Tiken Ltd and Another v. Bil International Ltd
Read the full judgment text of HCCL 87/2000 on BabelCite. This HCCL judgment was delivered on 18 July 2005.
1. In this action the plaintiff’s claim is for the sum of HK$123,708,758 together with interest and costs arising under certain warranties contained within an Acquisition Agreement dated 6 June 1994, pursuant to which the 1 st plaintiff (‘Tiken’), a subsidiary of the 2 nd plaintiff (‘Paul Y’), acquired all the issued shares of Downer Group Ltd (‘DGL’) from Cable Price Downer (‘CPD’), a wholly-owned subsidiary of the defendant, BIL International Ltd (‘BIL’).
Cited by 3 cases
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HCCL 87/2000 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE COMMERCIAL ACTION NO. 87 OF 2000 (formerly HIGH COURT ACTION NO. 5776 OF 2000) ------------------------- BETWEEN
---------------------- Before : Hon Stone J in Court Dates of Hearing : 6 - 8, 13 - 15 and 23 June 2005 Date of Judgment : 18 July 2005 ------------------------- J U D G M E N T ------------------------- Introduction 1.In this action the plaintiff’s claim is for the sum of HK$123,708,758 together with interest and costs arising under certain warranties contained within an Acquisition Agreement dated 6 June 1994, pursuant to which the 1st plaintiff (‘Tiken’), a subsidiary of the 2nd plaintiff (‘Paul Y’), acquired all the issued shares of Downer Group Ltd (‘DGL’) from Cable Price Downer (‘CPD’), a wholly-owned subsidiary of the defendant, BIL International Ltd (‘BIL’). 2.Quantification of the sum at issue is not in dispute; the respective experts for the parties have reached agreement upon this figure, which is the agreed amount of loss suffered by the plaintiff in a particular annual period upon what has been referred to throughout as the ‘Ting Kau Bridge Contract’. 3.Whether the defendant covenanted to make good such loss under the terms of the Acquisition Agreement is the subject-matter of this case which, for all practical purposes, can be divided into three main parts : first, the construction of the relevant provisions of the Acquisition Agreement, second, the issue of the rectification of that Agreement, and third, the matter of an alleged cancellation/settlement agreement which, it is said, had laid to rest outstanding disputes between the parties for an agreed sum of HK$4 million. 4.This judgment addresses each of these issues. Before so doing, however, it may assist to provide some indication of the factual background to this dispute, which was commenced in 2000 as HCA 5776 of 2000 prior to its transfer to the Commercial List later that year. The factual background 5.DGL was the holding company of a group of companies engaged in project management, civil engineering and construction, which carried out operations throughout the Asia Pacific region, including Australia, New Zealand and Hong Kong. 6.Although DGL was incorporated in New Zealand, by 1992/93 DGL’s head office had been relocated in Hong Kong, and its operations conducted from the territory. 7.The defendant, BIL (formerly known as Brierley Investments Ltd) by the early 1990’s was the fourth largest company on the New Zealand Stock Exchange, and was a global investment company whose business included the buying and selling of companies; it had purchased DGL in the early 1980’s. 8.By late 1993 BIL was concerned that continued ownership of DGL involved a level of commercial exposure incompatible with its commercial interests, and so the decision was taken to sell DGL. Accordingly, BIL began to seek out potential purchasers. 9.The 2nd plaintiff, Paul Y, was and is a substantial construction company incorporated in Hong Kong. Paul Y was duly approached by BIL, which had identified that company as a potential purchaser and as possessing the attributes considered necessary for any such sale and purchase; in particular, BIL had in mind a sale of DGL in exchange for a substantial minority shareholding in the purchaser. 10.Paul Y expressed interest in the acquisition of DGL, and in late March 1994 initial discussions began between the parties as to the basis of the sale and purchase; a confidential document entitled ‘Downer Group Limited, Information Memorandum’, dated March 1994, was delivered by BIL to Paul Y, and thereafter a series of meetings were held between representatives of the parties from late April 1994 up to 6 June 1994. 11.By the end of April 1994 a broad consensus had been reached as to the manner in which the proposed sale/acquisition should be structured. The prospective purchaser, Paul Y, retained Messrs Herbert Smith to act as its legal advisor, whilst BIL retained Messrs Deacons. 12.Legal representation apart, the lead negotiator for Paul Y was Mr Tom Lau, and for BIL a team was put in place which was headed by Mr Andrew Meehan, and which included Mr Gerald Gibbard and Mr Mark Horton. All four gentlemen gave evidence at this trial. 13.The date initially set for completion and signature of the Acquisition Agreement was 1 June 1994. However, the nature and complexity of the transaction resulted in the negotiations and drafting of the documentation continuing right up to the eleventh hour before the signing of the Agreement. 14.The Acquisition Agreement was actually signed on 6 June 1994. The parties thereto were Cable Price Downer Limited, as Vendor, Brierley Investments Ltd, as Guarantor, Limast Investments Ltd, as Subscriber, Tikan Enterprises Ltd, as Purchaser, and Paul Y – ITC Construction Holdings Ltd. 15.Originally it had been envisaged that full due diligence would be undertaken by all parties prior to completion of the acquisition. However, by early May 1994 it was acknowledged that Paul Y would not be able to carry out a full due diligence exercise in the time available. 16.To address this difficulty, it was agreed that BIL and CPD would provide guarantees, representations and warranties to protect Paul Y from certain risks arising out of the past, present and future position of the Downer Group. This is the effective genesis of the present case. 17.Mr Tom Lau, the chief negotiator for Paul Y and Tiken, wished to ensure that Paul Y was protected from potential losses on construction contracts in which the Downer Group had an interest. 18.In specific terms, risks arising from construction work which was yet to be undertaken by the Downer Group were addressed by Clause 14 of the Acquisition Agreement. I revisit this clause in some detail later in this judgment. For present purposes suffice to say that Clause 14 introduced the concepts of “Contracts in Hand”, which related to construction contracts subsisting at the date of the Acquisition Agreement, and also that of “Zero Margin Contracts”, which related to contracts which had been awarded as at the date of the Acquisition Agreement but which were not listed as “Contracts in Hand” as well as – and materially for this case – contracts for which a bid had been submitted but which had not yet been awarded at the date of the Acquisition Agreement. 19.The essence of the arrangement in clause 14 was that BIL and CPD guaranteed that Contracts in Hand would achieve a certain minimum profitability (or “Gross Margin”), whilst for that which were known as the Zero Margin Contracts an undertaking was given to make good any annual cash flow shortfall. 20.At this stage I should say something about the contract which has been the factual focus of the present dispute, namely, the Ting Kau Bridge Contract. The Ting Kau Bridge Contract 21.Downer & Company Limited (‘DCL’) was a subsidiary of Downer Group Limited. During the early part of the sale process which culminated in BIL disposing of its interest in DGL, DCL had been in negotiation with other major international construction companies for the purpose of entering into a joint venture agreement and tendering for the Government contract which was to be let for the design and construction of the Ting Kau Bridge and Approach Viaduct, which throughout has been referred to as the ‘Ting Kau Bridge Contract’. 