Court of Appeal (Qld)|2008-09-12|Before: McMurdo P, Muir JA and Wilson JSeparate, reasons for judgment of each member of the Court, each concurring as to the, orders made
McMurdo P, Muir JA and Wilson JSeparate, reasons for judgment of each member of the Court, each concurring as to the, orders made
Catchwords
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH
AND DEFENCES TO ACTION FOR BREACH – PERFORMANCE –
where the
applicant was employed by the respondent as general manager of two of the
Source
Original judgment source is linked above.
Catchwords
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACHAND DEFENCES TO ACTION FOR BREACH – PERFORMANCE –where theapplicant was employed by the respondent as general manager of two of therespondent’s restaurants – wherethe applicant acquired 4.5 per centof the issued shares in the capital of one of the respondent’s restaurantcompanies –where a director of the respondent offered to purchase theapplicant’s shares in the company for $110,000 – where $70,000wasto be payable by cheque and the balance of $40,000 to be payable upon theapplicant giving an invoice for that amount to thedirector’s constructioncompany – where the contract was partly written and partly oral –where the applicant transferredthe shares to the respondent and the respondentpaid $70,000 – where an invoice for $40,000 was never tendered –whetherthe respondent, having acquired title to the shares, could rely on the
applicant’s failure to tender an invoice to avoid paying
the balance of
the purchase price
APPEAL AND NEW TRIAL – APPEAL – PRACTICE AND PROCEDURE –
QUEENSLAND – WHEN APPEAL LIES – BY LEAVE OF
COURT – GENERALLY
– where the primary judge found that the respondent’s obligation to
pay the balance of the purchase
price was contingent on the applicant rendering
an invoice – where the sum claimed of $40,000 is reasonably substantial
–
whether the applicant will suffer a substantial injustice if leave is
not granted – whether there is an error of law which
requires correction
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH
AND DEFENCES TO ACTION FOR BREACH – REPUDIATION AND
NON-PERFORMANCE
– REPUDIATION – GENERAL PRINCIPLES – where the applicant was
employed by the respondent as general
manager of two of the respondent’s
restaurants – where the applicant acquired 4.5 per cent of the issued
shares in the
capital of one of the respondent’s restaurant companies
– where a director of the respondent offered to purchase the
applicant’s shares in the company for $110,000 – where $70,000 was
to be payable by cheque and the balance of $40,000
to be payable upon the
applicant giving an invoice for that amount to the director’s construction
company – where the
contract was partly written and partly oral –
where the applicant transferred the shares to the respondent and the respondent
paid $70,000 – where an invoice for $40,000 was never tendered –
whether the applicant was excused from tendering the
invoice due to the
respondent indicating through its conduct that tender of the invoice would be
futile
EMPLOYMENT LAW – THE CONTRACT OF SERVICE AND RIGHTS, DUTIES AND
LIABILITIES AS BETWEEN EMPLOYER AND EMPLOYEE – MISCELLANEOUS
MATTERS
– OTHER MATTERS – where the applicant and respondent entered into a
deed of compromise – where the deed
released the respondent from all
claims and liabilities “arising out of or in any way connected” with
the applicant’s
employment or termination – where the respondent
argued that the contract for the transfer and purchase of shares fell within
the
terms of the deed as it was connected to the applicant’s employment or
termination – whether the sale of the applicant’s
shares was part of
a transaction entered into which was connected to the applicant’s
employment or termination
Uniform Civil Procedure Rules 1999 (Qld), r 154(2)
Australian Mutual Provident Society v Chaplin & Anor [1978] UKPC 7
(1978) 18 ALR 385,
citedBank of Credit and Commerce International SA (in liq) v Ali
[2001] UKHL 8
[2002] 1 AC 251, consideredCarter v Scargill (1875) LR 10 QB
564, consideredConnecticut Fire Insurance Co v Kavanagh [1892]
AC 473, consideredElderslie Property Investments No 2 P/L v
Dunn [2008] QCA
158, consideredFAI Traders Insurance Co Ltd v Savoy Plaza Pty
Ltd [1993] VicRp 76
[1993] 2 VR 343, citedFullers’ Theatres Ltd v
Musgrove (1923) 31 CLR 524
[1923] HCA 12, citedGrant v John
Grant & Sons Pty Ltd (1954) 91 CLR 112
[1954] HCA 23,
consideredHatfield v Health Insurance Commission [1987] FCA 286
(1987) 15 FCR
487, consideredHubble v Wrightson NMA Ltd [1990] 1 NZLR 393,
citedKaram v ANZ Banking Group Ltd & 1 Ors [2001] NSWSC
709, consideredL Schuler AG v Wickman Machine Tool Sales Ltd
[1973] UKHL 2
[1974] AC 235, citedPeter Turnbull & Co Pty Ltd v Mundus
Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235
[1954] HCA 25,
citedPickering v McArthur [2005] QCA
294, distinguishedQantas Airways Ltd v Gubbins (1992) 28
NSWLR 26, considered R v Orcher (1999) 48 NSWLR 273
[1999] NSWCCA
356, consideredSuttor v Gundowda Pty Ltd (1950) 81 CLR 418
[1950] HCA 35, citedWorkers’ Compensation Board (Qld) v
Technical Products Pty Ltd (1988) 165 CLR 642
[1988] HCA 49,
considered
Judgment (211 paragraphs)
[1]
The applicant alleged in his statement of claim filed in proceedings commenced by him in the District Court against the respondent in September 2005 that:**
[2]
(a) The respondent had a restaurant and bar business which he conducted under the name Dicey Reilly's Garden City ("Dicey Reilly's");
[3]
(b) American Pie Restaurant Pty Ltd carried on business as Gecko Bar and Restaurant ("Gecko") at Garden City Shopping Centre;
[4]
(c) The applicant was employed by the respondent as general manager of Dicey Reilly's from June 2000 until about April 2004 and was also employed by American Pie as general manager of Gecko from October 2003 until April 2004;
[5]
(d) In July 2002 the applicant agreed with the respondent to pay a refundable deposit of $7,000 to the respondent in consideration of which the applicant would be paid 10 per cent of the profits of Dicey Reilly's;
[6]
(e) The applicant paid the deposit of $7,000 and became entitled to the sum of $25,000, being his share of the profits of Dicey Reilly's for the year 2002/2003;
[7]
(f) The applicant, in about mid 2003, acquired 4.5 per cent of the issued shares in the capital of American Pie for $70,000;
[8]
(g) In mid February 2004 Mr Mulhern, a director of the respondent, offered on behalf of the respondent to purchase the applicant's shares in American Pie for $140,000. An agreement was entered into between the applicant and the respondent that the purchase price be $110,000 payable as to $70,000 by cheque and as to the balance of $40,000 by payment by Mulhern Constructions Pty Ltd, a company controlled by Mr Mulhern, "on behalf of the [respondent] towards the cost of construction of two houses which the [applicant] was then intending to build" upon the applicant giving an invoice for that amount to Mulhern Constructions.
