Sinclair v Balanian

n Ltd (The Starsin) [2004] AC 715; [2003] UKHL 12 Internaut Shipping GmbH & Anor v Fercometal Sarl [2003] EWCA Civ 812; [2003] 2 Lloyds LR 430 London County Council v Agricultural Food Products Ltd [1955] 2 QB 218 Lym International Pty Ltd v Marcolongo [2011] NSWCA 303; 15 BPR 29,465 Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181 Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 Manicaros v Commercial Images (Aust) Pty Ltd (in liq) [2024] QCA 40 Manton v Parabolic Pty Ltd (1985) 2 NSWLR 361 Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353 Nurisvan Investment Ltd v Anyoption Holdings Ltd [2017] VSCA 141 Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 Pavlovic v Universal Music Australia Pty Ltd [2015] NSWCA 313; (2015) 90 NSWLR 605 Prudential Assurance Co Ltd v Health Minders Pty Ltd (1987) 9 NSWLR 673 Pugwall Pty Ltd v Arthur McKenzie Investments Pty Ltd (2022) 68 VR 559; [2022] VSCA 272 Quadling v Robinson [1976] HCA 31; (1976) 137 CLR 192 Scottish Amicable Life Assurance Society v Reg Austin Insurances Pty Ltd (1985) 9 ACLR 909 Shogun Finance Ltd v Hudson [2004] 1 AC 919; [2003] UKHL 62 Singh v De Castro [2017] NSWCA 241 South Australia v Commonwealth [1962] HCA 10; (1962) 108 CLR 130 Stellar Vision Operations Pty Ltd v Hills Health Solutions Pty Ltd [2023] NSWCA 102 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 Trueman v Loder (1840) 11 Ad & El 589; 113 ER 539 Vuletic v Contributory Mortgage Nominees Ltd (2006) 7 NZCPR 552 Young v Lamb [2001] NSWCA 225 Young v Schuler (1883) 11 QBD 651 Texts Cited: JD Heydon, Heydon on Contract (Thomson Reuters, 2019) NC Seddon, Seddon on Deeds (2nd edition, Federation Press, 2022) Category: Principal judgment Parties: 2023/259476 Fiona Leanne Sinclair (First Appellant) Fiona & John Sinclair Pty Ltd (Second Appellant) Ashod Balanian (First Respondent) Launch Partners Pty Ltd (Second Respondent)

2023/259477 Fiona & John Sinclair Pty Ltd (Appellant) Burns Bay Services Pty Ltd (Respondent) Representation: Counsel:

T Brennan SC with T Crispin (Appellants) A Cheshire SC (Respondents)

AR Conolly & Company Lawyers (Appellants) Kerrs (Respondents) File Number(s): 2023/259476 2023/259477 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity Citation: [2023] NSWSC 789 Date of Decision: 07 July 2023 Before: Henry J File Number(s): 2021/00209242

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] These appeals turn on whether a document described as a deed, and executed only by three companies, is effective as a contract which was binding with immediate effect, including on three individuals. The appellants are Mrs Fiona Sinclair (for herself and as representing her now deceased husband) and the company she owned with Mr Sinclair. The respondents are Burns Bay Services Pty Ltd, one of its directors and shareholders Mr Ashod Balanian, and another of Mr Balanian's companies, Launch Partners Pty Ltd. A dispute between the parties progressed to mediation. The parties agreed to a settlement which the mediator set out in a document referred to as "the Deed". The Deed was poorly drafted. The execution page, signed by the parties, designated the companies but not the individuals. The Deed also contained a clause permitting execution by counterparts. The appellants argued that the Deed was only intended to take effect if and when properly executed as a deed. The respondents accepted that the Deed was not effective as a deed, but argued that a valid and binding contract had been formed and that the contract extended to encompass Mrs Sinclair, Mr Sinclair's estate and Mr Balanian (the individuals) in their personal capacities. At first instance Henry J accepted the respondents' arguments. There were four issues on appeal: (1) whether the parties intended to be contractually bound by their agreement even though not completed as a deed; (2) whether the parties intended that the individuals personally be bound; (3) whether the Deed only took legal effect, binding on the individuals, when a counterpart execution page was exchanged; (4) whether the primary judge erred by addressing conduct subsequent to agreement being reached on the terms of the Deed. The Court (per Kirk JA, Leeming JA and Payne JA agreeing, with additional observations by Leeming JA) dismissed both appeals and held: As to the first issue:

