Eurest (Aust) Catering & Services Pty. Lt.d v. Independent Foods Pty. Ltd. & Ors. [2000] NSWSC 898

Eurest (Aust) Catering & Services Pty. Lt.d v. Independent Foods Pty. Ltd. & Ors. [2000] NSWSC 898

Apex's tender was not shown to have been made as agent for Independent, and the companies were not a sham. However, Independent participated in the tender by authorising Apex to offer its guarantee and to provide Independent's financial accounts in support of the tender. On a broad construction of clause 6.6, that participation meant Independent tendered jointly with Apex as a joint venturer, or alternatively jointly with Apex as an independent contractor, and thereby breached the restraint. The mere entry into the proposed guarantee would not itself be a breach, but if Independent were called on under the guarantee to take over the business of supplying food to the SRA, that would...

Jurisdiction
Australia
Judgment Date
31 August 2000
Procedural Posture
Equity Proceedings Seeking Declarations, Injunctions and Damages in Relation to Alleged Breach of Restraint Clause in Share Sale Agreement / Judgment on Liability Issues; Submissions to Be Heard as to Precise Orders
Outcome
The plaintiff was entitled to a declaration concerning Independent's breach of clause 6.6, but the tort of inducement of breach of contract was not established; the Court reserved precise orders for further submissions.
Legal Topics
['sale of Shares' 'restraint on Competition' 'tender for Business' 'holding and Subsidiary Companies' 'agency' 'joint Venture' 'independent Contractor' 'inducement of Breach of Contract' 'declarations and Injunctions']
['contract' 'corporations' 'equity' 'tort'] ['sale of Shares' 'restraint on Competition' 'tender for Business' 'holding and Subsidiary Companies' 'agency' 'joint Venture' 'independent Contractor' 'inducement of Breach of Contract' 'declarations and Injunctions']

Case Brief

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Procedural Posture

Equity Proceedings Seeking Declarations, Injunctions and Damages in Relation to Alleged Breach of Restraint Clause in Share Sale Agreement / Judgment on Liability Issues; Submissions to Be Heard as to Precise Orders

Legal Issues

  1. 1 ["Whether Apex's tender for the SRA contract amounted to a breach by Independent of clause 6.6 of the share sale agreement." 'Whether Independent tendered for the business jointly with Apex as a joint venturer or independent contractor.' 'Whether the proposed giving of a guarantee by Independent would itself breach clause 6.6.' 'Whether performance of the guarantee by Independent, if called on to take over the business, would breach clause 6.6.' 'Whether Apex or Ms Arnold committed the tort of inducement of breach of contract.']

Ratio Decidendi

Apex's tender was not shown to have been made as agent for Independent, and the companies were not a sham. However, Independent participated in the tender by authorising Apex to offer its guarantee and to provide Independent's financial accounts in support of the tender. On a broad construction of clause 6.6, that participation meant Independent tendered jointly with Apex as a joint venturer, or alternatively jointly with Apex as an independent contractor, and thereby breached the restraint. The mere entry into the proposed guarantee would not itself be a breach, but if Independent were called on under the guarantee to take over the business of supplying food to the SRA, that would...

Court Disposition

The plaintiff was entitled to a declaration concerning Independent's breach of clause 6.6, but the tort of inducement of breach of contract was not established; the Court reserved precise orders for further submissions.

Orders

  • ['The Court will hear submissions as to the precise orders to be made.']