Knight Frank Australia Pty Ltd v Australian Central Credit Union Ltd - [2019] SASC 9

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
KNIGHT FRANK AUSTRALIA PTY LTD v AUSTRALIAN CENTRAL CREDIT UNION LTD
[2019] SASC 9
Judgment of The Honourable Justice Stanley
7 February 2019
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT - FUNCTIONS OF APPELLATE COURT - WHERE INFERENCES OF FACT INVOLVED
LANDLORD AND TENANT - TERMINATION OF THE TENANCY - SURRENDER
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
EQUITY - EQUITABLE REMEDIES
The respondent leased several floors of a CBD building. The appellant managed the lease of the premises. The respondent surrendered the lease. The deed of surrender provided that the respondent would surrender the lease of the premises on 29 February 2016.
The respondent sought to vary the deed of surrender because it needed more time to remove various IT equipment from level 4 of the premises. The appellant agreed to vary the deed of surrender to give the respondent an extension of time to 30 March 2016 with respect to level 4 only. Notwithstanding the variation, the surrender time remained 29 February 2016.
At some time between mid and late March 2016, the IT equipment belonging to the respondent was removed from level 4 of the premises without the permission of the respondent. The respondent brought action against the appellant on the basis that it had suffered loss as a result.
At trial the appellant denied that the loss of the IT equipment was due to any act or omission on its part. In addition, it contended that the respondent had released it from any liability pursuant to clause 5.4 of the deed of surrender, which released the appellant from all claims and actions in respect of the premises. That release operated with effect from the surrender time of 29 February 2016.
The magistrate rejected both grounds of defence and found the appellant liable to the respondent.
On appeal, the appellant contends that the magistrate erred in finding that the respondent had proved its case on the balance of probabilities; and that the magistrate should have found that the deed of surrender released the appellant from the claim the subject of the proceedings.
Held: Appeal dismissed.
1. The evidence was sufficient to prove on the balance of probabilities the inference that the disappearance of the IT equipment resulted from the actions of the appellant’s contractors.
2. A textual analysis of the terms of clause 5.4 does not evince an intention to release the landlord and its manager from claims arising in the future and unknown either at the time of the execution of the deed of surrender or at the surrender time.
3. There is a sound basis for equity to confine the operation of clause 5.4 to claims known to exist, at the latest, at the surrender time of 29 February 2016.
Westpac Banking Corporation v Billgate Pty Ltd [2013] NSWSC 1304, distinguished.
Jackson v Lithgow City Council [2008] NSWCA 312; Grant v John Grant & Sons Pty Ltd (1954) 92 CLR 112; Karafotias v Karafotias (2003) 84 SASR 578; Karam v ANZ Banking Group Ltd [2001] NSWSC 709; Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26; Rinehart v Rinehart (No 3) (2016) 337 ALR 174; Doggett v Commonwealth Bank of Australia [2015] VSCA 351; Torrens Aloha Pty Ltd v City Bank NA (1997) 72 FCR 581, discussed.
Neat Holdings v Karajan Holdings (1992) 110 ALR 449; Blatch v Archer [1774] 1 Cowp 63; Nominal Defendant v Owens (1978) 22 ALR 128; Warren v Coombes (1979) 142 CLR 531; Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125; Franknelly Nominees Pty Ltd ATF VF & S Abrugiato Family Trust v Abrugiato [2013] WASCA 285, considered.

KNIGHT FRANK AUSTRALIA PTY LTD v AUSTRALIAN CENTRAL CREDIT UNION LTD
[2019] SASC 9
Magistrates Appeal: Civil
STANLEY J:
Introduction

The Australian Central Credit Union Ltd (the respondent) leased several floors of a CBD building from Primewest Funds Ltd (Primewest). Knight Frank Australia Pty Ltd (the appellant) managed the lease of the premises for Primewest.