1. Parties can intend that a document expressed as a deed take effect as a contract, whether or not they also intend that it operate as a deed. While the appellants point to manifestations of an intention that the document take effect as a deed, this does not of itself establish a further, negative intention that the document does not otherwise take effect as an agreement. There are numerous indications within the Deed that it was intended to be binding as an agreement. None of the operative clauses are premised on the guarantee having legal effect as a deed, and the execution block made no provision for the individuals to execute the document in their own capacity in the manner that would have been expected of a deed. These factors militate in favour of finding an intention that the Deed operate contractually. Surrounding circumstances can be taken into account in considering whether the parties intended to create contractual relations. Those circumstances strongly support that conclusion: at [88]-[104]. Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353; Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309; Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95; Pavlovic v Universal Music Australia Pty Ltd [2015] NSWCA 313; (2015) 90 NSWLR 605; Stellar Vision Operations Pty Ltd v Hills Health Solutions Pty Ltd [2023] NSWCA 102, applied. Commonwealth Dairy Produce Equalisation Committee Ltd v McCabe (1938) 38 SR (NSW) 397; Nurisvan Investment Ltd v Anyoption Holdings Ltd [2017] VSCA 141; Bombardier Inc v Avwest Aircraft Pty Ltd [2020] WASCA 2; Cirrus Real Time Processing Systems Pty Ltd v Jet Aviation Australia Pty Ltd [2023] NSWCA 280, considered. As to the second issue:

JUDGMENT

1. LEEMING JA: The principal issue in these two appeals is whether the document dated 8 April 2022 was effective to bind all six named parties, and in particular whether it was effective to bind Ms Fiona Sinclair and Mr Ashod Balanian, both of whom signed it expressly as directors. (There was at one stage a separate issue concerning the status of the estate of Ms Sinclair's husband, but following a representation order it was accepted that if she were bound, then so too was the estate).
2. I agree with Kirk JA that the appeals should be dismissed. I agree with his reasons, and I do not consider that anything hereafter qualifies those reasons. I agree with his Honour that that conclusion may be reached without regard to the "post-contractual" conduct, but wish to add the following concerning the evidence available to be used in resolving the principal issue.
3. First, on any view of the matter, evidence of surrounding circumstances was relevant and admissible to determine whether Ms Sinclair and Mr Balanian were bound. The document was replete with infelicities. Some do not greatly matter, such as the two clauses numbered 18, or the unnumbered clause between them. It is difficult to resist the conclusion that no attention was paid to the difference between a deed and a simple agreement: there are slightly more references to the document being 'this agreement' (see cll 10, 11, 12, 13, 14, 15, 16, 17) than 'this deed' (see cll 1, 6, 8, 9), but the coversheet, introductory words and execution page all refer to it being a deed. I mention these because to the extent that the question is one of construction, the mode of drafting is relevant. "Legal meaning should not turn on arguments based on semantic exactitude where it is plain that the parties have recorded their bargain in loose, ungrammatical language": Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 at [98].
4. Secondly, there were numerous inconsistencies on the face of the document which directly bore on who and in what capacity those executing the document were bound: 1. The coversheet identifies two separate proceedings in the Supreme Court, by their number and the parties to those two proceedings are listed as the parties to the document, yet only two of the parties to the document are described as "plaintiff" and "defendant". 2. Clauses 8 and 9 provide that "The defendants [sic] hereby releases [sic] the plaintiff [sic]" in cl 8 and "The plaintiffs [sic] hereby releases [sic] the defendant [sic]" in cl 9. The difficulty is not merely the consistently plural subjects of consistently singular verbs, but the fact that in consecutive clauses, "plaintiff" and "defendant" are expressed to be both singular and plural, thereby adding to the basal obscurity at the commencement of the document, where five parties are listed, but only two are defined as "plaintiff" and "defendant" despite the identification of two distinct legal proceedings, of which the document recites that "[t]he parties wish to settle all disputes between them". 3. The first reference in cl 2 is to a "plaintiff", followed by "plaintiff's" with an erroneous apostrophe, then a reference to "plaintiffs" before cl 3 returns to a singular "plaintiff". 4. In cl 2 there are two references to a singular "defendant" and four to a plural "defendants". Similarly, defendant is singular in cll 7 and 9 but plural in cll 3, 4 and 8.

