SUPREME COURT OF VICTORIA
COURT OF APPEAL	
	
S EAPCI 2023 0143	
S EAPCI 2024 0012	

Yume Group Holdings Pty Ltd (ACN 613 528 475)	Applicant/Cross-respondent	
		
v		
		
Ashthorn CA Pty Ltd (ACn 167 783 128)	Respondent/Cross-applicant	

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JUDGES:	McLEISH and KENNEDY JJA and WALLER AJA	
WHERE HELD:	Melbourne	
DATE OF HEARING:	14 April 2024  	
DATE OF JUDGMENT:	14 June 2024	
MEDIUM NEUTRAL CITATION:	[2024] VSCA 134	
JUDGMENT APPEALED FROM:	[2023] VCC 1945; [2023] VCC 2419 (Judge Burchell)  	

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CONTRACT – Contract to pay fees where capital raising obtained before expiry date – Whether capital raising obtained during term of contract – Trial judge found that transactions occurring before and after contract expiry date constituted single capital raising transaction – Trial judge erred in characterisation of transactions – Terms of agreements indicate capital raising occurred after contract expired – Appeal allowed.

CONTRACT – Construction – Meaning of ‘Potential Counterparty’ in contract for assistance with capital raising – Cross-applicant authorised to solicit commitments for capital raising from parties potentially interested in pursuing transaction ‘(each a “Potential Counterparty”)’ – Whether ‘Potential Counterparty’ as defined must be party solicited by cross-applicant – No such requirement in text of contract or supported by context or purpose identified from contract or relevant surrounding circumstances – Cross-appeal allowed.

Adaz Nominees Pty Ltd v Castleway Pty Ltd [2020] VSCA 201, applied – McVeigh v National Australia Bank Ltd (2000) 278 ALR 429; [2000] FCA 187; Recoveries Corporation Group Ltd v American Express Australia Ltd [2016] NSWSC 771, distinguished.
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Counsel	
Applicant/Cross-respondent:		Mr B Petrie	
Respondent/Cross-applicant:		Ms FJ Bentley with Mr L Freckelton	
	
Solicitors	
Applicant/Cross-respondent:		K&L Gates	
Respondent/Cross-applicant:		Peak Legal	

  
Table of Contents
Engagement Agreement
SUEZ transactions
Strategic Partnership Agreement
First Extension and Variation Agreement
Second Extension and Variation Agreement
Subscription Agreement
Trial judge’s reasons
Proposed grounds of appeal
Yume’s appeal submissions
Ashthorn’s appeal submissions
Consideration of appeal
Salu Folk transaction
Trial judge’s reasons
Proposed grounds of cross-appeal
Ashthorn’s cross-appeal submissions
Yume’s cross-appeal submissions
Consideration of cross-appeal
Conclusion

McLeish JA
KEnnedy ja
waller aja:
1	The applicant (‘Yume’) operates an online platform for surplus food management. The respondent (‘Ashthorn’) provides corporate finance advisory services. In late 2018, Yume was looking to raise capital or sell its business. On 16 January 2019, Yume and Ashthorn entered into an engagement agreement (‘Engagement Agreement’), pursuant to which Ashthorn agreed to provide Yume consultancy and advisory services in respect of a possible capital raising or business sale.
2	Under the terms of the Engagement Agreement, Ashthorn was entitled to receive ‘Advisory Retainer Fees’ of $8,800 (including GST) per month (cl 4.1) and, subject to certain conditions being met, a ‘Capital Raising Fee’ (cl 4.2) or a ‘Business Sale Fee’ (cl 4.3). The parties are in dispute as to whether two sets of transactions undertaken by Yume entitle Ashthorn to the payment of the Capital Raising Fee.
Engagement Agreement
3	It is necessary to set out the relevant provisions of the Engagement Agreement:
	1 	BACKGROUND
…
	… Yume is currently seeking to raise additional capital which may be equity, debt or any combination thereof (Capital Raising), and/or to sell the business which may be a sale of assets and/or a sale of shares (including potentially by merger or reverse acquisition) (Sale of Business), (each a Transaction).
	2 	TERM
This agreement commences on 16 January 2019 (Commencement Date) and expires 6 weeks after the Commencement Date (subject to any extension under this clause 2) (Expiry Date). Upon the initial Expiry Date (Initial Expiry Date), the Expiry Date will be automatically extended for periods of 1 month unless either party gives written notice to the contrary at least 7 days prior to the then current Expiry Date.
3 	SERVICES & CAPACITY
	Subject to payment of the Fees, Ashthorn agrees to advise on, assist with and project manage any Transaction considered or undertaken by Yume during the term of this agreement, including arranging and obtaining commitments for the Capital Raising in the amount and on terms acceptable to Yume and/or to solicit bids for the Sale Of Business, and Yume engages Ashthorn to act as Yume’s exclusive adviser and agent to do so.
Ashthorn’s services include any work that Ashthorn, at its sole discretion, deems necessary to assist with any Transaction, as set out in Annexure 1. …
…
	Yume authorises Ashthorn to solicit commitments for Capital Raising or bids for the Sale of Business on Yume’s behalf from parties potentially interested in pursuing a Transaction (each a Potential Counterparty) and Ashthorn will consult with Yume regarding Potential Counterparties.
	Yume authorises Ashthorn to share any or all information concerning or related to Yume or a Transaction with a Potential Counterparty, subject to the Potential Counterparty executing a confidentiality deed or agreement in a form satisfactory to Yume, and Yume will execute any such authorisation forms required by Ashthorn or the Potential Counterparty to effect same.
...
4 	FEES
4.1 	Advisory Retainer Fees
Yume will pay Ashthorn a fee of $8,000 (excluding GST) prior to commencement, and if the Expiry Date is extended beyond the Initial Expiry Date, Yume will pay Ashthorn a fee of $8,000 (excluding GST) per month in advance (Advisory Retainer Fee).
Ashthorn agrees to rebate Advisory Retainer Fees paid by Yume under this clause against any Capital Raising Fees payable under clause 4.2 or any Business Sale Fees payable under clause 4.3 where the Advisory Fee has not previously been rebated against another Capital Raising Fee or Business Sale Fee, providing that the Capital Raising Fee or Business Sale Fee payable by Yume in respect of that part of the Transaction shall never be less than zero.
4.2 	Capital Raising Fees
	Yume agrees to pay Ashthorn a fee if part or all of any Capital Raising is obtained or committed (or is deemed to have been) from a Potential Counterparty in one or more transactions (Capital Raising Fee).
	The Capital Raising Fee will be calculated as 7% (excluding GST) of the Committed Amount (excluding GST).
	The Committed Amount is the greater of the following amounts:
(a) 	the proceeds obtained from a Potential Counterparty before any set off or deduction for fees or other amounts payable to the Potential Counterparty or other parties; and
(b) 	the principal amount committed by a Potential Counterparty where Yume has elected to obtain an amount lower than the amount committed by the Potential Counterparty (for the purpose of this clause it is to assumed that any conditions regarding that commitment are satisfied and that the Potential Counterparty will exercise any contingent commitment or options).
The Capital Raising Fee is due and payable on the date the Committed Amount (or the relevant part thereof) is obtained or committed (or is deemed to have been). However, the Parties agree that the payment of any Capital Raising Fees due shall be made directly out of the proceeds of the first Capital Raising relating to that commitment provided those funds are advanced within 30 days of the Capital Raising Fee becoming due. If Ashthorn reasonably requires, to give effect to the above, Yume agrees to direct the Potential Counterparty (or any person acting on their behalf) to pay the fee directly to Ashthorn or as nominated by it. Yume shall not proceed with closing any Capital Raising until the fee is properly placed on the settlement statement and approved in writing by Ashthorn.
