Reported Decision : [2001] NSWSC 1009 [2001] ACL Rep 110 NSW 66 New South Wales Supreme Court CITATION : Aberdeen Asset Management Ltd (formerly Equitilink Australia Ltd) v Challenger Wealthlink Management Ltd & Ors [2001] NSWSC 1009 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 50132/99 HEARING DATE(S) : 08/05/01-18/05/01, 6/09/01, 10/09/01-13/09/01 JUDGMENT DATE : 14 November 2001 PARTIES : Aberdeen Asset Management Ltd (formerly Equitilink Australia Ltd) v Challenger Wealthlink Management Ltd & Ors JUDGMENT OF : Foster AJ at 1 COUNSEL : Mr D. Hammerschlag SC/Mr T.D. Castle - Plaintiff Mr B . Walker SC / Mr I.M. Jackman - Defendants SOLICITORS : Atanaskovic Hartnell - Plaintiff Mallesons Stephen Jaques - Defendants CATCHWORDS : Consultancy Agreement drawn up between plaintiff and defendants -construction of the provision of a particular clause in Agreement - entitlements in accordance with that clause. CASES CITED : Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352-353 DECISION : 1. The plaintiff's action against each defendant is dismissed; 2. The plaintiff is to pay the costs of each defendant. IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL DIVISION CORAM: FOSTER AJ WEDNESDAY, 14 NOVEMBER, 2001 No. 50132/99 - ABERDEEN ASSET MANAGEMENT LIMITED (formerly called EQUITILINK AUSTRALIA LIMITED - v - CHALLENGER WEALTHLINK MANAGEMENT LIMITED & ORS JUDGMENT 1 HIS HONOUR: The plaintiff in these proceedings, Aberdeen Asset Management Limited (formerly called Equitilink Australia Limited) is and was during the period with which this litigation is concerned, the operating company of a group of companies referred to as the EquityLink Group, which undertook funds management operations. As such, it managed funds referred to as retail funds, in which the investors were members of the public. It also operated funds referred to as wholesale funds which were funds comprising monies invested by institutions. For convenience, I shall refer to the plaintiff as EAL. 2 Laurence Stephen Freedman ("Mr Freedman") and Brian Michael Sherman ("Mr Sherman") were, at all relevant times, directors of EAL and joint managing directors of the Equitilink Group. Barry Sechos ("Mr Sechos") was a director of EAL and General Counsel for the Group. Ouria Sananikone ("Ms Sananikone") was a director of EAL and chief executive officer of the Group. 3 The third defendant, Challenger International Limited ("CIL") is a publicly listed company and the holding company for companies referred to as the Challenger Group. The first and second defendants are wholly owned subsidiaries of CIL. The first defendant was previously called Challenger Asset Management Limited. It was and is also involved in the business of funds management. The second defendant was and is a life insurance company. 4 William Edward Baker Ireland ("Mr Ireland") was and is the managing director of CIL and a director of the first and second defendants. 5 On 28 May 1998, the plaintiff and the first defendant entered into an agreement entitled "the Consultancy Agreement" ("The agreement"). The second defendant was involved in the agreement as guarantor of the obligations of the first defendant. CIL was not a party to the agreement. However, part of the consideration for the agreement was the issue to EAL by CIL of 1.25 million shares in that company. 6 The agreement is a lengthy one but only one clause is the subject of dispute in these proceedings. The agreement, in effect, provided for the purchase from EAL by the first defendant of the right to manage certain retail funds. EAL would retire as the manager of those funds and appointed the first defendant as manager in its place. The first defendant would then have full responsibility for the management of the funds, including their general administration and marketing. However, the agreement provided that EAL would be employed to carry out certain of the management functions, namely investment management. 7 The entry into the agreement was preceded by a period of negotiation. This involved the production of draft forms of agreement. At relevant times there were announcements to the Australian Stock Exchange and press releases. The clause of the agreement referred to above was numbered 6.8. During the course of negotiations, it went through earlier modifications to which it is now convenient to make reference. 8 On 6 April 1998, Mr Sechos, who was closely involved in the negotiations on behalf of EAL, forwarded to CIL for the attention of, inter alios, Mr Ireland, a draft document referred to as "Terms of Agreement". Clause 3(e) thereof contained the following proposed term: "In addition, any issue of shares by Challenger International Limited by way of private placement to any third party for the purposes of raising additional capital will first be offered to EquitiLink on the same terms and conditions as offered to that third party." It is clear that, by this draft clause, EAL was seeking to obtain a right of first refusal in respect of the contemplated share issues by CIL. 9 On 7 April 1998, in a letter on CIL letterhead forwarded by Mr Ireland to Mr Sechos, which contained a consideration of a large number of clauses of the draft Terms of Agreement, the proposed term was rejected by the following paragraph: "3(e)(b) No, Challenger is a independent public company and will make placements as appropriate. The board is always keen to keep the support of its current shareholders." 10 Negotiations continued and, on 14 April 1998, a revised Terms of Agreement was forwarded by Mr Sechos to Mr Ireland. It contained another version of the proposed clause, which adopted the procedure of striking out and underlining in order to indicate significant changes. In this form, the clause appeared as follows: " Placement of Shares Challenger will advise EquitiLink of any proposed issue of shares by Challenger International Limited by way of private placement to any third party for the purposes of raising additional capital and EquitiLink will be provided with an opportunity to participate in such placement on the same terms and conditions as offered to any third party." 11 By 20 April 1998 the final form of the Terms of Agreement had been accepted by the parties. The agreement was between EAL and the first defendant, then called Challenger Asset Management Limited, and referred to in the agreement as "Challenger". The final version of the clause, appearing in this document, was as follows: " Placement of Shares Challenger will advise EquitiLink of any proposed issue of shares by Challenger International Limited by way of private placement to any third party for the purposes of raising additional capital and EquitiLink will be provided with an opportunity to participate in such placement on the same terms and conditions as offered to any third party." 12 When the agreement was finally executed on 28 May 1998 it contained this clause, as clause 6.8. The proper construction of the words of this provision is a major issue in this case. It is contended by EAL that a number of share placements made by CIL after the date of the agreement have been made in breach of this clause, in that obligations said to be imposed upon the first defendant and guaranteed by the second defendant, in favour of EAL, have not been complied with. The specific share placements complained of will be referred to later in these reasons. 13 EAL alleges that the first defendant's failure to advise it of the intended share placements and consequent failure to provide it with the opportunity to acquire shares in CIL in accordance with the clause has resulted in it suffering considerable financial loss. It accordingly seeks damages and/or equitable compensation but only as an alternative to its main claim in these proceedings that it should obtain an order for specific performance against the first defendant of its obligations under clause 6.8. 14 As against the second defendant it seeks a declaration that it has "unconditionally and irrevocably guaranteed to the plaintiff the due and punctual performance by the first defendant of all its obligations" under the agreement. It also seeks an indemnity for loss occasioned by the first defendant's breach. 