In the matter of Jimmy’s Recipe Pty Ltd (No 2) [2020] NSWSC 632 - NSWSC 2020 case summary — Zoe

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In the matter of Jimmy’s Recipe Pty Ltd (No 2) [2020] NSWSC 632

[2020] NSWSC 632

Supreme Court of NSW|2020-05-12|Before: Leeming JA

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2020-05-12

Before

Leeming JA

Source

Original judgment source is linked above.

Judgment (25 paragraphs)

[1]

Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 Food Marketing Institute v Argus Leader Media 139 S Ct 2356 (2019) Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186; [2006] NSWCA 187 GPI Leisure Corp Pty Ltd v Herdsman Investments Pty Ltd (No 4) (1990) 9 BPR 17,461 Harris v Smith [2008] NSWSC 545; 14 BPR 26,223 In the matter of Jimmy's Recipe Pty Ltd [2018] NSWSC 1331 In the matter of Jimmy's Recipe Pty Ltd [2020] NSWSC 516 In the matter of Jimmy's Recipe Pty Ltd [2020] NSWSC 93 Lahoud v Lahoud [2009] NSWSC 623 Macdonald v Shinko Australia Pty Ltd [1998] Qd R 152; [1998] QCA 53 Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336; [1973] HCA 23 McDermott v Black (1940) 63 CLR 161; [1940] HCA 4 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 Octane Fitness v ICON Health and Fitness 572 US 545 (2014) Pell v The Queen [2020] HCA 12; 94 ALJR 394 Perpetual Custodians Ltd v IOOF Management Ltd [2013] NSWCA 231; 304 ALR 436 Peter Pan Drive-In Ltd v Flambro Realty Ltd (1978) 22 OR (2d) 291; 93 DLR (3d) 221 Peter Pan Drive-In Ltd v Flambro Realty Ltd (1980) 26 OR (2d) 746; 106 DLR (3d) 576 Righi v Kissane Family Pty Ltd [2015] NSWCA 238 Rinehart v Hancock Prospecting Pty Ltd; Rinehart v Rinehart [2019] HCA 13; 93 ALJR 583 Romag Fasteners Inc v Fossil Group Inc (US Supreme Court, 23 April 2020) Scaffidi v Perpetual Trustees Victoria Ltd (2011) 42 WAR 59; [2011] WASCA 159 Segelov v Ernst & Young Services Pty Ltd (2015) 89 NSWLR 431; [2015] NSWCA 156 Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) (2019) 99 NSWLR 317; [2019] NSWCA 11 Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 Smalley v Motor Accident Authority (NSW) (2013) 85 NSWLR 580; [2013] NSWCA 318 South Western Sydney Local Health District v Gould (2018) 97 NSWLR 513; [2018] NSWCA 69 TAL Life Ltd v Shuetrim; MetLife Insurance Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 Victoria v Tatts Group Ltd [2016] HCA 5; 90 ALJR 392 Watson v Foxman (1995) 49 NSWLR 315 Texts Cited: E Aprill, "The Law of the Word: Dictionary Shopping in the Supreme Court", 30 Ariz St L J 277 (1998) J Brudney and L Baum "Oasis or Mirage: The Supreme Court's Thirst for Dictionaries in the Rehnquist and Roberts Eras" 55 Will & Mary L Rev 483 (2013) S Christensen and W Duncan, The Construction and Performance of Commercial Contracts (Federation Press, 2nd ed 2018) P Herzfeld and T Prince, Interpretation (Lawbook Co, 2nd ed 2020) J D Heydon, Heydon on Contract (Lawbook Co, 2019) D Hodge, Rectification (Sweet & Maxwell, 2nd ed 2016) M Lemley, "Chief Justice Webster" (2020, ssrn.com/abstract=3537211), S Robertson, "Making Sense of Commercial Common Sense" (2018) 49(2) VUW L Rev 259 J Tarrant, Rectification of Documents (Federation Press, 2020) J Thomson et al, Commercial Contract Clauses: Principles and Interpretation (3rd ed, Thomson Reuters, 2019) Glanville Williams, Joint Obligations (London, Butterworths, 1949) Category: Principal judgment Parties: Gek Sim Tsia (Plaintiff, Applicant on interlocutory process filed 6 April 2020) Jimmy's Recipe Pty Ltd (Administrators Appointed) (First Defendant) Jimmy's Recipe Gateway Pty Ltd (Second Defendant) Alwin Nan Chu Chong (Third Defendant) Norannie Chong (Fourth Defendant) Chee Wee Seow (Fifth Defendant, Applicant on interlocutory process filed 13 April 2020) Representation: Counsel: D Barnett, W Chan (Gek Sim Tsia) P H Greenwood SC, P Dodson (Chee Wee Seow)

[3]

Judgment

LEEMING JA: The active parties to this phase of the proceedings, commenced by interlocutory processes filed last month, are the plaintiff Ms Gek Sim Tsia and the fifth defendant Mr Chee Wee Seow. Those two interlocutory processes were listed for hearing before me, exercising the powers of a Judge of this Court pursuant to s 31(3) of the Supreme Court Act 1970 (NSW), with a high level of expedition having regard to the subject matter. The underlying 2017 proceedings, pending in the Equity Division, concern the operation of two Malay-Chinese food outlets in the Sydney CBD, operated by the first and second defendants separately, but sharing the name "Jimmy's Recipe". The plaintiff is a minority shareholder in Jimmy's Recipe Pty Ltd who has been given leave to bring proceedings on its behalf against Jimmy's Recipe Gateway Pty Ltd (the second defendant), Mr Alwin Chong (the third defendant), Ms Norannie Chong (the fourth defendant) and Mr Seow: In the matter of Jimmy's Recipe Pty Ltd [2018] NSWSC 1331. The gist of the claim is that the first defendant's business, name, goodwill and intellectual property has been appropriated by the operations of the second Jimmy's Recipe business. The third and fourth defendants have also been found guilty of contempt (arising out of a breach of an undertaking to bank the cash takings of the first Jimmy's Recipe business), following a two day hearing in 2019 with judgment delivered on 19 February 2020: In the matter of Jimmy's Recipe Pty Ltd [2020] NSWSC 93. Mr Seow was not said to have been involved in the contempt.
Without any disrespect, I shall follow the approach taken in the parties' deed, and refer to the plaintiff, third, fourth and fifth defendants as "Sim", "Alwin", "Norannie" and "Seow" respectively. Sim is unwell, and the litigation has been conducted by her attorney, Mr Jia Hao Tsia, and so I shall also refer to "the plaintiff".
The two interlocutory processes concern a settlement deed dated 24 February 2020, pursuant to which the parties agreed to the proceedings being dismissed with general releases upon Sim receiving $565,000. Reference was made in the deed to the "Settlement Sum" comprising amounts of $515,000 and $50,000, the former to be paid by Alwin, the latter to be paid by Seow. Seow paid $50,000 in accordance with the deed. Alwin has paid nothing, and has recently been declared bankrupt.
The plaintiff contends that Seow is liable to pay the whole of the $565,000, and if that occurs, then the release in the deed will become operative and the 2017 proceedings will be dismissed in accordance with consent orders annexed to the deed. Seow contends that his liability is limited to $50,000. Against the possibility that his construction of the deed is wrong, he contends that the plaintiff is estopped from asserting that he is liable to pay the entire $565,000. He also submits that the deed should be rectified in equity. Finally, he submits that the plaintiff's insistence that he pay $565,000 is unconscionable in circumstances where the plaintiff knew that he believed his liability was limited to $50,000.
One could perhaps debate the precise legal category into which the deed falls and in particular whether it amounted to accord and satisfaction, or alternatively accord and conditional satisfaction (the authorities are reviewed in Scaffidi v Perpetual Trustees Victoria Ltd (2011) 42 WAR 59; [2011] WASCA 159 at [26]-[33]). But what matters is the meaning of the parties' agreement rather than the legal category (which may itself be debatable) into which it falls: Blue Moon Grill Pty Ltd v Yorkey's Knob Boating Club Inc [2006] QCA 253 at [20]. It was confirmed during the hearing (T59.38-60.39) that it was common ground that the release in the deed is executory and conditional, and is only operative upon receipt of the full $565,000 in a nominated account. That is to say, it was common ground that, to paraphrase the language of Dixon J in McDermott v Black (1940) 63 CLR 161 at 183; [1940] HCA 4, performance of the payment of $565,000, not the mere promise to pay that amount, was what was taken by Sim in place of her causes of action in the proceedings. The 2017 proceedings remain on foot, and in the event that the $565,000 is not paid, they will continue unless otherwise resolved. Thus, if Seow is right, and he is only obliged to make payment of $50,000, then unless some further compromise is reached, he will be entitled to the return of the money and the proceedings will continue.

[4]

The deed

The deed's recitals refer to the underlying proceedings, and to a costs order made in this Court, which proceeded to assessment and was registered as a judgment debt in the District Court in the amount of some $160,000. One recital also refers, incorrectly, to an outstanding judgment on the motion for contempt which the plaintiff had filed against the third and fourth defendants. That was correct when it was drafted, in January 2020, but became incorrect when judgment was delivered shortly before the deed was executed.
Clause 1.1 contains definitions and provides that "unless the context indicates otherwise", "Settlement Sum means $565,000 (inclusive of any GST) comprising, and to be payable, in the amounts of $515,000 by Alwin and $50,000 by Seow."
I will explain below how what was originally a definition confined to a monetary amount expanded to include words directed to the composition of that amount and by whom it was to be paid.
Clause 1.2 is headed "Interpretation" and has all the appearance of boilerplate to which at best only limited attention was given. It concerns successors, amendments, plurals, gender, other grammatical forms of words, time, headings, etc but relevantly provides: "In this deed unless the context otherwise indicates: ... (m) any agreement, representation, warranty or indemnity by two or more parties (including where two or more persons are included in the same defined term) binds them jointly and severally; ...".
The operative provision governing payment is cl 2(a): "Alwin and Seow agree to pay, and Sim agrees to accept, the Settlement Sum in full and final settlement of any and all Claims, including the Proceedings and any and all further liability or potential claims arising directly or indirectly in or from the Proceedings, the Judgment and Contempt Motion that Sim may have against [the other parties] in relation to the affairs of Jimmy's Recipe or Gateway".
Clauses 2(b) and (c) provide: "Alwin and Seow must pay the Settlement Sum in full by electronic funds transfer to the Nominated Bank Account within 28 days of the date of this Deed. Alwin and Seow must provide to Sim, or to Sim's solicitors, proof of payment on the date the Settlement Sum is paid."
Clause 3 requires Sim to provide a signed transfer of her 25% shareholding in Jimmy's Recipe in favour of Alwin following receipt of the Settlement Sum. The clause provides that the consideration of $9,700.00 for those shares "forms part of, and is provided for, in the Settlement Sum".
Clause 4 is a generally worded release, given in consideration of the terms of the deed and the payment of the Settlement Sum and "only upon the completion of the actions set out in clauses 2 and 3". Everyone accepts that the release is not yet effective. Clause 6 makes provision for the parties to sign consent orders, to be held in escrow by Sim's solicitors until the Settlement Sum was paid. Those orders, if made, would dismiss the proceedings with no order as to costs, and vacate all costs orders previously made. Those orders have not been made, and the 2017 proceedings remain on foot.
Clause 19 is an entire agreement clause: "This deed comprises the entire agreement between the parties in respect of the subject matter of this deed and supersedes any prior agreement, arrangement or understanding, whether oral or in writing, between the parties from the date of this deed."
Clause 23 is a no representation or reliance clause: "Each party confirms that it does not enter into this deed in reliance on any representation or other inducement by or on behalf of any other party, except for the representations and inducements expressly set out in this deed."