…
4.4 	Deemed Transactions
A Transaction shall be deemed to have been completed, obtained or committed under this agreement if that Transaction is completed, obtained or committed within 12 months following the Expiry Date by a Potential Counterparty (excluding an existing investor as at the date of this agreement) that was identified or introduced to Yume or contacted on behalf of Yume by Ashthorn prior to the Expiry Date and negotiations leading to a Transaction commenced (or were recommenced) with that Target at any time within 12 months following the Expiry Date.
…
	ANNEXURE 1 SCOPE OF SERVICES
1	SCOPE
	Ashthorn’s services include any work that Ashthorn, at its sole discretion, deems necessary to assist with the Capital Raising, which by way of example may include the following tasks:
(a) 	Review and familiarisation with Yume’s financial, operational and service offering Information;
(b) 	Advice regarding the positioning and presentation of any Capital Raising to Potential Counterparty(s);
(c) 	Prepare or assist with preparing Transaction marketing materials;
(d) 	Prepare financial analysis to support a Transaction;
(e) 	Advice regarding the structure, terms or pricing of a proposed Capital Raising;
(f) 	Introducing Potential Counterparty(s) to Yume;
(g) 	Soliciting and/or negotiating commitment for Capital Raising from Potential Counterparty(s);
(h) 	Review Capital Raising documentation and provide advice to Yume (and its legal advisers if applicable) regarding the commercial and financial aspects of the Capital Raising documentation;
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	ANNEXURE 2 GENERAL TERMS
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11	GENERAL
...
(h)	(Survival) All rights and obligations under clause 4 of this Agreement …, accrued rights or obligations existing at the time of termination or expiry; and any indemnities and any representations and warranties, survive termination or expiry of this document and the transactions contemplated by it. Any other provisions necessary or desirable to give effect to those rights and obligations survive expiry or termination of this agreement.
…
4	The Engagement Agreement was terminated by notice given by Yume on 13 September 2019, with the effective Expiry Date being 27 September 2019. This meant that the 12 month period referred to in cl 4.4 ended on 27 September 2020.
5	The relevant transactions in issue involved agreements between Yume and two third parties, SUEZ Recycling & Recovery Pty Ltd (‘SUEZ’) and Salu Folk Pty Ltd (‘Salu Folk’), respectively. After a trial in the County Court, Ashthorn was found to be entitled to the Capital Raising Fee in respect of SUEZ, but not in respect of Salu Folk. The judge’s decision in relation to SUEZ is the subject of the present application for leave to appeal. Ashthorn seeks leave to cross-appeal the judge’s decision in relation to Salu Folk.
6	For the reasons that follow, both the appeal and the cross-appeal should be allowed.
SUEZ transactions
7	On 24 April 2019, SUEZ sent a letter to Ashthorn (on behalf of Yume) detailing a non-binding expression of interest to invest in Yume.
8	On 21 June 2019, SUEZ sent a letter to Ashthorn detailing a best and final offer (‘SUEZ BAFO’). The SUEZ BAFO included an offer to purchase a 30 per cent equity stake in Yume for $2,000,000 and to provide an additional $500,000 convertible debt facility.
9	The SUEZ BAFO was expressed to be subject to a number of conditions, including the need for approval from SUEZ’s French parent company.
10	On 25 June 2019, Ashthorn sent a letter to SUEZ in which Ashthorn noted that Yume’s board identified SUEZ as ‘potentially its preferred strategic partner but before confirming this would like to clarify certain aspects of SUEZ’s BAFO’. Ashthorn went on to note that Yume is ‘willing to accept’ SUEZ’s offer of a $2,000,000 equity investment, but declined the offer of a $500,000 convertible loan. Ashthorn also sought ‘further details regarding the approvals that SUEZ requires prior to execution and completion’.
11	On 12 July 2019, SUEZ did not receive approval from its parent company to proceed with the transaction proposed under the SUEZ BAFO, because of a global freeze on investments. This was communicated to Yume, via Ashthorn, on the same day.
12	As a result, the equity transaction the subject of the SUEZ BAFO did not proceed.
13	The ensuing transactions with SUEZ involved four written agreements. First, on 11 September 2019, Yume and SUEZ entered into a strategic partnership agreement (‘Strategic Partnership Agreement’). Relevantly, it provided for a right of first refusal in the event that Yume should decide to issue shares to a third party.
Strategic Partnership Agreement
14	The Strategic Partnership Agreement relevantly provided:
	BACKGROUND
(A) 	The parties have been discussing various ways to work together, including the acquisition of shares in the Company [ie Yume] by the Strategic Partner [ie SUEZ] and entering into the Shareholders Deed (‘Previous Negotiations’).
(B) 	The Strategic Partner does not, at this stage, wish to proceed with acquiring shares in the Company, but may revisit this decision in the future.
(C) 	The parties now wish to proceed to enter into this binding long-form Agreement whereby the Strategic Partner will make a regular financial contribution to the Company.
…
1. 	DEFINITIONS AND INTERPRETATION
...
‘Initial Period’	means the first 6 month period of the Initial Term
‘Initial Term’ 		has the meaning given in clause 2.2.1
…
‘Strategic Partnership Fee’ 	means:
(a) 	for [the] Initial Period, $50,000 per calendar month exclusive of GST;
(b) 	for the Subsequent Period, $30,000 per calendar month exclusive of GST; or
(c) 	for any other period during the Term of this Agreement, $40,000 per calendar month exclusive of GST adjusted annually for CPI on the anniversary of the date of this Agreement;
or such greater amount as agreed between the parties pursuant to clause 2.2.3
‘Subsequent Period’	means the 6 month period commencing immediately after the end of the Initial Period
…
	2. 	STRATEGIC PARTNERSHIP
	2.1 	Payment
2.1.1 	During the Term, the Strategic Partner will pay the Company the Strategic Partnership Fee monthly in advance on the first day of each calendar month.
…
2.2	Term and Termination
2.2.1	This Agreement has an initial term of 12 months (‘Initial Term’).
…
	2.3 	Partnership Activities
The parties will explore and cooperate in relation to:
2.3.1 	joint media opportunities;
2.3.2 	communication of the partnership across:
(a) 	presentations at events and conferences;
(b) 	social media;
(c) 	Company network of buyers, suppliers and consumers:
(d) 	government forums,
2.3.3 	a joint launch event explaining the partnership between the parties;
2.3.4 	dedicated Strategic Partner branded electronic direct mails to Company database;
2.3.5 	active cross promotion and branding by the Strategic Partner of the Company’s objectives and business as an alternative waste provider;
2.3.6 	special offer for Strategic Partner customers to list on the Company platform;
2.3.7 	Strategic Partner logo on the Company’s homepage; and
2.3.8 	webinars and roundtables for Strategic Partner customers.
…
2.5 	Right of First Refusal
2.5.1	Subject to the provisions of the shareholders’ deed of the Company, if the Company determines to issue shares to any third party (being a party other than an existing shareholder, an employee or key executive or a related entity of either) during the Initial Term, the Company must first offer such shares to the Strategic Partner (‘Offer’).
2.5.2 	The Offer must contain:
(a) 	the number of shares being offered;
(b) 	the proposed price per share (which, if the Offer is made during the Initial Term, must comply with clause 2.6): and
(c) 	the time period for acceptance, being no more than ten Business Days from the date of the Offer (‘Offer Period’).
2.5.3 	The Strategic Partner must notify the Company whether it accepts or rejects the Offer within the Offer Period. For the avoidance of doubt, a failure to respond during the Offer Period shall be deemed to be a rejection of the Offer.
2.5.4 	If the Strategic Partner accepts the Offer, the parties must:
(a) 	use reasonable endeavours to procure it receives any shareholder consent which may be required (whether for the share issue or any associated documents required to give effect to that share issue); and
(b) 	otherwise use reasonable endeavours to complete the share issue in a timely manner.
