‘Studied ambiguity’ underpinned last minute amendments to the $6.05 million sale in 2013 of reality television Greenstone TV clinching a sale to Cordell Jigsaw in Australia. Equivocation meant a deal was struck, but this virtually invited subsequent litigation over deferred payments amounting to $554,700, the Court of Appeal said.
For a decade, John Harris with New Zealand on Air funding produced a slew of reality television programmes including Border Patrol, Serious Crash Unit and Highway Cops. Many of these programmes were later licensed for broadcast by the Seven network in Australia. In November 2013, Mr Harris sold his interest in Greenstone to Cordell Jigsaw Zapruder Productions Pty Ltd. It produces similar reality programmes across the Tasman. The agreed purchase price of $6.05 million was divided into two tranches: $4.8 million upfront; $1.25 million six months later with an adjustment if Highway Cops 2, then in production, was not taken up by the Seven network. Cordell Jigsaw did not want to pay in advance for potential licensing income that might not eventuate. It had control of Greenstone TV at the time Seven network was billed $A360,000 for twenty episodes of Highway Cops 2 at $A18,000 per episode. Mr Harris said he was entitled to the full $1.25 million second tranche, without deduction. Cordell Jigsaw deducted $554, 720 claiming the adjustment applied.
A minute examination of the 2013 sale agreement then followed in the High Court and the Court of Appeal. Both ruled $554,720 was still due. The adjustment formula was described as a compromise, drafted to ensure final agreement could be reached on the $6.05 million deal, but almost inevitably likely to lead to disputes over interpretation. Astute self-interest was the very reason the 2013 adjustment mechanism was left unclear, the Court of Appeal said, but leaving interpretation to the courts is the price paid for ‘studied ambiguity’. The economic effect of the Seven deal struck for Highway Cops 2 was consistent with previous deals, the Court ruled, even if it did not match exactly the usual Greenstone template. Mr Harris was entitled to his money.
GTV Holdings Ltd v. Delargey Trust – Court of Appeal (8.05.18)
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