Capital Radio Network Pty Ltd v Garrott

[2008] NSWSC 17

CITATION:	Capital Radio Network Pty Ltd v Garrott [2008] NSWSC 17
HEARING DATE(S):	06/12/07, 07/12/07
JUDGMENT DATE :	30 January 2008
JURISDICTION:	Equity Division
JUDGMENT OF:	Barrett J
DECISION:	Claims in statement of claim to be dismissed. Declaration to be made substantially as sought by cross-claim. Money judgments to be ordered in favour of defendants/cross-claimants subject to confirmation of relevant sums. Interest to be awarded pursuant to Civil Procedure Act 2005, s 100. Plaintiffs to pay defendants' costs. Short minutes to be brought in.
CATCHWORDS:	CONTRACTS - construction - provision for particular matter to be resolved by expert determination if not agreed by parties - whether determination of expert validly and effectively made in accordance with the provision
LEGISLATION CITED:	Civil Procedure Act 2005, s 100
CATEGORY:	Principal judgment
CASES CITED:	DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423 at CLR 429 Ferrall and McTaggart as Trustees for the Sapphire Trust and Ors and Blyton and Attorney-General of the Commonwealth [2000] FamCA 1442; (2000) 27 FamLR 178 Legal and General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314
PARTIES:	Capital Radio Network Pty Limited - First Plaintiff Radio Goulburn Pty Limited - Second Plaintiff Radio Canberra Pty Limited - Third Plaintiff Radio Snowy Mountains Pty Limited - Fourth Plaintiff Geoffrey Robert Garrott - First Defendant Martina Ball - Second Defendant
FILE NUMBER(S):	SC 1547/04
COUNSEL:	Mr G P McNally SC - Plaintiffs Mr N C Hutley SC/Mr M B J Lee - Defendants
SOLICITORS:	Clark McNamara Lawyers - Plaintiffs Levitt Robinson - Defendants

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

WEDNESDAY, 30 JANUARY 2008

1547/04 CAPITAL RADIO NETWORK PTY LTD & 3 ORS v GEOFFREY ROBERT GARROTT & ANOR

JUDGMENT

1 These proceedings involve the construction of an agreement dated 11 February 2002 by which certain proceedings in the Family Court of Australia were settled. The central question is whether a particular determination by a chartered accountant is a valid and effective determination pursuant to a contractual provision for expert determination. The plaintiffs seek declarations that it is not. The defendants, by their cross-claim, seek a declaration to the contrary effect and money judgments.

2 There are, in reality, two separate sources of obligations. One is the agreement to which I have referred. A term of the agreement required its parties to ask the Family Court of Australia to make, by consent, orders in terms set out in the agreement. Such orders were made by the court. They are the other source of obligations. For present purposes, however, I am concerned directly with the agreement only.

3 The original parties to the Family Court proceedings were Mr Blyton and Mrs Blyton, husband and wife. In circumstances which need not be related in detail, Mr Garrott, a business associate of Mr Blyton, later became a party to the proceedings, as did certain companies in which Mr Blyton and Mr Garrott had interests. Sufficient background, for present purposes, comes from the following extract from the judgment of the Full Family Court in Ferrall and McTaggart as Trustees for the Sapphire Trust and Ors and Blyton and Attorney-General of the Commonwealth [2000] FamCA 1442; (2000) 27 FamLR 178:

“[7] When the parties separated the husband had effective ownership and control of various companies and as such had effective ownership and control of six out of eight major radio stations from the Southern Highlands of New South Wales to the Victorian border.

[8] According to the husband, in or about March 1997, the husband's financial adviser and accountant, Mr Garrott, one of the applicants for leave to appeal, expressed his concern that the respondents’ marriage was not going to last. It appears that in accordance with advice proffered by him to the husband, a scheme was devised by Mr Garrott to protect the husband from any order that this court might make against his assets at the behest of the wife.

[9] The husband says that on 6 April 1997 he caused there to be an increase in the home loan owed by him and the wife to Andros Nominees Pty Ltd and purchased five more shares in Capital Radio Network Pty Ltd. The Sapphire Trust was established to hold these five shares for the benefit of the husband and his family. As a result of this transaction the husband and wife became beneficially entitled to 54% of the issued shares in Capital Radio Network Pty Ltd. The husband further says that at a later point in time he discovered that the Garrott family was also mentioned in the trust deed, that Mr Garrott was named as appointor of the trust, and that he did not understand what that meant.