15 As against the third defendant it seeks an order that it "do all such things as may be necessary on its part to effect any placement…of which the plaintiff avails itself." The case against CIL is put in a number of ways but ultimately depends upon the prior establishment of the plaintiff's case against the first defendant. 16 The evidence clearly indicates that, at least from late 1997, Mr Ireland and others responsible for the fortunes of the Challenger Group were desirous of increasing its capital base and of expanding its businesses. From that time onward, over the period with which this litigation is concerned, a program of expansion was actively pursued, of which the acquisition of the management rights from EAL under the agreement formed only a part. CIL sought to raise capital by share placements and capital thus raised was utilised in the acquisition of established businesses which then became part of the overall Challenger enterprises. Acquisitions were achieved by cash payment and also by the issue of shares in CIL. Share placements made in 1998, 1999 and 2000, in the course of this expansion are now the subject of claims by EAL in these proceedings, to the effect that the first defendant, in breach of clause 6.8, relevantly failed to provide an opportunity to EAL to participate in them. 17 During the same period CIL, from time to time, issued shares to certain executive employees pursuant to the exercise by those executives of share options which had been entered into as part of their remuneration packages. A similar claim is made by EAL in respect of those issues. 18 The various share issues, the subject of this dispute, have been dealt with at length in the affidavit and oral evidence, and the documentation in relation to them has been tendered in various exhibits. The share issues fall into discrete groups, which have been the subject of separate evidence and submission by the parties. It is convenient, in this judgment, to adopt the same approach. Although, ultimately, the disposition of these proceedings depends upon the view I form on the difficult question of the proper construction of the totality of clause 6.8, it is convenient to consider, first, certain of the disputed placements, which can more readily be dealt with by a consideration of only certain aspects of the clause. 19 As part of its program, CIL determined upon a capital raising in early 1998 by the issuing of 8,500,000 shares. This raising required approval by an extraordinary general meeting of CIL, which was held on 30 March 1998. The approval sought from the shareholders was granted. As a result, a large number of share placements were made, the details of which are set out in the plaintiff's amended summons in these proceedings. A parcel of 1,000,000 of these shares was provided to EAL as a result of an offer made by Mr Ireland to Mr Freedman, prior to the Extraordinary General Meeting. It appears that 7,800,000 shares were issued pursuant to the resolution of 30 March 1998. These consisted of, 575,000 at $2.00 on 2 June 1998, 6,355,000 shares at $2.00 on 2 July 1998 and 295,000 at $2.00 on 18 August 1998. There is no dispute that these shares were issued for the purpose of raising capital and that they were disposed of by private placements to third parties within the meaning of clause 6.8. Nor is there any dispute that, apart from the parcel of 1,000,000 referred to, EAL did not participate in these placements. 20 However, the defendants contend that clause 6.8 cannot apply to these placements as all relevant opportunities to participate had occurred before 28 May 1998, the commencement date of the agreement, notwithstanding that the actual registration of shares in the CIL register in some cases occurred thereafter. Moreover, the opportunity to participate had in fact been offered to Mr Freedman and had resulted in the successful application by EAL for 1,000,000 shares. Indeed Mr Freedman, in his evidence, accepted that these placements could not form part of EAL's claim in this litigation. 21 The documentation relevant to these placements is to be found in exhibit 7. I am satisfied that it sufficiently indicates that applications for the issue of these shares were made prior to the commencing date of the agreement and that the opportunity to participate in the placement was accorded to the relevant investors before that date. As will appear later in these reasons, I am satisfied that clause 6.8 does not require that participation opportunities be considered as at the date of registration of relevant share placements. The proposed issue of shares by way of private placement to third parties was, I am satisfied, well known to EAL as a result of the conversation between Messrs Ireland and Freedman. Moreover, Mr Sechos applied for the 1,000,000 shares sought by EAL on a form provided by Challenger which clearly indicated that a placement of 8.5 million shares was being made. Mr Sechos' evidence to the effect that, at all relevant times, he was not aware that the 1,000,000 shares applied for was part of an overall placement of 8.5 million, did not impress me. It was given in the context of his assertion that clause 6.8 provided EAL with a far more extensive entitlement, up to the amount of the whole placement. I am unable to accept that he was unaware that the shares applied for were part only of a proposed issue of 8.5 million. 22 I am satisfied that EAL, being fully aware of the size of the placement on offer and of the opportunity to apply for more, was satisfied to obtain the placement that it did. In any event, in view of what I consider to be the proper construction of clause 6.8, to be dealt with later in these reasons, EAL could have no rights to further participation in these placements. Accordingly, I dismiss this aspect of the plaintiff's claim. 23 It is convenient to consider, next, the claim by EAL that it should have been provided with opportunities to participate in proposed issues of shares to various executives of CIL. It is undisputed that these shares were issued to the relevant executive employees pursuant to the exercise by those employees of options to take up shares at a fixed price, the options being part of their overall remuneration packages. The various documents relating to these executive share options are collected in exhibit 7. The object of the provision of the options, and the subsequent issue of shares pursuant to them, was stated in the Explanatory Notes to the relevant resolution for the adoption of "the Challenger International Limited Employee Incentive Share Scheme" considered and passed at the annual general meeting of CIL on 26 November 1996. The object was stated as follows: "The aim of issuing the options is to act as an incentive for employees and is not for the purpose of raising capital. The Board of Directors will allocate and issue the options to executives as a reward for meeting pre-determined performance objectives." 24 Quite clearly, in my view, it was relevantly a term and condition of the provision of the subject shares to the placees that they should be employed by CIL and have met relevant performance standards. EAL could not, of course, comply with these conditions. Accordingly clause 6.8 could not, in my view, operate to provide it with any opportunity to participate in the placements. This aspect of the plaintiff's claim must also fail. 25 Next, it is convenient to consider, as a group, placements in respect of which the plaintiff claims, which involve the issuing of shares by CIL as consideration, or part consideration, for the acquisition of business assets. 