Keira Holdings v Broadcast Australia [2015] NSWSC 1716

Supreme Court New South Wales

Medium Neutral Citation: Keira Holdings v Broadcast Australia [2015] NSWSC 1716 Hearing dates: 2 November 2015, 3 November 2015 4 November 2015 and 5 November 2015 Date of orders: 05 November 2015 Decision date: 05 November 2015 Jurisdiction: Equity - Commercial List Before: McDougall J Decision: Amended summons dismissed Catchwords: CONTRACT – agreement whereby plaintiff provided its principal's services to manage one of the defendant's businesses – obligation to negotiate in good faith towards long-term incentive package – enforceability – whether breached – where defendant attempted in good faith to negotiate towards a package – failure of plaintiff to do the same – consequence that no breach shown – whether any loss suffered – poor performance of the business under plaintiff's management – result that any performance-based incentive package would not have yielded a benefit to the plaintiff in any event – alternative contention that plaintiff should have been remunerated in line with market rates – where evidence demonstrated that it was remunerated above market rates – consequence that no loss suffered Category: Principal judgment Parties: Keira Holdings Pty Ltd (Plaintiff) Broadcast Australia Pty ltd (Defendant) Representation: Counsel: ID Faulkner SC / AE Maroya (Plaintiff) PS Braham SC / R Mansted (Defendant)

Solicitors: Harland Sebastian Koops (Plaintiff) Minter Ellison (Defendant) File Number(s): 2014/200875

Judgment (ex tempore – revised 5 november 2015) 1. HIS HONOUR: In January 2010 the plaintiff (Keira) made a written agreement with the defendant (Broadcast Australia). The agreement was expressed to be retrospective to 1 July 2009. 2. Under the agreement, Keira agreed to supply the services of its principal, Mr Mullen, to perform the duties of managing director (MD) of Hostworks Group Pty Ltd (Hostworks). Hostworks was a wholly owned subsidiary of Broadcast Australia. 3. The contract included a promise (the LTIP clause) to negotiate in good faith so as to seek to agree upon a long term incentive package (LTIP) for the continued provision of Mr Mullen's services. 4. Keira says that the LTIP clause was enforceable, and that it was breached. Broadcast Australia says that the clause was not enforceable, but that, if it were, it was not breached. Broadcast Australia says that, in any event, Keira has failed to prove the pleaded (or any) loss that it claims.