[10] The husband deposes that following separation, Mr Garrott obtained legal advice for the husband and instructed the husband's legal representatives.

[11] On 31 December 1997, Loughnan JR made a number of orders as a result of an application for property settlement, residence and spousal maintenance filed by the wife. According to the husband, by January 1998, Mr Garrott had consulted solicitors and devised a plan pursuant to which the wife would not receive ‘anything’. According to the husband, he was told by Mr Garrott that:
The orders that Michelle has got don't stop other directors being appointed to the companies. We should do this, and then we will come up with an excuse for why the companies need more money. The excuse can be that Andros has lent the companies too much money and want it reduced. The new directors will decide to raise the money by way of share issues which they will vote for. As you and Michelle now do not have the ability to raise any money, because we have tied up all your assets, the directors will then have to offer the shares to other shareholders or new shareholders who will be me. [para 5 AB76]

[12] The fundamental cornerstone of the scheme was the premise that the Family Court of Australia does not have the power to overturn the issue of shares.

[13] The relevant companies affected by the scheme were:

• Capital Radio Network Pty Ltd;
• Radio Snowy Mountains Pty Ltd;
• Radio Canberra Pty Ltd;
• Radio Goulburn Pty Ltd;
• Ski FM Broadcasters Pty Ltd; and
• Snowy Mountains FM Pty Ltd.


[14] The husband has sworn that he agreed to the scheme based on the assurances of Mr Garrott that when the family law proceedings were settled, everything would be restored to its original position. Through a combination of appointing directors who were informed of the ‘scheme’, signing backdated letters and placing ingenuous phone calls, the husband significantly decreased the value of his financial holdings.

[15] In an attempt to execute the scheme, the husband signed a backdated deed of share mortgage in favour of Andros Nominees Pty Ltd over his shares in Capital Radio Network Pty Ltd, Radio Snowy Mountains Pty Ltd and Snowy Mountains FM Pty Ltd.

[16] In January 1998, the husband ceased to be chairman of directors of Capital Radio Network Pty Ltd and Mr Garrott replaced him. At this time the husband asserts that he held 51–4% of the shares, whereas Mr Garrott maintains it was 49%. The effect of the scheme reduced the husband and wife's shareholding to 8%.

[17] With the power he had acquired Mr Garrott appointed his son-in-law, Geoffrey McTaggart, and his cousin, Michael Ferrall, to positions of control and according to the husband, when he raised concerns about being restored to his original financial situation, Mr Garrott told him that nothing was going to be altered until he signed the settlement with his wife. This was negotiated for $200,000 in circumstances where the husband says he had asked to borrow the monies from Mr Garrott. The husband also acknowledges that the wife approached him to have settlement discussions between them personally because her solicitor had ceased to act for her and she was unable to afford to continue incurring legal fees.

[18] According to the husband, it then became apparent to him that Mr Garrott wanted to retain some of the husband's interests for what the husband says Mr Garrott described as ‘compensation for the personal stress and suffering’. The husband says that Mr Garrott would not discuss changing back the arrangements until he had signed the settlement with his wife and that in June 1999 was told by Michael Ferrall that he — Mr Ferrall — had been appointed to sell the radio station interests. The husband says he was told by Mr Ferrall:
If you agree to me becoming managing director of Capital Radio Network Pty Ltd and if you write to Geoffrey [Garrott] saying you will never take legal action against him on any matter and if you sign your settlement with Michelle then you might be able to get some of your interests back.
[19] The husband says that on 23 June 1999, he was then informed that Messrs Garrott and Ferrall were offering to sell Capital Radio Network Pty Ltd.”

4 In circumstances which included those thus described, the agreement of 11 February 2002 was made among Mr Blyton, Mrs Blyton, Mr Garrott (together with five other parties included in the description “the Garrott Group”) and five companies referred to as “the Capital Radio Group”. Four of those five companies are the four first mentioned at paragraph [13] of the Family Court’s judgment.