26 The first such transaction was referred to, in evidence, as "the Saltbush transaction". It took place on 22 June 1998 when 835,000 shares at $1.90 each in CIL were issued to Saltbush Nominees Pty Limited. The issue was made pursuant to an agreement called the PAML Share Sale Agreement between Hartley Poynton Limited, Challenger Life Limited, and CIL. Clause 5.1 of the agreement required that CIL issue these shares to Saltbush Nominees Pty Limited on completion of the agreement and as consideration for it. Under the agreement Challenger Life acquired from Hartley Poynton Limited all the issued ordinary fully-paid shares in the capital of Poynton Asset Management Limited. It is clear that, broadly stated, the shares were issued to enable the acquisition of the Hartley Poynton business to be operated in conjunction with the business of Challenger Life. It was argued on behalf of the plaintiff that the issue of these shares fell within the wording of clause 6.8 as they amounted to a private placement for the purpose of raising additional capital. It was submitted that the acquisition of the shares in Poynton Asset Management Limited was relevantly a raising of additional capital, in so far as the shares and the business assets controlled by them should properly be regarded as "additional capital" of CIL or the Challenger Group. I agree with the submission of the defendants that clause 6.8 should not be so construed. In my view, the words "raising additional capital" should reasonably be taken as relating only to the obtaining of capital in the form of money paid as consideration for the sale of shares. I consider this to be the ordinary meaning of the phrase and that the clause does not require any different construction. Moreover, the placement in question was made on condition that the Poynton Asset Management Limited shares should be transferred to Challenger Life. EAL was not, of course, the owner of these shares and could never have complied with this condition. This part of the plaintiff's claim must fail. 27 On 8 November 1999 CIL issued 5,195,243 shares at $4.10 per share in a transaction referred to by the parties as "the Garrison transaction". On 12 November 1999, it issued 1.6 million shares at $3.75 each in a transaction referred to as "the Norwich Union transaction". On 20 December 1999 it issued 535,052 shares at $4.05 each a transaction referred to as "the Beston Pacific Group transaction". On 23 December 1999 it issued 462,950 shares at $4.05 each in a transaction referred to as "the Integrated Equity transaction". There is no dispute that in each case the relevant share placement was made in consideration of the acquisition of business assets or of shares providing control of them. The parties did not seek to deal, in their submissions, with these transactions on an individual basis. The same submissions were made in respect of each. I shall deal with them in the same way. I accept the defendant's submissions that the shares were not issued for the purpose of "raising additional capital" and that it was not possible for EAL to participate in the placements "on the same terms and conditions," it not being the owner of the relevant business assets or of the shares which provided control of them. Accordingly, the plaintiff's claim in respect of these placements must also fail. 28 There remain for consideration the following transactions which I shall refer to by the names adopted by the parties. They are (1) the CPH transaction of 21 December 1998, (2) the Cavalane transaction of 15 March 1999, (3) the share issues of September 1999 and (4) the Deutsche Life transaction of February/March 2000. It will be necessary to discuss these transactions separately. However, the decision in respect of each will depend upon what I consider to be the correct construction of clause 6.8. 29 I have already indicated, in relation to the construction of clause 6.8 that, in my opinion, the phrase "raising additional capital" can refer only to the raising of sums of money by the making of relevant share placements. There is no dispute between the parties in respect of these transactions that each was, so far as the issue of shares is concerned, a private placement for the purpose of raising additional capital within the meaning of the clause. 30 Before I turn to a consideration of the remaining aspects of the construction of clause 6.8, it is convenient to set out the relevant facts relating to the CPH and Cavalane transactions, together with findings of fact where dispute exists. 31 On 21 December 1998 CIL made a placement of 5,000,000 shares at $2.50 each to CPH. On 15 March 1999 it issued 3,000,000 to Cavalane at $2.50 each and 6,000,000 Year 2003, convertible notes to Cavalane at $3.50 each. All these issues are the subject of claims by the plaintiff under clause 6.8. I am satisfied, however, that the claim in respect of the issue of convertible notes must necessarily fail. Although the convertible notes were subsequently converted into shares, no additional capital was raised by that event. The capital was raised by the issue of the convertible notes which, of their very nature, are not shares. Clause 6.8 is in the form drafted by Mr Sechos on behalf EAL and should be construed contra proferentem. With or without the assistance of this canon of construction, I am persuaded that the convertible note issue cannot reasonably fall within the terms of the clause. However, the share issues to CPH and Cavalane do fall within the clause. 32 The evidence establishes that during 1998, as part of Mr Ireland's plan for the expansion of the businesses of the Challenger Group, he was seeking to strengthen the position of Challenger Life Limited, which had been operating in the Group only since late 1997. He considered that its profile in the life insurance industry would be improved "if a shareholder was introduced onto its register with an established reputation in the insurance or finance industry." To this end he commenced negotiations with the St. George Bank and the ANZ Bank in relation to one or the other acquiring a substantial shareholding in Challenger Life. I am satisfied that he advised both Mr Freedman and also Mr Sherman, of his endeavours in this regard. This information did not evoke any suggestion from them that EAL might seek to invest in Challenger Life. However, no concluded agreement was reached with either of the banks. 33 In late 1998 Mr Ireland initiated discussions with Mr Jacob, a director of CPH. He offered CPH the opportunity to purchase half of the share capital of Challenger Life. This offer was not accepted but Mr Jacob gave Mr Ireland to understand that CPH would be interested in investing in CIL. Mr Ireland considered that if CPH became a substantial shareholder in CIL then the funds so obtained could be provided to Challenger Life and that "this would be another way of strengthening its credibility in the market." Additionally, it is clear that Mr Ireland and the other directors of CIL could foresee great benefit to the group should "the Packer interests" acquire a "cornerstone" interest in CIL. This would have a beneficial effect upon the standing of CIL and its subsidiaries in the market place. This proved to be correct, in so far as, when the market was made aware of the CPH share placement, the price of CIL shares rose considerably. 34 Negotiations were successful and resulted in the above referred to placements. An announcement was made by a letter from CIL to the Australian Stock Exchange on 21 December 1998, in which it was indicated that the securities to be issued to Cavalane were subject to approval at an Extraordinary General Meeting of CIL shareholders to take place early in February 1999. It was further indicated that the monies raised "totalling in excess of $40,000,000" would be "deployed as new capital in the wholly owned subsidiary, Challenger Life Limited" and that "this capital injection and the participation of a powerful shareholder"CPHG" greatly strengthens the competitive position of Challenger Life". Mr Ireland sent a copy of this letter, on the same day, to Messrs Freedman and Sherman. Both of them were overseas at the time but Mr Sechos received the communication and passed the information on to them. He also spoke to Ms Sananikone, then holidaying at Aspen in the USA. The evidence as to the contents of this conversation is somewhat confused. However, I am satisfied that there was reference to the increase in the value of EAL's then shareholding in CIL, as a result of the announcement and some reference to the desirability of obtaining more CIL shares if possible. It is clear that there was no reference to any suggested entitlement under clause 6.8 of the agreement, notwithstanding that Mr Sechos had drafted the clause in the form which had been ultimately accepted. 