Garland Hawthorn Brahe Solicitors (Plaintiffs)
Sparke Helmore Lawyers (Defendant)
File Number(s): 2025/0020774
This is an appeal from the decision of the Local Court in Novus Capital Limited v Empire Securities Group Pty Limited and Gerald Farley (Local Court (NSW), Atkinson LCM, 29 April 2025, unrep), brought under Division 4 of Pt 3 of the Local Court Act 2007 (NSW).
The first plaintiff, Empire Securities Group Pty Ltd, and the defendant, Novus Capital Limited, were parties to a “Corporate Authorised Representative and Conjunction Agreement for Share Trading and Corporate Advisory Services” dated 9 September 2013. The parties and primary Judge have referred to this agreement as the CAR Agreement; as will I. Through the CAR Agreement, Empire was appointed as a Corporate Authorised Representative of Novus, which was, at that time, a financial services provider and holder of an Australian Financial Services License.
By late January 2021, a dispute had emerged between Empire and Novus regarding a sum of money said by Novus to be payable by Empire under the CAR Agreement. The details of this dispute are not the subject of any findings made by the primary Judge. However, the dispute was resolved by the parties through a Deed of Settlement and Release dated 10 February 2021.
The Deed relevantly provided that:
“Background
A. Novus is the holder of an Australian Financial Services License under the Corporations Act 2001 (AFS License Number 238168).
B. Empire Securities has been a Corporate Authorised Representative of Novus since 2 June 2008 with the contractual arrangements of the authorisations outlined in an executed Corporate Authorised Representative Agreement (Corporate Authorised Representative Agreement).
C. Mr Gerard Farley has been an Authorised Representative of Novus since 10 March 2004 with the contractual arrangements of the authorisations outlined in an executed Authorised Representative Agreement (Authorised Representative Agreement).
D. The Parties wish to enter this Deed of Settlement and Release to finalise the payment of a Settlement Amount by Empire Securities and Mr Farley to Novus.
…
1.1 Definitions
…
Claim means any claim, action, demand, liability, loss, damage, cost, charge, expense, outgoing payment, order or judgment either at law, in equity or arising under statute, in respect of any matter whatsoever, including but not limited to any claim under the Corporate Authorised Representative Agreement and or Authorised Representatives Agreement.
Outstanding Debt Amount means the sum of One hundred and fifteen thousand, six hundred and thirty dollars and sixty-nine cents ($115,630.69).
Settlement Amount means the sum of sixty-three thousand and eighty dollars ($63,080.00).
…
2. Settlement Amount
2.1 Settlement Amount
(a) The Parties agree that the Settlement Amount is to be paid to Novus by February 2021.
(b) The Parties agrees (sic) that in the event of the Settlement Amount not being paid in full by the date outlined at 2.1(a), Novus will commence joint termination proceedings against Empire Securities and Mr Farley and seek the reimbursement of the total Outstanding Debt Amount.
3. Release
3.1 Release
(a) Upon performance by Empire Securities and Mr Farley of clause 2.1 of this Deed, Novus releases Empire Securities and or Mr Farley from all Claims save for or in connected (sic) with the enforcement of this Deed.
(b) This Deed may be relied upon and pleaded by Novus for the commencement of any Court or other legal proceedings related to or connected with an application to ensure performance of this Deed.
(c) This release does not relieve Empire and / or Mr Farley of the obligation to meet and be responsible for any claim made by any third party against Empire or Mr Farley arising from Empire and / or Mr Farley acting under the Novus AFSL License, or the CAR Agreement, or the AR Agreement.”
The reasons of the primary Judge record that the Deed also brought to an end the arrangement between the parties arising under the CAR Agreement. I do not think that this conclusion is strictly correct as a matter of law. However, the subsequent conduct of the parties – the subject of other findings made by the primary Judge – does suggest that Empire, for all practical purposes, ceased to act as a Corporate Authorised Representative of Novus at or around the time the Deed was executed.
