PURNIMA ANIL SALGAOCAR v LAKSHMI ANIL SALGAOCAR suing as the Administratrix of the ESTATE OF ANIL VASSUDEVA SALGAOCAR deceased

Facts

The dispute was between a mother, Lakshmi Anil Salgaocar (L), the sole administratrix of the estate of her late husband Anil Vassudeva Salgaocar, and their daughter Purnima Anil Salgaocar (P), one of the estate's beneficiaries. The estate was continuing a suit, HC/S 821/2015, against Darsan Jitendra Jhaveri over an alleged trust.

On 27 May 2021 L and P signed a second settlement agreement (2SA). Under cl 7, L was to have an independent accountant draw up accounts of the estate's non-India assets for the period from 1 January 2016 to 31 December 2020 and make them available for inspection by 1 December 2021. P alleged that L breached this: the document came late and was only a thin valuation report, not an account of L's dealings with the assets. P then filed HCF/OSP 6/2022 in the Family Justice Courts seeking the accounts, an audit and related relief. L responded with HC/OC 49/2022, alleging that by filing OSP 6 P herself breached cll 11 and 18 of 2SA, which in L's reading allowed P only to sue for breach of 2SA until S 821 was finally determined. In HC/SUM 2031/2022 L obtained an injunction restraining P from bringing any action other than for breach of 2SA until then. P obtained permission and appealed in AD/CA 81/2022.

Issues

1. Whether cl 18 of 2SA confined P to suing for breach of the agreement, or whether cl 11 allowed her to bring proceedings over the non-India assets if L had not complied with the agreement
2. Whether OSP 6 was an action P was precluded from bringing
3. Whether the court needed to decide if L had in fact breached cl 7

Holding

The Appellate Division allowed the appeal and set aside the injunction, so P could proceed with OSP 6 even though OC 49 had been heard and not yet decided. It stated that this ruling on the preliminary point bound the parties in OC 49 and in OSP 6. L was ordered to pay P costs of $23,000 all in for OA 10 and the appeal, and $10,000 all in for SUM 2031.

Reasoning

The court noted that the two clauses were not well drafted and appeared inconsistent, and that neither party's reading was clearly stated in 2SA. It held that cl 11 prevailed. If P could only ever sue on 2SA, the opening words of cl 11, which made her promise not to litigate conditional on L fully complying with the agreement, would be pointless. That proviso was meant to tell L that she had to comply, especially by providing the accounts, if she wanted P to hold off until S 821 ended. L's reading would also leave P equally constrained whether or not L was in breach, which would need clear words; cl 18 was not enough. Clause 18 instead stopped P from reviving OS 928, the earlier proceedings, apart from matters covered by cl 11, and it was not disputed that OSP 6 concerned those matters. So, if L had breached cl 7, P was not barred from OSP 6.

The court did not decide whether L had breached cl 7, as it was not hearing OSP 6 or OC 49, but noted that P had some basis for her allegation. P's argument based on American Cyanamid Co v Ethicon Ltd [1975] 1 AC 396 was misplaced, since the injunction followed directly from the judge's reading of the clauses. The court also questioned why the parties had run OC 49 in parallel with the appeal, and suggested that OSP 6 be heard as soon as possible, if possible before the judge who heard OC 49.

From the judgment