35 I am also satisfied that, sometime in January, Mr Sechos was directed on behalf of EAL to enquire whether it could take up any of the shares in the December issue. The enquiry was made but elicited the response that there were no shares available. Again, there was no claim made of any entitlement to further shares based upon clause 6.8. 36 The Extraordinary General Meeting referred to in the announcement was in fact held on 11 February 1999. EAL had been given notice of the meeting, which indicated that resolutions would be sought approving the issue to CPH or its nominee of up to a maximum of 3,000,000 ordinary shares in the capital of the company at $2.50 per share and also to ratify the previous issue of 5,000,000 shares to CPH on 21 December 1998 at $2.50 per share. Approval was also to be sought for the issue to CPH of the convertible notes. Additionally ratification was sought of the issue on 3 August 1998 of 1,250,000 ordinary shares to EAL at $2.30 per share, which issue had been made pursuant to the agreement of 28 May 1998. I am satisfied that EAL voted in favour of these resolutions. 37 It is the claim of Messrs Sechos, Freedman and Sherman that they did not claim any entitlement on behalf of EAL in respect of these share issues to CPH and Cavalane because they had simply forgotten the existence of clause 6.8. They asserted that this absence of recollection persisted until about mid August 1999 when Mr Sechos, having consulted the agreement for the purpose of dealing with a dispute with Challenger, as to its level of performance under the agreement, came upon clause 6.8 and realised its potential for the making of claims in respect of share placements which had been made by CIL and in respect of which no opportunity to participate had been accorded to EAL. 38 This discovery led to either Mr Sechos or Mr Freedman, shortly thereafter, raising the matter towards the end of a meeting with Mr Ireland, the purpose of which had been to discuss problems that had arisen in the implementation of the agreement. The claim was made that EAL was entitled to the Consolidated Press issue and should have been given an opportunity to participate in the "Consolidated Press and Cavalane placements." I am satisfied that Mr Ireland was taken aback by this assertion and that he responded to the effect that the deal had involved not only a share placement but also the issuing of convertible notes as debt financing, that EAL's shares in Challenger had been acquired at a low price, that a profit in the order of $60,000,000 had been made in respect of those shares as a result of the addition of CPH to the Challenger register. He also said that the previous placement to EAL had resulted in a fall in the price of CIL shares. 39 There is dispute as to the contents of this conversation. I prefer the evidence of Mr Ireland to that of Messrs Sechos, Freedman and Sherman. Although Mr Ireland was cross-examined vigorously on this and other matters and submissions made as to his lack of credibility, I formed the view that he was basically a reliable witness who, at times, was confused but who was endeavouring to give truthful evidence. 40 The claim made at the August meeting was followed up in a letter from Mr Sechos, on behalf of EAL, to Mr Ireland dated 20 August 1999, which dealt with a number of matters in dispute between the companies and which, under the heading "Further Private Placements", made reference to clause 6.8 and noted that EAL had never been advised of any private placements in CIL since 28 May 1998. Nor had opportunity been provided to participate in such placements. The letter concluded by stating that EAL had been made aware "through ASX announcements and press reports" that CIL had made a number of such private placements. It alleged a continuing breach of the clause which it described as "fundamental". It sought that EAL provide offers to subscribe "for shares on the same terms and conditions as each private placement" claiming that "the longer such offers remain outstanding, the larger our potential losses." A letter in similar terms was forwarded on 31 August 1999. There was no reply to these letters, although the last letter threatened proceedings for breach of contract. 41 It is difficult to determine what significance should be attributed to Mr Ireland's failure to reply to these letters. I am satisfied that he held the view that clause 6.8 had only a limited operation, applying only in respect of what he loosely described as "broad based placements." He was, at the time these letters were written, involved in the making of a placement of shares which could be so described. He in fact made an offer of participation in the share issue to EAL which offer was refused. I shall refer to these matters later. It is also clear that he was disenchanted with EAL and its proprietors and was, as he freely conceded in his evidence, resentful towards them. It is understandable that he may not have wanted to enter into an unpleasant debate with Mr Sechos at that point of time. I am not prepared to attribute much significance to his failure to answer these letters at the time they were received. He was also vigorously cross-examined as to his failure to disclose to the board of CIL which by then included CPH representatives, the threatened action by EAL, it being suggested that he knew he had made a great mistake in respect of clause 6.8. He denied this suggestion. I accept this denial. 42 It is clear that, after rejecting, in the letter of 7 April 1998, the plaintiff's sought-for right of first refusal, Mr Ireland had not played any active role in the drafting of clause 6.8. I am satisfied that, at the time of the CPH and Cavalane placements he retained in his mind no more than a broad impression of its terms. Although his view that it applied only to "broad placed placements" was suggested, in cross-examination, to be no more than an after-thought, virtually arrived at in the witness box, I am satisfied that I should accept his evidence that, at the time of those placements, he had, in the back of his mind, a hazy concept of the agreement as providing some potential entitlement to EAL. However, he did not think it had any application to those placements. He would have been fortified in this view by the absence of any claim made at that time by EAL, especially in circumstances where it had been made aware of the proposed placements. Moreover, it had in fact voted in favour of them at the March extraordinary general meeting. 43 Whilst I can understand Mr Ireland's state of mind in 1999 in relation to the clause, I do not have a similar understanding in relation to Messrs Sechos, Freedman and Sherman. Despite the fact that the clause was referred to as "fundamental" in the letter of 20 August 1999, it was, so it is claimed, entirely forgotten by all concerned in EAL from the time of entering into the agreement on 30 May 1998 until its fortuitous rediscovery by Mr Sechos in August 1999. Until that time it had, so it was asserted, vanished from their minds, to the point that not even a glimmer of recollection remained. 44 I simply cannot accept the assertion that clause 6.8 thus disappeared into oblivion. Mr Sechos was, in fact, the drafter of this clause. At the time when he produced the draft, and thereafter, he was dealing with Mr Bacon, a director of CIL and of Challenger WealthLink, in relation to the settling of the agreement. Mr Bacon remembered the clause. He was in a far better position to do so than Mr Ireland who had left the questions of detail to others. Mr Bacon was of the view that the 1,000,000 shares provided to EAL at Mr Freedman's request from the share issue approved in March 1998 had been provided pursuant to clause 6.8. He was also of the view that the clause could have no application to the placements for CPH and Cavalane negotiated at the end of the year. Yet, Mr Sechos asserts that he had no recollection of the clause at all. I have already referred to the fact that Mr Sechos signed the application form for the issue of the 1,000,000 shares from the 8,500,000 issue, shortly after the execution of the agreement without, so it is said, it even crossing his mind that clause 6.8 might have some application. 