5 The agreement of 11 February 2002 began by reciting matters of background, that the parties were “in issue as to the validity and effect of” certain transactions (designated the “Disputed Transactions”), particulars of certain proceedings in the Supreme Court of Tasmania, that a mediation conducted by the Honourable D L Mahoney AO QC had produced an agreement (referred to as the “Oral Agreement”) and that the agreement contained in the document was intended, upon execution by all parties, “to operate in substitution for the Oral Agreement”. By the operative provisions that followed, the parties committed themselves to a contractual regime of some complexity.

6 The aspect of the contractual regime at the centre of these proceedings concerned fees of Mr Garrott’s firm. As is mentioned at [8] of the Family Court judgment, Mr Garrott (or, more precisely, his firm) was the financial adviser and accountant to Mr Blyton. He also provided professional services to companies associated with Mr Blyton. Clause 15 of the agreement of 11 February 2002 was in these terms:

“ GR Garrott & Co accountancy etc fees. The amount of any liability of CRN and/or its subsidiaries to GR Garrott & Co for accounting fees (1) in respect of the year ended 30 June 1999, (2) in respect of the year ended 30 June 2000, (3) in respect of the year ended 30 June 2001, and (4) in respect of the period from 1 July 2001, shall be subject to resolution in accordance with the provisions of the Sixth Schedule.”

7 The reference here to “CRN” is a reference to Capital Radio Network Pty Ltd, one of the five corporate parties to the agreement described as “the Capital Radio Group”, including Radio Canberra Pty Ltd, Radio Goulburn Pty Ltd and Radio Snowy Mountains Pty Ltd.

8 Clause 16 provided as follows:

“ General Releases. Each of the Husband, the Wife, the Garrott Group and Capital Radio Group releases the others from all actions, claims, suits, demands, proceedings, liabilities, debts and costs which each might have againstd the others, or any of them, at law, or in equity, or under any statute, howsoever arising out of any facts matters or circumstances which have occurred to this date, whether known to the releasing party or not, including without limitation all such claims as have been brought, or suggested, in the Proceedings, or which arise howsoever out of the facts, matters and circumstances referred to in any document filed in the Proceedings PROVIDED THAT this release is not intended to affect any right which Mrs Blyton or Mr Blyton might have against the other to make an application under s.79A of the Family Court Act AND PROVIDED FURTHER THAT in the case of the wife, each release granted by her shall operate from the date of payment of the Principal Sum to her.”

9 It is also necessary to set out in full the Sixth Schedule to the agreement:

“1. The procedure contained in this Schedule applies when any provision of this Agreement, including any other Schedule thereto, has the effect that a matter or issue is subject to resolution in accordance with the provisions of the Sixth Schedule.
2. Within 14 days of the date of this agreement, Mr Blyton and Mr Garrott shall appoint an independent accountant (nominated by Mr Blyton, subject to the consent of Mr Garrott, such consent not unreasonably to be withheld) (‘the Independent Accountant’) for the purposes of determining any disputes to which this Schedule may apply. In the event of any issue arising as to whether the refusal of consent is unreasonable, such issue shall be resolved summarily by the Mediator [sic] without any obligation to give reasons but each party may provide a brief written statement to the Mediator setting out his position in the dispute.
3. To the extent that any matter or issue to which this Schedule applies is not agreed, Mr Blyton and Mr Garrott will negotiate in an endeavour to define the scope of the dispute, and then agree the matter or issue, including the amount in question, or reduce the scope of the dispute. Each party will if called upon to do so produce to the other all relevant vouchers and ledgers and other records in the possession custody or control of such party which may bear upon such matter or issue.
4. If the parties remain unable to agree all the remaining matters and issues in dispute, those matters and issues remaining in dispute will be submitted to the Independent Accountant, and the matter or issue in dispute shall be resolved in accordance with the certificate of the Independent Accountant, who shall act as an expert and not an arbitrator and shall not be obliged to give reasons but each party may provide a brief written statement to the Independent Accountant setting out his position in the dispute.
5. The fees of any such accountant are to be paid by Mr Garrott and Mr Blyton in proportions equivalent to their respective degrees of success in respect of the amount submitted to such accountant as the amount remaining in dispute at the time of such submission.”

10 The combined effect of the quoted portions of the agreement is that the fees of Mr Garrott’s firm of the kind referred to in clause 15, if not agreed, were to be payable in sums determined in the way set out in the Sixth Schedule, with such other and separate claims as might be maintained in respect of such fees being released by clause 16. The relevant parties thus agreed that sums determined in accordance with the Sixth Schedule would be paid and accepted in full discharge of obligations and entitlements in respect of relevant fees and that the determination would settle all questions of liability once and for all.

