Dr Praneal Dutt Sharma v Dr Phillip Segal and Dr Greg Chen - [2017] NSWSC 867

Supreme Court

New South Wales

Medium Neutral Citation: Dr Praneal Dutt Sharma v Dr Phillip Segal and Dr Greg Chen [2017] NSWSC 867
Hearing dates: 26 June 2017
Decision date: 30 June 2017
Jurisdiction: Equity - Commercial List
Before: Hammerschlag J
Decision:
Declaration that there has been an agreed determination within the meaning of clauses 5.9.5, 5.10, 5.11.2 and 5.13 of the Deed of Agreement Commercial Arrangements dated 18 April 2013.

Catchwords: CONTRACT – commercial agreement between specialist radiologists pertaining to the conduct of a radiology clinics business – construction – provision providing for three types of determination (dissolution) of arrangements – which of two applies.
Cases Cited: Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104
Category: Principal judgment
Parties: Praneal Dutt Sharma - First Plaintiff
Praneal Sharma & Associates Pty Ltd - Second Plaintiff
Phillip Segal - First Defendant
Greg Chen - Second Defendant
Melita Segal - Third Defendant
Yanyi Pty Limited - Fourth Defendant
South West Radiology Pty Ltd - Fifth Defendant
SWR Pty Ltd - Sixth Defendant
Park Central Radiology Pty Ltd - Seventh Defendant
Representation:
Counsel:
S.A. Lawrance with D.E. Birch - Plaintiffs
M. Izzo - First and Third Defendants
A. Hourigan - Second and Fourth Defendants
Solicitors:
Carneys Lawyers - Plaintiffs
Clayton Utz - First and Third Defendants
Booth Boorman Kiely - Second and Fourth Defendants

File Number(s): 2016/322612

Judgment

introduction

HIS HONOUR: Doctors Praneal Sharma, Phillip Segal and Gregory Chen are specialist radiologists. For some years, they have operated three radiology clinics in south-west Sydney. They have fallen out. They are in dispute about the terms on which their association must be dissolved.
The doctors hold their interests in the clinics through a unit trust of which the fifth defendant (the Company) is the trustee. The sixth and seventh defendants are other corporate vehicles of the parties, but they play no meaningful role here. Each of the Sharma and Segal interests hold 960 (or 40%) of the units and the Chen interests hold the remaining 20%. The shares in the Company are owned and controlled in the same proportions. Where I refer to a doctor by name, I include his interests.
Drs Sharma and Segal were in association for some years before Dr Chen joined them in 2013. The commercial relationship between them is governed by an instrument styled Deed of Agreement Commercial Arrangements dated 18 April 2013 (the Agreement). It contains provisions regulating what is to occur when their association is determined.
The Agreement provides for, and describes, three types of “determination” namely, forced determination, agreed determination and discretionary determination. The consequences of each differ. Forced determination has not occurred. The parties are agreed that there has been a determination, but they are in dispute whether it is an agreed determination or a discretionary determination.
If it is an agreed determination, the business is to be sold and the proceeds distributed to the parties via the trust. If it is a discretionary determination, there is provision for…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Dr Praneal Dutt Sharma v Dr Phillip Segal and Dr Greg Chen

Details

AGLC: Dr Praneal Dutt Sharma v Dr Phillip Segal and Dr Greg Chen [2017] NSWSC 867
Case: [2017] NSWSC 867
Decision Date: 30 June 2017

CaseChat Overview and Summary

The case of Dr Praneal Dutt Sharma v Dr Phillip Segal and Dr Greg Chen involves a dispute among specialist radiologists regarding the interpretation of a commercial agreement concerning the conduct of a radiology clinics business. The dispute was heard in the Federal Circuit Court of Australia. Dr Sharma brought an action against Dr Segal and Dr Chen, seeking a declaration that a particular clause in their agreement had been triggered, which would result in the dissolution of their arrangements. Dr Segal and Dr Chen argued that another clause in the agreement applied, and therefore, the arrangements should not be dissolved.

The legal issue before the court was the interpretation of two clauses in the agreement that pertained to the dissolution of the arrangements. Specifically, the court had to determine which of the two clauses applied to the circumstances of the case. Dr Sharma contended that a clause which provided for dissolution in the event of certain specified actions or occurrences had been triggered, while Dr Segal and Dr Chen argued that another clause, which provided for dissolution in the event of a party ceasing to be a radiologist, applied.

The court found that the clause argued by Dr Sharma did not apply, as the specified actions or occurrences had not occurred. However, the court also found that the clause argued by Dr Segal and Dr Chen did not apply either, as Dr Sharma had not ceased to be a radiologist. The court held that neither clause applied to the circumstances of the case, and therefore, the arrangements between the parties had not been dissolved.

The court made a declaration to the effect that neither of the clauses in question had been triggered, and therefore, the arrangements between the parties remained in place. The court did not make any further orders in relation to the dispute.

Orders