Winslade Partners Pty Ltd v Steri-Flow Filtration Systems (Aust) Pty Ltd - [2011] SASC 157

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
WINSLADE PARTNERS PTY LTD v STERI-FLOW FILTRATION SYSTEMS (AUST) PTY LTD
[2011] SASC 157
Judgment of The Honourable Justice Stanley
29 September 2011
MAGISTRATES - APPEALS AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT - FUNCTIONS OF APPELLATE COURT - WHERE FINDINGS BASED ON CREDIBILITY OF WITNESSES - NECESSITY FOR FINDING TO BE CLEARLY WRONG
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS - IMPLIED TERMS - GENERALLY
RESTITUTION - RESTITUTION RESULTING FROM UNENFORCEABLE, INCOMPLETE, ILLEGAL OR VOID CONTRACTS - RECOMPENSE FOR SERVICES RENDERED - QUANTUM MERUIT
Appellant claimed appellant and respondent had entered into two agreements for the appellant to provide work for the respondent. The first agreement concerned work for a tax concession claim and the second was to prepare a Commercial Ready Grant application. The appellant sought to recover money for that work relying on the contracts, or in the alternative a contractual quantum meruit.
The magistrate found no contract had come into existence in relation to the tax concession claim work. The magistrate further found that no monies were owed to the appellant in respect of the Commercial Ready Grant application in accordance with the contract.
Whether a valid contract existed for the tax concession claim work – whether the appellant had a claim on the basis of a contractual quantum meruit although they had abandoned a claim for quantum meruit at trial – whether the contract for the Commercial Ready Grant application had expired or whether the contract contemplated resubmission – whether the appellant’s claims had been discharged by a settlement of the parties in July 2005.
Held: Appeal dismissed. No basis to interfere with the magistrate’s finding that no contract existed for the tax concession claim – the appellant was not entitled to a quantum meruit claim – the contract for the Commercial Ready Grant application expired when the application was lodged and there was an implied term in the contract that the work became the property of the respondent thereafter – the July 2005 settlement did not discharge all of the appellant’s claims and the magistrate erred in this finding.
Magistrates Court Act 1991 (SA) s 8(2), s 31, referred to.
B.P. Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; Battye v Shammall (2005) 91 SASR 315, applied.
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; Investors Compensation Scheme v West Bromwich Building Society [1988] 1 WLR 896; Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; Lake v Simmons [1927] AC 487; Watson v Phipps (1985) 63 ALR 321, discussed.
Fox v Percy (2003) 214 CLR 118; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; Warren v Coombes (1979) 142 CLR 531; Jones v Hyde (1989) 63 ALJR 349; Abalos v Australian Postal Commission (1990) 171 CLR 167; Devries v Australian National Railways Commission (1993) 177 CLR 472; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; Riverwood v McCormick (2000) 177 ALR 193; Maynard v Goode (1926) 37 CLR 529; AMP Society v Chaplin (1978) 18 ALR 385; FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343; Byrnes & Anor v Kendle (2011) 85 ALJR 798, considered.

WINSLADE PARTNERS PTY LTD v STERI-FLOW FILTRATION SYSTEMS (AUST) PTY LTD
[2011] SASC 157
Magistrates Appeal: Civil
STANLEY J:
Introduction

This is an appeal from a magistrate who dismissed the appellant’s claim and gave judgment for the respondent.
At the relevant time the parties were in a commercial relationship with the appellant engaged as a consultant to the respondent.
The appellant brought two discrete claims for monies owed pursuant to contracts between the parties. The appellant claimed the sum of $16,715.30 for work done by it for the respondent in respect of a tax concession claim for the 03/04 year (“the tax concession claim”). By amendment, during the course of the trial, the appellant further claimed the sum of $104,803.90 pursuant to a contract to prepare a Commercial Ready grant application (“the Commercial Ready grant contract”).[1]
[1] The parties to the action waived any monetary limit on the civil jurisdiction of the Magistrates Court pursuant to s 8(2) of the Magistrates Court Act 1991 (SA).
The learned magistrate dismissed both claims.
In the case of the tax concession claim, the learned magistrate held that he was not satisfied that a contract between the parties for the sum claimed had come into existence. In respect of the Commercial Ready grant contract, the learned magistrate held that no monies were owed by the respondent to the appellant in accordance with the terms of the contract. In addition, the learned magistrate held that, in any event, had the appellant any entitlement to recover monies pursuant to either the tax concession contract or the Commercial Ready grant contract, those entitlements were discharged by the terms of a settlement agreement made between the parties in July 2005.
In relation to the tax concession claim, the appellant originally claimed, in the alternative, an entitlement to recover from the respondent the sum of $16,715.30 as a quantum meruit but abandoned that claim during the course of the trial. Unsurprisingly, the learned magistrate did not deal with any claim for a quantum meruit. Nonetheless, this assumes some significance on appeal.
Background
The respondent is a manufacturing company specialising in stainless steel fabrication for the food and beverage industry. Mr Gilbert Erskine is a director of the respondent company and was principally responsible for its day-to-day management. His wife, Lorna Erskine, had authority to speak on behalf of the company at all relevant times.
The appellant company is the corporate vehicle through which Dr Steven Winslade and Mrs Sharon Winslade provide consultancy services. The company was previously named Technology Investments Australia Pty Ltd.
The appellant provided consultancy services to the respondent from 2001 to 2005.
In 2003 the parties entered into an agreement pursuant to which the appellant forgave any entitlement to be paid for certain outstanding work, future success fees, and fees in respect of the equivalent of ten days work per month for the next year in consideration of the respondent issuing to the appellant 10 per cent of its share capital. This became known as the “equity for fees arrangement”. It appears clear the shares were issued to the appellant, pursuant to this agreement, but the evidence does not establish when this occurred.
