Prior v Kemp

Gaudron and Gummow JJ considered the appeal in *Prior v Kemp*. The dispute concerned the interpretation of a clause within a deed of settlement, specifically whether it imposed a personal obligation on the appellant, Mr Kemp, to pay a sum of money to the respondent, Ms Prior, or if it merely created a charge over certain property. The primary issue before the court was the nature and enforceability of this obligation.

The central legal question was whether the wording of the settlement deed created a personal covenant by Mr Kemp to pay the sum, or if it merely established a security interest over specified assets. This distinction was critical for determining the scope of Ms Prior's rights and the extent of Mr Kemp's liability.

Their Honours reasoned that the language of the deed, particularly the use of the phrase "shall pay," indicated a clear intention to create a personal obligation on Mr Kemp. They applied principles of contractual interpretation, emphasizing that the plain meaning of the words used in the deed should be given effect. The court found that the obligation was not solely contingent on the realisation of the charged property, but rather a direct undertaking by Mr Kemp to discharge the debt.

The appeal was dismissed, with the court upholding the primary judge's finding that Mr Kemp was personally liable for the payment of the sum stipulated in the deed of settlement.