On 24 December 2015, the respondent executed a Deed of Surrender with Primewest. The Deed of Surrender provided that the respondent would surrender the lease of the premises on 29 February 2016. The respondent leased levels one to five, seven, and the basement of the premises.
On 20 January 2016, the respondent and Primewest agreed on a variation of the Deed of Surrender such that an extension of time to 30 March 2016 was granted to the respondent to comply with clauses 3, 4.3 and 4.4 with respect to its occupation of level 4 of the premises. Clause 3 was the obligation to give vacant possession; clause 4.3 was the obligation to remove loose furniture items; and clause 4.4 was the obligation to make good. The remaining terms of the Deed of Surrender expressly remained in force.
The respondent’s server room was located on level 4. The variation was sought by the respondent because it needed more time than was provided in the Deed of Surrender to remove various IT equipment from level 4 prior to its relocation to new premises.
The Deed of Surrender included in clause 5.4 a release of Primewest and the appellant “from all claims and actions by the Tenant arising under or in connection with the Lease or in respect of the Premises”. That release operated with effect from the surrender time. Notwithstanding the variation, the surrender time remained 29 February 2016 (Surrender Time).
At some time prior to 30 March 2016 IT equipment belonging to the respondent was removed from level 4 of the premises without the permission of the respondent.
The respondent brought action against the appellant on the basis that as a result it had suffered loss which was due to the negligence and/or breach of duty of the appellant who had arranged for contractors to remove rubbish from level 4 on 23 and 24 March 2016. The appellant denied it was liable to the respondent.
At the trial before a magistrate the appellant essentially put the respondent to proof on the question of whether the loss of the IT equipment was due to any act or omission on its part. In addition, it contended that even if the respondent’s loss was due to the appellant’s negligence or breach of duty, the respondent had released it from any liability in respect of the same pursuant to clause 5.4 of the Deed of Surrender.
The magistrate rejected both grounds of defence and found the appellant liable to the respondent. Damages were assessed at $71,980.
Grounds of appeal
There are two grounds of appeal:
Ground 1: the magistrate erred in failing to find that the respondent had not proved its case on the balance of probabilities; and
Ground 2: the magistrate should have found that the Deed of Surrender released the appellant from the claim the subject of the proceedings.
Evidence at trial
At trial the respondent conducted a circumstantial case based on evidence that was largely documentary and uncontentious. Two employees of the respondent, Mr Needs and Mr Lilburn, gave brief evidence. Mr Needs was employed as the infrastructure manager for the respondent. He gave evidence he was responsible for managing the respondent’s hardware and software and data centre. In February 2016, he saw the IT equipment on level 4 of the premises. Mr Lilburn was employed as the leasing and fit out manager for the respondent. He was involved in negotiating the Deed of Surrender. He explained the reasons for the need to negotiate an extension of the lease in respect of level 4. He gave evidence of negotiations between the respondent and the appellant over various items that were left on the premises after the respondent had vacated all but level 4. Mr Lilburn said that he negotiated with Mr Ferencz and Mr Low of the appellant.
On 18 March 2016 Mr Ferencz sent an email to Mr Lilburn which enclosed a quote from a firm, Tech20, dated 16 March 2016 for the removal of material from the leased premises on levels one to five, seven and the basement of the premises. It sought agreement from the respondent that it would pay the cost of removing and dumping “loose items including chairs, photocopiers, wood structures, loose timber and other general rubbish (including in cupboards)”. The respondent would not agree to pay for the removal of this material but consented to it occurring. Mr Lilburn gave evidence that at some time between 22 March and 30 March 2016 IT people engaged by the respondent attended at the premises and found that IT equipment that they had been stripping out of level 4 had disappeared. This information was passed on to Mr Lilburn. He gave evidence he contacted Mr Ferencz to ask whether the appellant had removed the IT equipment from level 4.
On 30 March 2016, Mr Ferencz sent an email to Tech20 in the following terms:
Hi Reece,
Apparently People’s Choice Credit Union had some computer equipment on a desk on level 4 that was removed in the clear up. Can you please confirm with the contractor what day these would have been removed and where they would have been taken.