[9]
**(h) Such agreement (the "Contract") was partly written and partly oral. It consisted of conversations on an occasion in mid February 2004 between the applicant and Mr Mulhern at an address in Cleveland. Its written components were:
[10]
(i) a document entitled "proposed share redistribution" dated 23 February 2004;
[11]
(ii) a letter from American Pie to the applicant dated 5 March 2004 and a further letter dated 5 March 2004 from the applicant requesting an invoice from Civic Steel Constructions.
[12]
(i) The respondent paid the applicant $70,000 but failed and refused to pay the balance of $40,000. It repudiated the Contract "in correspondence of 23 December 2004."
[13]
(j) The respondent failed to refund the applicant's original payment of $7,000 and to pay his share of the profits of $18,000.
[14]
[3] The respondent, in its defence, admitted the applicant's entitlement to payment of the sums of $7,000 and $18,000 but alleged that those monies had been paid. As for the Contract, the respondent alleged that the agreed consideration payable under the Contract was $70,000, being a refund of the monies paid the applicant for his shares in American Pie.
[15]
[4] In the alternative, the respondent alleged that by a Deed of Compromise entered into between the applicant and the respondent on 6 September 2004, the applicant released the respondent from all claims which he had against the respondent, including the applicant's claims under the Contract.
[16]
[5] After a two day trial the learned primary judge found that:
[17]
(a) The respondent was indebted to the applicant for the sums of $7,000 and $18,000 but the applicant was prevented by the terms of the Deed from recovering from the respondent.
[18]
(b) It was a term of the Contract that "the balance of $40,000 would be paid by the [respondent] by paying up to that amount any invoice rendered by the [applicant's] builder in relation to the construction by the [applicant] of two houses at Sherwood."
[19]
(c) The respondent's obligation to pay "was contingent upon the [applicant] rendering to the [respondent] the third party invoice the subject of the agreement. No such invoice was ever rendered by the [applicant]. Accordingly, there is no present entitlement in the [applicant] to recover the $40,000 from the [respondent]."
[20]
(d) The applicant's claim for the $40,000 was dismissed and he was ordered to pay the respondent's costs.
[21]
The applicant's arguments in support of his application for leave to appeal
[22]
[6] The applicant seeks leave to appeal in respect of the claim for $40,000 and the order for costs. He contends that the finding that the respondent's performance was contingent on the rendering of the invoice or invoices was not supported by the evidence; rather such means of payment was but "one possible method of performance which passed away over time, while leaving the central obligation to pay $110,000 intact."
[23]
[7] In support of this contention the applicant's counsel referred to "the proposed share distribution" document dated 23 February 2004 in which Mr Mulhern stated:**
[24]
"Due to circumstances, Paul Fraser has expressed his inability to take up his holding and has intimated his agreement to sell down his overall interest in the sum of $110,000. After obtaining advice from the company's accountants, it is recommended that IRB purchase Mr Fraser's shares."
[25]
[8] This document makes no mention of any provision for payment of the purchase monies by two instalments. The applicant also places reliance on a letter from Mr Mulhern to him of 16 April 2004 which, under the reference "Gecko Bar and Restaurant", stated -
[26]
"I note that you have agreed to dispose of your investment in the above Venue. A figure of $110,000.00 has been previously agreed with respect to such investment with the sum of $70,000.00 having already been paid to you. The terms of payment for the balance sum ($40,000.00) has yet to be agreed.
[27]
I propose that such sum be paid by 12 monthly instalments, 11 in the sum of $3,500.00 with a final payment in the sum of $1,500.00.
[28]
Upon your acceptance of the above the first payment shall be made on 1st May 2004 and monthly thereafter. Please indicate at the foot of the banking co-ordinates for such deposits.
[29]
I ask that you sign the acknowledgement below indicating your acceptance.
[30]
I, Paul Simon Fraser, acknowledge the receipt of and agree with the content of this correspondence. I acknowledge that the sum of $110,000 is in full satisfaction of all sums payable with respect to my investment. I acknowledge the receipt of the sum of $70,000.00 previously paid and confirm the balance payable in the sum of $40,000.00. I further confirm my acceptance of the payment schedule and accept that the sum of $40,000.00 shall be paid by 12 monthly instalments, 11 in the sum of $3,500.00 with a final payment in the sum of $1,500.00 commencing the 1st May 2004. I have set forth below the Banking co-ordinates for such deposits and authorise and direct that the payments referred above be made to such account.
**[9] The document was unsigned by the applicant who swore that he had not seen it at any relevant time. The argument advanced was that it contained an admission by the respondent that the sum of $40,000 remained owing. That may be so but it does not advance the applicant's case. The primary judge found that the $40,000 was payable under the Contract, in accordance with its terms, and had not been paid. The letter does not assist in construing the Contract either. A party's subjective understanding of the meaning of a contract is irrelevant to its construction as is, it is generally accepted, the subsequent conduct of the parties.[1]
[33]
[10] It was submitted also that the primary judge's findings as to the terms of the Contract were not within the pleading: it was not pleaded by the respondent that there was a contract price partly contingent on presentation of a building invoice and the defence alleged a price of $70,000 being a refund of the applicant's original price for his shares in American Pie.
[34]
The primary judge's findings as to the relevant contractual terms
[35]
[11] The findings of the primary judge as to the terms of the Contract and to the applicant's entitlement under those terms are as follows[2]:**
[36]
"[60] In the result, on the evidence of the plaintiff, I find the agreement alleged to have been reached with Mr Mulhern was one whereby the defendant would be paid $110,000. Part thereof, $70,000, was to be paid directly by the defendant which was done. The balance $40,000 was to be paid by the defendant paying an invoice, up to that amount, rendered to the plaintiff by his construction company whether it be Civic Steel Constructions or another. That is consistent with paragraph 11(b) of the plaintiff's statement of claim. Although there was mention in discussions and in correspondence of Civic Steel Constructions, I am satisfied the alleged agreement obliged the defendant to pay the $40,000 on presentation of an invoice from whatever builder the plaintiff ultimately contracted with.