2.5.5 	If the Strategic Partner rejects the Offer, the Company may offer shares to any third party in its absolute discretion, provided that:
(a) 	such offer must be on no more favourable terms than the Offer; and
(b) 	the share issue must be completed within 3 months of the date of the Offer.
2.6 	Valuation
The parties have agreed on the value of the Company based on discussions during the previous negotiations (which took place in June and July 2019). If the Company proposes to issue shares during the Initial Term, then the price and terms of shares offered to the Strategic Partner pursuant to clause 2.5 shall be based on:
2.6.1 	a valuation of $6,666,667 for 100% of the Company;
2.6.2 	a discount of $30,000 multiplied by the number of months the Strategic Partner has paid the Strategic Partnership Fee during the Initial Period; and
2.6.3 	a discount of $10,000 multiplied by the number of months the Strategic Partner has paid the Strategic Partnership Fee during the Subsequent Period.
For example, if SUEZ elects to purchase a 30% equity stake in the Company, and has paid the Strategic Partnership Fee for 12 months, the purchase price will be:
(30% x $6,666,667) – ($30,000 x 6) – ($10,000 x 6) = $1,760,000
For the avoidance of doubt this valuation remains valid for the Initial Term only.
First Extension and Variation Agreement
15	On 14 September 2020, Yume and SUEZ entered into a further agreement (‘First Extension and Variation Agreement’). Among other things, the Strategic Partnership Agreement was extended to 12 December 2020, with effect from 10 September 2020.
16	Relevantly, the First Extension and Variation Agreement provided:
1. 	Except as varied by this Extension and Variation Agreement, the Agreement continues in full force and effect and remains binding on the parties.
2. 	On and from the earlier of the date of this Extension and Variation Agreement or 10 September 2020:
	…
l.	In clause 2.6, the words ‘for the Initial Term only’ are deleted and replaced with ‘until 12 December 2020.’
…
…
5. 	Notwithstanding the date of execution of this Extension and Variation Agreement, the revised terms set out in this Extension and Variation Agreement will apply to the Agreement from the earlier of the date of this Extension and Variation Agreement or 10 September 2020.
Second Extension and Variation Agreement
17	On 31 March 2021, Yume and SUEZ entered into a second ‘Extension and Variation Agreement’, by which the right of first refusal was replaced by a call option. That agreement relevantly provided:
	BACKGROUND
A. 	SUEZ and Yume entered into a Strategic Partnership Agreement dated 11 September 2019, as extended and varied under an Extension and Variation Agreement that came into effect on 10 September 2020 (the Agreement).
B. 	SUEZ and Yume now wish to further extend the Initial Term under the Agreement, vary the Agreement to provide for a revised Strategic Partnership Fee and establish detail of a future offer for SUEZ to subscribe to a 20% shareholding in Yume.
THE PARTIES AGREE:
1. 	Except as varied by this Second Extension and Variation Agreement, the Agreement continues in full force and effect and remains binding on the parties.
2. 	On and from 10 December 2020:
	…
b. 	The following new definitions are added to clause 1.1. of the Agreement:
“‘Extension Amount’ means the amount of $559,107.50 (exclusive of GST)
‘Subscription Shares’ means 2,068,425 ordinary shares in the capital of Yume which, as at the date of the Second Extension and Variation Agreement, represents 20% of the total shareholdings in Yume
‘Share Subscription’ means the subscription for, and issue of, the Subscription Shares to the Strategic Partner 
‘Subscription Amount’ means $559,107.50 (exclusive of GST), which only becomes due and payable in the event that the Strategic Partner completes the Share Subscription”
…
i. 	The heading of clause 2.5 of the Agreement is amended by replacing ‘Right of First Refusal’ with ‘Share Subscription’.
j. 	Clause 2.5.1 of the Agreement is deleted and replaced with: “Subject to the provisions of the shareholders’ deed of the Company and clause 2.5.7 of this Agreement, the Company:
(a) 	will not issue shares to any third party (other than an existing shareholder of the Company) during the Initial Term, without first obtaining written consent from the Strategic Partner (such consent to not be unreasonably withheld); and
(b) 	acknowledges and agrees that, on or before 30 June 2021 the Strategic Partner may request that the Company issue the Subscription Shares to the Strategic Partner and, on receipt of that request, the Company must offer the Subscription Shares to the Strategic Partner for $1,448,215 (where only the Subscription Amount remains payable in respect of the Subscription Shares) (‘Offer’). 
Notwithstanding the above, as at the date of the Second Extension and Variation Agreement, the Company acknowledges it has no intention to issue shares to any existing shareholder during the Initial Term.”
k.	Amend clause 2.5.2(b) of the Agreement as follows (changes shown in red underline):
“(b)	the valuation and price per share (which, if the Offer is made during the initial term, must be determined in accordance comply with clause 2.6): and”
…
o.	Delete clause 2.6 of the Agreement and replace it with the following:

“2.6	Valuation
2.6.1	The valuation of the Subscription Shares pursuant to the Offer shall be as follows:
(a)	$330,000 of shares calculated on a post-money valuation of the Company of $6,666,667; and
(b)	the balance ($1,118,215) of shares calculated on a post-money valuation of the Company of $7,430,000.
2.6.2	If the Strategic Partner accepts the Offer, then:
(a)	the parties acknowledge and agree that $889,108 (being part of the Strategic Partnership Fees) shall be deemed to have been paid in advance for the Subscription Shares; and
(b)	the balance payable by the Strategic Partner for the Subscription Shares shall be the Subscription Amount only.
2.6.3	For the avoidance of doubt the Valuation in clause 2.6.1(a) remains valid until 12 September 2021.”
…
6. 	Notwithstanding the date of execution of this Second Extension and Variation Agreement, the revised terms set out in this Second Extension and Variation Agreement will apply to the Agreement on and from 10 December 2020.
Subscription Agreement
18	Finally, on 5 July 2021, SUEZ and Yume entered into a share subscription agreement (Subscription Agreement). Pursuant to its terms, SUEZ received 2,068,425 shares in Yume (representing 20 per cent of the total shares on issue), for an ‘Aggregate Subscription Price’ of $1,448,215.50. That amount corresponds to the valuation of the Subscription Shares, and the exercise price of the call option, under the Second Variation and Extension Agreement.
19	The Share Subscription Agreement contained the following provisions:
	1. 	DEFINITIONS AND INTERPRETATION
	1.1 	Definitions
	In this Agreement:
‘Aggregate Subscription Price’	means the total amount payable by the Investor [ie SUEZ] in respect of the Subscription Shares, being $1,448,215.50.
…
‘Completion Amount’	means $559,107.50
…
‘Strategic Partnership Agreement’	means the strategic partnership agreement between the Company [ie Yume] and the Investor dated 11 September 2019, as amended by the first extension and variation agreement dated 10 September 202 [sic] and the second extension and variation agreement dated 31 March 2021
‘Subscription Shares’	means, in respect of the Investor, the shares which the Investor is subscribing for under this Agreement, being 2,068,425 Shares in the capital of the Company which, immediately after Completion, will represent 20% of the total Shares on issue
…
	3. 	SUBSCRIPTION
3.1 	Application
3.1.1 	Subject to the terms of this Agreement, the Investor hereby applies to the Company for the issue and allotment of the Subscription Shares for the Aggregate Subscription Price.
3.1.2 	Except to the extent set out in the Constitution or the Shareholders’ Deed, the Subscription Shares will otherwise have the same terms as, and rank pari-passu at all times and in all respects with, the other Shares issued on or prior to the Completion Date.
3.2 	Consideration for Subscription Shares
The parties acknowledge and agree that:
3.2.1 	on Completion, only the Completion Amount will be payable by the Investor in respect of the Subscription Shares; and
3.2.2 	the balance of the Aggregate Subscription Price (being $889,108) has been paid by the Investor under the Strategic Partnership Agreement (and the Investor has no further obligations in respect of such amounts).