Facts

1. This summary of the facts is drawn substantially from Henry J's findings (at [23]-[81]), which were not disputed on appeal.

The parties and the two proceedings

1. Mr Sinclair was a mortgage broker who had worked alongside Mrs Sinclair until his death in 2021. They were the sole shareholders and directors of FJS. Mr Sinclair died on 23 November 2021, after which Mrs Sinclair became the sole director of FJS.
2. Mr Balanian has a background in cryptocurrencies. He was introduced to Mr Sinclair in 2017 through Mr Ellison, who had known Mr Sinclair for a long period.
3. In 2018 a digital commodity investment fund business, known as the Digital Commodity Assets Fund (DCAF), was formed. It was managed by BBS, with each of Messrs Balanian, Ellison and Sinclair involved. Digital Commodity Assets Pty Ltd (DCA) was the corporate trustee. Mr Balanian and Mr Ellison are directors and shareholders of BBS and DCA. FJS is a shareholder of BBS and Mr Sinclair was a shareholder of DCA.
4. Mr Sinclair had been a director of BBS and DCA until 21 December 2019, when the parties had a falling out. In June 2021 the Sinclairs and FJS commenced the first of its two proceedings in the Supreme Court alleging misleading and deceptive conduct by Mr Balanian and Launch Partners in relation to DCAF (the Balanian Proceedings). They sought to recover investment funds of $250,000, which they asserted were held on trust for FJS. They also sought damages equating to the value of the cryptocurrency and cash in a digital wallet which they could no longer access. In July 2021 FJS initiated the second Supreme Court proceedings, this time against BBS seeking an order that it be wound up (the BBS Proceedings).
5. In due course Mr Balanian and Launch Partners conceded that the Sinclairs were owed $250,000 (less amounts for tax paid), but otherwise denied or did not admit the allegations made against them. The Sinclairs sought summary judgment for that amount in September 2021.
6. The BBS Proceedings and the Sinclair parties' summary judgment application in the Balanian Proceedings were listed for hearing in early December 2021, but that was vacated due to Mr Sinclair's death in November. Rees J then made orders appointing Mrs Sinclair as the representative of Mr Sinclair's estate for the purpose of the Balanian proceedings pursuant to r 7.10(2)(b) of the Uniform Civil Procedural Rules 2005 (NSW) and listed the BBS and Balanian Proceedings for directions in March 2022. For completeness, I note that a similar order appointing Mrs Sinclair the representative of Mr Sinclair's estate was made by this Court on the date of the hearing of the appeals.

Organisation of a mediation

1. Mr Chris Wakeford was a "corporate advisor" who had known Mr Sinclair and Mr Ellison for about 25 years. Prior to his death, Mr Sinclair had asked Mr Wakeford to do whatever he could to look after Mrs Sinclair.
2. In late 2021, Mr Wakeford contacted Ms Terry Zabetakis, a solicitor and the principal of a legal and alternate dispute resolution practice known as The Resolution Hub. She is an accredited mediator who has practised as such since about 2016 or 2017. Mr Wakeford informed her of the disputes between the parties, and told her that they might be interested in a mediation. From December 2021 onwards Ms Zabetakis had numerous interactions with Mr Wakeford, Mr Balanian, Mr Elision and Mrs Sinclair about the dispute and the possibility of a mediation. Henry J found Ms Zabetakis was a witness of truth.
3. Notably, on 29 March 2022 Ms Zabetakis had a one hour video call with Mrs Sinclair in which Mrs Sinclair indicated the following: she was happy to continue the conference without her solicitor (Mr Alan Conolly) being present; her solicitor knew about the mediation but she did not want or need him at the mediation; she wanted to speak to her solicitor before sending documents about the dispute to Ms Zabetakis; she intended to bring Ms Penny Richards to the mediation who she described as a friend, Mr Sinclair's executor and trustee, who she said had to be present to sign any documents and approve any agreements on behalf of the estate; she was willing to attend the mediation and explore the issues; she was comfortable for the mediation to be conducted by Ms Zabetakis; she had read the affidavits of Mr Balanian and Mr Ellison and was "appalled" by them, referring to an allegation Mr Sinclair had engaged in hacking and had locked Mr Ellison out of his account; she wanted to finish the matter out of Court; if there was any chance of a reasonable settlement then she would try it; her solicitor believed that she could be awarded at least $15 million; $5 million would be her best case scenario although she thought that was probably unrealistic; she had been speaking with her accountant and would speak to her solicitor before the mediation; and she wanted the mediation to be done before Easter, with 8 April 2022 the most suitable date (Good Friday was on 15 April 2022).
4. On 1 April 2022 Ms Zabetakis received a call from Mrs Sinclair's solicitor, Mr Conolly, which lasted for approximately 21 minutes. Ms Zabetakis told Mr Conolly that she had requested details from the participants and had received information from them (mainly verbally) but had not been provided with the pleadings or affidavits, which she would like to review. She asked Mr Conolly to provide copies of these documents. He said he would do so by 4 April.