[37]
[61] The next question to be determined is whether the entitlement of the plaintiff to be paid $40,000 by the defendant was contingent upon the plaintiff rendering an invoice from his construction company as the defendant asserts, or whether the defendant's obligation to pay was unconditional in that the payment of that third party invoice was simply a method of payment open to the defendant if he chose, as the plaintiff asserts; I can find no basis in the evidence for the plaintiff's contention that he was entitled to the $40,000 whether or not he rendered the third party invoice from his building contractor. Rather, the evidence shows that the plaintiff was to render that invoice before the defendant's liability to pay the $40,000 arose. I so find."
[38]
Were the findings as to the terms of the Contract within the scope of the pleadings?
[39]
[12] The applicant's own pleading, referred to in paragraph 2(g) above, alleged a purchase price of $110,000 payable as to $70,000 by cheque and the balance of $40,000 by Mulhern Constructions on behalf of the respondent on presentation to it by the applicant of an invoice in the sum of $40,000. The findings were thus within the scope of the pleadings. The fact that the respondent pleaded a quite different case does not negate the applicant's own allegations. In order to determine the case the parties had to meet and the primary judge had to decide, it is necessary to look at the issues raised by all of the pleadings. If this were not enough, the applicant's own evidence established an agreement under which a total purchase price of $110,000 was to be paid by a cash payment of $70,000 and a further payment of $40,000, consequent on the presentation of an invoice.
[40]
[13] The applicant's counsel's complaint that that the point on which the respondent succeeded at first instance on the $40,000 claim was not pleaded but should have been, is justified. Rule 154(2) of the Uniform Civil Procedure Rules provides that "a party who denies the performance or occurrence of a condition precedent must specifically plead the denial". The defence did not advert to any failure by the applicant to provide the third party invoice. Counsel for the respondent raised the non-fulfilment of the condition precedent point in his written submissions delivered after the close of evidence. No objection was taken by the applicant's counsel on the trial or on appeal but he submits that the respondent's reliance on an unpleaded allegation should be taken into account when considering any argument by the respondent that the applicant's case strays outside the pleadings.
[41]
The evidence supporting the primary judge's findings
[42]
[14] The relevant evidence is in the following extracts from the transcript of the applicant's cross-examination:**
[43]
"So what was said between you? What did Mr Mulhern say to you?-- Mr Mulhern, basically put a proposal to me. He basically said - because, obviously, he chatted, previously about double the money which was 140,000. He basically, put a proposal together saying, look, if you get 100 - if I give you the other 70 on top of what you have in there you will have to pay capital gains tax on it. I have got a win win situation here, which means that I can, basically, put it through my construction company. So obviously there was some sort of tax write-off that he was able to do there. Sorry, I will go back a little bit. I was, actually, building two houses with my girlfriend at the time and a friend in Sherwood, and I mentioned this to Richard and so Richard came up with the idea that if I invoiced him from the construction - a construction company that I was using for the amount of $40,000 he would give me the 70 that was owed, which was the 45 I put in plus the net profit from year 02/03, that was the 70, plus he would pay the construction company $40,000. Yeah, that was basically the deal." [3]
[44]
"... Yep. I - just after having that meeting with Richard - sorry, just on that meeting with Richard, as well, he asked me to send - he would like two letters, one letter which said I was handing back my share in Gecko or something to that effect for the amount of $70,000 and another letter which said I would receive $40,000 being paid by Mulhern Construction."[4]
[45]
"As his Honour pointed out previously the second letter about Civic Steel Constructions refers to supply and installation of a mezzanine floor at the Gecko Bar. Is that accurate or not?-- No.
[46]
What was the steel to be for?-- It was for steel- I was in negotiations - I was, basically, in negotiations at the time with a company called Civic Steel Construction. On speaking to Mulhern during the meeting I, basically, indicated that these negotiations were happening with these two houses that I was building. I did actually say, "Look, it's not" - you know, it's not said. I haven't signed a contract yet, that it is civic steel because I was actually having conversations with other construction companies, as well, and he basically said, "Look, don't worry, I'll - just send me a letter saying that you would like the 40,000. We will put it under Civic Steel. If it changes there's no problem I will just change it."[5]
[47]
"Which he said, right, let's - it's pretty easy, you know, I know you've got some houses getting built, I will give you the 70,000 by way of a cheque, we will do the other 40,000 as payment to Civic Steel or whoever the construction company is and that's it, done."[6]
[48]
"Excuse me one moment, your Honour. Did you ever engage Civic Constructions to do this work or Civic Steel, was it?-- No, I didn't.
[49]
Who did you end up engaging?-- I ended up using Cosmopolitan.
[50]
When did you tell Mr Mulhern about that?-- I didn't.
[51]
Because the deal was that he would pay this money to the construction company, right?-- That's correct.
[52]
And you never told him which Construction company to pay to is that right?-- Well, it was meant to be Civic Steel."[7]
[53]
"Okay. So as far as you were Concerned the deal was: I'm selling my shares for $110,000 they're going to pay me $70,000 cash and they're going to pay $40,000 to someone else to do a job for me, but really it was 40,000 going directly back to you; is that right?-- Yep."[8]
[54]
"The whole point of the 110 was obviously - Mr Mulhern's motivation for it was that he would put it through his construction company."[9] (emphasis added)
[55]
[15] The above passages, particularly the emphasised parts, provide an adequate basis for the primary judge's finding in paragraph [60] of his reasons.
[56]
[16] Two letters of 5 March 2004, Exhibits 3 and 4, were put in evidence. Exhibit 3 was on American Pie's letterhead signed by Mr Mulhern and addressed to the applicant. It was headed "Proposed financial interest in Gecko and restaurant, Garden City Shopping Centre, Upper Mt Gravatt" and provided inter alia:**
[57]
"... Your interest will be taken up by the Irish Restaurant and Bar Company. The sum of $70,000 will be re-paid to you by this company within 14 days of the date of this correspondence."
[58]
[17] Exhibit 4 commenced with the reference "Civic Steel Constructions" and provided:
[59]
"Please provide an invoice to The Irish Restaurant and Bar Company Pty Ltd for $40,000 exclusive of GST from Civic Steel Constructions for the supply and installation of a steel mezzanine floor at Gecko Bar and Restaurant, Garden City.
[60]
The invoice is required from Civic Steel prior to the handover of payment and only when you are satisfied with the work performed."
