In Empire Securities Group Pty Limited v Novus Capital Limited [2026] NSWSC 83, the Supreme Court of New South Wales reaffirmed the narrow construction of release clauses, finding that if parties intend a release to extend to future or unknown claims, the clause must say so in clear terms.

Empire Securities Group Pty Ltd (Empire) and Novus Capital Limited (Novus) were parties to a Corporate Authorised Representative Agreement (CAR Agreement) under which Empire and Mr Farley were appointed as Authorised Representatives of Novus. A dispute arose regarding amounts payable under the CAR Agreement that was resolved in a Deed of Settlement and Release dated 10 February 2021, under which Novus agreed to release Empire and Mr Farley from specified claims (Deed of Release).

Shortly after execution of the Deed of Release, Novus incurred legal costs investigating a potential claim against Empire in relation to an investment. Novus sought to recover those costs from Empire under an indemnity in the CAR Agreement. Empire relied on clause 3.1 of the Deed of Release as a defence to the claim for indemnity, which provided that:

1. 1. … Novus releases Empire Securities and or Mr Farley from all Claims save for or in connected (sic) with the enforcement of this Deed.
   2. This Deed may be relied upon and pleaded by Novus for the commencement of any Court or other legal proceedings related to or connected with an application to ensure performance of this Deed.
   3. This release does not relieve Empire and/or Mr Farley of the obligation to meet and be responsible for any claim made by any third party against Empire or Mr Farley arising from Empire and/or Mr Farley acting under the Novus AFSL License, or the CAR Agreement…

The Deed of Release defined ‘Claim’ as:

… any claim, action, demand, liability, loss, damage, cost, charge, expense, outgoing payment, order or judgment either at law, in equity or arising under statute, in respect of any matter whatsoever…

At first instance, the primary judge held that the Deed of Release did not operate as a complete bar to the claim by Novus. Empire appealed arguing that the primary judge should have found that by clause 3.1(a) Novus released them from the claim.

In relation to the threshold issue of whether Empire required leave to appeal, the Supreme Court held that the proper construction of clause 3.1(a) of the Deed of Release was a question of law and that the appeal could be brought as of right.

In considering the substantive issue on appeal, the Supreme Court re-iterated well established principles that a release is to be construed narrowly and that the general words are confined by (i) the recitals and the particular matter identified in the release and (ii) things that were in the contemplation of the parties at the time the release was executed.  Accordingly, an intention to release future or unknown claims must be clearly stated.

While the broad definition of ‘Claim’ in the Deed of Release used the words ‘in respect of any matter whatsoever’ and clause 3.1(a) contemplated ‘all Claims’, the Court held that the clause did not cover events that had not yet occurred and nothing in the clause indicated an intention to release Empire from future liabilities under the CAR Agreement. Accordingly, the investigation costs claimed by Novus were not captured by the Deed of Release and the Court dismissed the appeal.

The decision highlights the need to clearly define claims that are the intended subject of the release and to specify whether future or unknown claims are included.

The decision can be found here.