The mediation

1. The mediation took place on 8 April 2022 between about 10:00am and 7:30pm at Mr Wakeford's office in North Sydney. It was run by Ms Zabetakis. The others in attendance were Mr Wakeford, Mr Balanian, Mr Ellison, Mrs Sinclair and Ms Richards (although she was absent for some of the afternoon). The parties' lawyers and accountants were not present.
2. The mediation followed the course set out in what Ms Zabetakis referred to as her "Mediation Script". Ms Zabetakis wrote notes on the script as the day progressed.
3. Prior to the first joint session, Ms Zabetakis had a private session with Mrs Sinclair and Ms Richards during which she asked whether they were happy to proceed with the mediation without lawyers or accountants present, and they confirmed that they were. She testified that Mrs Sinclair said to her: I don't want this going on anymore. If we can resolve it today, I will get my life back. I know what I am doing and I'm very clear about what I want to achieve here. If I don't get what I want I won't settle.
4. Ms Zabetakis' notes record that at the outset of the first joint session Ms Zabetakis (again) confirmed with all participants that they still wished to proceed without lawyers present, and that all participants strongly expressed that they were in the "right head space to proceed and wanted to do so without lawyers … they had received advice from lawyers and just wanted to do it without their interference". Ms Richards confirmed that she was present as Mrs Sinclair's friend and as the executor of Mr Sinclair's estate. During the opening joint session Ms Zabetakis indicated that neither solicitor had provided her with the documentation she had asked for, which meant that she had not included the correct details on the documents to be signed, including the "Agreement to Mediate".
5. The parties began with opening statements. Ms Zabetakis described Mrs Sinclair as appearing upset and emotional during the opening session but as calm and composed for the remainder of the day. After openings, Ms Zabetakis asked the parties to identify the key issues, which she then listed on a whiteboard. The parties discussed these issues together before holding private discussions in breakout rooms with Ms Zabetakis. During the first private session with Mrs Sinclair and Ms Richards, Mrs Sinclair indicated that she would be willing to settle for "around $2.5 million to maybe $3 million but it depends on how willing they are to write to Rodney". She was referring to Rodney Forrester, who was the accountant for the Fund. Mrs Sinclair believed that Mr Sinclair's reputation had been harmed in the eyes of Mr Forrester by the respondents. It is apparent that this was a significant cause of distress to her. She described the repair of that harm as "one of my biggest things".