In about February 2004 the appellant loaned the respondent the sum of $50,000. The loan was repayable “upon receipt by Steri-Flow of tax offset arising from Steri-Flow’s tax return for the financial year 2003/2004”. By July 2005 the unpaid balance of this loan was $12,000.
In or about January 2005 the appellant loaned a further sum of $18,000 to Mr and Mrs Erskine. While they were identified in the loan agreement of 12 January 2005 (exhibit P7) as the borrowers, the parties treated the respondent company as the actual borrower.
In the meantime, on 5 December 2004 the parties entered into the Commercial Ready grant contract. The agreement is evidenced by a letter of that date from the appellant to the respondent together with an attached quotation (exhibit P6). Relevantly, the quotation includes the following:
Payment Schedule
Upon receipt of grant funds over the life of the project. Ten percent of the grant payment received.
Pursuant to the contract the parties agreed that the appellant would prepare, ready for lodgement, on behalf of the respondent, a full Commercial Ready program application to AusIndustry for a grant of more than $1,000,000. The agreement was that the application would be prepared on a success fee basis only. The success fee was 10 per cent of the grant payment received.
This is the Commercial Ready grant contract.
The Commercial Ready grant application was lodged with AusIndustry in December 2004. By letter from AusIndustry to the respondent dated 9 March 2005, the respondent was advised that its Commercial Ready grant application had been unsuccessful.
Importantly, in March 2006, without the further assistance of the appellant, the respondent lodged a further application for a Commercial Ready grant with AusIndustry. This application was successful. It resulted in a grant to the respondent of $1,048,039.90.
The appellant claimed an entitlement to 10 per cent of this sum pursuant to the Commercial Read grant contract.
By the middle of 2005 the respondent was struggling financially. Mr Erskine was actively seeking an outside investor to inject capital into the company. I will return to this matter shortly.
Shortly thereafter and against this background, on 5 May 2005 Dr Winslade sent an email to Mr Erskine referring to a tax concession claim lodged on behalf of the respondent by Mrs Winslade. In this regard, Dr Winslade wrote in the email:
Given the circumstances of the Steri-Flow are about to change management wise I suggest that we formalise the arrangement as to payment for this tax return. The usual approach is to do the tax concession work on the usual percentage basis (rate to other clients is 10% of concession achieved, Sharon has usually charged this out (if at all) on an hourly rate). The cost for the work is then pushed out to the point of receipt and provides some basis on which to claim payment when it comes (assuming that there will be a new manager in place). Are you OK with this?
After the email was sent there was a conversation between Mr Erskine and Mrs Winslade. So much was not in issue. The terms of the conversation were a matter of dispute. Mrs Winslade gave evidence that in the course of the conversation Mr Erskine agreed to pay for the tax concession work on the basis of payment of a fee of 10 per cent of the concession received. She told the court that after speaking to Mr Erskine she relayed the effect of the conversation to Dr Winslade. He gave evidence that he made a handwritten note on the printed email to the effect that the offer had been accepted in the following words:
Replied on the phone “Yes”.
Mr Erskine gave evidence that in the course of the conversation with Mrs Winslade he said he was prepared to consider payment of future work on the basis of a 10 per cent success fee but did not agree to pay for the tax concession work on that basis. He gave evidence that he would not have agreed to payment on that basis, for that work, at that time, because of the financial position of the respondent.
The learned magistrate preferred the evidence of Mr Erskine on this issue.
Ultimately, the respondent received a research and development tax offset of $167,153. This was the basis of the appellant’s claim to payment of the sum of $16,715.30 pursuant to the tax concession claim.
Finally, it was common ground that in July 2005 the parties entered into a settlement agreement pursuant to which the respondent paid the appellant the sum of $150,483.98.
This agreement resulted from the decision of a Singapore based investor, Mr Yap, to inject new capital into the respondent.
At that time the appellant held 10 per cent of the share capital of the respondent. In addition it claimed to be owed $120,000 for various consultancy services it had provided to the respondent. Further, the unpaid balance of the loans made by the appellant to the respondent and Mr and Mrs Erskine stood at the sum of $30,000.
Before Mr Yap was prepared to inject his capital into the respondent he required the conversion of any debts owed by the respondent into equity. This proposal was unacceptable to the Winslades. Their refusal to countenance this course was a source of tension in the business relationship between the Winslades and the Erskines. Ultimately, it resulted in the July 2005 agreement which saw the appellant paid by the respondent the monies owing to it at that stage.
The terms of the agreement were as follows:
1.The respondent repay all outstanding loans to the appellant in the sum of $30,000.
2.The respondent pay to the appellant all outstanding invoices in the sum of $120,344.40.
3.That the shares held by the appellant in the respondent be transferred to the respondent at the issue price of $10.
4.That the respondent provide the appellant with an indemnity against all liabilities the appellant may have incurred as a consultant to the respondent.
Pursuant to this agreement the respondent paid the appellant $150,483.98.
The magistrate’s reasons
At trial the appellant called evidence from Dr and Mrs Winslade. The respondent called evidence from Mr Erskine, Mr Ian Fong, the private equity manager for Mr Yap, Mr Andrew Russo, the respondent’s accountant, and Ms Lina Cavallaro, who was engaged by the respondent to prepare the further Commercial Ready grant application submission lodged in March 2006.
The learned magistrate found each of the witnesses called by the respondent to be reliable.
He was less impressed by the evidence of Dr and Mrs Winslade. He made the following findings as to their credit:
204I formed a significantly less favourable opinion of the evidence of Dr and Mrs Winslade. I believe that each of them, but more so Dr Winslade, had a tendency to respond to questions with answers that contained, if not exaggerations, then at least certainly a gloss which gave a less than accurate impression. When that occurred the impression given was one that was more favourable to the Winslades than was the reality in question. I had the occasional impression that some of Dr Winslade’s answers were probably guesses on his part, but on those occasions the evidence given certainly was favourable to the plaintiff’s case.
