HAZE & YEATS

The parties to this proceeding were Haze and Yeats. The dispute concerned the interpretation of a clause within a deed of settlement. The matter came before Rees J of the Supreme Court of New South Wales.

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.

Rees J considered the plain meaning of the words "best endeavours" and concluded that they imposed a higher obligation than merely acting in good faith. His Honour referred to established legal principles that require a party undertaking best endeavours to take all those steps in their power which are capable of producing the desired result, even if those steps involve some cost or inconvenience. The Court found that the wording of the clause in question clearly indicated an intention to impose a positive and proactive obligation.

The Court ordered that the interpretation of the clause be as contended for by Haze, finding that Yeats had failed to satisfy its obligations under the best endeavours clause.