…
	10. 	GENERAL
 …
10.8 	Entire agreement
10.8.1 This Agreement supersedes all previous agreements in respect of its subject matter and constitutes the entire agreement between the parties.
10.8.2 The parties acknowledge that in entering into this Agreement each party has not relied on any representations made by the other party (or its agents or employees), other than as expressly set out in this Agreement.
…
Trial judge’s reasons
20	The trial judge ordered that Yume pay Ashthorn the sum of $58,712.56, comprising $111,512.56 in respect of the Capital Raising Fee concerning SUEZ, less an agreed amount of $52,800 in respect of Advisory Retainer Fees in relation to SUEZ. It was significant to that conclusion that the judge found that the various SUEZ agreements constituted a single transaction or contract.
21	The judge held that the ‘SUEZ agreements’ amounted to ‘one singular transaction’ and therefore that both the funds representing strategic partnership fees under the initial Strategic Partnership Agreement, the First and Second Extension and Variation Agreements, as well as the ultimate purchase of shares under the Subscription Agreement, amounted to a Capital Raising and attracted a Capital Raising Fee.
22	The judge referred to the decision of the High Court in Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd, to the effect that it is material to determine whether the effect of a second contract is to bring an end to the first contract and replace it with the second, or whether the effect is to leave the first contract standing, subject to the alteration. The judge found that the intention of the parties was to keep the Strategic Partnership Agreement on foot. She said that, as a result, all the agreements could be taken to be part of the same transaction.
23	The judge referred to evidence of Katy Barfield, the founder and chief executive officer of Yume. She described the Strategic Partnership Agreement as ‘effectively a workaround agreement’ following the failed SUEZ BAFO, which enabled SUEZ and Yume to be able to continue in a partnership agreement. The judge also found it relevant that funds paid by Yume to SUEZ as part of the Strategic Partnership Fees were discounted from the ultimate purchase price of the shares issued to SUEZ, referring to cl 2.6 of the Second Variation and Extension Agreement. The judge said that the discount supported the view that, from when the partnership was entered into until the final acquisition of shares, the agreements for the ongoing contribution to Yume by way of Strategic Partnership Fees were made ‘with the ultimate goal in mind of purchasing equity in Yume’. In conclusion on this issue, the judge said:
	In my view, it would be contradictory to accept Katy’s evidence and acknowledge that the Strategic Partnership Agreement was designed to ‘continue’ the ‘partnership’ between Yume and SUEZ, only to ultimately declare that the subsequent variation, extensions and subscription agreement were all separate agreements, falling outside the scope and timeframe of the Engagement Agreement. Viewing all documents as part of one contract and one transaction is the logical extension of Katy’s evidence that the Strategic Partnership Agreement was ‘an immediate stop gap’ that enabled SUEZ and Yume to continue together ‘in (a) partnership agreement’.
24	The judge also dealt with and rejected an argument advanced on behalf of Ashthorn to the effect that the word ‘and’ in cl 4.4 (the deeming provision) should be read as ‘or’. On that reading, the deeming provision would apply where negotiations leading to a Transaction commenced or recommenced during the 12 months following the Expiry Date. It is unnecessary to refer further to this argument.
25	The judge found that a Capital Raising Fee was payable where ‘part or all of any Capital Raising was obtained or committed (or was deemed to have been) from a Potential Counterparty in one or more transactions’, which was satisfied in this case because the capital had been raised in more than one transaction. The amount raised was $1,448,215, meaning that Yume was liable to pay a Capital Raising Fee on that amount of $58,712.56 (which comprised $111,512.56 less $52,800 of Advisory Retainer Fees). 
Proposed grounds of appeal
26	Yume advances two proposed grounds of appeal. The first ground involves the question of whether a Capital Raising Fee was payable in relation to the SUEZ transactions, while the second ground concerns the amount of such fee in the event that it was payable. As will become apparent, it is only necessary to deal with the first ground. The grounds are:
	1. 	The primary judge erred in: 
(a) 	concluding that the respondent is entitled to a Capital Raising Fee under cl 4.2 of the Engagement Agreement between the applicant and respondent, in respect of the agreements entered into between the applicant and SUEZ Recycling & Recovery Pty Ltd (SUEZ);
(b) 	concluding that the agreements entered into between the applicant and SUEZ constituted a single transaction or a single contract;
(c) 	failing to conclude that, for the purposes of cl 4.2 of the Engagement Agreement, the applicant and Suez did not enter into a legally binding agreement under which a Capital Raising was completed, obtained or committed at any time during the term of the agreement, or within 12-months after its termination for the purposes of clause 4.4.
2. 	Alternatively to proposed ground 1, the primary judge erred in:
(a) 	concluding that the applicant is required to pay to the respondent a Capital Raising Fee under cl 4.2 of the Engagement Agreement in the amount of $111,512.56;
(b) 	concluding that the total sum payable by the applicant to the respondent under cl 4.2 of the Engagement Agreement, after rebating the Advisory Retainer Fees of $52,800 (inc GST) that had already been paid, is $58,712.56;
(c) 	failing to conclude that the Capital Raising Fee payable by the applicant to the respondent under cl 4.2 of the Engagement Agreement (which the applicant denies it is liable to pay at all), is:
(i) 	$33,600 only (exc GST); alternatively,
(ii) 	$42,000 only (exc GST);
(c) 	failing to conclude that the total sum payable by the applicant to the respondent under cl 4.2 the Engagement Agreement, after rebating the Advisory Retainer Fees of $48,000 (exc GST) that had already been paid, is nil.
Yume’s appeal submissions
27	Yume advanced six arguments. 
28	First, it was submitted that the judge’s finding that cl 4.4 did not apply was not supported by the Engagement Agreement. It was submitted that such a conclusion made no commercial sense because it would entirely defeat the purpose of cl 4.4. The applicant submitted that, for a Capital Raising Fee to be payable in respect of one or more transactions, such transactions must be legally binding contracts entered into within 12 months of the Expiry Date (ie by 27 September 2020). This meant that the Second Extension and Variation Agreement entered into on 31 March 2021 and the Subscription Agreement entered into on 5 July 2021 had to be excluded from any consideration of the question whether Ashthorn was entitled to a Capital Raising Fee.
29	Secondly, Yume submitted that, in finding that the various SUEZ agreements constituted a single transaction and a single contract, the judge ignored the express terms of those agreements. Yume submitted that the Strategic Partnership Agreement did not constitute a raising of capital, because it did not compel Yume to issue, nor did it confer on SUEZ any right to acquire, any equity, debt or combination thereof in Yume. The right of first refusal was a much more limited entitlement. Yume submitted that SUEZ only acquired a contractual right to acquire shares in Yume upon the parties entering into the Subscription Agreement, more than 12 months after the Engagement Agreement had terminated. This meant that Ashthorn was not entitled to a Capital Raising Fee in connection with SUEZ.
30	Thirdly, Yume submitted that the SUEZ agreements could not properly be regarded as a single contract or a single transaction. In reliance on the decision of Finkelstein J in McVeigh v National Australia Bank Ltd (‘McVeigh’), it was said that a single transaction can arise when two instruments are executed contemporaneously, or where a series of documents are executed on the faith of others being executed and where each is intended to operate only as part of that transaction and therefore, as a matter of substance, they are to be regarded together as one transaction.
31	Yume submitted that the SUEZ agreements did not fit these criteria. They were not contemporaneous. None of them was entered into on the faith that the others would be executed. As a result, the Strategic Partnership Agreement (as varied and extended) could not be regarded as being part of the same transaction or contract as the Subscription Agreement, which was fundamentally different in terms. Rather, they were separate contracts and transactions. It followed that Ashthorn was not entitled to a Capital Raising Fee.