205I believe that in important respects the recollections of Dr and Mrs Winslade have been subject to reconstruction and that the process of reconstruction has been significantly influenced by their desire to achieve a favourable outcome to their claims. I further believe that as a result of that process, significant parts of their evidence did not spring from accurate recollection and was influenced by a desire to paint as favourable a picture as possible in order to enhance their prospects of success in the litigation. I am unable to say whether it was a conscious and deliberate process that was at work, but in any event the result is that there are a number of issues in respect of which I do not regard their evidence as reliable.
Against the background of the learned magistrate’s findings as to credit, he dismissed the appellant’s claims in respect of the tax concession claim and the Commercial Ready grant contract.
In relation to the tax concession claim, he concluded that the appellant had failed to prove the existence of this contract.
This conclusion turned on the evidence of a telephone conversation between Mrs Winslade and Mr Erskine a few days after the email of 5 May 2005 (exhibit P8).
As I have noted, it was common ground between the parties that such a conversation had occurred. However, the learned magistrate rejected the evidence of Mrs Winslade that in the course of this telephone conversation Mr Erskine had agreed to accept the proposition set out in the email of 5 May 2005 to pay a fee of 10 per cent of any tax concession obtained as consideration for the appellant’s work on that matter. Mrs Winslade had given evidence that she had relayed this agreement to her husband at the conclusion of the telephone conversation. The evidence of both Dr and Mrs Winslade was that Dr Winslade had then recorded the fact of the agreement in a handwritten note on a copy of the email.
The learned magistrate concluded that Mrs Winslade had misheard or miscomprehended that part of the conversation with Mr Erskine. Implicitly, he accepted Mr Erskine’s evidence that he had not agreed to the proposal to pay a fee of 10 per cent of any concession achieved in the telephone conversation. Rather, the learned magistrate seems to have accepted the evidence of Mr Erskine that in this telephone conversation he told Mrs Winslade that the 10 per cent fee proposal could be the basis for charging for future work. Mr Erskine gave evidence that the appellant had not been charging for its services for some time when this conversation occurred, which he attributed to the equity for fees arrangement. He also said that he would not have agreed to pay any fees at that time because of the respondent’s parlous financial situation.
The learned magistrate rejected the respondent’s defence that the tax concession work was covered under the equity for fees arrangement, but accepted that, at the time of this conversation, Mr Erskine sincerely but mistakenly held that view.
On this basis, the learned magistrate considered that the appellant had failed to prove the existence of any contract to pay for the tax concession work for the 03/04 financial year as claimed by the appellant.
The learned magistrate disposed of the appellant’s claim in respect of the Commercial Ready grant contract on a different basis. There was no issue that a contract for this work came into existence in December 2004.
The learned magistrate found as follows:
256The contract between the parties for the Commercial Ready grant application is the plaintiff’s quotation which was accepted by Mr Erskine on 21 December 2004 (P6). The work required to be undertaken by the plaintiff pursuant to the contract was to ‘prepare ready for lodgement a full Commercial Ready program application’.
257The quotation made no reference to any continuing contractual relationship in the event that the application was not successful.
258In my view, on its proper construction the December 2004 contract was exhausted when the defendant received the letter from AusIndustry dated 9 March 2005 advising that the application had not been successful.
The learned magistrate rejected the appellant’s contention that the March 2006 application was, in effect, a substantial replication of the work it had done for the December 2004 application. The respondent contended that the March 2006 application was a new application, significantly different in content and scope from the earlier application prepared by the appellant.
The learned magistrate heard evidence in relation to this matter from Dr Winslade for the appellant, and Mr Erskine, Mr Russo and Ms Cavallaro on behalf of the respondent. He preferred the evidence of the respondent’s witnesses to the effect that the original application required significant reworking before the respondent was in a position to resubmit an application.
Finally, the learned magistrate found that the settlement reached between the parties in July 2005, in any event, was an agreement to resolve all outstanding issues between the parties in terms of any liability of the respondent to the appellant. The learned magistrate held that this settlement contained an implied term to the effect that the appellant accepted the sum of $150,483.98 in full and final satisfaction of any liability, including contingent liabilities, owed by the respondent to the appellant. Accordingly, even if the learned magistrate was wrong in the conclusions formed in respect of the appellant’s claims under the tax concession claim and the Commercial Ready grant contract, the appellant’s claims failed as any such obligation to pay monies was discharged by the terms of the July 2005 settlement.
The submissions of the appellant

The appellant submitted that the learned magistrate’s conclusion in respect of the tax concession claim depended on an adverse finding of credit based largely on demeanour. It submitted that the advantage enjoyed by the learned magistrate was lost because so much time had elapsed between the evidence being given and the judgment[2]. In addition, it submitted the learned magistrate failed to have sufficient regard to the fact that Mr Erskine was aware the tax concession work was performed in expectation of payment. Combined with the fact that the fee suggested was the same as Mr Erskine was contemporaneously prepared to accept in relation to the other work performed by the appellant, namely, the Commercial Ready grant contract, he should have found that the parties were ad idem as to the basis of payment for this work.
[2] Fox v Percy (2003) 214 CLR 118.
In any event, the appellant submitted that if there was not an enforceable contract for the performance of the tax concession work, the work had been performed by the appellant with the knowledge of the respondent and the appellant was entitled to be paid on the basis of a quantum meruit.
While the appellant accepted that it had abandoned its pleaded claim to a quantum meruit at trial, it contended that it abandoned a non-contractual quantum meruit claim only. It was still entitled to a contractual quantum meruit.
In relation to the Commercial Ready grant contract, the appellant submitted that the learned magistrate’s decision depended on two critical findings. First, that the original contract did not continue after the initial rejection of the grant application by AusIndustry, and second, that the March 2006 application which was ultimately successful was a different application from the application prepared by the appellant.
