MATTHEWS & BENDER

The parties to this proceeding were Matthews and Bender. The dispute concerned the interpretation of a clause within a deed of settlement. The matter came before Macmillan J of 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.

Macmillan 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 considered that it required the party to take all steps in their power, which a prudent and determined person, acting to give effect to the contract, would take. This included taking all reasonable steps to achieve the desired outcome, even if those steps involved some expense or inconvenience. The court's interpretation was informed by established principles of contractual interpretation, focusing on the ordinary meaning of the words used in their commercial context.

The court found that Bender had not used its best endeavours to procure the execution of the further agreement as required by the deed.