32	Fourthly, it was said that the judge erroneously relied upon the subjective evidence of Ms Barfield regarding her own understanding of the purpose and effect of the SUEZ agreements. In addition, the finding that SUEZ was committed to providing Yume with capital and acquiring an interest in Yume was unsupported by evidence and in direct contrast to the express words of the Strategic Partnership Agreement, which contained the right of first refusal. It was also submitted that the judge had erroneously relied upon the post-contractual conduct of SUEZ and Yume, including their entry into the Subscription Agreement, in construing the Strategic Partnership Agreement.
33	Fifthly, Yume submitted that the judge ignored the fact that both Yume and SUEZ had at various points been free not to proceed with any capital raising. Prior to entry into the Subscription Agreement, SUEZ was neither compelled nor committed to purchasing any shares in Yume. Yume submitted that, at least prior to the Second Variation and Extension Agreement, which was entered into after the 12-month period in cl 4.4 expired, Yume was not compelled to offer any shares to SUEZ to purchase.
34	Sixthly, Yume submitted that the judge’s conclusion that the Strategic Partnership Agreement was really something different to that which its express terms revealed, was tantamount to finding that the agreement was a sham. It was submitted that this was a serious and erroneous finding which had not been raised with the parties. Moreover, Yume noted that SUEZ was not a party before the court and did not have the opportunity to be heard in respect of that finding.
Ashthorn’s appeal submissions
35	Ashthorn submitted that the judge was correct in her approach to cl 4.4. On the basis that the various instruments comprised a single capital raising transaction falling within cl 4.2, the judge was correct to find that cl 4.4 did not render SUEZ an existing investor each time it made a payment under the Strategic Partnership Agreement or when it entered into the Subscription Agreement.
36	Secondly, Ashthorn said that Yume had not identified the express terms of the agreements which the judge was said to have ignored. Ashthorn referred in particular to the call option provided for by the Second Variation and Extension Agreement. That option satisfied the requirement in cl 4.2 which provided that it was to be assumed that any conditions were satisfied and that the Potential Counterparty would exercise any contingent commitment or options.
37	Thirdly, Ashthorn submitted that the terms of both the First and Second Variation and Extension Agreements made it clear that the parties’ intention was not to rescind the Strategic Partnership Agreement, but to keep it on foot. Clause 1 of each instrument stated unambiguously that, except as varied by that instrument, the Strategic Partnership Agreement ‘continues in full force and effect and remains binding on the parties’. Ashthorn submitted that there could be no doubt that the Strategic Partnership Agreement, as extended and varied, was a single contract. Ashthorn accepted that, while the Subscription Agreement was a separate agreement, the Strategic Partnership Agreement was itself sufficient to engage Ashthorn’s entitlement to a Capital Raising Fee, even without the further proposition that it, together with the Subscription Agreement, formed a single Capital Raising. 
38	In relation to Yume’s reliance upon McVeigh, Ashthorn submitted that the case dealt with the circumstances in which two or more documents may be used in the interpretation of each other, which was not relevant to what constitutes a ‘Transaction’ or a ‘Capital Raising’ under the Engagement Agreement. Ashthorn submitted that the Strategic Partnership Agreement, as extended and varied, and the Subscription Agreement, operated in concert to effect the same Capital Raising as that term was defined in the Engagement Agreement. The shares in Yume that SUEZ purchased pursuant to the Subscription Agreement were the subject of the option that it exercised under the Strategic Partnership Agreement, as varied by the Second Variation and Extension Agreement. This was plain from the direct reference in the Subscription Agreement to the Strategic Partnership Agreement, including that the sum of $889,108 paid by SUEZ to Yume was deducted from the Aggregate Subscription Price. Ashthorn submitted that this was direct acknowledgement that part of the total Capital Raising was received by Yume through the payments committed by SUEZ under the Strategic Partnership Agreement, which was entered into within the term of the Engagement Agreement. As a result, part or all of any Capital Raising was obtained or committed from a Potential Counterparty in one or more transactions within the meaning of cl 4.2 and the judge was correct to conclude that Ashthorn was entitled to the Capital Raising Fee in respect of that acquisition.
39	Fourthly, Ashthorn submitted that the oral evidence of Ms Barfield constituted an admission by a contracting party after the contract was made of a fact that was a relevant part of the context in which the contract had been made, and was admissible in evidence on construction accordingly. Equally, the post-contractual conduct of the parties including entry into the Subscription Agreement was permissibly relied upon by the judge as going to the context in which the contract was made.
40	Fifthly, Ashthorn submitted that it does not matter that the parties were free not to proceed with any Capital Raising. The fact that there was a Capital Raising, and part of it was obtained or committed within the relevant period, made a Capital Raising Fee payable irrespective of whether Yume or SUEZ had obtained the requisite internal approvals.
41	Sixthly, Ashthorn submitted that the judge did not make a finding tantamount to finding that the Strategic Partnership was a sham. No argument was made below, and it did not follow, that the Strategic Partnership Agreement was not genuine, or that it was false and deceptive.
42	In oral submissions, Ashthorn submitted that it had ‘brought SUEZ to the table’, to a point where the right of first refusal had been agreed and the parties were envisaging a capital raising. It was submitted that this meant that Ashthorn became entitled to a Capital Raising Fee if one took place in the future. Ashthorn relied on Recoveries Corporation Group Ltd v American Express Australia Ltd, for the proposition that a future right to payment that is contingent on an event other than further performance of the contract may survive and be enforceable once the contingency is met. Here, the contingency was that payments made under the Strategic Partnership Agreement would be treated as payments for shares in Yume. It was submitted that Ashthorn’s right to payment survived the agreement, in accordance with cl 11(h) of Annexure 2.
Consideration of appeal
43	The parties were agreed that the opening sentence of cl 4.2 of the Engagement Agreement was to be read as if the words ‘prior to the Expiry Date’ or ‘during the Term of this agreement’ (which is the same thing) appeared after the words ‘obtained or committed’. In other words by cl 4.2, the Capital Raising Fee would be payable if part or all of a Capital Raising was obtained or committed prior to 27 September 2019, or was deemed to have been, in one or more transactions. Clause 4.4, concerning ‘Deemed Transactions’, provided that a Transaction was deemed to have been completed, obtained or committed ‘under [the] agreement’ if it was completed, obtained or committed within 12 months following the Expiry Date (ie by 27 September 2020) by a Potential Counterparty that was identified or introduced to Yume or contacted on behalf of Yume by Ashthorn prior to 27 September 2019 and negotiations leading to a Transaction commenced with that party at any time within 12 months following the Expiry Date (ie by 27 September 2020).
44	SEUZ agreed to a Capital Raising as defined, when it entered the Subscription Agreement. Ashthorn contended in this Court, albeit not advancing any notice of contention, that SUEZ also agreed to a Capital Raising when it entered into the Second Extension and Variation Agreement. The latter submission depended on applying the ‘assumption’ in the first paragraph of cl 4.2 that the Potential Counterparty ‘will exercise any contingent commitment or options’.
45	In either case, the Capital Raising would have been agreed to after the Expiry Date of 27 September 2019, and also after the extended ‘deemed’ Transaction period ending on 27 September 2020 — the Subscription Agreement was entered into on 5 July 2021, and the Second Extension and Variation Agreement was entered into on 31 March 2021, with effect from 10 December 2020. The issue is whether amounts paid by SUEZ to Yume before those dates constituted part of that Capital Raising (it not being suggested that they constituted all of it).
46	The judge’s decision rested on the conclusion that the relevant Capital Raising was obtained or committed in one or more transactions, which constituted a single contract or capital raising transaction. It was said that it followed from that conclusion that the fees and funding provided under all the agreements together constituted a Capital Raising, part of which was obtained or committed prior to 27 September 2019, so as to attract the Capital Raising Fee in cl 4.2. It was also said to follow that cl 4.4 had no application, it seems because it dealt only with cases where no part of the Capital Raising had been obtained or committed prior to 27 September 2019.
