SUPREME COURT OF NEW SOUTH WALES - COURT OF APPEAL

KATER v CADIZ CORPORATION PTY LTD

SAMUELS, Reynolds and Glass JJA

10 July 1975 -

Glass JA I am in entire agreement with what has fallen from my brother Samuels. However, as we propose to disturb the judgment of the learned judge below I feel I should add a few words myself.

The dispute between the parties can be very shortly stated. The vendor contends that cl 7 is limited in its operation to excess distribution in the year ended 30 June 1968. The purchaser, on the other hand, claims it relates not only to that year but to succeeding income years as well. At first sight I thought that if the vendor ' s construction was right, cl 7 would be tautological for the reason that a claim in respect of the 1968 excess distribution was already provided for in the concluding words of cl 6. Clause 6, however, does no more than provide a ceiling for that claim whereas cl 7 stipulates the formula by means of which the claim is made proportionate to the amount disallowed.

We were referred by Mr Priestley, leading counsel for the vendor, to the precise terms of s 106 . In the light of the language which appears there one finds in cl 7 a strong indication that it is limited in its operation to excess distribution in the year ended 1968 and deemed dividend in the year 1969. At that stage the burden of argument swung in the direction of counsel for the purchaser. He first contended that there was support for his construction in certain phrases, namely " for any reason " , " in no case " and " payable hereunder " .

In my opinion, these are phrases of ambivalent import in the present context. He then submitted that the language of the clause should be treated as loose language intended to mean that the benefit of the excess distribution in 1968 was carried beyond 1969 for an indefinite period to the extent that it was not used up from year to year in the form of a deemed dividend. If a choice has to be made between two constructions, the first of which assumes that solicitors have used precise language to express their meaning exactly, and the second that they have used imprecise language to express their meaning inaccurately, I have a distinct preference for the former construction. To do otherwise would cast an undeserved aspersion on the standards of training of the legal profession.