Sambell v UTSA Pty Ltd [2000] VSC 299

Supreme Court of Victoria|2000-06-29|Before: Smith, J.

Summary Judgment - construction of settlement terms - Judgment in part.

I have already indicated that the defence has raised an arguable construction point, in my view, so far as the plaintiffs' claim is based on Clause 8(d) of the terms of settlement, and therefore there should be leave to defend to that extent.

I have already indicated in the course of argument, that the ingenious argument advanced by Mr Moore to suggest there was an arguable immunity is without substance ultimately once it is examined closely.

That leaves two other issues. Firstly, there was the issue about the construction of Clause 8 and Clause 9 and the argued need to read the two together in interpreting the obligation under Clause 8(c). That clause imposed an obligation on the defendants and their lawyers that they would not directly or indirectly advocate that any of the Sambell parties had acted dishonestly or in breach of any legal or equitable duty to any person or corporation. It was argued that there would be no breach of Clause 8(c), in the event that there were no contribution orders made in the proceedings. It was put that this is an arguable construction. It seems to me that it is not arguable. The parties have carefully drawn terms of settlement. I would expect such a clause to have been articulated if it was to apply. The argument requires more than just a clever construction of the clauses, it requires the implication of terms, which was not sought. It seems to me that there is no arguable basis for the construction advanced.

The other argument advanced was, bearing in mind that the allegations of dishonesty were ultimately withdrawn, that there was therefore not a breach of Clause 8(c). This turns really, it seems to me, on the construction of the phrase "will not directly or indirectly advocate". In my view, on the material, there is no doubt that, during the course of the proceedings, the defendants did advocate that the Sambell parties had acted dishonestly. They may have withdrawn that allegation later, but I am satisfied that for the purpose of advocacy in the proceedings they did make that allegation, and it seems to me that the argument advanced for the defendants must fail.

Accordingly, I am prepared to make orders which would have the effect that the plaintiffs in these proceedings are entitled to have judgment entered in respect of the cause of action which relies upon allegations of breach of Clause 8(c), but that otherwise there should be leave to defend.

Firstly, I will order that the appeal is dismissed; secondly, that there be judgment that the 2nd and 3rd defendants pay the plaintiffs damages to be assessed by a Master of this Court in respect of the breaches of the agreement alleged in paragraphs 10 and 13 of the plaintiffs' statement of claim; and that otherwise the 2nd and 3rd defendants have leave to defend the proceedings; that the 2nd and 3rd defendants pay the plaintiffs' costs of the appeal and the summons of 17 May 2000.

I reserve the question of the appropriate scale of costs for the determination of a Master of this Court.

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