22.Downer & Company entered into such a joint venture agreement, the Ting Kau Contractors Joint Venture (‘TKCJV’), on 14 May 1994, and the joint venture submitted its tender for the Ting Kau Bridge Contract on 20 May 1994, that is, some 16 days prior to the signing of the Acquisition Agreement. 23.This joint venture bid was successful. The Ting Kau Bridge Contract was awarded to the TKCJV on 23 August 1994, some ten weeks after execution of the Acquisition Agreement. On any view this contract was significant. Its value was some HK$1.75 billion, the project involved a construction period of some 4 years, and it was somewhat unusual in that it was a “design and construct” contract, which connoted that the construction would not be to Government design but that the successful tenderer was required to design major items covered by the contract, including the bridge itself. 24.In the event the completed Ting Kau Bridge, which is close by the suspension bridge linking Lantau to the New Territories, is one of the largest ‘cable stay’ bridges in the world. It is, if I may say so, a magnificent feat of design and engineering. 25.However, its construction was not without complication, or delay, and in the years 1996/97 and 1997/98 the TKCJV suffered losses. The present claim is for losses suffered in 1997/98. 26.For the annual period 1 April 1997 to 30 March 1998 the loss suffered was HK$494,835,031, and it is the amount of that loss proportional to DCL’s stake in the TKCJV, that is, the adjusted sum of HK$123,708,758, which forms the basis of the plaintiff’s claim in this action. The claim as made 27.In order for the plaintiffs to advance a claim under the Acquisition Agreement, Tiken was required, pursuant to Clause 14.3(A), to issue to BIL and CPD a certificate (“the Company’s Certificate”) setting out the “Gross Contract Income” and “Annual Cost” (as defined) for the relevant Annual Period. The excess of cost over income represents the loss for the particular year. 28.Clauses 14.3(B) to (D) of the Acquisition Agreement provided a mechanism for disputes between the parties as to the Company’s Certificate to be resolved. 29.By clause 14.5(B) BIL and CPD undertook to pay to Tiken the amount by which the Annual Cost of the Zero Margin Contracts exceeded the Gross Contract Income for the relevant Annual Period, and by clause 23.1 of the Acquisition Agreement, BIL guaranteed the performance of CPD’s obligations, including the payment of all monies due. 30.By letter dated 27 June 1998, Tiken delivered the Company’s Certificate to BIL for the Annual Period ending 31 March 1998. This letter noted that the Ting Kau Bridge Contract was the only relevant Zero Margin Contract for the Annual Period. The Certificate showed a Gross Contract Income of HK$173,049,332.86 and an Annual Cost of HK$365,736,588.04. Accordingly, the sum as originally claimed was HK$192,687,255.18, and it is this sum, as now adjusted to HK$123,758 consequent upon the agreement of the respective accountancy experts, which now is sought by the plaintiff. 31.To the claim as thus advanced CPD replied on 13 July 1998. This reply made a number of points. 32.CPD maintained that it had no liability pursuant to clause 14 of the Acquisition Agreement, that the Ting Kau Bridge Contract was not a Zero Margin Contract, that it did not agree that the Company’s Certificate complied with the relevant provisions of clause 14, and that it did not agree with the amount of the Gross Contract Income and Annual Cost as specified in the Company’s Certificate. 33.Thereafter negotiations ensued, but with no result. Hence these proceedings. The shape of the case 34.Although this case is larded with a very significant amount of detail, its broad shape is tolerably straightforward. 35.The plaintiff’s case is that as a matter of proper construction, the Ting Kau Bridge Contract is a Zero Margin Contract (‘ZMC’) that is covered by the Acquisition Agreement as signed, and gives rise to contractual liability on the part of BIL to make good the loss that was suffered. 36.Alternatively, if, as a matter of construction, the Ting Kau Bridge Contract is not covered by the Acquisition Agreement, then that Agreement should be rectified by order of the court so as to include within Schedule 3 thereof a list of all existing joint ventures – of which the TKCJV was but one – to which DGL and/or its subsidiaries were party, and thus that on this basis the Ting Kau Bridge Contract would fall within the contractual definition of a ZMC. 37.To this case the defendant makes three submissions. 38.First, that as a matter of construction the Ting Kau Bridge Contract is not covered by the Acquisition Agreement; second, that the plaintiffs are not entitled to rectification, as there never was any common intention, let alone agreement, that the TKCJV was to be included within Schedule 3, and thus would fall within the definition of a ZMC; and third, and in any event, that any possible claim that Paul Y might have had in respect of the Ting Kau Bridge Contract had been finally resolved when an agreement was reached between Mr Andrew Meehan of BIL and Mr Tom Lau of Paul Y to the effect that all potential contingent liabilities would be waived for the consideration of HK$4 million. 39.Accordingly, issue is squarely joined between the parties upon the questions of construction and rectification of the Acquisition Agreement, with the matter of the alleged settlement additionally being put forward by the defendant. 40.Given that, if substantiated, such an overall settlement effectively would be determinative of this case, I propose to deal with this ‘blanket’ defence at the outset before proceeding to consider the other, more fundamental, issues. The Settlement/Cancellation Agreement 41.I can dispose of this element of the case relatively briefly. 42.BIL relies on an alleged binding oral agreement between the plaintiffs and BIL which discharged BIL from any liability under the Acquisition Agreement. 43.BIL’ s case is that the alleged Cancellation Agreement was an oral agreement made in or around September 1995 at a meeting held in the Clipper Lounge of the Mandarin Hotel between Mr Tom Lau, acting for Paul Y, and Mr Andrew Meehan, then acting on behalf of BIL. 44.It is pleaded that this under this agreement there was to be “a cancellation of all claims which the parties then had or might have had against each other”, and that the consideration for the cancellation agreement was that the defendant agreed to pay the plaintiffs HK$4 million. 45.It is common ground that this agreement never was reduced into writing, and that the sum of HK$4 million never has been paid by the defendant to the plaintiffs. 46.The plaintiffs’ response to this is that a meeting did indeed take place between Mr Meehan and Mr Lau at or around the date in question, that the two men did generally discuss ways of resolving any potential liability that BIL might have as the result of having entered into the Acquisition Agreement, but that no agreement ever was reached and that the discussions as then took place were of a preliminary nature only. 47.Mr Lau’s evidence was that he had indicated to Mr Meehan that Paul Y and Tiken would be prepared to release Brierley and Cabprice in respect of the Contracts in Hand, that is, the guaranteed Gross Margin, for the sum of HK$4 million, but that there was no mention of, and nor did he offer to waive, the plaintiff’s rights in relation to the Zero Margin Contracts. He noted in this connection that there was “neither an incentive nor a commercial justification for me to do so”, and that in fact no concluded agreement ever was reached in relation to the proposed release, which in any event would have been a ‘connected transaction’ pursuant to the Listing Rules of the Hong Kong Stock Exchange and, as such, formally notifiable. 