11 The principal question for decision in these proceedings is whether a determination made on 15 December 2003 by Mr R C Scott of Messrs Duesburys, Chartered Accountants, in relation to the matters identified in clause 15 was or was not a determination binding on the parties by force of the agreement of 11 February 2002.

12 It is accepted on both sides that Mr Scott was duly appointed “independent accountant” in accordance with the Sixth Schedule provisions and that three questions were submitted to him for determination under the Sixth Schedule. Those questions were set out in a letter of 17 July 2002 from Paltos & Co, solicitors, to Mr Scott. The question now relevant is a question concerning clause 15. It was posed in these terms:

“3. Under clause 15 of the Agreement you are to resolve the amount of liability of CRN and/or its subsidiaries to G R Garrott & Co. (now called Garrott & Ball) for accounting fees:
(a) in respect of the year ended 30 June 1999;

(b) in respect of the year ended 30 June 2000;

(c) in respect of the year ended 30 June 2001;

(d) in respect of the period from 1 July 2001.
4. Accordingly you are to resolve the amount of the liability of CRN and its subsidiaries for these accounting fees.
We will arrange for Mr Garrott to send you copies of each of the financial accounts and details of the accounting fees which remain unpaid and in respect of which you are to determine the liability.
Please note that under the terms of the Sixth Schedule you are to act as an expert and not as an arbitrator and you are not required to give reasons for your decision.
Both our clients and Mr Blyton and RSM may each provide a brief written statement to you setting out their position in relation to the matters in dispute.”

13 Mr Scott’s determination, set out in a letter to Mr Blyton dated 15 December 2003, was as follows:

“ Accounting Fees
The accounting fees in dispute were set out in a letter to you dated 2 June 2003.
It is my determination that of the amounts set out as being in dispute, the following amounts are payable to Garrott & Ball by the following entities:

$
Radio Canberra Pty Limited	265,731.39
Radio Goulburn Pty Limited	260,884.80
Radio Snowy Mountains Pty Limited	205,065.10
Capital Radio Network Pty Limited	6,512.00”

14 The reference to this extract from Mr Scott’s letter to “a letter to you dated 2 June 2003” is a reference to Mr Scott’s letter of that date to Mr Blyton. That letter formed part of a chain of correspondence through which Mr Blyton and Mr Garrott had, over a period of more than a year, communicated claims, concessions and contentions to Mr Scott. It is necessary to say something about those communications.

15 The first of the communications made by Mr Garrott was by letter dated 27 August 2002 with which he enclosed his firm’s claim for fees not previously rendered – for the period June 1999 to 28 February 2002 in the sum of $523,482.00 (being $174,494.00 for Radio Canberra, $174,494.00 for Radio Goulburn and $174,494.00 for Radio Snowy Mountains); and for the period March 2002 to 30 June 2002 in the sum of $57,112.00 (being $28,556.00 for Radio Canberra and $28,556.00 for Radio Goulburn). The total for both periods together was therefore $580,594.00 apportioned $203,050.00 to Radio Canberra, $203,050.00 to Radio Goulburn and $174,494.00 to Radio Snowy Mountains. The description provided was:

“Corporate, taxation, secretarial and professional services in relation to hours and services expended and performed by Senior Principal, G R Garrott.”

16 Attached to this claim were five pages of narration detailing types of work and areas of activity and concluding with a calculation of the total number of “folios to receive attention from Garrott & Ball in relation to corporate affairs”.

17 In response to a subsequent request by Mr Scott that the parties forward their respective contentions to him, Mr Garrott sent a letter of 19 September 2002 which read in part as follows:

“ Clause 15
Accounting, Secretarial and Corporate Services
My submission was detailed in the letter of 27th August 2002. Further supporting evidence is available from individual staff diaries, computer records, time sheets and hourly records. Work performed and corporate financial records, correspondence and documents generated by each staff member and partner are available at the office of Garrott & Ball, Chartered Accountants.
The system of detailed staff and partner recording has not changed since 1989, in relation to the Radio Group. Payment of monthly professional accounts continued to June 1999, when they ceased after Mr Blyton took control through the Family Court.”

