Crawley v Crawley [2012] QSC 294

SUPREME COURT OF QUEENSLAND CITATION: Crawley v Crawley Land & Ors [2012] QSC 294 PARTIES: ASHLEY JOHN SCOTT CRAWLEY (plaintiff) AND CRAWLEY LAND PTY LTD ACN 074 464 804 as trustee of the TARAWERA TRUST and the HILLVIEW TRUST (first defendant) AND DIANE PATRICIA CRAWLEY and BRETT CHRISTOPHER MATTHEW CRAWLEY as trustees of the MARANUI TRUST (second defendant) AND J & D CRAWLEY PTY LTD ACN 010 807 753 as trustee of the JF CRAWLEY TRUST (third defendant) AND DIANE PATRICIA CRAWLEY and BRETT CHRISTOPHER MATTHEW CRAWLEY (as executors of the estate of JOHN FRANCIS CRAWLEY deceased) (fourth defendant) AND DIANE PATRICIA CRAWLEY (fifth defendant) FILE NO/S: 5914 of 2005 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court DELIVERED ON: 26 September 2012 DELIVERED AT: Brisbane -- 1 of 37 -- 2 HEARING DATE: 9 July 2012 Further submissions on 10, 12 July, 13 and 14 September 2012 JUDGE: Atkinson J ORDER: 1. The court declares that the parties have compromised proceeding BS 5914 of 2005 on the terms set out in a letter dated 2 December 2010 from BCI Lawyers to the plaintiff. 2. The court orders specific performance of the draft deed which is Exhibit AC31 to the affidavit of Ashley Crawley filed on 6 July 2012 except that the definitions of “claim” and “counterclaim” should be deleted from clause 1.1 and in their stead inserted the definition of claim set out in the draft deed which is Exhibit AC24 to that affidavit and clause 13.6 should be deleted. CATCHWORDS: PROCEDURE — SUPREME COURT PROCEDURE — PLEADINGS — ADMISSIONS — where defendants relied on admission by plaintiff that he had been removed as appointor and guardian of a trust — where defendants had in previous pleadings alleged that his removal was valid and plaintiff had denied that allegation — where plaintiff contested bona fides of reasons for removal — whether pleading should be taken as assertion of fraud on the power — whether admission is clear and unequivocal — whether plaintiff bound by admission EVIDENCE — ADMISSIBILITY AND RELEVANCY — ADMISSIBILITY — PAROL EVIDENCE RULE — where defendants alleged a term should be implied into a settlement agreement from pre-contractual negotiations — whether the settlement agreement is ambiguous — whether the pre- contractual negotiations are admissible as to the construction of the agreement CONTRACTS — GENERAL CONTRACTUAL PRINCIPLES — CONSTRUCTION AND INTERPRETATION OF CONTRACTS — IMPLIED TERMS — where several offers were made to settle the proceedings — where defendants asserted that the intention of the offer was to separate Hillview and Tarawera Trusts equally between two brothers — where previous offers had included a term that the plaintiff resign as guardian and appointor of the Hillview Trust — where settlement agreement provided for his brother to resign as guardian and appointor of the Tarawera Trust but made no provision as to the Hillview Trust — whether the term alleged is necessary for the business efficacy of the agreement — whether the term alleged is so obvious it goes without saying — whether -- 2 of 37 -- 3 the term should be implied CONTRACTS — GENERAL CONTRACTUAL PRINCIPLES — CONSTRUCTION AND INTERPRETATION OF CONTRACTS — AGREEMENTS TO SETTLE PROCEEDINGS — where plaintiff had been removed as appointor and guardian of a trust — where in primary proceedings plaintiff contested the validity of that removal — where proceedings settled by agreement — whether plaintiff had by settling the proceedings foregone his right to litigate the question of the validity of his removal Uniform Civil Procedure Rules 1999 (Qld), r 190 ACT Leagues Club v Australian Capital Territory Rugby League Inc (Unreported, Federal Court of Australia, ACT G 26 of 1995, 2 August 1995, Higgins, Tamberlin and Kiefel JJ), followed Agricultural and Rural Finance Pty Limited v Gardiner (2008) 238 CLR 570, cited Ash v Hutchinson & Co (Publishers) Ltd [1936] 2 All ER 1496, followed Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622, considered Bell Group Ltd (in liq) v Westpac Banking (No 9) [2008] WASC 239, cited BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, followed Breen v Williams (1996) 186 CLR 71, considered Cachia v Westpac Financial Services Ltd [2000] FCA 161, cited Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, followed Commissioner of Taxation (Cth) v Bargwanna [2012] HCA 11, cited Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226, followed Graham Evans Pty Ltd v Stencraft [1999] FCA 1670, followed Great Western Railway and Midland Railway v Bristol Corporation (1918) 87 LJ Ch 414, followed Hawkins v Clayton (1988) 164 CLR 539, considered Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41, followed ING Funds Management Ltd v ANZ Nominees Ltd [2009] NSWSC 243, cited James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Pty Ltd [1970] AC 583, cited L J Hooker Ltd v W J Adams Estates Pty Ltd (1977) 138 CLR 52, considered Masters v Cameron (1954) 91 CLR 353, considered -- 3 of 37 -- 4 Mills v Mills (1938) 60 CLR 150, considered Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, cited Port of Melbourne Authority v Anshun (1981)147 CLR 589, cited Re Ball’s Settlement Trusts [1968] 1 WLR 899, cited Re Registered Trade Marks Certina & Certina DS (1970) 44 ALJR 191, cited Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, followed Schuler L A G v Wickman Machine Tool Sales Ltd [1973] 2 All ER 39, followed Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206, considered Sinclair, Scott & Co v Noughton (1929) 43 CLR 310, considered Toll (FGCT) P/L v Alphapharm Pty Ltd (2004) 219 CLR 165, cited Vroon BV v Fosters Brewing Group [1994] 2 VR 32, considered Wright v TNT Management Pty Ltd (t/as Comet Overnight Transport) (1989) 15 NSWLR 679, cited COUNSEL: KN Wilson SC for the plaintiff DR Cooper SC with C Francis for the defendants SOLICITORS: Thynne & McCartney for the plaintiff Macpherson & Kelley Lawyers for the defendants The plaintiff‟s application [1] The plaintiff, Ashley John Scott Crawley (―Ashley Crawley‖), filed an application seeking the following relief: ―1. A declaration that the parties have compromised Court action BS5914 of 2005 on the terms set out in a letter dated 2 December 2010 from BCI Lawyers to the Plaintiff. 2. That the compromise agreement be specifically performed and carried into effect, and that orders be made to enable that to occur. 3. That the costs of and incidental to this Application be assessed on the indemnity basis and be paid by the Defendants.‖ [2] The letter dated 2 December 2010 from BCI Lawyers, acting for the defendants, to the plaintiff (the ―letter of offer‖) was in the following terms: ―Further to my previous correspondence in this matter, and in particular, my client‘s [sic] offers to you to resolve both these proceedings and your proposed claim for further and better provision out of your late father‘s estate, I am instructed to inform you that those offers are hereby expressly withdrawn. -- 4 of 37 -- 5 I am instructed to make the following offer to you to settle proceedings no BS 5914 of 2005. So there can be no confusion, the offer contained herein has no bearing on your proposed claim for further and better provision out of your late father‘s estate. Furthermore, the offer is made without any admission of liability and otherwise pursuant to the principals [sic] enunciated in Calderbank v Calderbank [1975] 2 ALL ER 333. My clients‘ offer is as follows: 1. you immediately withdraw the caveats currently registered over the land known as Maranui and the Hillview Conglomeration; 2. your mother and Brett, in their capacity as executors and trustees of your late father‘s will, will immediately resign as appointors and guardians of the Tarawera Trust, such that you will remain as the sole appointor and guardian of the Tarawera Trust; 3. Crawley Land Pty Ltd will resign as the trustee of the Tarawera Trust to enable you to appoint yourself or another entity under your control as trustee of the Tarawera Trust and you will from that point in time assume control of the trust (and 5/6ths of the fee simple in the properties known as Burnlea1 and Tarawera); 4. at the same time, your mother will transfer her interest (1/6th of the fee simple – valued at $375,000.00 in 2006) in the properties known as Burnlea and Tarawera to you or to the person or entity appointed by you as the trustee of the Tarawera Trust (at your direction) at no cost to you; 5. J & D Crawley Pty Ltd as trustee of the JF Crawley Trust will pay the stamp duty and legal costs associated with the transfer of your mother‘s interest in Burnlea and Tarawera to you; 6. as at 30 June 2010, the Tarawera Trust was indebted to the JF Crawley Trust in the sum of $203,763.00, being a loan between the JF Crawley Trust and the Tarawera Trust. J & D Crawley Pty Ltd as trustee of the JF Crawley Trust will cause the loan to be forgiven, such that the Tarawera Trust will become debt free; 7. in your capacity as an appointor and guardian under the Marauni [sic] Trust Deed, you consent to the appointment of Crawley Land Pty Ltd to the position of trustee of the Maranui Trust; 8. you otherwise agree to a variation of the Maranui Trust Deed so that you are removed as an appointor and guardian; 9. Crawley Land Pty Ltd will immediately cause to be transferred to you, or to the entity of your choice, the 1 The property described as ―Burnlea‖ is spelt in other documents ―Bernlea‖. -- 5 of 37 -- 6 northern block of Maranui known as ―Brumells‖ (lot 5) free of all encumbrances at no cost to you; 10. J & D Crawley Pty Ltd as trustee of the JF Crawley Trust will pay the stamp duty and legal costs associated with the transfer; 11. upon the transfers referred to above being effected, you transfer your shares in Crawley Land Pty Ltd to an entity to be nominated by Diane Crawley; 12. J & D Crawley Pty Ltd will pay the costs and any applicable stamp duty associated with that transfer; 13. J & D Crawley Pty Ltd will pay to you the sum of $157,750.00 with 14 days from the date of execution of the deed referred to at 19 below; 14. J & D Crawley Pty Ltd retain the right to harvest any crops growing on Burnlea, Tarawera and Brummels as at the date of acceptance of this offer; 15. my client‘s [sic] will release you from all liability in respect of the counterclaim in the proceedings; 16. you release my client‘s [sic] from all liability in respect of all your claims in the proceedings; 17. each party bears their own costs of and incidental to the action; 18. upon the terms of settlement being carried into effect, the parties will execute and file a Notice of Discontinuance of the proceedings; and 19. the terms of settlement, if accepted, are to be recorded in a Deed of Settlement prepared by me at my client‘s expenses [sic] for execution by all parties. This offer will remain for acceptance for a period of 14 days after which, it shall automatically lapse.‖ [3] The letter of offer was accepted by letter from Norton Rose acting on behalf of the plaintiff sent by facsimile transmission on 16 December 2010. The letter of acceptance was in the following terms: ―Ashley Crawley has recently engaged me to assist him with the settlement phase of Supreme Court action BS 5914 of 2005 in which he is both plaintiff and respondent to a counterclaim. I am not instructed to become Ashley‘s solicitor on the record. I refer to your letter to Ashley of 2 December 2010 and advise that my client accepts in principle the terms of the offer of settlement set out in that letter, subject to review of the terms of the deed of settlement which you are to prepare. I look forward to receiving the draft deed of settlement in due course.