48.For his part Mr Meehan asserted that the discussions that took place between himself and Mr Lau indeed had resulted in a final and concluded global agreement of all possible potential liabilities arising under the Acquisition Agreement, and pointed to the fact that he had thus reported back to the BIL board in New Zealand in November 1995, and that the agreement had been reflected in the adjustment that had been made to the provisions contained in the ledgers of Cable Price Downer. 49.For the defendant Mr Bleach SC strongly submitted that the evidence showed that such an agreement had been reached as Mr Meehan had alleged, and that when viewed objectively and in proper context the settlement of contingent liabilities under the Acquisition Agreement must have included any possible liability in respect of the Ting Kau Bridge Contract. Nor, Mr Bleach suggested, was there anything uncertain or unworkable about the consideration, because if no mutually agreeable commercial alternative could be found as to the payment of HK$4 million then that amount would be payable in cash. Hence, he said, the subject matter and consideration were clear and unambiguous, and whilst it was true that no time frame specifically had been discussed, this did not render the agreement too uncertain, the courts being prepared in such situations to infer a ‘within a reasonable time’ approach, and in any event this issue was not time-sensitive. 50.For the plaintiffs Mr Shieh SC observed that typically sophisticated commercial entities negotiating a significant transaction – and in this case it was being asserted that all potential liabilities under the Acquisition Agreement were being settled – will reach an agreement in principle before reducing that agreement into writing, and the fact that, in the present case, the alleged Cancellation Agreement never was reduced into writing was an important factor to be taken into account when deciding whether a binding agreement was reached. Moreover, no proper explanation had been forthcoming from Mr Meehan justifying his admitted failure to press for the alleged agreement to be reduced into written form. 51.He noted that no equivalent entry reflecting a receivable of HK$4 million ever had been made in the ledgers of Paul Y or Tiken, which was consistent with Mr Lau’s belief that no concluded binding agreement existed, and he further submitted that the reason that Mr Meehan or Mr Horton (to whom Mr Meehan apparently had reported this event) had never considered disclosing an agreement of this nature to the New Zealand Stock Exchange was because there was, at best, consensus in principle which might, in the fullness of time, be reduced into writing and executed as a binding agreement. 52.Accordingly, said Mr Shieh, the proper inference from the circumstances as revealed on the evidence was that the alleged consideration was never demanded nor paid because both parties knew that there was no binding agreement. Nor, he submitted, could it be said that there was sufficient certainty as to the parties and the terms of such cancellation agreement – the entire issue was redolent with ‘fuzziness’ – and in any event the scope of any purported discharge of BIL from liability could only have been that Mr Lau, as he had said, was prepared only to consider discharging BIL’s warranty relating to Contracts in Hand, and that in the circumstances there was, and could have been, no commercial justification for agreeing to any release relating to Zero Margin Contracts, within which category the huge, and ‘long-tailed’, Ting Kau Bridge Contract clearly fell; indeed, said Mr Shieh, Mr Lau’s explanation of his willingness to consider a deal on the Contracts in Hand but not the Zero Margin Contracts had not been challenged in cross-examination. 53.Finally, Mr Shieh noted that if, contrary to the plaintiff’s case, there was a binding agreement cancelling the warranty in relation to the Zero Margin Contracts, the plaintiffs were entitled to treat that agreement as repudiated, and that such repudiation had been accepted by service of the Company’s Certificate or by the issue of the writ, with the result that the plaintiff is not entitled to rely on the alleged cancellation agreement. 54.As Mr Bleach fairly observed, upon this issue the court is presented with directly conflicting evidence, and accordingly must decide whether it was the intention of both parties that an agreement had been reached, and whether the terms of that agreement were sufficiently certain for there to be established an enforceable and binding contract. 55.I have reflected upon the totality of the evidence, and I have considered also the impression made by the two protagonists on this question, Mr Tom Lau and Mr Andrew Meehan. 56.Both men struck me as honourable and as essentially honest, and, whilst clearly fighting their corner, each was doing the best that he could in order to assist the court on this issue. I am not prepared to find that either man was other than a witness of truth. 57.Mr Meehan clearly was under the impression that he had struck a deal with Mr Lau, although, notwithstanding this dispute between them, it was notable that he was not prepared to criticize or to attack the veracity of Mr Lau; post the Acquisition Agreement BIL and Paul Y had appeared to enjoy a successful relationship at the corporate level, by September 1995 Mr Meehan had been appointed to the Board of Paul Y, and it is clear that Mr Lau and Mr Meehan had got on well and had considerable mutual regard. 58.Both Mr Lau and Mr Meehan struck me as experienced businessmen, and I do not find it odd that they would have had the type of conversation that clearly had taken place in the Clipper Lounge in September 1995. Nor do I find it odd that each man may have come away from that exchange with a different perception of precisely what had, or had not, been agreed, not least because Mr Lau, as he admitted in cross-examination, and in his responses to matters canvassed by the court, frankly accepted that if he was guilty of anything, it perhaps lay in a misplaced sense of politesse towards Mr Meehan, and a reluctance to spell out in specific terms a clear and emphatic rejection of the matters which were being generally discussed with Mr Meehan. 59.At the end of the day, however, I do not have the slightest difficulty in rejecting the claim by the defendant to the effect that a binding and concluded settlement agreement had been reached between the two men in the terms alleged. 60.The evidence simply is not there to enable the court to conclude, on the probabilities, that a binding oral agreement had come into effect, the consequence of which would have been to release all contingent liabilities relating to a major commercial transaction with immediate effect, and wherein its terms are in dispute, the agreement never having been reduced to writing, and payment thereunder neither having been made nor even tendered. 61.This issue clearly was broadly canvassed between Mr Lau and Mr Meehan, but that is a far cry from establishing the existence of such an agreement, and I find as a fact that no such agreement came into being. 62.This conclusion, therefore, is sufficient to dispose of this third issue, and I turn now to that which I consider to be by far the more significant questions arising within the ambit of this case, questions which, if I may say so, are considerably the more difficult to resolve. Construction and Rectification 63.I mean no criticism when I observe that the manner in which this case has been run and argued has resulted in a blurring of the evidential boundaries between these conceptually different issues. 