47	The critical question under cl 4.2 is whether part or all of any Capital Raising was obtained or committed (or deemed to have been) prior to the Expiry Date. It is necessary, in order to answer that question, to identify the Capital Raising and the point at which any part of it was obtained or committed.
48	As has been seen, the judge found that the four agreements were part of the same transaction. She found that the parties did not intend the successive agreements to have rescinded the Strategic Partnership Agreement, but that it was kept on foot. In reaching that conclusion, the judge relied in particular on Ms Barfield’s evidence that the Strategic Partnership Agreement was a ‘workaround agreement’ after the SUEZ BAFO failed, and on the discount of strategic partnership fees from the ultimate purchase price of the shares. The judge found that SUEZ ‘remained as committed’ to funding Yume as it had been ever since the failed SEUZ BAFO.
49	In our view, this approach failed to take sufficient account of the terms of the contracts and led to a result wholly inconsistent with those terms.
50	First, while two contracts may be intended to operate together, and may each bear on the interpretation of the other, that was not this case. Each of the Extension and Variation Agreements expressly operated from a specified date, and the Strategic Partnership Agreement continued in full force and effect from that date, as amended. The Subscription Agreement, moreover, expressly superseded all previous agreements in respect of its subject matter and constituted the entire agreement between the parties. In other words, there were successive, not contemporaneous, contractual arrangements, that did not operate together as a single contract at any point.
51	Secondly, there are clear indications in the agreements preceding the Subscription Agreement that neither Yume, nor SUEZ, had committed to a capital raising at any earlier time. It was stated in the Strategic Partnership Agreement itself that SUEZ ‘does not, at this stage, wish to proceed with acquiring shares’ in Yume, ‘but may revisit this decision in the future’. The Second Extension and Variation Agreement inserted a provision recording that, as at its date (which was 31 March 2021, or possibly 10 December 2020), Yume acknowledged that it had ‘no intention to issue shares to any existing shareholder during the Initial Term’ (which expired on 11 September 2021).
52	Thirdly, cl 4.2 provides that the Capital Raising Fee becomes due and payable on the date that the Committed Amount, or the relevant part thereof, is obtained or committed. It is not clear how this provision would apply on the judge’s approach to the SUEZ agreements. It would not be possible for the Capital Raising Fee to become due and payable, calculated by reference to and upon payment of an amount that was only subsequently put towards a Capital Raising, and which was paid before any Capital Raising took place. 
53	To the extent that the judge relied on the subjective intentions of Ms Barfield as going to construction of the relevant agreements, they would not be relevant to that issue. On the other hand, evidence of mutually known objective background circumstances relevant to the purpose is admissible no matter how clear the ‘ordinary meaning’ of the words. Identification of purpose may allow admission of evidence of the genesis of the transaction, the background, the context and the market in which the parties are operating.
54	Reference to these considerations does not assist Ashthorn, however. The fact that the parties contemplated the possibility of a future share issue cannot alter the fact that, by the very agreements in issue, they expressly did not commit to a Capital Raising during the period in which cl 4.2 applied, or the extended period in cl 4.4. Nor does the fact that, when they ultimately did agree to a Capital Raising, the parties agreed to treat prior payments made for other purposes as part of the price for the issued shares cause the agreements that were operative according to their terms during the relevant periods to be amended with retrospective effect so as to treat the payments as part of a Capital Raising at the times they were made. 
55	It is not entirely clear whether the judge relied on the subjective evidence of Ms Barfield and the later treatment of the payments of Strategic Partnership Fees as amounts paid in advance of the Capital Raising, for the purpose of construing the Engagement Agreement, or for the purpose of applying it to the facts of the case. But in either event, the result was contrary to the express terms of the agreements. Ms Barfield’s evidence could not turn the payments made prior to 27 September 2019 (for the purposes of cl 4.2) or 27 September 2020 (for the purposes of cl 4.4) into part of a Capital Raising at the time they were made.
56	Returning then to the question posed by cl 4.2, it is clear that no part of the Capital Raising in question was obtained or committed prior to 27 September 2019. Nothing took place by way of Capital Raising until the Subscription Agreement or, at best, the agreement for the call option with effect from 10 December 2020 in the Second Extension and Variation Agreement.
57	Nor does cl 4.4 avail Ashthorn. It seems a Transaction is deemed to have been completed, obtained or committed under the Engagement Agreement (that is, before the Expiry Date and therefore attracting cl 4.2), if certain conditions are met. The first of those is that the Transaction is completed, obtained or committed within 12 months of the Expiry Date (that is by 27 September 2020). That condition is not met in the present case, because both the Second Extension and Variation Agreement and the Subscription Agreement were entered into after that time. Clause 4.4 therefore has no application.
58	The proposition Ashthorn derived from Recoveries Corporation does not alter these conclusions. This was not a case of a right to payment in the future that was subject only to a contingency (whether consisting of further performance or not). For the reasons given, Ashthorn did not have a right to payment when the Engagement Agreement came to an end, other than a potential right under the deeming provision in cl 4.4. To treat the right to a Capital Raising Fee as existing at the termination of the agreement, subject only to the contingency that there was subsequently a Capital Raising that ‘converted’ payments already made to payments in return for shares, would be contrary to the express terms of the agreement. In particular, the right to the Capital Raising Fee accrued, and it was required to be paid, at the time that capital was obtained or committed, not upon the happening of some future contingency. The fact that there had been no Capital Raising when the agreement came to an end meant that Ashthorn had accrued no ‘right’ to a Capital Raising Fee in the future. As such, there was no right which cl 11(h) of Annexure 2 could operate upon so as to preserve.
59	These conclusions suffice to mean that Yume’s second, third, and fifth arguments must be upheld and the appeal must be allowed. In respect of Yume’s remaining arguments on the appeal:
(a)	In relation to the fourth argument, for reasons given already, it is unclear whether the judge relied on the subjective evidence of Ms Barfield, which could not assist in any event.
(b)	As to the first argument, it is unnecessary to address the judge’s conclusion that cl 4.4 had no application, because cl 4.4 did not apply to the Capital Raising in relation to SUEZ in any event. The import of the judge’s conclusion was that, because there was a single transaction, SUEZ was an ‘existing investor’, taking the Transaction outside cl 4.4. It is not apparent how that would be so, given that the exception in cl 4.4 applies to Potential Counterparties who are ‘existing investors’ as at the date of the Engagement Agreement (16 January 2019), before any part of the relevant Transaction had taken place. But the matter need not be pursued.
(c)	In relation to the sixth and final argument, it is unnecessary to decide whether the judge effectively found that the Strategic Partnership Agreement was some kind of sham.
60	The first ground of appeal having succeeded, it is unnecessary to address the second ground.
Salu Folk transaction
61	The relevant agreement in the case of Salu Folk was a Subscription Agreement, entered into in the following circumstances.
62	Salu Folk was a founding and existing shareholder of Yume prior to Ashthorn’s engagement.
63	At a Yume board meeting held on 18 October 2018, Wolfgang ‘Pitzy’ Folk, the principal and director of Salu Folk, stated that he ‘remained supportive of Yume and would consider reinvestment when the runway required’.
64	At a subsequent board meeting held on 18 December 2018, Mr Folk stated that he was ‘prepared to put money in’.
65	On 9 January 2019 (before the Engagement Agreement was entered into), the director of Ashthorn, Paul Beanland, sent an email to Ms Barfield, and Mr Quentin Miller (another director of Yume) and asked them to ‘confirm Yume’s current cash balance, burn rate, and if Yume has backstop funding available to bridge capital raising or sale (eg from existing investors)?’. Mr Beanland went on to state, ‘If backstop funding is not currently available, I believe it may be prudent to commence arranging such finance ASAP’, and then provided his views as to how the funding could be structured.
