[25] It is clear that the parties to the agreements of 31 May and 30 August 1991 did not intend that the agreement of 31 May should be wholly rescinded. That is apparent from a number of the provisions of the 30 August agreement. In particular, it was made clear by s 11 of the 30 August agreement, which has been quoted above [this section expressly provided for the earlier agreement to remain 'in full force and effect']. This is hardly surprising. The agreement of 31 May had worldwide operation, and covered many dispositions and acquisitions that were unaffected by the alterations proposed in relation to Australia. It is also to be observed that the deed of assignment executed by the respondent and Nicholas Products Pty Ltd on 30 August 1991 recited that it was entered into pursuant to the agreement of 31 May 1991, as amended. The manifest intention of the parties was not that the agreement of 31 May 1991 should be wholly rescinded and replaced by a new agreement, but that the rights and liabilities under, and the mode of performance of, the agreement, should be varied in certain respects".
75 In Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 75 ALJR 312 the plurality said the following:
"[20] The decision of the majority in the Court of Appeal in the present case appears to involve the holding that there was a discharge of the prior contractual relationship between Concut and Mr Wells, that the Service Agreement became the exclusive charter of the contractual rights and duties of the parties, and that subsisting rights and liabilities under the prior contract, including those arising by reason of breach thereof, were compromised or released. However, the text of the Service Agreement itself, as well as the surrounding circumstances indicate that such a conclusion would not be in accord with the manifest intention of the parties".
76 Their Honours then referred to various aspects of the Service Agreement in question in that case that indicated that the previous employment contract between Mr Wells and the employer was to continue and that the terms of the continuing contractual relationship were to be supplemented by the terms of the Service Agreement. Their Honours said that the Service Agreement "manifested no intention to displace rights and liabilities which had accrued between the parties since Mr Wells had become the Queensland branch manager in 1980 by releasing or compromising those rights and liabilities" (at [21]). Indeed the Agreement contained a clause expressly preserving the accrued rights of Mr Wells in respect of his prior service.
77 The decisions in Sara Lee and Concut were applied by this Court in Encyclopaedia Britannica Australia Ltd v David Campbell [2009] NSWCA 286. In that case, Sackville AJA (with the concurrence of Giles JA and myself) observed:
"57 In my opinion, the May 2000 Letter, on its proper construction, provided for a period of three months notice in the event of termination of the respondent's contract, otherwise than for misconduct or by reason of redundancy. Although it may not matter, the better view is that the May 2000 contract was intended to amend (and not to discharge) the pre-existing contract between the parties. This intention is suggested by the absence of any reference in the May 2000 Letter to a number of important issues (including superannuation, health insurance and sick leave entitlements) dealt with in the June 1999 Letter. (That letter retained its contractual force by reason of the express provision in the March 2000 Letter that it would form an addendum to the respondent's original letter of employment.) Clearly enough, the parties intended that some or all of the contractual terms in force immediately prior to the respondent's appointment as General Manager would continue to form part of his contract of employment after his appointment as General Manager. On this basis, the May 2000 Letter preserved the contractual effect of the period of notice stipulated in the 13 March 2000 file note, namely that the respondent was entitled to three months notice on termination of his contract, otherwise than for misconduct or by reason of redundancy".
78 To my mind, these authorities indicate that the first question to be addressed in the present context is whether on its true construction the Second Loan Agreement manifested an intention of the parties that the terms of that Agreement (together with the Deed of Settlement of 28 July 2005) exhaustively govern their relationship, with the result that the First Loan Agreement was superseded and that the debts due under it were discharged. The second question is whether the Third Loan Agreement was likewise intended to supersede the Second Loan Agreement.
79 These questions should in my view be answered in the affirmative.
80 As is apparent from the description given in [29] above, the Second Loan Agreement purported to be comprehensive in its terms. It did not leave any aspect of the relationship between the parties to be governed by the First Loan Agreement. The principal sum advanced under the Second Loan Agreement was $640,000 which incorporated not only the original advance but the further advance. The terms on which that advance of $640,000 was made were set out in the Second Loan Agreement. That Agreement did not require, or permit, any reference to the First Loan Agreement for the purpose of identifying any further or different terms.
81 A letter of offer of 5 July 2005 was expressed to be incorporated in the Second Loan Agreement. This letter referred to the "Loan Amount" as being "$640,000.00 (Additional Advance $190,000.00)". The reference to an "Additional Advance" there and in two other places in the letter does not in my view indicate that the letter, or the Second Loan Agreement into which it was incorporated, assumed the continued operation in any way of the First Loan Agreement. In light of the unequivocal way in which the Second Loan Agreement itself was expressed, these references should in my view be understood as no more than references to the historical position, that is, that the present advance was for an amount $190,000 greater than the previous one. The position is even clearer in respect of a Letter of Offer of 14 August 2006 which was incorporated into the Third Loan Agreement. This letter did not contain any reference to any part of the $640,000 as being an additional advance. It simply referred to the "Loan Amount" as being $640,000.
82 In my opinion the effect of the Second Loan Agreement was that the original advance of $450,000 was treated as having been repaid by part of the advance under the Second Loan Agreement of $640,000. The advance of $640,000 provided for by that Agreement only made sense if the earlier advance of $450,000 was to be treated as having been repaid, as on no view of the relationship between the parties did the respondent advance $1,090,000 ($450,000 plus $640,000) to the appellant. As indicated in [28] above, the parties agreed that the balance of the advance of $640,000 would be applied in the manner specified in the Deed of Settlement of the same date.
83 A similar conclusion is apt in respect of the Third Loan Agreement. That Agreement clearly manifested an intent that it be an exhaustive statement of the terms of the advance of $640,000 expressed to have been made under it. That advance repaid the advance of the same amount under the Second Loan Agreement. As a result the Third Loan Agreement superseded that earlier Agreement.
84 The terms of the Deed of Settlement do not conflict with the views that I have expressed. That Deed recited the original borrowing of $450,000 and contained an agreement by the respondent to increase "the current principal amount of $190,000.00, ('the further advance') making a total of $640,000.00, the principal ('The Loan')". The parties could have given effect to this agreement in the Deed by varying the original arrangement to increase the principal by $190,000 but the Second Loan Agreement in my view manifested a different intent, namely, to treat the original advance as having been repaid and to have the respondent make an advance of $640,000 upon terms comprehensively stated in the Second Loan Agreement.
85 The respondent contended that its "Statement of Loan A/C" relating to the appellant showed that the parties had not agreed to treat the original advance as having been repaid because that document treated the indebtedness of the appellant as a single continuous running account. I do not however consider that this account is of any significance. The executed Loan Agreements recorded the arrangements between the parties. The fact that after the Agreements were made one party treated the transactions in a particular way in its books of account does not dictate the meaning of the executed Agreements.