64.It is trite law that the evidence admissible upon a construction argument is considerably more circumscribed than that admissible in terms of a rectification case. Whilst that which is popularly described as the ‘matrix of facts’ remains in background play in terms of construction, that which specifically is inadmissible, but which of course validly looms large in any rectification case, are the parties’ intentions and state of mind when they entered into the agreement which now is sought to be rectified. In itself this is not an unusual difficulty, but it is worthwhile at the outset to remind oneself of the salient difference in approach which is required on the part of the court when dealing with these matters. 65.It strikes me, therefore, that it is preferable to begin that which I regard as the main part of this judgment by turning first to the question of the construction of the relevant parts of the Acquisition Agreement. If and in so far as the plaintiff gets home on the construction issue, the question of rectification necessarily falls away as a ‘live’ issue. The construction issue 66.The plaintiffs contend that, as a matter of pure construction, the Ting Kau Bridge Contract falls within the meaning of clause 14.1(F)(2) of the Agreement, which reads thus :
The definition of ‘Joint Venture’ is to be found in clause 1.1(A), and reads :
whilst ‘Subsidiaries’ is defined, within Recital D of the Agreement, as :
67.It is common ground that the TKCJV’s tender for the Ting Kau Bridge Contract was submitted on 20 May 1994, prior to the date of the Acquisition Agreement, whilst the Contract itself was awarded on 23 August 1994, that is, well after 6 June 1994, with the consequence that the relevant clause for determining whether the Ting Kau Bridge Contract was a Zero Margin Contract is clause 14.1(F)(2). 68.However, whilst the TKCJV was a contractual joint venture to which Downer & Company, a Subsidiary as defined, was a party, the problem is that Schedule 3 of the Acquisition Agreement, which is entitled “Downer Group – List of Current Joint Ventures”, does not list the TKCJV. In fact, this Schedule lists only six joint ventures, all of which were joint ventures that had that category of contracts defined as ‘Contracts in Hand’. 69.Whilst the plaintiff asserts that as a matter of construction the Ting Kau Bridge Contract is a ZMC, the defendant’s case is that this Contract was not a ZMC because the TKCJV does not appear in Schedule 3, and thus does not fall within the relevant contractual definition. 70.In terms of the construction argument, the plaintiffs say that they get home in two ways : either that the Ting Kau Bridge Contract was a contract awarded after the date of the Agreement, for which the relevant Joint Venture had submitted a tender prior to that date, or alternatively, that this was a contract awarded post-Agreement for which a relevant Subsidiary, in this instance Downer & Company, had tendered prior to the date of the Agreement. 71.It strikes me that this latter formulation is somewhat strained, and does not succeed. In my view the natural and ordinary meaning of clause 14.1(F)(2) is that a contract awarded on the submission of a tender by a Subsidiary must import a contract awarded to that Subsidiary independently, and not to a Subsidiary which merely is part of a successful tendering Joint Venture to which the contract is awarded. If this were not the meaning, it is difficult to see why the clause in question should have been drafted in the form that it takes. So I reject the plaintiff’s proposed construction which is premised upon the basis of a tendering Subsidiary. 72.In my view the plaintiffs’ “Joint Ventures” argument, which in this context I take as the primary submission, is the more promising. 73.In this regard Mr Shieh argues that the umbrella term “Joint Ventures” embraces all the contractual and corporate joint ventures to which the Company and/or certain of the Subsidiaries are party, and that the remainder of that definition, namely “details of which are set out in Schedule 3 …” does not narrow the definition, but that it is merely informative, in that it directs the reader to a schedule in which details of these Joint Ventures are to be found. 74.The contrary argument, espoused with persuasion by Mr Bleach, is that the words “certain of” immediately preceding “the Subsidiaries” restricts the ambit of the term “Joint Ventures” in the sense that the intention of the draftsman was that only those joint ventures to which selected subsidiaries are party are intended to be caught by the definition. He says that the meaning of the descriptive words “details of which are set out in Schedule 3” plainly serves to limit the joint ventures falling under the definition to those listed in Schedule 3, and that had the parties intended the schedule to be illustrative and not definitive, the draftsman easily could have used a form of words such as “including but not limited to”. 75.Reflection has reduced the initial attraction of this argument. It seems to me that the use of the words “certain of” merely serves to connote that not all subsidiaries are parties to joint ventures; that is, only certain of the subsidiaries fall into this category. 76.In fact, and notwithstanding this argument, Mr Shieh has a further string to his bow. He says that even if, which is disputed, the words “certain of” have the effect of limiting the joint ventures to which selected subsidiaries are party, there is no doubt, even on the face of Schedule 3 itself, vide items 1, 5 and 6 therein, that Downer & Company falls within the category of “certain Subsidiaries”, and thus on any view Downer & Company is a Subsidiary covered by the reference to “certain of the Subsidiaries” within the term “Joint Ventures” as defined. 77.To this I am not sure that Mr Bleach had any specific response, save to reaffirm his basic proposition that the reader does not know, and is not in a position to know, what are the joint ventures in question absent reference to Schedule 3, and that the reader specifically is taken there via the link of the descriptive words “details of which are set out in Schedule 3”. Mr Bleach maintained that without the descriptive words and the schedule, the provision would be uncertain and would make no commercial sense, and that if Schedule 3 were not intended to be exhaustive (which would be contrary to the situation with the other schedules in the Agreement), and if the definition were to mean all joint ventures, there would be no need to have Schedule 3 within this Agreement at all. Which conclusion, he maintained, would be odd, not least because this was a document which had been extensively negotiated by experienced commercial people. 78.I do not find this latter point as persuasive as otherwise may have been the case. It is common ground that this Agreement was put together in significant haste, and that amendments were being made right up until the eleventh hour – indeed, the evidence is that Schedule 3 itself was amended at the very last minute, with the typewritten addition of item 6, which, perhaps ironically in the circumstances of the current debate, involved a joint venture between Downer & Company and a mainland Chinese partner. 79.For his part Mr Shieh submitted that the parties would have used a different formulation of the definition if they had intended the construction for which BIL now contended, as, for example, “‘Joint Ventures’ means the joint ventures and consortia listed in Schedule 3”. 