TENNISON & GOURLAY

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

The central legal issue before the Court was whether the wording of the settlement deed created a personal covenant by Mr Gourlay to pay the sum of $100,000, or if the obligation was merely to procure payment from a company, thereby limiting his liability to his capacity as a director. The Court was required to determine the true construction of the relevant clause in the deed.

Mushin J applied the principles of contractual interpretation, focusing on the plain and ordinary meaning of the words used in the deed. His Honour considered the context of the clause within the entire deed and the surrounding circumstances. The Court found that the language used, particularly the phrase "shall pay," indicated a clear intention to impose a personal obligation on Mr Gourlay. The Court distinguished this from a situation where a party merely agrees to procure payment from a third party.

The Court ordered that Mr Gourlay was personally liable to pay Ms Tennison the sum of $100,000, together with interest and costs.