On 18 February 2021, Empire informed Novus that it had received a letter from an investor “wanting his money back” and “alleging misrepresentations” in connection with an investment made in a company described as Xinja Bank. Empire alluded to the need for either it or Novus to communicate with their insurer in relation to this potential claim.
After receiving this communication, Novus notified its insurer and engaged Sparke Helmore Solicitors “to investigate and manage the claim”. The primary Judge was satisfied that Novus was entitled to incur legal costs investigating the potential claim. However, Novus’ decision to do so was made independently of Empire and without its knowledge.
Novus received invoices from Sparke Helmore in connection with the work it undertook in investigating, managing and providing legal advice about the potential claim alluded to in Empire’s 18 February 2021 letter. I infer from the terms of the judgement ultimately entered by the primary Judge that the sum payable to Sparke Helmore under these invoices was in the order of $37,011.70; I will refer to this liability as the “investigation costs”.
In the proceedings before the primary Judge, Novus sought to recover the investigation costs from Empire; asserting that it was entitled to do so by reason of cl 11.2 of the CAR Agreement, which provided:
“11.2 The corporate representative will pay to the licensee any costs or expenses (including all legal costs and expenses) incurred or to be incurred by the licensee in investigating any claim by a client or in defending any claim by a client whether before an external dispute resolution scheme, a mediator, an arbitrator or a court of competent jurisdiction.
11.3 The corporate representative must pay to the licensee, in addition to any amount payable by the corporate representative pursuant to cause (sic) 11.2, the amount of any excess or deductible paid or payable by the licensee as a result of any claim on the licensee’s professional indemnity insurance arising out of a claim resulting from or arising out of or in any way related to the corporate representative’s or client adviser’s acts or omissions.”
A number of defences were raised by Empire in the proceedings before the primary Judge. For present purposes, it is relevant only to note that, amongst them, was an assertion that cl 3.1 of the Deed operated as a complete bar to the claim being made by Novus.
The primary Judge’s reasons for rejecting this defence are set out at [32]-[36] of her Honour’s reasons as follows:
“[32] There was a general release in the deed. As the High Court stated in Grant v John Grant & Sons Pty Ltd, ‘a releasee must not use the general words of a release as a means of escaping the fulfilment of obligations falling outside the true purpose of the transaction as ascertained from the nature of the instrument and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence, character and extent of the liability in question and the actual intention of the releasor’.
[33] However clause 3.1 (c) of the deed of release expressly carved out a class of potential claims arising from ‘Empire and/or Mr Farley acting under the Novus AFSL or the CAR agreement or the AR agreement’. These claims would not receive the benefit of the general release contemplated in clause 3.1 (a) of the deed.
[34] Clause 3.1 (c) referred to the ‘obligations’ of Empire and Mr Farley to “meet and be responsible for any claim made by a third party against Empire or Mr Farley”. It expressly referred to the CAR agreement. The clear inference is available that the parties had agreed that the CAR agreement would still have a part to play with respect to such claims.
[35] The CAR agreement placed various obligations on Empire and Mr Farley including to indemnify Novus under clause 11. The CAR agreement also contemplated that action could be taken to enforce it e.g. clause 16 preserved the right to take action to enforce a personal guarantee against the corporate representative in the event of termination of the agreement.
[36] In the circumstances, I am satisfied that the deed does not operate as a bar to these proceedings.”
A threshold question arises as to whether the plaintiffs require leave to bring the appeal and, if so, whether leave should be granted.
Division 4 of Pt 3 of the Local Court Act relevantly provides:
39 Appeals as of right (cf LCA 1982, section 73)
(1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law.
…
40 Appeals requiring leave (cf LCA 1982, section 74)
(1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court but only by leave of the Supreme Court.
…
41 Determination of appeals (cf LCA 1982, section 75)
(1) The Supreme Court may determine an appeal made under section 39 (1) or 40—
(a) by varying the terms of the judgment or order, or
(b) by setting aside the judgment or order, or
(c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court’s directions, or
(d) by dismissing the appeal.
