Brownlie v Merrick

[2000] NSWCA 258

CITATION:	Brownlie v Merrick [2000] NSWCA 258 revised - 25/09/2000
FILE NUMBER(S):	CA 40281/00
HEARING DATE(S):	11 September 2000
JUDGMENT DATE:	11 September 2000
PARTIES :	Julian Brownlie v Robert David Merrick
JUDGMENT OF:	Priestley JA at 1; Powell JA at 16; Giles JA at 17

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	DC 4296/98
LOWER COURT JUDICIAL OFFICER :	R.A. Rolfe DCJ

COUNSEL:	Appellant - C.R. Newlinds Respondent - T.G.R. Parker
SOLICITORS:	Appellant - Allen Allen & Hemsley Respondent - Riley Grey-Spencer
CATCHWORDS:	Deed of indemnity - whether indemnifier released by later agreement
CASES CITED:	Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112
DECISION:	Appeal dismissed with costs.

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40281/00
DC 4296/98

PRIESTLEY JA
POWELL JA
GILES JA

11 September 2000

BROWNLIE v MERRICK

1    PRIESTLEY JA: The factual background to this case is neatly set out in the first five pages of the trial judge's reasons, which I will adopt, rather than repeat or summarise. See Annexure A. 2    After stating the facts of the matter, the trial judge recorded and discussed the arguments of counsel, and then stated his conclusion that the release relied on by the defendant, Mr Brownlie, did not release him from his obligation to the plaintiff, Mr Merrick, under the deed of indemnity dated 16 March 1993. The trial judge then entered judgment against the defendant for the amount due under the deed. 3    In reaching his conclusion, the trial judge held against two contentions advanced for the defendant. One was that documents which were said to have passed between the parties to the Agreement of 3 August 1995, in the mediation which preceded that Agreement, were relevant to the interpretation of the release in clause 9 of the Agreement, and were admissible. The other contention not accepted by the trial judge was that upon its proper interpretation, whether the rejected evidence should have been treated as admissible or not, clause 9 of the Agreement released the defendant from his obligation to the plaintiff. 4    I will deal first with the interpretation of clause 9 on the basis only of the evidence admitted by the trial judge. I agree with the trial judge's opinion substantially for the reasons he gave. 5    The proceedings begun by the defendant, which were settled by the Agreement, were solely concerned with the situation that had arisen shortly before between Mr Brownlie and First Direct Holdings Limited, following upon the ouster of Mr Brownlie by the board of directors of that company from his position of chief executive officer of the company. 6    The defendants in those proceedings were the company and present and past directors. The proceedings and the Agreement dealt only with Mr Brownlie's claims against the company and the liabilities and obligations of each to the other. The trial judge applied the principal proposition for which Grant v John Grant and Sons Pty Ltd (1954) 91 CLR 112 is authority. This proposition is identified in the High Court's reasons by reference to a number of formulations in slightly differing language. The one most apt to the circumstances of the present case appears at the foot of page 127 and continues over the page, where the High Court cited the principle as it had been briefly stated by Lord Justice Farwell in Cloutte v Storey, as follows:

“ It is not in accordance with principle or authority to construe deeds of compromise of ascertained specific questions so as to deprive any party thereto of any right not been in dispute and not in contemplation by any of the parties to such deed. ”

7    On the basis of the principle of which this was one expression, the trial judge stated the conclusion I have already mentioned. As I have also already mentioned, it seems to me that he was right in that approach. 8    The Agreement gives no basis for inferring any wider release was within the contemplation of the parties to the Agreement in which Mr Merrick was really a very minor player, than to deal with a number of specific matters which were in contest between Mr Brownlie and the company. 9    As against this approach, counsel for Mr Brownlie in argument in this court, drew the Court's attention to a further passage in Grant which commences at page 129, in which there was discussion of the recognised situation that in some circumstances a release framed in general terms will be recognised as “... blotting out so to speak all conceivable grounds of further disputes or claims between all or any two or more parties to a deed.” 10    In Grant the High Court said there was not, in the contents of the deed in question in that case, enough to evince such an intention. Likewise, in my opinion, in the Agreement in question here there is not only not enough to see any such intention as a possible meaning to be gathered from the words, the terms of the Agreement seem to me to be positively against it. 11    For example, clause 13 of the Agreement contemplates the possibility of further court action by Mr Brownlie against the company. True it is that the clause circumscribes that possibility by a number of precautions intended to limit the possibility of such further court action. Even taking into account those limitations, the clause is the exact opposite of what you would expect in an agreement intended to blot out all conceivable grounds of further disputes. 12    For these reasons, I agree with the trial judge's construction of the Agreement, without reference to any of the evidence which Mr Brownlie was seeking should be admitted. 13    Turning to the question of the admissibility of that evidence, it does not seem to me to be necessary in this appeal to form a concluded opinion about it. The reason for that is that it seems to me that if the evidence were to be taken into account in arriving at the meaning of clause 9 of the Agreement, it would only reinforce the interpretation which, in my opinion, should be arrived at simply upon a reading of the document itself, in the light of the surrounding circumstances that were the subject of evidence admitted by the trial judge. 14    I should perhaps add that I am inclined to agree with the trial judge's view in regard to this aspect of the case also, but I will refrain from expressing any concluded opinion of it, because for the reason already mentioned, I do not think it is necessary. 15    In my opinion the proper interpretation of the relevant parts of the Agreement is so clear that the trial judge was justified in making the remark that he did that the contentions upon which the defendant was attempting to rely were very difficult to make out. I think he was right in his holding that they could not be sustained, and that he arrived at the only reasonable conclusion in the case. In my opinion, the appeal should be dismissed with costs. 16    POWELL JA: I agree 17    GILES JA: I also agree. 18    PRIESTLEY JA: The order of the Court is that the appeal is dismissed with costs.

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