18 On 22 October 2002, Mr Garrott expanded the claim to cover services referable to the period of three months to 30 September 2002. That claim refers to “detailed invoices for the three months ended 30 September 2002, in relation to corporate and secretarial professional services, undertaken by one of the principals of the firm”. On 3 February 2003, there was a claim for fees for “Garrott & Ball services for the 3 months ended 31 December 2002”.

19 By a letter dated 20 January 2003, Mr Blyton’s solicitors conveyed to Mr Scott “our client’s submission and supporting documentation”. A number of items referable to clause 15 were conceded. These were, in the main, the whole or some part of monthly fee invoices each of which involved what is, in the context, a relatively modest sum – ranging from a high of $3,019.50 to a low of $524.00 for one month. Beyond making the several concessions, the letter from Mr Blyton’s solicitors merely said that nothing more was accepted as owing, adding, in one instance, that no itemised account or time sheets had been provided.

20 Mr Garrott consolidated and summarised his position in a letter to Mr Scott dated 11 February 2003. His basic contention was that all the clause 15 items “deleted” by the submission made on behalf of Mr Blyton should be restored.

21 Mr Scott wrote to Mr Garrott on 14 March 2003. The section of the letter dealing with clause 15 began as follows:

“ Clause 15
I believe that Mr Blyton and yourself have provided sufficient information in respect of accounting, secretarial and corporate services fees for me to start to address the dispute, however I do note the following issues ….:”

22 Further correspondence involving all of Mr Scott, Mr Garrott and Mr Blyton’s solicitors followed. It culminated in the letter from Mr Scott to Mr Blyton dated 2 June 2003 to which reference has already been made. That letter began:

“Following my recent correspondence with Ms Lopich on your behalf and with Mr Garrott, I believe I am in a position to summarise the status of various aspects of the dispute between yourself and Mr Garrott.”
…
“ Clause 15
I have summarised the amounts claimed and conceded by each party in respect of accounting and other fees. The amounts claimed by Mr Garrott have now been confirmed with him and are summarised in the attachments to this letter for Radio Snowy Mountains Pty Limited, Radio Goulburn Pty Limited and Radio Canberra Pty Limited. For clarity, the column titled ‘Total Accounting & Secretarial etc charges claimed by GR Garrott” has been confirmed by Mr Garrott as a complete and accurate representation of his claims against these companies for the period shown.
In addition, Mr Garrott has confirmed that he has claimed an amount of $6,512 in respect of Capital Radio Network Pty Limited, being for an invoice of that amount dated 17 February 1999.
The amounts you have conceded are shown in the attachments, and you have made no concession in relation to the $6,512 claimed from Capital Radio Network. Please confirm that your concessions are completely and accurately recorded, or advise me if any adjustments should be made.
Once confirmed, I plan to treat any amount claimed but not conceded as amounts in dispute submitted to me under the Sixth Schedule.”

23 These were “attachments to this letter”, one for each of the three companies mentioned. Each attachment contained several columns showing an invoiced amount for each of stated periods (almost always one month), adjustments or additional claims by Mr Garrott for the period, the total claim for the period and the amount conceded by Mr Blyton. A final column “Remaining balance to be addressed” showed, for each period, the difference between Mr Garrott’s claims and Mr Blyton’s concessions. Taking all three schedules together, there were 26 items in the final columns. With four exceptions, the greatest was $5,130.00 and none was otherwise greater than $1,600.00. The four exceptions were sums of $254,447.60, $254,649.80, $174,494.10 and $28,560.00.

24 These four amounts (much larger than all the others) were expressed to be for periods greatly exceeding one month, whereas each of the other amounts was related to a one month period. The sum of $254,447.60 (Radio Canberra Pty Ltd) was for the period August 2002 to December 2002). The sum of $254,649.80 (Radio Goulburn Pty Ltd) was also for the period August 2002 to December 2002. The sum of $174,494.10 (Radio Snowy Mountains Pty Ltd) was for the period June 1999 to February 2002. The sum of $28,560.00 (also Radio Snowy Mountains Pty Ltd) was for the period October 1997 to June 1999. These were updated and consolidated versions of the fees notified by Mr Garrott on 27 August 2002.