[5]

Overview of submissions on construction

It is convenient to give a short overview of the parties' submissions immediately, although some details are better deferred to the analysis which follows.
The plaintiff's submissions focussed upon the primary obligations in cl 2(a), (b) and (c). Each is expressed as something to be done by "Alwin and Seow". In particular, the payment of the Settlement Sum is something which those two men "agree" to pay in cl 2(a), and that is sufficient, so it is said, to engage cl 1.2(m) so as to bind Alwin and Seow jointly and severally. According to the plaintiff, the concluding words in the definition of "Settlement Sum" identified merely the way in which the defendants allocated responsibility for the $565,000 as between themselves and did not affect Sim's entitlement to be paid the full amount by either of them. The plaintiff said this made commercial sense, because Seow had an interest in discharging the liability of the other defendants. In particular, he was a director and (indirectly) a shareholder in Gateway, which itself was one of three defendants liable to pay the quantified costs amount of some $160,000.
Seow's submissions focussed upon the definition of "Settlement Sum". He submitted that the words "to be payable, in the amounts of $515,000 by Alwin and $50,000 by Seow" must be given work to do. When the definition of "Settlement Sum" is substituted elsewhere in the deed where that defined term is used, including cl 2(a), the result is, in his submission, to make it clear that Mr Seow is only liable to pay $50,000. This was said to be supported by various contextual considerations, including the fact that Mr Seow was only joined as a person knowingly involved in some of the alleged breaches by Alwin, and that substantial heads of liability, including liability already found to exist, could on no view be sheeted home to Seow.
Further, Seow relied upon the way in which the deed came to be executed. The concluding words in the definition of "Settlement Sum" were added during negotiations into an earlier draft which had merely provided that "Settlement Sum means $565,000 (inclusive of any GST)". Still further, Seow says that in the two months preceding the execution of the deed, he had consistently maintained that he would not pay anything more than $50,000.
The plaintiff resists resort being had to the earlier drafts of the deed for the purpose of construction, and relies upon the entire agreement clause, and what was said of a similar clause in Righi v Kissane Family Pty Ltd [2015] NSWCA 238 at [46]. Alternatively, if one were to have regard to the earlier drafts, then the plaintiff maintained that it was also necessary to have regard to the rejection of additional words, proposed by Seow's solicitor, which would have made the position clear beyond argument. The proposed insertion and rejection of the additional words is central to the factual issue which arises on Seow's interlocutory process, and it is convenient to defer the details for the moment.

[7]

The presumption of joint and several promises

The plaintiff says that there is a promise in cl 2(a) by two parties (Alwin and Seow) to "agree" to pay the Settlement Sum. Clause 2(b) likewise contains a promise by the same two parties. In each case, that is sufficient, according to the plaintiff, to engage cl 1.2(m) such that their promise is joint and several.
I accept the prima facie position that that is the effect of cl 1.2(m). Clause 1.2(m) reflects the fact that New South Wales (unlike most other Australian jurisdictions) has not altered the position at common law that an obligation expressed to bind two parties is presumed to bind them jointly and not severally (the position is discussed in J Thomson et al, Commercial Contract Clauses: Principles and Interpretation (3rd ed, Thomson Reuters, 2019), pp 128-129). Clause cl 1.2 alters that default position.
The effect of a promise being joint and several is not without its complexity. The position was lucidly explained by Glanville Williams, Joint Obligations (London, Butterworths, 1949), pp 34-35 by reference to a judgment of Baron Parke: "The nature of a joint and several obligation was expounded by a judge famous for his learning in the common law as follows. 'A joint and several bond ... though on one piece of parchment or paper, in effect comprises the joint bond of all, and the several bonds of each of the obligors, and gives different remedies to the obligee."
The complexity that such a clause can engender was mentioned by Lord Millett in AIB Group (UK) Plc v Martin [2001] UKHL 63; [2002] 1 All ER 353 at [14]-[20]; the complexity inclined his Lordship towards not reading such clauses literally. However, that was a minority view, and no party in this litigation raised the point, which I accordingly pass over.
Accepting, favourably to the plaintiff, that cl 1.2(m) bears its literal meaning, it is common ground that its application upon Alwin's and Seow's agreement in cl 2(a) is not inevitable. Clause 1.2(m) only applies "unless the context otherwise indicates". The real question is whether the operation of cl 1.2(m) is displaced by the context, and, in particular, by the words "comprising, and to be payable, in the amounts of $515,000 by Alwin and $50,000 by Seow" in the definition of "Settlement Sum".

[8]

Substitution of "Settlement Sum" by its definition

Seow submitted, and I did not understand the plaintiff to resist, that the deed was to be construed by reading the entirety of the definition into the substantive clauses where reference is made to "Settlement Sum". That is the conventional approach: Segelov v Ernst & Young Services Pty Ltd (2015) 89 NSWLR 431; [2015] NSWCA 156 at [88].
(For completeness, I am conscious that just as cl 1.2 is subject to the context otherwise indicating, so too is the definition of "Settlement Sum" in cl 1.1. I did not understand the plaintiff to rely upon the opening words of cl 1.1. That course was wise. Legal content cannot be given to cl 2(a) without going to the definition of "Settlement Sum"; that is to say, the definition is an essential part of the parties' bargain. On the other hand, cl 1.2(m) serves a completely different purpose, namely, to displace the default position at common law that obligations expressed to bind two persons are construed as joint obligations. In other words, the definition of "Settlement Sum" is the negotiated bespoke agreement of the parties, while cl 1.2(m) is boilerplate. It is no answer to the problem posed by the definition of "Settlement Sum" to observe that the definition may be displaced by a contrary indication in the context.)
As Segelov illustrates, sometimes the substitution of a definition can give rise to grammatical difficulty. When the definition of "Settlement Sum" is substituted into cl 2(a) (and, for clarity, underlined), the clause reads: "Alwin and Seow agree to pay, and Sim agrees to accept, $565,000 (inclusive of any GST) comprising, and to be payable, in the amounts of $515,000 by Alwin and $50,000 by Seow in full and final settlement of any and all Claims, including the Proceedings and any and all further liability or potential claims arising directly or indirectly in or from the Proceedings, the Judgment and Contempt Motion that Sim may have against [the other parties] in relation to the affairs of Jimmy's Recipe or Gateway".
Two observations may be made of the effect of substituting the definition for the defined term. 1. The literal effect of including the words "and to be payable" in the two amounts by Alwin and Seow is to qualify the promise in the clause that "Alwin and Seow agree to pay". That is because the object of "agrees to pay" is the $565,000, which is also the subject of "to be payable". The coincidence of active and passive forms deriving from the same verb "pay" and the object of the active form being identical to the subject of the passive form tends powerfully in favour of the first being qualified by the second. 2. The syntax does not function perfectly, because of the imperfections in the definition. The word "in" does not correspond to "comprising", while the word "by" makes sense if it identifies by whom the amounts are "payable", but does not accommodate the participle "comprising". But its somewhat garbled grammar does not prevent the ordinary task of attributing legal meaning to the clause.
The most natural reading of the definition of Settlement Sum is that there are two limbs: a limb dealing with how the $565,000 is to be comprised, and a limb dealing with by whom it is to be payable. This was understandably embraced by Seow, who said that the second limb qualified each of Alwin's and Seow's obligations to pay. Mr Barnett's solution in oral submissions to the grammatical imprecision was to invite the Court to conclude that "comprising" and "to be payable" amounted to a single composite term, which to that extent was less closely connected with and therefore less apt to qualify the obligation upon Alwin and Seow to "pay" the $565,000. While I acknowledge the warts-and-all way that the plaintiff attended to the textual weaknesses attending his construction as well as its strengths - ordinarily it is more effective advocacy to grapple with the weaknesses of one's case, rather than hoping that they may pass undetected - I am unpersuaded by the proffered solution. The syntactical imprecision in the prepositions does not seem to me to be a sufficient reason to devalue the force of the linkage between "pay" and "to be payable". The fact that other words are less than perfectly grammatical does not much detract from the significance attributable to "pay" and "to be payable" being directed to the same dollar sum. That was Lord Neuberger's point in Arnold v Britton [2015] AC 1619; [2015] UKSC 36 at [18]: "[i]f there is a specific error in the drafting, it may often have no relevance to the issue of interpretation which the court has to resolve".

[9]