‖ [4] This was a welcome development in litigation which had commenced in 2005 and evidenced grave family disharmony. The parties are, or are companies and trusts controlled by, two brothers, Ashley and Brett Crawley, their mother, Diane Crawley, and the estate of their father, John Crawley, who died on 16 June 2010, -- 6 of 37 -- 7 after this litigation began. The court is now called upon to determine if this proceeding (―the trust litigation‖) has been compromised and if so what the terms of that compromise are. [5] In his foreword to the 4th edition of Foskett‘s text ―The Law and Practice of Compromise‖ Lord Bingham of Cornhill, then Lord Chief Justice of England, expressed both the desirability and difficulties associated with compromise of an action as follows: ―The law loves compromise. It has good reason to do so, since a settlement agreement freely made between both parties to a dispute ordinarily commands a degree of willing acceptance denied to an order imposed on one party by court decision. A party who settles forgoes the chance of total victory, but avoids the anxiety, risk, uncertainty and expenditure of time which is inherent in almost any contested action, and escapes the danger of total defeat. The law reflects this philosophy, by making it hard for a party to withdraw from a settlement agreement, as from any other agreement, and by giving special standing to an agreement embodied, by consent, in an order of the court. Rules of practice are framed so as to encourage settlement, by exposing the substantial loser of an action to a heavy burden of costs and enabling the maker of a reasonable offer, even if the offer is refused, to obtain some protection against that burden. But there is, as always, a catch. To negotiate a final and binding settlement agreement; to make sure that all necessary matters are covered; to express the terms clearly and unambiguously; to make sure that the agreement is simply and inexpensively enforceable; to advise where one party claims that he has been misled or pressured into making an agreement by the other side; all this may call for as much skill, including legal skill, as fighting the action. In this, as in other legal fields, there is no substitute for a sound grasp of legal principle, an understanding of the special rules governing the subject matter and a knowledge of the up-to-date case law.‖ [6] The problems in this compromise arose when the parties attempted to record the terms of settlement in a Deed of Settlement as envisaged by clause 19 of the letter of offer. Deed of Settlement [7] On 17 December 2010, Greg Mann from Norton Rose telephoned Mark Dillman from BCI Lawyers, now referred to as M+K Lawyers, solicitors for the defendants saying that he would draft a deed of settlement for consideration by the defendants. That proposed deed of settlement (―draft deed (trust litigation) 1‖) was attached to an email from Mr Mann on 20 December 2010. The deed drafted by Mr Mann gave effect to most of the clauses in the offer of 2 December 2010. [8] Paragraph C of the introduction in draft deed (trust litigation) 1 set out that the parties had agreed to settle the action and the counterclaim on the terms of the deed. -- 7 of 37 -- 8 The release in clause 11.1 of draft deed (trust litigation) 1 was in the following form: ―Subject to the parties fulfilling their respective obligations under clauses 2, 3, 4, 6, 7 and 8 of this Deed, Ashley releases each of CL, Maranui Trustees, JDC, Executors, Diane and Brett from all Claims, and each of CL, Maranui Trustees, JDC, Executors, Diane and Brett releases Ashley from all Claims.‖ [9] The Ashley therein referred to is Ashley Crawley, the plaintiff in this proceeding. CL stands for Crawley Land Pty Ltd ACN 074 464 804 (―Crawley Land‖) as trustee of the Tarawera Trust; the Maranui Trustees are defined as Diane Patricia Crawley and Brett Christopher Matthew Crawley as trustees of the Maranui Trust; JDC is J&D Crawley Pty Ltd ACN 010 807 753 (―J&D Crawley‖) as trustee of the JF Crawley Trust. The Executors are Diane Crawley and Brett Crawley as executors of the state of John Francis Crawley (deceased). Diane is Diane Crawley and Brett, Brett Crawley. [10] The proposed parties to draft deed (trust litigation) 1 were Ashley Crawley, Brett Crawley, Diane Crawley, J&D Crawley in its own capacity and as trustee of the JF Crawley Trust, Crawley Land in its own capacity and as trustee of the Tarawera Trust, Diane Crawley and Brett Crawley as executors of the estate of John Crawley (deceased), Diane Crawley and Brett Crawley as trustees of the Maranui Trust and AJSC Pty Ltd (a company which Ashley Crawley intended to set up to function as the new trustee of the Tarawera Trust, referred to as ―New Trustee‖). [11] The ―Claim‖ was defined to mean: ―any present or future, actual or contingent, claim, cause of action, complaint, liability, cost or expense that any person (whether or not a party to the Proceeding) has or might have in connection with or arising in any way from the facts or matters alleged in the Proceeding or the Counterclaim, as the case may be, whether or not the facts, matters or circumstances giving rise to that Claim are known to that person or to any other person at the date of this Deed.‖ [12] The practical consequences of the release set out in clause 11.1 of the proposed deed were set out in clauses 11.2 to 11.5 which provided as follows: ―11.2 Ashley must take all necessary steps to discontinue the Proceeding, within 7 days after the obligations referred to in clause 11.1 have been fulfilled. 11.3 Each of CL, Maranui Trustees, JDC, Executors, Diane and Brett must consent to the discontinuance of the Proceeding, and must not make any claim for payment of any costs of the Proceeding consequent upon such discontinuance. 11.4 Each of CL, Maranui Trustees, JDC, Executors, Diane and Brett must take all necessary steps to discontinue the Counterclaim, within 7 days after the obligations referred to in clause 11.1 have been fulfilled. 11.5 Ashley must consent to the discontinuance of the Counterclaim, and must not make any claim for payment of any costs of the Counterclaim consequent upon such discontinuance.‖ -- 8 of 37 -- 9 [13] On 28 January 2011, Mr Dillman of M+K Lawyers replied to Mr Mann‘s email, making various unexceptionable changes to draft deed (trust litigation) 1. I shall refer to this draft as draft deed (trust litigation) 2. The definition of claim remained unchanged. Clause 4 of draft deed (trust litigation) 2 was apt to give effect to clauses 7 and 8 of the letter of offer. It provided: ―4. Resignation as Guardian and Appointer of the Maranui Trust 4.1 Ashley will immediately resign as Guardian and Appointor of the Maranui Trust. 4.2 Ashley forever disclaims any interest, vested or contingent, present or future, in the Maranui Trust.‖ [14] However, a new clause 10 was added which Mr Dillman said was ―not strictly necessary because it reflected the provisions of the late Mr Crawley‘s (deceased) Will‖ but was included ―for consistency and completeness‖. Clause 10 of draft deed (trust litigation) 2 provided: ―10. Resignation as Guardian and Appointer of the Hillview Trust 10.1 Ashley will immediately resign as Guardian and Appointor of the Hillview Trust. 10.2 Ashley forever disclaims any interest, vested or contingent, present or future in the Hillview Trust.‖ There had not been any reference to the Hillview Trust in the letter of offer or the letter of acceptance. [15] Telephone conversations then took place between the solicitors. On 2 February 2011, Mr Mann telephoned Mr Dillman and said he had received instructions from Ashley Crawley to make an offer to the defendants to settle both this proceeding and his family provision claim. On 17 February 2011 Mr Mann sent a fresh draft deed of settlement to Mr Dillman with a copy to Ashley Crawley (―draft deed (trust litigation and family provision claim) 1‖) which provided for settlement of both. Mr Mann said in the email that Ashley Crawley had not had the chance to consider this draft and reserved his right to require further changes. [16] In draft deed (trust litigation and family provision claim) 1, ―claim‖ was defined as: ―Claim means any present or future, actual or contingent, claim, cause of action, complaint, liability, cost or expense that: (1) any person (whether or not a party to the Proceeding) has or might have in connection with or arising in any way from the facts or matters alleged in the Proceeding or the Counterclaim, as the case may be; or (2) Ashley has or might have in connection with the estate of his late father, John Francis Crawley including, without limitation, a family provision claim under the Succession Act 1981, whether or not the facts, matters or circumstances giving rise to that Claim are known to that person or to any other person at the date of this Deed‖ [17] Draft deed (trust litigation and family provision claim) 1 added more definitions, retained the clause removing Ashley Crawley as guardian and appointor of the -- 9 of 37 -- 10 Maranui Trust and made other machinery changes. So far as the Hillview Trust was concerned, the clause was refashioned to provide: ―5. Resignation as Guardian and Appointer of the Hillview Trust 5.1 To the extent that Ashley may currently be a Guardian or Appointor of the Hillview Trust, Ashley hereby resigns as Guardian and Appointor of the Hillview Trust. 5.2 Ashley forever disclaims any interest, vested or contingent, present or future, in the Hillview Trust.‖ [18] The clause dealing with the transfer by Diane Crawley was changed from the clause which appeared as clause 6 in draft deed (trust litigation) 1 (and clause 7 in draft deed (trust litigation) 2) where it was in these terms: ―6 Transfer by Diane 6.1 Diane must transfer to New Trustee her one-sixth interest, unencumbered by any third-party interests, to New Trustee. 6.2 Diane must bear the cost of the transfer of title under clause 6.1, including paying any transfer duty.‖ In draft deed (trust litigation and family provision claim) 1, the equivalent of clause 6.1 became: ―8.1 Diane must transfer to Ashley or, at Ashley‘s option, New Trustee her one-sixth interest, unencumbered by any adverse interests, to New Trustee.‖ [19] On 24 February 2011, Mr Dillman sent a letter by email to Mr Mann attaching his proposed amendments (―draft deed (trust litigation and family provision claim) 2‖). In that draft deed various changes were made including to the clause relating to Diane Crawley which became: ―8 Transfer by Diane 8.1 Diane must transfer to Ashley her one-sixth interest, unencumbered by any third-party interests. 8.2 Diane must bear the cost of the transfer of title under clause 8.1, including paying any transfer duty.‖ A new clause was included about Ashley Crawley‘s right to participate in the use of the Eaglebar GPS tower. The definition of claim remained the same, as did the clause relating to the Hillview Trust. [20] On 1 March 2011, Ashley Crawley commenced acting for himself again as he had done earlier in this litigation. He sent an email to Mr Dillman setting out why he did not find various amendments suggested by the defendants acceptable and asking Mr Mann to send him a Deed of Settlement strictly in accordance with the letter of offer made on 2 December 2010 by close of business on that day. Mr Dillman replied saying he was unable to do it in that time frame. [21] On 2 March 2011, Ashley Crawley sent a further email to Mr Dillman in the following terms: ―I refer to the Calderbank offer from your clients by email dated 2 December 2010 which was accepted by me on 16 December 2010. -- 10 of 37 -- 11 The terms of the offer require that if the terms of settlement are accepted they are to be recorded in a Deed of Settlement prepared by you at your client‘s expense for execution by all parties. The terms of settlement were accepted 11 weeks ago tomorrow. Please let me have a Deed of Settlement recording the terms of settlement as set out in your email of 2 December 2010 as a matter of urgency and by no later than 5.00pm tomorrow so that the document can be executed.‖ [22] On 2 March 2011, Mr Dillman emailed a further copy of a draft deed. It related to both the trust litigation and the family provision claim rather than just to the settlement of this proceeding and made further changes to draft deed (trust litigation and family provision claim) 2. It did not change the definition of claim or the clause relating to the Hillview Trust. I shall refer to it as draft deed (trust litigation and family provision claim) 3. [23] Ashley Crawley replied by email on 4 March 2011 expressing his dissatisfaction with the proposed settlement of the family provision claim, advising what he required to settle the family provision claim in addition to this proceeding and asking if Mr Dillman‘s client, Brett Crawley, was prepared to do that. He then repeated his request for a deed of settlement of the agreement made when he accepted the letter of offer. ―In the meantime I suggest that you provide me with a deed of settlement with the precise terms as set out in your calderbank offer so that if we cannot reach agreement with regard to the claim against my father‘s estate that [sic] we are in a position to immediately execute the deed to settle the current court proceedings in the exact terms of your calderbank offer.