Re Dier, J. v Ex parte Suduk, J.

[1991] FCA 493

3UDGh/IENT NO. ........ .... 4-q3./ ..B[ ...,

IN THE FEDERAL COURT OF AUSTRALIA	1
GENERAL DIVISION	1
BANKRUPTCY DISTRICT OF THE	1 No. P1731 of 1989
STATE OF NEW SOUTH WALES	)

RE :	JOHN DIER
EX PARTE:	JOHN SUDUK AND SUSAN SUDUK

CORAM :	HILL J
PLACE :	SYDNEY
DATE
-.	26 JUNE 1991

'ECEIVED

FEDERAL COURT OF

AUSTRALIA

EX TEMPORE REASONS FOR JUDGMENT '\ PRINCIPAL

' REQISTRY

In this matter the applicant, Mr John

order that a bill of costs in respect of a bankruptcy petition presented by Mr and Mrs Suduk against him be stayed. The parties accept that the court has jurisdiction to give the relief sought which turns upon the proper construction of a deed of release entered into between the parties. The bankruptcy petition was subsequently dismissed in June of 1990 following an agreement reached by the parties at that time.

the Suduks as petitioning creditors against Mr Dier.

The disputes between the parties arose out of an agistment arrangement entered into between them. The terms of this arrangement were not before me, but it would seem that under it Mr Dier had agreed to pay certain moneys by way of agistment to Mr and Nrs Suduk. Moneys were claimed by the Suduks to be owing by Mr Dier under this arrangement and ultimately bankruptcy proceedings were commenced in 1988 by

These proceedings were settled in that year on the basis that Mr Dier pay the sum of $17,096 plus costs. The amount of $17,096 has been paid although the costs as taxed, approximately $1100, apparently remain unpaid.

That settlement, however, was not to bring the dispute between the parties to an end. Further agistment fees became payable by Mr Dier to the Suduks who, on 3 April 1989, obtained a default judgment against Mr Dier in the Magistrates Court of Victoria in the sum of $18,312. That judgment formed the basis of a bankruptcy notice issued in this court which led to a further creditors petition being presented by the Suduks against Mr Dier. That petition in No P 1731 of 1989 was filed on 16 August 1989.

In due course settlement was reached between the
parties in these proceedings. Under that settlement Mr Dier

agreed to pay $18,889.39 plus the costs of the Suduks as taxed

or agreed. It is the bill of costs in these proceedings the	taxation of which Mr Dier seeks to have stayed.
The amount of $18,889.39 has been paid by M r Dier in accordance with the settlement. However, that settlement too was not to end the disputes between the parties. The Suduks claimed that further amounts for agistment were due and according to Mr Dier sought to move the horses from Victoria to Queensland to obtain possession of them.
The said dispute was the subject of a settlement reached before court proceedings had been resorted to by the parties. Agreement in principle was reached in early July
1990 and the settlement was reduced to writing in a deed dated
5 July 1990 and by a payment made the same day by M r Dier to the Suduks of $12,500.

The deed of release contains the following recital:

"WHEREAS	the	R e l e a s o r s	c l a i m	from	the
R e l e a s e e s	m o n i e s	and	e x p e n s e s	o f	and
i n c i d e n t a l	t o	the	a g i s t m e n t	by	the

R e l e a s o r s a t the r e q u e s t o f the R e l e a s e e s

o f the mare	" S a l a d Days"	and her	f i l l y " S o
C a l l e d "	t o 5	J u l y 1990	( h e r e i n a f t e r c a l l e d

' the f e e s ' ) AND WHEREAS the r e l e a s e e s h a v e

p a i d t o the R e l e a s o r s i n f u l l s e t t l e m e n t

o f the fees the sum o f TWELVE THOUSAND

FIVE IENDRED DOLLARS $12,500. "

The operative clauses of the release provide as

follows :

"1. In payment o f the s a i d sum wh ich the

R e l e a s o r s acknowledge h a v i n g r e c e i v e d , the

R e l e a s o r s hereby r e l e a s e the R e l e a s e e s

from	a l l	c l a i m s ,	demands,	a c t i o n s ,	s u i t s
and	C o u r t	costs	w h a t s o e v e r	which	they

m i g h t h a v e or m i g h t b u t for t h i s agreement

h a v e been e n t i t l e d t o make or b r i n g

a g a i n s t	the	R e l e a s e e s	for	a n y	m o n i e s
p a y a b l e	t o the	R e l e a s o r s	i n r e s p e c t	o f	the
fees.

