Strudwick & Baker Johnson

The parties to this proceeding were Strudwick and Baker Johnson. The dispute concerned the interpretation of a clause within a deed of settlement, specifically whether it imposed a personal obligation on Mr. Strudwick to pay a sum of money to Baker Johnson. The matter came before Lindenmayer J in the Supreme Court of Victoria.

The central legal issue before the Court was whether the wording of clause 10.1 of the deed of settlement created a personal covenant by Mr. Strudwick to pay the sum of $150,000 to Baker Johnson, or if it merely reflected an obligation undertaken by a company, Strudwick Pty Ltd, which Mr. Strudwick controlled. The Court was required to determine the true nature of the obligation and the extent of Mr. Strudwick's personal liability under the deed.

Lindenmayer J reasoned that the language of clause 10.1, particularly the use of "Mr. Strudwick covenants and agrees," indicated an intention to create a personal obligation on Mr. Strudwick. The Court considered the surrounding provisions of the deed and the context of the settlement, concluding that the inclusion of Mr. Strudwick's personal covenant was deliberate and intended to provide Baker Johnson with recourse beyond the company. The principle applied was that clear and unambiguous language in a contract will be given its ordinary meaning, and where a party explicitly covenants, they are bound by that covenant. The Court found that the deed did not contain any express or implied qualification that Mr. Strudwick's covenant was conditional upon the company's obligation or was merely a reflection of the company's undertaking.

The Court ordered that Mr. Strudwick was personally liable to pay the sum of $150,000 to Baker Johnson pursuant to clause 10.1 of the deed of settlement.