CVC Limited v Trinity Limited

[2009] NSWSC 640

CITATION:	CVC Limited v Trinity Limited [2009] NSWSC 640
HEARING DATE(S):	26 June 2009
JUDGMENT DATE :	26 June 2009
JURISDICTION:	Equity
JUDGMENT OF:	White J
EX TEMPORE JUDGMENT DATE:	26 June 2009
DECISION:	Order that the second and third defendants' notice of motion filed 19 June 2009 be dismissed with costs.
CATCHWORDS:	No question of principle
PARTIES:	CVC Limited & Ors v Trinity Limited & Ors
FILE NUMBER(S):	SC 50059/09
COUNSEL:	Plaintiffs: R E Dubler SC with A Harding Defendants: N J Kidd with V Thomas
SOLICITORS:	Plaintiffs: DLA Phillips Fox Defendants: Middletons Lawyers

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

WHITE J

Friday, 26 June 2009

50059/09 CVC Limited & Ors v Trinity Limited & Ors

JUDGMENT – for summary dismissal

1 HIS HONOUR: The second and third defendants seek orders for the summary dismissal of the proceedings against them. They submit that it is not seriously arguable that clause 7.2 of the separation agreement, or any other provision of the separation agreement, notably clauses 7.4 and 11.6, impose any obligation on them to buy, or arrange a buyer for, the CVC units. They submit it is not seriously arguable that there is any implied term requiring them to co-operate to achieve that outcome, and that the only breach of the contract the plaintiff can arguably establish would be a breach by the first defendant.

2 Applications for summary dismissal are not regarded with favour in the commercial list. I was told that the practical reason for the second and third defendants making this application is that, whilst they remain parties to the proceedings, the plaintiffs will be seeking discovery of a wide range of documents from them, and that they ought not be exposed to the risk of having given such discovery if they are not proper parties to the proceedings. I am not sure that much would practically be gained by such an approach because if the second and third defendants do have relevant documents, then they will doubtless be required to produce them, whether on discovery or subpoena. Be that as it may, I would not refuse the application simply on the ground that such applications are not regarded with favour in the commercial list.

3 It is true that the obligation in clause 7.2 is an obligation imposed on the first defendant. I also accept that, on its face, clause 7.4 does not make the second and third defendants liable for the covenants given by the first defendant. However, the plaintiffs now seek to plead that the first defendant is in a position to control each of the second and third defendants. They will allege that the first defendant's obligation under clause 7.2 required it, to the extent necessary to effect or complete the acquisition of the units, to arrange for an entity under its control, including the second and third defendants, to make the acquisition. It is then said that either, as a matter of implied term, or, on the proper construction of clause 11.6, the second and third defendants would be required to act in accordance with a request by the first defendant that they acquire the units.

4 The relief which will be sought includes an order that the first defendant make a request to the second and third defendants to execute all documents and do all things to purchase the units, and an order that the second and third defendants comply with such a request. At the moment, there is no material to show the matrix of facts in which the separation agreement and the cognate deed of release were entered into. That matrix of facts could well be relevant, and probably would be relevant, to determining the extent of the parties' expressed or implied obligations. The absence of evidence about the matrix of facts is a reason for at least being cautious in dealing with the summary dismissal application.

5 It is a general rule that each party to a contract agrees by implication to do all such things as is necessary on his part to enable the other party to have the benefit of the contract. The scope of that implied obligation of co-operation to multi-party contracts is a question of some difficulty. I do not think it appropriate on a summary judgment application to resolve the extent of that implied duty. Moreover, clause 11.6 can at least arguably be read as requiring that each party must do all things that another party, from time to time, may reasonably request to give effect to the document and all transactions incidental to it. If, as the plaintiffs contend, the first defendant, to perform its obligation under clause 7.2, should request the second and third defendants to purchase the units, then it is reasonably arguable that clause 11.6 requires the second and third defendants to do such things so as to give effect to the transactions contemplated by clause 7.2, namely, the purchase of the units from the CVC investors.

6 The joinder of the second and third defendants is necessary for those questions to be determined; and for it to be determined whether they would be required to comply with such a request, if it is determined that the first defendant was or would be obliged to make it. I also think that as parties to the agreements for which the plaintiffs seek an order for specific performance, the second and third defendants are necessary, or, if not necessary, at least proper parties.

7 For these reasons, I order that the second and third defendants' notice of motion filed 19 June 2009 be dismissed with costs.

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