WOODWARD & JACQUES

In the matter of *Woodward & Jacques*, Hartnett J of the Supreme Court of Tasmania considered a dispute between the parties concerning the interpretation of a clause within a deed of settlement. The core of the disagreement revolved around whether a specific payment made by the respondent, Jacques, constituted a "capital gain" as contemplated by the settlement deed.

The primary legal issue before the Court was to determine the proper construction of clause 7(b) of the deed of settlement. This clause stipulated that if the respondent realised a "capital gain" from the sale of certain shares, a proportion of that gain would be payable to the applicant, Woodward. The Court was required to ascertain whether the payment in question, which arose from a buy-back of shares by the company, fell within the definition of a "capital gain" for the purposes of this clause.

Hartnett J's reasoning focused on the ordinary meaning of the words used in the deed, read in their context. His Honour considered the nature of the transaction, noting that it was a buy-back of shares by the issuing company, rather than a sale to a third party. The Court concluded that such a transaction did not give rise to a "capital gain" in the ordinary sense, nor did the surrounding circumstances suggest a contrary intention. The legal principle applied was that contractual terms should be given their plain and ordinary meaning unless the context clearly indicates otherwise.

Consequently, Hartnett J found that the payment made by the respondent did not constitute a capital gain within the meaning of clause 7(b) of the deed. The application was dismissed.