2. The c o n t r a c t for a g i s t m e n t b e t w e e n the

R e l e a s o r s and the R e l e a s e e s i s hereby

d e t e r m i n e d and the R e l e a s o r s acknowledge

t h a t	a l l m o n i e s	d u e	by	t h e m	t o Paul	Hogg
a n d / o r	P a t a l i n a	S t u d	h a v e	been	p a i d	t o

d a t e and no c a u s e o f a c t i o n i s i n

existence between the s a i d Paul Hogg

and/or Patalina Stud and the Releasors."

The question between the parties is whether that deed of release operated to release Mr Dier from the obligation to pay to the Suduks the taxed costs agreed to be paid in the settlement of 27 June 1990 in respect of bankruptcy proceedings P1731 of 1989. A bill of costs in those proceedings has been prepared and an appointment arranged for its taxation. I rejected evidence of what was said during the course of negotiations of the deed of release which evidence sought to establish the intention of the parties in entering into it. I did so having regard to what was said by Mason J in Codelfa Construction Ptv Limited v State Rail Authority of New South Wales (1981-2) 149 CLR 337 at 352 in the following passage:

"Obviously the prior negotiations w i l l tend t o establish objective background

facts which were known t o both parties and	the subject matter o f the contract. To
the extent t o which they have t h i s tendency they are admissible. B u t i n so
f a r a s they consist o f statements and
actions o f the parties which are
re f lec t ive o f the ir actual intentions and
expectations they are not receivable. The point i s that such statements and actions reveal the terms o f the contract which the parties intended or hoped t o make. They are superseded by, and merged i n , the
contract i t s e l f . The object o f the par01
evidence rule i s t o exclude them, the prior oral agreement o f the parties being inadmissible i n a i d o f construction, though admissible i n an action for
rect i f icat ion. "

See also my judgment in Murrav Publishers Ptv Ltd v Mt Blue
Cow Skibowl Ptv Ltd (unreported 26 June 1991).

The deed of release is not happily worded. No doubt this in part has resulted in the present application. The applicant relies on the release in the deed of "court costs". His solicitor says the agreement was clearly intended to put an end to all outstanding matters between the parties. One of these matters was the outstanding court costs not yet taxed. Hence, she submitted, the release should be construed as a release by the Suduks of their claim for court costs. The respondents, through their counsel, sought to confine the release to claims in respect of agistment in the matter of dispute between the parties and, if relevant, court costs in respect of such claims, not in respect of earlier claims no longer in dispute between the parties.

On the whole, I think that the respondents submission is to be preferred. Clause 1 of the deed of release releases, inter alia, claims, suits and court costs, but only those which but for the agreement the ~uduks would have been entitled to "make or bring" against M r Dier, for moneys payable "in respect of the fees". The expression

"fees" is defined in the recitals to mean a claim by the

Suduks for moneys and expenses of and incidental to the agistment of the two horses to 5 July 1990. While the matter is not free from doubt the surrounding circumstances make it clear that the only outstanding claim for agistment was that for the $12,500. The outstanding court costs were not of and incidental to the claim for that amount or indeed the claim for agistment. They related to bankruptcy proceedings arising out of the recovery of agistment fees which were no longer in dispute.

The strongest argument against this interpretation
is the difficulty as a matter of language of reading the words

"court costs" as governed by the words "in respect of the fees". There were of course no court proceedings in which

court costs had been incurred in relation to the $12,500 claimed by the Suduks against M r Dier. However, there were no actions or suits in respect of those fees either. What the language of the deed suggests is that the parties were intent on releasing the claims or demands in respect of the fees of $12,500 which claims and demands had been made and to ensure

actions or suits be brought in respect of them and to ensure

that the deed could be pleaded in bar thereafter should any

that any legal costs that may be awarded in such actions or
suits were similarly released in advance.

Nothing in the deed suggests that the Suduks intended to release the existing court costs not yet taxed which had by agreement been ordered to be paid by Mr Dier. This being so I would dismiss the application and order the applicant to pay the respondents costs of it.

I certify that this and the
preceding six (6) pages
are a true CODY of the Reasons
for Judgment herein of his Honour

M r Justice Hill.

Associate:
Date: 26 &ne 199i

Solicitors for Sally Nash & CO

Applicant/Debtor:

Counsel and Solicitors	Mr Peters instructed by Greaves
for the Respondent/Creditor	Wannan & Williams
Date of Hearing:	26 June 1991
Date Judgment Delivered:	26 June 1991