The Deed

1. The Deed is eight pages long including its cover and execution pages. On the cover page it is entitled "Deed of Release & Indemnity" with a subheading "Settlement of Proceedings". Above that heading it includes two pairs of names: FJS and BBS (both with their ACNs listed), and identifies the BBS Proceedings, and then refers to Mr and Mrs Sinclair and "Ashod Balanian & Launch Partners Pty Ltd", after which it identifies the Balanian Proceedings.
2. The second page of the agreement begins "THIS DEED dated 8th day of April 2022". It then lists the parties as follows: BETWEEN Fiona & John Sinclair Pty Ltd of [address] (Plaintiff) AND Burns Bay Services Pty Ltd (ACN 628 360 083) of [address] (Defendant) & BETWEEN John Gregory Sinclair & Fiona Leanne Sinclair AND Ashod Balanian & Launch Partners Pty Ltd
3. That delineation implicitly refers, again, to first the BBS Proceedings and then the Balanian Proceedings, with the parties being correctly identified for each.
4. There are then "recitals" which state: A. On or abouts 2017 to 2018 the parties entered into a business partnership. B. In or abouts 2020 a dispute arose between the parties in relation to the partnership management and structure. C. The parties contend that certain issues arose regarding directorship, director loans, ICO's, shareholder issues, tax returns and the breakdown in partnership relations. D. In or abouts 2021 the plaintiff commenced proceedings no. 2021/209242 & 2021/00179061 in the Supreme Court of New South Wales (the proceedings). E. The parties wish to settle all disputes between them arising out of the issue of the proceedings (the dispute).
5. There is no definition of "plaintiff", but that label is attached after the reference to FJS on that page. Read in the context of the references to the two proceedings, the natural construction is that the Sinclairs also fell within that term. That conclusion is supported by the fact that cll 2(b)(i), 2(b)(ii) and 9 employ the plural "plaintiffs", and cl 2(a) uses an inappropriately possessive "plaintiff's". Similarly, cl 2 of the Deed (quoted below) refers to "the defendant", which is also not defined other than being a label attached after the reference to BBS. Senior counsel for the appellants accepted that the usage in cl 2 would sensibly be construed as referring to all of the defendants in the two proceedings. Again, that conclusion is supported by use of the plural term in cll 2(a), 2(b), 3, 4 and 8.

Events after the mediation

1. Henry J summarised events after the mediation in her judgment at [94]-[117]. It suffices to note the following. The solicitors for the respondents (Kerrs) sent a letter to Mr Conolly, acting for the appellants, on 22 April 2022 saying that in circumstances "where the Deed appears to be missing some important elements, we are in the process of preparing a more comprehensive version which will of course reflect the terms of settlement reached". Mr Conolly responded saying: We are unhappy with the circumstances in which the mediation occurred, in which we were not involved. We do not at this time concede that the deed that resulted is effective to terminate the proceedings.
2. Mr Conolly did not identify who the "we" was who was said to be unhappy; it would appear to have been his own unhappiness, given his client's clear, oft-repeated decision to exclude him. Kerrs said in answer that its clients contended that there was a binding final settlement reached between the parties reflected in the Deed. The two Supreme Court proceedings were adjourned more than once as the parties interacted. Kerrs drafted a more detailed proposed draft deed but the parties could not agree on its terms. The negotiations reached their nadir on 1 August 2022 when Mr Conolly sent an ill-founded letter to Kerrs asserting, amongst other things, that "[i]t seems there was a conspiracy … between Mr Balanian, Mr Ellison and Mr Wakeford, to achieve a mediation without Mrs Sinclair being represented or advised".
3. Shortly thereafter the appellants filed an interlocutory process in each of the Supreme Court proceedings seeking a declaration that the Deed was void and unenforceable. Points of claim and defence were exchanged. It was those applications which came before Henry J.

The proceedings before the primary judge

1. FJS and Mrs Sinclair had asserted in their points of claim that the Deed was void and unenforceable due to the conduct of Mr Balanian and Mr Ellison which was said to be unconscionable (at equity and under statute), and conduct by them and Mr Wakeford was said to be misleading and deceptive. In the end these points were not pressed before the primary judge. Nor did the appellants argue that the Deed was insufficiently certain or complete to operate.
2. What they did argue, notably, was that the Deed was only intended to take effect if and when properly executed as a deed, which it had not been. They focused in particular on the counterparts clause in the Deed in that regard (cl 13). The respondents accepted that the Deed was not effective as a deed, but argued that a valid and binding contract had been formed, and that the contract extended to encompass Mrs Sinclair and Mr Balanian (and implicitly Mr Sinclair's estate) in their personal capacities.
3. Henry J upheld the respondents' arguments. Her Honour noted that there was no dispute that the Deed did not comply with the execution requirements of s 38 of the Conveyancing Act 1919 (NSW) (at [147]). She said that the evidence of what occurred at the mediation, together with the terms of the Deed itself, objectively indicated that the parties intended immediately to be bound by the terms of the Deed as a contract, and they signed it at the end of the mediation as an act of recording their binding agreement, including in their personal capacities (at [148]-[182]). As regards the latter point, Henry J noted: [165] Mrs Sinclair, Mr Sinclair and Mr Balanian are identified as parties to the Deed in their personal capacities based on their status as natural person parties to the Balanian Proceedings. The Deed recites that, as parties, they wished to settle all disputes between them arising out of the issue of the proceedings (recital E) and relevantly provides that the Deed was entered into by them (cl 1), they would execute consent orders (cl 6) and they had the benefit or burden of terms as either a "plaintiff" party or a "defendant" party.
4. With regard to the execution block, her Honour said that the absence of separately identifiable signature blocks for Mrs Sinclair, Mr Balanian and the estate of Mr Sinclair to sign in their personal capacities made the failure of the Deed to identify that they were bound personally less significant than usual (at [166]-[167]). She addressed the counterparts clause at [170] (which is quoted below at [140]). Her Honour considered some of the post-agreement conduct of the parties (at [183]-[185]), finding that this was not inconsistent with an acceptance that the Deed was binding.