Submissions based on the Cambridge Dictionary online

The written submissions prepared on behalf of the plaintiff (signed by counsel previously briefed) sought to deal with the words "comprising, and to be payable" in a different way. It was said that according to the Cambridge Dictionary online, "comprising" means "to consist of" while "payable" means "that should be paid". Based on those meanings, it was said that when the definition was substituted into cl 2(a), the clause read: "[the third and fifth defendants] agree to pay ... $565,000 ... [to consist of], and [that should be paid], in the amounts of $515,000 by [the third defendant] and $50,000 by [the fifth defendant]."
It was then submitted that the latter part of those words was "silent as to the primary obligation of the defendants" and "indicates the sources of funds and no doubt governs the apportionment of liability for the Settlement Sum as between the third and fifth defendants".
With this approach I wholeheartedly disagree. Mr Barnett did not disavow it, but he did not mention the submission in his oral address and for good reason. First, for reasons which need not be rehearsed here, construction of documents is not much advanced by choosing a favoured dictionary definition of a word, and substituting that definition into the text: see South Western Sydney Local Health District v Gould (2018) 97 NSWLR 513; [2018] NSWCA 69 at [77]-[81]. Frequently, the choice of the favoured definition dictates the result, and produces merely the illusion of analysis.
All dictionaries are not alike. The favoured meaning "that should be paid" is absent from the Oxford English Dictionary, from the New Shorter Oxford Dictionary and from the Macquarie Dictionary. No explanation was given for counsel's choice of dictionary; I am left wondering how many dictionaries were consulted in order to identify the favoured meaning. My copy of Black's Law Dictionary gives the following definition of "payable": "Capable of being paid; suitable to be paid; admitting or demanding payment; justly due; legally enforceable. A sum of money is said to be payable when a person is under an obligation to pay it. Payable may therefore signify an obligation to pay at a future time, but, when used without qualification, term normally means that the debt is payable at once, as opposed to 'owing'". That account helpfully captures the range of meanings in legal contexts, which the word is capable of bearing, and makes it clear that resort to a dictionary in the present case is, at best, the starting point of analysis, rather than the conclusion. It is I suppose elementary that dictionaries identify meaning by words, and give the widest range of available meanings, while contracts are drafted in sentences, whose meaning turns in the first instance on the immediate context of the sentence read as a whole. Determining the meaning of the whole sentence is not assisted by using different words which the parties did not use which have been taken from a dictionary.
Moreover, the submission disregards the immediately preceding words "to be". Those two small words are capable of contributing to a very wide range of meanings. In their present context they are readily capable of imposing an obligation, or, more accurately, reinforcing the obligation immanent in "payable".
By choosing a definition that dilutes the force of "payable" to something which should be paid, and omitting words which might strengthen the obligatory aspect of "payable", the submission simply disregards aspects of the parties' agreed text in two distinct ways. But cl 2(a) is made of basic words familiar to any legal practitioner and indeed to any businessperson in the position of the parties; why ever should resort to a dictionary be necessary in such a case?
The limited role of a dictionary in the process of construction has more recently been endorsed in J D Heydon, Heydon on Contract (Lawbook Co, 2019), p 266. However, the views I have expressed here and elsewhere about the use of dictionary definitions have been said, in the second edition of their extremely helpful work, to overstate the position: P Herzfeld and T Prince, Interpretation (Lawbook Co, 2nd ed 2020), pp 36-37, by reference to Smalley v Motor Accident Authority (NSW) (2013) 85 NSWLR 580; [2013] NSWCA 318 at [47]; 2 Elizabeth Bay Road Pty Ltd v The Owners - Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409 at [81], TAL Life Ltd v Shuetrim; MetLife Insurance Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 at [80] as well as Gould. I acknowledge that much will turn on the particular word and the particular dictionary definition. I accept that genuinely obscure words, and obscure meanings of words, may be elucidated by a dictionary, although such words are not commonly found in modern contracts and statutes. But, with respect to those who are less unattracted to dictionaries than am I, I fail to see how the definitions collected in counsel's preferred dictionary of basic words like "liability", "unreasonableness", "unless", "unlikely" and now "payable", all of whose meanings are surely self-evidently contextual, will much assist determining the particular legal meaning of the sentence in the particular contract or statute where they occur.
The issue is very important in the United States. When a statute authorises a plaintiff whose registered trademark has been violated to recover, "subject to the principles of equity", the defendant's profits, any damages sustained and costs, a dictionary definition of "principle" does not much help; cf Romag Fasteners Inc v Fossil Group Inc (23 April 2020). When a statute requires personnel actions to be "free from any discrimination based on age", a dictionary definition of "free from" does not much help: cf Babb v Wilkie (6 April 2020). Whatever the meaning of "confidential" in a freedom of information statute be, the range of meanings given to that word in a dictionary does not much help; cf Food Marketing Institute v Argus Leader Media 139 S Ct 2356 (2019). Whatever the meaning of an "exceptional case" when attorneys' fees may be allowed in patent legislation, the dictionary definition of "exceptional" does not much help: cf Octane Fitness v ICON Health and Fitness 572 US 545 (2014). There are many, many instances of such reasoning in recent decisions. I am far from alone in considering the United States Supreme Court's embrace of dictionary definitions as tending against transparency. I have previously referred to E Aprill, "The Law of the Word: Dictionary Shopping in the Supreme Court", 30 Ariz St L J 277 (1998); see further the well-titled papers by J Brudney and L Baum "Oasis or Mirage: The Supreme Court's Thirst for Dictionaries in the Rehnquist and Roberts Eras" 55 Will & Mary L Rev 483 (2013) and M Lemley, "Chief Justice Webster" (2020, ssrn.com/abstract=3537211), who quotes in fn 110 a former editor of the Oxford English Dictionary: "[I]t's probably wrong, in almost all situations, to use a dictionary in the courtroom. Dictionary definitions are written with a lot of things in mind, but rigorously circumscribing the exact meanings and connotations is not usually one of them."
I respectfully think that Australian courts should be cautious before accepting submissions on the construction of statutes or contracts based on dictionary definitions.

[10]

Clause 1.2(m) is displaced by the context

Returning to the question of when cl 1.2(m) would be displaced, the plaintiff relied upon what Barrett J had said in Barak Pty Ltd v WTH Pty Ltd [2003] NSWSC 15; 11 BPR 20,687 as to the operation of a qualification "unless the context indicates a contrary intention", especially at [17]: "The important point is that the qualification 'unless the context indicates a contrary intention' operates solely by reference to the content of the instrument itself. There is, in effect, a direction by those responsible for composing the instrument to those who will afterwards read it that the whole of the subject matter and the scheme by which the instrument deals with that subject matter are to be considered in deciding whether a word to which a defined meaning is assigned is to be read as having some other meaning. Only if, by express words or necessary implication, the instrument itself shows, within its own four corners and without resort to extrinsic evidence, that the other meaning must have been intended is it permissible to abandon the defined meaning."
I note for completeness the concern I raised during the hearing, namely, that the position may well be less circumscribed. There is a line of authority, not mentioned in Barak, to the effect that the words "unless the context indicates a contrary intention" are unnecessary, and that any specially defined term may not bear that defined meaning where the term appears elsewhere in the document even without an express provision that about the context indicating to the contrary. The position is relevantly identical in contracts and in statutes. In an appeal concerning the construction of an insurance contract, Fullagar J said: 'Neither in the case of a statute nor in the case of a contract or any other instrument is there any rule of law or of construction which requires us to apply a definition where to do so would be at variance with a context or with a general intent to be gathered from the whole of the instrument": Halford v Price (1960) 105 CLR 23 at 33; [1960] HCA 38.
In Perpetual Custodians Ltd v IOOF Management Ltd [2013] NSWCA 231; 304 ALR 436 at [86], I said, with the agreement of McColl and Gleeson JJA: "The same approach applies to contracts. For example, Lord Steyn has written extrajudicially that '[e]ven an agreed definition is of limited use: it takes no account of contextual requirements': (2001) 21 OJLS 59 at 60. The same point was made by Fullagar J in Halford v Price (1960) 105 CLR 23 at 33. Professor McMeel has written (The Construction of Contracts, 2nd ed (2011) Oxford University Press, p159) that 'even defined terms must yield to wider context or contrary intention.' Professor Carter has said that 'the absence of [words to the effect 'unless the context indicates otherwise'] does not mean that the definition necessarily applies to every usage of the term in the document' (The Construction of Commercial Contracts (2013) Hart, p 446). That must in my opinion be correct in principle. The ordinary approach to construction insists on reading the contract as a whole and doing so harmoniously, so as to resolve or minimise internal inconsistency. Foreign to that approach would be a slavish rule that defined terms inevitably bear every aspect of their defined meaning." The point is further elaborated in P Herzfeld and T Prince, Interpretation, p 477.
There may be some tension between those decisions and the strictness of the formulation in Barak as to when a provision such as cl 1.2(m) is displaced. It seems unlikely that the test for displacing the operation of interpretation provisions is based on the presence of words such as "unless the context indicates a contrary intention" if those words are otiose. Further, in point of principle, everyone accepts that extrinsic evidence is available as an aid to the construction of at least some contracts; it seems difficult to see why in such a case extrinsic evidence should not bear upon whether a clause such as cl 1.2(m) is displaced. All of that said, it seems likely that little will turn on this point in any real case, and nothing turns on it in the present case.
It is sufficient to adopt the plaintiff's submission, even if that is in fact an unduly circumscribed approach. Even on the approach for which the plaintiff contended, the effect of the words "unless the context indicates a contrary intention" must be considered within the four corners of the contract and therefore in light of the express words "comprising, and to be payable, in the amounts of $515,000 by Alwin and $50,000 by Seow".
If cl 1.2(m) is applied to the obligations in cll 2(a) and 2(b), then each of Alwin and Seow is severally obliged to pay the full $565,000 to Sim. But that would be inconsistent with the express language of the definition of "Settlement Sum" when it is imported into those two clauses. The inconsistency arises from the words "to be payable" and the separate identification after those words of the precise amounts which each of Alwin and Seow is required to pay. In their context in the definition of Settlement Sum, those words are to be read as a qualification upon what would otherwise be the primary obligations to pay the plaintiff in cll 2(a) and (b). But the qualification is inconsistent with Alwin and Seow being jointly and severally liable in the full amount.
Against that conclusion, the plaintiff says that the references to $515,000 and $50,000 merely reflect the liability of the two men vis-à-vis one another. But the obligation upon which cl 1.2(m) is said to apply is the obligation that "Alwin and Seow agree to pay the Settlement Sum", and when the definition of Settlement Sum is substituted into that obligation, there is, it seems to me, the plainest of language indicating that the primary obligation to pay cannot be joint and several.
To reiterate, the point comes down to the meaning of the promise given to Sim, expanded by inserting the definition, and simplified by omitting immaterial words concerning GST and Sim's acceptance: "Alwin and Seow agree to pay ... $565,000 ... comprising and to be payable in the amounts of $515,000 by Alwin and $50,000 by Seow."
I do not accept that cl 1.2(m) has the effect that the plaintiff can require Seow to pay the full $565,000, leaving Seow to recover $515,000 from Alwin. Accepting that aspects of the syntax are awkward, that is not a licence to undo the ordinary effect of the qualifying words "comprising" and "to be payable" and the dollar figures indicating that the $565,000 is made of two components. The word "comprising" and the two amounts of $515,000 and $50,000 point to the $565,000 constituting two components. And even if that is a little unclear, the words "to be payable" qualify the obligation upon Alwin and Seow to pay, being the very obligation in respect of which the plaintiff seeks to deploy cl 1.2(m). The qualifying words "to be payable" in separate, unequal amounts is as clear an indication as may be that both men are not severally liable in the total amount.

