This passage from a decision of the Federal Court is a summary of the legal principles which arise in the context of interpreting the provisions of a settlement agreement in a fair work deed of settlement.
“It is a well-accepted rule of construction that general words in a release are confined to the matters raised in the recitals: Grant v John Grant & Sons Proprietary Limited (1954) 91 CLR 112 (Grant) at 123 (per Dixon CJ, Fullagar, Kitto and Taylor JJ)). Clause 1.2 of the Deed is also to this general effect.
57 The core principle that governs the interpretation of any agreement is that the meaning of the terms are to be determined by what a reasonable person would have understood them to mean: Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35] (per French CJ, Hayne, Crennan and Kiefel JJ); Toll (FCGT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165; [2004] HCA 52 at [40] (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); and Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 at [22] (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).”
Woods v T&F.S. Woods Pty Ltd [2023] FCA 1108 delivered 18 September 2023 per Thomas J