CALVERT & MERCER

Calvert & Mercer concerned a dispute between the parties regarding the interpretation of a clause within a deed of settlement. The matter came before Sexton J in the Supreme Court of Victoria.

The central legal issue before the Court was whether the settlement deed, which contained a clause requiring the parties to use their best endeavours to procure the execution of a further agreement, imposed a positive obligation on the parties to take all reasonable steps to achieve that outcome, or whether it merely required them to act in good faith.

Sexton J reasoned that the phrase "best endeavours" in the context of the deed imposed a more stringent obligation than merely acting in good faith. His Honour held that it required the party bound by the clause to take all reasonable steps in their power to achieve the stipulated outcome, even if those steps might involve some expense or inconvenience. The Court considered the ordinary meaning of the words and the commercial context in which the deed was entered into.

The Court found that the defendant had not taken all reasonable steps to procure the execution of the further agreement as required by the deed. Consequently, the Court made orders in favour of the plaintiff.