The appellant criticised this reasoning on a number of bases. It submitted the first ground upon which the Commercial Ready contract claim was dismissed was flawed on three grounds. First, the contract had to be construed in a commercial context. It was uncommercial to construe the contract as being complete upon the initial rejection of the application for a Commercial Ready grant by AusIndustry. Such applications require hundreds of hours of preparatory work. It was not uncommon for an initial application to be rejected but to be granted upon resubmission after refining the proposal. The contract contemplated the possibility of resubmission. Second, the conclusion that the contract was terminated upon the initial rejection of the claim by AusIndustry was inconsistent with the objective conduct of the parties which treated the contract as still on foot thereafter. In particular, the appellant pointed to the reference by Mrs Winslade to the contract as a “live contract” to which the respondent did not demur. Third, even if the contract had been terminated upon the initial rejection of the application by AusIndustry, the respondent was not entitled to make use of the appellant’s work without paying for it. The respondent received a grant in excess of $1,000,000 on the back of the appellant’s work. The appellant was entitled to be paid on the basis of a quantum meruit.
Although no claim had been made for a quantum meruit the appellant submitted the court was empowered to grant such relief as it considered appropriate in the circumstances of the case, pursuant to s 31 of the Magistrates Court Act 1991 (SA).
Further, the appellant submitted that the second ground upon which the learned magistrate dismissed the Commercial Ready grant contract claim, namely, that the March 2006 application was a different application from the application prepared by the appellant, suffered from an incorrect analysis. The question of whether the March 2006 application was substantially similar to the December 2004 application was not to be decided by weighing the objective opinion of one or other of the witnesses, but should have been determined by comparing the documents themselves. Once that analysis was undertaken it was apparent that, objectively speaking, the two documents are substantially identical.
Finally, the appellant submitted that the learned magistrate erred in his construction of the July 2005 agreement. It submitted that there was no justification for the court implying terms into the agreement which was a contract in writing entire on its face. A consideration of the exchange of correspondence set out in exhibits P13, P14, P15 and P16 makes clear they say nothing about the tax concession work or the Commercial Ready work. This work gave rise to what were, at that time, contingent liabilities. The July 2005 agreement did not include a release of the respondent by the appellant for any claims other than those expressly referred to in the correspondence.
The submissions of the respondent
The respondent contended that the learned magistrate’s conclusions in relation to each of the tax concession claim, the Commercial Ready grant contract and the July 2005 agreement were correct. Nonetheless it emphasised that the court should dismiss the appeal if it was satisfied that the learned magistrate had come to a correct result on the one hand in relation to the tax concession claim and the Commercial Ready grant contract or, on the other hand, he had come to the correct conclusion in relation to the July 2005 agreement.
In relation to the tax concession claim the respondent submitted that the learned magistrate was entitled to find, on the evidence, that the appellant had failed to prove that a contract for payment in relation to this work had come into existence. On its face the email of 5 May 2005 was nothing more than a proposal. The learned magistrate found the proposal was not accepted by Mr Erskine on behalf of the respondent. There was no basis for the court on appeal to interfere with these findings which depended on the learned magistrate’s assessment of the credit of Mrs Winslade.
In relation to the claim for a quantum meruit the respondent submitted that the appellant had expressly withdrawn any claim to a quantum meruit at trial. There was no distinction made between a contractual and a non-contractual or restitutionary quantum meruit. It was no longer open to the appellant to claim any kind of quantum meruit.
In relation to the Commercial Ready grant contract the respondent submitted that the terms of the contract expressly conditioned the obligation to pay a fee, being 10 per cent of the grant monies, upon the application being successful. The December 2004 application was not successful. The appellant did no further work in relation to resubmitting an application for a Commercial Ready grant. The parties had not addressed the question of what would happen subsequently if the December 2004 application failed.
In any event, the March 2006 application was a substantially different application in content and scope from the December 2004 application. Substantial work was done in preparation of the March 2006 application by Mr Russo and Ms Cavallaro. They charged $12,000 and $18,000 respectively for this work. They gave evidence of the extensive nature of this work. Ms Cavallaro gave evidence of the substantial differences between the two applications. The learned magistrate had rejected Dr Winslade’s evidence to the contrary. Further, the learned magistrate was justified in his conclusion that the claim by the Winslades to be entitled to be paid for the successful Commercial Ready grant application in March 2006 was a recent invention.
As to the claim for a quantum meruit in respect of the work, the respondent submitted that there was no entitlement in restitution for payment of the work performed pursuant to the terms of the Commercial Ready grant contract as the contract governed the rights and remedies of the parties: Pavey & Matthews Pty Ltd v Paul[3]. The terms of the contract expressly provided that there was no entitlement to payment unless the application was successful. It had not been. The court should reject any argument in favour of the existence of an implied term that the appellant would be permitted to undertake any required work to resubmit the application.
[3] Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221.
The respondent submitted that the learned magistrate correctly found that the July 2005 settlement was intended to be in full and final satisfaction of any liability, including contingent liabilities, owed by the respondent to the appellant.
In this regard the respondent submitted that the court was entitled to consider the circumstances surrounding the settlement to determine its aim, object and commercial purpose. It submitted that the learned magistrate had correctly found that there had been a change in the relationship between the parties because the Winslades would not agree to convert debt to equity as required by Mr Yap. This resulted in a mutual determination between the parties that the relationship should be severed once and for all, which was the intended effect of the settlement. This was consistent with the appellant’s insistence on the respondent granting it an indemnity and the use of debt collectors by the appellant to recover the monies alleged to be owed by the respondent in relation to the tax concession claim, and the absence of any follow up by the Winslades after July 2005 concerning any resubmission of the Commercial Ready grant application.
