DAVIEGA & HARPE

The parties to this proceeding were Daviega and Harpe. The dispute concerned the interpretation of a clause within a deed of settlement, specifically whether it imposed a personal obligation on Harpe to pay a sum of money to Daviega, or whether the obligation was solely on a company, Harpe Pty Ltd. The matter came before Young J in the Supreme Court of New South Wales.

The central legal issue before the Court was whether the language of the settlement deed created a personal covenant by Harpe, as opposed to a covenant by Harpe Pty Ltd. This involved an examination of the wording of the relevant clause and the surrounding context of the deed to ascertain the intention of the parties at the time of its execution.

Young J considered the principles of contractual interpretation, focusing on the plain meaning of the words used in the deed. His Honour noted that where a party signs a deed in their personal capacity, and the deed refers to them in a way that suggests personal undertaking, a personal obligation can arise. In this instance, the deed referred to Harpe in a manner that indicated he was undertaking a personal obligation to ensure payment, rather than merely acting as an agent for the company. The Court found that the wording of the clause, particularly the use of "Harpe covenants and agrees," established a personal liability.

The Court therefore held that Harpe was personally liable to pay the sum stipulated in the settlement deed to Daviega.