KALE & KARMEL

In the matter of *Kale & Karmel*, Murphy J of the Supreme Court of New South Wales was required to determine a dispute between the parties concerning the interpretation of a deed.

The central legal issue before the Court was whether the deed, which contained a clause requiring the parties to act in good faith, imposed an obligation on one party to take positive steps to facilitate the performance of a contractual obligation by the other party.

Murphy J reasoned that the obligation to act in good faith, as stipulated in the deed, did not extend to requiring a party to take positive steps to assist the other party in fulfilling their contractual obligations. His Honour applied the principle that contractual obligations are generally to be performed by the parties themselves, and the duty of good faith does not impose a positive duty to assist in performance unless expressly or implicitly contemplated by the contract. The Court found that the deed did not contain any such contemplation.

The Court therefore held that the party in question was not in breach of the good faith clause.