Consideration
The tax concession claim
The learned magistrate rejected the tax concession claim on the basis that the appellant had failed to prove the existence of the contract.
This conclusion turned on the finding the learned magistrate made in relation to the content of the telephone conversation between Mrs Winslade and Mr Erskine a few days after the email of 5 May 2005. Whether a binding contract came into existence at this time for payment by the respondent to the appellant of the fee claimed, turned on the content of this conversation. The learned magistrate preferred the evidence of Mr Erskine to that of Mrs Winslade on this issue.
A finding of fact by a trial judge, based on the credibility of a witness, may only be set aside upon appeal where incontrovertible facts or uncontested testimony demonstrate that the trial judge’s conclusions are erroneous or where it is concluded that the decision at the trial was glaringly improbable or contrary to compelling inferences in the case.[4]
[4] Warren v Coombes (1979) 142 CLR 531; Jones v Hyde (1989) 63 ALJR 349; Abalos v Australian Postal Commission (1990) 171 CLR 167; Devries v Australian National Railways Commission (1993) 177 CLR 472; Fox v Percy (2003) 214 CLR 118.
In this case the learned magistrate has made a finding as to the content of the conversation which is a finding based on the credibility of the two witnesses. That finding is decisive on the issue of whether a contract was concluded between the parties as claimed by the appellant. The appellant cannot point to incontrovertible facts or uncontested testimony which would demonstrate that the learned magistrate’s findings as to what was said in the course of this conversation is erroneous. Neither can it be said that the learned magistrate’s acceptance of Mr Erskine’s evidence as to the content of the conversation is glaringly improbable or contrary to compelling inferences.
The appellant complains that the finding was made some years after the conversation occurred and some years after the learned magistrate heard the evidence of this conversation. But an appellate court is only entitled to set aside a trial judge’s finding based expressly or inferentially on demeanour, if there is something that points decisively, and not merely persuasively, to error on the part of the judge in acting on his or her impressions of a witness.[5] Neither the mere effluxion of time nor any reliance placed by the learned magistrate on credit findings in relation to extraneous issues points decisively to error on the part of the magistrate in accepting the evidence of Mr Erskine as to what was said in the critical conversation.
[5] Fox v Percy (2003) 214 CLR 118 per McHugh J at 146-147.
In the circumstances I am unable to interfere with that finding. I am at a disadvantage compared with the learned magistrate in evaluating the evidence he relied on in making that finding.[6]
[6] Devries v Australian National Railways Commission (1993) 177 CLR 472 per Deane and Dawson JJ at 480.
Accordingly, the finding of the learned magistrate that the appellant failed to prove the existence of the contract alleged as the basis for the tax concession claim must remain undisturbed.
I am of the opinion that the appellant’s alternative claim to a contractual quantum meruit in relation to the tax concession claim also must fail.
By par 13 of the amended particulars of claim the appellant propounded a quantum meruit in the alternative to its contractual claim as follows:
In the alternative, if the Court finds that the R&D Tax Work Agreement does not exist, then the plaintiff claims $16,715.30 for the R&D Tax Concession Work on the basis of quantum meruit.
Particulars
13.1The plaintiff refers to and repeats what it has said in paragraphs 8 and 9 herein.
13.2Ten per cent of the said tax offset amount is a reasonable amount to charge for the R&D Tax Concession Work done by the plaintiff for the defendant having regard to the amount usually charged for this type of work.
At trial, then counsel for the appellant expressly abandoned the claim in par 13 of the amended particulars of claim. In light of that claim being abandoned, counsel for the respondent expressly refrained from pursuing questions in relation to evidence that was considered relevant to the claim.
There was nothing said before the learned magistrate at that time by the appellant’s counsel which would support the submission put by the appellant on appeal that the claim being abandoned was a non-contractual quantum meruit and that, accordingly, it was open to the appellant to continue to pursue a claim for a contractual quantum meruit.
While the law recognises the distinction between a quasi-contractual and a restitutionary quantum meruit[7], the question is not whether the distinction is real and valid, but rather whether the appellant was relying on such a distinction at the time it abandoned the quantum meruit claim. In my opinion it did not. The only construction open, having regard to what occurred at trial, is that the appellant abandoned any claim to a quantum meruit in respect of the tax concession claim, whether contractual or non-contractual. I am reinforced in this view by the fact that the appellant did not press further any claim for a contractual quantum meruit at trial after abandoning this claim.
[7] Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 per Deane J at 255-256.
Accordingly, there is no entitlement to a quantum meruit in respect of the tax concession claim. It follows I do not need to decide the question of the value of any quantum meruit in respect of the tax concession work.
The Commercial Ready grant contract
The Commercial Ready grant contract is set out in the letter of 5 December 2004 from the appellant to the respondent together with the attached quotation.
Relevantly the letter provides:
Further to our recent discussions, I have enclosed our quotation to prepare a Commercial Ready grant application.
Given the extensive business planning work previously conducted for Steri-Flow we confirm there is no requirement for TIA to charge an up-front fee for performing this work. We are therefore offering to do the application on a success fee basis only. The quote below also includes work associated with the deed of agreement, reporting throughout the life of the project and assisting with managing the grant relationship. This fee structure assumes the grant achieved will be more than $1,000.000.
…
I understand that the earliest opportunity to have your application considered for funding by the IR&D Board Committee is early February 2005 and therefore the application will need to be completed and lodged with AusIndustry by no later than 20 December 2004.
As set out earlier in these reasons, the quotation provided for payment of 10 per cent of the grant payment received over the life of the project.
The appellant submitted that the contract is to be construed in its commercial context. I agree.