[11]

Further considerations favouring Seow's construction

Two other matters strengthen the conclusion I would reach based on cll 1.1, 1.2 and 2 alone. First, the plaintiff's construction sits uneasily with cl 3. That clause contains an acknowledgement by Sim that $9,700 comprises the consideration for the 2500 shares transferred by her to Alwin. The plaintiff's construction allows for the possibility that Seow will pay the entirety of the Settlement Sum, including the consideration for the shares she is required to transfer to Alwin. On the other hand, Seow's construction requires Alwin to pay most of the Settlement Sum, easily exceeding the $9,700 which is consideration for the shares he receives under the deed.
Secondly, Seow's construction has the advantage of according with a sensible commercial purpose. This is not a case where contributions are to be made by two parties to compromise a large claim against both of them. Part of the claim is for liability consequential upon the contempt judgment, which attaches only to Alwin and Norannie. Another part of the claim is the liability for the costs order which has been registered as a judgment in the District Court. Seow is not directly liable for any part of that judgment. It was clear to all the parties at all times that there were individual components to the liability which the deed was intended to compromise, and it was clear that Alwin's exposure was much greater than Seow's. As it happens, it is plain on the face of the deed that what had been agreed, as between themselves, was that Alwin would pay slightly more than ten times the amount paid by Seow.
The uncommerciality of the construction favoured by the plaintiff is that it is inherently improbable that Seow would assume the entirety of Alwin's liability, which is some ten times greater than his own, and included large components of liability for which he bore no responsibility, in circumstances where Seow's interests were far from wholly aligned with Alwin's. I am conscious that the issue is to identify what the parties are taken to have agreed, not what they should have agreed, and that mere imprudence on the part of one party is not sufficient: cf Arnold v Britton at [20] and see, for the restrictions of this consideration, S Robertson, "Making Sense of Commercial Common Sense" (2018) 49(2) VUW L Rev 259. Even so, I regard the result for which the plaintiff contends as contrary to common sense.

[12]

Precontractual statements

That is sufficient to resolve the question of construction, before attending to the dispute as to the use of precontractual documents. This turned on cl 19. It was said in Righi at [46], of a clause materially identical to cl 19, that: "the parol evidence rule operates to exclude the use of pre-contractual conduct (such as negotiations between the parties and prior drafts of the contract) so as to add to, subtract from or in any manner vary or qualify the May Deed or as a direct aid in construction of the May Deed" (footnote omitted).
As much may be accepted. However, as Emmett JA, with whom Ward and Gleeson JJA agreed, immediately proceeded to elaborate, what matters is the purpose for which extrinsic evidence is tendered. Emmett JA said: "As is clear from the above, the purpose for which such evidence is to be used is critical to determining whether or not it is admissible (in the non-evidentiary sense). Evidence of prior negotiations between the parties can sometimes be used for the purpose of establishing aspects of the contract's context, evidence of which is always admissible. For example, evidence of pre-contractual negotiations between the parties might establish their common understanding that certain work was to be done for three eight-hour shifts per day, six days per week. Even prior drafts of a contract have been used for that purpose" (footnotes omitted).
There can be dispute whether evidence of, say, pre-contractual negotiations is sought to be used permissibly, to identity the context in the manner identified by [46] of Righi, or impermissibly, as a "direct aid in construction", contrary to an entire agreement clause, in the manner identified in of Righi. The Court of Appeal was alert to that distinction, which is apt to be blurred rather than crisp, and did not need to express a concluded view on how it applied in that appeal. The same point was made by Bathurst CJ, with the agreement of Beazley P and Macfarlan JA, in BB Retail Capital Pty Ltd v Alexandria Landfill Pty Ltd [2015] NSWCA 319 at [65]: "ALF was correct in pointing out that evidence of negotiations may be admissible in construing a contract, not on the basis that such evidence shows the subjective expectations and intentions of the parties but rather that it shows the context in which the agreement was made and the surrounding circumstances objectively known to the parties ... Further, as Emmett JA recently pointed out in Righi v Kissane Family Pty Ltd [2015] NSWCA 238 at [48], Ward and Gleeson JJA agreeing, the line between using extrinsic evidence of negotiations to show the context in which the agreement was made or using such evidence to show the subjective intention of the parties as an aid to construction can be blurred."
A narrower approach may be seen in S Christensen and W Duncan, The Construction and Performance of Commercial Contracts (Federation Press, 2nd ed 2018), p 213, but I am bound by what was said in Righi and BB Retail Capital. In any event, I respectfully think it is correct in principle. It is one thing for the parties to promise that their deed is the entirety of their agreement, and supersedes every prior agreement, arrangement or understanding between them. It is another thing entirely to give legal meaning to the words they have chosen in their deed. After all, "[e]very clause in a contract, no less arbitration clauses, must be construed in context. No meaningful words, whether in a contract, a statute, a will, a trust, or a conversation, are ever acontextual": Rinehart v Hancock Prospecting Pty Ltd; Rinehart v Rinehart [2019] HCA 13; 93 ALJR 583 at [83] (Edelman J). Clause 19 does not speak to the admissibility of and reliance upon evidence relevant to context and purpose. None of the foregoing is to deny that an entire agreement clause may have a material impact fending off conclusions that there is a collateral contract, or a precontractual representation, or an estoppel.
The process of construction of a written contract does not turn on the parties' subjective intentions. However, a line of authority permits regard to the "known and communicated desire" of one party as a contextual matter, consistently with the objective approach to contractual construction. The words "known and communicated desire" are those of Beazley JA in Boreland v Docker [2007] NSWCA 94 at [72], applied by Ward J in Lahoud v Lahoud [2009] NSWSC 623 at [446] and by me, with the agreement of Gleeson JA, in Cherry v Steele-Park (2017) 96 NSWLR 548; [2017] NSWCA 295 at [61], with reference to further authority to the same effect at [60] and [62]-[63]. I acknowledge the contrary view of White JA in the same case, which has attracted the endorsement of Professor Tarrant: J Tarrant, Rectification of Documents (Federation Press, 2020), pp 48-50. Nonetheless, I think I am entitled (and indeed bound) to have regard to the fact that critical words in the definition of "Settlement Sum" reflected the consistently stated position of Seow, that his liability was limited to $50,000. I do so not because they indicate Seow's subjective understanding. I do so because the context in which cl 2(a) and the definition of "Settlement Sum" falls to be construed is one in which the $50,000 had a clear meaning - it was the amount which, to the knowledge of all parties, Seow had consistently said was the maximum he would contribute. Seow's stated position concerning the $50,000 is an objective surrounding circumstance which gives colour to the division of $565,000 into two components of $515,000 and $50,000. A further factor favouring Seow's construction is that a reasonable person in the position of the parties might have intended that the obligation to pay the $565,000 was to be limited consistently with Seow's stated position, and might not have intended Seow to be liable in the full amount.
That said, I am unpersuaded that anything turns on the acceptance of an expanded form of the definition of "Settlement Sum" proposed by Mr Lambert or the rejection of a further clause proposed by Mr Krass in circumstances described below. The provenance of the words used in the deed as executed does not meaningfully bear upon the context in light of which cl 2 is to be construed.
However, as noted above, I would have reached the same conclusion even if I put the fact of Seow's consistently stated position of his maximum contribution to one side.
Accordingly, I reject the plaintiff's construction. It follows that the plaintiff's interlocutory process must be dismissed.

[17]