‖ [24] Mr Dillman‘s response on 7 March 2011 rehearsed the history of negotiations between them and concluded: ―I am instructed to inform you the offer contained in my email to you on Wednesday 2 March 2011 [draft deed (trust litigation and family provision claim) 3] is my clients‘ final offer to resolve all matters with you. They will not negotiate any further. I am not prepared to send you a deed recording the terms of the ‗Calderbank offer‘ until you inform me categorically that the offer contained in my email to you of 2 March 2011 is rejected. If you do not accept the offer contained in my email to you of 2 March 2011, then I will seek my clients‘ instructions in respect of your request.‖ [25] On 15 March 2011, Ashley Crawley rejected the offer to settle both matters as contained in draft deed (trust litigation and family provision claim) 3. He instructed solicitors, Thynne & Macartney, to commence proceedings with regard to the family provision claim. -- 11 of 37 -- 12 [26] After further correspondence between Mr Dillman and Ashley Crawley, Mr Dillman enquired of Ashley Crawley whether he was prepared to settle both matters if Mr Dillman made the changes requested by him to draft deed (trust litigation and family provision claim) 3. Mr Dillman said that when Ashley Crawley answered that question, he would send him ―a deed, either in a form limited to the current proceedings, or in a form dealing with all claims.‖ In response, Ashley Crawley asked for a deed ―in accordance with the terms of the Calderbank offer for my consideration.‖ [27] On 24 March 2011, Mr Dillman emailed to Ashley Crawley a draft deed of settlement in which the definition of ―claim‖ related only to this proceeding (―draft deed (trust litigation) 3‖). The definition of claim was the same as in draft deed (trust litigation) 1. In draft deed (trust litigation) 3, clause 10, however, was in the same form as clause 5 in draft deed (trust litigation and family provision claim) 1 and provided as follows: ―10. Resignation as Guardian and Appointer of the Hillview Trust 10.1 To the extent that Ashley may currently be a Guardian or Appointor of the Hillview Trust, Ashley will immediately resign as Guardian and Appointor of the Hillview Trust. 10.2 Ashley forever disclaims any interest, vested or contingent, present or future, in the Hillview Trust.‖ Clause 13.2 provided: ―Ashley confirms that J&D Crawley has no liability to him, whether for debt, unpaid dividends or on any other account and releases J&D Crawley accordingly.‖ [28] On the following day, Ashley Crawley asked for three changes: the deletion of clause 10 which provided for Ashley‘s resignation as guardian and appointor of the Hillview Trust, as it was ―outside the terms of the letter of offer‖; the correction of the spelling of Diane Crawley‘s name in clause 12.1; and the deletion or amendment of clause 13.2 as the terms of the letter of offer only required a release from claims in this proceeding. He said he would review draft deed (trust litigation) 3 in more detail and revert to Mr Dillman. [29] On 30 March 2011, Mr Dillman sent another draft deed to Ashley Crawley (―draft deed (trust litigation) 4‖). It deleted clause 10, corrected the spelling of Diane Crawley‘s name and deleted clause 13.2 as requested by Ashley Crawley. In his covering email, Mr Dillman said: ―Herewith deed amended in accordance with your requests. If it is in order now, I will issue hard copies to everyone for execution with the appropriate attachment …‖ [30] Unfortunately that was not the end of the matter. On 4 April 2011, Ashley Crawley made further suggestions for changes to draft deed (trust litigation) 4. On 6 April -- 12 of 37 -- 13 2011, he informed Mr Dillman that he had received further advice in relation to his family provision claim and was prepared to accept draft deed (trust litigation and family provision claim) 3 received from Mr Dillman on 2 March 2011 subject to certain specified changes being made. By separate email later that day, Ashley Crawley sent a marked up copy of the changes he proposed which I shall refer to as draft deed (trust litigation and family provision claim) 4. [31] Ashley Crawley proposed that if Mr Dillman‘s clients were not prepared to accept his proposals in draft deed (trust litigation and family provision claim) 4, then they should arrange to sign a deed to settle this proceeding by the following Friday, i.e., 8 April 2011. He said that he would get his comments to Mr Dillman regarding draft deed (trust litigation) 4 that afternoon. [32] On 7 April 2011, Ashley Crawley sent a number of ―comments‖ to Mr Dillman regarding draft deed (trust litigation) 4. One of them was that ―the definition of Claim would need to be amended to more specifically limit the term to the claims in the proceedings BS 5914/05.‖ It does not appear that any deed was signed on 8 April. [33] On 10 April 2011, Ashley Crawley sent an email to Mr Dillman proposing a clause to be added to both draft deed (trust litigation) 4 and draft deed (trust litigation and family provision claim) 4 regarding exchange of executed counterparts by facsimile or email. [34] On 15 April 2011, Mr Dillman dealt with each of the matters raised by Ashley Crawley in his previous three emails and enclosed a draft deed for the settlement of this proceeding only (―draft deed (trust litigation) 5‖). It did not make any reference to the Hillview Trust. With regard to the definition of claim, Mr Dillman said: ―this was inserted in the deed by your former lawyer, presumably on your instructions. It is not an unusual definition for deeds of this nature and subject to making it clear that the definition does not include your claim against your late father‘s estate, we do not think it requires amendment.‖ [35] Accordingly, Mr Dillman amended the definition of ―claim‖ to mean: ―any present or future, actual or contingent, claim, cause of action, complaint, liability, cost or expense that any person (whether or not a party to the Proceeding) has or might have in connection with or arising in any way from the facts or matters alleged in the Proceeding or the Counterclaim, as the case may be, whether or not the facts, matters or circumstances giving rise to that Claim are known to that person or to any other person at the date of this Deed but excludes any claim that Ashley has for further and better provision out of the estate of the Late John Francis Crawley (deceased).‖ [36] Mr Dillman said in his covering letter that draft deed (trust litigation) 5 was proposed by his clients for signature. He had forwarded it to his clients for signature and return and in a handwritten note added that the original of draft deed (trust litigation) 5 was in the post with the necessary attachments. [37] Ashley Crawley responded by email on 21 April 2011 drawing attention to what he identified as errors with regard to the Tarawera Trust and the release of Brett -- 13 of 37 -- 14 Crawley in his own right when he was not a party to the trust litigation. He did not demur to the definition of claim. [38] On 28 April 2011, Mr Dillman replied by letter attending to those problems by amending draft deed (trust litigation) 5. I shall refer to the draft deed sent on 28 April 2011 as draft deed (trust litigation) 6. The definition of claim did not change. As well as those amendments, however, Mr Dillman added a new clause 10 which provided: ―10 The Hillview Trust 10.1 Ashley acknowledges that he is no longer an appointor or guardian of the Hillview Trust and to the extent necessary, hereby records his consent to his removal from those positions by the deed of variation of the Hillview Trust dated 18 July 2003. 10.2 Ashley forever disclaims any interest vested or contingent, present or future in the Hillview Trust.‖ [39] With regard to this clause, he said in his covering letter: ―Whilst my letter of offer, which was accepted by you, did not contain any provisions particular to the Hillview Trust, it is implicit in the offer, which you accepted, that you would take the Tarawera Trust and its assets and Brett and Diane would take the Hillview Trust and its assets. Clause 10.1 is nothing more than an acknowledgement that you have been removed as an appointor and guardian of the Hillview Trust and clause 10.2 mirrors clause 5.5, which deals with the Tarawera Trust.‖ [40] Because this case had not proceeded expeditiously to resolution it had been the subject of caseflow management orders. On 29 April 2011, the matter was listed for review on the caseflow management list. Orders were made to endeavour to assist the parties to reduce their compromise agreement to a deed of settlement as envisaged by clause 19 of the compromise agreement. The affidavits by Ashley Crawley and Mark Dillman set out different reasons for their failure to comply with those orders, a difference which it is unnecessary to resolve on this application. The order provided that in the event the parties were unable to execute a deed by 1 June 2011, the solicitor for the defendants should inform the caseflow manager and supervised case list manager and the matter would be transferred to the supervised case list for more intensive supervision. [41] On 30 May 2011, Mr Dillman wrote to Ashley Crawley about clause 10 of draft deed (trust litigation) 6. Mr Dillman acknowledged that his letter of offer did not expressly require Ashley Crawley to acknowledge that he was no longer an appointor or guardian of the Hillview Trust or to resign from it. He said that his clients however considered it ―fundamental to the deal‖ that Ashley Crawley acknowledge in the manner provided by clause 10 or by express resignation that he was no longer an appointor or guardian of the Hillview Trust. He then put forward an argument as to why, notwithstanding the omission of any mention of the Hillview Trust in the compromise agreement, it was nevertheless covered by the compromise agreement. This argument was expressed in the following way: ―Your claim was for the land owned by the Tarawera Trust (its only asset) or alternatively, an interest in the land owned by both the -- 14 of 37 -- 15 Tarawera Trust and the Hillview Trust as a tenant in common with Brett. The Hillview Trust‘s only asset is the land it owns. The offer that has been made to you and which you have accepted gives you the land owned by the Tarawera Trust. As your claim was in the alternative, and you have been offered and accepted the first alternative, you have clearly forgone any claim to Hillview. The offer you accepted similarly provides that you release my clients from liability in respect of all of your claims in the proceedings. That includes the Hillview Trust. It follows therefore that you are settling all claims you have in respect of the only asset of the Hillview Trust. That you resign as an appointor and guardian of that trust is nothing more than a mechanical feature of the Deed to ensure that my clients can enjoy that property without further inference from you, which is what you expect in respect of the land owned by the Tarawera Trust.‖ [42] The parties were unable to resolve their difference of opinion as to whether clause 10 should be included in the settlement deed. [43] Ashley Crawley retained the solicitors, Thynne & Macartney, to act for him in this proceeding and on 8 March 2012, Margaret McNamara of Thynne & Macartney wrote to Mr Dillman with regard to the terms of draft deed (trust litigation) 6. With regard to the definition of ―claim‖ Ms McNamara said: ―The parties are supposed to be releasing each other from liability for their ‗claims‘ rather than releasing to the extent of the definition of ‗Claim‘ inserted in the draft Settlement Deed. Therefore the definition of ‗Claim‘ should read: ‗‗Claim‘ means the claims in the Proceeding or the Counterclaim, as the case may be.