Later the same day Mr Lilburn sent Mr Ferencz an email setting out details of the IT equipment that was missing. He wrote:
…
While we had discussed the removal of chairs and photocopiers across the building at no time was there any discussion about the removal of IT equipment from Level 4. As a minimum and prior to it occurring I would have expected a phone call outlining what you planned to do and during what timeline. Given we had tenure of the floor until the end of the month I am surprised anything was removed at all.
…
Later on the same day Mr Ferencz sent an email to Mr Lilburn informing the respondent that the appellant’s contractor confirmed that items were removed from level 4 of the premises the previous week and taken to Metro Waste.
A work order from Tech20 was admitted into evidence which provided for the removal of loose items and paint as per the quotation of 16 March 2016. Tech20 was directed by the appellant to “attend to levels 4 and 5 first (excepting in that you will not have access into the level 4 server room until after PCCU remove their equipment)”.
In cross-examination, Mr Lilburn confirmed that throughout March 2016 employees of the respondent could access level 4 of the premises.
On 1 April 2016 Mr Ferencz sent an email to Mr O’Donoghue of Primewest. The email also was admitted into evidence. In it Mr Ferencz wrote:
As you are aware we had been negotiating with PCCU to get them to remove their loose items and rubbish from the building. On the 2 March Ian agreed to remove the items. Later, he asked the FM to obtain a quote from our contractor for his consideration. On 18 March we sent him the Tech20 quote, seeking confirmation that PCCU will pay the cost of $3,480 plus GST. As you know, we were then contact be [sic] Andrew McIntyre on behalf of PCCU, confirming that they would not pay the clean up costs and that they had left the premises as was required. They would not do any further works.
We instructed Tech20 to commence the cleaning up works and painting on 22 March. The clean-up included level 4 (excluding the server room), as we had no reason to believe that PCCU were using the floor other than the server room. PCCU staff were only occasionally on site. Rubbish and equipment was lying around all floors. As you know NCVER are showing interest in levels 5 and 4, so we were keen for them to be tidied up promptly.
Wednesday morning at 8:56 a.m. (sorry I told you yesterday on the phone) Ian rang me alleging that equipment that PCCU’s IT staff had taken out of the server room and placed on a table had been removed. He asserts that it was Tech20 who removed the equipment. I contacted Tech20 immediately and they advise that old equipment lying on the floor on level 4 was removed and dumped along with the rest of the equipment and rubbish from the other floors. Since receiving Ian’s claim we have asked Tech20 to confirm their earlier advice and we await their response.
We don’t believe PCCU are able to substantiate their allegations. We believe we were acting in good faith and without malice when we instructed Tech20 to remove all items. PCCU had wiped their hands of their responsibility and at no time had they indicated that anything but rubbish was lying around. We had previously specifically asked them about photocopiers that were still in situ on other floors, and they confirmed they were surplus and could be dumped. Any equipment left lying around was treated the same way.
At trial the appellant elected not to call any evidence.
Reasons of the magistrate
In respect of ground 1 the magistrate gave reasons as follows:[1]
I find, on the balance of probabilities, that the plaintiff has proved through Mr Needs’ evidence that there was, in late February 2016, IT equipment that it owned on Level 4 and that, consistent with the chain of email communications and the work order, it was removed from Level 4 on 23 or 24 March by Tech20, and subsequently disposed of. I also find, on the balance of probabilities, that the defendant instructed Tech20 to remove all items from the premises apart from those in the server room in circumstances where the plaintiff retained the right to occupy Level 4, and that the defendant, in instructing Tech20 to remove, or alternatively in failing to instruct Tech20 not to remove IT equipment, from Level 4, breached a duty of care that it owed to the plaintiff. This is particularly so in circumstances where the plaintiff had an entitlement to occupy Level 4, keep IT equipment there and not be concerned that the defendant would remove it without authority.