Contemporaneous documents

I start with the incontestably correct context, as recorded in contemporaneous documents, as suggested by Keane JA in Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136 at [34], which in turn accorded with what had been said in Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186; [2006] NSWCA 187 at [28]-[29]: "Usually, the rational resolution of an issue involving the credibility of witnesses will require reference to, and analysis of, any evidence independent of the parties which is apt to cast light on the probabilities of the situation."
There was uncontroversial evidence that there had been an unsuccessful mediation in 2018, that a deed of settlement had been drafted in negotiations which followed the mediation, and that while judgment was reserved on the contempt prosecution, there was an informal settlement conference which lasted the whole of 19 December 2019. The parties came close to achieving settlement, but fell short. The sticking point was the total amount the defendants were to pay. Seow had offered to pay $50,000. His consistently stated position was that he would pay no more.
The parties reached agreement on 21 January 2020. It is unnecessary and perhaps impossible to say whether there was then and there a presently binding oral agreement and if so its nature; cf Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622. It was at all times contemplated that a deed of settlement would be executed, which would provide for a period to pay, following which releases would be given and the proceedings dismissed.
The first draft of the deed in evidence was provided on the morning of Wednesday 22 January 2020. That had the correct settlement figure ($565,000) but had been based on an earlier draft and had not been updated to provide for Seow's $50,000. It was emailed by Ms Morgan, and Ms Vojvodic said, and I accept, that she had not personally turned her mind to its detail (T38.26).
The second draft was provided by Mr Lambert on that Wednesday afternoon. His changes to the first draft were highlighted in yellow. His email to Ms Vojvodic identified four changes, of which the first two were "Setting out who pays the settlement monies" and "Specifying an amount of consideration for the transfer". (There was also an immaterial change to one of the Recitals.)
Those changes were reflected by changes to the definition of "Settlement Sum", and to cll 2 and 3, as follows (what Mr Lambert had highlighted in yellow is emboldened below): "Settlement Sum means $565,000 (inclusive of any GST) comprising and to be payable in in the amounts of $515,000 by Alwin and $50,000 by Seow." "2 Payment (a) Alwin and Seow agree to pay, and Sim agrees to accept, the Settlement Sum in full and final settlement of any and all Claims, including the Judgment and the Contempt Motion that Sim may have against: (1) Alwin; (2) Norannie; (3) Seow; (4) Jimmy's Recipe (including any director, officer, employee or agent of Jimmy's Recipe); and (5) Gateway (including any director, officer, employee or agent of Gateway), in relation to the affairs of Jimmy's Recipe or Gateway. (b) Alwin and Seow must pay the Settlement Sum in full by electronic funds transfer to the Nominated Bank Account within 28 days of the date of this Deed. (c) Alwin and Seow must provide to Sim, or to Sim's solicitors, proof of payment on the date the Settlement Sum is paid. 3. Transfer of shares On or before the Date of Settlement and following receipt of the Settlement Sum in cleared funds, Sim must provide to Alwin's solicitor's a signed transfer in proper and enforceable form transferring all of her 2500 shares in Jimmy's Recipe (Sim's Shares) to Alwin with the consideration for the same expressed on the signed transfer to be "2,500 x $3.88 per share = $9,700.00" which the Plaintiff agrees forms part of and is provided for in the Settlement Sum."
All of Mr Lambert's suggestions reproduced above, except for the surplus "in" in the definition of "Settlement Sum" and the reference to "the Plaintiff" instead of "Sim" in cl 3, were ultimately accepted in the deed as executed. Ms Morgan sent a further draft reflecting as much to Mr Lambert on Thursday 23 January just before noon.
An email from Mr Krass on the Wednesday evening records that his firm's server was down for maintenance and he did not have access to his file and was writing on his phone.
The following day, Thursday 23 January, by email sent at 12.43pm, Mr Krass made further changes to those proposed by Mr Lambert. (His changes were made directly on Mr Lambert's document, the relevant clauses of which are reproduced above, rather than upon the further draft which had been sent to Mr Lambert earlier that day as mentioned above.) Mr Krass' covering email said merely that his suggested changes were attached, and that he had yet to run them past his counsel.
Mr Krass raised two comments in relation to the width of the mutual releases, which were at that stage expressed to extend to "any other dealings between the Parties whatsoever". His comment (which was repeated) was "I cannot work out what this means ... cannot make it fit grammatically". The only changes which he put forward were three alterations to cl 2. In the original document, his changes were in blue underline, while Mr Lambert's were in yellow highlighting. I have left Mr Lambert's changes in bold, and added Mr Krass' proposals in underline: "2 Payment (a) Each of Alwin and Seow agree to pay to Sim from their own contributions to the Settlement Sum (respectively $515,000 and $50,000), and Sim agrees to accept, the Settlement Sum in full and final settlement of any and all Claims, including the Judgment and the Contempt Motion that Sim may have against: (1) Alwin; (2) Norannie; (3) Seow; (4) Jimmy's Recipe (including any director, officer, employee or agent of Jimmy's Recipe); and (5) Gateway (including any director, officer, employee or agent of Gateway), in relation to the affairs of Jimmy's Recipe or Gateway. (b) Alwin and Seow must pay their own contributions to the Settlement Sum in full by electronic funds transfer to the Nominated Bank Account within 28 days of the date of this Deed. (c) Alwin and Seow must provide to Sim, or to Sim's solicitors, proof of payment on the date their own contributions to the Settlement Sum is paid."
Mr Krass' changes were sent to Mr Lambert, with copies to Mr Papadopoulos and the solicitor for Gateway. He did not send them to the plaintiff's solicitors. It is common ground that the draft deed which contained Mr Krass' suggestions reproduced above was never sent to the plaintiff's solicitors.
Mr Lambert's mobile phone records, which were exhibited to his second affidavit, show a short call of 1 minute from him to Ms Morgan at 5.21pm on Thursday 23 January.
Ms Morgan sent an email to Ms Vojvodic at 5.38pm reporting of her call with Mr Lambert, and saying "he is generally fine with the deed except for the release in clause 4(3) which says that the parties release each other in relation to all dealings between them. He said it is too broad". She said she would speak to Ms Vojvodic in the morning "to see if we can tighten it up".
Mr Krass made a file note of a call to Mr Lambert at 8.48am on Friday 24 January.
It recorded that Mr Lambert was going to be in Melbourne on the Saturday, but "Craig is going to write to the other side in relation to my other comments on the settlement deed". The file note does not otherwise mention the changes to cl 2. Mostly the file note was about the width of the releases.
Two points made me made about the note. 1. If the file note is accurate, the call was made by Mr Krass to Mr Lambert, and does not appear on the latter's mobile phone records, although those records suggest that Mr Lambert was en route into chambers (he made outgoing calls at 8.32, 8.43 and 9.08 which are recorded as originating at "NEWPRT", "COLLAROYPLAT" and "WILGHBY NTH" respectively). 2. If the timing of Mr Krass' filenote is accurate, there were two conversations between the men at around 9am and 10am on the Friday morning. Whether there were two calls, or a single call, does not matter. It is clear that they spoke about the width of the release in the then draft deed, consistently with the comments made by Mr Krass on the draft sent by him to Mr Lambert the previous afternoon.
Ms Vojvodic gave evidence that she made two filenotes of conversations between her and Mr Lambert on the afternoon of 24 January 2020. The first was her calling him, reproduced in its entirety below:
The memo bears a time of 3:30pm, and records the fact that she called him. The handwriting states: "Said Mel had spoken to me re her concern re wide release. Sgg we add to sub para (3) in relation to J R. He will get instructions."
Ms Vojvodic made a second file note which records a telephone call to her from Mr Lambert, and the times "4pm to 4.17pm" on that Friday afternoon. Its significance warrants reproducing it in its entirety:
The file note records "includes '; and' in releases", and is largely directed to the terms of the release, whether there should be releases as between the defendants, and the fact that because Seow was in Melbourne they would not be able to respond until Tuesday. It concludes "He will talk to Warren on Tuesday and get back to me".
Mr Krass has a file note dated 24 January at 4:26pm of a call from Mr Lambert, which in its entirety provided: "Call from Craig Lambert - discussing progress of his settlement negotiations with other parties - he queried the trade mark license and spoke about various technicalities and difficulties in such claim as Chee Wee may wish to make - he also reported on his discussions with BWS and other terms of settlement - he raised within the issues that I had raised with the other defendants including him - he will email me the latest correspondence - we won't release the plaintiff for things we don't know about"
At 4.33pm, a "further updated deed" was emailed to Mr Lambert by Ms Morgan. This is minutes after the conclusion of the conversation recorded in Ms Vojvodic's second filenote (4pm - 4.17pm) that afternoon. There were no differences to the definition of "Settlement Sum" or cl 2 from what had been supplied to Mr Lambert the previous day. The first paragraph of the releases is altered so as to insert the words "; and" precisely as recorded in Ms Vojvodic's filenote. Some words were also inserted so as to narrow the releases (rather than a release of "any other dealings between the Parties whatsoever", those words were qualified by adding "in relation to Jimmy's Recipe"). That is the change recorded in Ms Vojvodic's first file note that afternoon, at 3.30pm.
Mr Lambert forwarded the further updated deed to Mr Krass at 4.52pm.
Mr Lambert's tax invoice dated 24 January has an entry for Friday 24 January "Phone conference with solicitor from the other side x 2 - 24 mins".
I attach considerable significance to Mr Lambert's mobile phone records. First, there is no reason to doubt their accuracy. In particular, the timing of each recorded call is consistent with each of the other calls on the statement, and where possible they correlate to other documentary evidence such as Ms Vojvodic's filenotes. Secondly, as it happens, because of their frequency, they enable quite a deal to be inferred with confidence about what Mr Lambert was doing on the critical afternoon.
Mr Lambert's mobile phone records for 24 January disclose no fewer than 12 outgoing calls for the period between 3:53pm and 7:33pm, including the following: 1. 19 minutes commencing 3:57pm to Ms Vojvodic's work number; 2. 2 minutes commencing 4:17pm to a number not identified in the evidence; 3. 2 minutes commencing 4.19pm to Mr Paterson's work number (the solicitor for Jimmy's Recipe Gateway); 4. 36 minutes commencing 4:24pm to Mr Krass. I infer that that call finished at 5:00pm; 5. 9 minutes commencing 5:21pm to a number not identified in the evidence but which Mr Lambert called most days including repeatedly on the following Saturday and Sunday and, I infer, was not related to work and in particular was not Ms Vojvodic; 6. 20 minutes commencing 5:34pm to Mr Papadopoulos, his instructing solicitor.
The phone records also (purport to) identify the location of the handset when the call originates. All of the calls mentioned above are said to have originated in "SYDNEY" except that the long call to Mr Krass is identified as "WiFi Calling" and that to Mr Papadopoulos is "WOOLLOOMOOLOO". Of the latter, Mr Lambert volunteered that: "If you look at the entry at 5.34 Woolloomooloo, that's where I'm ringing Peter Papadopoulos the solicitor and I'm literally sitting in my car in the Domain Carpark ringing him and telling him what's, what's occurred."
There is then a gap, followed by a flurry of five brief calls between 7.17pm and 7.33pm when the handset appears to have been located in Terrey Hills, Oxford Falls, Belrose and Mona Vale; this suggests he was driving home.
The main point is this. There is an approximately 20 minute gap, between 5pm, when the call with Mr Krass commencing at 4:24pm concluded, and 5.21pm, when the call to the unidentified number commenced, when Mr Lambert's handset was not originating calls. The 9 minute call commencing at 5.21pm on what I have inferred is a non-work matter may have been made while Mr Lambert was walking from chambers to the carpark.

[18]

Analysis of contemporaneous documents

Before turning to the much more fallible testimonial evidence, it is convenient to summarise what I regard as being consequent upon the documents mentioned above.
First, the times (4pm to 4.17pm) on Ms Vojvodic's file note of 24 January 2020 are strikingly accurate in relation to the time of Mr Lambert's call to her (19 minutes commencing 3:57pm, according to his phone records). That tends to suggest an accurate note taker. It is corroborated by other filenotes which I will mention in due course.
Secondly, the 4pm filenote is not a verbatim note, or anything like a verbatim note, of a relatively lengthy call. However, it commences "w/o prejudice" and then records "includes '; and' in releases." That change was purely cosmetic, and was made in the draft deed sent to Mr Lambert at 4.33pm. There is no reference in the filenote to the other amendment to the release in the 4.33pm draft, confining it to "in relation to Jimmy's Recipe", but that had been proposed in their conference 30 minutes earlier, and if as seems likely Mr Lambert did not oppose that change, there is no reason for it to be noted.
Thirdly, Ms Vojvodic was prepared to make a note of very minor changes in the deed. The first change noted was a purely cosmetic change to cl 4. The fact that the first thing recorded in the filenote is an inconsequential change to cl 4 might tend to suggest that that was the first item raised by Mr Lambert. It is of course possible that Mr Lambert thereafter returned to cl 2, but that strikes me as not the most natural way for counsel for the third and fourth defendants to propose to the solicitor for the plaintiff a series of changes sought by the solicitor for the fifth defendant.
Fourthly, Mr Lambert called Mr Krass at 4.24pm and spoke with him for 36 minutes. But no one suggests that Mr Krass and Mr Lambert spoke earlier that afternoon, and in particular, no one suggests that they spoke after the 3.30pm conversation between Mr Lambert and Ms Vojvodic, and before the conversation which commenced at 4pm. The significance of this is that, as will be seen below, Seow's case based on estoppel and unilateral mistake turns on there being a third conversation between Mr Lambert and Ms Vojvodic, after Mr Lambert had already spoken with Ms Vojvodic about the changes to cl 2 suggested by Mr Krass.
Hence the significance of the window of some 20 minutes after 5pm, when Mr Lambert was not speaking on his handset on a call originating by him. Seow relied on the evidence of Mr Lambert to submit that this is when the critical conversation between Ms Vojvodic and Mr Lambert took place, and that it occurred on a landline (there being no record of any outgoing calls on his mobile handset). Mr Lambert's affidavit states "After that call I rang Ms Vojvodic back as I had promised Mr Krass I would do. I recall that I telephoned her from my chambers phone. We then ad the discussion set out in paragraph 72 of my first affidavit. I believe that call lasted about 5 minutes."
Mr Lambert says that: "I then called Mr Krass on my chambers phone and told him what is set out in paragraph 73 of my first affidavit."
It is clear that the calls to Ms Vojvodic and Mr Krass to which Mr Lambert deposes were not made on his mobile phone. There was no suggestion of a second mobile phone. If they were made at all, they must have been made on his landline from chambers. They could not have been commenced before 5pm, and both must have been completed before Mr Lambert left chambers to go to the Domain carparking station from which (according to his recollection, supported by his mobile phone records) he made a long call to Mr Papadopoulos, his instructing solicitor at 5.34pm, after the 9 minute non-work call which commenced at 5.21pm.