25 The substance of the difference that ultimately emerged between Mr Garrott and Mr Blyton was summarised in a letter of 7 December 2003 from Mr Blyton to Mr Scott:

“[M]y position remains … that we have already conceded and paid all the legitimate accounting fee invoices. What Garrott continues to claim are the 3 huge invoices that he lodged after the signing of the ACO for his own ‘personal time’ in this matter. He is prevented from doing this by the general release provisions in the ACO.”

26 The point thus highlighted by Mr Blyton is that there had been an established course of dealing in which Mr Garrott’s firm had forwarded monthly bills to the several companies for services rendered. What Mr Blyton calls “the 3 huge invoices” (with the sums of $174,494.10 and $28,560.00 for Radio Snowy Mountains being treated as a single aggregate) related to services claimed to have been rendered over periods of more than one month being, in each case, a period which included several of the single months for which fees had been separately rendered according to the established billing practice.

27 Mr Scott had already taken up with Mr Garrott in correspondence the question of substantiation of what Mr Blyton was to call “the 3 huge invoices” for Mr Garrott’s “own personal time”. He also asked why the work concerned was “not previously billed with the routine monthly invoices”. Mr Garrott replied by referring to supporting invoices (and narrative) previously provided and, as to the apparent overlapping, said:

“As Mr Blyton had refused to pay monthly professional charges from June 1999, it was considered pointless to render further accounts from Garrott & Ball (for G R Garrott’s time and services) until various actions had been resolved.”

28 Mr Garrott’s firm said in a letter to Mr Scott dated 1 May 2003:

“Quarterly claims by G R Garrott are quite separate to monthly accounting and secretarial charges. These quarterly claims are for additional time and services incurred by senior partner G R Garrott dealing with various corporate issues detailed in those quarterly invoices.”

29 In the cross-claim, the fees in the quarterly invoices are described as being for “high level corporate and professional services”. I have already referred to the description of 27 August 2003 (see paragraph [15] above).

30 Things came to a head on 15 December 2003, when Mr Scott issued his determination already mentioned. Shortly before doing so, he attended Mr Garrott’s office and made a file note that reads in part as follows:

“I reviewed records in a room in Garrott’s offices.
It contained 24 Boxes of records.
In addition, I estimate that there was another 55 boxes of records that were on shelves & bookcases not in boxes.
Geoffrey had a further set of files in his own office, amounting to 5 to 10 boxes.
I reviewed numerous folders of court applications, affidavits etc. It is clear that the issues are complex, & that there are serious problems between Garrott & Blyton/Leitch and that much time an extraordinary amount of time has gone into preparing the papers in that room, and also research & other dealings surrounding them, such as briefing lawyers etc.”

31 The contention of the plaintiffs is that Mr Scott’s determination of 15 December 2003 was not a determination of the matter required by clause 15 to be resolved in accordance with the Sixth Schedule. The question to be addressed by the court is therefore the question posed by McHugh JA in Legal and General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314 at 336:

“In each case the critical question must always be: Was the valuation made in accordance with the terms of a contract? If it is, it is nothing to the point that the valuation may have proceeded on the basis of error or that it constitutes a gross over or under
value. Nor is it relevant that the valuer has taken into consideration matters which he should not have taken into account or has failed to take into account matters which he should have taken into account. The question is not whether there is an error in the discretionary judgment of the valuer. It is whether the valuation complies with the terms of the contract.”

32 Clause 15 of the agreement, by its terms, required the liability of the companies “to G R Garrott & Co for accounting fees” for the stated periods to be determined in accordance with the Sixth Schedule. The heading arguably broadened the description of the relevant fees by referring to “G R Garrott & Co accountancy etc fees”. There is thus a degree of uncertainty or ambiguity in the description or identification of the relevant fees, with use of both “accounting” and “accountancy” and addition to the latter of the indeterminate “etc”.

33 Given that ambiguity or uncertainty, I turn to some matters of context.

34 What Mr Blyton called “the 3 huge invoices” were issued after the agreement of 11 February 2002 had been executed. Before the advent of those invoices (and before the execution of the agreement), Mr Garrott’s firm had rendered regular monthly invoices. More than 100 of these are in evidence, covering a period of some three years for the several companies. The smallest monthly charge was $154, the largest less than $6,000. Most were of the order of $1,000 to $2,000. Many of the invoices referred to “accountancy and secretarial services” for a given month. Others referred to “accountancy, secretarial and advisory services”. Sometimes the reference was just to “accounting services”; sometimes just “services”.