…
The plaintiffs contended that their single ground of appeal raises a question of law and, therefore, an appeal lies as of right: s 39(1) Local Court Act. Novus disagreed, submitting that the single ground of appeal raises a question of mixed law and fact because “the Deed can only be ascertained by reference to the factual background and by assessing the evidence…”. On this basis, Novus said that leave is required to bring the appeal (pursuant to s 40 (1) Local Court Act) and should be refused.
In Collector of Customs v Agfa-Gavaert Ltd (1996) 186 CLR 389 at 394; [1996] HCA 36 (“Agfa-Gavaert”), the High Court observed that, despite the efforts of many distinguished judges and jurists, no universally applicable test for distinguishing questions of law and fact had to that point been formulated. A more recent observation to similar effect was made in Director of Public Prosecutions (Cth) v JM (2013) 250 CLR 135; [2013] HCA 30 at [39]. Nevertheless, in *Agfa-*Gavaert, the Court (at 395) did describe as helpful the following taxonomic approach taken by the Full Federal Court in the context of construing a statute in Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 289; [1993] FCA 456:
“1. The question whether a word or phrase in a statute is to be given its ordinary meaning or some technical or other meaning is a question of law.
- The ordinary meaning of a word or its non-legal technical meaning is a question of fact.
- The meaning of a technical legal term is a question of law.
- The effect or construction of a term whose meaning or interpretation is established is a question of law.
- The question whether facts fully found fall within the provision of a statutory enactment properly constructed is generally a question of law.”
(Footnotes omitted).
“… The meaning attributed to individual words in a phrase ultimately dictates the effect or construction that one gives to the phrase when taken as a whole and the approach that one adopts in determining the meaning of the individual words of that phrase is bound up in the syntactical construction of the phrase in question…
If the notions of meaning and construction are independent, as we think they are, then it is difficult to see how meaning is a question of fact while construction is a question of law without insisting on some qualification concerning construction that is currently absent from the law.”
“Speaking in the context of the adjudication of questions of construction of legislation, Aronson, Groves and Weeks observe that ‘[o]ne of the assumptions underlying Marshall CJ's judgment in Marbury v Madison remains to this day, namely, that to every question of law, there can be only one right answer.’ On judicial review of, or appeal from, a decision concerning the construction of legislation, a contract, a will, or a trust, no latitude is given to a primary decision maker even where the primary decision was one about which opinions might reasonably differ. ‘As to construction, there is always one and only one true meaning to be given to fully expressed words.’”
(Footnotes omitted).
I draw from the above that a question as to the proper construction to be given to words used in a legal document – including a contract – will be a question of law. Applying that conclusion in the context of the plaintiffs’ single ground of appeal, I am satisfied that it raises a question of law. It: (i) contends that the primary Judge erred in construing cl 3.1 of the Deed; (ii) propounds what plaintiffs assert is the correct construction; and (iii) askes the Court to apply the clause – correctly construed – to the facts as found by the primary Judge. No challenge was made to any of the factual findings made by the primary Judge.
The possibility that it may be necessary and appropriate to have regard to any of those unchallenged findings of fact to resolve a constructional choice – in the sense discussed in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37 at [49] – does not result in the question raised becoming one of mixed law and fact.
Accordingly, the plaintiffs’ appeal may be brought as of right.
“[44] The applicable principles as to construction of releases are not in dispute. Pharmacy Platform referred to the recent explanation of those principles in Wardman v Macquarie Bank Ltd [2023] FCAFC 13; (2023) 322 IR 278 at [206]–[209] per Wheelahan J (Bromberg and Snaden JJ agreeing).
