Goldsmith v Sandilands and Ors P91/2000

The High Court of Australia heard an appeal in *Goldsmith v Sandilands and Ors*. The dispute concerned the interpretation of a clause in a deed of settlement, specifically whether it conferred a right to a share of future profits on the appellant, Mr Goldsmith, or merely a right to a fixed sum of money. The respondents were the executors of the estate of the late Mr Sandilands.

The central legal issue before the High Court was the proper construction of clause 7 of the deed of settlement. This clause stipulated that Mr Goldsmith was to receive "a sum equal to one-third of the net profits of the business known as 'Sandilands & Associates' for the period of five years from the date of this Deed". The court was required to determine whether this provision granted Mr Goldsmith a proprietary interest in a share of the future profits of the business, or if it merely created a contractual obligation to pay a sum of money calculated by reference to those profits.

The High Court, by majority, held that the clause did not create a proprietary interest in Mr Goldsmith. The majority reasoned that the language used in the deed indicated a personal obligation to pay a sum of money, rather than an intention to confer a share of the profits themselves. They emphasised that the deed did not grant Mr Goldsmith any rights of ownership, control, or participation in the business, nor did it impose any obligations on him in relation to its operation. The court distinguished this situation from cases where a partnership or a trust might create a proprietary interest in future profits. The obligation was to pay a sum calculated by reference to the profits, not to receive a share of the profits as they accrued.

The appeal was dismissed.