Trilogy v CLS Software [2002] NSWSC 1174

New South Wales Supreme Court

CITATION : Trilogy v CLS Software [2002] NSWSC 1174 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 3153/02 HEARING DATE(S) : 02/12/02 JUDGMENT DATE : 4 December 2002

Trilogy HIS Pty Limited - Plaintiff PARTIES : CLS Software International Inc - First Defendant Hotel Information Systems Inc - Second Defendant JUDGMENT OF : Barrett J

COUNSEL : Mr T L Lee, Solicitor - Plaintiff Mr J W Stevenson - Defendants SOLICITORS : Terence Lockyer Lee & Associates - Plaintiff Deacons - Defendants CATCHWORDS : EQUITY - injunctions - interlocutory injunctions - balance of convenience - relevance of whether damages adequate remedy - relevance of need for court's supervision Cayne v Global Natural Resources plc [1984] 1 All ER 225 CASES CITED : Liristis Holdings Pty Ltd v Q-Corp Marine Pty Ltd [2001] NSWSC 418 Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 State Transport Authority v Apex Quarries Ltd [1988] VR 187 DECISION : Interlocutory injunction granted

- 8 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BARRETT J

WEDNESDAY 4 DECEMBER 2002

3153/02 - TRILOGY HIS PTY LTD v CLS SOFTWARE INTERNATIONAL INC & ANOR

JUDGMENT

1 On or about 10 April 2002, the plaintiff and the first defendant exchanged executed parts of a document entitled "heads of agreement". The terms of it are as follows: " HEADS OF AGREEMENT

These Heads of Agreement are made on April 10, 2002 between CLS Software International Inc ('CLS') of 9601 Jeronimo Road, Irvine, California, USA, 92618 and Trilogy HIS Pty Limited ('Trilogy HIS') of 444 Gardeners Road, Alexandria, NSW Australia. The parties agree as follows: 1. Until such time as a Distribution Agreement is entered into between the parties as a replacement for that distribution agreement made 30 December 1996 between CLS and Trilogy Business Systems Australia Pty Limited (the 'Old Agreement') which has since expired, this agreement resolves all outstanding items currently in dispute. 2. The parties agree and acknowledge that they have satisfied themselves that these Heads of Agreement are self sufficient in themselves and on no account will the parties allege in any Proceedings that they are deemed to be void by reason of uncertainty. 3. Until superseded by a more formal instrument of agreement, these Heads of Agreement shall remain in full force and effect from the date hereof during which time Trilogy HIS shall have the exclusive distribution rights to the CLS Software (as defined in the Old Agreement) in the Territory (as defined in the Old Agreement) and to all other software products distributed by CLS and/or any corporation associated with or related to CLS. The parties shall work in good faith to expeditiously replace these Heads of Agreement with a more formal instrument of agreement (the 'New Agreement') with the substance comparable to that of the attached draft having a term of 5 years. 4. In full settlement of any royalties payable by Trilogy Business Systems Australia Pty Limited to CLS up until and including 30 June 2002, Trilogy HIS will: (a) Pay to or procure the payment to CLS of the sum of US$150,000; and (b) pay to or procure the payment to CLS of the sum of US$50,000,000 as a pre-payment against future licence fees, but subject to the express condition that if the said sum of US$50,000 is not credited fully against such future licence fees within six months of the date of payment to CLS of that sum, then the said sum of $50,000 or such part as remains uncredited against future licence fees, may at the absolute discretion of Trilogy HIS be credited against other payments which may be due and payable by Trilogy HIS to CLS. The settlement monies referred to above shall not become payable to CLS until such time as the parties execute the New Agreement. 5. Trilogy HIS shall purchase the CLS Software (as defined in the Old Agreement) from CLS at a price being forty per cent (50%) (sic) of the current list price of the CLS Software (as defined in the Old Agreement) and shall similarly purchase any other software product as referred to in these Heads of Agreement at fifty percent (50%) of the current list price of that software. 6. Trilogy HIS will pay to CLS royalties of: (a) ten percent (10%) of collected support fees from any existing customer at the time of these Heads of Agreement; and (b) ten percent of the current list price for support from any new customer who is not a customer of Trilogy HIS at the time of these Heads of Agreement; all of which shall be paid by Trilogy HIS to CLS within thirty (30) days of the close of each quarter. 7. Unless specifically referred to in these Heads of Agreement, no part of the Old Agreement shall form part of these Heads of Agreement."