Sasson v Fahevu

C. On or about June 1 1990, JT and DS, by way of informal agreement, entered into a fee sharing arrangement for certain advisory and success fees earned by DSP on an equal basis. Each holds one (1) ordinary share and are directors of STYAD PTY LIMITED.

J. During February, 1992 DS's contribution diminished significantly, and, in fact, ceased on May 15 1992.

O. DS and JT wish to terminate the fee sharing arrangement and settle all outstanding matters between themselves in accordance with the terms hereafter.

1. DSP shall forthwith terminate all contracts listed in Schedule 1 by letter substantially in the form set out in Schedule 3 forwarded by post to each company or as the parties agree.

2. JTP shall immediately after termination of the contracts referred to in Schedule 1, offer to each of those companies its services on substantially the same terms and conditions as DSP previously.

3. In respect of the fees payable pursuant to contracts entered into before the date of this Deed with the companies listed below, JTP shall be entitled to hourly fees calculated in accordance with this Deed, and the balance of the fees received will be divided equally between JTP and DSP provided that the total fees paid to JTP shall not exceed 60% of the total fees received from:

However, in respect of Rowe Corporation Limited, total fees is defined as fees received less out of pocket expenses." 6 Another client, Exicom, was dealt with in cl 4. 7 The hourly fee referred to in cl 3 was $250: see cl 5. 8 Pursuant to cl 6, Tarrant was required to advise Sasson "when each of the Contracts referred to in Schedule 1, and subsequently entered into by [JTP] have been terminated, lapsed or completed". 9 Schedule 1 provided further for the fee splitting arrangement in respect of the contracts with the six clients specified in cls 3 and 4 as follows: " SCHEDULE 1

TERMINATION OF FEE SHARING ARRANGEMENT FEE FEE SPLIT MANDATE DATE AMOUNT (DSP/JCT) COMMENT ($000)

AUSTRAM 2/3 10 50/50 NO FEE SHARING ON FUTURE DEALS

ROWE 2/4 100 50/50 NO FEE SHARING ON FUTURE DEALS WITH KORVEST

MAYNE 19/2 15 50/50" (emphasis added)

10 The contract (or mandate as it is called in the schedule) relevant to DSP's claim is the Rowe Corporation contract. Rowe Corporation had been a client of Fahevu that Fahevu, through Tarrant, had introduced to the joint business. Rowe Corporation was a public unlisted company whose key business was the design, manufacture and installation of switchboards for airconditioning units for commercial property developments in Melbourne. In 1990, Rowe Corporation was for sale. The joint business had prepared an information memorandum for the sale and were actively seeking either purchasers for the shares in Rowe Corporation or alternatively purchasers for the assets of its business. Korvest had shown interest as a prospective purchaser. 11 On 2 April 1992, Rowe Corporation formally appointed the joint business "to assist…with the sale of the business". The appointment was contained in a letter of that date which specified the terms and conditions of the appointment. The appointment was in general terms and was not, according to its terms, limited to a proposed sale to any particular person or entity. It was open as to time, save that cl 4 provided the agreement could be terminated by either party by the giving of a written notice which specified the "the effective date of the Termination". This appointment constituted the mandate specified in Schedule 1 of the Deed against Rowe Corporation's name. The anticipated fee in respect of that contract was assessed, in the Deed, at $100,000. 12 Korvest was also a contact or client who had been introduced to the joint business by Tarrant. At about the time the 2 April 1992 agreement was entered into with Rowe Corporation, discussions were on foot between Rowe Corporation and Korvest in relation to Korvest acquiring Rowe Corporation. The joint business had been responsible for bringing the two parties together. However, Korvest lost interest in acquiring Rowe Corporation and, as the trial judge found "effectively there was no pending transaction between Rowe and any other entity as at the end of June 1992" (the date of the Deed). 13 After the execution of the Deed, Rowe Corporation remained for sale. Sometime prior to 23 February 1993 Rowe Corporation approached Fahevu asking whether "anyone at Boral" might be interested in purchasing it. Fahevu pursued enquiries which appeared to be promising. On 23 February 1993, Rowe Corporation and Fahevu entered into a new agreement whereby Fahevu was to "assist Rowe Corporation … with the sale of the business". Subject only to a difference in the rate of commission and the amount of disbursements which could be incurred without consent, the terms of the appointment were identical to the 2 April 1992 agreement. Assuming for the moment that the 2 April 1992 agreement remained on foot, then as a matter of law, the new appointment on 23 February 1993 had the effect of terminating the 2 April 1992 agreement, although whether the new agreement was in substitution for the 2 April 1992 agreement pursuant to the Deed or not, is an issue at the heart of the appeal. 14 Notwithstanding its initial interest, no sale eventuated to Boral. 15 The next development occurred in about May 1993, when another company Jeffries Industries Limited, approached Fahevu, expressing an interest in purchasing a business. Fahevu introduced Jeffries Industries to Rowe Corporation. Rowe Corporation and Jeffries Industries entered into a share sale agreement in September 1993 (the Jeffries transaction). The Jeffries transaction was completed in October 1993. Fahevu was paid for the transaction by way of the issue of 13,333 shares in Jeffries Industries.

