Selected Seeds Pty Ltd v QBEMM Pty Limited & Ors

Selected Seeds Pty Ltd (the applicant) sought leave to appeal to the High Court of Australia against a decision of the Court of Appeal of the Supreme Court of Queensland. The dispute concerned the interpretation and enforceability of a deed of settlement and release entered into between the applicant and QBEMM Pty Limited and others (the respondents). The applicant alleged that the respondents had breached the terms of the deed, which had been entered into to resolve prior litigation.

The central legal issue before the High Court was whether the Court of Appeal had erred in its construction of the deed of settlement and release. Specifically, the High Court was required to determine whether the Court of Appeal had correctly interpreted the scope of the release granted by the applicant and whether the respondents' actions constituted a breach of the covenants contained within the deed. The applicant contended that the Court of Appeal’s interpretation had unduly restricted the operative effect of the deed.

The High Court granted leave to appeal and ultimately allowed the appeal. The Court found that the Court of Appeal had erred in its construction of the deed. The High Court applied principles of contractual interpretation, emphasizing the importance of giving effect to the plain and ordinary meaning of the words used in the deed, considered in light of the surrounding circumstances and the purpose of the agreement. The Court held that the respondents' conduct did indeed fall within the scope of the release and constituted a breach of the covenants, as the Court of Appeal had adopted an overly narrow interpretation of the operative clauses. The High Court therefore set aside the orders of the Court of Appeal.