Angelis as trustee for the Angelis Family Trust v Pemba Capital Partners Fund I Partnership, LP [2019] NSWSC 1646

Angelis as trustee for the Angelis Family Trust v Pemba Capital Partners Fund I Partnership, LP [2019] NSWSC 1646

Clause 9.1 used the language of recital and subjective intention, not the language of obligation. The conditions expressed in cl 9 for Pemba's exercise of its Exit right were the giving of a Sale Notice under cl 9.2 and implementation subject to cl 9.4, with the Angelis Parties' agreed protection being the pre-emptive right in cl 9.4. On the proper construction of cl 9, a party seeking an Exit must intend to achieve an Exit which maximises Shareholder value, but cl 9 does not require that the Exit in fact maximise Shareholder value.

Jurisdiction
Australia
Judgment Date
25 November 2019
Procedural Posture
Equity Commercial List Proceeding Concerning Construction of a Shareholders Agreement / Principal Judgment Deciding a Separate Question in Advance Under R 28.2 of the Uniform Civil Procedure Rules 2005 (nsw) While the Proceedings Were Part Heard
Outcome
Declaration made that cl 9 requires an intention to achieve an Exit which maximises Shareholder value but does not require that the Exit actually maximise Shareholder value.
Legal Topics
['construction of Commercial Contracts' 'shareholders Agreement' 'exit Rights' 'drag Right' 'pre Emption Right']
['contract Law' 'equity' 'commercial Law'] ['construction of Commercial Contracts' 'shareholders Agreement' 'exit Rights' 'drag Right' 'pre Emption Right']

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Procedural Posture

Equity Commercial List Proceeding Concerning Construction of a Shareholders Agreement / Principal Judgment Deciding a Separate Question in Advance Under R 28.2 of the Uniform Civil Procedure Rules 2005 (nsw) While the Proceedings Were Part Heard

Legal Issues

  1. 1 ['Whether compliance with cl 9.1 of the 29 November 2017 Shareholders Agreement requires the party seeking an Exit to have the intention to achieve an Exit which maximises Shareholder value.' 'Whether compliance with cl 9.1 of the 29 November 2017 Shareholders Agreement requires that the Exit actually maximise Shareholder value.']

Ratio Decidendi

Clause 9.1 used the language of recital and subjective intention, not the language of obligation. The conditions expressed in cl 9 for Pemba's exercise of its Exit right were the giving of a Sale Notice under cl 9.2 and implementation subject to cl 9.4, with the Angelis Parties' agreed protection being the pre-emptive right in cl 9.4. On the proper construction of cl 9, a party seeking an Exit must intend to achieve an Exit which maximises Shareholder value, but cl 9 does not require that the Exit in fact maximise Shareholder value.

Court Disposition

Declaration made that cl 9 requires an intention to achieve an Exit which maximises Shareholder value but does not require that the Exit actually maximise Shareholder value.

Orders

  • ['On the proper construction of cl 9 of the Shareholders Agreement made on 29 November 2017 between the plaintiffs and the first, second and sixth defendants, the party seeking an Exit must have the intention to achieve an Exit which maximises Shareholder value.' 'On the proper construction of cl 9 of the...