45 Moreover, clause 6.8 was included in the agreement because, according to Mr Sherman and Mr Sechos, it was a vehicle by which EAL could increase its equity in CIL, in pursuit of its then desire that there be a long term relationship between the companies. In these circumstances, I find it impossible to accept that, when it became known to Mr Sechos and Messrs Freedman and Sherman that a very large private placement of shares had been made to CPH on 21 December 1998 and that a similarly large placement was to be made to Cavalane, after approval was given at an extraordinary general meeting of CIL, on 11 February 1999, none of them had even a faint recollection that a clause in the agreement might provide an opportunity to take up a large quantity of shares. Indeed EAL voted in favour of the Cavalane resolution at the Extraordinary General Meeting in the knowledge that there had been a significant increase in the value of CIL shares after the announcement of the CPH placement. Mr Sherman advanced the view that he had forgotten about the clause because it imposed no obligations upon EAL, the inference being that, had it done so, he would have remembered it. The impression I gained during the case was rather to the contrary effect; that he and others in EAL would have been more likely to have remembered it, had they truly regarded it as providing them with some significant financial entitlement. 46 I have come to the conclusion that, at the very least, Mr Sechos, Mr Freedman and perhaps Mr Sherman had, at all relevant times, a recollection of clause 6.8 which was equivalent at least to Mr Ireland's recollection, namely that it provided an opportunity to EAL to participate in some circumstances in private placements of shares by CIL. I am satisfied that, whilst having a recollection of this sort, they were not at the time sufficiently interested in the acquisition of further shares in CIL to apply their minds to any rights they might have under the clause. They had a significant shareholding in CIL. They did not seek to add to it. In fact during 1999 they sold it down significantly in order, as I find, to obtain funds to deal with problems which had arisen in relation to a company they were operating in the United States. Although it was asserted that, as investment managers, they regularly sold shares at a profit and bought back into them when the market was favourable, they did not in fact buy back into CIL shares after they sold their holding down. 47 I am also satisfied that when Mr Sechos focused his attention on the wording of clause 6.8 in August 1999, it was perceived that it might provide a source of fruitful litigation, to be prosecuted on the basis that EAL had not been provided with an opportunity to participate in the earlier placements on the same or equivalent terms and conditions as offered to CPH, Cavalane and any other recipients of private placements of shares, the value of the shares having risen significantly in the interim. 48 Additionally, there is clear evidence, which I accept, that, had EAL successfully demanded participation in the CPH and Cavalane placements, to the extent of receiving a placement of similar amount, or (on another construction of the clause), half of those placements, the placements would not have gone ahead at all, or not in that form. It is probable that "the Packer interests" would either have withdrawn or would have considered buying a half share in Challenger Life. As it was, the placements had been made, the share price had increased, and other investors had taken up shares in CIL on the expectation that those interests would retain a substantial investment in the company. Accordingly, the rights of third parties had become involved in the situation, as a result of EAL not taking timely steps to ascertain its rights, if any, and seek their implementation. 49 The above considerations lead me to the view that, even if the plaintiff's case were to succeed, it would not be appropriate to grant it the remedy of specific performance against the first defendant. Laches and delay would be a discretionary bar. 50 What, however, were EAL's rights under clause 6.8? This brings me to a consideration of the proper construction of the clause. The submission is made on behalf of the plaintiff that the clause is "clear and unambiguous". I do not find it to be so. Nor did Messrs Sechos, Freedman and Sherman, when giving their understanding of its operation in their evidence. Mr Freedman (at T176-179) was questioned in cross-examination as to the perceived entitlement of EAL under the clause in respect of an issue of 7,000,000 shares in September 1999, to which more detailed reference will be made later. As will be seen, Mr Ireland offered EAL, pursuant to the clause, a placement of 100,000 shares. This offer was rejected on the basis that it did not conform with clause 6.8. Mr Freedman expressed the view that the fact that the amount offered was larger than offered to any other party was irrelevant and that, under the clause, EAL should have been offered the entire placement of 7,000,000. The following passage occurs in his cross-examination (T178): "Q. That means that so far as your reasoning you are now supposedly remembering was concerned, EquitiLink was to be given, before anybody else, an opportunity to take all of the shares on offer, is that right? A. Yes. Q. There is no difference you can now describe to his Honour between such an understanding of the deal and a right of first refusal, is there? A. No. Q. Yet, you knew beyond any possibility of doubt, that a right of first refusal had been rejected during the negotiations in which you were involved, didn't you? A. Yes. Q. It follows then that you could not have on 3 September 1999 believed that you had the right of first refusal which had been rejected, isn't that correct? A. Possibly, yes. Q. From which it also follows that a view you took that the offer was invalid unless it gave you the opportunity before anybody else to take all 7 million, could not possibly have been a proper ground for insisting upon further compliance with 6.8, do you agree? A. Well, if they had offered us 3 and a half million and someone else 3 and a half million, then we would have been, I believe, okay on clause 6.8. Q. To make it quite clear, what was in your mind the day you refused was that you had been offered something better than any other third party had been offered, and you rejected it because you hadn't been offered the whole lot? A. Yes. Q. Isn't that right? A. Yes. Q. You took the risk that your view or understanding of clause 6.8's meaning and operation justified that stance, isn't that right? A. Yes." 51 Mr Sherman was questioned about the same subject. I find his evidence (at T350-354) confusing but it would appear that, in his view, the clause provided EAL with virtually a right of first refusal in respect of any proposed private share placement by CIL. 52 Mr Sechos, when asked concerning his view of EAL's entitlement, under clause 6.8, in respect of the "proposed allotments to Mr Packer's companies", stated that: "We should be offered the same amount". 53 More specifically, when his attention was directed to the time of "Mr Packer's issues" he was asked the following questions and gave the following answers (T272): "Q. At that time, if you had clause 6.8 consciously to the forefront of your mind, would you have taken the position on the executive committee that this was an event that entitled EquitiLink to half the amount being issued or to the same amount as was being issued to Mr Packer? A. If at that time Challenger had offered an amount to CPH which they had accepted, then I would – I would think or my belief is that we were entitled to the same amount so if it was eight million shares they agreed to take at that point, then they would need to come to us and offer us eight million shares. That is my view of 6.8." 