JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: RECCE PHARMACEUTICALS LTD -v- IAN DAVID BROWN [2022] WASCA 66
CORAM: MITCHELL JA
BEECH JA
VAUGHAN JA
HEARD: 17 FEBRUARY 2022
DELIVERED : 13 JUNE 2022
FILE NO/S: CACV 117 of 2020
BETWEEN: RECCE PHARMACEUTICALS LTD
Appellant
AND
IAN DAVID BROWN IN HIS OWN CAPACITY AND AS DULY AUTHORISED REPRESENTATIVE OF VARIOUS OTHER PERSONS
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: MASTER SANDERSON
Citation: IAN DAVID BROWN -v- RECCE PHARMACEUTICALS LTD [2020] WASC 393
File Number : COR 98 of 2020
Catchwords:
Corporations law - Construction - 'Terms and Conditions of Performance Shares' - Whether terms and conditions entitled claimants to convert performance shares into ordinary shares - Whether, properly construed, 'Holder' required to continue to perform duties and functions as director or key management personnel at time of achievement of performance milestone - Whether implied term in terms and conditions that conversion was subject to holders of performance shares materially contributing to achievement of relevant performance milestone - Turns on own facts
Legislation:
ASX Listing Rule 6.1
ASX Guidance Note 19
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
| Appellant | : | G A Sirtes SC & S A Scott |
| Respondent | : | S K Shepherd |
Solicitors:
| Appellant | : | Automic Legal Pty Ltd |
| Respondent | : | Forbes Kirby |
Case(s) referred to in decision(s):
Abbott v Middleton (1858) 7 HLC 68; (1858) 11 ER 28
Attorney General of Belize v Belize Telecom Ltd [2009] UKPC 10; [2009] 1 WLR 1988
Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99
Biodiesel Producers Ltd v Stewart [2007] FCA 722
Black Box Control Pty Ltd v TerraVision Pty Ltd [2016] WASCA 219
Blenkinsop v Herbert [2017] WASCA 87; (2017) 51 WAR 264
BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] HCA 40; (1980) 180 CLR 266
Brennan v Permanent Trustee Co of New South Wales Ltd [1945] HCA 17; (1945) 73 CLR 404
Brown v Recce Pharmaceuticals Ltd [2020] WASC 393
Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253
CA & Associates Pty Ltd v Fini Group Pty Ltd [2020] WASCA 31
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337
Currie v Glen [1936] HCA 1; (1936) 54 CLR 445
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640
Huntingdale Village Pty Ltd (Receivers & Managers Appointed) v Corrs Chambers Westgarth [2018] WASCA 90
JKC Australia LNG Pty Ltd v CH2M Hill Companies Ltd [No 2] [2020] WASCA 112
Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd [2008] NSWCA 5
Maggbury Pty Ltd v Hafele Aust Pty Ltd [2001] HCA 70; (2001) 210 CLR 181
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- AGLC
- Recce Pharmaceuticals Ltd v Brown [2022] WASCA 66
- Case
- [2022] WASCA 66
- Decision Date
CaseChat Overview and Summary
The court examined the established principles of construing commercial instruments, emphasizing that the focus should be on the objective meaning of the words used, considering the context and purpose of the transaction. The court reviewed previous cases to illustrate the accepted approach to construction, highlighting that the text should be interpreted by what a reasonable person in the parties' position would understand. The court also noted that while the text is usually interpreted alone, extrinsic evidence can be considered if it aids in understanding the instrument's purpose or if the text is ambiguous.
The court found that the master's interpretation of the terms and conditions was correct. The court held that the master was not in error for considering extrinsic materials, as such evidence can assist in interpreting the instrument, particularly in understanding the commercial purpose or objects of the contract. The court concluded that the master's approach was consistent with established principles and that the interpretation of the terms was appropriately determined.
The court upheld the master's decision, affirming that the terms and conditions were correctly interpreted. The appeal was dismissed, and no orders were made beyond affirming the master's findings.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Accordingly, in terms of identifying intention for the purpose of the task of construction, there is commonality of approach in construing an instrument, be it a contract, a deed of trust or a will. The question for consideration is not what the parties or party meant to say, but rather is what is the objective meaning to be attributed to the words the parties or party used to express what was agreed or provided for. That, in our view, is the proper approach to construing the terms and conditions attaching to the performance shares. Those terms and conditions are a commercial instrument. The general principles to be applied in construing commercial instruments are well established[67] and do not require detailed elaboration for the proper disposition of this appeal. [67] See eg Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] - [52]. In this court see: Black Box Control Pty Ltd v TerraVision Pty Ltd [2016] WASCA 219 [42]; CA & Associates Pty Ltd v Fini Group Pty Ltd [2020] WASCA 31 [51] - [54]; JKC Australia LNG Pty Ltd v CH2M Hill Companies Ltd [No 2] [2020] WASCA 112 [67] - [72]. In broad summary, the text used is to be interpreted objectively by considering what the language adopted would mean to a reasonable person in the position of the parties or party. The text used is to be considered in its relevant context, including the surrounding circumstances known to the parties or party at the time of the transaction, and having due regard to the purpose or object of the transaction as revealed by the text and context. At this point it is convenient to deal with two of the respondent's supplementary arguments (see [51] above). The master was not in error in having regard to extrinsic materials when construing cl (l) of the terms and conditions attaching to the performance shares. Evidence of surrounding circumstances was admissible to assist in the interpretation of the instrument even if no ambiguity in meaning could properly be identified. Ordinarily the process of construction is possible by reference to the instrument alone. Indeed, as was said by French CJ, Nettle and Gordon JJ in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd, where an expression is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances cannot be adduced to contradict that plain meaning.[68] But, as their Honours went on to say:[S]ometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'.[69][68] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [48].[69] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [49].