(d) JFP will prior to completion cause Laon Pty Limited to do all things and sign all documents necessary to unwind its indebtedness to Perfect Auto Body Canberra Pty Limited and/or Santee Pty Limited.]
8 Reading together the provisions that have been set out, one would understand the expression "the minimum aggregate amount" in cl 5(a) and "[t]he minimum amount" in cl 5(b) to mean that the price fixed by cll 4, 7 and 10 and ascertained utilising cl 5(e) will not in any case be less than $14.2 million. The provision for a determination in cl 5(e) relates only to an amount "in excess of the minimum of $14,200,000". The lack of precision involved in the contemplation of the possibility of a higher figure is due to the fact that the agreement had to be reached so hastily, and thus before all relevant information could be made available to the parties. But it was expected to be available shortly and so it was agreed (by cl 2(g)) that "settlement shall be completed by no later than 30 September 2004".
9 Progress towards settlement proving tardy, the consent orders for specific performance were obtained on 24 September on the basis (expressed in the orders) that settlement would take place by 29 October 2004. In the orders, the court noted certain further agreements of the parties, as follows:
"5. In the event of any failure by Messrs Einfeld Symonds Vince and Grant Thornton, Chartered Accountants, to agree in terms of clause 5(c), (d) and (e) of the Heads of Agreement by 29 October 2004, then the minimum sum of $14.2 million is to be paid on completion of the transaction and any dispute as to any additional sum is to be resolved by a partner of Lonergan Edwards & Associates, appointed by the Managing Partner of that firm (the costs of that determination to be borne equally by the parties) and any such determination shall be made by that partner as an expert, not as an arbitrator, and that decision will be final and binding upon the parties and, failing determination by Lonergan Edwards, by a partner of such firm of Chartered Accountants as is appointed by the Court.
6. Any sum in excess of $14.2 million determined to be payable is to be paid within seven days of that determination.
7. The parties will, by their solicitors, settle the terms of any collateral documents (including the leases referred to in the Schedule to the Heads of Agreement) as referred to in clause 3 of the Heads of Agreement so as to enable settlement to take place as soon as possible an [sic], in any event, no later than 29 October 2004.
8. In the event that the terms of the leases are not agreed or settled by 29 October 2004, the lessees shall continue in possession and pay rent under the terms to that point agreed. The lessee is not to carry out any structural alterations to the leased premises, shall not assign, sublet or otherwise part with possession of the leased premises, and shall effect appropriate insurances until the terms of the lease have settled."
10 The event contemplated by the variation of the agreement noted as cl 5 in the orders did occur, that is to say, the accountants did fail "to agree in terms of clause 5 (c), (d) and (e) of the Heads of Agreement by 29 October 2004". This being so, what the clause provides is that "the minimum sum of $14.2 million is to be paid on completion of the transactions and any dispute as to any additional sum is to be resolved by [an appointed partner of Lonergan Edwards and Associates]". Then the fixing of the time for payment of the minimum sum of $14.2 million, that is, on completion, is followed by the fixing by cl 6 of the time for payment of "[a]ny sum in excess of $14.2 million determined to be payable" - it is to be paid "within seven days of that determination", that is, of the appointed partner of Lonergan Edwards and Associates.
11 Clauses 5 and 6 noted in the orders of 24 September cut the Gordian knot of the difficulty of ascertaining the precise figure for payment under particular clauses of the contract at a settlement date fixed in the very near future by dividing the amount payable into two sums, one payable on completion and the other at a deferred date. This seems a clear solution, easy to apply, the clarity of which might be thought to have been its chief commercial attraction.
12 But the question raised on behalf of the defendants fastens upon the expression in cl 5 "and any dispute as to any additional sum". It is said the failure to agree was not on the basis no excess was payable, but, some ascertained amount being beyond debate, related to its full extent. According to the defendants, the sum, or the minimum sum, to be paid on settlement would have to be augmented to embrace so much of an excess over $14.2 million under consideration as is not in contest between the parties. Not only does the argument insist upon this as the true meaning of the contract; it asserts the plaintiffs' adoption of a contrary view is so baseless that the court should infer they have repudiated their obligations.
13 On the face of the Heads of Agreement and the further clauses agreed as noted on 24 September 2004, there appear to me to be grave difficulties about this argument. What triggers the provision fixing the minimum sum of $14.2 million as the amount to be paid on completion under cl 5 of the terms noted by Windeyer J is any failure of the named accountants "to agree in terms of clause 5(c), (d) and (e) of the Heads of Agreement by 29 October 2004". It is "then" that the payment of the $14.2 million (an amount reiterated in cl 6) is provided for. The referral of "any dispute as to any additional sum" follows as a consequence. Furthermore, the failure to agree in terms of cl 5(c), (d) and (e) is a failure to finalize certain accounts and to determine their result - it is not a failure to agree on certain items while agreeing on others.
14 Counsel for the defendants put emphasis on the words "the minimum sum" in cl 5 of the terms noted on 24 September, which he contended would include any amount not itself in dispute that would form part of an excess over $14.2 million, even though the final figure constituting the excess remained in doubt. But cl 5 does not simply refer to "the minimum sum"; it refers to "the minimum sum of $14.2 million". In any case, cl 6, which refers to the same amount, calls it "[a]ny sum in excess of $14.2 million", without any reference to the source of that figure in the minimum sum contemplated by the Heads of Agreement.
15 In my opinion, subject to one matter to be considered, not only is it impossible to characterize the plaintiffs' stance as evincing, or providing any evidence of, a repudiation: that stance is in accordance with a correct view of the relevant contractual obligations. Pursuant to the plaintiffs' counter motion, I shall make a declaration to that effect.
16 The matter still to be considered is the defendants' contention that the plaintiffs have changed their view on the question of the amount of the minimum payment on settlement, and this change of view should be taken as evidencing lack of bona fides from which repudiation could be inferred. The argument was not that the obligations of the parties had actually been varied or that the terms of the contract could be construed in the light of the conduct of the parties, although it was put there had been "a clear and unambiguous admission". It was not suggested that the court could or should depart from the principle stated by way of a quotation from Lord Wilberforce in the judgment of Mason J in Codelfa Construction Proprietary Limited v State Rail Authority of New South Wales (1982) 149 CLR 337 at 348:
"It is one and the same principle which excludes evidence of statements, or actions, during negotiations, at the time of the contract, or subsequent to the contract [emphasis added] … ."