35 What Mr Blyton called “the 3 huge invoices” – or, more precisely, the separate documents making up each – contained forms of words such as “corporate and secretarial professional services”. A letter from Mr Garrott to Mr Scott dated 19 September 2002 proceeded on the basis that clause 15 was concerned with fees for “accounting, secretarial and corporate services”. And as I have already said, Mr Garrott referred to the larger invoices produced otherwise than on a month-by-month basis as being for “additional time and services incurred by senior partner G R Garrott dealing with various corporate issues detailed in those quarterly invoices”. The supporting narrative referred to a large number of matters, including consultation with solicitors, meeting with shareholders, dealing with court applications, legality of appointments, secretary appointments, auditor appointments, obtaining legal advice, directors’ responsibilities and court defences.

36 When the words of clause 15 are considered in context, one possible approach (the narrowest approach) is to regard “accounting fees” (or the potentially somewhat wider “accountancy etc fees”) as confined to fees for accounting tasks such as keeping books of account, posting debits and credits and producing financial statements. That is “accounting” at its most basic. But it is clear that the parties could not have contemplated this narrowest approach. The regular monthly bills in the period before the agreement was executed often referred to “accountancy and secretarial services”, a description obviously broader than “accounting”. Some of the monthly bills referred to “accountancy services”, while others referred to “accountancy, secretarial and advisory services”. From these descriptions alone, it is obvious that the work done before the agreement was entered into extended beyond the narrow concept of “accounting” to which I have referred. There was an established pattern that included “secretarial” and “advisory” services, as well as “accountancy” (or “accounting”) services. The parties’ intention, when the agreement was made, cannot have been confined to the narrow processes of “accounting” to which I have referred. The “mutually known facts” (to use the words of Stephen J, Mason J and Jacobs J in DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423 at CLR 429) concerned a pattern of conduct and professional services beyond “accounting” and “accountancy” which included, at the least, “secretarial” and “advisory”.

37 Given those “mutually known facts”, I do not think that the plaintiffs can be heard to say that fees for “accounting” or “accountancy” are alone contemplated by clause 15. The clause must be taken to be concerned with fees for services of the kind that the particular firm of chartered accountants had in fact provided over the course of a lengthy retainer. It is, I think, significant, that three of the periods referred to in clause 15 had ended before the agreement was made. It is also significant that the agreement was to resolve all outstanding financial matters. It must be presumed that the intended scope of the clause was, as to those three periods, such as to cover all professional services and all fees for those services.

38 The plaintiffs say, however, that the contemplation of the parties in February 2002 must be regarded as shaped by the history of regular monthly bills of relatively modest amount. It follows, according to the plaintiffs, that even if (as I have found), “accounting fees” and “accountancy etc fees” extend to all professional fees, the intention was that the quantum should be of the order indicated by the regular monthly bills. The large invoices for work attended to personally by Mr Garrott were not rendered until after the agreement of 11 February 2002 had been entered into and related to services provided in periods significantly before that date.

39 I am not persuaded that the parties’ common intention can be taken to have been as just described. They had come to an acrimonious parting of the ways. There was clearly uncertainty and dispute about the quantum of fees due to Mr Garrott’s firm. There is nothing from which one can infer that the uncertainty and dispute was confined to (or even extended to) the sums actually rendered. General releases had been given. The dispute resolution mechanism was therefore to resolve the total situation once and for all. The inquiry to be undertaken by the expert extended to fees in respect of the stated periods and must be taken to entail an examination of all work related to each period, whether billed or unbilled. Had the narrower task of, as it were, taxing or assessing bills actually rendered been contemplated, it is reasonable to think that the parties would have defined the expert’s function in those terms. They did not, being content to adopt the wider approach related to fees generally, without reference to extant and articulated claims for them.

40 I move to another contention of the plaintiffs. They argue that clause 15, upon its true construction, implies an end date, so far as the fourth of the identified periods is concerned, that is, “the period from 1 July 2001”. The end date, the plaintiff’s say, is either the date of the agreement (11 February 2002) or the date of appointment of the expert (17 July 2002). According to the plaintiffs, the expert’s determination cannot deal with fees for work done after the cut-off date.