[61]
**[18] The signature at the foot of the letter was illegible.
[62]
[19] In addition to these letters there was evidence of another letter prepared, it would seem, by Mr Mulhern for signature by the applicant, signed by the applicant and provided to the respondent. The applicant described this letter as one "basically asking for the arrangement that 40,000 would be paid to Civic Steel Construction for the houses at Borden Street". The applicant swore that Exhibit 3 was provided to him in response to that letter. The primary judge found that Exhibits 3 and 4 were faxed by Mr Mulhern to the applicant at 12.14pm on 5 March 2004.
[63]
[20] The applicant's evidence was that he was constructing two houses in Sherwood in 2004. The proceedings went to trial in January 2008. It may be inferred that construction of the houses was completed well before trial and that by the time of trial, the applicant was incapable of providing to Mulhern Constructions an invoice from a company engaged in the construction of one or both of the houses in respect of work done by it for the applicant. The sum of $70,000 was paid "fairly quickly". It was made plain to the applicant before the end of 2004 and, perhaps not long after 16 April 2004, when the applicant's employment was terminated, that the $40,000 would not be paid.
[64]
[21] The applicant seeks to avoid the consequences of not having submitted the invoice to Mulhern Constructions by contending that on or about 16 April 2004 the respondent repudiated the Contract and the applicant accepted the repudiation. It is argued, at least implicitly, that upon the Contract being terminated, the applicant became entitled to damages equal in amount to the outstanding balance of purchase price of $40,000. On behalf of the respondent it is submitted that the repudiation allegation is inconsistent with the applicant's case: the applicant sued on the Contract. Consequently, it is submitted, if there was a repudiation it was not accepted by the applicant. That submission appears to me to be correct. It is argued also that the issue of repudiation, not having been raised at first instance, the respondent was denied the opportunity of addressing it by evidence or otherwise[10] and it would not accord with principle for the applicant to be permitted to mount such a case now.
[65]
[22] There would be more force in this submission if the alleged repudiation had not been pleaded expressly. Acceptance of the alleged repudiation was not pleaded but I greatly doubt whether any more or different evidence would have been led had the applicant argued at first instance that the Contract had been terminated.
[66]
Is there a basis on which the balance sale price is recoverable?
[67]
[23] The mechanism for payment on the rendering of an invoice was of no benefit to the applicant unless he was to put into execution a plan to avoid capital gains tax which was not of his devising. It was not argued on appeal that he had that intention and the primary judge made no such finding. The applicant swore that he was interested only in obtaining the agreed $110,000 for his shares. It was not argued either that the Contract could not be performed legally.
[68]
[24] The respondent agreed to pay $110,000 and introduced the third party invoice as a trigger for payment. The method of payment could have been of benefit to the respondent (putting aside the reduction of the price from the $140,000 discussed initially to the agreed $110,000) only if it was used to permit the respondent to fraudulently misrepresent that the payment had been made in the construction of a premises owned by it or by one of its related companies. Not surprisingly, it did not contend that it proposed to carry out a fraudulent scheme, either at first instance or on appeal. The position then was that it was of no practical consequence to either party at any time after the Contract was entered into whether an invoice was rendered by a third party to the applicant as a trigger for payment of the $40,000 or whether the applicant requested payment by invoice or otherwise.
[69]
[25] The general principle is that a party to a contract must perform exactly what he undertook to do.[11] As a general rule, where payment is due on demand or upon the performance of some other act by the creditor, the creditor cannot sue before making demand or performing the act.[12] But in my view it would be a surprising result if the respondent in the circumstances outlined above was able to keep the shares without paying the full purchase price merely because the applicant had demanded payment to him of the balance purchase price instead of presenting an invoice for payment on his behalf.
[70]
[26] At first instance the possible application of the doctrine of substantial performance[13] was not explored. Nor was there reliance on authorities such as Carter v Scargill[14] referred to with apparent approval by Isaccs and Rich JJ in Fullers' Theatres Ltd v Musgrove[15] and applied in Hubble v Wrightson NMA Ltd[16]. In Carter v Scargill the plaintiff agreed to sell to the defendant the plaintiff's business, the premises in which it was located and related goodwill, plant and furniture. It was a term of the agreement that if it was established from the plaintiff's books that the business realised a clear profit of £7 per week the defendant would pay certain instalments of purchase monies to the plaintiff. The defendant went into possession and carried on the business. The plaintiff's claim for the instalments of the purchase price was resisted on the basis that the prescribed level of profits had not been established.
[71]
[27] It was held that the defendant, having received a substantial portion of the consideration, could not rely on the non-performance of "what might have been originally a condition precedent." Field J, who delivered the judgment of the Court, after referring to authority which supported that conclusion, said[17]:**
[72]
"This doctrine is well and firmly established, and is in accordance with principles of common sense and justice. In this particular case, if the reverse were true, a deficiency of one shilling per week would deprive the plaintiff of the whole of the stipulated price."
[73]
**[28] If this principle applied, the respondent, having acquired title to the shares, could not rely on the applicant's failure to present an invoice in order to avoid paying the balance purchase price.
[74]
[29] These principles were not addressed in argument. My main purpose in referring to them is to make clear my non-acceptance of the proposition that the applicant could never recover the balance purchase price without first having presented a relevant invoice.
[75]
[30] There is, however, another principle which the applicant does invoke, belatedly, to avoid the consequences of his failure to render an invoice. It is that the respondent, having made it plain to the applicant by its conduct that there was no point in the applicant submitting an invoice in order to obtain payment of the $40,000, excused the applicant from so doing.[18] The applicant did not accept the respondent's repudiatory conduct but he had no further obligations to perform under the Contract and there could be no impediment to his suing for the balance of the sale price.
[76]
[31] The pleadings do not contain allegations of an entitlement on this basis and no such case was advanced at first instance. The statement of claim, however, did allege repudiation of the Contract and failure to pay the $40,000. Had the point been taken below, no evidence could have been given "which by any possibility could have prevented the point from succeeding".[19]
[77]
[32] This Court is now in possession of all relevant facts. The primary judge's determination of the terms of the Contract is not disputed by the respondent and is arrived at as a result of the primary judge's acceptance of the applicant's evidence on the point. In Connecticut Fire Insurance Co v Kavanagh[20], Lord Watson, delivering the judgment of the Privy Council, in words approved of in the joint judgment in Suttor v Gundowda[21], said:**
[78]
"When a question of law is raised for the first time in a court of last resort, upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is not only competent but expedient in the interests of justice, to entertain the plea."
[79]
**[33] This conclusion, however, is not sufficient to dispose of the matter on its merits. The respondent relies also on the Deed of Compromise.
[80]
Does the Contract and claims under it come within the scope of the Deed of Compromise?