80.He noted that where the parties had intended the schedules to the Acquisition Agreement to be exhaustive, they were quite capable of unambiguously so providing – see, for example, the definitions of “Contracts in Hand” and “Properties” appearing in clause 1.1(A) of the Agreement – and further that Schedule 3 is referred to on one occasion only within the entire Agreement, and that in the definition of “Joint Ventures”, although the phrase ‘Joint Ventures’ is used in other clauses. Moreover, he said, it is clear from the use of the term in these other clauses – see, in particular, clauses 6.1 and 17.1 – that the objective intent was for the definition of ‘Joint Ventures’ to encompass all joint ventures existing at the time of the Acquisition Agreement, and not just the six listed in Schedule 3. 81.With regard, for example, to clause 6.1, Mr Shieh submitted that there was an “obvious commerciality” about this provision, which required BIL and CPD to ensure that DGL, the Subsidiaries and, insofar as could reasonably be procured, the Joint Ventures, would not conduct any extraordinary business activities between execution and completion of the Acquisition Agreement without consultation with Paul Y, and that, in addition, BIL and CPD were required to ensure that Paul Y was consulted in relation to any significant tenders submitted between execution and completion. Accordingly, said Mr Shieh, given that it is undisputed by BIL that there were 17 joint ventures not listed in Schedule 3, if the restrictive construction of the term ‘Joint Ventures’ was accepted, this would mean that the provisions of clause 6.1 would not ‘bite’ with regard to any of these 17 joint ventures, which would defeat the plain and obvious commercial purpose of the provision, and was a result that could not have been within the contemplation of reasonable businessmen. 82.At bottom, therefore, the plaintiff’s contention was that the plain intention of the parties was that the term ‘Joint Ventures’ would mean all existing joint ventures, and that this construction harmonised with all the clauses – vide clauses 6.1, 12.1 – 12.4, 13.5 – 13.6, 14.4, 14.9, and 17.1 of the Acquisition Agreement which had used that term. 83.Accordingly, Mr Shieh argued, an internal inconsistency within the definition of “Joint Ventures”, as represented by the phrase “details of which are set out in Schedule 3”, could be addressed by adopting the expedients variously outlined in Lewison, The Interpretation of Contracts (2004), at page 279 et seq, and in particular by the application of the maxim ‘falsa demonstratio non nocet cum de corpore constat’, which Lewison (at page 289) interprets to mean that “where the words of description in a contract apply in part correctly and in part incorrectly to some subject matter, the incorrect part will be rejected, and the correct part read as if it stood alone”. 84.Thus, said Mr Shieh, applying the falsa demonstratio maxim, the preceding words in the definition of “Joint Ventures”, namely, “all of the contractual and corporate joint ventures and consortia to which [DGL] and/or certain of the Subsidiaries are party” adequately identified the subject and are not nullified by an incorrect description, that is, “details of which are set out in Schedule 3 …” in a subsequent part. In this circumstance, he asserted, the subsequent words are to be rejected as falsa demonstratio. 85.The preceding words constituted the dominant and governing words, he submitted, because it is clear on the face of the document itself that the definition of Joint Ventures was supposed to include all existing joint ventures, and that it was clear in other contexts, as, for example, in terms of the definition of “Contracts in Hand”, that where a schedule was supposed to be dominant, the draftsman had used a particular and different form of wording. 86.Mr Shieh noted that, in circumstances similar to the present, Chief Justice McLelland of the Supreme Court of New South Wales had applied the falsa demonstratio maxim in Famous Makers Confectionary Pty Ltd v. Sengos, (1993) NSW Lexis 7527, a case in which the plaintiff had purchased a business of repacking and wholesaling confectionary from the 2nd defendant, and wherein a clause of the sale agreement had referred to the relevant ‘plant’ the subject of the sale, and the dispute had centered upon what was included within the definition of ‘plant’, which had been described in Part 8 of the Schedule to the agreement. In turn, Part 8 had referred to an ‘Annexure B’, which comprised seven pages of depreciation schedules on forms appropriate for income tax returns. Against this background the plaintiff in this case had argued that Annexure B was not an exhaustive list of the relevant ‘plant’, whilst the defendants contended that, on the true construction of the agreement, no items of plant or equipment were the subject of the sale except those listed in Annexure B. This latter contention was rejected by the judge, who held that the words “and more particularly described in Pt8 of the Schedule” should be treated as falsa demonstratio and that the remainder of the contractual description, within Recital C, of that which was to be the subject of the sale “should be treated as dominant and correct and as providing the content of the definition of the plant intended by the parties”. 87.In response to this submission, Mr Bleach took strong issue with the application of the falsa demonstratio maxim in the present circumstances. He submitted that as a starting point the court will, if it can, give effect to all words of description, and to construe the words now sought to be rejected as words of limitation, unless it can be shown (which here it cannot) that such an approach would lead to absurdity or lack of business sense. 88.Accordingly, he said, the maxim will apply only in a clear and plain case, and there must be an adequate and certain description of the subject matter of the provision under construction even in the absence of the words sought to be rejected. So that if those words themselves formed part of the essential description of the subject, the maxim cannot be applied and, similarly, if the description taken as a whole fits some subject without inaccuracy, the court cannot reject part of that description. 89.In this case, he argued, the words sought to be rejected did not contain or refer to something which was either non-existent or clearly wrong in the context of the document itself, nor did these words result in total inconsistency or repugnancy, and thus there was no room for application of this aid to construction. The present case simply was not one where there was any clear or obvious inconsistency if the descriptive words and Schedule 3 are included and read together in the definition of “Joint Ventures”; in fact, absent the descriptive words and Schedule 3, the subject matter of the clause, that is, which joint ventures would be identified, would be uncertain and unclear. 90.Mr Bleach further suggested that Famous Makers Confectionary, op cit., was distinguishable on its facts, in that there was nothing in the “surrounding circumstances” in that case which would suggest any basis for distinguishing or excluding the relevant items, and that this case did not assist the court in the current dispute. 91.The point is not an easy one, but after some reflection I have decided that in terms of the construction of this document that Mr Shieh’s arguments are to be preferred, and that the words “all of the” within the definition of “Joint Ventures” are sufficient to evince an intention that this should be the controlling or governing part of that definition. 92.I find persuasive the plaintiff’s case that it is evident from the document itself that the definition of “Joint Ventures” was intended to include all existing joint ventures, that as a matter of objective fact this intention was not effected, and thus that it is open to the court to find that the subsequent part of the definition, namely “details of which are set out in Schedule 3”, properly falls within the rubric of falsa demonstratio. 