Central Management Holdings Pty Ltd & Anor v Nauru Phosphate Royalties Trust [2001] NSWSC 1056

New South Wales Supreme Court

CITATION : Central Management Holdings Pty Ltd & Anor v Nauru Phosphate Royalties Trust [2001] NSWSC 1056 CURRENT JURISDICTION: Equity Division Commercial List FILE NUMBER(S) : SC 50168/2000 HEARING DATE(S) : 12 and 13 November 2001 JUDGMENT DATE : 22 November 2001

Central Management Holdings Pty Limited (First Plaintiff) PARTIES : Aphelion Marketing Pty Limited (Second Plaintiff) Nauru Phosphate Royalties Trust (Defendant) JUDGMENT OF : Brownie AJ

COUNSEL : RJ Powell (Plaintiffs) GL Turner (Defendant) SOLICITORS : Bowring Stone Lawyers (Plaintiffs) Alan Brown & Company (Defendant) CATCHWORDS : Construction of written contract - No question of principle DECISION : See paragraphs 25 and 26.

SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

BROWNIE AJ

Date: THURSDAY 22 NOVEMBER 2001

50168/2000 - CENTRAL MANAGEMENT HOLDINGS PTY LIMITED & ANOR v NAURU PHOSPHATE ROYALTIES TRUST

JUDGMENT 1 HIS HONOUR: The two plaintiff companies were beneficiaries of a trust, so as to be entitled in certain circumstances to be paid sums of money representing specified proportions of the profits of a business. In the expectation that there might be difficulties in relation to making these distributions, the plaintiffs and the defendant entered into a Contract containing a promise by the defendant that it would lend to the plaintiffs sums of money equal to the amounts that would otherwise be payable by way of distributions from the trust, if the expected difficulties arose. The issues to be resolved now are whether, on the proper construction of the relevant documents, three particular items of expense should be taken into account in calculating the relevant profit. In shorthand form, the items in question may be described thus:-