66	Mr Beanland subsequently met with Mr Folk and asked that he provide Yume with a letter of comfort in relation to the proposed investment in Yume. Minutes of a subsequent Yume board meeting on 6 February 2019 note ‘Pitzy to prepare commitment letter to satisfy Paul’s requirements’. A draft letter of comfort was then prepared by Salu Folk’s solicitors on 13 February 2019. Ashthorn provided feedback on the draft. Ashthorn later recommended that Yume utilise a convertible redeemable preference share structure for the purpose of Salu Folk’s investment.
67	On 27 June 2019, Yume and Salu Folk entered into a share subscription agreement (‘Salu Folk Subscription Agreement’) under which Yume was entitled to require Salu Folk to subscribe for up to 200,000 convertible redeemable preference shares in Yume at a price of $1 per share within a 12-month period.
68	Salu Folk ultimately provided Yume capital of $200,000 under the Salu Folk Subscription Agreement in two tranches of $100,000, respectively paid on 17 July 2019 and on or before 19 September 2019 — in each case, prior to the Expiry Date under the Enterprise Agreement.
69	It is not necessary to set out the terms of the Salu Folk Subscription Agreement.
Trial judge’s reasons
70	In relation to the claim relating to Salu Folk, the judge addressed two issues. The first was the meaning of the expression ‘Potential Counterparty’ in cl 3 of the Engagement Agreement. 
71	It is convenient to repeat the relevant part of cl 3:
	Yume authorises Ashthorn to solicit commitments for Capital Raising or bids for the Sale of Business on Yume’s behalf from parties potentially interested in pursuing a Transaction (each a Potential Counterparty) and Ashthorn will consult with Yume regarding Potential Counterparties.
72	The judge found that the purpose of the clause was to authorise the soliciting of potentially interested parties, and to define those parties that had been solicited as ‘Potential Counterparties’. The judge said that the term ‘Potential Counterparty’ was introduced towards the end of the relevant sentence and placed in brackets, in order to explain that the designation ‘Potential Counterparty’ ‘relates to an interested party that has been solicited’. 
73	The judge found that it made little commercial sense for Ashthorn to receive fees for transactions that it did not solicit. She found that the Capital Raising Fee provisions had been included ‘as an incentive to go above and beyond the baseline duties of the Engagement Agreement’, which implied that ‘something extra must be done to attract these fees’. The judge said ‘plainly this “extra work” is the act of soliciting’.
74	As to the second issue, whether Ashthorn had solicited Salu Folk within the meaning of the Engagement Agreement, the judge referred to competing arguments of the parties and noted that both parties envisaged that there needed to be some level of ‘entreating’ or ‘convincing’ and that neither party insisted that the act of soliciting needed to include an introduction. 
75	The judge rejected an argument on behalf of Yume that the definition of a Potential Counterparty excluded existing investors as referred to in cl 4.4 of the Engagement Agreement. She held that that provision relates specifically to deemed transactions and was therefore limited to transactions occurring after the expiry of the Engagement Agreement. As such, cl 4.4 had no relevance to the Salu Folk Subscription Agreement, which was entered into while the Engagement Agreement was still on foot.
76	The judge found that Ashthorn had not solicited Salu Folk’s ultimate contribution. Mr Folk had made comments prior to the execution of the Engagement Agreement to the effect that he was committed and willing to invest in Yume, and was ‘always going to invest in Yume in the future’. The judge said that, given that Mr Folk was a founding shareholder when Yume was incorporated in 2015, the other founder being Ms Barfield, and that she had described Salu Folk as being Yume’s ‘angel investor’, together with the fact that Salu Folk had a demonstrated history of investing in Yume, Mr Folk’s commitments to reinvest made prior to the entering into of the Engagement Agreement should be taken to be genuine.
77	The judge accepted that Ashthorn had played a role in formulating the ultimate Salu Folk transaction, including playing an instrumental role in the structure and formation of the agreement, explaining and negotiating the letter of comfort, working with Yume’s lawyers and board members to consolidate the ultimate terms, and insisting on the ultimate form of the convertible redeemable preference shares. The judge found, however, that this did not amount to soliciting within the meaning of the Engagement Agreement, and was better characterised as part of Ashthorn’s commitment to ‘assist with and project manage any transaction considered or undertaken by Yume during the term of [the] agreement’. In other words, this matter was covered by the Advisory Retainer Fee, which the judge found was ‘deemed to be adequate to compensate’ Ashthorn for its work in facilitating a transaction that it did not solicit.
78	The judge therefore concluded that Ashthorn was not responsible for soliciting a commitment from Salu Folk as a Potential Counterparty in accordance with the Engagement Agreement and was therefore not entitled to a Capital Raising Fee in relation to the Share Subscription Agreement entered into between Yume and Salu Folk.
Proposed grounds of cross-appeal
79	Ashthorn seeks leave to cross-appeal in respect of the trial judge’s denial of its claim to a Capital Raising Fee in connection with the Salu Folk Subscription Agreement, on the following proposed grounds:
	Proposed ground 1
(a)	The trial judge erred by concluding that the definition of ‘Potential Counterparty’ in cl 3 of the Engagement Agreement was limited to counterparties to any Capital Raising or Sale of Business transactions solicited by the cross-applicant.
(b)	The trial judge ought to have held that the definition of Potential Counterparty comprised only the words ‘parties potentially interested in pursuing a Transaction’.
	Proposed ground 2
(a)	Alternatively to proposed ground 1, the trial judge erred in finding that the cross-applicant did not solicit the commitment from Salu Folk Pty Ltd to the transaction the subject of the Salu Folk Subscription Agreement.
(b)	The trial judge ought to have found that the cross-applicant did solicit commitment from Salu Folk in respect of that transaction.
Ashthorn’s cross-appeal submissions
80	The proposed cross-appeal raises two issues. The first is whether the judge was correct to read the word ‘solicit’ as forming part of a definition of ‘Potential Counterparty’.
81	The second is, if the judge was correct, whether she was correct to make the further finding that Ashthorn had not solicited Salu Folk in the relevant sense.
82	Ashthorn contended that the judge ought to have found that, on its proper construction, the definition of ‘Potential Counterparty’ was confined to the words ‘parties potentially interested in pursuing a Transaction’. It was said that the defined term ‘Potential Counterparty’ refers to a noun, and that it made grammatical and logical sense to only include the words from ‘parties’ onwards, being the adjectival clause describing the party in question. The text preceding the word ‘parties’ was said to refer to the actions which Yume authorised Ashthorn to take in relation to a Potential Counterparty and not to form part of the defined term.
83	Ashthorn submitted that this was supported by the textual context within cl 3 and the scope of work in Annexure 1, which reinforced that the words preceding ‘parties’ do not form part of the definition. The term ‘Potential Counterparty’ was used to delineate the scope of operation of other provisions, including authorising Ashthorn to consult with Potential Counterparties and to share information concerning Yume or a transaction with such parties, subject to obtaining appropriate confidentiality undertakings. Ashthorn pointed out that its engagement included services beyond solicitation of investment, including advising, assisting and project managing transactions with existing investors or investors it did not solicit. It was submitted that these provisions would be unworkably constrained if the definition of ‘Potential Counterparty’ included only those parties from whom Ashthorn had already solicited commitments. It was said to be clear from Annexure 1, in particular the use of the word expression ‘and/or’ in sub-cl 1(g), that the scope of work extended to negotiation with the Potential Counterparty without the need for that party to have been solicited by Ashthorn.
84	Ashthorn submitted that the judge had impermissibly attributed a particular commercial intent or understanding of commercial common sense to the parties and used that attributed purpose to give the words of the contract a meaning they did not reasonably bear.