93.I bear in mind, also, as part of the factual matrix to which I am entitled to take account, that whilst the definition clause was contained in the earliest draft of the Acquisition Agreement, it is common ground that the content of Schedule 3 was completed in great haste, and in fact did not assume its present form until the evening of 5 June, the day before the signing of the Agreement. 94.Whilst I appreciate that each case turns upon its own wording and facts, I do not accept that Famous Makers Confectionary, op cit., is of no assistance or is non-analogous. Indeed, the false description in that case “and more particularly described in Pt8 of the Schedule” strikes me as more indicative of completeness than the present words, “details of which are set out in Schedule 3”; as Mr Shieh commented, if the maxim can be applied on the wording of the clause in that case, the present case is a fortiori. I also agree that the descriptive words in the present case are more clearly indicative of grammatical subordination to the preceding words than is the situation in Famous Makers. 95.In the course of argument the court also was referred to the case of Corocraft Ltd and anr v. Pan American Airways Inc. [1969] QB 616 in which the Court of Appeal considered a similar situation in relation to a statute, the Carriage by Air Act 1932, which was supposed to set out the Warsaw Convention within Schedule 1 thereof. The plaintiffs were the owners of jewellery lost during carriage by air by the defendant, and made a claim. The Warsaw Convention, as set out in the Schedule to the statute, was in English, but the translator of the authorized French text had placed his own, incorrect, gloss upon that text. It was argued at first instance that the Warsaw Convention “as set out in the First Schedule” was the authoritative text (which would have precluded the defendant carrier from reliance on the limitation provisions), but in the Court of Appeal Denning LJ rejected the argument, based as it was upon an incorrect translation of the French, and held that the words of description “as set out in the First Schedule” should be rejected as falsa demonstratio. 96.I further accept the submission that, in the same way as the court in Corocraft was able to reject the descriptive words there in question by reference to that which the court had identified as the governing legislative intent, namely that the statute should enact the Convention as properly translated from the French, likewise the descriptive words in this case are subordinate to the governing part of the definition of “Joint Ventures”, and in light of the internal inconsistency between that dominant part and the descriptive reference to Schedule 3, which contains an incomplete list, I am prepared to uphold the plaintiff’s construction and to reject the reference to Schedule 3. 97.If this be the correct approach, as in my view it is, this conclusion is sufficient to dispose of the construction argument, and of this case, in the plaintiff’s favour. 98.In my judgment the TKCJV was a Joint Venture and that the Ting Kau Bridge Contract was a Zero Margin Contract within the meaning of the Acquisition Agreement. I so hold. Rectification 99.As earlier observed, if the construction element of this case was resolved (as it now has been) in favour of the plaintiffs, the issue of rectification no longer remains a ‘live’ issue. However, should the conclusion the court has reached on the construction argument be in error, I turn briefly to consider the question of rectification, which represented the other string to the plaintiff’s liability bow. 100.The plaintiff’s case on rectification, as put at this trial, is that there was a requisite common intention that Schedule 3 should contain a list of all existing joint ventures to which DGL and its subsidiaries were parties. In this connection, Mr Shieh went out of his way to stress that it was not his case that there had to be any common intention to include the TKCJV within Schedule 3 or that the Ting Kau Bridge Contract would be a Zero Margin Contract – indeed Mr Shieh stated (at page 30 of his closing submission) that in this latter regard the plaintiffs accepted that there was no such common intention. 101.This distinction is significant on the facts of this case for the following reason. The three viva voce witnesses for the defendant, Mr Meehan, Mr Gibbard and Mr Horton, all New Zealanders, each stated that when they were variously considering this Acquisition Agreement, they had been labouring under the misguided impression, based upon incorrect information given to them by Mr Gillies of DGL, that the TKCJV had not been signed. I have no reason to doubt this evidence, indeed I accept it; these gentlemen struck me as tough, essentially honest and straightforward businessmen, who were keen to relate to the court, absent embroidery, the manner in which this sale of DGL to Paul Y had been conceived and executed. I did not get the impression that any of these witnesses were attempting to convey other than the truth. 102.Accordingly, although the plaintiffs were not minded to accept the proposition that the three witnesses for BIL in fact had been misled by Mr Gillies as to the status of the TKCJV – and I have rejected the plaintiff’s contention in this regard – it may readily be appreciated that such evidence as to having been so misled is crucial in terms of the framing of the relevant, and required, element of common intention necessary to get home on a plea of rectification. Thus, if the case was that there was a common intention specifically to include the TKCJV within Schedule 3, any rectification case would fail since, ex hypothesi, the other contracting party, in terms of its executives Meehan, Horton and Gibbard, could not have had any such intention in light of the misleading nature of the information they had been given : simply put, as far as they were concerned, at that time, there was no signed TKCJV. If, however, the case is that the common intention was that all the joint ventures should go into Schedule 3, then clearly the rectification case takes on a different hue. 103.Mr Bleach was quick to highlight the fact that the alternative manner in which the plaintiffs now put the rectification case did not reflect the narrower manner in which it had been pleaded, which had rehearsed that the TKCJV was a Joint Venture for the purposes of the Contract and that that which specifically was sought was “Rectification of the Contract by adding the TKCJV to Schedule 3 of the Contract”. 104.He further submitted (at page 32 of his closing submission) that the question for the court to resolve was whether there was a common intention continuing up to the time of the signing of the Agreement that all joint ventures should be listed in Schedule 3 so that all resulting contracts would be either Contracts in Hand or Zero Margin Contracts within the meaning of the Acquisition Agreement. 105.In the course of his argument Mr Bleach reviewed the history of the negotiations and the drafting process, and stressed that BIL had been entirely dependent upon DGL and, specifically, Mr Gillies for provision of information and documents. He also noted that the BIL team of Messrs Meehan, Horton and Gibbard were experienced in merger and acquisition transactions, and were well aware of the fundamental importance of risk assessment within the context of agreeing warranties, guarantees and indemnities. 