L E STEWART INVESTMENTS PTY LTD v MERCEDES-BENZ (NSW) PTY LTD [1992] NSWCA 127

L E STEWART INVESTMENTS PTY LTD v MERCEDES-BENZ (NSW) PTY LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MAHONEY, CLARKE and SHELLER JJA

18 December 1991, 14 February 1992

[1992] NSWCA 127

CONTRACT — CONSTRUCTION — CERTAINTY SATISFACTION

Mahoney JA In this proceeding the plaintiff claims damages from the defendant for, as it alleges, a breach by the defendant of CL1.4 of the agreement made between them on | January 1987. The dealership agreement provided, by that clause, for the acceptance by, as I shall describe them, the Mercedes Benz interests of a dealer in place of the plaintiff.

The plaintiff proposed for this purpose a Mr Politis or one of the companies controlled by Mr Politis. The Mercedes Benz interests decided not to accept Mr Politis or his company. It is upon that that the plaintiff bases its claim.

The facts are detailed in the judgment of Clarke JA. I agree with his Honour's judgment.

Two main issues were argued by Mr Jacobs QC for the plaintiff and by Mr Ellicott QC for the Mercedes Benz interests, namely: (1) whether CL1.4 imposes contractual obligations upon the Mercedes Benz interests; and (2) (if it does) whether those obligations were broken by them. On these matters I shall add some observations of my own.

(1) The binding force of CL1.4:

Mr Ellicott QC submitted that the terms of CL1.4 were so general in nature that no legally binding obligations were imposed by them. Reference was made to Thorby v Goldberg (1964) 112 CLR 597, Placer Development Limited v Commonwealth (1969) 121 CLR 353 and to Godecke v Kirwan (1973) 129 CLR 629, and to the considerations there discussed.

Parties may, of course, stipulate in terms that the obligations undertaken by them are not to be legally binding obligations but are to bind, eg, in honour or otherwise. The parties in the present case have not specified in terms what their intention was and it is therefore necessary to infer from the terms of the agreement and the relevant surrounding circumstances what their intention in this regard was.