Issue 1: Was the Deed intended to be binding even if not executed as a deed?

1. A deed is a document which is generally said to have three characteristics: it is signed and sealed by the party whom the deed places under a liability; it is delivered to or for the benefit of the party to whom the liability has been incurred; and it transfers an interest in property, or creates a right or an obligation, or confirms an act pursuant to which an interest in property has already passed or pursuant to which a right or obligation is created: Manton v Parabolic Pty Ltd (1985) 2 NSWLR 361 at 368-369; NC Seddon, Seddon on Deeds (2nd edition, Federation Press, 2022), 6 [1.3]; JD Heydon, Heydon on Contract (Thomson Reuters, 2019), 185 [6.10]. As Seddon has warned, however, definitions of deeds run the risk of being over-inclusive or under-inclusive given the complexity of the subject: at 6 [1.3].
2. The law of deeds is an amalgam of common and statutory law. The execution of deeds by companies is addressed, non-exhaustively, by s 127 of the Corporations Act 2001 (Cth); see also Conveyancing Act, s 51A. More generally, s 38 of the Conveyancing Act in this State relevantly provides, first, that every deed shall be signed as well as sealed, and shall be attested by at least one witness not being a party to the deed (subs (1)); and, secondly, that every instrument expressed to be a deed or to be sealed, and which is signed and attested in accordance with the section, shall be deemed to be sealed (subs (3)).
3. As noted, the primary judge recorded at [147] that there was no dispute that the Deed "does not comply with the execution requirements of s 38". It appears that this refers, at the least, to the fact that the Deed had not been signed by Mrs Sinclair and Mr Balanian and attested. Even if the execution page was taken to have been signed by them in their personal capacities, their signatures were not witnessed.
4. The primary position of the appellants was that the Deed would be effective as a deed if and when the two individuals duly executed a counterpart deed. They argued that the Deed was only intended to operate as a deed, if and when executed as such. They say it was not intended to operate as a contract.
5. For the Deed to take effect as a deed it would be necessary for the parties to intend that the document take effect as such: note Seddon on Deeds, 54 [2.5]. But that is not the current question. Parties can intend that a document expressed as a deed take effect as a contract, whether or not they also intend that it operate as a deed: see eg Commonwealth Dairy Produce Equalisation Committee Ltd v McCabe (1938) 38 SR (NSW) 397 at 403; Nurisvan Investment Ltd v Anyoption Holdings Ltd [2017] VSCA 141 at [56]-[63]; Bombardier Inc v Avwest Aircraft Pty Ltd [2020] WASCA 2 at [85]-[89]; Seddon on Deeds, 149 [2.34].

Issue 2: Did the parties intend that the individuals be parties to the Deed?

1. The Deed has not been signed by Mrs Sinclair and Mr Balanian in their personal capacities, there having been no execution block prepared for them to do so. It has been executed only by the three companies. Given that fact, it might have been thought that the question of whether it was intended that they personally be bound would be disputed. Yet that was not so, at least not on the appellants' primary case. Indeed, the contrary is true. They argued that the common intention was as follows: Mrs Sinclair and Mr Balanian (and presumptively also Mr Sinclair's estate) were to be parties to the Deed; the Deed would not be binding on any of the parties, including the three companies, unless and until the individuals bound themselves to the Deed; and that would only occur if and when they executed the Deed in their personal capacity.
2. Senior counsel for the applicants did flirt with the idea of making an alternative case, after being asked about why the companies were not immediately bound by the Deed given some queries that had been raised from the bench about the application of the counterparts provision in cl 13 to the facts. The following exchange indicates that this argument was not really pressed: BRENNAN: I think your Honour's question does indicate there is a case in the alternative and that's this. If it be that there could not be a counterpart with a separate execution page, so every other aspect of the document being identical but with a separate execution page, then, of course, there could be no work to be done by cl 13, in which case the document would be immediately binding and effective as a deed as between the three companies. KIRK JA: Which is contrary to lots of other parts of the document which you are implicitly relying upon for your first point to say, "No, the companies aren't immediately bound because it was clear it was an attempt to resolve the whole dispute between all named parties as identified on [the second page of the Deed]." BRENNAN: Yes. I accept that if I go to that case I have real problems in construction.
3. For the avoidance of doubt it is appropriate to address the issue. It is clear from the Deed that the common intention was indeed that Mrs Sinclair and Mr Balanian, along with Mr Sinclair's estate, would be parties to the Deed and personally bound by it, despite the absence of provision for them to sign in their personal capacity.