54 In later evidence Mr Sechos appeared to espouse the view that clause 6.8 conferred on EAL an entitlement to an amount of shares at least equal to the amount being offered to any third party. As the letter of offer from Mr Ireland in respect of the September 1999 placement, to which reference will be made later, contained an indication that the 100,000 shares being offered to EAL was in fact more than was being offered to others, he was questioned as to why the offer had been rejected. He gave the following evidence (T295): "Q. If you are getting more than the others, that is all you can ever hope for under clause 6.8, isn't it? A. All we can hope for under clause 6.8-- Q. Is at least as much? A. Same terms and conditions. Q. And on your interpretation which involves quantum, at least as much as any other third party, isn't that right? A. Correct, yes." 55 After some further cross-examination relating to the terms and conditions of the offer, Mr Sechos was asked the following questions and gave the following answers: "Q. And I suggest to you that that meant that so far as compliance with clause 6.8 was concerned, on 3 September, so far as you understood it, you were being offered more shares than anyone else, on the same terms and conditions as applied generally, correct? A. Yes. Q. What more did you want, under 6.8? What more did you want, as a director and lawyer? A. I would have gone back for more details. Q. What details did you need apart from price, parcel, time of payment? A. Who was placing the shares, how it was being placed. Q. I am sorry? A. Who was placing shares, how it was being placed, to whom the offers were being made. Q. Why were you entitled under clause 6.8 to know the identity of any other allottee potential or actual? A. That's my view of the words "on the same terms and conditions". Q. So "on the same terms and conditions", it was interpreted by you back on 3 September to mean that there was a right to require prior disclosure of the other people that Challenger was treating with, is that what you mean? A. Yes. Q. You don't truly hold that view, do you? A. In relation to my letter of 3 September, I think more-- Q. You had better just answer my question. You don't truly hold that view, do you? A. I do hold that view. Q. What is it about those words "on the same terms and conditions" out of which you extract a right in Equitilink, presumably not possessed by anybody else, to know the details of other people with whom Challenger was treating? A. To have the full information in relation to the offers being made at the time and placements being made at the time." 56 Mr Sechos also stated that, in his view, under clause 6.8, EAL would have been entitled to be provided with information as to the identity of a broker dealing with the share placements and also the identity of the people "that a broker rings up". He said that these were matters he had in mind when he "wrote the clause." 57 The evidence cited above was given by Mr Sechos in the course of a lengthy passage of cross-examination relating to his refusal of the CIL offer of 3 September 1999. I was not impressed with the evidence he gave, nor the manner of its giving. It had the appearance of being manufactured on the run in order to defend a position which was becoming increasingly untenable. 58 In counsels' final written submissions, it was claimed on behalf of the plaintiff that, as a matter of construction, it had an entitlement under the clause, as expressed in the following paragraphs: "What the provision simply requires is that if an opportunity is offered to another party Equitilink be offered an equal opportunity. What that opportunity is, is a matter only within the control of the defendants' camp. Thus, if the defendants only wish to issue 1 million shares, and comply with their obligation under clause 6.8 they must first offer the third party 500,000 and Equitilink 500,000. If, however, they go ahead and offer the third party 1 million shares, they must also offer Equitilink 1 million which will, if Equitilink avails itself of the opportunity, result in the issue of 2 million shares ……………………. Thus, one of two outcomes must follow for clause 6.8 to be satisfied: (a) Equitilink is entitled to subscribe for half of any shares proposed to be issued – this could be achieved by cutting back the amount of shares proposed to be allotted to other parties; or (b) If Challenger International proceeds to issue shares to any third party, it must offer Equitilink the opportunity to subscribe for the same number of shares as it has issued to those third parties. That is, it must double the size of the share issue to ensure that a position of equality is obtained as to number of shares in the event that Equitilink choose to accept the opportunity offered to it." 59 No other construction was suggested on behalf of the plaintiff. Accordingly, it must be accepted that, on the plaintiff's case, had it, hypothetically, been aware of the clause at the time of the proposed CPH and Cavalane issues, it would have asserted its rights in these terms, with the result that it would have either demanded one-half of the proposed placements or, alternatively, if the Packer interests were not prepared to accommodate to this situation, then, placements to it of equal size at the same share price. 60 I find myself quite unable to accept this construction of clause 6.8. Nor, am I satisfied that it was, indeed, the construction that Mr Sechos had in mind when the clause was drafted in response to Mr Ireland's clear rejection of the original clause, which had provided a right of first refusal. I am satisfied that, if Mr Sechos had truly considered that in drafting and winning acceptance by the defendants of clause 6.8, he had achieved such a significant entitlement for EAL in relation to future share placements by CIL, he could not conceivably have forgotten about the clause until he chanced to stumble upon it, in August 1999. 61 Moreover, I am satisfied that, had the proposed clause provided EAL with the suggested entitlements to participate in share issues, it would have been rejected out of hand by CIL, as being basically unworkable and not far removed in its operation from the rejected draft. 62 In my view the clause, when read in context with the previous draft clause and the wording of Mr Ireland's rejection of it, has the appearance of seeking to do no more than put into formal and more precise language, what had been expressed by Mr Ireland. It would have been perceived as providing a mechanism for giving effect to Mr Ireland's then benevolent intentions in relation to EAL as a loyal shareholder in CIL. 63 It is useful to approach the construction of the clause by considering, first, what it does not convey. In the first place, it was clearly not intended to provide for EAL's having a right of first refusal. This had been expressly rejected in negotiations and that fact is admissible as an aid to interpretation. (Codelfa Constructions Pty Limited v State Rail Authority of NSW (1982) 149 CLR 337 at 352-353). Secondly, the clause makes no reference to the number of shares in respect of which the relevant opportunity is to be provided. The words "on the same or equivalent terms and conditions as offered to that third party" contain no reference to the number of shares contained in the offer. The construction urged by the plaintiff would, in my view, require the reading into these words of words such as "and in the same number". In my opinion this would effect a radical change in the meaning and operation of the clause, in circumstances where there is no warrant for the taking of such a step. Moreover, if those words, or words to similar effect, had been included, I am quite confident that they would have been rejected on behalf of CIL. They would have had the effect of seriously limiting its control, as a public listed company, over its own share placements, particularly in relation to the making of strategic placements such as the CPH and Cavalane issues. 