ASSK Investments Pty Limited v AMA Group Limited [2020] NSWSC 1756

ASSK Investments Pty Limited v AMA Group Limited [2020] NSWSC 1756

The HOA was a binding and operative agreement for the sale and purchase of the Business. Construed objectively and commercially, cl 7(b) was not a condition precedent to the existence of a binding sale transaction; at most it was a condition precedent to entry into further Business Sale Agreements. Non-fulfilment of cl 7(b) therefore did not bring down the transaction. In any event, further Board approval was not necessary because the defendant had committed itself to the transaction by execution through a director and company secretary with the authority of the directors. The plaintiff was entitled to specific performance.

Jurisdiction
Australia
Judgment Date
07 December 2020
Procedural Posture
Equity Commercial List Proceedings for Specific Performance of a Binding Heads of Agreement, Alternatively Damages / Principal Judgment After Hearing
Outcome
Order for specific performance in favour of the plaintiff.
Legal Topics
['construction of Contract' 'conditions Precedent' 'business Sale Agreement' 'specific Performance' 'damages']
['contract Law' 'equity' 'commercial Law'] ['construction of Contract' 'conditions Precedent' 'business Sale Agreement' 'specific Performance' 'damages']

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Procedural Posture

Equity Commercial List Proceedings for Specific Performance of a Binding Heads of Agreement, Alternatively Damages / Principal Judgment After Hearing

Legal Issues

  1. 1 ["Whether the Binding Heads of Agreement bound the defendant to purchase the plaintiff's business or merely gave the defendant an option to proceed after due diligence and Board approval." "Whether cl 7(b), requiring all necessary third party consents, authorisations and approvals including the Purchaser's Board approval, was a condition precedent to a binding sale transaction." 'Whether non-fulfilment of cl 7(b) meant there was no binding agreement for sale and purchase.' 'Whether the plaintiff was entitled to specific performance.']

Ratio Decidendi

The HOA was a binding and operative agreement for the sale and purchase of the Business. Construed objectively and commercially, cl 7(b) was not a condition precedent to the existence of a binding sale transaction; at most it was a condition precedent to entry into further Business Sale Agreements. Non-fulfilment of cl 7(b) therefore did not bring down the transaction. In any event, further Board approval was not necessary because the defendant had committed itself to the transaction by execution through a director and company secretary with the authority of the directors. The plaintiff was entitled to specific performance.

Court Disposition

Order for specific performance in favour of the plaintiff.

Orders

  • ['The defendant is to specifically perform the Binding Heads of Agreement entered into by the parties on 1 November 2019 within 31 days after the date of the order, or such other date as the parties agree, together with any appropriate ancillary orders to make the order effective.' 'The parties are to bring in Short...