Trial Judge's Findings 16 The trial judge found that the appointments made by each of the letters of 2 April 1992 and 23 February 1993 were "deal specific" - that is, directed to Korvest in the case of the 2 April 1992 agreement and Boral in the case of the 23 February 1993 agreement and did not relate to any ongoing arrangement in relation to the sale of Rowe Corporation. His Honour also held that for the purposes of the successful introduction of Jeffries Industries, there was no contract similar to the earlier two, and that Fahevu "was in the position of a facilitator or perhaps a go-between who had brought the two parties Rowe and Jeffries together". It followed on this construction of the various documents and transactions that DSP was not entitled to any portion of Fahevu's fee on the Jeffries transaction. 17 In rejecting DSP's claim for a share of Fahevu's fee, the trial judge said: "As part of the document, Schedule 1 notes specifically a number of entities in respect to which the parties when acting as a partnership has some dealings. At issue in these proceedings is work done in connection with Rowe. It refers in respect to Rowe the comment, 'no fee sharing on future deals with Korvest.' It is to be remembered that the Korvest deal did not eventuate and that this was apparent by mid July, 1992. Mindful of the evidence of Mr Max Rowe I am not persuaded by Sasson that he is entitled to a share of any fee relating to the specific mandate given to Tarrant by Mr Rowe in his subsequent dealings with the Rowe sale to Jeffries." 18 The evidence of Max Rowe (the principal of Rowe Corporation) to which his Honour referred was that that notwithstanding the general words of the letter of appointment on 2 April 1992, he required a new contract of appointment for each prospective purchaser. Tarrant gave similar evidence, namely that in his dealings with Rowe each engagement had been "deal specific".

Issues on the Appeal 19 Four issues arose on the appeal: first, the proper construction of cl 3 and schedule 1 (in so far as it related to Rowe Corporation); secondly, whether clause 3 was subject to compliance with clauses 1 and 2 and, if so, whether there had been compliance; thirdly, whether the trial judge had erred in failing to take into account certain post-contractual admissions made by Tarrant; and fourthly, the correct calculation of damages to which DSP is entitled if successful on the appeal.