64 I agree with the submission on behalf of the defendants that it is proper to take into account, in the construction of the clause, as part of the matrix in which it is to operate, the usual market practice, established by the evidence, that, in respect to placements made by publicly listed companies in Australia: "(a) the timing of placements and the total number of shares placed are determined at the discretion of the issuing company; (b) all participants in each placement are normally treated equally with respect to the price of shares offered in the placement and any conditions associated with the offer; and (c) the number of shares offered to each investor in each placement can differ significantly, and is determined at the discretion of the issuer company or their stockbroker), subject to statutory requirements." 65 It is also relevant to consider that CIL was not a party to the agreement, that it was a publicly listed company subject to Stock Exchange listing rules in respect of its share issues, and that the first defendant Challenger WealthLink, the contracting party, was a wholly owned subsidiary of CIL and, consequently, was in no position to control its decisions. It could not, for instance, require that CIL permit it to provide market sensitive information in relation to any proposed placement of shares by CIL, in circumstances where it would have been improper, or even illegal, to do so. 66 I am of the view that, construing the clause as part of a commercial document, the words "proposed issue of shares…by way of private placement to any third party" should be read as conveying a composite concept and that, consistently with the definition section of the agreement, "any third party" should be read as singular or plural, depending upon the situation to which the clause, from time to time, might apply. I consider it to be quite artificial to seek to confine, as a matter of construction, the "proposed issue of shares" to the point of time when the shares were, in fact, about to be issued. In my view the words can properly be translated, by way of interpretation, as amounting to "any proposal for the issue of shares…by way of private placement to any third party or parties". 67 I have already expressed my view as to the proper construction of the words "raising additional capital", as relating only to the obtaining of money from the sale of shares. 68 The clause is, of course, divided into two parts. Under the first part the first defendant has the active obligation of advising the plaintiff of the proposed issue. Despite the wording of clause 9.3 of the agreement, I entertain some doubt whether such advice is required to be given in writing. Nothing turns on that in the present case. The second part, couched in the passive voice, requires that EAL or its nominee be "provided with an opportunity to participate in such placement." Certainly the wording is not as definite as that appearing in clause 4(a) of the agreement where the first defendant undertook "to procure the issue to EquitiLink Limited" of 1,250,000 shares in CIL. However, in my view, and despite the fact that only CIL could provide the relevant opportunity to participate, the first defendant would be in breach of an obligation imposed on it by the clause if the relevant opportunity was not provided. It is, therefore, most important to determine what the phrase "provided with an opportunity to participate in such placement" means in the context of the agreement and its surrounding circumstances. 69 I have already indicated that, in my opinion, sufficient ambiguity exists in the wording of the clause for the construer to call in aid background information. I have already set out facts relating to the practice of the finance and securities industry which can reasonably be taken into account. I should add that, even without this assistance, I am satisfied that I would come to the same view as to the meaning of these words in the context of the clause. I am satisfied that, in construing these words, regard must be had to the undoubted discretion of CIL to determine the number of shares that it will issue to any applicant and whether, indeed, it will issue any shares at all. Such discretion must be exercised in the interests of the company. Where shareholder approval is necessary, it cannot control the way in which shareholders vote. Similarly, it would be most unusual for a discretion to issue shares to be exercised in such a way as to bring the company into conflict with the listing rules of the Stock Exchange. These matters have been canvassed in the evidence and I need not refer to them further. In my view, the submission made on behalf of the defendants as to the meaning of these words is correct. Namely that "an opportunity to participate in such placement" means no more than a chance to have a favourable exercise of discretion as to the issue of shares in the proposed placement. The words carry no assurance that shares will be issued in any number, or indeed at all. 70 I should add that, in my opinion, the clause contemplates only one placement of shares whether it be to one party or spread among several. The opportunity to participate is restricted to obtaining, in the event of a favourable exercise of discretion by the issuer, a part of that particular placement. The clause does not envisage any entitlement in EAL to seek an issue of shares to it, which are not included in the number proposed to be issued in the placement. It could not, in reliance on the clause, seek an issue of shares to it, which would be additional to the total of those to be provided in the placement. 71 With this interpretation of the clause in mind I come to consider the plaintiff's claim in respect of the CPH and Cavalane share issues. The case, of course, must be approached on the basis that, hypothetically, after being advised of the proposed issues, the plaintiff had asserted an entitlement based upon its construction of the section. Accordingly it would have demanded half the issue or an additional issue of the same size. Manifestly, the claim to such a share issue in CIL would have been rejected. Having regard to the plaintiff's insistence on the correctness of its interpretation, then and now, it is reasonable to assume that, in the hypothetical situation postulated, the plaintiff would not have been satisfied with some lesser outcome and would have resorted to litigation which, consistently with the proper construction of the clause, it would have lost. Accordingly, its claim in respect of the CPH and Cavalane issues necessarily fails, in limine, because causation of damage cannot be established. 72 I should add that, if, as is not so, the plaintiff's case were put on the basis that it lost an opportunity for the issue to it of some proportion of the share placement, which might have been achieved through negotiation between itself, CIL and the Packer interests, I am satisfied that it would also fail. The evidence satisfies me that, such was the importance to the Packer interests and to CIL of the acquisition by those interests of a 20% cornerstone shareholding in CIL, an application by EAL to be included in that placement, at any amount, would have been courteously refused. This refusal would not have been a breach of clause 6.8. The relevant opportunity would have been accorded but, in the special circumstances of the placement, would have been unproductive. 73 Accordingly, the plaintiff's claims in respect of the CPH and Cavalane share issue must also fail. 74 Having regard to the construction of clause 6.8 which I have arrived at, the remaining claims can be dealt with, without any need for extensive consideration. 75 In September 1999 CIL proposed to issue 7,700,000 shares in its capital, 4,000,000 at $8.45 per share and 3.7 million at $8.50 per share, the latter issue being for domestic as opposed to international placement. On the morning of 3 September 1999 Mr Ireland telephoned Mr Freedman and offered him 100,000 shares in the domestic placement. Mr Freedman told him that the offer should be put in writing. This request was followed-up by a letter from Mr Sechos to Mr Ireland in which "notice in writing of the proposed placements in accordance with clauses 6.8 and 9.3 of the Consultancy Agreement" was sought. It was also indicated that the "nominal amount of 100,000 shares" was not an appropriate "opportunity to participate in such placement on same or equivalent terms and conditions as offered to relevant third party" pursuant to clause 6.8. The letter concluded: "We note that we will require reasonable time to consider the offer once received in accordance with the notice provisions contained in the agreement." Mr Ireland responded with another letter on the same day, which set out the terms and conditions of the issue and noted that the offer to the plaintiff was " above the entitlement to others". It seems that this situation changed. It is, however, clear that the " terms and conditions " which related to price, dividends/bonus, time of acceptance and date of settlement were applicable to all shares on issue. 