[81]
"A. The Employee was employed ('the employment') by the
[82]
B. The employment terminated ('the termination') with effect
[83]
C. The parties have, without any admissions as to liability,
[84]
agreed to resolve any matters between them arising from the employment or the termination or each of them on the terms and conditions set out in this Deed."
[85]
[35] Clause 2 makes provision for the payment by the respondent to the applicant of monies owing to the applicant "for entitlements [as employee] approved at the time of the termination" including holiday pay and salary. Clauses 2.2 and 2.5 provide respectively:
[86]
"2.2 Without making any admissions to liability, the Employer will pay to the Employee, on an ex gratia basis, within fourteen (14) days of the date on which the Employee executes this Deed, a further sum equal to four months' salary ('the Payment'), less tax at the Eligible Termination Payment rate.
[87]
2.5 The Payment is made in full and final satisfaction of all claims the Employee has or may have or would have had against the Employer, excluding any claims in relation to personal injury."
[88]
[36] Clause 3 is in respect of the provision by the respondent to the applicant of a "statement of service". Clause 4 is a confidentiality clause. Clause 5 prohibits the parties from making disparaging remarks in respect of the other. Clause 6.1 of the Deed provides:
[89]
"6.1 The Employee releases the Employer from all claims and liability arising out of or in any way connected with the employment, the termination, or either of them, excepting any claims for personal injury.
[90]
6.2 The Employer releases the Employee from all claims and liability arising out of or in any way connected with the employment, the termination, or either of them."
[91]
[37] Counsel for the respondent argued that the Contract falls within Clause 6.1. No particular reliance was placed on Clause 2.5. That was probably because of the appreciation that, when read together with Clause 6.1 and in light of the recitals, Clause 2.5 should not be construed as having a wider application than Clause 6.1. It was submitted that the applicant's relationship with the respondent depended upon his employment by the respondent. The relationship had a twofold aspect: the applicant's employment by the respondent and their common status as shareholders of American Pie. The second aspect of the relationship arose out of and could not have arisen but for the first. The applicant continued, until April 2004, to draw a wage from the respondent whilst working "in the venue operated by American Pie". The following passage from the applicant's evidence-in-chief is relied on to show the connection between the applicant's employment and his American Pie shareholding:
[92]
"Okay. So was there some discussion with you about this buying the shares in American Pie? -- Yep, absolutely, just exactly the same as the restaurant, basically my experience and the fact that they wanted to, I suppose, show - show loyalty to myself for sticking with them for a number of years, my, experience, they wanted to, sort of, reward me in a way, I suppose, but also have me bound to them financially which made sense as an incentive for me that the better -I suppose the better the restaurant went the more I would get and also the better Gecko Bar and Restaurant went the more I would get there."
[93]
**[38] The respondent's counsel submits that at the time of the execution of the Deed on 6 September 2004 both parties were well aware of the existence of the share purchase agreement which had been concluded, at the latest, in February 2004 and the applicant was aware of his potential claim for $40,000.
[94]
[39] Principles relevant to the construction of commercial contracts are conveniently set out in the reasons in Elderslie Property Investments No 2 P/L v Dunn as follows:[22]**
[95]
"The object of contractual construction is to 'ascertain and give effect to the intentions of the contracting parties.' (Homburg Houtimport BV v Agrosin Private Ltd (The Starsin)[2003] UKHL 12; [2004] 1 AC 715 at 737) Those intentions, to be determined objectively, are 'what a reasonable person would have understood [the words of the contract] to mean.' (Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd[2004] HCA 52; (2004) 219 CLR 165 at 179) And to ascertain that 'normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.' (Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd[2004] HCA 52; (2004) 219 CLR 165 at 179) Such a reasonable person is one who has all the background knowledge which would reasonably have been available to the parties in the situation which they were in at the time of the contract. (Per Lord Hoffman in Investors Compensation Scheme Ltd v West Bromwich Building Society[1997] UKHL 28; [1998] 1 WLR 896 at 912) The Deeds, as commercial contracts, 'should be given a businesslike interpretation'. The interpretation of each Deed requires 'attention to...the commercial circumstances which the document addresses, and the objects which it is intended to secure.' (McCann v Switzerland Insurance Australia Ltd[2000] HCA 65; at 589) Commercial contracts are to be construed with a view to making commercial sense of them.
[96]
In Wickman Machine Tool Sales Ltd v L Schuler AG ([1974] AC 235 at 251) Lord Reid said:
[97]
'The fact that a particular construction leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make that intention abundantly clear.'
[98]
In Antaios Compania Naviera SA v Salen Rederierna AB, ([1985] AC 191 at 201) Lord Diplock expressed stronger views concerning the imperative to make business sense of commercial contracts, stating:
[99]
'If detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense.' "
[100]
[40] The expression "in connection with" is capable of having a wide meaning but in common with expressions such as "relating to" and "in respect of" its meaning must be derived from the context in which it was used. The following passages from the reasons in Workers' Compensation Board (Qld) v Technical Products Pty Ltd[23] illustrate the point:
[101]
"It has been said, perhaps somewhat extravagantly, that the words 'in respect of' 'have the widest possible meaning of any expression intended to convey some connexion or relation between the two subject-matters to which the words refer': Trustees Executors & Agency Co. Ltd. v. Reilly [[1941] VLR 110 at 111], cited in State Government Insurance Office (Q.) v. Crittenden [(1966) [1966] HCA 56; 117 CLR 412 at 416]. The words were cited again by Gibbs J. in McDowell v Baker [(1979) 144 CLR 413 at 419], and by Mason J. in State Government Insurance Office (Q.) v. Rees [(1979) [1979] HCA 52; 144 CLR 549 at 561], when his Honour added the comment: 'But, as with other words and expressions, the meaning to be ascribed to 'in respect of' depends very much on the context in which it is found'.[24]
[102]
Undoubtedly the words 'in respect of' have a wide meaning, although it is going somewhat too far to say, as did Mann C.J. in Trustees Executors & Agency Co. Ltd. v. Reilly [[1941] V.R 110 at 111], that 'they have the widest possible meaning of any expression intended to convey some connection or relation between the two subject-matters to which the words refer'. The phrase gathers meaning from the context in which it appears and it is that context which will determine the matters to which it extends."[25]
[103]
[41] The following observations of Davies J in Hatfield v Health Insurance Commission[26], although directed to a question of statutory construction, are also of relevance:
[104]
"Expressions such as "relating to", "in relation to", "in connection with" and "in respect of" are commonly found in legislation but invariably raise problems of statutory interpretation. They are terms which fluctuate in operation from statute to statute... .