The Proper Construction of Clause 3 and Schedule 1 of the Termination Agreement

Clause 3 20 DSP contends that upon its proper construction, cl 3 means that the existing contracts in respect of each of the clients specified in Schedule 1 were to be terminated pursuant to and in accordance with the provisions of cl 1; that Fahevu was to seek to enter into new contracts with those clients in accordance with cl 2; and that once those new contracts had been entered into, then, in respect of the clients specified in cl 3 there was to be a fee sharing arrangement as contained in that clause. 21 Senior counsel for DSP accepted that this construction required cl 3 to be rewritten (by including the words highlighted below), so as to read: "In respect of the fees payable pursuant to contracts entered into before the date of this Deed [and for which there have been substituted new contracts pursuant to cl 2] with the companies listed below, JTP shall be entitled to hourly fees calculated in accordance with this Deed, and the balance of the fees received will be divided equally between JTP and DSP provided that the total fees paid to JTP shall not exceed 605 of the total fees received from [the five nominated companies including Rowe Corporation]." 22 Senior counsel submitted this construction gave effect to the clear sense and intent of the Deed - namely that Tarrant was to continue to exploit the business opportunities which had accrued to the joint business in respect of the contracts specified in Schedule 1 by entering into new contracts with those companies. Any commission earned from the new contracts was to be split between DSP and Fahevu in accordance with the percentages specified in Schedule 1. 23 Fahevu did not really contest this construction, and in my view, it is the only possible construction of the clause which is available so as to give it business efficacy. I should add that I do not see this as involving the implication of a term, nor was the matter argued by either party in that way. Rather, it is simply using a phrase to understand what the clause was saying. 24 Counsel for Fahevu also conceded that the Jeffries transaction fell within the express terms of both the 2 April 1992 and 23 February 1993 contracts. To that extent, therefore, there was no issue between the parties and they were agreed as to the proper construction of cl 3. It follows that to the extent that the trial judge found otherwise, Fahevu and Tarrant accept DSP's contention that the trial judge was in error.

Schedule 1 25 DSP submitted that, upon its proper construction, the entry in Schedule 1 in relation to Rowe Corporation meant that if the particular Korvest proposal which was on foot in June 1992 fell through, any subsequent agreement which Korvest entered into to purchase Rowe Corporation would not attract the fee splitting arrangements specified in the schedule. However, any agreement reached with any other purchaser would be subject to fee splitting (provided that any such agreement otherwise fell within the terms of the Deed). Senior Counsel for Fahevu and Tarrant eventually conceded this construction (see transcript of argument pp 20 -22). In my opinion, DSP's contention is correct. 26 At this point therefore, the parties were agreed as to the proper construction of cl 3 and Schedule 1. This makes it unnecessary to deal with the further basis upon which DSP sought to establish the proper construction of the provisions, namely through the admissions of Tarrant both in correspondence between the parties and in cross-examination. However, in deference to the submissions which were put on this point, I will deal with the matter briefly.

Reliance on Admissions 27 In support of the construction of cl 3 and Schedule 1 for which it contended (and which was eventually conceded by Fahevu and Tarrant), DSP relied on certain admissions made by the respondents as to Fahevu's obligation to share the fees earned in respect of the Jeffries transaction. The first admission was said to be made in a letter dated 25 January 1995, from Fahevu to DSP in which Fahevu dealt with two post-termination transactions. The first transaction was not one specified in the Deed and Fahevu denied liability for the payment of any fees in respect of it. That transaction is not in issue here, except that DSP relies on the distinction which Fahevu itself drew in the letter between the two transactions. The second transaction subject of the letter was the Jeffries transaction. Fahevu provided an explanation of the transaction, and concluded: "You will also appreciate our agreement did provide for the payment to JTP of up to 60% of fees generated by JTP including fees calculated on an hourly basis in order to complete the [Jeffries transaction]. 28 As you can see the net difference is rather small, and that at a market price of $0.58 (buyer $0.50, seller $0.58 as at 23/1/95) the gross value of the shares ignoring brokers commission would be $7,733.14 from which JTP would seek reimbursement of $5,658.00 in out of pocket expenses as per our agreement. 29 In addition I would agree to pay DSP 40% of the balance, representing 40% of $2,075.14 or $830.06. You will appreciate therefore that any other method of settling the matter would be impossible for me to achieve bearing in mind that I have found myself in a position where the net fees generated by this matter are hardly of any substance." 30 The second alleged admission was contained in a schedule of expenses which was in evidence. The schedule was headed: "RE: OUT OF POCKET EXPENSES INCURRED BY JOHN TARRANT AND PARTNERS DURING THE SALE OF ROWE TO JEFFRIES INDUSTRIES LIMITED AND NET OF EXPENSES REIMBURSED BY EITHER PARTY"