85	In any event, by the second proposed ground of cross-appeal, Ashthorn submitted that the trial judge erred by failing to find that Ashthorn solicited Salu Folk’s commitment to the Capital Raising the subject of the Salu Folk Subscription Agreement. It was submitted that the judge erred in relying on the payment structure under the Engagement Agreement as setting a bar for what amounted to soliciting a commitment that was higher than suggested by the plain meaning of the word in the context in which it appeared. The judge was said to have erroneously focussed on whether there was a commitment or general willingness by Mr Folk to invest further funds in Yume, whereas the words ‘solicit commitments for Capital Raising’ in the (assumed) definition of ‘Potential Counterparty’ required regard to be had to the specific Capital Raising transaction in hand as that which was to be solicited. It was said that the judge failed to have adequate regard to the evidence of Ashthorn’s role in bringing about the specific Capital Raising the subject of the Salu Folk Subscription Agreement.
86	Specifically, Ashthorn submitted that there was no evidence that Mr Folk’s general willingness to further invest in or financially assist Yume if needed rose any higher than an indication that he would ‘follow his money’ or a reassurance from Mr Folk that he would ‘be good for the money if we needed it’. No specific terms, quantum or structure had been discussed and no agreement was in place. 
87	Secondly, Ashthorn submitted that contemporaneous documentary evidence, together with the evidence of Mr Beanland, established that it was he who suggested the idea of backstop funding. He also met with Mr Folk and explained to him the need for a letter of comfort, reviewed the initial letter of comfort and gave advice on its terms to Yume, conceived of the idea of the convertible redeemable preference share structure, negotiated the terms and structures of the deal with Mr Folk’s advisor, and gave advice to members of the board on the proposed transaction. Finally, he worked on the terms of the initial iteration of the Salu Folk Subscription Agreement and assisted in the renegotiation of the terms of that document to bring about a more commercially advantageous deal in the form of the final Salu Folk Subscription Agreement.
88	In short, Ashthorn submitted that the evidence showed that Mr Beanland was the architect of the transaction effected under the Salu Folk Subscription Agreement. In the circumstances, the judge ought to have accepted that Ashthorn had solicited Salu Folk’s commitment to the Capital Raising.
Yume’s cross-appeal submissions 
89	Yume submitted that the judge’s interpretation of the meaning of ‘Potential Counterparty’ accorded with the ordinary meaning of the words chosen by the parties and that Ashthorn’s argument effectively ignored the word ‘solicit’ in construing the meaning of the words ‘Potential Counterparty’. Yume submitted that the judge was right to say that it would make little commercial sense for Ashthorn to receive fees for transactions it did not solicit. Ashthorn had not attempted to explain how business common sense would entitle it to a Capital Raising Fee that it was not responsible for soliciting. Yume submitted that it was significant that Ashthorn was entitled to receive a monthly advisor retainer fee of $8,000 pursuant to cl 4.1. It was said to be clear from cl 3 that these fees were in consideration for the services specified in Annexure 1. The judge was correct to find that, in order to be entitled to a Capital Raising Fee, something more was required on the part of Ashthorn than the delivery of the services specified in Annexure 1.
90	As to the question of solicitation, Yume submitted that the Court should not interfere with findings of fact unless they were demonstrated to be wrong by incontrovertible facts or uncontested testimony, to be glaringly improbable, or to be contrary to compelling inferences. Yume submitted that Ashthorn had approached the question as if the appeal was a fresh trial of questions of fact.
91	Yume accepted that Mr Beanland played an instrumental role in the structure and formation of the final form of the Salu Folk Share Subscription Agreement, explaining and negotiating the letter of comfort and working with Yume’s lawyers and board members to consolidate the ultimate terms. However, this did not amount to ‘soliciting’. Rather, to the extent that Ashthorn assisted with the structure of the Salu Folk Subscription Agreement, this was why it was paid the advisory retainer fee of $8,000 per month. The scope of services set out in Annexure 1 included assistance by providing ‘[a]dvice regarding the structure, terms or pricing of a proposed Capital Raising’. There was no requirement that these services be connected to a Capital Raising to which Ashthorn would be entitled to a fee under cl 4.2. It was said to be reasonable to expect Ashthorn to provide such services in circumstances where it was being paid advisory retainer fees.
Consideration of cross-appeal
92	When construing the terms of a commercial contract, the court asks what a reasonable businessperson would have understood those terms to mean. To answer that question, the reasonable businessperson is placed in the position of the parties. The terms are construed objectively, and, as already mentioned, the subjective intentions of the parties are irrelevant. The objective approach requires reference to the text and its ordinary meaning, together with the context, being the entire text of the contract including matters referred to in the text, and the purpose. Unless a contrary intention appears in the contract, the court is entitled to approach the task of interpretation on the assumption that the parties intended to produce a commercial result, and should construe it so as to avoid a commercial nonsense. However, the court does not weigh the commerciality of the agreement, and business common sense is a topic on which reasonable minds may differ.
93	As a matter of grammar, the text of the relevant clause in the present case is clear: Potential Counterparties are ‘parties potentially interested in pursuing a Transaction’. Ashthorn is authorised to solicit commitments from such parties for Capital Raising or for a Sale of Business. The question is whether that authorisation has the effect of confining the meaning of ‘Potential Counterparties’ to parties who have in fact been so solicited.
94	In our view, it does not. 
95	First, as noted, the grammatical structure of the relevant sentence does not suggest such a construction, and it is not suggested by the text itself. To the contrary, the construction strains the language considerably.
96	Secondly, the authorisation to solicit commitments necessarily assumes that the parties who may be solicited are capable of identification before they are solicited. The construction for which Yume contends would mean that the authorisation did not take effect until the party had already been solicited. This would be an anomalous outcome.
97	Thirdly, Ashthorn is authorised also to negotiate commitments for Capital Raising from Potential Counterparties (cl 1(g) of the Annexure to the Engagement Agreement), in terms which do not require a prior solicitation to have occurred. That contemplates that a party may be identified as a Potential Counterparty without there having been any prior solicitation. 
98	Finally, it would be surprising if Ashthorn could only share information about Yume with a third party, and obtain confidentiality undertakings from that party, if it had already solicited a commitment from the party in question. That would imply that solicitation of a third party would have to occur before Ashthorn became entitled to share information with, and obtain confidentiality undertakings from, that party, which seems commercially perverse.
99	The judge identified a purpose underlying her preferred construction in that it made little commercial sense for Ashthorn to receive fees in respect of a Capital Raising or a Sale of Business unless Ashthorn had solicited those transactions. Ashthorn was said to be separately remunerated for transactions it did not solicit by the Advisory Retainer Fees.
100	In our view, the suggested purpose is not apparent from the agreement itself or any relevant surrounding circumstances. It is evident from the Engagement Agreement that Ashthorn was engaged in order to advise, assist with and manage Transactions (defined as a Capital Raising or Sale of Business), including by arranging and obtaining commitments for a Capital Raising and soliciting bids for a Sale of Business, and that Ashthorn was Yume’s ‘exclusive adviser and agent to do so’. There is nothing surprising, or lacking in commercial sense, in an arrangement whereby Ashthorn is paid a fee for such services in any event, together with a ‘success fee’ if a Transaction comes to fruition during the term of the agreement. To infer a purpose of rewarding Ashthorn only for a Capital Raising which it has solicited would arbitrarily deprive it of that fee even where, consistently with cl 3, it had advised, assisted with and managed the Capital Raising, including by arranging and obtaining commitments for that Capital Raising, but in circumstances where it had not solicited the commitment in the first place.
101	We therefore do not accept that the posited commercial purpose provides a sound basis for reading the definition of ‘Potential Counterparty’ as referring only to third parties solicited by Ashthorn.
102	It follows that the first ground of the cross-appeal must be upheld and the cross-appeal must be allowed. It is unnecessary to address the second ground.
Conclusion
103	For these reasons, leave to appeal and to cross-appeal should be granted, and the appeal and the cross-appeal are allowed.
104	We will invite the parties to prepare orders giving effect to these reasons, and as to the costs of the appeal and cross-appeal and the costs of the trial in the County Court, together with any ancillary matters. In the event that the parties are not in agreement as to any order, we will receive written submissions and make orders on the papers.
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