‘ We have seen the exchange in correspondence about your argument that the definition was originally inserted by our client‘s previous solicitor. Our client does not admit to this and denies it was inserted on his instructions. In any event your argument in this respect is not sustainable and, in addition, the wording did not accord with what was agreed. Because of this change in the definition, there should be a separate provision in the deed dealing with our client‘s possible claim for further and better provision out of the estate of his late father and the provision that needs to be included in the deed is to the following effect: ‗All parties acknowledge and agree that these terms of settlement and the releases given pursuant to these terms of settlement do not include any claim that Ashley has for further and better provision out of the estate of the late John Francis Crawley (deceased).‘‖ -- 15 of 37 -- 16 [44] With regard to clause 10, Ms McNamara said: ―You have sought to include provisions regarding the positions of Appointor and Guardian of the Hillview Trust when there is no reference whatsoever to such issues in the settlement offer, which you acknowledge in your letter of 28 April 2011. You say it was implicit in the offer that our client would so agree to his removal as appointor and guardian of this Trust. No such implication can be inferred into your client‘s offer. Our client has agreed to make no claim against the lands forming part of the Hillview Trust and agreed to give the release in point 16 of your client‘s offer to that Trust. Nothing can be implied from those two agreements that any agreement was made in relation to our client removing himself from those two roles. Accordingly our client requires the removal of clause 10 entirely. However as Hillview Trust is now a party to the Deed, a definition for ‗Hillview Trust‘, should be included in the settlement deed.‖ [45] In his response on 28 March 2012, Mr Dillman repeated his argument as to why it was necessary to remove Ashley Crawley as appointor and guardian of the Hillview Trust which he said was ―a matter which has been ventilated in previous correspondence but unfortunately was omitted from my ‗without prejudice‘ letter of 2 December 2010.‖ [46] With regard to the definition of claim, Mr Dillman pointed out that the definition was inserted by Mr Mann in draft deed (trust litigation) 1 and his clients had agreed to it. The original definition had only been altered in one respect and that was to preserve Ashley Crawley‘s claim against his late father‘s estate. That was done at Ashley Crawley‘s request. On 30 March 2012, Ms McNamara again wrote to Mr Dillman with regard to the proposed definition of claim. Ms McNamara concluded by saying that Ashley Crawley, who had been acting for himself for a considerable period of time, had now been given advice as to the breadth of the definition of ―claim‖ and accordingly sought amendment of the definition. [47] On 12 April 2012, Ashley Crawley signed a deed of settlement which he said accorded with the terms of the offer he had accepted (―draft deed (trust litigation) 7‖). Ms McNamara sent a copy of the signed draft deed (trust litigation) 7 to Mr Dillman under cover of a letter dated 12 April 2012. In that letter she referred to the requirement of the parties to provide a joint report to the supervised case list judge assigned to this matter, Boddice J, by 13 April 2012. In draft deed (trust litigation) 7, ―Claim‖ was defined to mean ―the claims in the Proceeding or the Counterclaim, as the case may be‖. ―Counterclaim‖ was defined as ―the counterclaim against Ashley in the Proceeding.‖ [48] Notwithstanding various objections to it, Mr Dillman wrote to Thynne & Macartney on 13 April 2012 concluding: ―All of that said, my clients will agree to the terms of the deed proposed by you provided that the deed is amended to include a provision to the effect your client resigns as an appointor and guardian of the Hillview Trust contemporaneously with Brett‘s resignation as an appointor and guardian of the Tarawera Trust. -- 16 of 37 -- 17 I am instructed that this is, from my client‘s [sic] point of view, non negotiable.‖ [49] Ms McNamara responded on 13 April 2012 that they were happy to report to the judge that the parties had agreed to the terms of settlement except that the defendants required the following clause to be inserted in the deed: ―10. The Hillview Trust 10.1 Ashley acknowledges that he is no longer an appointor guardian of The Hillview Trust and to the extent necessary, hereby records his consent to his removal from those positions by the Deed of Variation of The Hillview Trust dated 18 July 2003. 10.2 Ashley forever disclaims any interest vested or contingent, present or future in The Hillview Trust.‖ She said that the plaintiff would not agree to the inclusion of that clause on the basis that was not a term of the letter of offer accepted by him. Pleadings in the plaintiff‟s application [50] On 3 May 2012, the plaintiff filed an application seeking the relief set out in paragraph 1 of these reasons. Boddice J then made orders for the filing of points of claim, points of defence, reply and affidavits of evidence-in-chief and set the matter down for a one day hearing on 9 July 2012. Without further order, the defendants filed amended points of defence and a cross-claim. That cross-claim sought the following relief: ―(a) a declaration that in the events which have occurred, the Plaintiff is bound by the Hillview admission; (b) further and alternatively, an order that the Defendants‘ deed (or alternatively a deed that contains an acknowledgement of the Hillview admission) be specifically performed and carried into effect; (c) such further orders, directions or other relief as to the Court seems meet; (d) costs on the indemnity basis.‖ [51] Certain terms used in that prayer for relief are explained in the amended points of defence and cross-claim. The ―defendants‘ deed‖ in paragraph (b) refers to draft deed (trust litigation) 6 sent by the defendants‘ solicitors to Ashley Crawley on 28 April 2011. The ―Hillview admission‖ is said to be an admission by the plaintiff in the pleadings in this proceeding (ie the trust litigation) that, by a Deed of Variation dated 18 July 2003, the Hillview Trust Deed and the Hillview Trust were varied by removing the plaintiff as guardian and as an appointor of the Hillview Trust. [52] In order to determine what relief should be given, it appears to me that there are four related questions which first need to be determined: (1) Have the parties compromised this proceeding? (2) What are the terms of the compromise? (3) Is the plaintiff bound by what is alleged to be the Hillview admission? -- 17 of 37 -- 18 (4) If he is not, should a term to that effect be implied into the compromise agreement? Is there a compromise? [53] The parties made a compromise agreement on 16 December 2010 when the defendants‘ letter of offer was accepted by the plaintiff. The offer was in writing, detailed and specific but makes reference to the terms of settlement, if accepted, being recorded in a Deed of Settlement. [54] What does this clause mean for the terms and efficacy of the compromise agreement? The plaintiff submitted that the compromise agreement contains the terms set out in the letter of offer and no other should be implied nor was it understood that new substantive terms would be added. [55] The defendants submitted first that the compromise agreement reached on 16 December 2010 was an agreement of the fourth class in Masters v Cameron (1954) 91 CLR 353. The different types of agreement were usefully summarised by Dowsett J, with whom French J (as his Honour then was) and Whitlam J agreed, in Graham Evans Pty Ltd v Stencraft [1999] FCA 1670 at [43]-[45]: ―[43] … it is appropriate to look briefly at relevant authorities. In Masters v Cameron (1954) 91 CLR 353 at 360-361, the High Court said: ‗Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiations shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. Of these two cases the first is the more common. Throughout the decisions on this branch of the law the proposition is insisted upon which -- 18 of 37 -- 19 Lord Blackburn expressed in Rossiter v Miller [(1878) 3 App Cas 1124] when he said that the mere fact that the parties have expressly stipulated that there shall afterwards be a formal agreement prepared, embodying the terms, which shall be signed by the parties does not, by itself, show that they continue merely in negotiation. His Lordship proceeded: ‗... as soon as the fact is established of the final mutual assent of the parties so that those who draw up the formal agreement have not the power to vary the terms already settled, I think the contract is completed.‘ ... A case of the second class came before this Court in Niesmann v Collingridge [(1921) 29 CLR 177] where all the essential terms of a contract had been agreed upon, and the only reference to the execution of a further document was in the term as to price, which stipulated that payment should be made ‗on the signing of the contract‘. Rich and Starke JJ observed that this did not make the signing of a contract a condition of agreement, but made it a condition of the obligation to pay, and carried a necessary implication that each party would sign a contract in accordance with the terms of the agreement. Their Honours, agreeing with Knox CJ, held that there was no difficulty in decreeing specific performance of the agreement, ‗and so compelling the performance of a stipulation of the agreement necessary to its carrying out and due completion ...‘ Cases of the third class are fundamentally different. They are cases in which the terms of the agreement are not intended to have, and therefore do not have, any binding effect of their own. The parties may have so provided either because they have dealt only with major matters and contemplate that others will or may be regulated by provisions to be introduced into the formal document, ... or simply because they wish to reserve to themselves a right to withdraw at any time until the formal document is signed.‘ [44] In Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622, McLelland J said at 628: ‗The intention of the parties to be legally bound by their consensus is sufficiently clearly expressed to take the case out of the third class of cases referred to in Masters v Cameron [[1954] HCA 72;] (1954) 91 CLR 353 at 360-362, that is, ... cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own. (at 361) There is in reality a fourth class of case additional to the three mentioned in Masters v Cameron as recognized by Knox CJ, Rich J and Dixon J in Sinclair, Scott & Co v Noughton [1929] HCA 34; (1929) 43 CLR 310 at 317, -- 19 of 37 -- 20 namely, ‗... one in which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms‘.‖ [45] In the Court of Appeal [reported sub-nom G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631] at 634, McHugh JA (Kirby P and Glass JA concurring) said: However, the decisive issue is always the intention of the parties which must be objectively ascertained from the terms of the document when read in the light of the surrounding circumstances: ... . If the terms of a document indicate that the parties intended to be bound immediately, effect must be given to that intention irrespective of the subject matter, magnitude or complexity of the transaction. Even when a document recording the terms of the parties' agreement specifically refers to the execution of a formal contract, the parties may be immediately bound. Upon the proper construction of the document, it may sufficiently appear that ‗the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms.‘ Sinclair, Scott & Co Ltd v Noughton (at 317).