and was addressed to DSP. It appears to have been prepared by Tarrant. It was submitted that this document constituted an admission by the respondents that there was an obligation to DSP in respect of the Jeffries transaction, otherwise there would have been no point in providing it with the information. 31 Tarrant also admitted in cross-examination that the transaction was covered by the termination agreement. DSP relied upon this evidence, not in support of its construction of the agreement, which it accepted it could not do: see Administration of the Territory of Papua and New Guinea v Daera Guba (1973) 130 CLR 353; Sportsvision Australia Pty Limited v Tallglen Pty Limited (1998) 44 NSWLR 103, especially at 116; contra Spunwill Pty Limited v Bab Pty Limited (1994) 36 NSWLR 290 at 304-312; but as an admission or acknowledgment of the state of the parties rights: see Pitcher v Langford (1991) 23 NSWLR 142 at 160; Grey v Australian Motorists & General Insurance Co Pty Limited [1976] 1 NSWLR 669 at 684-5; Jones v Sutherland Shire Council [1979] 2 NSWLR 206 at 231; Sportsvision Australia Pty Limited v Tallglen Pty Limited at 120. Interestingly, Fahevu and Tarrant accepted the wider proposition found to be the law by Santow J in Spunwill, where his Honour stated at 312: "Though the relevance of subsequent conduct as an aid to construction is as evidence of a party's subjective belief as to what the contract meant when it was made, use of such conduct will be legitimate under the objective theory of the contract in the limited circumstances where conduct evidences a clear and mutual subjective intention as to what the contract originally meant." 32 However, they submitted that the subsequent conduct relied upon by DSP was not probative of a clear and mutual subjective intention. As the subsequent conduct relied upon by DSP was not relied upon for this purpose it is not necessary to resolve the conflict between Santow J in Spunwill and Bryson J in Sportsvision on this point. 33 Fahevu and Tarrant make the same submission however, in relation to the use of this conduct as an admission on the basis that the conduct was engaged in, in the course of settlement negotiations which followed threats by DSP to sue. I agree that such conduct has to be examined in its context and its probative value assessed in that light. However, the context, in this case of settlement negotiations, does not rob such conduct of its character as an admission. I should also add that the admission in cross-examination is not affected by the context of settlement negotiations. 34 In my opinion, there is force in DSP's submission that the documents referred to above and the cross-examination constitute relevant admissions on behalf of Fahevu of the contractual rights and obligations under the termination agreement. Those admissions were to the effect that the Jeffries transaction fell within the terms of the termination agreement. Although it is correct to say in a general sense that the context in which the documents came into existence may affect the weight to be given to particular evidence, I am of the opinion that the context in this case does not lessen the weight to be given to the letter of 25 January 1995. That is because, in the letter, Tarrant drew a distinction between the two transactions to which the letter referred. In the one case, a liability was vociferously denied. In the other, namely in respect of the Jeffries transaction, liability was unambiguously conceded. The dispute at that stage was as to the method of computation and the amount which should be paid to DSP. 35 Accordingly, as a matter of construction of the termination agreement, the Jeffries transaction fell within cl 3. That is supported by the admissions to which I have referred.

Non-compliance With Clauses 1 and 2 36 The consequence of the concession in relation to the proper construction of cl 3 and Schedule 1 was that Fahevu and Tarrant were driven back to reliance upon non-compliance with clause 2 of the Deed in support of their defence that DSP was not entitled to any fees in respect of the ultimate sale to Jeffries Industries. Senior counsel conceded at an early stage of his submissions that there had been sufficient compliance with cl 1, at least in relation to Rowe Corporation (transcript of argument 19 -20). In fairness to counsel, the evidence upon which he relied to make this concession was not evidence of compliance with cl 1 according to its terms. However, it seems to me that the concession having been made, the only question for the Court to determine is whether there was any or sufficient compliance with cl 2.

Timely Compliance With Clause 2 37 Clause 2 required the new contracts to be entered "immediately after termination of the contracts referred to in Schedule 1". Clause 1 required that the existing contracts be terminated "forthwith". The evidence was not precise as to when the 2 April 1992 contract was terminated, although it seems to have been at about the time that Korvest lost interest in purchasing Rowe Corporation, which was in about July 1992. Clause 2 required that the new contract be entered into immediately upon termination of the existing contract. 38 Fahevu was the party responsible for compliance with cl 2. The law is clear that a party to a contract responsible for performance of a particular condition of a contract, cannot rely on its own non-performance to resist either rescission as the suit of the other party or a claim in damages for breach of a condition to which the non-fulfilled condition was subject. 39 In my opinion, therefore, the respondents' argument must fail.

