Phontos v Tresedar Pty Limited and Ors

Phontos sued Tresedar Pty Limited and others in the Supreme Court of Victoria, disputing the validity of a deed of settlement that released Tresedar from liability but not the other parties. The plaintiff, a director of Tresedar, sought to continue the litigation against the other defendants despite the settlement. Central to the case was whether the continuation of the lawsuit against the other defendants constituted disparagement of Tresedar, in breach of the non-disparagement clause in the deed.

The court was tasked with interpreting the non-disparagement clause and determining whether the plaintiff's continuation of the action against the other defendants constituted disparagement of Tresedar. The central issue was whether the clause applied to the plaintiff’s capacity as a director of Tresedar or if it was limited to the corporation itself. Another consideration was whether the continuation of the lawsuit against the other defendants could be seen as disparaging Tresedar, given that Tresedar was already released from liability.

The court found that the non-disparagement clause was intended to prevent actions that could harm the reputation of Tresedar. Since Tresedar was released from liability, the clause did not apply to the plaintiff in his capacity as a director. The court held that the continuation of the lawsuit against the other defendants did not constitute disparagement of Tresedar, as it did not affect Tresedar’s released status. Consequently, the court ruled in favour of the defendants, finding that the plaintiff’s continuation of the lawsuit did not breach the terms of the deed of settlement.

The final orders of the court dismissed the plaintiff's claim against Tresedar Pty Limited and confirmed the validity of the deed of settlement. The court held that the non-disparagement clause did not extend to the plaintiff as an individual, and his continuation of the action against the other defendants did not amount to disparagement of Tresedar.