[105]
The terms may have a very wide operation but they do not usually carry the widest possible ambit, for they are subject to the context in which they are used, to the words with which they are associated and to the object or purpose of the statutory provision in which they appear."
[106]
[42] After quoting the passage from Hatfield, Spigelman CJ, with whose reasons the other members of the Court agreed, said in R v Orcher[27]:
[107]
"[32] Finally, the Full Federal Court returned to this matter in Health Insurance Commission v Freeman[1998] FCA 1340; (1998) 158 ALR 267 at 273 where the Court said:
[108]
'The words 'in connection with' have been accepted as capable of
[109]
describing a spectrum of relationships between things, one of which is bound up with or involved in another: see Collector of Customs v
[110]
Pozzolanic Enterprises Pty Ltd[1993] FCA 456; (1993) 43 FCR 280 at 288. However, as was pointed out by Sackville J in Taciak v Commission of Australian Federal Police(1995) 59 FCR 285 at 295, the question that remains in a particular case is what kind of relationship will suffice to establish the connection contemplated by the statute. That requires a 'value judgment about the range of the statute': see Pozzolanic (at 289)."
[111]
[43] Again, the views expressed are equally applicable to contractual construction.
[112]
**[44] For a "claim" or "liability" to come within Clause 6.1 of the Deed, there must be a sufficient nexus between it and the applicant's employment or the termination of his employment.
[113]
[45] The recitals to the Deed suggest that in negotiating its terms the parties were concerned to resolve any issues between them or which may arise subsequently in relation to applicant's role as employee of the respondent. The backdrop to the Deed was the proceedings in the Industrial Relations Commission instigated by the applicant against the respondent. The proceedings are referred to in Clause 2.4 of the Deed. The operative provisions of the Deed are concerned with the proceedings and the rights, entitlements and obligations of the parties in relation to the employer/employee relationship which existed between them. The Deed provides for the consequences of termination of its relationship. There is no suggestion in the evidence that negotiations concerning the Deed made reference to or were concerned in any way with the Contract or monies payable thereunder.
[114]
[46] The Contract does not concern the applicant's employment. It effected a sale and purchase of his shareholding in American Pie. In my view the applicant's claim for payment of the balance purchase price for his shares in American Pie is not relevantly connected with his employment or its termination. It may be that, were it not for his employment, he would not have had the opportunity of acquiring the shares. But his interest in the shares, once acquired, was in no way dependent on his continued employment. His rights in respect of the shares arose from his title to the shares and had no connection, however remote, with his status as an employee.
[115]
[47] Nor was the sale of the applicant's shares part of an agreement or transaction entered into consequent upon or relating to the termination of his employment. The evidence shows no more than a desire on Mr Mulhern's part to acquire the shares and the applicant's readiness to relinquish them: an attitude assisted by Mr Mulhern's failure to provide the applicant with a share certificate. There was no connection whatsoever between the receipt by the applicant of the consideration for the sale of the shares and his employment.[28] The entering into of the Contract was also remote in time from the termination of the relationship of employer/employee. The Contract was entered into in February 2004. Termination took place in April of that year.
[116]
[48] Whether the principles referred to in paragraph [39] hereof or those expounded in Grant v John Grant & Sons Pty Ltd[29] are applied, in my view the result is the same. In Qantas Airways Ltd v Gubbins[30] Gleeson CJ and Handley JA succinctly explained that Grant "sets out the principles by reference to which a court will decide whether a general release will cover a particular dispute. The rule is that the general words of a release will, in an appropriate case, be read down to conform to the contemplation of the parties at the time the release was executed." A "reasonable person" would not have understood the Deed as extending to the Contract. The Contract was remote from the matters the parties wished to address by the Deed.
[117]
[49] The applicant also seeks leave to appeal against orders made by the primary judge on 28 February 2008 in which the applicant was ordered to pay the respondent's costs of the proceedings calculated on the standard basis up to and including 13 June 2006 and on the indemnity basis after 13 June 2006. Counsel accepted that the arguments advanced by both of them in relation to this application would be relevant only if the applicant were to be unsuccessful in obtaining leave and on the consequent appeal. It was accepted also that if leave to appeal was granted it was appropriate for the appeals to be dealt with on their merits.
[118]
[50] Having regard to the amount in issue in the proceedings, the applicant requires leave of this Court under s 118 of the District Court Act 1967 (Qld) to appeal. It is appropriate that leave be granted. The sum claimed is reasonably substantial. If leave is not granted the applicant will suffer a substantial injustice and, as the above reasons demonstrate, there is an error of law to be corrected.[31]
[119]
[51] I do not consider it appropriate that the respondent pay all of the applicant's costs of the proceedings at first instance, having regard to the respondent's success in resisting the claims for $18,000 and $7,000. It is relevant also that the appeal succeeded on a ground not argued at first instance.
[120]
(a) In each application, leave to appeal be granted and the appeal be allowed;
[121]
(b) In each appeal, the orders at first instance be set aside;
[122]
(c) In Appeal No 2432 of 2008, the respondent pay the applicant the sum of $40,000 together with interest thereon at 9 per cent per annum from 14 September 2005 to the date hereof;
[123]
(d) The respondent pay two-thirds of the applicant's costs of the proceedings at first instance, including reserved costs, if any, on the standard basis.
[124]
(e) The respondent pay the applicant's costs of and incidental to the applications for leave to appeal and the appeals, to be assessed on the standard basis.
[125]
[53] WILSON J: I have read the reasons for judgment of Muir JA. I respectfully adopt his Honour's statement of the factual findings made by the trial judge. I am in general agreement with his Honour's reasoning and with the orders he proposes, and shall confine my observations to two issues - the applicant's repudiation argument and the scope of the Deed of Compromise.
[126]
[54] On 16 April 2004 Mr Mulhern asked the applicant to speak with him in the Chapel Bar. According to the applicant he was held there against his will and interrogated (about matters relating to his employment). The meeting turned into a confrontation between Mr Mulhern and his helpers on one side and the Dodrills on the other. In the meantime locks were changed. Although he worked again the next day, his employment was terminated, with effect from 19 April 2004.[32]
[127]
[55] By this time the $70,000 had been repaid. The applicant did not engage Civic Steel, but another construction company Cosmopolitan. He did not tell Mr Mulhern about the change. Under cross-examination the applicant gave the following evidence[33] -**
[128]
"Who did you end up engaging?-- I ended up using Cosmopolitan.
[129]
When did you tell Mr Mulhern about that?-- I didn't.
[130]
Because the deal was that he would pay this money to the construction company right?-- That's correct.