106.From a chronological point of view, he said, it was clear that the concept of “Contracts in Hand” was resolved at a fairly early stage, and commercial common sense had dictated that in this context BIL had insisted on “overs and unders” – meaning that profits in one year could be offset against losses in another year. However, it also was clear that the concept of Zero Margin Contracts did not arise until very late in the drafting day, in fact in written terms not until the late evening on 3 June 1994, although it appears that the issue of what to do with potential contracts not covered by “Contracts in Hand” was probably raised earlier on 3 June, or possibly the previous day. In any event, he submitted, once the first draft as it related to ZMC provisions had been received by the BIL team, the evidence indicates that it was immediately appreciated that it had made no provision for “overs and unders”, and accordingly a fundamental issue from BIL’s viewpoint was whether it safely could agree to such proposed terms, which in turn would depend upon BIL coming to a view in respect of the ZMC’s. 107.As to this, submitted Mr Bleach, the uncontradicted evidence showed that on 4 June 1994 Mr Gibbard had noticed a discrepancy in the proposed schedules to the Acquisition Agreement to the effect that the TKCJV was identified in the proposed Schedule 8 but had not been included in Schedule 3. As a result, Mr Gibbard had spoken to Mr Gillies and had been told that the Ting Kau Joint Venture Agreement had not been signed, and that he had obtained assurances from Mr Gillies (who was not called in this case) that the joint ventures that were listed in the proposed Schedule 3 – which, as a matter of fact, were all Contracts in Hand – would in fact achieve the gross margin profit levels that were sought to be guaranteed. 108.Accordingly, the evidence was that the matter had been discussed between the BIL team, together with their legal adviser, Mr Mackesy of Deacons (whom also was not called), and it was decided that the lack of any parallel “unders and overs” provision in respect of ZMC’s was not material as it was perceived that there was no real risk in respect of the joint ventures as were listed in Schedule 3. Thus, having been informed that the Ting Kau Joint Venture Agreement had not been signed, so far as the BIL team was concerned the issue of potential contingent liability in respect of that joint venture did not arise for an assessment of the risk involved in the provision of a zero margin warranty in terms of any contract that might be awarded to the Ting Kau Joint Venture, and therefore when the Acquisition Agreement had been executed, BIL had believed that the TKCJV properly was not included within Schedule 3. 109.It followed from this, concluded Mr Bleach, that there could not have been an intention on the part of BIL, when it had put its signature to the Acquisition Agreement, that the Ting Kau Joint Venture Agreement should be included in Schedule 3 by reason of the fact that it was believed that any contract ultimately to be awarded would not constitute a ZMC as defined. And that if this be correct, as it clearly was on the evidence, which had been probed but not dented, any question of rectification properly could not arise absent the reasoning element of common intention. 110.Mr Shieh’s riposte to this apparently convincing rebuttal of the rectification case was that, even assuming that the BIL personnel in fact had been misled by Mr Gillies to the effect that the TKCJV had not been signed, and thus need not be included within Schedule 3, this was but an internal and unexpressed intention on BIL’s part, and that it was not BIL’s case that the plaintiffs had known of, or were privy to, this internal mistake. 111.Thus, argued Mr Shieh, if the plaintiffs could succeed in demonstrating that there was a common intention, outwardly expressed, that Schedule 3 should set out all existing joint ventures, such a common intention would be the dominant and governing intention for the purpose of rectification, and would not be defeated by any uncommunicated and incorrect understanding on the part of BIL as to what ‘all’ in fact included. 112.In this connection, he cited Spry, Equitable Remedies, 5th ed., at 612, to the effect that the “better view is that it does not matter whether the lack of conformity between the document and the concurrent intention arises through an error of fact or an error of law …” and the observation of Mustill J (as he then was) in The “Olympic Pride”, [1980] 2 Lloyd’s Rep 67, at 72 that :
113.Mr Shieh argued that the existence of such a common intention and its outward manifestation could be divined from the drafting history of the Agreement, in particular the definition of “Joint Ventures” and the dual-use nature of the list of such Joint Ventures, and also from the evidence of the witnesses at this trial. 114.In reviewing the drafting history of the Acquisition Agreement, he drew attention in particular to the manner in which the definition of “Joint Ventures” had evolved, and noted that on 5 June 1994 Messrs Herbert Smith, the plaintiffs’ lawyers, further had amended the then existing definition specifically by adding the words “all of the” between the words “means … the contractual and corporate joint ventures …”, and that by this time the draft provision on Gross Margin Warranty and Zero Margin Contracts (containing reference, within its definition, to the concept of Joint Ventures) already had been provided by Herbert Smith to Deacons on 3 June 2004. Deacons had reverted on the same day, and against the suggested changes, including the added term “all of the”, appeared the initials, ‘PKT’, of the assistant solicitor to Mr Mackesy, that is, Philippa Kilburn-Toppin (whom, like Mr Mackesy, also was not called to give evidence), which in itself was suggestive of recognition and endorsement of those changes. 115.Whilst the plaintiff relied upon the words “all of the” in terms both of construction and rectification, it was in the rectification context alone, said Mr Shieh, that the plaintiffs invoked the additional (and presently admissible) fact that the presence of the words “all of the” within the definition of “Joint Ventures” clearly did not arise by way of blind adherence to ‘boilerplate’ nor by accident, but had formed the subject of a specific and conscious addition by the plaintiff’s legal advisor and specific and conscious acknowledgment thereof by Deacons for the defendant. 116.A further aspect of the drafting history, he submitted, was the fact that there never had been any intention to ‘pick and choose’ between different joint ventures in the compilation of the list of relevant joint ventures, and that the intention always had been that the same list would be used both for definitional and disclosure purposes. In terms of the evidence on this point, Mr Shieh noted that Mr Gibbard, Mr Meehan and Mr Horton had accepted that this would be the case; as Mr Gibbard responded in cross-examination :
117.In line with this evidence, it further is indisputable that the same list of joint ventures eventually was used for the purpose both of the definition of “Joint Ventures” within Schedule 3 of the Agreement and for the disclosure of all joint ventures within Annexure 7 of the Disclosure Letter dated 3 October 1994. 118.As to the element of common intention, Mr Tom Lau was in no doubt :