‘206 In relation to the construction of releases, in Grant v John Grant & Sons Pty Ltd [1954] HCA 23; 91 CLR 112, Dixon CJ, Fullagar, Kitto and Taylor JJ referred at 123–124 to two related common law principles of construction. The first was that general words of a release are to be restrained by any particular occasion referred to in the recitals—
The principle relied upon is that adopted by the common law long ago for the restriction of wide general words in a release of obligations, viz that the general words of a release should be restrained by the particular occasion: Knight v Cole (1690) 3 Lev 273 [83 ER 686]. Thus the general words of a release are to be restrained by the particular recital: Payler v Homersham (1815) 4 M & S 423 [ 105 ER 890]. As it is concisely expressed by Best J in Lampon v Corke (1822) 5 B & Ald 606 at 611 [106 ER 1312 at 1314] “If there be introductory matter, that will qualify the general words of the release.
(Citations added in place of the footnotes.)
207 This first principle may be seen as an emanation of the more general principle that the words of a contract are to be construed as a whole having regard to the purpose or objects to be secured by the contract. The first principle operates on the premise that there are express objects evident from recitals.
208 The second and differently expressed common law principle of construction referred to in the joint judgment in Grant v John Grant Sons Pty Ltd is that the general words in a release are limited to those things which were in the contemplation of the parties at the time when the release was given—
The principle which it is thus sought to apply was expressed by Lord Westbury in London South Western Railway Co v Blackmore (1870) LR 4 HL 610 as follows: ‘The general words in a release are limited always to that thing or those things which were specially in the contemplation of the parties at the time when the release was given’ [at 623]. It was expressed by Taunton J in Upton v Upton (1832) Dow PC 400 36 RR 817 in this way: ‘… the general words of a release may be limited by the particular matter out of which the release springs and the particular intent of the parties by whom the release is executed’ [at 406; 821].
(Citations added in place of the footnotes.)
209 The second principle may also be seen as an emanation of the more general principle that in the construction process regard be had to the purpose to be secured by a contract, objectively ascertained. To the extent that such an examination extends to mutually known circumstances that are extrinsic to the words of the contract, the principles referred to by French CJ, Nettle and Gordon JJ in Mount Bruce Mining [Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104] at [48]–[49] will apply…
[45] To similar effect, in Reid v Commonwealth Bank of Australia (2022) 109 NSWLR 149; [2022] NSWCA 134 at [33] Leeming JA (Bell CJ agreeing) referred to the ‘wide-ranging rule of the common law’:
… that releases are to be construed narrowly, with general words confined to those things which were ‘specially in the contemplation of the parties at the time when the release was given’: Directors &c of the London and South Western Railway Company v Blackmore (1870) LR 4 at 623. Lord Westbury added (at 623–624) that ‘a dispute that had not emerged, or a question which had not at all arisen, cannot be considered as bound and concluded by the anticipatory words of a general release.’
[46] It was nevertheless acknowledged in Reid at [36] that it remains possible, even in equity, for a release to extend to claims of which the releasor is unaware.”
The answer to the question of construction raised in the present matter turns primarily on what is described in the above extract from Wardman v Macquarie Bank Ltd (2023) 322 IR 278; [2023] FCAFC 13 at [206]-[207] as the first principle.
It was theoretically open to Novus to have released Empire from any future – and, therefore, unknown – claims arising under the CAR Agreement had it chosen to do so: Reid v Commonwealth Bank of Australia (2022) 109 NSWLR 149; [2022] NSWCA 134 at [36]; Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251 at [27]. However, to be effective this intention would ideally have been made clear in the text of the Deed and reflected in its recitals; it was not.
The recitals to the Deed expressly identify the CAR Agreement. However, Recital D offers little assistance when it comes to ascertaining what the parties objectively intended to achieve through the Deed. At best, the recitals point to the existence of the contractual arrangements between the parties to the Deed and, implicitly, a desire to resolve a dispute of some description which had emerged between them by the payment of a sum of money. The nature or origin of that dispute is not revealed by the recitals.
Relevantly, the recitals do not record an intention by the parties to terminate the CAR Agreement or otherwise bring their contractual arrangements to an end. The wider textual context provided by the Deed suggests that this was not the parties’ intention.
