National Australia Bank Ltd v Sayed (No 3)

In the Federal Court of Australia, National Australia Bank Ltd brought an action against Sayed, concerning the interpretation of an agreement in principle which was later replaced by a formal contract. The bank sought clarification on the extent of mutual releases agreed upon by the parties, specifically whether these releases extended to their respective servants and agents. The case revolved around the precise wording of the contract and the implications of these terms.

The court was tasked with determining whether the mutual releases in the contract extended to the servants and agents of both parties. The central issue was whether the phrase "all persons" in the release clause encompassed individuals acting on behalf of the parties, such as employees and agents. The bank argued that the mutual releases should only apply to the parties themselves, while Sayed contended that the term "all persons" should be interpreted broadly to include the parties' servants and agents.

The court examined the language of the contract and the context in which it was written. It considered the intention of the parties at the time of the agreement and the commercial purpose of the settlement. The court found that the term "all persons" was ambiguous and could reasonably be interpreted in two ways. Ultimately, the court decided that the broader interpretation, which included servants and agents, was consistent with the overall purpose of the settlement agreement. This interpretation promoted a comprehensive and final resolution of all disputes between the parties.

The court ruled in favour of Sayed, finding that the mutual releases extended to the servants and agents of both parties. The bank's appeal was dismissed, and the terms of the contract were upheld as interpreted by the lower court.