MORTON & ALLAN

The parties to this proceeding were Morton and Allan. 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 Altobelli J of the Supreme Court of New South Wales.

The central legal issue before the Court was whether the deferred payment, which was contingent on the net profit of a particular business, was to be calculated by reference to the profit before or after the deduction of certain management fees. This interpretation was crucial for determining the precise amount payable by Allan to Morton under the settlement deed.

Altobelli J's reasoning focused on the plain and ordinary meaning of the words used in the relevant clause of the settlement deed. His Honour considered the context in which the clause appeared and the overall purpose of the deed. The Court applied principles of contractual interpretation, emphasising that where the language of a contract is clear and unambiguous, it should be given its literal meaning. His Honour found that the wording of the clause indicated that the management fees were to be deducted in calculating the net profit for the purpose of the deferred payment.

The Court therefore found in favour of Allan, determining that the deferred payment was to be calculated after the deduction of the management fees. The specific orders made by the Court would have reflected this determination of the contractual dispute.