The documented variation to the Deed of Surrender made it clear that the plaintiff was entitled to occupy Level 4 to the end of March 2016 with no requirement to remove anything from it.
Given the defendant’s election not to call any evidence I consider that I am entitled to make a series of Jones v Dunkel findings.This permits an inference to be drawn that any witness that might have been called by the defendant to shed light on the issues in dispute believe the parties, would not have assisted the defendant.
The defendant elected not to call Mr Ferencz and Mr Low who were the authors of a number of emails produced, and who engaged in phone communications with Mr Lilburn. In the circumstances, I draw an inference that any evidence Mr Ferencz or Mr Low may have given would not have assisted the defendant and, in the circumstances, the email communication between Tech20 and the defendant of 30 March 2016 and onwards, may be treated, in my view, as a contemporaneous explanation of what the defendant did. Given there was no contradictory evidence produced by the defendant I consider it is reasonable, on the balance of probabilities, to find that Tech20 accessed Level 4 on 23 or 24 March 2016 and removed the items of IT equipment set out in the equipment list.
There can be no reasonable basis for the defendant to believe it had a right to enter Level 4 to remove equipment, notwithstanding the statement made in their email of 4 April 2016 that they had ‘no reason to believe that PCCU were using the floor other than the server room’. In fact, even if the defendant had no reason to believe the plaintiff was using Level 4, the plaintiff had a clear right to occupy it and to retain equipment there.
The work order details from the defendant to Tech20, and the tendered email correspondence, indicates that Tech20 acknowledged to the defendant that it removed equipment from Level 4 and I find, on the balance of probabilities, that the equipment removed was the equipment that was in existence on Level 4 on 24 February 2016 when Mr Needs visited the premises.
[Citation omitted].
[1] Australian Central Credit Union v Knight Frank Australia (Magistrates Court of South Australia, Magistrate Adair, 28 September 2018) at [24]-[29].
In respect to ground 2 the magistrate gave the following reasons:[2]
The ‘Surrender Time’ is identified in Item 4 of the ‘Information Table’ in the Deed, as ‘11.59 pm on 29 February 2016’ and the Deed was only varied to the extent the plaintiff was granted an extension to comply with its obligations under clauses 3, 4.3 and 4.4, to 30 March 2016. These clauses specify the plaintiff’s obligations in respect of vacant possession, removal of property and ‘making good’. The defendant argues that the words of cl 5.4 are broad and cancel all claims and actions by the plaintiff ‘arising under or in connection with the lease or in respect of the Premises’.
Given that the variation to the Deed only effects cl 3, cl 3.4 and cl 4.4, the Surrender Time applies to obligations or rights, claims or actions pursuant to the remaining clauses. As at the Surrender Time the plaintiff released Primewest and the defendant from those claims or actions as they existed at that date. In my view this clause does not release the defendant from any obligation or liability or action that arises thereafter, as occurred here.
This is consistent with the authority that general words in a Release are limited to those matters which are specifically in the contemplation of the parties at the time the Release is given. Given that the defendant has relied on cl 5.4 in its defence it bears the onus of leading evidence of what was in the specific contemplation of the parties at the time the Release was given in December 2015. Whilst it is clear that parties may agree to release claims or rights to which they are, at that time, unaware, this may only be achieved if clear language is used to make plain that is the intention.
No such clear language has been used in the release in cl 5.4 and no evidence was lead as to what was in the contemplation of the parties at the time the release was given. Accordingly, I find this defence is not made out.
[Citation omitted].
[2] Australian Central Credit Union v Knight Frank Australia (Magistrates Court of South Australia, Magistrate Adair, 28 September 2018) at [31]-[34].
Against this background, I turn to consider each ground of appeal.