Issue 3: Did the Deed only take legal effect when executed by the individuals in their capacity as such?

1. The core of the appellants' argument rested on the counterparts provision in cl 13 of the Deed. They said that "the effect of the counterparts clause, on its terms, was that FJS having signed would not become bound unless and until Mrs Sinclair delivered her counterpart". They argued that the primary judge had erred by focusing on the surrounding circumstances rather than giving effect to the terms of the Deed itself. They asserted that her Honour's conclusion turned on her "erroneous reading out of the counterparts clause". These arguments should not be accepted.

The nature of the question

1. Both sides accepted that the Deed would only become legally binding once all of the intended parties, including the individuals, had bound themselves to its terms. The question here is whether or not the Court should conclude that the individuals should be taken to have done so, despite having only signed in their identified corporate capacities.
2. Is that a question of construction of the Deed or a question of formation of the contract? The appellants argued orally that it was the former; the respondents asserted the latter. The appellants suggested that there were two points which depended on the characterisation of the question. First, they argued that surrounding circumstances are of lesser significance for a contractual construction issue than for a formation one. Secondly, the appellants said that post-contractual conduct would not be admissible on a construction question but would or might be on a formation question. It is not necessary to consider the relevance of such conduct here for reasons explained below when addressing ground 5.
3. There is a third matter, relating to whose intention is being ascertained. It is useful to address this point first, because it throws some light on the characterisation issue. A construction question turns on what the parties are taken to have agreed by reference to what a reasonable person in the position of the parties would have understood the terms to mean: see eg Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181 at [11]; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at [40]; Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 at [35]. That is a matter of ascertaining objectively the common intention of the parties to the contract.
4. Whether or not an offer has been accepted such as to form a contract is also determined objectively but the focus is subtly different. What matters "is what each party by words and conduct would have led a reasonable person in the position of the other party to believe": Toll at [40]; see also eg Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548-550. For formation, thus, the focus is on objective ascertainment of the intention of the relevant person as assessed by a reasonable person in the position of the other party or parties (see Heydon on Contract, 28 [2.40]). For construction the focus in construing the contract is on objective ascertainment of the parties' common intention.

The counterparts clause

1. The clause is as follows: 13. Counterparts This agreement may be executed in any number of counterparts each of which will be an original but such counterparts together will constitute one and the same instrument and the date of the agreement will be the date on which it is executed by the last party.
2. There was no necessity for the Deed to be executed by counterparts. The parties who were intended to have been bound could all have executed the same document. The appellants suggest, however, that given that in fact Mrs Sinclair, Mr Balanian and Mr Sinclair's estate did not sign the Deed in those capacities, there was provision for them to do so by way of signing a counterpart. And in that circumstance, they said, the "date of the agreement" would be the date of execution of the last party to do so. An implicit premise, which may be accepted, was that the reference to the "date of the agreement" in cl 13 meant the date the Deed took effect.
3. The primary judge said this of the argument: [170] Considered objectively, the clause was included as a boilerplate provision and was not intended by the parties to have any real work to do given that all the parties to the Deed were in attendance and signed one document at the end of the mediation. There is nothing in the evidence to suggest that Mrs Sinclair or Mr Balanian, when signing as directors, intended not to be bound personally and were waiting to consider whether to sign as individuals and return a counterpart, such that the Deed would only then become binding. To the contrary, in my view, the objective evidence indicates that they intended to be personally bound notwithstanding the qualification on their signatures in the Deed. There is also no apparent logic, and it makes no commercial sense, for Mrs Sinclair to have signed as a director and bound FJS but, at the same time, reserved her right to execute the Deed personally.
4. The appellants argue that this conclusion draws improperly on the surrounding circumstances, in particular the evidence that the parties did intend to conclude their agreement on that day. That argument wrongly presupposes that the surrounding circumstances have little relevance. In any event, there is such evidence from the Deed itself.
5. To begin with, as the respondents argued, cl 13 is facultative. It does not say that the Deed must or will be executed in counterparts, simply that this may be done. It is then significant that there is simply no provision in the Deed for Mrs Sinclair, Mr Balanian and Mr Sinclair's estate to execute it in their personal capacity. A "counterpart" naturally means a copy or duplicate that is identical: note Seddon on Deeds, 13 [1.6]. For the individuals to have executed another copy indicating that they were executing it in their capacities as such would be to execute a copy with additional words identifying who was signing and in what capacity, being words of significance. As senior counsel for the appellants accepted, this would be "a different document". The absence of provision for the individuals to sign in that capacity indicates that they were not envisaging that the Deed would be executed in counterparts and, rather, suggests that the need for the individuals to bind themselves in terms had been overlooked.