‖ [56] It is a matter of construction to determine objectively what the parties had agreed on 16 December 2010.2 The letter of offer refers to the terms of settlement, ―if accepted‖, being recorded in a Deed of Settlement to be prepared by the defendants‘ solicitors. The terms of settlement were accepted by the plaintiff on 16 December 2010. There was therefore a binding agreement, which contained the terms of settlement. Those terms were to be recorded in a Deed of Settlement. In its ordinary meaning this is an agreement of the first class referred to in Masters v Cameron, that is one in which the parties had reached finality in arranging all the terms of their bargain and intended to be immediately bound but at the same time intended to have the terms restated in a formal deed in more precise and formal language and include appropriate machinery provisions but not change the substantive terms of the agreement. It does not appear in those circumstances to fall into the ―fourth class‖. Of course, parties are always free to consent to additional substantive terms but it does not appear that objectively that was the case in this instance at the time the agreement was reached on 16 December 2010. [57] The fact that negotiations took place with a view to extending the compromise to include proposed litigation with regard to family provision which did not result in a further agreement does not affect the existence of the agreement reached on 16 2 See Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 461-462 [22]; Toll (FGCT) P/L v Alphapharm Pty Ltd (2004) 219 CLR 165 at 178-179, 186, [36], [40]-[41]. -- 20 of 37 -- 21 December 2010.3 Neither does the difficulty the parties experienced in putting the terms of settlement into a formal deed affect the existence of the agreement reached on 16 December 2010. What are the terms of the compromise? [58] As to the terms of settlement, the defendants submit that notwithstanding its absence from the compromise agreement, the plaintiff is bound by the Hillview admission, either because it is an implied term of or condition precedent to the compromise agreement or because the plaintiff is bound by an admission he has made on the pleadings. [59] I shall first consider whether such an admission has been made on the pleadings. If not, I will then consider whether or not such a clause is an implied term of or a condition precedent to the compromise agreement. Was there a Hillview admission? [60] Rule 190(1) of the Uniform Civil Procedure Rules 1999 (UCPR) provides that if an admission is made by a party in a pleading, the court may make any order to which the party applying for the order is entitled on that admission. [61] In order for the court to act on an admission in the way contemplated by r 190(1), the admission must be sufficiently clear and settled, and not subject to application for amendment or withdrawal. Here there has not been any application to withdraw any admission so the question is whether an unequivocal admission has been made. [62] Kiefel J, with whom Higgins and Tamberlin JJ agreed in ACT Leagues Club v ACT Rugby League said that the ―purpose of the rule is to save time and costs where a party can be seen, by unambiguous admissions of fact howsoever made, to have a clear entitlement to the relief claimed‖.4 Citing Barwick CJ in Re Registered Trade Marks Certina & Certina DS,5 her Honour reiterated that ―the power is discretionary and is exercised with great caution‖.6 In relation to the requirement for clarity, her Honour continued: ―The requirement that the entitlement be ‗clear‘ cannot be satisfied where the right asserted is subject to some other contention which cannot be disposed of then and there by legal argument, a course which was not in any event undertaken here. Whilst it is possible that the procedure could be utilised prior to the close of pleadings, an order could only be warranted where the Court could conclude with certainty that no matter could be raised against the right to relief claimed.‖ [63] The authorities in England are to similar effect. The oft-cited case is Ash v Hutchinson & Co (Publishers) Ltd 7 which involved a copyright action in which the 3 James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Pty Ltd [1970] AC 583; Agricultural and Rural Finance Pty Limited v Gardiner (2008) 238 CLR 570 per Gummow, Hayne and Kiefel JJ at [35]; cf. Kirby J at [115]. 4 ACT Leagues Club v Australian Captial Territory Rugby League Inc (Unreported, Federal Court of Australia, ACT G 26 of 1995, 2 August 1995, Higgins, Tamberlin and Kiefel JJ). 5 (1970) 44 ALJR 191. 6 ACT Leagues Club v Australian Captial Territory Rugby League Inc (Unreported, Federal Court of Australia, ACT G 26 of 1995, 2 August 1995, Higgins, Tamberlin and Kiefel JJ). 7 [1936] 2 All ER 1496. -- 21 of 37 -- 22 plaintiffs called no evidence and relied exclusively on admissions in the defence and in other correspondence. Ultimately the claim was barred on the basis that the defendant publishers were joint tortfeasors with the author, from whom damages had already been recovered. However, the Court of Appeal also rejected the proposition that the admissions in the defence could be relied upon, because they were not sufficiently clear. Greene LJ held:8 ―A plaintiff who relies for the proof of a substantial part of his case on admission in the defence must, in my judgment, show that the matters in question are clearly pleaded and as clearly admitted; he is not entitled to ask the court to read meanings into his pleadings which, on a fair construction, do not clearly appear, in order to fix the defendants with an admission.‖ [64] I shall therefore examine the pleadings to determine if the Hillview admission was clearly and unequivocally made. [65] This proceeding commenced by claim and statement of claim filed on 21 July 2005. At that time the plaintiff was Ashley Crawley and the defendants were Crawley Land as trustee for the Tarawera Trust and the Hillview Trust (first defendant), John Francis Crawley as trustee of the Maranui Trust (second defendant) and J&D Crawley as trustee of the JF Crawley Trust (third defendant). [66] The claim and statement of claim were amended pursuant to leave granted by Philip McMurdo J on 27 September 2005. At that time John Crawley and Diane Crawley were added as the fourth and fifth defendants respectively. A defence to the amended statement of claim and a counterclaim was filed on 18 October 2005. A reply and answer was filed on 29 November 2005. An amended defence and counterclaim was filed on 14 March 2006. It was amended pursuant to r 378 of the UCPR. [67] On 19 June 2006, the plaintiff filed a notice of change of solicitors. On 12 May 2008, another notice of change of solicitors was filed by the plaintiff and on 8 May 2009, the plaintiff filed a notice that he was acting in person. [68] On 28 May 2009, directions were given on a caseflow review which required any further amended pleadings to be filed by certain specified dates. A further amended statement of claim was filed on 26 June 2009. A further amended defence and counterclaim was filed by the defendants on 24 July 2009. [69] On 26 August 2009, a second further amended statement of claim and an amended reply and answer were filed. A caseflow order made on 27 August 2009 allowed further time for the filing of an amended defence and counterclaim. Various applications were heard on 24 September 2009. The consent order in respect of those applications was signed by the counsel who had settled the statement of claim, amended statement of claim, the further amended statement of claim, the second further amended statement of claim and the reply and answer. On 7 October 2009, a second further amended defence and counterclaim was filed. [70] On 25 February 2011, the parties informed the court on a caseflow review that the matter had settled. The court ordered that if a notice of discontinuance were not filed by 29 April 2011 the matter would be relisted for further directions. On 29 8 [1936] 2 All ER 1496 at 1505. -- 22 of 37 -- 23 April 2011, as no notice of discontinuance had been filed, further orders were made on a caseflow review as referred to earlier in these reasons.9 [71] The relevant pleadings as at 16 December 2010 were therefore the second further amended statement of claim which had been filed on 26 August 2009, a second further and amended defence and counterclaim filed on 7 October 2009 and an amended reply and answer filed on 26 August 2009. By then, by virtue of an order made on 28 November 2010, the defendants were as set out at the beginning of these reasons. [72] The claim as set out in the second further amended statement of claim was: ―1. As against the first fourth and fifth defendants: 1.1 a declaration that Bernlea and Tarawera are held by the first fourth and fifth defendants on express, resulting or constructive trust for the benefit of the plaintiff; 1.2 alternatively, a declaration that the Hillview conglomerate is held by the first fourth or fifth defendants on express resulting or constructive trust for the benefit of the plaintiff and Brett Christopher Matthew Crawley as tenants in common in equal shares. 2. As against the second defendant: 2.1 a declaration that Maranui is held by the second defendant on express, resulting or constructive trust for the benefit of the plaintiff and Brett Christopher Matthew Crawley as tenants in common in equal shares. 3. As against the third defendant: 3.1 a declaration that it holds $144,060 on trust for the plaintiff absolutely; 3.2 an order requiring the third defendant to pay $144,060 to the plaintiff; 3.3 interest thereon pursuant to section 47 of the Supreme Court Act 1995 at rates prescribed by practice direction. 4. Costs.‖ [73] It appears from the pleadings that the first defendant, Crawley Land, was incorporated on 19 June 1996 and that, by Deed of Trust dated 25 September 1996 between Norman Fox as settlor and Crawley Land as trustee, the Hillview Trust and the Tarawera Trust were established as discretionary trusts. John and Diane Crawley and their sons, Ashley and Brett Crawley, were named as specified beneficiaries in the Trust Deed of each trust. The general beneficiaries included the children of the specified beneficiaries. John, Ashley and Brett Crawley were named as Guardians and Appointors in the Hillview Trust Deed and the Tarawera Trust Deed.10 [74] In the second further amended statement of claim it was alleged that: 9 See [40]. 10 Second Further Amended Statement of Claim, paras 1.1, 1.2, 2.1, 2.2, 2.3; Second Further Amended Defence and Counterclaim, para 1(a), (b); Amended Reply and Answer, para 1. -- 23 of 37 -- 24 ―35. By resolution of the shareholders on 24th June 2003, Ashley was removed as a director of Crawley Land. 36. On 24th June 2003, John wrote to Ashley on behalf of Crawley Land, requiring Ashley to consent to his removal as a guardian and an appointor of the Tarawera Trust and the Hillview Trust. 37. On 8th July 2003, a meeting by post of the guardians of the Tarawera Trust and the Hillview Trust purported to agree to remove Ashley as a guardian and an appointor of the trusts.‖ These paragraphs remained as they had been in the original statement of claim filed on 21 July 2005. [75] In paragraph 1(a)(iv) of the second amended defence and counterclaim, the defendants alleged that ―by a Deed of Variation dated 18 July 2003, the Hillview Trust Deed and the Hillview Trust were varied by removing the plaintiff as a guardian and as an appointor (as hereinafter pleaded).‖ In paragraph 1(b)(iv), they alleged that ―by a Deed of Variation dated 18 July 2003, the Tarawera Trust Deed and the Tarawera Trust were varied by removing the plaintiff as a guardian and as an appointor (as hereinafter pleaded).‖ [76] In paragraph 1 of the amended reply and answer the plaintiff admitted paragraphs 1(a) and 1(b) of the second amended defence and counterclaim ―save in respect of matters alleged in the defence and counterclaim to be ‗as hereinafter pleaded‘, to the extent such later pleading is denied or not admitted.‖ [77] In response to paragraph 35 of the second further amended statement of claim, the defendants admitted, in paragraph 30(a) of the second further amended defence and counterclaim, that Ashley Crawley was removed as a director of Crawley Land. As to the allegations in paragraphs 36 and 37, they admitted the allegations and said, in paragraph 31(c) of the second further amended defence and counterclaim, that Ashley Crawley was removed as a guardian and appointor for the reasons set out in the letters dated 24 June 2003 from Crawley Land to Ashley Crawley, namely: ―(i) for the better management, and to protect the interests, of the Trusts; (ii) to protect the interests of the beneficiaries of the Trusts; (iii) the inability of the three Guardians and Appointors of the Trusts to reach effective agreement or work together in their capacities as directors of the First Defendant as trustee.