Ecomi Technology Pte Ltd v Mb Technology Ltd [2024] NZCA 47, 7 March 2024
- Court
- Court of Appeal
- Judgment
- 7 March 2024
- Neutral
- [2024] NZCA 47
Areas of law
Judgment analysis
AI-generated summary
It can misstate holdings, facts, or citations. Always confirm against the judgment PDF.
Facts
MB Technology agreed to provide advisory services to Ecomi and invest in its OMI tokens. It also agreed to buy shares in Orbis. The relationship between the parties' principals broke down in mid-2020. MB Technology commenced legal action against Ecomi in Singapore (the Singapore Action) concerning breaches of their agreements, obtaining worldwide freezing orders. A mirror action was filed in New Zealand (the New Zealand Ecomi Action). Due to an exclusive jurisdiction clause, a separate proceeding was commenced in New Zealand against Orbis regarding the share purchase (the Orbis Action). In December 2020, the parties entered a Settlement Agreement which resolved the Singapore Action and the New Zealand Ecomi Action. The agreement expressly stated it did not apply to the Orbis Action. Subsequently, MB Technology discovered that Orbis shares had, contrary to its belief, been issued. It then filed an amended statement of claim in the unresolved Orbis Action, adding Ecomi as a defendant and including a new 'Bonus Token Claim' for OMI tokens it alleged were promised as a bonus for its investment in Orbis. Ecomi and Orbis applied for summary judgment and/or strike-out of the Bonus Token Claim, arguing it was barred by the Settlement Agreement. The High Court dismissed their application, leading to this appeal.
Held
- A contractual clause comprising more than one sentence, particularly where one sentence is expressed to be 'for the avoidance of doubt', should be read as a cohesive whole. The clarifying sentence guides the interpretation of the operative sentence, rather than creating a 'carve-out' or exception.
- When interpreting a settlement agreement, the term 'allegations made in' a proceeding refers to allegations that are material to the disposition of that proceeding, not every contextual assertion made in supporting documents, especially where a broader interpretation would contradict the parties' expressed intention to exclude other proceedings from the settlement.
- The Bonus Token Claim was not barred by the Settlement Agreement because it related to MB Technology’s investment in Orbis (the subject of the expressly excluded Orbis Action) and was not a claim arising directly or indirectly from the subject matter of the settled proceedings, which concerned MB Technology’s separate investment and advisory relationship with Ecomi.
The appeals are dismissed. The appellants must pay MB Technology Ltd costs for a standard appeal on a band A basis together with usual disbursements. We certify for second counsel.
Key passages6
The starting point of contractual interpretation is the text that the parties used.
“The starting point is that one looks to the text that the parties used.”
It is permissible to have regard to the relevant context as long as the relevant contextual points are clear, obvious and known to both parties, to ascertain the parties’ objective intentions.
“At the same time, it is permissible to have regard to the relevant context as long as the relevant contextual points are clear, obvious and known to both parties.”
The aim of contractual construction is to ascertain the meaning it would convey to a reasonable business person, based on their expressed intentions.
“The aim of the exercise of construction of a contract or other document is to ascertain the meaning which it would convey to a reasonable business person.”
Contractual interpretation is a holistic exercise based on the whole contract, not excessively focused on a particular word, phrase, or clause.
“The exercise is one based on the whole contract or a holistic approach. Courts are not excessively focused upon a particular word, phrase, sentence, or clause. Rather, the emphasis is on the document or utterance as a whole.”
A court should examine the relevant context even if the text appears plain and unambiguous.
“The court should always proceed to examine the relevant context even if the relevant text appears, at first glance, to be plain and unambiguous.”
A clause in a contract expressed to be 'for the avoidance of doubt' is usually intended to clarify or remove doubt as to the correct interpretation of another provision, rather than operate as a 'carve out' or exception.
“...a sentence or clause in a contract expressed to be “for the avoidance of doubt” is usually intended to clarify or remove doubt as to the correct interpretation of another provision (or, in this case, the preceding sentence).”
Cases mentioned in judgment
Legislation mentioned
- Fair Trading Act 1986, s 9