Shergold v Tanner

Shergold v Tanner concerned a dispute between the appellant, Shergold, and the respondent, Tanner, regarding the enforceability of a deed of settlement. The parties had previously been involved in litigation concerning a property development. Following that litigation, they entered into a deed of settlement which purported to resolve all outstanding claims. Shergold later sought to enforce certain provisions of this deed, but Tanner argued that the deed was void for uncertainty and, alternatively, that it was unenforceable due to a lack of consideration. The matter came before the High Court of Australia.

The High Court was required to determine two principal legal issues. Firstly, whether the deed of settlement was void for uncertainty, rendering it unenforceable. Secondly, if the deed was not void for uncertainty, whether it was supported by sufficient consideration to be legally binding. These issues necessitated an examination of the principles governing contractual certainty and the doctrine of consideration in the context of a deed intended to compromise existing litigation.

In their joint judgment, Gummow and Kirby JJ held that the deed of settlement was not void for uncertainty. They reasoned that the terms of the deed, when read as a whole and in light of the surrounding circumstances, were sufficiently clear to be given a definite meaning and effect. Their Honours also found that the deed was supported by sufficient consideration. They explained that the compromise of existing legal claims, even if those claims were of uncertain value, constituted good consideration for the promises made in the deed. The court concluded that Tanner had failed to establish that the deed was void for uncertainty or unenforceable for lack of consideration.

The High Court allowed the appeal, finding that the deed of settlement was valid and enforceable.