LISKE & AINSCOMB

The parties to this proceeding were Liske and Ainscomb. The dispute concerned the interpretation of a clause within a deed of settlement, specifically whether it imposed a personal obligation on Mr Ainscomb to pay a sum of money to Ms Liske, or if it was merely an acknowledgement of a debt that was otherwise unenforceable. The matter came before Ryan J in the Supreme Court of Victoria.

The central legal issue before the Court was whether the wording of clause 4 of the deed of settlement created a personal covenant by Mr Ainscomb to pay the sum of $150,000 to Ms Liske, or if it simply recorded an existing debt without creating a new, enforceable personal obligation. This required the Court to consider the principles of contractual interpretation, particularly in relation to deeds and the intention of the parties as expressed in the document.

Ryan J reasoned that the language of clause 4, which stated "The Debtor hereby acknowledges and agrees to pay to the Creditor the sum of $150,000", was sufficiently clear to impose a personal obligation on Mr Ainscomb. His Honour found that the use of the word "agrees" in conjunction with "to pay" indicated a present undertaking and a promise to perform the action. The Court applied the principle that where a deed contains an express promise to pay, that promise will be enforceable as a personal covenant, irrespective of whether the underlying debt was otherwise statute-barred or unenforceable. The Court concluded that the deed created a new and independent obligation on Mr Ainscomb to pay the sum.

The Court ordered that judgment be entered for the plaintiff, Ms Liske, against the defendant, Mr Ainscomb, in the sum of $150,000, together with interest and costs.