Clause 2.1(b) of the Deed expressly provided that:
“The Parties agree that in the event of the Settlement Amount not being paid in full by the date outlined at 2.1 (a), Novus will commence joint termination proceedings against [the plaintiffs] and seek the reimbursement of the total Outstanding Debt Amount.”
As was pointed out by Ms Moussa, who appeared for Novus, this clause suggests that the parties to the Deed contemplated that the relevant contractual arrangements – including those arising under the CAR Agreement – would continue if Empire paid the Settlement Amount by the required date. Those continuing arrangements would logically have included the indemnities provided for in cl 11 of the CAR Agreement. The continuation of these arrangements – and the possibility that future obligations may arise under them – must be borne in mind when approaching the express terms of cl 3.1(a) and seeking to ascertain from them the parties’ objective intention. Those of the primary Judge’s findings, which suggest Empire ceased to act as a Corporate Authorised Representative of Novus after the Deed was executed, cannot be relied upon in construing its terms.
When construing cl 3.1(a), the definition of “Claim” found in cl 1.1 must be read into its operative text: see Gispac Pty Ltd v Michael Hill Jeweller (Australia) Pty Ltd [2024] NSWSC 18 at [107] and the cases cited therein. Approached in this way, the relevant release becomes:
“3.1 Release
(a) Upon performance by Empire Securities and Mr Farley of clause 2.1 of this Deed, Novus releases Empire Securities and or Mr Farley from all [any claim, action, demand, liability, loss, damage, cost, charge, expense, outgoing payment, order or judgment either at law, in equity or arising under statute, in respect of any matter whatsoever, including but not limited to any claim under the Corporate Authorised Representative Agreement and or Authorised Representatives Agreement] save for or in [connection] with the enforcement of this Deed.”
Nothing in the above words expressly points to an objective intention that Empire be released from any future claims that might arise under the CAR Agreement. While the words “in respect of any matter whatsoever” are extremely broad they do not, on their face, refer to matters which have not yet occurred. On the narrow construction that must be given to those words – see Reid v Commonwealth Bank of Australia (2022) 109 NSWLR 149; [2022] NSWCA 134 at [33] – an intention to provide a release from any future liabilities that might arise in the course of the parties’ future contractual arrangements cannot merely be implied.
On this basis, the release in cl 3.1(a) is confined to such claims as might have existed as at the date of the Deed; that is, 10 February 2021. Neither the investigation costs nor Novus’ asserted entitlement to recover those costs under cl 11.2 of the CAR Agreement existed as at 10 February 2021. For this reason, the primary Judge was correct to hold that those costs lay beyond the reach of the release contained in cl. 3.1(a).
Given the above conclusion, it is not necessary for me to consider whether the claim made by Novus in the proceedings before the primary Judge falls within the exception to the release contained in cl 3.1(c).
As the claim made by Novus in the proceedings before the primary Judge was not captured by the release contained in cl 3.1(a) of the Deed, the plaintiffs’ single ground of appeal fails.
The Court makes the following orders:
Proceedings dismissed.
The plaintiffs are to pay the defendant’s costs of the proceedings as agreed or assessed.
If either party contends for a different costs order to that which is provided for in Order 2, they should make an application to my Associate by 4pm 20 February 2026, whereupon I will vacate Order 2.
Should an application for a different costs order be made pursuant to Order 3:
(a) That application should include submissions of not more than 2 pages and any necessary evidence; (b) The other party may serve and provide to my Associate responsive submissions of not more than 2 pages and any necessary evidence by 4pm 24 February 2026; and (c) I will determine the question of costs on the papers.
**********
Empire Securities Group Pty Limited
Novus Capital Limited [2026] NSWSC 83
(1996) 186 CLR 389
(1993) 43 FCR 280
(2013) 250 CLR 135
(2018) 264 CLR 541
(2022) 109 NSWLR 149
(2023) 322 IR 278
(2015) 256 CLR 104