[131]
And you never told him which Construction company to pay it to; is that right?-- -Well, it was meant to be Civic Steel.
[132]
Right?-- Then after that just for a specific time line----
[133]
Yep? -- ---- on April the 16th obviously everything happened.
[134]
Yep?--. I was then terminated and then after that came a change of construction people. I received some correspondence from Mulhern's lawyers stating that everything had been paid, nothing else was coming and that was it, and that's when I then was going to go to McCullough and Robertson for this amount that was outstanding that was - that Mulhern was refusing. McCullough and Robertson, who were representing the Doddrills at the time, advised me, that I shouldn't go with them that I should be an independent - I need to be an independent witness for them ----"
[135]
**The correspondence from Mr Mulhern's lawyers was not tendered in evidence.
[136]
[56] The applicant's counsel submitted that the events of 16 April 2004 and the correspondence from Mr Mulhern's lawyers amounted to repudiation of the share repurchase contract and waiver of the benefit of any condition precedent.[34] The applicant did not accept the repudiation and terminate the contract. Rather, he sued on the contract for moneys owing.[35]
[137]
[57] This case was not pleaded.[36] It is difficult to see what further or different evidence the respondent might have called at trial had repudiation in April 2004 been pleaded. As I understood the argument on appeal, the respondent did not challenge the applicant's contention that what occurred at that time amounted to repudiation, but restricted its submissions to the significance of the applicant's not having terminated the contract in consequence of that repudiation. Despite some initial hesitation, I am satisfied that the applicant has done no more than raise a fresh question of law in the appellate proceeding.
[138]
[58] As Carter & ors say in Contract Law in Australia[37] -**
[139]
"...an unaccepted repudiation is not without legal effect. Most important is the idea that an unaccepted repudiation may absolve a promisee from the consequences which would otherwise attach to a failure on the promisee's part to discharge contractual obligations".
[140]
[59] They go on to discuss cases such as Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd.[38] In that case buyers under a contract for the sale of oats were required to nominate a vessel which could load in January - February. They tentatively booked a vessel giving an approximate shipping date of 14 February, but failed to make a nomination in accordance with the contract. On 31 January the sellers informed the buyers that they would not be able to supply the oats in Sydney. Instead of accepting this as a repudiation of the contract, the buyers attempted unsuccessfully to persuade the vessel to call in Melbourne where the sellers claimed to have the oats available for shipment. The buyers then accepted the repudiation as terminating the contract, and claimed damages. Under the contract the sellers' obligations were dependent on the buyers' nomination. The High Court held that the sellers' repudiation, even though not accepted until after the time for nomination had passed, relieved the buyers of the obligation to nominate a vessel. Dixon CJ said[39] -
[141]
"Now long before the doctrine of anticipatory breach of contract was developed it was always the law that, if a contracting party prevented the fulfilment by the opposite party to the contract of a condition precedent therein expressed or implied, it was equal to performance thereof: Hotham v East India Co.[40] But a plaintiff may be dispensed from performing a condition by the defendant expressly or impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention".
[142]
**[60] In the present case, if the applicant's presenting an invoice was indeed a condition precedent to the respondent's obligation to pay the $40,000, the applicant was absolved from that obligation by the respondent's conduct in April 2004.
[143]
[61] Muir JA has set out the relevant provisions of the deed and the respondent's submissions as to why the applicant's claim for $40,000 pursuant to the share repurchase contract falls within clause 6.1.[41]
[144]
[62] There may be a question whether the principles for the construction of releases discussed in Grant v John Grant & Sons Pty Ltd[42] are merely illustrative of the general principles for the construction of commercial contracts,[43] or whether they are significantly different in content.
[145]
[63] The way in which the principles for the construction of deeds of release came before the High Court in Grant was explained by Kirby P in the NSW Court of Appeal in Qantas Airways Ltd v Gubbins[44] -**
[146]
"That was a case involving a challenge to a replication pleaded, under the old system of pleadings in this State, to a plea that the claims put in suit had been released by deed. The release in question, as here, was contained in a deed by which the disputes between the parties were compromised and settled. As here, the deed was expressed in very general words. In the replication, the pleader pleaded additional facts which, it was contended, resulted in the exclusion of the claims sued upon from the operation of the general words of the release. Two replications were pleaded on the footing that at law, as distinct from in equity, the consequence followed from the facts pleaded. The third replication was pleaded by way of a reply on equitable grounds. The defendant's demurrer to this replication was upheld by the Supreme Court. That decision was reversed on appeal by the High Court.
[147]
Dixon CJ, Fullagar, Kitto and Taylor JJ traced[45] the application in the English Court of Chancery from 'a very early time' of its special doctrines as to the 'unconscientious reliance upon the general words of a release'. Their Honours quoted Sir Duncan Kerly's Historical Sketch of the Equitable Jurisdiction of the Court of Chancery:
[148]
'...The peculiar construction of releases in equity, which restricts their operation to matters within the contemplation of the parties, rests ... partly on mistake of expression, and partly on mistake going to the substance of the transaction. This construction accorded with principles settled before the present period, and was, in fact, a development of the rule that words are to be understood secundum subjectam materiam, for 'the chief and governing rule of the construction is drawn from the end or cause'.'
[149]
Various authorities were taken to illustrate this point. Their Honours[46] said:
[150]
'... If the circumstances made it inequitable for the releasee to set up the general words of release as applicable to some particular liability which the releasor sought to enforce against him at law, the Court of Chancery might be expected to intervene to restrain a plea in spite of the existence of grounds for supposing that the court of law might itself construe the release down so that the plea would fail...
[151]
From the authorities which have already been cited it will be seen that equity proceeded upon the principle that 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.'
[152]
This principle is still good law in Australia. It has never been modified by the High Court. The change in the system of pleadings has not altered its continuing operation.
[153]
The principles which have governed the admission of evidence of surrounding circumstances for the construction of other contracts need to be modified where the contract under scrutiny is a deed of release. That this is so is demonstrated by Grant."
[154]
In the same case Gleeson CJ and Handley JA referred to Grant as setting out the principles by which a court will decide whether a general release will be held to cover a particular dispute. Their Honours said[47] -
[155]
"The rule is that the general words of a release will, in an appropriate case, be read down to conform to the contemplation of the parties at the time the release was executed."