119.One of Mr Lau’s responses, in cross-examination, has given me pause for thought as to the element of intention, wherein at one stage he appeared to equivocate on the point, but I am satisfied, and so find, after reviewing his evidence as a whole, that he did have the intention that Schedule 3 would list all the joint venture agreements; indeed he said so in clear terms earlier in his cross-examination. 120.For the defendant, it does not appear than any of the witnesses disputed the factual basis for compiling the relevant lists of joint ventures. Mr Meehan made it clear that he was not involved in the detail of what Schedule 3 and Annexure 7 should contain, although it appears that he accepted that they should contain all the active joint ventures, Mr Gibbard acknowledged that the exercise was not a ‘cherry picking’ one, and that the same list would be used for Schedule 3 and for Annexure 7, and that in terms of the list joint ventures he would have had in mind all existing joint ventures between the Downer group companies/subsidiaries and other entities, whilst Mr Horton, the company secretary and a seasoned legal professional, emphasized that it was his “standard practice” to disclose all relevant information, and that he would have wished “a complete list of the existing or active joint ventures to which the Downer group was a party to be produced for disclosure purposes …”, and that it had been intended that the list(s) of joint ventures would contain that information : “as it transpired, it appears that the same list was used for both disclosure purposes and as schedule 3”. 121.In light of the totality of the evidence, fairly read, it is difficult to form a view other than that there existed a common intention that all existing joint ventures to which DGL and/or its Subsidiaries were party should go into Schedule 3. I so find. 122.The issue, however, is whether this conclusion is sufficient for the purpose of rectification. Which brings me back to the initial debate. Given, as has been accepted, that Messrs Meehan, Horton and Gibbard were labouring under a misapprehension, caused by the misinformation conveyed by Mr Gillies, that the TKCJV had not in fact been signed, does this fact represent the end of any rectification argument, on the basis there could have been no common intention that this joint venture should be included within Schedule 3, and hence as an inchoate joint venture could and would not fall within the terms of clause 14.1(F)(2)? 123.I have not found this an easy question to resolve. Ultimately I have concluded that the answer to this question is ‘no’, and that issues of internal misapprehension are nothing to the analytical point in terms of the rectification debate. I remind myself of the heavy burden upon the party seeking rectification, and the necessity for the court to be satisfied to the standard which Mustill J in The “Olympic Pride”, op cit., at 73, described as “a high degree of conviction”. In my view, however, Mr Shieh was entitled to reformulate the issue upon the wider basis now propounded, and in my judgment, and notwithstanding my initial reservations on the point, such reformulation has sufficed to get him home. 124.As I have indicated I am satisfied, on the totality of the evidence, that it did represent the common intention of the parties that Schedule 3 was to contain all the relevant joint ventures, and that such intention existed at the time of the execution of the Agreement. By oversight the Agreement did not reflect such intention, and whilst the fact that the BIL team were misinformed by their colleague at DCL is unfortunate, ultimately this should not detract from application of basic principle. 125.At the end of the day the remedy of rectification seeks to ensure that the instrument contains the provisions which the parties actually intended it to contain, and not those which it would have (or, perhaps, in this case, may not have) contained had they been better informed. Thus, the fact that, had the true position of the TKCJV been appreciated, the BIL team would have pursued the drafting issue of “unders and overs” within the context of ZMC’s does not, it seems to me, stand in the way of the rectification of Schedule 3 as now is sought. 126.I accept that had the BIL team been in possession of the correct data that they would have subjected the concept of the ZMC’s, and thus BIL’s exposure thereunder, to considerably greater scrutiny/reflection than this category appears to have been accorded given the state of the information then available to them. 127.I further recognise that in light of the obvious and real concerns that the BIL team had as to contingent liabilities, and hence the insistence on “overs and unders” within the context of ‘Contracts in Hand’, that the only basis upon which they could have come to a view that it was unnecessary to negotiate a similar provision for ZMC’s was that they believed that there were no material contracts that might be caught by the ZMC provisions that had sufficient potential downside as to require such protection by the device of “overs and unders”; certainly, it is not difficult to accept that the financially very significant and ‘long-tailed’ Ting Kau Bridge Contract would have excited attention in this context, and may well have occasioned reconsideration of the defendant’s primary approach to ZMC’s within the terms of the Agreement which BIL ultimately was prepared to sign. 128.Nevertheless, the point remains that in terms of not pursuing the issue of “overs and unders” in the ZMC context that the BIL team made a judgment, albeit one based upon incorrect information, and whilst this decision has turned out to be disadvantageous, I am unable to agree with the view that that which amounted to an internal, uncorrected (and uncommunicated) error on the BIL side now should be regarded as determinative of the rectification issue. 129.As a matter of history, Mr Lau subsequently spotted the omissions listed in Annexure 7, and by letter dated 28 October 1994, addressed to Mr Horton, then Company Secretary of Cable Price Downer, he had requested “a short rectifying document” which would add the omitted joint ventures to the list in Annexure 7 as well as to that in Schedule 3 of the Acquisition Agreement, which he referred to as “a copy of Annexure 7”. 130.By letter dated 2 December 1994 Mr Horton responded, with apologies for the delay which had been caused by BIL waiting for Mr Gillies to supply details enabling an “informed response”. In that letter Mr Horton stressed that BIL was not aware of the joint venture agreements which had been referred to by Mr Lau at the time of the execution of the Acquisition Agreement, and recognized that the only joint venture which might fall within the category of Zero Margin Contracts was that relating to the Ting Kau Bridge, in which connection he raised queries as to the tender dates, and whether this had been submitted prior to the Agreement date. Nevertheless, he commented that “BIL is of an open mind” as to whether this and other contracts should be included, and that “we would appreciate your views”. Although, somewhat curiously in the circumstances, Mr Lau did not further respond – indeed it was not until some three and a half years later, by the letter of demand of 27 June 1998, that the issue was formalized in the form of a claim in accordance with clause 14.3(A) of the Acquisition Agreement – I do not consider that anything turns on this delay : either in the circumstances the rectification case is made out, or it is not. 131.Accordingly, whilst in light of the conclusion earlier reached on the construction point this issue does not require decision in order to resolve this litigation, had it been necessary so to do this court would have found that the plaintiffs had succeeded on the rectification issue on the basis of the requisite common intention that Schedule 3 should have contained a list of all existing joint ventures to which DGL and/or its Subsidiaries were parties, and that were it to be necessary there should be rectification of the Acquisition Agreement in order to reflect that fact. Order 132.As the result of the foregoing judgment, therefore, I have found that the plaintiffs case against the defendant is made out, and accordingly the Order of this court is as follows :
Mr Paul Shieh SC, instructed by Messrs Herbert Smith, for the plaintiffs Mr John Bleach SC, leading Mr Thomas Au, instructed by Messrs Freshfield Bruckhaus Derringer, for the defendant |
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