41 I confess myself unable to see any basis for any such implication. The agreement contained, in clause 16, general releases. If any of the companies continued to obtain services from Mr Garrott’s firm after 11 February 2002, it must have been intended that that work would be charged for and that payment would be made. It cannot have been intended that work done in, say, March 2002, would be outside the scope of the dispute resolution mechanism as to fees but caught by the general release in clause 16, so that that work was, of necessity, done for nothing. The same reasoning applies if the postulated cut-off date is the date of the expert’s appointment.

42 Another contention of the plaintiff’s concerning timing is that the fees to be determined were, according to the parties’ intentions, confined to those in respect of which a memorandum of fees had been rendered as at 11 July 2002 (or, alternatively, the date of the expert’s appointment). Again, I can see no basis for this. It would mean that if, as at 11 July 2002, an account for work done in the month of June 2002 had not yet been prepared and despatched, the general release in clause 16 would preclude recovery of proper charges for that work. There is simply no rational basis for imputing any such intention to the parties.

43 The final matter to be mentioned is the plaintiffs’ contention that much of the “high level” work was not really work done for the companies – or, more precisely, that the descriptions of work given lead to an inference to that effect. Rather, it is argued, the time and effort expended were concerned with Mr Garrott’s own position and interests. I do not consider that there is any basis upon which I can find that the expert, in this respect, acted outside the scope of his allotted task. Implied by his decision is acceptance of all the “high level” work as performed within the scope of the retainer of Mr Garrott‘s firm by the relevant company. There is no reason to think that he did not give full consideration to that question or that he did not apply himself diligently to the allotted task.

44 It is relevant to point out, in this last connection, that the expert determination process involved, as a preliminary, attempts by the parties to agree and, as part of its own procedure, the making of representations by the parties to the expert. The only objection ever raised by the plaintiffs (or, more accurately, Mr Blyton) in the course of representations to Mr Scott was that, in one instance, no itemised account or time sheets had been provided (see paragraph [19] above), that “the 3 huge invoices” had been raised after the signing of the agreement on 11 February 2002 (see paragraph [25] above) and that the general release prevented this (also paragraph [25] above). Mr Blyton had full opportunity to make submissions about the terms of relevant retainers and to argue that particular work was beyond their scope. No such submission was made.

45 In the result, therefore, the plaintiffs have failed to show that Mr Scott’s determination of 15 December 2002 with respect to “Accounting Fees” (see paragraph [13] above) was made otherwise than in accordance with the contract of 11 February 2002 and, in particular, clause 15 and the Sixth Schedule.

46 The plaintiffs’ claims for declaratory relief will accordingly be dismissed. On the cross-claim, there will be a declaration to the effect of that sought (that is, that Mr Scott’s determination of 15 December 2003 is final and binding) but modified so that the final and binding effect recognised by the declaration is expressed to apply to all parties (not just the plaintiffs/cross-defendants) and so that the declaration is confined to the matter arising under clause 15 of the agreement. There will also be judgment upon the cross-claim in favour of the cross-claimants (that is, Mr Garrott’s firm) and against each of Radio Goulburn Pty Ltd, Radio Canberra Pty Ltd and Radio Snowy Mountains Pty Ltd for the appropriate sum of money. However, since the amount claimed in the cross-claim is, in the first two cases, somewhat greater than that stated in Mr Scott’s determination, I shall defer ordering judgment until the precise sums are confirmed or clarified – hopefully by agreement.

47 The cross-claimants also claim interest on alternative bases – first, an alleged term of the retainer, in each case, requiring payment of “interest and collection costs” at the rate of 1.5% per month on unpaid invoices; or, second, under s 100 of the Civil Procedure Act 2005.

48 The plaintiffs, by their defence to cross-claim, deny the agreement from which the obligation to pay “interest and collection costs” is said to arise. The court, in the present proceeding, is unable to come to a conclusion on the matter. The appropriate course will be to allow interest from the date of Mr Scott’s determination to the date of judgment on the statutory basis set out in s 100.

49 The plaintiffs/cross-defendants will be ordered to pay the costs of the defendants/cross-claimants.

50 I direct that there be filed by delivery to my Associate within seven days agreed short minutes of orders giving effect to the foregoing or, if there is no agreement, the form of short minutes for which each side contends, together with written submissions as to why that form should be preferred to the form tendered by the opposition.

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