NAMVAR & PALES

In the matter of *Namvar & Pales*, Harper J of the Supreme Court of Victoria was required to determine a dispute concerning the interpretation of a settlement agreement. The applicants, Namvar and Pales, sought to enforce certain terms of this agreement against the respondent.

The central legal issue before the Court was whether the settlement agreement, which had been entered into to resolve prior litigation, contained an implied term that the respondent would not pursue or continue certain legal proceedings against the applicants. The applicants contended that such an implied term was necessary to give business efficacy to the settlement agreement.

Harper J considered the principles governing the implication of terms into contracts, particularly the test of business efficacy and the requirement that the term must be so obvious that it "goes without saying". His Honour analysed the surrounding circumstances and the express terms of the settlement agreement, concluding that the parties had not intended to create an express or implied prohibition on the respondent continuing the specific proceedings in question. The Court found that the agreement, as written, did not preclude the respondent from taking the steps they had.

Consequently, Harper J dismissed the applicants' application for an injunction to restrain the respondent from continuing those proceedings.