Ground 1
The appellant submits that the respondent failed to discharge the onus it bore of proving that it was the appellant’s contractors who removed the respondent’s IT equipment from level 4 of the premises. It submits that this inference was only one of a number of inferences open on the evidence, and that the choice of that inference was a mere matter of conjecture. The appellant submits further that the magistrate fell into error in reasoning that the facts in issue were proved by the appellant’s failure to adduce contradictory evidence. In addition, the magistrate erred in failing to refer at all to the evidence that employees of the respondent had access to level 4 of the premises until 30 March 2016.
In this case, the respondent had to prove on the balance of probabilities that the IT equipment was present on level 4 of the premises on 23 or 24 March 2016, and that employees or agents of Tech20 removed that equipment.
The strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove.[3] All evidence is to be weighed according to the capacity of one side to have produced the evidence and the capacity of the other to contradict the evidence.[4] Where satisfaction of the civil standard of proof depends on inference, there must be something more than mere conjecture, guesswork or surmise. That is, there must be more than “conflicting inferences of equal degrees of probability so that the choice between them is a mere matter of conjecture”.[5]   In Jackson v Lithgow City Council,[6] the New South Wales Court of Appeal said:
[3]    Neat Holdings v Karajan Holdings [1992] HCA 66 at [2], (1992) 110 ALR 449 at 450.
[4]    Blatch v Archer (1774) 1 Cowp 63 at 65.
[5]    Nominal Defendant v Owens (1978) 45 FLR 430 at 434, 22 ALR 128 at 132.
[6] [2008] NSWCA 312 at [9]-[10].
Before dealing with the facts it is helpful to remind oneself of the terms of the task at hand. In Holloway v McFeeters, Williams, Webb and Taylor JJ cited and applied passages from the joint judgment of Dixon J (as he then was), Williams, Webb, Fullagar and Kitto JJ in Bradshaw v McEwans Pty Limited, which were as follows:
“ … you need only circumstances raising a more probable inference in favour of what is alleged … where direct proof is not available it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference; they must do more than give rise to conflicting inferences of equal degree of probability so that the choice between them is [a] mere matter of conjecture … . All that is necessary is that according to the course of common experience the more probable inference from the circumstances that sufficiently appear by evidence or admission, left unexplained, should be that the injury arose from the defendant's negligence. By more probable is meant no more than on the balance of probabilities such an inference might reasonably be considered to have some greater degree of likelihood.”
In Jones v Dunkel, the High Court discussed Holloway v McFeeters in an appeal concerning a truck accident on a hill. The proof of the accident was circumstantial. The cause had been heard before a jury. The High Court divided on the question whether the evidence permitted the jury to conclude that the defendant driver had been negligent and caused the accident. (Dixon CJ and Taylor J thought not; Kitto, Menzies and Windeyer JJ thought it could.) Dixon CJ, having referred to Holloway v McFeeters and Bradshaw v McEwans said the following, referring to the passage from Bradshaw v McEwans:
“But the law which this passage attempts to explain does not authorise a court to choose between guesses, where the possibilities are not unlimited, on the ground that one guess seems more likely than another or the others. The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied.”
Though Dixon CJ was in dissent, this passage can be taken to reflect the essential content of Holloway v McFeeters, and of the views of the justices in Jones v Dunkel.
[Citations omitted].

Where the task for a court is to draw inferences from undisputed facts, or facts established by the findings of a trial judge, an appellate court is generally in as good a position as the trial judge to decide the proper inference to be drawn. While respect and weight is to be given to the conclusion of the trial judge, an appeal court is not to shrink from giving effect to its own conclusions.[7] In this case, the issue is whether the circumstances raise as a probable inference that the disappearance of the IT equipment resulted from the actions of Tech20 on 23 and 24 March 2016.[8]
[7] Warren v Coombes [1979] HCA 9 at [18], (1979) 142 CLR 531 at 551.
[8] Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125 at 141.
In my view, for the reasons that follow, the evidence was sufficient to prove this inference on the balance of probabilities.