‖ [78] In paragraph 23 of the amended reply and answer, the plaintiff denied paragraph 31(c) of the second further amended defence and counterclaim: ―on the grounds Ashley was removed from office, and his authority withdrawn in order to ensure that: 23.1 Crawley Land, and the Tarawera and Hillview Trusts, would be controlled and managed by John and Brett; 23.2 Ashley would no longer manage or benefit from the Tarawera or Hillview Trusts; 23.3 Ashley would no longer benefit from the JF Crawley Trust.‖ It follows from the form of paragraph 23 of the amended reply and answer that the plaintiff has admitted that he was removed from office as appointor and guardian of the Hillview Trust and the Tarawera Trust, although he disputes the reason for that -- 24 of 37 -- 25 removal. The reasons alleged by the plaintiff for his removal might be thought to contain an implied allegation that the exercise of the power to remove for those reasons constituted a fraud on the power.11 [79] The history of the pleadings tends to support that reading. In the defence and counterclaim filed on 18 October 2005, paragraph 31 was in the following form: ―As to paragraphs 36 and 37 of the Amended Statement of Claim, the Defendants:- (a) admit the allegations contained therein; (b) say that the Plaintiff has been validly removed as a Guardian and an Appointor of each of the Tarawera Trust and the Hillview Trust; (c) say that such removal was done for the reasons set out in the two letters dated 24 June 2003 from the First Defendant to the Plaintiff, namely:- (i) for the better management, and to protect the interests, of the Trusts; (ii) to protect the interests of the beneficiaries of the Trusts; (iii) the inability of the three Guardians and Appointors of the Trusts to reach effective agreement or work together in their capacities as directors of the First Defendant as trustee.‖ [80] Paragraph 34 of the defence and counterclaim was in the following terms: ―As to paragraph 46 of the Amended Statement of Claim, the Defendants:- (a) admit that the Plaintiff‘s authority to incur debts on behalf of the Third Defendant and to operate the bank account of the Third Defendant were withdrawn by facsimile dated 13 May 2003 from Fox & Thomas (Solicitors) to Kennedy Spanner Lawyers; (b) say that such withdrawal of authority was given following, and in view of, the matters contained in the said facsimile and the matters pleaded in paragraphs 30(b) and 30(c) hereof.‖ [81] In response, paragraph 23 of the plaintiff‘s reply and answer filed on 29 November 2005 was in the following terms, ―as to the allegations in the defence, the plaintiff‖: ―23. Denies paragraphs 30(b), 31(c) and 34(b) on the grounds Ashley was removed from office, and his authority withdrawn in order to ensure that: 11 Re Ball’s Settlement Trusts [1968] 1 WLR 899 at 905 (variation cannot alter substratum of trust); Cachia v Westpac Financial Services Ltd [2000] FCA 161 at [68]-[72], [74]; 70 ALR 65 at 82-83 (that proposition may be no more than an application of the equitable doctrine of fraud on the power); Bell Group Ltd (in liq) v Westpac Banking (No 9) [2008] WASC 239 at [4458]; ING Funds Management Ltd v ANZ Nominees Ltd [2009] NSWSC 243 at [149] (power to amend subject to doctrine of fraud on the power); Commissioner of Taxation (Cth) v Bargwanna [2012] HCA 11 at [13] (broadly framed powers of amendment do not extend to alteration of the substratum of the trust). -- 25 of 37 -- 26 23.1 Crawley Land, and the Tarawera and Hillview Trusts, would be controlled and managed by John and Brett; 23.2 Ashley would no longer manage or benefit from the Tarawera or Hillview Trusts; 23.3 Ashley would no longer benefit from the JF Crawley Trust.‖ [82] The reference to paragraph 30(b) appears to be in error. In the preceding paragraphs of the reply and answer the plaintiff had pleaded to paragraph 30(b) of the defence and counterclaim, by not admitting it as the allegations lacked sufficient particularity for the plaintiff to assess whether the allegations were true or false, and that the allegations could not be admitted or denied until completion of the interlocutory steps. It would appear therefore that the plaintiff intended to deny paragraph 31(b) of the defence and counterclaim but inadvertently did not. [83] On 14 March 2006, the defendants responded by filing an amended defence and counterclaim. In that pleading, they deleted paragraph 31(b) which had not been pleaded to in the reply and answer. Paragraph 31(a) and 31(c) remained the same. When an amended reply and answer was filed on 26 August 2009, paragraph 23 remained the same. [84] There is no allegation by the plaintiff that he was not removed from office. It was not explicitly pleaded that his removal as appointor and guardian was void.12 However it can be seen by this analysis of the pleadings that it cannot be concluded that the plaintiff clearly and unequivocally admitted not only that he was removed as appointor and guardian but that that removal was valid, in that it did not constitute a fraud on the power. In those circumstances in the absence of a clear admission, the declaration sought by the defendants must be refused. Was a Hillview clause part of the compromise agreement? [85] If the defendants cannot rely on the Hillview admission, they contend that the compromise agreement should be taken to have included a term in the form of what they refer to as version 2 or version 3 of a clause relating to the Hillview Trust. Version 2 is in the terms of clause 5 of draft deed (trust litigation and family provision claim) 1 submitted to the defendants by Mr Mann on 17 February 201113 which provided that Ashley Crawley, to the extent that he might be a guardian or appointor of the Hillview Trust, resigned from those positions (―the Hillview resignation clause‖). Version 3 is in the terms of clause 10 of draft deed (trust litigation) 6 submitted by Mr Dillman to the plaintiff on 28 April 201114 which provided that Ashley Crawley acknowledged that he was no longer an appointor or guardian of the Hillview Trust and to the extent necessary recorded his consent to his removal from those positions by the deed of variation of the Hillview Trust of 18 July 2003 (―the Hillview acknowledgement and consent to removal clause‖). I shall refer to both clauses compendiously as a Hillview clause. The defendants rely on the ―surrounding circumstances known to the parties and the purpose and object of the transaction‖ to imply or infer a Hillview clause into the compromise agreement; or to contend that the offer made on 2 December 2010 contained an 12 cf Mills v Mills (1983) 60 CLR 150 at 185 re fraud on the power by company directors. 13 See [17]. 14 See [38]. -- 26 of 37 -- 27 implied condition that the plaintiff would provide an acknowledgement of the Hillview admission in the deed of settlement recording the compromise agreement. As I have already found, there was no unequivocal Hillview admission, so its acknowledgement could hardly be said to be a condition precedent. [86] The principles relied upon by the defendants to ―infer‖ a term apply only in cases where ―there is no formal agreement‖15 or in ―a case where it is apparent that the parties have not attempted to spell out the full terms of their contract‖.16 In such a case, what the terms of an agreement are is of necessity a matter of inference. In this case the letter of offer which was accepted was in writing, detailed and specific. All of the substantive terms were set out in the compromise agreement. It follows that this is not a case where a Hillview clause, whether in the form of the Hillview resignation clause or the Hillview acknowledgement and consent to removal clause, could be inferred as a term of the agreement between them notwithstanding its not having been included in the written compromise agreement. [87] There are major obstacles in what might be considered the Herculean task of arguing that a Hillview clause is an implied term or condition precedent of the compromise agreement. The first obstacle is the uncertainty as which version of the clause should be implied or said to be a condition precedent which would seem to be enough on its own to defeat its implication. [88] Even if I were wrong about that, the next obstacle is that the defendants‘ argument requires the admission of pre-contractual negotiations as to construction of the agreement. Even if the pre-contractual negotiations were admitted, it is far from clear that they would assist in implying any such term or condition precedent. Are the pre-contractual negotiations admissible? [89] The general rule in construing instruments and agreements is to give effect to the intention of the parties. That intention is to be ascertained from the objective construction of the instrument which gives effect to the agreement. In Schuler L A G v Wickman Machine Tool Sales Ltd, Wilberforce LJ held:17 ―The general rule is that extrinsic evidence is not admissible for the construction of a written contract; the parties‘ intentions must be ascertained, on legal principles of construction, from the words they have used. It is one and the same principle which excludes evidence of statements, or actions, during negotiations, at the time of the contract, or subsequent to the contract, any of which to the lay mind might at first sight seem to be proper to receive.‖ [90] Evidence of the surrounding circumstances is admissible to resolve an ambiguity, but not to create that ambiguity. In Codelfa Construction Pty Ltd v State Rail Authority of NSW,18 Mason J (as his Honour then was) recalled the statements of Atkinson and Shaw LJJ in Great Western Railway and Midland Railway v Bristol Corporation to the effect that 15 Breen v Williams (1996) 186 CLR 71 at 90. 16 Hawkins v Clayton (1988) 164 CLR 539 at 573. 17 [1973] 2 All ER 39 at 53. 18 (1982) 149 CLR 337. -- 27 of 37 -- 28 ―evidence of surrounding circumstances was inadmissible except to resolve an ambiguity, that is, where the words are susceptible of more than one meaning, … evidence of surrounding circumstances was not admissible to raise an ambiguity for in their opinion that would be to contradict or vary the words of the written document, the assumption being that in the overwhelming majority of cases the written words will have a fixed meaning.‖19 [91] Specifically in relation to pre-contractual negotiations, his Honour found that by operation of the parol evidence rule they are admissible for purposes of rectification, but not for questions of construction: ―Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.‖20 [92] There is no ambiguity on the face of the agreement as set out in the letter of 2 December 2010. The letter does not contain any term that the plaintiff be removed as appointor and guardian of the Hillview Trust. Recourse to extraneous evidence to suggest that such a term should be implied is impermissible in the absence of any ambiguity on the matter. Accordingly, the evidence of pre-contractual negotiations is inadmissible as to questions of construction. [93] Even if, contrary to my view, the pre-contractual negotiations were admitted, it does not appear that they would assist the defendants in satisfying the legal requirements of the implication of a Hillview condition, whether as a term of the agreement or as a condition precedent. What were the pre-contractual negotiations? [94] The negotiations leading to the eventual compromise can, on the material before me, be traced back to the death of John Crawley on 16 June 2010. On 28 June 2010, the plaintiff sent a letter to Mr Dillman informing him of his intention to make a claim against his father‘s estate. Mr Dillman replied on 30 June 2010, saying that he had instructions to make an offer to settle the proceedings within the next two weeks. [95] On 27 July 2010, Mr Dillman sent three letters to the plaintiff. [96] In the first, he made an offer on behalf of the defendants ―to reflect your late father‘s wishes, being that upon his death you and your brother Brett assume ownership, in equal shares, of the family‘s farming properties.