Mio Art Pty Ltd as T'ee of Spencer Family Trust v Mango Boulevard Pty Ltd (No 6)

In the case of Mio Art Pty Ltd as Trustee of the Spencer Family Trust v Mango Boulevard Pty Ltd (No 6), the primary issue before the court was whether the plaintiff had the legal standing to claim payment from the first defendant under a share sale agreement. The plaintiff argued that it had not legally assigned its debt to a third party and maintained its ownership of the debt. The first and fourth defendants contended that the plaintiff had legally assigned the debt to a third party, thereby depriving the plaintiff of standing. The court was tasked with determining the nature of the agreement between the plaintiff and the third party and whether it constituted a legal assignment of the debt.

The court examined the terms of the agreement between the plaintiff and the third party, which provided that upon an Event of Default, the third party could exercise an option to be paid amounts due to the plaintiff under the share sale agreement. The court found that the better construction of the agreement was that it did not effect an absolute assignment and, until an Event of Default, there was only a charge. This conclusion was supported by the fact that the document referred to the parties as "Chargor" and "Chargee" throughout, and other documents were admissible as an aid to the construction of the agreement. The court also considered the statutory requirement for an absolute assignment under the Property Law Act 1974 (Qld) and found that notice of the assignment must be an express notice. The email sent by a third party, which was not sent by or on behalf of the plaintiff or the purported assignee, did not constitute such notice.

Furthermore, the court addressed the issue of the admissibility of extrinsic evidence in relation to the instruments and determined that contemporaneous documents signed by the plaintiff and the third party could assist in the construction of the agreement. The court found that these documents were admissible as an aid to the construction of the agreement and that they did not render the agreement inadmissible because not every relevant fact or circumstance was also proved.

The court concluded that the plaintiff had standing to claim payment from the first defendant. The court noted that the plaintiff's termination of the relevant agreements with the third party did not necessarily mean that the agreements were terminated as the plaintiff alleged. The court made a declaration that, subject to any right to set-off any sum as pleaded in paras 29U(c) and (d) of the Sixth Further Amended Defence of the first and fourth defendants, the plaintiff is entitled to payment by the first defendant, pursuant to cl 5.1(a) of the SSA made between them and dated 4 July 2003, of the sum of $602,729. The court will hear the parties as to whether, consistently with this judgment and the declaration to be made against the first defendant, a like declaration should be made against the fourth defendant.