White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2008] NSWSC 1225

New South Wales Supreme Court

CITATION : White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2008] NSWSC 1225

HEARING DATE(S) : 27, 28 and 29 October 2008

JUDGMENT DATE : 21 November 2008

JURISDICTION : Equity Division

JUDGMENT OF : Young CJ in Eq

DECISION : Proceedings dismissed with costs.

CATCHWORDS : CONTRACTS [130]- Repudiation- Held on facts that plaintiff was not prepared to perform the memorandum of understanding ("MOU")- Defendants justified in terminating the MOU. EQUITY [36]- Fiduciary obligations- MOU- First defendant or its nominee agree to seek and exercise option on behalf of company to be formed in which members of the plaintiff company would be shareholders- Liberty of one party to make business decisions "on behalf" of another not a determinative indicia of fiduciary relationship- Parties in this case are commercial persons of equal bargaining power- Plaintiff considers MOU arrangement as "collaborative" in nature- No fiduciary obligations. EQUITY [53]- Unconscionable conduct/equitable fraud- Whether second defendant's exercise of the option unconscionable in the sense of the Pallant v Morgan equity- Agreement that plaintiff would surrender rights and defendants would obtain option for benefit of plaintiff's shareholders- Held that alleged detriment suffered by plaintiff's surrender of rights was its contractual duty under contract now terminated- In light of plaintiff's repudiation of contract, no fraud or unconscionable conduct found.

LEGISLATION CITED : Trade Practices Act 1974 (Cth) ss 45, 51AA, 51AC

CATEGORY : Principal judgment

Abau Holdings Pty Ltd v J & C Reid Pty Ltd (Young J, 20 March 1987, unreported) ACCC v Amcor Printing Papers Group Ltd (2000) 169 ALR 344 ASIC v Citigroup Global Markets Australia Pty Ltd (No 4) (2007) 160 FCR 35 Assets Co Ltd v Mere Roihi [1905] AC 176 Avondale Printers & Stationers Ltd v Haggie [1979] 2 NZLR 124 Bahr v Nicolay (No 2) (1988) 164 CLR 604 Banner Homes Group plc v Luff Developments Ltd [2000] Ch 372 Barnes v Addy (1874) LR 9 Ch App 244 Barrios v Chiabrera (1984) 3 BPR 9276 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 Breen v Williams (1996) 186 CLR 71 DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 Enkelmann v Glissan (1982) 2 BPR 9631 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 Fileman v Liddle (1974) 2 BPR 9192 Francis v Dingman (1983) 2 DLR (4th) 244 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Holiday Inns of America Inc v Broadhead (Megarry J, 19 December 1969, unreported) CASES CITED : Holiday Inns of America Inc v Broadhead (1974) 232 EG 951 Homeward Bound Gold Mining Co NL v McPherson (1896) 17 LR (Eq) 281 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Jessica Estates Pty Ltd v Lennard [2007] NSWSC 1434 Jones v Peters [1948] VLR 331 Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd (1958) 100 CLR 342 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 Lonrho plc v Fayed (No 2) [1992] 1 WLR 1 Mortimer v Bailey [2005] 2 BLR 85 News Ltd v Australian Rugby Football League 64 FCR 410 Pallant v Morgan [1953] Ch 43 Paragon Finance plc v D B Thakerar & Co [1999] 1 All ER 400 Paul Dainty Corporation Pty Ltd v The National Tennis Centre Trust (1990) 22 FCR 495 Presbyterian Church (NSW) Property Trust v Scots Church Development Ltd (2007) 64 ACSR 31 Tasman Capital Pty Ltd v Sinclair [2008] NSWCA 248 Westminster Estates Pty Ltd v Calleja (1970) 91 WN (NSW) 222 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2007) 13 BPR 24,835; [2007] NSWSC 1210 White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (2007) 13 BPR 24,851; [2007] NSWSC 1430 Wik Peoples v Queensland (1996) 187 CLR 1