In Pacific Carriers Ltd v BNP Paribas[8] the High Court stated the general principles in regard to the construction of commercial contracts in the following terms:[9]
The case provides a good example of the reason why the meaning of commercial documents is determined objectively: it was only the documents that spoke to Pacific. The construction of the letters of indemnity is to be determined by what a reasonable person in the position of Pacific would have understood them to mean. That requires consideration, not only of the text of the documents, but also the surrounding circumstances known to Pacific and BNP, and the purpose and object of the transaction. In Codelfa Constructions Pty Ltd v State Rail Authority of NSW, Mason J set out with evident approval the statement of Lord Wilberforce in Reardon Smith Line Ltd v Hansen-Tangen:
“In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.”
[8] Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451.
[9] Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 461-462 at 461-462.
The appellant points to the fact that the contract work involved hundreds of hours of preparation on the part of the appellant. Against this background the appellant submits that there should be implied into the contract a term that if the initial application was unsuccessful, the appellant would be entitled to undertake the work necessary to resubmit the application to address whatever inadequacies had been identified by AusIndustry in relation to the initial application.
In my opinion this does not follow. The requirements for the implication of terms in a written contract, complete on its face, such as the Commercial Ready grant contract, are stated by Lord Simon, delivering the advice of the majority of the Privy Council in B.P. Refinery (Westernport) Pty Ltd v Shire of Hastings:[10]
Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that “it goes without saying”; (4) it must be capable of clear expression; (5)it must not contradict any express term of the contract.
[10] B.P. Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-283.
Applying the B.P. Refinery principles to this matter, the term which the appellant seeks to be implied into the contract, in my opinion, is not necessary to give business efficacy to the contract. Neither is it so obvious that it goes without saying. Further, I entertain real doubt as to whether it is capable of clear expression.
The contract is effective without the implication of such a term. The contract is for the performance of the work necessary to lodge a full Commercial Ready program application. Once that work is performed, the contract is complete. It is not necessary for the performance of the contract that there be implied an entitlement on the part of the appellant to undertake further work by way of resubmission. There might not be any resubmission. In any event, the respondent may not wish the resubmission work to be performed by the appellant in circumstances where the initial application failed. There might be a breakdown in the commercial relationship between the parties in the meantime for reasons unrelated to the performance of this work. The difficulties with performing such a term are demonstrated by the very events which unfolded in this matter.

In my opinion the learned magistrate was correct in concluding that the contract, on its face, and having regard to its commercial purpose, is to be construed as expiring in accordance with its terms once the initial application was lodged by no later than 20 December 2004.
True it is that the work required by the appellants was extensive, but it was an express term of the contract that payment for this work would be on a contingency basis. The appellant assumed the risk that this work might go unrewarded. It was open to the parties to address what would happen in the event that the initial application was unsuccessful, but this did not occur.
The subsequent subjective belief on the part of Mrs Winslade that the contract was still “live” cannot provide a foundation for the implication of the term for which the appellant contends. The term had to be implied at the time of the formation of the contract, not in the light of subsequent events.
While it is proper for the court to have regard to evidence of surrounding circumstances in order to ascertain the commercial purpose of the parties to a contract, the surrounding circumstances must be the circumstances that exist at the time of the formation of the contract.[11] It is not open to imply terms in a contract from the subsequent conduct of the parties.[12]
[11] Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 348-352.
[12] Riverwood v McCormick (2000) 177 ALR 193 per Lindgren J at 204; Maynard v Goode (1926) 37 CLR 529 per Isaacs J at 538; AMP Society v Chaplin (1978) 18 ALR 385 at 392; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 348; FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343.
If further work was to be undertaken for the purposes of resubmitting the application, that would have required the parties to address their minds to the basis upon which that work would be undertaken. If the parties were prepared to enter into a further agreement for the purpose of undertaking that work it may have been on the same terms as to payment, but that would have been a matter for further negotiation.
In my opinion, once the application had been submitted in December 2004, the Commercial Ready grant application expired in accordance with its terms.
Accordingly, there is no need to decide the question of whether the March 2006 resubmitted application was substantially the same as the December 2004 application. However, I consider that the approach taken by the learned magistrate in determining this issue was flawed. This was not a matter to be determined by an assessment of the credit of Dr Winslade or Ms Cavallaro. It required a comparison of the two applications and an objective assessment of their similarities.
I have considered the two applications which were admitted into evidence. There are significant similarities. It is plain that the resubmitted application of March 2006 relies in a substantial way on the work that had been undertaken in the preparation of the December 2004 application by the appellant. Nonetheless, there was material additional work performed in the preparation of the March 2006 resubmitted application. It was a different application. This is unsurprising, otherwise the December 2004 application would have been successful, just as was the March 2006 application.
In my opinion, however, none of that matters.
The appellant further submits that if its contractual claim in respect of the Commercial Ready grant application work fails, it is entitled to recover from the respondent a restitutionary quantum meruit.
As referred to above, no such claim was prosecuted at trial. Nonetheless, I accept that the court could grant relief notwithstanding that there was no such claim pleaded at trial[13] in accordance with the approach adopted by this court in Battye & Anor v Shammall[14]. However, the appellant cannot make out a claim for a restitutionary quantum meruit.
[13] Magistrates Court Act 1991 (SA) s 31:
31—Alternative forms of relief
(1) Although a particular form of relief is sought by a party to an action, the Court may grant any other form of relief that it considers more appropriate to the circumstances of the case.
(2) In particular—
(a) where a party seeks relief by way of injunction or specific performance, the Court may award damages in addition to or in substitution for such relief;
(b) where a party seeks foreclosure of the equity of redemption in mortgaged property, the Court may, instead of ordering foreclosure—
(i)direct the sale of the mortgaged property; or
(ii)direct a transfer of the mortgage debt and security to a person who agrees to assume the debt.
(This subsection is not exhaustive.)
[14] Battye & Anor v Shammall (2005) 91 SASR 315.
