LANE & JACKSON

The parties to this proceeding were Lane and Jackson. The dispute concerned the interpretation of a clause within a deed of settlement, specifically regarding the calculation of a deferred payment. The matter came before L. Turner J of the Supreme Court of Victoria.

The central legal issue before the Court was whether the deferred payment, which was contingent on the net profit of a business, was to be calculated based on the profit of the business as a whole, or only on the profit generated by a specific division of that business. This interpretation turned on the precise wording of clause 3.2 of the deed of settlement.

L. Turner J reasoned that the plain and ordinary meaning of the words used in clause 3.2, when read in context, indicated that the profit calculation was to be based on the entire business. The judge considered the grammatical structure of the clause and the surrounding provisions of the deed, concluding that there was no ambiguity that would permit an interpretation limiting the calculation to a particular division. The principle applied was that contractual terms should be given their ordinary meaning unless the context clearly indicated otherwise.

The Court therefore found in favour of Jackson, holding that the deferred payment was to be calculated by reference to the net profit of the business as a whole.