Damages 40 That leaves the question of quantification of damages. The amount to which DSP was entitled was governed by the Deed and the 23 February 1993 agreement. The fee in fact earned by the respondent for the transaction was the transfer of shares in Jeffries Industries. After the shares were transferred, there were trading restrictions placed upon Jeffries Industries shares by the Australian Stock Exchange and the shares fell in value shortly after they were transferred to Fahevu. 41 The parties argued the question of damages but briefly, and, from my point of view, without giving much assistance to the Court. DSP contended it was entitled to payment based upon the value of the shares as at the date of transfer of the shares. Fahevu and Tarrant contended that if there was an obligation to fee share on this transaction, the appellant was not entitled to anything, either because they were prevented by operation of law from transferring the shares, or alternatively, because the shares were valueless. 42 In my opinion, the argument advanced on behalf of Fahevu and Tarrant misconceives the nature of Sasson's entitlement under the Deed and the 23 February 1993 agreement . Sasson's entitlement was to the payment of a fee - which under the terms of the Deed and agreement was contemplated to be a money sum. The fact that Fahevu and Tarrant agreed to take the fee "in kind" in the form of shares does not mean that Sasson in turn was obliged to take payment in that form. It was entitled to a sum of money. Its entitlement was therefore to one half of the value of the shares at the relevant time less JTP's expenses. 43 In contract the general rule is that damages are assessed as at the date of breach: see Johnson v Agnew [1980] 1 AC 367; Johnson v Perez (1988) 166 CLR 351. The date of breach in this case was the date upon which Fahevu and Tarrant should have paid DSP its entitlement in accordance with the Deed and agreement, that is, within a reasonable time after JTP received the Jeffries Industries shares. I would assess a reasonable time in the circumstances to be 14 days as there were some calculations to be done in relation to out of pocket expenses and there would have been some administrative time involved in obtaining or preparing transfer forms, as the case may be. 44 The shares were valued at $4.50 each, or a total of $59,998.50 at the date of completion of the Rowe transaction. The trial judge records Tarrant as having received the shares in late March 1994, although the Share Certificate issued to Fahevu (being the "payment" to JTP) is dated 31 January 1994. His Honour's reference to March may only be a typographical error although, on the determination of damages to which I have come, it does not make any difference whether the correct date is the end of January or the end of March. His Honour found that the share price at the time the shares were transferred to Fahevu was between $3.60 and $3.90. The Stock Exchange Record of Prices at about the middle of February 1994 (being about 14 days after the transfer to Fahevu if it occurred at the end of January) record a price varying between $3.54 and $3.60. Between then and the middle of April (being about 14 days after the end of March, if that is the correct date of transfer) the share price fluctuated up and down slightly between about $3.55 and $3.90. Doing the best I can in the circumstances I am of the opinion that the 'value' which should be ascribed to the shares at the time of breach is $3.60, making a total 'payment' by way of transfer of share scrip of approximately $48,000. There is also a reference in the judgment to Tarrant having received $5,000 in cash as part of its payment in the transaction, making a total payment of $53,000. From this amount must be deducted JTP's "out of pocket expenses" in accordance with clause 3 of the Deed, to determine the "total fees". Those expenses were, it seems, $3,511.80 (say $3,500). The appellant is entitled to one half of the balance after deduction of those expenses. Accordingly, the damages to which the appellant is entitled is $24,750.00. 45 Accordingly, I would allow the appeal and propose the following orders:

(ii) Verdict and judgment of the court below set aside.

(iii) Verdict and judgment for the appellant in the amount of $24,750.00.