[19]

Testimonial evidence - affidavits

The most transparent way to resolve the factual issue is to reproduce quite fully the competing testimonial evidence. It is best to deal first with what was disclosed by the affidavits, and then the cross-examination.
Mr Lambert's account was that he had two conversations with Ms Vojvodic and two with Mr Krass commencing at 3:57pm on the afternoon of Friday 24 January 2020. 1. First, Mr Lambert told Ms Vojvodic that Mr Krass wanted to insert further words into cl 2, and that she said "My clients are not going to agree to those changes at this late stage and if I press it much further the whole thing might just fall over". He then raised the changes to the release, to which she agreed. 2. Secondly, Mr Lambert told Mr Krass that while the changes to the release were fine, her clients would not agree to the change to the payment clause. He said that Mr Krass told him "That's odd as they know my client is only in for 50 grand. The proposed changes do nothing more than ensure that. Could you please go back to them Craig and press the changes?" to which he replied "I'll give it a try but I don't like the chances much." 3. Mr Lambert says he then rang Ms Vojvodic again and reiterated Mr Krass' request, to which she responded: "Frankly I don't see what those words achieve. His client is already protected in terms of the definition of the settlement sum which clearly sets out what your clients have to pay and what his client has got to pay." 1. Mr Lambert says that he rang Mr Krass back, passed on Ms Vojvodic's advice that "your proposed amendments didn't achieve anything more than what is already in the deed and your client already has that protection in the definition of the Settlement Sum" to which Mr Krass replied "Okay, I accept that. She is after all partner in a large Sydney law firm and if I know she has that view then I'm happy to rely on that and take the same view. So, I won't get in the way."
In his affidavit in reply Mr Lambert pointed to his billing records, which showed two telephone conferences with "solicitor from the other side". He says that his records show the total time for the two calls was 24 minutes, which he believes was 19 minutes for the first call and 5 minutes for the second call.
Mr Krass gave evidence of two conversations that afternoon between him and Mr Lambert. This occurred only in his affidavit in reply; his account of his conversations with Mr Lambert in his first affidavit affirmed 5 April 2020 referred to a single conversation between him and Mr Lambert, and it is not clear whether that was when Mr Lambert was reporting Ms Vojvodic's initial rejection of the changes to cl 2, or Mr Lambert's response after Mr Krass had asked him to press it with her. Mr Krass' account in his affidavit in reply was more elaborate. He said that what he said to Mr Lambert to push back to Ms Vojvodic was: "We have said all along that Chee Wee's contribution to any settlement is to be $50,000 and we have never wavered from that. My view is that the proposed draft has that effect anyway, so I can't see why she is resisting it. Please go back to her and press the changes. Chee Wee's in this settlement for $50,000 only. I insist."
His account of Mr Lambert's second call to him included: "Lambert: I have spoken to Snezana again about your changes to the deed. She won't agree with your changes. She said they don't change anything and your client already has that protection in the definition of the Settlement Sum. Krass: That is my view too and I know it's yours. Chee Wee's contribution is capped at $50,000. Now that I know that Snezana takes the same view, I'm content with that. On that basis I won't press for my changes. She is a partner in a city firm and I am prepared to take her word for it. On that basis I won't get in the way of the settlement."
Ms Vojvodic has a different account. She said there were two conversations between Mr Lambert and her on 24 January, but at the times of her filenotes, 3.30pm and 4pm.
She said the first was substantially as per her filenote of 3.30pm, save that it contains a mistake, and the reference to "re her concern" about the width of the releases should have been a reference to "re his concern". Ms Vojvodic addressed the 3.30pm conversation with Mr Lambert in paragraph 21 of her affidavit of 27 April 2020. In that paragraph, she responded to a statement by Mr Lambert which had placed a conversation with her on the previous day. She said she was not in the office on that day. She annexed a file note of the 3.30pm conversation. In his affidavit in reply, Mr Lambert responded at paragraph 17 to paragraph 21 of Ms Vojvodic's affidavit. He accepted that Ms Vojvodic was correct about the conversation occurring on 24 rather than 23 January. He did not otherwise dispute her account of that conversation.
Ms Vojvodic said that the second conversation was recorded in her second file note at 4pm. She disagreed with Mr Lambert's recollection, but recalled having a conversation concerning the amendment to cl 2 as follows: "Craig: It has been tough going with everyone. Me: I can only imagine. I am glad I only need to deal with you and that you then deal with all of the other defendants. Craig: Yes, I have even had Warren on the phone. You know Warren and I are great friends but sometimes. Me: Why, what did he want? Craig: He wanted me to make some changes to the payment clause to make it clear who pays what. Me: But it's set out in the definition of Settlement Sum. Craig: That's exactly what I said to him."
Ms Vojvodic said in her affidavit in reply that she did not believe that Mr Lambert read out the text of the changes Mr Krass had proposed to the payment clauses. She said that she did not understand that Mr Lambert was referring to or requesting amendments in the event that one party could not pay.

[20]

Testimonial evidence - cross-examination

Mr Lambert was tested on his recollection of the 24 January conversation as follows: Q. Firstly I think you say in your reply affidavit you are certain that you read the changes, is that correct? A. Yeah I am certain of it because they're not my words. Q. Is it the case though, I'm just trying to firstly just understand or test you on your certainty that you actually read out verbatim the changes-- A. I didn't read them verbatim, that, that wouldn't be right to say that. But I certainly read them. I, I, I read the phrases. I said something to her like: "He wants the words 'each of' at the beginning of it, and he wants to insert words to the effect of, you know, 'their own contribution to the settlement, their own contribution to the payments, their own contribution to clause C'." You know, that's the way I went about it."
He said of his report to Mr Krass the following: "Q. So then you rang Mr Krass and had the conversation you set out at paragraph 71, correct? A. Yeah, yeah I rang him and told her - told him that - I kind of tried to break it to him gently by saying that, you know, I'd spoken to her about the release clause and that we could, you know, narrow that in terms of adding some words with - adding some words to the end of that, the words in respect of Jimmy's Recipes to get rid of that word "whatsoever" which they were using, and yeah, and I told him that she wasn't going to agree to it."
Of the later call which Mr Lambert said that he made to Ms Vojvodic, he said: "Q. But in any event, just in terms of timing, is this right, that the call you say you have - you say at paragraph 72 "You then rang Ms Vojvodic back"? A. I rang her back yeah. Q. Just so we can get timing right, that would be after your call to Mr Krass, is that right? A. Could be yeah. Q. So it's at some point after 5 o'clock is that right? A. Should have been around then yeah. I, I rang her back just as I was leaving for the day. ..."
He then said of the conversation said to found the representation: "Q. You'd accept, would you, that when you say words to the following effect and set out the effect, that's your best recollection of the effect, but you're not suggesting that's the precise words used? A. Well, it depends what you're talking about. If you want to take me to whatever it is you want to refer to in that respect, but I can tell you that one of the things that Ms Vojvodic said to me was that - what I set out about two paragraphs above paragraph 73, I have a very clear recollection of that, that she said that, you know, his client was already protected in terms of the definition of settlement sum, which set out what the client - what our clients had to pay and his clients had to pay. She used the word "protected". Q. You say she used those actual words? That's your clear recollection? A. All I'm saying, Mr Barnett, is she used the word "protected" to me, and that's my best recollection of the conversation, that she said to me that our clients - well, [not] our clients, but Warren's clients, were also protected because of the definition in the settlement sum, which set out what each party had to pay. Q. You didn't explore that any further with Ms Vojvodic in terms of exactly in what circumstances there was protection or what the protection consisted of. Is that right? A. No, I was running out the door and, you know, I had to get back to Warren as well, so I didn't go any further with that. I just accepted it at face value. Q. You didn't say, for example, as you've said already, I think - you didn't say this is ensuring there's several liability, not joint liability, or anything of that nature. Correct? A. No, no, no. Those words just never got used throughout all the conversations, Mr Barnett. They never got used. I mean, there's no point saying they were used. They were never used."
Mr Krass said: "Q. After your conversation with Mr Lambert why didn't you write to the plaintiff and say, "We note you've told us this is how the deed operates. We are relying on that position," so there's no doubt "we are relying on this when [we] execute the deed"? A. Because I had the representation from Mr Lambert or through Mr Lambert that the plaintiff's solicitor took the same view as me in relation to the clause and I think I said in my affidavit if I get that sort of representation from a partner in a city firm I'm prepared to take it. Q. Did you ask Mr Lambert to go into or explain his discussions with Ms Vojvodic as to the extent of the protection already offered by the definition of "settlement sum"? A. No. Q. Did you ask him words to the effect of, "Did you mention several liability?" for example? A. No. Q. Is it right just to say you assumed that Ms Vojvodic and you were talking about the same thing; is that right? A. Yes, in the context of my conversation with Mr Lambert, yes."
Ms Vojvodic was cross-examined on whether Mr Krass' proposed changes were read out to her by Mr Lambert: "Q. Mr Krass was asking for some changes to the payment clause? A. Yes. Q. What you said would affect what he then advised his client? A. Yes. Q. Mr Lambert read out to you the proposed changes to the payment clause that Mr Kraus wanted, didn't he? A. No, I don't recall - look, he could have but I, I really don't recall him doing that. Q. Do you accept he could have? A. Well, of course, anything's possible. Q. Indeed, you'd have to say this is probable, wouldn't you? A. No, because it's like that if, if he had I would have [said], 'Well, send it through to me.' Q. I suggest he told you what the phrases were that Mr Krass wanted by way of changes to the payment clause and you accept he might have; is that right? A. Well, yeah. Q. But when you heard the changes that he wanted, you certainly heard that he wanted there to be specificity about who was to pay how much under the deed, correct? A. Yes, which was already in the deed." and then: "Q. In your view, what was being put to you by Mr Lambert on behalf of Mr Krass didn't change the position of the parties at all? A. No, we knew the payment. We knew the way that the payment was being made. Q. You didn't think these amendments added anything? A. I didn't think that amendments - I mean what he said to me was, 'Warren wants to make some changes to the payment clause to make it clear who pays what,' and I said, 'Well, it's clear in the definition who pays what,' and I simply recall Mr Lambert saying, 'That's exactly what I said to him,' and ..(not transcribable).. I remember that part. Q. In other words, it was your view, wasn't it, that these changes were unnecessary? A. I was of the view that it was unnecessary to make further changes setting out who was to pay who - setting out how the payment was to be made. Q. I take it you didn't want at that stage to make any changes to the deed that you thought were unnecessary? A. No, but if, if, if it had been put then I would have had to get instructions, so it wasn't that I wasn't agreeing to any changes. We wanted the settlement to proceed."
Ms Vojvodic denied there was a further conversation later that afternoon. She did not recall saying that she had told Mr Lambert that Seow was "protected": "Q. I put it to you that you did refer in a conversation with Mr Lambert to the fact that Mr Seow was already protected by the terms of the definition of settlement sum? A. I don't, I don't recall saying that. Q. You don't deny saying it do you? A. I, I don't recall saying it. I do recall saying that it's already set out in the definition of settlement sum. I, I don't think I would have spoken in those sorts of words."