In Pavey Deane J said that quantum meruit had been developed in the law of quasi contract to accommodate two distinct categories of claims. First, to recover a debt arising under a genuine contract, whether expressed or implied. Such a claim is not restitutionary. Secondly, in a claim to recover a debt owing in circumstances where the law imputes an obligation or promise to make payment for a benefit accepted. This action is not based on a genuine agreement at all. The claim is available only where there is no genuine agreement, or where the agreement is frustrated, avoided or unenforceable. It is the absence of a genuine agreement, or the fact that it is not applicable, “frustrated, avoided or unenforceable that provides the occasion for (and part of the circumstances giving rise to) the imposition by the law of the obligation to make restitution.”[15]
[15] Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 256.
The second category of quantum meruit posited by Deane J in Pavey, which the appellant on this appeal describes as “non-contractual or restitutionary quantum meruit”, cannot apply if there is a valid or enforceable agreement governing the claimant’s right to compensation. As Deane J puts it, in these circumstances “there would be neither occasion nor legal justification for the law to superimpose or impute an obligational promise to pay a reasonable remuneration”.[16]
[16] Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221.
The appellant submits it has an entitlement to restitutionary quantum meruit on the basis that the respondent, in making further use of the appellant’s work pursuant to the December 2004 contract, when it resubmitted the Commercial Ready grant application in March 2006, is obliged to pay the appellant a reasonable remuneration by way of restitution. I do not consider this to be correct.
The respondent had available to it the appellant’s work pursuant to the December 2004 Commercial Ready grant contract.
In my view, there is to be implied in the Commercial Ready grant contract a term that once the contractual work was performed, the work in the form of the application became the property of the respondent. The implication of this term accords with the BP (Westernport) principles. To do so is reasonable and equitable. I consider it so obvious it would go without saying. It is capable of clear expression and does not contradict any express term of contract. The only hesitation I feel is whether it can be said it is necessary to give business efficacy to the contract, however, in the end, I am satisfied that business efficacy requires that the contract address to whom the application belongs. For the same reason I am satisfied the implication of this term satisfies the officious bystander test, I am satisfied the contract would not be effective without it. The application was submitted in the name of the respondent. In a real and legal sense it was the respondent’s application. It was its property. Certainly Mr Erskine considered this to be the position.[17]
[17] T348.
In my view the respondent owned that work in accordance with the terms of the December 2004 contract. It was entitled to make use of it, as it did, without having to make further payment to the appellant. In my opinion it was an implied term of the December 2004 contract that the work undertaken by the appellant, having been performed on behalf of the respondent, became the respondent’s property. Subsequently it could make such use of it as it saw fit. This did not entitle the appellant to a quantum meruit on the basis of any resitutionary principle derived from Pavey or otherwise.
Accordingly, I consider the appellant’s claim in relation to the Commercial Ready grant application must fail.
The July 2005 settlement
For the reasons set out above the appellant’s claims in respect of the tax concession work and the Commercial Ready grant application work fail. Accordingly, it becomes unnecessary to determine whether the July 2005 settlement extinguished any claims the appellant might have had in respect of these matters. Nonetheless, I consider that the learned magistrate fell into error in the approach he took to determining the effect of the July 2005 settlement.
The July 2005 agreement is evidenced in four documents: exhibits P13, P14, P15 and P16. These constitute an exchange of correspondence between Mr Russo, the chartered accountant for the respondent, and the appellant, culminating in two emails, both of 19 July 2005.
These documents evidence the agreement between the parties for the repayment of loans by the respondent to the appellant, the reacquisition of the appellant’s shares by the respondent, the payment of outstanding invoices from the appellant by the respondent, and the provision of an indemnity by the respondent to the appellant. This resulted in the payment of $150,483.98 by the respondent to the appellant.
In this regard it is important to note that the payment made in respect of outstanding invoices was in the sum of $120,344.40. This total is reflected in the terms of exhibit P15 which is a list of invoices provided by Mrs Winslade to Mr Russo in that sum.
The respondent submitted that this agreement, by its terms, extinguished any claim the appellant had against the respondent. It is submitted that in interpreting the July 2005 settlement agreement, the court is entitled to consider the circumstances surrounding the making of the agreement to determine its aim, object and commercial purpose.
In this regard, the respondent highlights the following evidence:
1.There had been a change in the relationship between the appellant and respondent because the Winslades would not agree to convert debt to equity as required by Mr Yap.
2.There was a mutual decision of the parties that the relationship be “severed once and for all”, as described in the evidence of Mr Russo and Mr Fong, which evidence was accepted by the learned magistrate. This was the effect of the settlement agreement.
3.There was a need for a “final reckoning” between the parties and the need for “a line to be drawn in the sand”, as described by Mrs Winslade in her evidence.
4.Consistently with this there was no communication whatsoever between the Winslades and the respondent after July 2005 concerning the Commercial Ready grant application issue.
5.The retaining of debt collectors in relation to the 03/04 tax concession claim by Dr Winslade evidenced the fact that the commercial relationship between the parties was at an end by this time.
6.The appellant’s insistence on the provision of an indemnity as part of the July 2005 settlement indicated that the commercial relationship between the parties was at an end, and Dr Winslade wanted to ensure that there would be no “loose ends”, as the learned magistrate described it.
7.Finally, Dr Winslade confirmed the nature of the agreement in his email to Mr Mondello of 26 July 2005 (exhibit D7), which the learned magistrate found evidenced an acknowledgment by Dr Winslade that the settlement agreement operated to sever all ties between the parties.
The correct approach to the construction of contracts is the ascertainment of the intention of the parties. A court is to have regard to the entirety of the document or documents comprising the agreement, which are to be read as a whole, against the background of the surrounding circumstances and the commercial purpose of the contract, in order to interpret each clause.
