Mosman Services Pty Ltd (ACN 079 350 744) (Suing in a Representative Capacity as Trustee of the Mosman Services Trust) v William James McDonald

Mosman Services Pty Ltd, suing in a representative capacity as trustee of the Mosman Services Trust, brought an action against William James McDonald for alleged breaches of an oral agreement concerning directorships. The case was heard by the Supreme Court of New South Wales. Mosman Services claimed that an oral agreement was reached with McDonald regarding directorships and sought to enforce the agreement, which McDonald denied.

The court needed to decide several issues, including whether an agreement was indeed reached between the parties, and if so, whether it was intended to create legal relations. Additionally, the court examined whether an implied term existed in the agreement, requiring the parties to do all things necessary to give each other the benefit of the contract, including a mutual obligation to co-operate. The court also assessed whether McDonald had the intention to pay the promised money, which is relevant to potential deceit claims.

The court found that an oral agreement was made between the parties concerning the directorships. It was determined that the conversation did take place and an agreement was reached. The court further found that an implied term existed in the agreement, obliging the parties to cooperate and do all things necessary to benefit from the contract. The court concluded that McDonald did not intend to pay the promised money, which was necessary for a deceit claim, and thus dismissed the deceit claim. The court interpreted the services agreement in a way that made commercial sense, considering all the circumstances and the intent of the parties.

The court ordered that Mosman Services was entitled to recover damages for breach of the oral agreement concerning directorships, but dismissed the deceit claim. The exact amount of damages was to be determined in a further hearing.