[21]

Consideration of evidence on disputed facts

The contemporaneous documents show precisely two conversations between Ms Vojvodic and Mr Lambert on the afternoon of 24 January 2020, one at 3.30, the other at 4pm. That reflects both Ms Vojvodic's file notes, and also Mr Lambert's fee note. And it accords with Ms Vojvodic's recollection. The parties are agreed that both those conversations occurred, and I find that they did, at the times on Ms Vojvodic's filenotes and (in the case of the latter) Mr Lambert's mobile phone records.
Was there a third conversation between Mr Lambert and Ms Vojvodic shortly after 5pm?
Mr Lambert relies on his fee note to support his recollection of a further 5 minute conversation with Ms Vojvodic shortly after 5pm. However, when analysing the fee note in his affidavit in reply, he did not address the 3.30pm conversation which he had, in his first affidavit, mistakenly placed on the previous day. The consequence is that he gave no explanation why, if as Seow contends there was a third conversation, his fee note came to be incorrect. I cannot place any great weight upon the justification proffered by Mr Lambert supportive of a 5 minute conversation after 5pm when it turns upon his own fee note which is, on his own case, inaccurate and unaccompanied by any explanation for its inaccuracy.
So far as the materials available to me permit, it seems that Mr Lambert's fee notes are largely but not invariably accurate. For example, his fee note includes phone messages the plaintiff's solicitor totalling 3 minutes on 23 January 2020, consistently with his mobile phone records (1 minute at 11:13am to Ms Vojvodic, 1 minute at 1:10pm to Ms Vojvodic, and 1 minute 5:21pm to Ms Morgan). That is an impressive correlation, especially given the shortness of time (the idea that counsel would bill for 1 minute, or even 3 minute intervals, was unprecedented in my experience, prior to hearing this case). However, they appear to be not entirely free from error. While Mr Lambert's fee note records a conversation on 22 January of 12 minutes, that seems likely to have been his call with Ms Morgan on 23 January (which was followed by her email to Ms Vojvodic).
I regard Ms Vojvodic's filenotes as highly reliable in terms of dates and times. I have already referred to the accuracy of the time recorded by her on the 4pm file note. I have checked each of her filenotes of conversations with Mr Lambert where Mr Lambert originated the call on his mobile phone. There are precisely two: 1. Ms Vojvodic has a "1 unit" file note of a call from Mr Lambert at 12.50 on 13 January. Mr Lambert's mobile phone records show a 2 minute call to her at 12.51 on that day. 2. Ms Vojvodic has an 8 minute file note of a call from Mr Lambert on 22 January where the time is described as "9.10am to 9.18am". Mr Lambert's mobile phone records show a 9 minute call to her at 9.10am on that day.
When those two are considered together with the filenote at 4pm, it emerges that in every case where Ms Vojvodic has a filenote of a conference with Mr Lambert where the latter called her on his mobile phone, her timing is accurate to within a minute or so.
I conclude that there is reason to be confident that the times recorded on Ms Vojvodic's filenotes are accurate.
Seow relies on the evidence of Messrs Lambert and Krass to contend for a further conversation between him and Ms Vojvodic during which an assurance was given. This must have taken place shortly after 5pm, and, according to Mr Lambert, was made on his landline from chambers, the records for which were not in evidence. If that conversation took place, Ms Vojvodic who has the appearance of being a reliable note-taker, did not make a note of it. Mr Krass, who made a filenote of his conversation with Mr Lambert at 4.26pm that afternoon, made no note of any further conversation half an hour later. Mr Lambert took no notes of any of his conversations with Ms Vojvodic. And if Seow's case is correct, the only contemporaneous document prepared by Mr Lambert, namely his fee note, is incorrect, because in that case there would have been three conversations between them on that day.
Mr Lambert conceded in his affidavit in reply that his recollection about the 3.30pm conversation was incorrect, when he was confronted with Ms Vojvodic's affidavit including the filenote. Because Ms Vojvodic called him, there was no record of an outgoing call on his handset. Mr Lambert's concession reflected a proper acknowledgement of limitations of his recollection and the probative value of contemporaneous documents.
Turning to the inherent probabilities, I think there is force in Ms Vojvodic's evidence that if Mr Krass on behalf of Seow had been serious in his proposed amendment, she would have expected him to provide the text of it to her, directly. Alternatively, if Mr Lambert had made it clear that Mr Krass had asked him to "press" the proposed change to cl 2, then it is plausible that she would have made a note of it and sought to obtain instructions.
I also bear in mind what the two were doing that afternoon. Mr Lambert was spending most of that Friday afternoon making calls on his phone. For better or worse, he was charged with negotiating the terms of the settlement deed on behalf of all defendants, and thus it was necessary for him to speak separately to Mr Paterson and Mr Krass, as well as his own instructing solicitor Mr Papadopoulos, and to Ms Vojvodic. It was inevitable that there would be a deal of repetition in those calls, all on the same subject matter. And he kept no notes of any of those calls. There was ample scope for his recollection to be conflated or confused, notwithstanding that he was doing the best he could when he made his affidavits and when he was cross-examined.
On the other hand, Ms Vojvodic spoke only with Mr Lambert. She kept notes of two of the conversations the pair had that Friday afternoon. There was much less scope for conflation or confusion on her part because she participated in many fewer calls that afternoon concerning the terms of the deed than did Mr Lambert.
The conferences between Mr Lambert and Ms Vojvodic might be thought to have been a little awkward. It is a little unusual for one side's barrister to call the other side's solicitor, when both parties had solicitors and counsel acting for them. It is also unusual for one defendant's counsel to be conveying a proposal to the plaintiff's solicitor not on behalf of his own clients, but on behalf of another defendant, who was separately represented. But doing the best I can, I do not think that bears upon the issue one way or the other. The point cuts both ways. It does not make either witness' recollection more reliable or less reliable.
So far I have not relied on my impressions of any of the witnesses. All gave evidence over an audio visual link, consistently with restrictions imposed under Public Health Orders during the COVID-19 pandemic. From my perspective, the link was of high quality, although there were some occasions where the sound dropped out. Whenever that occurred and there was the possibility that it was significant, the witness was asked to repeat his or her answer.
The lawyers presented in quite different ways. Mr Lambert was voluble and on occasion an enthusiastic volunteer of answers which were not always responsive. Ms Vojvodic was restrained and precise, and in answer to questions based on something being possible, was inclined to answer that anything is possible. She made concessions readily. Mr Krass was measured, but of course he was not a participant in the critical conversation. I formed the view that all three were highly consciousness of the importance of the task (which is an unpleasant one) which they were performing, and took their obligations seriously and professionally. All three were litigators, familiar with the processes of cross-examination.
I am sceptical of the proposition that my seeing and hearing the witnesses give evidence places me in a materially favoured position in assessing the probative value of their evidence. There were no pauses, or intonation of tone, or body language, which were material to evaluating what is recorded in the transcript. It is all too easy to let one's emotional response to a witness impact upon the only thing which matters, which is the probative value of his or her testimony. I do not regard any of my reasoning or conclusions to be affected by any advantage I enjoyed over and above what emerges from a careful review of the transcript, an approach which accords with what was said in Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [31], and acknowledges what the High Court more recently described as "the highly subjective nature of demeanour-based judgments": Pell v The Queen [2020] HCA 12; 94 ALJR 394 at [49].
I do give weight to Ms Vojvodic's statement that while she recalled saying "it's already set out in the definition of Settlement Sum", she didn't think she would have used the word "protected". Ms Vojvodic spent many minutes in January speaking with Mr Lambert about the terms of the draft deed. No one could expect either lawyer to remember his or her precise language. However, people are able to say whether language attributed to them is the sort of language they use, or alternatively is not the sort of language they tend to use. I accept Ms Vojvodic's evidence that "protected" was not the sort of language she tended to use.
I also think that Mr Lambert had an actual recollection of sitting in his car at the parking station on the Friday afternoon speaking with Mr Papadopoulos.
However, beyond those matters I am sceptical that any witness had an actual recollection of the particular words that were used in the flurry of conversations on a Friday afternoon at the end of January. True it is that Mr Lambert's affidavit was to that effect. But by a "clear recollection" Mr Lambert did not mean that he could remember the words which Ms Vojvodic actually used. In response to Mr Lambert's statement that "She used the word 'protected'", Mr Lambert was asked an open-question: "Q. You say she used those actual words? That's your clear recollection? A. All I'm saying, Mr Barnett, is she used the word "protected" to me, and that's my best recollection of the conversation, that she said to me that our clients - well, well, our clients, but Warren's clients, were also protected because of the definition in the settlement sum, which set out what each party had to pay."
Mr Lambert's answer makes it plain that his actually recollection was at best limited to a single word, and his confusion about "our clients" - words which he immediately appreciated could not have been used - tends to confirm as much. Elsewhere in his evidence he candidly accepted that he lacked a precise recollection of what he said. An example is how he relayed Mr Krass' proposal to Ms Vojvodic: "I read the phrases. I said something to her like: "He wants the words 'each of' at the beginning of it, and he wants to insert words to the effect of, you know, 'their own contribution to the settlement, their own contribution to the payments, their own contribution to clause C'." You know, that's the way I went about it."

