Forbes Engineering (Asia) Pte Limited v Forbes (No 4) [2009] FCA 675

Forbes Engineering (Asia) Pte Limited v Forbes (No 4) [2009] FCA 675

First respondent liable for damages for the agreed 1998 profit shortfall under guarantee, oral agreement binding only first respondent, second respondent not bound because not party to oral variation and no ostensible authority, audit report for 1999 inadmissible for unreliability and prejudice, claim for 1999 shortfall not made out, contract variations and acquisition of Favco did not discharge liability, valid consideration found for lease guarantee, claim not statute barred or abuse of process.

Parties
First Applicant: Forbes Engineering (Asia) Pte Limited; Second Applicant: Forbes Engineering Holdings (Australia) Pty Limited; First Respondent: Mark Forbes; Second Respondent: Karen Lee Forbes
Jurisdiction
Australia
Judgment Date
22 June 2009
Procedural Posture
Contract and Guarantee Dispute / Final Judgment
Outcome
Application successful in part; first respondent liable for damages, application otherwise dismissed.
Legal Topics
Profit Guarantee, Share Sale Agreement, Lease Guarantee, Breach of Contract, Damages, Authority of Agent, Variation of Contract, Consideration, Statute of Limitations, Estoppel, Abuse of Process, Admissibility of Evidence
Contracts Guarantees Commercial Law Profit Guarantee Share Sale Agreement Lease Guarantee Breach of Contract Damages +7 more

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Parties

Forbes Engineering (Asia) Pte Limited

First Applicant

Forbes Engineering Holdings (Australia) Pty Limited

Second Applicant

Mark Forbes

First Respondent

Karen Lee Forbes

Second Respondent

Procedural Posture

Contract and Guarantee Dispute / Final Judgment

Legal Issues

  1. 1 Whether the respondents are liable for profit shortfall under guarantee for 1998 and 1999
  2. 2 Whether oral variation bound both respondents
  3. 3 Whether audit report for 1999 complied with calculation machinery in contract and is admissible

Ratio Decidendi

First respondent liable for damages for the agreed 1998 profit shortfall under guarantee, oral agreement binding only first respondent, second respondent not bound because not party to oral variation and no ostensible authority, audit report for 1999 inadmissible for unreliability and prejudice, claim for 1999 shortfall not made out, contract variations and acquisition of Favco did not discharge liability, valid consideration found for lease guarantee, claim not statute barred or abuse of process.

Court Disposition

Application successful in part; first respondent liable for damages, application otherwise dismissed.

Orders

  • Applicants entitled to damages against first respondent for breach of Forbes Guarantee and Forbes Lot 8 Lease Guarantee in amount of $127,284.
  • First respondent to pay applicants interest at annual rate of 10% on ordered sum from date cause of action arose, pursuant to s 51A Federal Court of Australia Act 1976 (Cth).