‖ That offer included 19 (1918) 87 LJ Ch 414 at 418-419. 20 (1982) 149 CLR 337 at 352. -- 28 of 37 -- 29 that the claim for family provision be withdrawn. No mention was made of the plaintiff‘s status as appointor and guardian of the Hillview Trust in that offer. [97] In the second letter, Mr Dillman further proposed that the defendants subdivide and sell part of the Maranui properties to the plaintiff. In the third letter, Mr Dillman made a further offer on behalf of the defendants, contingent upon the plaintiff‘s acceptance of the principal offer in the first letter, to pay the plaintiff a sum equal to half of the value of the plant and equipment of the JF Crawley Trust. [98] On 4 August 2010, Mr Dillman sent a further email to the plaintiff making it clear that ―one of the clauses my clients will require in the deed of settlement referred to in my open letter to you of 27 July 2010 is a release from you in favour of Dianne [sic], Brett, J & D Crawley Pty Ltd, Crawley Land Pty Ltd, the Super Fund and all of the trusts that you do not take control of in respect of all claims now or in the future which you may have against any of them.‖ [99] On 25 August 2010, Mr Dillman again wrote to the plaintiff, following a telephone conversation between the parties. Referring to that telephone conversation, he said: ―So there can be no misunderstanding, it is intended that: 1. Brett will resign as a guardian and appointor of the Tarawera Trust; 2. Brett expects you to do the same in respect of the Hillview Trust; …‖ [100] On 6 September 2010, the plaintiff replied to Mr Dillman‘s first letter of 27 July 2010. He said that ―in general what is proposed is acceptable to me‖. However, he raised a number of issues, none of which related to the power of appointment under the Hillview Trust. On 21 September 2010, the plaintiff replied to Mr Dillman‘s second letter of 27 July 2010, disputing the proposed price for the subdivision. On 22 September 2010, the plaintiff replied to Mr Dillman‘s third letter of 27 July 2010, disputing the value of the plant and equipment of the JF Crawley Trust to be divided between himself and Brett Crawley, suggesting either the use of an independent valuer or the division of the property between the two in a manner which he outlined in some detail. [101] On 20 October 2010, Mr Dillman wrote to the plaintiff, replying to the three letters of the plaintiff. [102] In relation to the letter of 6 September 2010, he said that the defendants did not consider that the issues raised by the plaintiff were an obstacle to a settlement agreement. They agreed that the consequence of the terms of their father‘s will was that the plaintiff and Brett would both be appointors and guardians of the Tarawera Trust, but that Brett was prepared to effect a variation of the trust removing him, leaving the plaintiff as the sole appointor and guardian of the Tarawera Trust. [103] In relation to the letters of 21 and 22 September 2010, the defendants reaffirmed the accuracy of their valuations and rejected the suggestions of the plaintiff. [104] In relation to the nature of the settlement proposed, Mr Dillman observed that: ―2. Your primary claim in the proceedings presently before the Court is for a declaration to the effect that you are the owner of Bernlea and -- 29 of 37 -- 30 Tarawera. My clients are prepared to transfer that property to you in the manner suggested in this letter. 3. Your claim for a declaration that you and Brett own the Hillview Conglomeration as tenants in common is an alternative claim and so, becomes irrelevant. 4. Whilst you claim ownership of Maranui together with Brett, as tenants in common, what my clients have proposed and still propose is that you, or an entity nominated by you, ends up with Brummell‘s, with my clients bearing the costs associated with the transfer. Brummell‘s is clearly more valuable than the remaining parcel that comprises Maranui. …‖ [105] Mr Dillman then proposed a counter-offer to ―vary the terms of the earlier offers‖. That offer largely incorporated the terms of the three letters of 27 July 2010, including the proposed subdivision and sale of the Hillview House for a fixed sum, the payment of a sum said to amount to half the value of the plant and equipment of the JF Crawley Trust, and the division of the Maranui and Tarawera Trusts between the parties as previously outlined. It included that the proceedings would be discontinued and the plaintiff would forego all claims against his father‘s estate. In addition, it explicitly provided that one of the terms of settlement would be that: ―2. You resign as appointor and guardian of the Hillview Trust.‖ [106] However, then on 2 December 2010, Mr Dillman wrote to the plaintiff expressly withdrawing all previous offers and making another offer in their place, which related only to this proceeding and not to the claim against John Crawley‘s estate. That offer was in the terms set out at paragraph [2] of these reasons, was accepted by the plaintiff, and formed the agreement whose terms fall for consideration. The defendants seek to imply a term which was present in an offer that had been expressly withdrawn. Implication of a term into a contract [107] For a term to be implied into a contract, that term must: 1. be reasonable and equitable; 2. be necessary to give business efficacy to the contract; 3. be so obvious that it goes without saying; 4. be capable of clear expression; and 5. not contradict any express term of the contract.21 [108] Generally, this is a ―strict test‖.22 For a term to be implied, it must satisfy these requirements to displace the presumption that an agreement between parties means what it says. [109] The first difficulty for the defendants is that, as observed by the High Court in Hospital Products Ltd v United States Surgical Corporation, a term should not be implied unless it is 21 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-3; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 347. 22 Wright v TNT Management Pty Ltd (t/as Comet Overnight Transport) (1989) 15 NSWLR 679 at 697 -- 30 of 37 -- 31 ―necessary to imply any further term, ‗with the object of giving to the transaction such efficacy as both parties must have intended that at all events it should have‘ … or to make the agreement work or to avoid an unworkable situation …‖23 [110] A term removing the plaintiff as appointor and guardian of the Hillview Trust is not required to give business efficacy to the agreement. The settlement can operate without the plaintiff being removed. Although it might create substantial difficulties in the workings between the parties, the court will not ―look at a business transaction and try to see how many difficulties could arise in the working- out‖24 of the arrangement if the agreement is clear on its face. [111] This requirement may be less strict in the case of contracts which are informal or partly oral, or which the parties have made no serious attempt to reduce to a complete written form. In such a case, the requirement that the term be necessary to give business efficacy to the contract need not be rigidly applied, so long as the term is one which is ―so obvious that it goes without saying‖. However, the latter requirement, as a general rule, ―must be satisfied, even in the case of an informal oral contract, before the courts will imply a term which cannot be implied from some actual statement, from previous dealings between the parties or from established mercantile practice‖.25 [112] This is not such a case. As revealed by the pre-contractual negotiations, by the time the offer contained in the letter dated 2 December 2010 was accepted by the plaintiff on 16 December 2010, efforts had been made to reduce the offer to writing at least three times. The defendants were legally advised and made considered offers that were slightly varied at each juncture to reflect the progress of the negotiations between the parties. A term should not be easily implied into such an agreement or considered as a condition precedent. [113] In any event, the term alleged could not be said to be ―so obvious that it goes without saying‖. That question is to be ascertained according to whether, if an officious bystander had suggested the alleged term be included in the contract, the parties would have regarded it as too obvious to warrant express inclusion.26 The term to be implied must be ―so obvious that both [parties] would clearly have agreed to its inclusion in the contract … had they directed their minds to it at the time they concluded their bargain‖.27 Where a term is adverse to the interests of one party and in favour of the other, this will not be easily implied.28 [114] The term alleged is in favour of the defendants and against the interests of the plaintiff. The pre-settlement negotiations illustrate with some clarity that, if an officious bystander had suggested to the parties at the time of the agreement that a term to that effect be included, the response would not have been that it was so obvious that it goes without saying. In fact, there has been substantial debate about and there are complex legal questions surrounding the question of whether the 23 (1984) 156 CLR 41 at 66. 24 Vroon BV v Fosters Brewing Group [1994] 2 VR 32 at 68. 25 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 121. 26 Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 cited in L J Hooker Ltd v W J Adams Estates Pty Ltd (1977) 138 CLR 52 at 74. 27 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 241. 28 Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169 at 197. -- 31 of 37 -- 32 plaintiff had already been validly removed or whether the settlement agreement needed to so provide. [115] It is not sufficient that the term alleged be a reasonable one. While the term to be implied must be reasonable and equitable between the parties, it is not sufficient for such an implication that a reasonable agreement would or should have contained that term. In Codelfa, Mason J observed that: ―the evidence revealed a matter which was in the common contemplation of the parties yet was not a contractual provision actually agreed upon for the simple reason that it was a matter of common assumption. … To say that the maintenance of three eight hour shifts a day for six days a week was a matter of common contemplation between the parties is not enough in itself to justify the implication of a term. … It must appear that the matter of common contemplation was necessary to give the contract business efficacy and that the term sought to be implied is so obvious that it goes without saying.‖29 [116] It may have been desirable and reasonable to include in the settlement agreement a term consistent with the Hillview resignation clause or the Hillview acknowledgement and consent to removal clause. However, it is not so obvious that it goes without saying. The court is unable to rewrite the parties‘ agreement.30 [117] It follows that such a term cannot be implied into the agreement. Nor could it be sensibly suggested that the offer made on 2 December 2010 contained an implied condition that the plaintiff would provide an acknowledgement of the Hillview admission in the deed of settlement recording the compromise agreement. [118] It remains to consider what is the relationship between the parties consequent upon the compromise agreement having been entered into between them. Effect of John Crawley‟s will [119] John Crawley executed his last will on 28 July 2008. He died on 16 June 2010 and the will was admitted to probate on 9 November 2010. The will disposed of various interests and entitlements with regard to, inter alia, the Tarawera Trust and the Hillview Trust. [120] Under the heading ―Powers of Appointment‖, Clause 5.4 of the will provided: ―(2) With respect to the Tarawera Trust (a) I appoint Ashley to exercise any powers of appointment which I may have had or which may be exercised by Ashley with respect to the Tarawera Trust established pursuant to a trust deed dated 25 September 1996 between Crawley Land Pty Ltd as trustee and Norman Laurie Fox as settler, and any variations thereafter (Tarawera Trust). (b) The appointment of 5.4(2)(a) is conditional upon Ashley, to the satisfaction of my Trustee: 29 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 354-355. 