The respondent continued to occupy level 4 of the premises after the Surrender Time until 30 March 2016, pursuant to the Deed of Variation. While the evidence establishes that employees of the respondent could have had access to level 4 during that period, the only evidence of anyone having access during that time is that the only people who were present during that period were the respondent’s IT people and the employees and agents of Tech20. The IT equipment was on level 4 in February 2016. I am prepared to infer it was still present on level 4 after 29 February 2016, as the very reason for the variations to the Deed of Surrender was because the respondent could not arrange for the removal of its IT equipment from level 4 by the Surrender Time. I accept the uncontradicted evidence of Mr Lilburn that he was informed by his IT people after 24 March 2016 that the IT equipment had disappeared from level 4. Tech20 removed items from level 4 on 23 and 24 March 2016. Clearly, there was some communication between Mr Ferencz and Mr Low and Tech20 in relation to this matter, but the appellant declined to call evidence from either of them, or from Tech20. I am prepared to infer that, in these circumstances, their evidence would not have assisted the appellant.
The evidence is sufficient to establish an inference that it was more likely than not that the IT equipment was removed from level 4 by Tech20 on 23 or 24 March 2016. That conclusion does not involve making a choice between a number of inferences open on the facts. There is no other reasonable inference open on the facts.
The magistrate did not err in observing that there was no contradictory evidence produced by the appellant. That did not involve any reversal of onus but, rather, consideration of whether there was any competing inferential hypothesis. In any event, I have reconsidered the inferences properly to be drawn from the proved facts. In doing so, I have had regard to the evidence that employees of the respondent might have had access to level 4 after February 2016.
For these reasons, I would dismiss ground 1.
Ground 2
The appellant contends that the magistrate erred in construing clause 5.4 of the Deed of Surrender as being limited to a release in respect of claims and actions known to exist at the Surrender Time, namely, 29 February 2016. The appellant submits that this construction is contrary to the broad and untrammelled language of the clause. Accordingly, the terms of clause 5.4 encompassed the respondent’s claim.
I do not accept this submission.
It is well established that a common law right may be released at common law only by a deed of release or by an agreement for consideration, but an equitable right may be released in equity under hand, orally or by conduct.[9]
[9] Franknelly Nominees Pty Ltd v Abrugiato [2013] WASCA 285 at [232].
In this case, we are concerned with a deed of release.
In Grant v John Grant & Sons Pty Ltd,[10] the High Court held that, as a matter of construction, the general words in a release are limited to those matters which were specifically in the contemplation of the parties and formed the subject matter of settlement at the time when the release was given. But in Grant the High Court also applied the equitable principle identified in the joint judgment of Dixon CJ, Fullagar, Kitto and Taylor JJ as follows:[11]
... equity proceeded upon the principle that a releasee must not use the general words of release as a means of escaping the fulfilment of obligations falling outside the true purpose of the transaction as ascertained from the nature of the instrument and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence, character and extent of the liability in question and the actual intention of the releasor.
[10] [1954] HCA 23, (1954) 91 CLR 112.
[11] [1954] HCA 23 at [14], (1954) 91 CLR 112 at 129.
In Karafotias v Karafotias,[12] Bleby J cited with approval the following statement of principle in Karam v ANZ Banking Group Ltd by Santow J:[13]
[12] [2003] SASC 42 at [25], (2003) 84 SASR 578 at 583.
[13] [2001] NSWSC 709 at [406].
A number of other relevant principles are referred to and conveniently summarised by Santow J in Karam v ANZ Banking Group Ltd [2001] NSWSC 709 at [406]:
``The principles applicable to construing releases or purported releases can conveniently be set out in a series of propositions:
(1)     In construing a release, here embodied in a letter of variation to the terms of lending, the court should ascribe to the release the meaning that the release would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties at the time that they signed the document containing the release.
(2)     In order for the court to give effect to what in an objective sense the contracting parties intended, it is clear that a party may agree to release claims or rights of which it is unaware and of which it could not be aware, provided clear language is used to make plain that that is its intention.
(3)     Consistent with this emphasis on intention, general words in a release are limited to what was specifically in the contemplation of the parties at the time when the release was given.