Surrounding circumstances and conclusion

1. The surrounding circumstances offer strong reinforcement to the conclusion that a reasonable person in the position of the corporate parties would conclude that the individuals intended to bind themselves personally when signing the Deed on 8 April 2022. The appellants only weakly argued to the contrary, that being the very reason for their attempts to set those circumstances aside.
2. It is quite clear that all of the parties wished to resolve their dispute, including both proceedings, and they meant to do so in a binding and effective fashion on that day (see above at [103(1)]). That involved the individuals being immediately bound. Further, the Deed was drafted in less than ideal conditions, by a person who was a solicitor but relevantly acting as a mediator, working under time pressure, and where the parties had chosen not to involve their own solicitors, despite the repeated suggestions of Ms Zabetakis that they might wish to do so.
3. There is nothing to suggest that any of the parties turned their minds to the need to address the individuals in their capacity as such. That point does much to explain why the execution page was not drafted to address that issue. The absence of careful thought on the topic is illustrated by the fact that Ms Richards purported to sign on behalf of FJS as though she was standing in the shoes of Mr Sinclair as a director of that company. She was not - she had not obtained probate, and even if she had that would not have rendered her a director of FJS. As the primary judge noted at [172], the Supreme Court had authorised Mrs Sinclair to act for the estate in the conduct of the proceedings, which extended to the settlement of those proceedings; if anyone was to sign on behalf of the estate it was her.
4. In cross-examination Ms Zabetakis accepted that she did not ask the participants if they understood that they were entering the Deed personally and on behalf of the companies. She said she did ask the parties if they knew their roles as directors, and if Ms Richards knew her role as an executor and trustee. But that evidence did not indicate that Ms Zabetakis was suggesting that the parties were not agreeing to the Deed in their personal capacities. The appellants also sought to rely on the fact that Ms Zabetakis told the parties that she would email a copy of the Deed to their lawyers. The claimed significance of that bland and unsurprising statement is illusive.

Issue 4: Did the primary judge err in considering post-contractual conduct?

1. The appellants' ground 5 complained that Henry J erred in referring to evidence of subsequent conduct in construing the Deed at [183] and [185], but also erred at [184] in "discounting evidence of subsequent conduct" said to favour the appellants' case. The latter challenge was withdrawn at the hearing when the inconsistency with the appellant's argument about the irrelevance of evidence of subsequent conduct was pointed out.
2. There is no doubt that conduct may be relevant insofar as acceptance of an offer is said to be manifest by that conduct. But that is not the issue here, where the acceptance by the individuals was manifest by their signature. In light of the conclusions above, it is unnecessary to address whether evidence of conduct subsequent to the mediation could be relevant to considering whether the Deed took effect as a contract. That is so because I have concluded that it did, with immediate effect. And it is so regardless of subsequent conduct. At highest, the primary judge's references to subsequent conduct at [183]-[185] were directed to showing that the conduct identified was not inconsistent with the conclusion she had already reached. Even if her Honour erred in going that far (a point it is not necessary to resolve), it makes no difference to the result.

Orders

1. In each matter the appeal should be dismissed with costs.

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