30 Foskett, ―The Law of Compromise‖ 4th ed [5-42]. -- 32 of 37 -- 33 (i) Agreeing to release and indemnify me, Diane, Brett and our respective personal representatives, Crawley Land Pty Ltd or the trustee for the time being of the Hillview Trust from any actions or claims of whatever nature by Ashley or by the Tarawera Trust; (ii) Withdrawing any caveat registered against any land held by any of the above named persons and Companies (in whatever capacities); and (iii) Discontinuing any actions which may then exist against any of the above named persons and Companies (in whatever capacities). (3) With respect to the Hillview Trust (a) I appoint Brett to exercise any powers of appointment which I may have had or which may be exercised by Brett with respect to the Hillview Trust established pursuant to a trust deed dated 25 September 1996 between Crawley Land Pty Ltd as trustee and Norman Laurie Fox as settler, including any variations thereafter (Hillview Trust). (b) The appointment of Clause 5.4(3)(a) is conditional upon Brett, to the satisfaction of my Trustees: (i) Agreeing to release and indemnify me, Dianne [sic], Ashley and our respective personal representatives, Crawley Land Pty Ltd or the trustee for the time being of the Tarawera Trust from any actions or claims of whatever nature by Brett or by the Hillview Trust; and (ii) Discontinuing any actions which may then exist against any of the above named persons and Companies (in whatever capacities). (4) In the exercise of the power of appointment pursuant to clauses 5.4(1), 5.4(2) and 5.4(3), I request that the appointee appoint itself or themselves, as the case may be, or a company controlled by one of them or all of them, as the case may be, to be trustee of the respective trust.‖ [121] John Crawley then provided for the transfer of his interest in the various farming properties to each of those trusts as follows: ―5.5 My interest in the properties known as „Tarawera‟ and „Bernlea‟ (1) I give my interest in the properties known as ‗Tarawera‘ and ‗Bernlea‘ to the Tarawera Trust. 5.6 My interest in the properties known as „Willow Glen‟ and „Hillview‟ (1) I give my interest in the properties known as ‗Willow Glen‘ and ‗Hillview‘ to the Hillview Trust.‖ -- 33 of 37 -- 34 [122] He then bequeathed the residue of his estate and ensured that the conditions imposed with regard to the powers of appointment also applied to the gift of his interest in the properties to the trusts as follows: ―5.7 Rest and residue of my estate (1) I give the rest and residue of my estate to Diane. This gift will fail if Diane does not survive me. (2) If this gift would otherwise fail, I give it to The Ashley Crawley Trust and The Brett Crawley Trust. (3) The gift to the Tarawera Trust and to the Ashley Crawley Trust referred to in clauses 5.6 and 5.7 respectively are conditional upon satisfaction of the condition contained in clause 5.4(2)(b). (4) The gift to the Hillview Trust and to the Brett Crawley Trust referred to in clauses 5.5 and 5.7 are conditional upon satisfaction of the condition contained in clause 5.4(3)(b).‖ [123] The state of affairs as they appear to be at present is as follows. Originally, the trustee of the Tarawera Trust and the Hillview Trust was Crawley Land. John, Ashley and Brett Crawley were guardians and appointors of each of those trusts. [124] On 24 June 2003, Ashley Crawley was removed as a guardian and appointor of each of those trusts, leaving John and Brett Crawley as the appointors and guardians. In this proceeding, Ashley Crawley did not dispute that he was removed but challenged the validity of that removal. [125] Upon John Crawley‘s death, the bequests under his will took effect, subject relevantly to the conditions set out in clause 5.4(2)(b) and 5.4(3)(b) of the will. The will provided that upon settlement of this proceeding and the family provision claim, in accordance with 5.4(2)(b) Ashley Crawley would become a guardian and appointor of the Tarawera Trust along with Brett Crawley. The family provision claim has not been compromised. Nevertheless, under the settlement agreement, Ashley Crawley will become the sole appointor and guardian of the Tarawera Trust and Crawley Land will resign as trustee so that Ashley Crawley (or an entity nominated by him) may become the trustee of the Tarawera Trust. [126] Upon the settlement of this proceeding in accordance with cl 5.4(3)(b), Brett Crawley becomes, under the will, the only guardian and appointor of the Hillview Trust. This is the case on the assumption that Ashley Crawley was removed as an appointor and guardian of the Hillview Trust on 24 June 2003. Ashley Crawley has admitted his removal in the reply and answer but has not unequivocally admitted the validity of that removal. However, this proceeding has been compromised. He has lost therefore the right to pursue that claim. By compromising his claim, he has lost the right to dispute the validity of his removal on 24 June 2003 as appointor and guardian of the Hillview Trust. [127] The situation in which the parties find themselves is therefore that Ashley Crawley has been removed as guardian and appointor under the Hillview Trust, and the validity of that removal cannot be disputed by him because he has compromised the proceeding in which it was disputed.31 It was not strictly necessary therefore to 31 Foskett, ―The Law and Practice of Compromise‖ [6.01], [6.02]; Port of Melbourne Authority v Anshun (1981)147 CLR 589. -- 34 of 37 -- 35 refer to that in the compromise agreement, although for the avoidance of doubt and the avoidance of the very dispute with which I am dealing and with the benefit of hindsight, it may well have been better to include a term to that effect in the settlement agreement. Specific performance [128] It remains only to determine which, if any, of the draft settlement deeds conforms with the Deed of Settlement referred to in paragraph 19 of the letter of offer, that is, a deed which contains the terms of settlement and which can therefore be ordered to be specifically performed. Draft deed (trust litigation) 7 contains the settlement terms agreed by the parties on 16 December 2010. Any other terms can be described as machinery provisions that one might expect in the deed contemplated in paragraph 19 of the letter of offer of 2 December 2010. That draft deed was signed by the plaintiff on 12 April 2012 and is exhibit AC31 to the affidavit of Ashley Crawley filed on 6 July 2012. [129] There is however one matter in that deed which should be amended better to reflect the compromise agreement reached between the parties which was refined in the course of negotiating the terms of the deed to give effect to the terms of the compromise. [130] The letter of offer of 2 December 2010 was ―to settle proceedings No. BS 5914 of 2005.‖ Paragraphs 15 to 18 of the letter of offer provided: ―15. my client‘s [sic] will release you from all liability in respect of the counterclaim in the proceedings; 16. you release my client‘s [sic] from all liability in respect of all your claims in the proceedings; 17. each party bears their own costs of and incidental to the action; 18. upon the terms of settlement being carried into effect, the parties will execute and file a Notice of Discontinuance of the proceedings.‖ [131] The plaintiff‘s solicitor drafted terms to give effect to this through the definition of claim and clause 11 about release and discontinuance.32 This was accepted by the solicitor acting for the defendants. Later it was modified at Ashley Crawley‘s request to ensure that it could not be taken to refer to Ashley Crawley‘s family provision claim. [132] The definition of ―claim‖ was then: ―any present or future, actual or contingent, claim, cause of action, complaint, liability, cost or expense that any person (whether or not a party to the Proceeding) has or might have in connection with or arising in any way from the facts or matters alleged in the Proceeding or the Counterclaim, as the case may be, whether or not the facts, matters or circumstances giving rise to that Claim are known to that person or to any other person at the date of this Deed but excludes any claim that Ashley has 32 See [8], [11], [12]. -- 35 of 37 -- 36 for further and better provision out of the estate of the Late John Francis Crawley (deceased).‖33 The plaintiff should not be able to resile from his concurrence to this definition of claim which gives precision and certainty to the compromise entered into. The release should then be in the form of clause 13.1 to 13.5 of draft deed (trust litigation) 7, set out below, which is in the terms which have always been agreed between the parties. It is not necessary in those circumstances to include clause 13.6. [133] Clause 13 provides: ―13 Release and discontinuance 13.1 Subject to the parties fulfilling their respective obligations under this Deed, Ashley releases each of CL, Maranui Trustees, JDC, Executors, Diane from all Claims, and each of CL, Maranui Trustees, JDC, Executors, Diane releases Ashley from all Claims. 13.2 Ashley must take all necessary steps to discontinue the Proceeding, within 7 days after the obligations contained in this deed having been fulfilled. 13.3 Each of CL, Maranui Trustees, JDC, Executors, Diane must consent to the discontinuance of the Proceeding, and must not make any claim for payment of any costs of the Proceeding consequent upon any such discontinuance. 13.4 Each of CL, Maranui Trustees, JDC, Executors, Diane must take all necessary steps to discontinue the Counterclaim, within 7 days after the obligations contained in this deed having been fulfilled. 13.5 Ashley must consent to the discontinuance of the Counterclaim, and must not make any claim for payment of any costs of the Counterclaim consequent upon such discontinuance. 13.6 All parties acknowledge and agree that these terms of settlement and the releases given pursuant to these terms of settlement do not include any claim that Ashley has for further and better provision out of the estate of the late John Francis Crawley (deceased).‖ [134] Specific performance should be granted of draft deed (trust litigation) 7 which is exhibit AC31 to the affidavit of Ashley Crawley filed on 6 July 2012 except that the definitions of ―claim‖ and ―counterclaim‖ should be deleted from clause 1.1 and in their stead inserted the definition of claim set out in draft deed (trust litigation) 6, which is exhibit AC24 to the affidavit of Ashley Crawley filed on 6 July 2012, and clause 13.6 should be deleted. Conclusion [135] The parties compromised this proceeding on the terms set out in the letter of offer dated 2 December 2010. A deed that gives effect to that offer, as agreed in 33 Draft deed (trust litigation) 5, see [35]. -- 36 of 37 -- 37 paragraph 19 of that offer, should be specifically performed. That compromise agreement did not deal with Ashley Crawley‘s position with regard to the Hillview Trust. However, that matter can no longer be litigated. It was unresolved but the proceeding in which it was in dispute has been compromised. Ashley Crawley has in the circumstances foregone his right to contest the validity of his removal as appointor and guardian of the Hillview Trust. [136] I shall hear argument as to costs and the precise terms of an order to give effect to specific performance as set out in these reasons. Orders 1. The court declares that the parties have compromised proceeding BS 5914 of 2005 on the terms set out in a letter dated 2 December 2010 from BCI Lawyers to the plaintiff. 2. The court orders specific performance of the draft deed which is Exhibit AC31 to the affidavit of Ashley Crawley filed on 6 July 2012 except that the definitions of ―claim‖ and ―counterclaim‖ should be deleted from clause 1.1 and in their stead inserted the definition of claim set out in the draft deed which is Exhibit AC24 to that affidavit and clause 13.6 should be deleted. -- 37 of 37 --