(4)     Although there are no special rules of construction, such as a contra proferentem requirement, in the absence of clear language courts have been slow to infer that a party intended to surrender rights and claims of which it was unaware and could not have been aware.
(5)    Although each release should be considered against its own matrix of facts, an example of this line of `cautionary principle' (Lord Bingham's phrase) is the frequently cited judgment of the High Court of Australia in Grant v John Grant & Sons Pty Ltd, where Dixon CJ, Fullagar, Kitto and Taylor JJ (at 125) referred with approval to the proposition put by Sir Frederick Pollock in his Principles of Contract, that `in equity a release shall not be construed as applying to something of which the party executing it was ignorant'.
(6)     Despite the fact that, strictly speaking, releases are subject to no special rules of construction, a transaction in which one party agrees in general terms to release another from any claims upon it does have special features.
(7)     In such circumstances it may well be appropriate to imply an obligation upon the beneficiary of such a release to disclose the existence of claims of which it actually knows and which it also realises might not be known to the other party, for such an obligation is consistent with a concern to protect parties from sharp practice, by preventing advantage being taken of the known ignorance of the conceding party. (The bank made no such disclosure here.)
(8)     Most recently in this Court in Amaca Pty Ltd formerly known as James Hardie & Coy Pty Ltd v CSR Ltd, Bergin J adopted the principles of construction broadly as outlined above, including the `cautionary principle' and taking into account the purpose of the contract and the circumstances in which made.''
[Citations omitted].
In Qantas Airways Ltd v Gubbins,[14] Kirby P (as he then was) said:[15]
If a deed of release is signed by a party ... it should be open to a party to contend that the generality of the language of the deed of release was not, in the circumstances, intended to cover a particular matter. Deeds of release are usually expressed in very wide terms. ... It is thus entirely legitimate to consider what is the subject matter to which such a deed was directed if it is later contended that, despite the generality of its language, the parties at execution had something more confined in mind. Such is a rule of equity.
[14] (1992) 28 NSWLR 26.
[15] (1992) 28 NSWLR 26 at 44.
This is particularly so where it is contended that a deed of release releases a party from claims that were unknown at the time that the release was granted, as the claim had not yet come into existence.
A recent example of this is to be found in Rinehart v Rinehart (No 3),[16] where the relevant release was in the following terms:[17]
[T]he Covenantor ... hereby releases and forever discharges all and singular the Releasees from all and any liability, claims, demands, suits and actions of any nature whatsoever in any loss, injury or damage that might be caused to the Covenantor therefrom, and the liability of the Releasees in respect of any such claim is thereby absolutely distinguished, discharged and in all respects ended.
[16] [2016] FCA 539, (2016) 337 ALR 174.
[17] [2016] FCA 539 at [320], (2016) 337 ALR 174 at [380]-[381].
Gleeson J construed that release clause as not applying to any claims which occurred after the execution of the deed. Her Honour said:[18]
In my view, there is nothing in the language of clause 3 which extends to claims which had not arisen at the time that the releases in clause 3 were given. The word “forever” in clause 3(a) does not have that effect ... Accordingly, it does not cover the substantive claims that are based on events occurring after the deed of obligation and release.
[18] [2016] FCA 539 at [605], (2016) 337 ALR 174 at [428].
On the other hand, in Doggett v Commonwealth Bank of Australia,[19] Whelan JA said:[20]
It is possible to enter into an arrangement which does settle “all conceivable further disputes”. The equitable principles articulated in Grant v John Grant restrain a party from unconscientious reliance on legal rights. Particular circumstances may reveal that it would be unconscientious to allow the general words of a release to be relied upon. Grant v John Grant was such a case. But there will be no room for the application of those equitable principles if it is clear that the parties intended the general words of release to encompass all conceivable future disputes.
[Citations omitted].
[19] [2015] VSCA 351.
[20] [2015] VSCA 351 at [63].