(iv) The respondents to pay the appellant's costs of the appeal and of the hearing below, but is to have, if qualified, a certificate under the Suitors' Fund Act 1951 (NSW). 46 FITZGERALD JA: The circumstances giving rise to this appeal are set out in the judgement of Beazley JA. I will adopt the abbreviations used by her Honour to identify the parties to the Deed which has given rise to this litigation. 47 Until the termination of the joint venture between DSP and JTP (Fahevu) provided for by the Deed, DSP had been the entity which had contracted on their joint venture's behalf. By the Deed, the contracts entered into in DSP's name listed in Schedule 1 to the Deed were to be terminated. Deed, cl 1. JTP was to approach the persons whose contracts had been terminated by DSP and seek to obtain them as clients. Deed, cl 2. According to its terms, cl 3 of the Deed only related to the division between DSP and JTP "… of the fees payable pursuant to contracts entered into before the date of this Deed with the companies listed below" (emphasis added), one of which was Rowe Corporation Ltd ("Rowe"). 48 DSP's claim is that it is entitled to share in a "fee" which it asserts was received by JTP pursuant to a contract entered into by JTP with Rowe after the Deed. 49 To meet the difficulty presented by the language of cl 3 of the Deed, DSP submitted that that clause has to be read as though it entitled DSP to a share of fees received by JTP payable pursuant to contacts entered into by JTP in accordance with cl 2 of the Deed. Beazley JA has noted that JTP did not really contest that view, and I cannot discern how cl 3 could otherwise operate in relation to Rowe, as was plainly intended. There is no suggestion that any fee was payable by Rowe as at the date of the Deed or immediately thereafter, when DSP was required by cl 1 to "forthwith terminate" its contract with Rowe. The omission of the words missing from cl 3 of the Deed is an obvious mistake which can be corrected in accordance with established principles of construction. Fitzgerald v Masters (1956) 95 CLR 425, 426-427. 50 JTP entered into a contract with Rowe on 23 February 1993. Like the contract between DSP and Rowe which existed at the date of the Deed, the contract of 23 February 1993 between JTP and Rowe was expressed in terms which were wide enough to include the sale of Rowe's business or shares to any other party. However, the trial judge found that, despite its general terms, the contract dated 23 February 1993 between JTP and Rowe was initially intended to relate only to a prospective sale of Rowe's business to Boral, which did not eventuate. Rowe was unwilling to be "shopped around to all and sundry", and it required to approve persons whom first DSP and later JTP proposed to approach. It does not follow that the contract dated 23 February 1993 between JTP and Rowe ceased to have effect when the proposed sale to Boral fell through in about April 1993. The contract remained in operation with potential application to any future prospective purchaser approved by Rowe. 51 Another company, Jeffries Industries Ltd, which for a period had been a client of the joint venture between DSP and JTP, approached JTP in May 1993 inquiring about businesses which were for sale. Rowe was contacted and was interested. Following negotiations, Jeffries acquired all issued shares in Rowe, in exchange for an issue of Jeffries' shares. On 31 January 1994, JTP received 13,333 shares in Jeffries at Rowe's direction, and accepted those shares as its "fee". The market value of Jeffries' shares was then between $3.60 and $3.90 per share. 52 If the contract of 23 February 1993 between JTP and Rowe was a contract entered into pursuant to cl 2 of the Deed, DSP was entitled to share in JTP's "fee", calculated in accordance with cl 3 and Schedule 1 of the Deed. It was not suggested that it was a breach of the Deed for JTP to accept a "fee" of 13,333 shares in Jeffries, or that, by reason of the agreement between JTP and Rowe that JTP would be paid in Jeffries shares, the contract of 23 February 1993 between JTP and Rowe was not, or ceased to be, a contract entered into pursuant to cl 2 of the Deed or that JTP's "fee" was not paid under that contract. 