Ferrier-Watson v McElrath

The Full Federal Court heard an appeal in *Ferrier-Watson v McElrath*. The dispute concerned the interpretation and application of a deed of settlement entered into between the parties, which aimed to resolve a prior dispute regarding the sale of shares in a company. The primary issue on appeal was whether the respondent, Mr. McElrath, had breached the terms of the deed by failing to make a payment by a specified date.

The Full Federal Court was required to determine whether the deed of settlement imposed a contractual obligation on Mr. McElrath to make a payment by 30 June 2011, and if so, whether his failure to do so constituted a breach of contract. The court also had to consider whether the appellant, Ms. Ferrier-Watson, had waived her right to enforce the payment by that date, or if Mr. McElrath was otherwise excused from performance.

The court analysed the language of the deed, particularly clause 3.1, which stipulated that Mr. McElrath "shall pay" a sum of money to Ms. Ferrier-Watson by 30 June 2011. The judges found that this language created a clear and unconditional obligation to pay by that date. They rejected arguments that the payment was contingent on other events or that the wording allowed for flexibility. The court applied principles of contractual interpretation, emphasizing the importance of giving effect to the plain meaning of the words used in the deed. The court found that Mr. McElrath had breached the deed by failing to make the payment by the stipulated date.

The Full Federal Court allowed the appeal, setting aside the primary judge's orders. The court ordered that judgment be entered for Ms. Ferrier-Watson against Mr. McElrath for the amount due under the deed, together with interest.