76 I am satisfied that, as he said, Mr Ireland attempted to contact Mr Sherman by telephone during the day to discuss the proposed allotment and the reasons for the plaintiff's refusal to participate in it. The calls were not returned. I have already referred to the reasons advanced by the plaintiff, primarily through Mr Sechos, for its refusal to accept the offer and its alleged views of its entitlement under clause 6.8. The September placement followed hard upon the assertion by the plaintiff in August that there had been failure on the part of the defendants to comply with clause 6.8 in relation to the CPH and Cavalane issues and its request to be provided with details of all other private placements made since the date of the agreement. It is quite plain, in my view, that after August 1999 the plaintiff had determined upon a course of suing for its alleged entitlements and that this intention coloured its responses in respect of the September placement and the later Deutsche Life Limited placement in March 2000. 77 So far as the September placement is concerned, I am satisfied that the first defendant complied with the terms of the clause and that the plaintiff based its rejection of the offer upon its erroneous interpretation of the clause, which error it persisted in. 78 Accordingly, I am satisfied that the plaintiff's claim in respect of the September transactions must fail. 79 The remaining transaction, referred to as the Deutsche Life Limited transaction, involved an issue by CIL, in early 2000, of 8.4 million ordinary shares at an issue price of $4.10 per share, later reduced to $4 per share. The shares were to be issued for the purpose of raising money capital in order to fund partially the acquisition of the business of Deutsche Life Limited to be operated in conjunction with Challenger Life Limited. 80 On 14 February 2000 Mr Ireland wrote to the directors of EAL in relation to the proposed issue. He referred to clause 6.8 and advised that CIL was proposing to issue 8.4 million ordinary shares for the purpose of raising capital at an issue price of $4.10 per share. The letter stated: "Although the proposed issue may not constitute a 'private placement' as that term was used in clause 6.8 of the Consultancy Agreement, please let me know whether you wish to take up the whole or any part of the proposed issue." On 18 February 2000 Mr Sechos responded by letter, asserting that Mr Ireland's letter had not complied with clause 6.8 and did not contain sufficient details concerning the proposed offer. The letter continued by stating an assumption that the proposed issue would be by way of institutional placement and that, based on that assumption, EAL did not wish to participate. 81 When the placement price was reduced to $4 per share Mr Ireland forwarded a further letter on 23 March 2000 to the directors of EAL, which advised of the reduction in the price and stated that in accordance with clause 6.8, EAL was made an offer to subscribe to shares at that issue price. The letter continued by stating "The proposed placements will be made on the undertaking from the placees that they will remain long term holders of the shares allotted. Accordingly, any acceptance by you of this offer will need to contain an undertaking to that effect." The letter further indicated that there was a need to obtain shareholder approval for the proposed placements and that acceptance of the offer was required by 27 March 2000. 82 By letter dated 24 March 2000 EAL replied, stating that, for the previous reasons and also "given the unresolved dispute between us", that it did not wish to participate in the issue or nominate any other person to do so. The letter concluded: "Would you please ensure that future notices and offers comply with clause 6.8 of the Consultancy Agreement so that we may properly consider them (for example, at a minimum information concerning the number of shares proposed to be issued, the identity of the proposed allottees and the proposed use of the funds to be raised should all be provided)." 83 Mr Ireland responded by letter of 27 March 2000, asserting that CIL's previous letters had complied with clause 6.8. He stated that "the identity of the allottee and the proposed use of the funds" were not relevantly part of the terms and conditions contemplated by the clause. The letter concluded, "We shall at all times comply with our obligations under clause 6.8 but only to the extent of the drafting of that clause". 84 Correspondence between the parties' solicitors then ensued. The plaintiff's solicitors, by letter of 30 march 2000, asserted that "Quite plainly, our client is entitled to receive the same information to participate in any offers as the other proposed participants so that it can properly make a decision. To the extent that your client's letter suggests otherwise, it is inconsistent with your client's obligations under clause 6.8". The defendants' solicitors responded by letter of 4 April 2000, asserting that clause 6.8 did not contemplate "in its terms…a broad entitlement" to information of the kind referred to in the plaintiff's letter or in that of their solicitors. Sufficient information had been provided and the plaintiff's decision not to participate was obviously "a commercial matter for it". 85 At the hearing a fresh issue surfaced. It related to the reference in Mr Ireland's letter of 23 March 2000 to the undertaking that the placees would remain "long term holders of the shares allotted". Although the matter had not been relied on by the plaintiff at the time, it was asserted that other allottees had not been subject to this term. The allottee in question was CPH. In fact a written assurance had been given on its behalf to Deutsche Life Limited that it would remain as a shareholder, which was known to Mr Ireland. The issue, if it is worthy of serious consideration, should be resolved in favour of the defendants. 86 I have no difficulty in finding that EAL had no desire to be involved in the placement. It wished to rely upon this litigation which it had commenced in October 1999 and did not wish to take any steps which might be perceived to prejudice its claims. It is not to be forgotten that it was, in fact, offered the whole placement in circumstances where, as the evidence of Mr Jacobs establishes, it could have received it. It now claims that it should be afforded damages on the basis that it was not given the opportunity of applying for it. 87 In my opinion, it rejected the opportunity it was, in fact, offered on grounds which were specious and designed purely to bolster the present claim. Its asserted construction of clause 6.8 was erroneous, persisted in, and constituted the real effective cause of its failure to participate in the placement. This claim must also fail. 88 In the result therefore, all claims made by the plaintiff against the first defendant must be dismissed with costs. 89 As the plaintiff's claims against the second and third defendants cannot succeed, if the claims against the first defendant fail, and if the plaintiff is incorrect in its construction of clause 6.8, it follows that those claims must also be dismissed with costs. 90 Accordingly I make the following orders: 1. The plaintiff's action against each defendant is dismissed. 2. The plaintiff is to pay the costs of each defendant. ******************* Last Modified: 11/15/2001 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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