By way of example, consider the terms of the release in Westpac Banking Corporation v Billgate Pty Ltd,[21] which provided:[22]
Upon payment of $10,000,000 to the Bank, the Borrowers and Guarantors unconditionally and irrevocably release and discharge the Bank from all or any Claim that the Borrowers and Guarantors presently have, may have or which but for this deed would, could or might at any future time have or have had, against the Bank in respect of any matter arising directly or indirectly out of or in connection with the subject matter of this deed, and any other matters relating to, arising out of or otherwise connected with:
(a)     the Debt;
(b)     the Guaranteed Amount;
(c)     the Facility; and
(d)     the Securities.
“Claim” was defined to mean relevantly:
... any ... causes of action whatsoever arising at law, in equity, and under statute which they may have or which but for this deed would, could or might at any future time have or have had against each other in respect of or arising out of either directly or indirectly any matter referred to in or arising out of this deed.
[21] [2013] NSWSC 1304.
[22] [2013] NSWSC 1304 at [613]-[614].
In Billgate, Stevenson J observed that the deed was drawn in very wide terms.[23] His Honour held that, save that the deed did not, in terms, release the bank from claims “unknown” to the releasors, it is hard to contemplate a deed of release being drawn in wider terms.[24] Stevenson J rejected the submission that the releasors could invoke equity to bring a claim against the bank. The contrast with clause 5.4 in this case is stark.
[23] [2013] NSWSC 1304 at [612].
[24] [2013] NSWSC 1304 at [617].
Torrens Aloha Pty Ltd v City Bank NA,[25] is a case where the release clause was in similar terms to clause 5.4. The appellant released the defendant from “all ... actions, suits, causes of action, proceedings; claims ... demands, costs and expenses whatsoever which [the appellant] now has in any way arising out of or incidental to [the credit agreement]”. The Court held this did not encompass a cause of action which had not yet accrued, or was not yet in contemplation. Sackville J said:[26]
It is clear in the present case that the dispute between the parties in 1987 did not relate to the terms of the Credit Agreement requiring the appellant to make C grossed up payments of interest to Citibank NA. That issue did not arise between the parties until 1994. The principle of construction to which I have referred strongly suggests that the deed should not be construed as applying to a claim which was not the subject of any consideration by any of the parties at the time it was executed. This view is reinforced by the language of the deed itself. The recital refers to the fact that disputes had arisen between the parties, indicating that the release was intended to relate to the disputes and differences between the parties. Clause 1 itself is limited to causes of action and claims D which the appellant "now has". While the language of cl 1 is literally capable of applying to a cause of action in existence but not adverted to by the parties, the absence of broader language often found in releases militates against a sweeping construction of the release.
[25] [1997] FCA 77, (1997) 72 FCR 581.
[26] [1997] FCA 77, (1997) 72 FCR 581 at 599-600.
Accordingly, the first question is whether it is clear that the parties intended the words of clause 5.4 to encompass all conceivable future disputes. The second question is whether, if the language of clause 5.4 is sufficiently wide to encompass all conceivable future disputes, equity should restrain the appellant from relying on its legal rights.
In my view, the answer to the first question is in the negative. A textual analysis of the terms of clause 5.4 does not evince an intention to release the landlord and its manager from claims arising in the future and unknown either at the time of the execution of the Deed of Surrender or at the Surrender Time, i.e. 29 February 2016. There is an absence of clear words expressly referring to unknown future claims that would indicate an intention to release the landlord and its manager from such claims.
In this case, in granting the release, the respondent necessarily had no knowledge of the claim in respect of the missing IT equipment. I am satisfied the true purpose of the release did not extend to releasing the appellant from such a claim. This makes it unnecessary to answer the second question but, in any event, there is a sound basis for equity to confine the operation of clause 5.4 to claims known to exist, at the latest, at the Surrender Time.
It follows that the magistrate was correct.
I would dismiss ground 2.
Conclusion
I would dismiss the appeal.
I would hear the parties as to costs.