[22]

Findings

I conclude that this was a case where professional people were doing their best, having regard to the contemporaneous documents and context, to reconstruct their conversations, comprised of words which were not especially important at the time, and in circumstances where all had made two affidavits attempting to do the same thing, with the unavoidable distortions of recollection that occur in that process. I bear firmly in mind that in long running litigation, a settlement had finally been reached, and everyone was trying to finalise the form of a deed as quickly as might be. There is no reason why the conversations would have been thought by anyone at the time to be of any great importance once the deed was executed (a month later) until such time (two months later) as Alwin failed to pay.
I find that there was not a third conversation between Mr Lambert and Ms Vojvodic on the afternoon of Friday 24 January 2020. I find that Ms Vojvodic's file notes are a complete record of the two conversations the pair had that afternoon. It follows that I find that Mr Lambert's fee note accurately records that there were two conversations, that starting at 3.30 and that starting at 4pm. I am not willing to prefer the recollections of Mr Lambert and Mr Krass over Ms Vojvodic's recollection, which accords with what is recorded in her file notes and Mr Lambert's fee note.
It is common ground that there was a conversation between Mr Lambert and Ms Vojvodic concerning Mr Krass' proposed amendments to cl 2. There is no clear evidence that Ms Vojvodic said anything which was sufficiently clear to found a representation. I am prepared to find that either Ms Vojvodic used the word "protected" or, more probably, she agreed with a statement made by Mr Lambert to the effect that Seow was "protected". But that word might be used in many ways falling far short of giving rise to any rights in equity. For example, "Does Mr Krass think he isn't protected by the definition?" or "Do you think Mr Krass is right and he isn't protected?"
It is as well to recall the familiar considerations stated by McClelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-9, written in the context of a claim for misleading and deceptive conduct, but equally apposite to any circumstance where reliance is placed upon an oral statement: "Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience."
The pleadings are commendably precise, and turn upon there being a representation by Ms Vojvodic that the definition had the meaning that Seow's obligation was a several obligation to pay $50,000 and no greater amount, that no further words of limitation of Seow's liability were needed, and that Seow was "protected" from liability to the plaintiff in excess of $50,000 by the definition of "Settlement Sum". I do not accept that Ms Vojvodic made the representation on which Seow relies to found his cases based on estoppel and unilateral mistake.
The plaintiff acknowledges that the position might well be different if there had been an acknowledgment from the plaintiff or her lawyers that Seow's liability was limited to $50,000, even if Alwin did not pay. It was conceded, and in my view properly so, that "[i]f Ms Vojvodic responded by saying that that is the basis upon which the plaintiff is proceeding, that the deed already reflects that position and that the fifth defendant can rely on that assurance, then one can see the basis for a claim for any one or more of common mistake, unilateral mistake, misrepresentation or estoppel". However, I have concluded that Ms Vojvodic did not make that response.
In short, I do not accept there was a conversation after 5pm between Mr Lambert and Ms Vojvodic, after Mr Krass had asked Mr Lambert to "press" his changes, during which Ms Vojvodic gave an assurance to Mr Lambert that Seow was "protected", which Mr Lambert relayed to Mr Krass. I do not accept that there was a further conversation after 5pm on Friday 24 January, and while I do accept that there was a conversation earlier that day when Mr Lambert raised Mr Krass' suggested alterations to cl 2, I am not satisfied that Ms Vojvodic's response amounted to a representation capable of founding equitable relief in the nature of estoppel or unilateral mistake.
In those circumstances, there is no occasion to turn to the other obstacles which this aspect of Seow's claim faces. Those include whether Mr Lambert relayed Ms Vojvodic's assurance to Mr Krass, whether it was reasonable for Mr Krass to rely on Mr Lambert's account, and the effect of the no representation clause. I do not think it is appropriate to address those aspects, which not only do not affect the outcome, but also are premised on something being said in a conversation after 5pm which I have concluded did not occur.

[23]

Rectification in equity

Those findings do not necessarily stand in the way of the settlement deed being rectified in equity. That does not turn on there having been any representation from Ms Vojvodic as pleaded. Nor is the entire agreement clause an answer to rectification: Macdonald v Shinko Australia Pty Ltd [1998] Qd R 152; [1998] QCA 53. However, it is necessary for Seow to establish that there was, at the time the document was executed, a common intention which, through a common mistake, was not reflected in the document: Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336 at 346 and 350-351; [1973] HCA 23; Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 at [46] and [103]; Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) (2019) 99 NSWLR 317; [2019] NSWCA 11 at [12]-[14]. It is also necessary for Seow to provide very clear proof. Many adjectives have been used to describe this, including "very strong", "irrefragable", "clear and convincing" and "proved to a high standard": see the account in Heydon on Contract at 1113-1115. Strong evidence is needed to counteract the evidence of the parties' intention displayed by the instrument itself. There is also the inherent unlikelihood, in a case such as the present, that all three sets of lawyers for the plaintiff, Alwin and Seow were separately mistaken as to the intentions of their clients, such that especially cogent evidence is required. This is the point made in Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 at [461]: "To conclude that the parties have misrecorded their common intention in that sort of situation involves the solicitors on both sides of the transaction having each failed to grasp and express the intention of his or her own client. In other words, each of the solicitors has been mistaken, and, furthermore, mistaken in the same way. There is a measure of inherent unlikelihood in such an event happening."
The plaintiff's attorney, Mr Jia Hao Tsia, gave evidence on this topic as follows: "I did not think about what Sim's rights were under the draft deed if one or the other of Alwin and Seow did not or could not pay, beyond always having in mind that the releases would not take effect until Sim received the whole sum. I deny that I intended or believed that Sim could only ever recover from Seow the sum of $50,000 irrespective of whether Alwin paid or could pay. I simply did not think about that issue."
No application was made to cross-examine him. I accept that evidence. His evidence accorded with that of the lawyers acting for Sim, Alwin and Seow that they did not turn their minds to the position.
As Mr Barnett submitted, that falls short of what equity requires. Equity requires all parties to have been under the apprehension that in such circumstances, the obligations were limited to the amounts specified. It is not sufficient that the parties did not actively turn their minds to the issue, in order to establish a basis for rectification in equity.
The parties' submissions did not explore the law governing this point. I note that some Canadian authority might support Seow. There are similarities between the present case and Peter Pan Drive-In Ltd v Flambro Realty Ltd (1978) 22 OR (2d) 291; 93 DLR (3d) 221 at 224, appeal dismissed 26 OR (2d) 746; 106 DLR (3d) 576. But I would not depart from what was said in GPI Leisure Corp Pty Ltd v Herdsman Investments Pty Ltd (No 4) (1990) 9 BPR 17,461 at 17,465-6: "Although it may not be necessary that the parties held a common intention as to the precise words in which the term should be expressed, it is necessary that there be a common intention as to the substance and detail of the precise variation which it is said should be made to the instrument."
Likewise, Brereton J accepted in Harris v Smith [2008] NSWSC 545; 14 BPR 26,223 at [39] that "it is not open to rectify a contract to include express terms ... which the parties never contemplated". As his Honour observed, that does not prevent the implication of terms in the contract as rectified in the usual way. But Seow's claim for rectification presupposes that the deed does not expressly or impliedly on its proper construction limit his liability to Sim to $50,000.
It is not necessary for me to consider whether the absence of evidence of intention of Gateway is a further obstacle to this claim. Gateway was a party to the deed, but it was arguably not a party to the promise in cl 2. That gives rise to complexity in two respects. The first is whether the knowledge of Seow (who was one of three directors) may be attributed to Gateway, which was separately represented in the litigation, for the purpose of rectification in equity. The second is whether Gateway's intention is necessary in relation to rectifying a clause in a multipartite deed which only involved promises between Sim, Alwin and Seow; it is not entirely clear to me that that is so. On the first aspect, Gateway was separately represented, including in the negotiations; it may be doubted that equity would regard Mr Seow's state of mind as sufficient for this purpose. A long series of cases where questions of attribution have arisen in England and Wales is considered in D Hodge, Rectification (Sweet & Maxwell, 2nd ed 2016) pp 397-415. On the second aspect, Gateway was not a party to the promise in cl 2(a), and it may perhaps be doubted, if it were shown to the requisite high level of clarity that Sim, Alwin and Seow had executed the deed under a common mistake, that Gateway's failure to turn its mind to a point which did not concern it would stand in the way of rectification. But no submissions were made on this point, and I express no concluded view.
Accordingly, were I of the view that Seow was primarily liable to Sim in the amount of $565,000, I would dismiss his claims in estoppel, unilateral mistake, or rectification.

[24]

Conclusion and Orders

For those reasons, both interlocutory processes should be dismissed.
A minor issue concerns the form of both parties' interlocutory processes. In particular, Seow's interlocutory process appeared not to join all parties to the deed. I granted leave at the conclusion of the hearing for an amended process to be provided. In accordance with that leave, the plaintiff and Seow provided short minutes of order, to which they consented, which had the effect of retrospectively joining additional parties to the interlocutory processes. I indicated while judgment was reserved that I was not prepared to make such orders, which would have an effect on persons who seemed not to have been joined to the interlocutory processes, merely on the basis of what the plaintiff and Seow agreed, and that the point could be revisited when judgment was delivered. In light of the outcome, my present view is that nothing turns on this. True it is that I would not make the declarations sought by Seow in the absence of joinder; cf Australian Oil Exploration Ltd v Lachberg (1958) 101 CLR 119 at 133-134, accepting Bowen QC's submission at 121; [1958] HCA 51. But even if all necessary parties were present and had been heard, I also see no reason, as presently advised, for any declaratory relief to issue. The only significance of the issue of the construction of the deed is whether the plaintiff can demand $515,000 from Seow. I have concluded that he cannot. The litigation will continue until it is resolved, consensually or by judgment. There is no suggestion, so far as I am aware, that a declaration of the construction recorded in these reasons will assist anybody. If that be wrong (if for example some financial institution is concerned by Seow's potential obligation to pay $515,000) then this point may be revisited.
I will give the parties an opportunity to be heard as to any further orders which are appropriate, including orders for the return of the $50,000 and the further conduct of the underlying proceedings, which will need in due course to attend to the bankruptcy of Alwin and Norannie. It will also include costs. However, it may assist if I express my present - and therefore necessarily preliminary - views on the latter.
The starting point is for the costs of each interlocutory process to follow the event. (The substance of the matter is that the plaintiff ran a construction case, and Seow responded not merely by propounding his own construction, which would not have required a separate interlocutory process, but by seeking equitable relief.) That would give rise to an especially arid dispute in categorising which of the plaintiff's costs are attributable to Seow's equitable claim, and which of Seow's costs are attributable to the plaintiff's contractual claim. The possibility of a contested assessment of both parties' costs should be avoided if at all possible.
I think it is likely, irrespective of the outcome of that dispute, that the costs of Seow's interlocutory process considerably exceed those of the plaintiff's. However, in a real sense Seow's interlocutory process was "defensive", in the sense that it was an unsuccessful but arguably not unreasonable fallback response to the plaintiff's case based on construction.
There was also a contest concerning waiver of privilege which I determined on the papers, favourably to the plaintiff: In the matter of Jimmy's Recipe Pty Ltd [2020] NSWSC 516. The costs of that would be small, but not trivial.
Bearing in mind all those matters, my tentative view is that no order as to costs, with the intent that the plaintiff and Seow each bear their own costs of the two interlocutory applications (including the privilege dispute), may be an appropriate exercise of the discretion.
I make the following orders:
Dismiss the interlocutory process filed by the plaintiff on 6 April 2020.
Dismiss the interlocutory process filed by the fifth defendant on 13 April 2020 (as amended on 8 May 2020).
Direct the plaintiff and the fifth defendant to provide agreed short minutes of order, or, failing agreement, orders for which they contend, together with short submissions in support, in relation to the return of the $50,000, any other directions for future conduct of the proceedings, and costs, within 14 days of today, with a view to any other dispute being determined on the papers. If either side contends that there should be an oral hearing, that contention and short reasons in support of it should be included in the document.
The exhibits to be returned.