53 No assertion was made by JTP that DSP did not implement cl 1 in relation to Rowe in the sense that it did not "forthwith terminate" its contract with Rowe which was current at the date of the Deed. JTP did not obtain a further contract from Rowe until almost eight months after the Deed. That contract entitled DSP to share in JTP's "fee" only if it resulted from an offer made to Rowe by JTP in accordance with cl2 of the Deed. In that event, JTP's refusal to share the fee entitled DSP to damages for breach of cl 3 of the Deed. 54 If JTP did not make an offer to Rowe in accordance with cl 2 of the Deed that was the clause which it breached, and DSP is entitled to damages for that breach. Those damages would only be calculated on the same basis as the damages payable by JTP for a breach of cl 3 of the Deed if DSP established that, but for JTP's conduct or omission, a contract with Rowe which would have encompassed the sale of its business or shares to Jeffries was available to JTP at a time which would have brought the contract within cl 2 of the Deed. 55 It was not established by DSP that JTP did not make an offer to Rowe in accordance with cl 2 of the Deed on, or subject to one matter, that the contact dated 23 February 1993 resulted from such an offer. 56 Beazley JA's judgment records admissions by JTP and Tarrant that DSP was entitled to a share of JTP's "fee". Those admissions are sufficient evidence, in the absence of other evidence, to warrant a conclusion that the contact of 23 Feb 1993 between JTP and Rowe was a contact pursuant to cl 2 of the Deed. 57 Accordingly, I am of opinion that DSP was entitled under the Deed to share the "fee" received by JTP. 58 DSP was only entitled to half of JTP's "fee" after deduction of JTP's " out of pocket expenses". On a broad estimate, which on the evidence is the best that can be done, DSP was entitled to 6600 Jeffries' shares. 59 The Deed did not expressly provide when DSP was entitled to receive its share of JTP's "fee". Accordingly, JTP had a reasonable time after it received its fee to give DSP its entitlement. 60 JTP sought to introduce a complication at this point by reference to information which it claimed it had acquired after its receipt of shares in Jeffries. JTP was said to have become aware that, by reason of circumstances which were not publicly known, Jeffries shares were, or might be, worth substantially less than their market value. This founded an assertion, without significant elaboration, that it would have been unlawful for JTP to transfer any Jeffries shares to DSP prior to the time when, as subsequently occurred, it was ascertained that Jeffries was insolvent and it was placed in liquidation. There would have been no breach of the Deed by JTP if the reasonable time within which it was required to give DSP its entitlement in accordance with the Deed had not expired when Jeffries went into liquidation. 61 If DSP was not entitled to a money payment but only a transfer of JTP's Jeffries' shares, the inadequate material available revealed no justification for JTP's refusal or failure to transfer Jeffries' shares to DSP prior to JTP becoming aware of any "insider" information. It is unnecessary to consider whether, and if so why, it would have been impermissible for JTP to transfer Jeffries' shares to DSP after it obtained "insider" information when the contractual obligation to transfer the shares existed prior to JTP obtaining that information. 62 After JTP received its Jeffries' shares, those shares fell in value, and, when Jeffries went into liquidation, its shares became valueless. Again, only a broad estimate of the value of a Jeffries' share at the time when DSP was entitled to receive its share of JTP's "fee" is possible. I consider it appropriate to proceed on the basis that, at the material date, the market value of Jeffries' shares was $3.60 per share. 63 If JTP had performed its contractual obligation under the Deed, it would have transferred 6,600 Jeffries' shares, each then worth $3.60, to DSP, or paid DSP or the total value of those shares, i.e. $23,760. 64 Prima facie, that is the amount to which DSP is entitled to as damages for JTP's breach of the Deed. The paucity of evidence, and the manner in which the litigation has been conducted, do not require the Court to decide whether, in an appropriate case, the damages would be less because of the decrease in value of Jeffries' shares which followed. 65 In my opinion, therefore, JTP breached cl 3 of the Deed, resulting in a loss of DSP of $23, 760. 66 Tarrant was also joined in the District Court and a respondent to this appeal. He was not a party to the Deed, and I cannot identify any basis upon which he is liable to DSP. DSP's appeal against the judgment in favour of Tarrant should be dismissed, with costs. 67 However, DSP's appeal against the judgment in favour of JTP should be allowed, the judgment set aside, and a judgment in favour of DSP against JTP for $23,760 damages substituted. JTP should pay DSP's costs of its action against JTP in the District Court and its appeal to this Court against the District Court judgment in favour of JTP. If qualified, JTP should have a certificate under the Suitors Fund Act 1951. ***************************

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