[156]
**[64] The High Court drew on principles applied by the Court of Chancery in support of the proposition that a release will not be construed as applying to something of which the party executing it was unaware.[48] But, under general principles for the construction of commercial contracts, in determining facts "known by the parties", an objective approach is required.[49]
[157]
[65] In Bank of Credit and Commerce International SA (in liq) v Ali[50] the respondent was made redundant by reorganisation of the appellant's business. He received a pay out upon signing a form recording that the payment was in full and final settlement of "all or any claims whether under statute, common law or in equity of whatsoever nature that exist or may exist and, in particular, all or any claims rights or applications of whatsoever nature that the appellant has or may have or has made or could make in or to the industrial tribunal..."[51] Subsequently the bank collapsed, and he brought a claim for "stigma damages" (to compensate for disadvantage in the labour market from his association with the failed bank). It was not until some years after he signed the release that the House of Lords held that such claims were sustainable in principle. Applying general principles for the construction of contracts the House of Lords held (by majority) that the parties had not intended to provide for the release of rights and the surrender of claims which they could not have had in their contemplation. Thus it was unnecessary for their Lordships to consider whether equity would restrain unconscionable reliance on such a deed. But both Lord Nicholls of Birkenhead and Lord Clyde eschewed the notion of there being different rules in equity and at common law for the construction of contracts.[52]
[158]
[66] In Karam v ANZ Banking Group Limited[53] Santow J reconciled these principles in this way -**
[159]
"The principles applicable to construing releases or purported releases can conveniently be set out in a series of propositions:
[160]
(1) In construing a release, here embodied in a letter of variation to the terms of lending, the Court should ascribe to the release the meaning that the release would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties at the time that they signed the document containing the release: ICS v West Bromwich BS[1997] UKHL 28;[1998] 1 All ER 98 per Lord Hoffman at 114.
[161]
(2) In order for the Court to give effect to what in an objective sense the contracting parties intended, it is clear that a party may agree to release claims or rights of which it is unaware and of which it could not be aware, provided clear language is used to make plain that that is its intention: see Salkeld v Vernon[1758] EngR 153; (1758) 1 Eden 64, 28 ER 608 per Lord Keeper Henley.
[162]
(3) Consistent with this emphasis on intention, general words in a release are limited to what was specifically in the contemplation of the parties at the time when the release was given: Grant v John Grant and Sons[1954] HCA 23; (1954) 91 CLR 112 per Dixon CJ, Fullagar, Kitto and Taylor JJ; Iletrait Pty Limited v McInnes (NSWCA, 17 April 1997, unreported) per Priestley JA with whom Grove AJA and Handley JA agreed).
[163]
(4) Although there are no special rules of construction, such as a contra proferentem requirement, in the absence of clear language courts have been slow to infer that a party intended to surrender rights and claims of which it was unaware and could not have been aware: BCCL v Ali [2001] 1 All ER961 at 966 per Lord Bingham, (contrast Lord Nicholls in BCCL v Ali (supra) at 971-72 who was of the view that for the purposes of construction a general release is simply a term in the contract).
[164]
(5) Although each release should be considered against its own matrix of facts, an example of this line of 'cautionary principle' (Lord Bingham's phrase) is the frequently cited judgment of the High Court of Australia in Grant v John Grant & Sons Pty Limited (supra), where Dixon CJ, Fullagar, Kitto and Taylor JJ (at 125) referred with approval to the proposition put by Sir Frederick Pollock in his 'Principles of Contract' (Stevens: London, 1950) 13th ed at 412, that 'in equity a release shall not be construed as applying to something of which the party executing it was ignorant.'
[165]
(6) Despite the fact that, strictly speaking, releases are subject to no special rules of construction, a transaction in which one party agrees in general terms to release another from any claims upon it does have special features: BCCL v Ali at 984 per Lord Hoffman.
[166]
(7) In such circumstances it may well be appropriate to imply an obligation upon the beneficiary of such a release to disclose the existence of claims of which it actually knows and which it also realises might not be known to the other party: BCCL v Ali at 984 per Lord Hoffman, for such an obligation is consistent with a concern to protect parties from sharp practice, by preventing advantage being taken of the known ignorance of the conceding party; BCCL v Ali per Lord Nicholls at 973. (The Bank made no such disclosure here.)
[167]
(8) Most recently in this Court in Amaca Pty Limited formerly known as James Hardie & Coy Pty Limited v CSR Limited[2001] NSWSC 324, Bergin J adopted the principles of construction broadly as outlined above, including the "cautionary principle" and taking into account the purpose of the contract and the circumstances in which made."
[168]
**[67] As Muir JA has demonstrated, in the present case, on the application of general principles for the construction of commercial contracts, the release effected by the deed did not extend to the applicant's claim for moneys owing pursuant to the share repurchase contract. In these circumstances, it is not necessary to resolve the question whether the principles for the construction of releases discussed in Grant v John Grant & Sons Pty Ltd[54] are truly different from those general principles.
[169]
[68] I agree with Muir JA that the applications for leave to appeal should be granted and that the appeals should be allowed.**
[11]Chitty on Contracts Volume 1, 28th Ed 22 - 001
[173]
[12]Libyan Arab Foreign Bank v Bankers Trust Co(1989) QB 728 at 748, 749
[174]
[13] Cf. Chitty supra at paras 22 - 027 to 22 - 035; Hoenig v Isaacs [1952] EWCA Civ 6; [1952] 2 All ER 176; Contract Law in Australia, 3rd Ed paras [1830] - [1832]
[32] Transcript of Trial Proceedings on 23 January 2008, pp 40-41; Appeal Record Book, pp A428-429; see also Transcript of Trial Proceedings on 24 January 2008, p 114; Appeal Record Book, p A502.
[192]
[33] Transcript of Trial Proceedings on 23 January 2008 , pp 57-58; Appeal Record Book A445-A446.
[193]
[34] Applicant's Outline of Argument in CA File No. 2432 of 2008 filed 11 April 2008, pp 9-10; Transcript of Appeal Proceedings on 6 August 2008, pp 9-11, 16-17.
[194]
[35] See Statement of Claim in DC File No. BD 3448/05, undated, para 18(a).
[195]
[36] In paragraph 15 of the Statement of Claim, ibid, the applicant pleaded that the respondent, through its solicitors, repudiated the share repurchase contract in correspondence of 23 December 2004. That correspondence was not tendered, and repudiation based on it was not pressed at trial.
[196]
[37] J W Carter, Elisabeth Peden, G J Tolhurst, Contract law in Australia (LexisNexis, 5th ed, 2007), paras 30-47.
[43] As conveniently summarised in the passage from Elderslie Property Investments No 2 Pty Ltd v Dunn[2008] QCA 158 at paras 20, 21 and 22 cited by Muir JA.