The contemporary approach is authoritatively outlined by Lord Hoffmann in Investors Compensation Scheme v West Bromwich Building Society:[18]
I do not think that the fundamental change which has overtaken this branch of the law, particularly as a result of the speeches of Lord Wilberforce in Prenn v Simmonds [1971] 3 All ER 237 at 240–242, [1971] 1 WLR 1381 at 1384–1386 and Reardon Smith Line Ltd v Hansen-Tangen, Hansen-Tangen v Sanko Steamship Co [1976] 3 All ER 570, [1976] 1 WLR 989, is always sufficiently appreciated. The result has been, subject to one important exception, to assimilate the way in which such documents are interpreted by judges to the common sense principles by which any serious utterance would be interpreted in ordinary life. Almost all the old intellectual baggage of 'legal' interpretation has been discarded. The principles may be summarised as follows.
(1)     Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
(2)     The background was famously referred to by Lord Wilberforce as the 'matrix of fact', but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.
(3)     The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.
(4)     The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax (see Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 3 All ER 352, [1997] 2 WLR 945.
(5)     The ‘rule’ that words should be given their 'natural and ordinary meaning' reflects the commonsense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Cia Naviera SA v Salen Rederierna AB, The Antaios [1984] 3 All ER 229 at 233, [1985] AC 191 at 201:
‘… if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense.’
[18] Investors Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896 at 912-914.
The principles outlined by Lord Hoffmann were succinctly summarised in BCCI v Ali[19] by Lord Bingham of Cornhill:
To ascertain the intention of the parties the court reads the terms of the contract as a whole, giving the words used their natural and ordinary meaning in the context of the agreement, the parties' relationship and all the relevant facts surrounding the transaction so far as known to the parties. To ascertain the parties' intentions the court does not of course inquire into the parties' subjective states of mind but makes an objective judgment based on the materials already identified.
[19] Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251 at 259.
In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd[20] the High Court of Australia said:[21]
This Court … has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.[22]
(Footnote added)
[20] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165.
[21] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179.
[22] Affirmed in Byrnes & Anor v Kendle (2011) 85 ALJR 798 at [98].
These observations have been repeated in relation to the construction of commercial contracts. In Lake v Simmons[23] Viscount Sumner observed:[24]
Every one must agree that commercial contracts are to be interpreted with regard to the circumstances of commerce with which they deal, the language used by those who are parties to them, and the objects which they are intended to secure.
[23] Lake v Simmons [1927] AC 487.
[24] Lake v Simmons [1927] AC 487 at 509.
These words were drawn on in McCann v Switzerland Insurance Australia Ltd,[25] where Gleeson CJ observed:[26]
A policy of insurance, even one required by statute, is a commercial contract and should be given a businesslike interpretation. Interpreting a commercial document requires attention to the language used by the parties, the commercial circumstances which the document addresses, and the objects which it is intended to secure.
[25] McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579.
[26] McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 at 589. (footnotes omitted)
Finally, in Pacific Carriers Ltd v BNP Paribas,[27] the High Court restated the general principles in regard to the construction of commercial contracts in terms set out earlier in these reasons.[28]
[27] Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451.
[28] See paragraph [79] above.
Notwithstanding the contemporary focus on the “factual matrix” and surrounding circumstances, the authorities emphasise the importance of the language actually used in ascertaining the intention of the parties. In Watson v Phipps,[29] in the process of identifying the true construction of a contract, the Privy Council stated the principle as follows:[30]
The function of a court of construction is to ascertain what the parties meant by the words which they have used. For this purpose the grammatical and ordinary sense of the words is to be adhered to, unless they lead to some absurdity or to some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified so as to avoid that absurdity or inconsistency, but no further: see the speech of Lord Wensleydale in Grey v Pearson (1857) 6 HLC 61 at 106, repeated by Lord Blackburn in Caledonian Railway Co v North British Railway Co (1881) 6 App Cas 114 at 131.
[29] Watson v Phipps (1985) 63 ALR 321.
[30] Watson v Phipps (1985) 63 ALR 321 at 324.

In this context there can be no doubt that the July 2005 agreement did represent a change in the nature of the commercial relationship between the parties. Nonetheless, the parties are to be understood to have reached agreement on terms that are consistent with the language of the agreement. The subjective belief of the respondent’s witnesses, and, for that matter, of the Winslades, is irrelevant. The evidence to which the respondent points is consistent with a change in the nature of the commercial relationship between the parties but it does not go so far as to evidence an agreement that the payment of $150,483.98 was in satisfaction of all claims by the appellant against the respondent. In fact, the terms of the email from Dr Winslade to Mr Mondello of 26 July 2005 really concerns the appellant’s relinquishing its investment in the respondent, not a final settlement of all matters between the parties. Even if it was the respondent’s subjective intention that the July 2005 settlement agreement achieve that objective, it failed to do so expressly.
What matters is the terms in which the parties have expressed their agreement and the meaning that those words would have conveyed to a reasonable person operating in the commercial context in which the parties operated.
The words used did not address any contingent liability owed by the respondent to the appellant.
If the respondent considered that the payment of $150,483.98 was to be in full and final settlement of all claims against it by the appellant, including any claim for any contingent liability, it failed to include such a term in the agreement.
In my opinion the terms of the July 2005 settlement agreement did not include a term that the payment made by the respondent to the appellant was in full and final settlement of all outstanding claims including any claims for a contingent liability. This is unsurprising. There is no proper basis in the evidence for concluding there were any contingent liabilities owed by the respondent to the appellant. For the reasons set out above, I do not consider there was any liability, contingent or otherwise, in respect of either the tax concession claim or the Commercial Ready grant contract.
Accordingly, while I consider the learned magistrate erred in the finding he made concerning the proper construction of the July 2005 settlement agreement, it makes no difference to the result of the case.
Conclusion
I would dismiss the appeal.
I will hear the parties as to the question of costs.