MERRICKS & DEERING

The parties to this proceeding were Merricks and Deering. The dispute concerned the interpretation and application of a deed of settlement and release entered into between the parties. The matter came before Burchardt J of the Supreme Court of Victoria.

The central legal issue before the Court was whether the deed of settlement and release operated to extinguish the plaintiff's claim for damages arising from a breach of contract, notwithstanding that the plaintiff had not been paid the full amount stipulated in the deed. Specifically, the Court had to determine the effect of the deed on the plaintiff's accrued cause of action.

Burchardt J reasoned that a deed of settlement and release, while capable of extinguishing a cause of action, does so on the basis of the agreement reached between the parties. The Court held that the intention of the parties, as evidenced by the deed, was to compromise all claims, and that the payment of the settlement sum was a condition precedent to the release of those claims. As the full settlement sum had not been paid, the condition precedent had not been met, and therefore the release had not taken effect. The Court applied the principle that a release of a cause of action is generally conditional upon the performance of the terms of the settlement agreement.

The Court found that the plaintiff's claim for damages had not been extinguished by the deed and therefore the plaintiff was entitled to pursue its claim.