Wu & Anor v King Enterprises & Trading Pty Ltd & Ors [2005] NSWSC 283

Wu & Anor v King Enterprises & Trading Pty Ltd & Ors [2005] NSWSC 283

The sale documents contained clear drafting errors: the parties intended the Plaintiffs, as the selling shareholders, to receive the business sale proceeds, and the parties later agreed the stock in trade items and prices. King Enterprises was therefore bound to pay the unpaid stock amount in Australian dollars, and the Third and Fourth Defendants were liable as guarantors after demand by service of the Statement of Claim.

Jurisdiction
Australia
Judgment Date
29 March 2005
Procedural Posture
Contract Debt and Rectification Proceedings Arising From Sale of Business Agreement and Guarantees / Trial Hearing; Defendants Did Not Appear; Ex Tempore Judgment
Outcome
Judgment for Plaintiffs.
Legal Topics
['rectification' 'contract Debt' 'sale of Business' 'guarantee' 'stock in Trade Valuation' 'currency of Payment' 'interest' 'costs']
['contract Law' 'equity'] ['rectification' 'contract Debt' 'sale of Business' 'guarantee' 'stock in Trade Valuation' 'currency of Payment' 'interest' 'costs']

Case Brief

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Procedural Posture

Contract Debt and Rectification Proceedings Arising From Sale of Business Agreement and Guarantees / Trial Hearing; Defendants Did Not Appear; Ex Tempore Judgment

Legal Issues

  1. 1 ['Whether the Plaintiffs, rather than Carlington, were entitled to receive the purchase price under the sale of business agreement.' 'Whether the sale of business agreement should be rectified because of a drafting error as to the payee of the purchase price.' 'Whether King Enterprises was bound by the agreed stock in trade valuation reached after the stock take.' "Whether the Third and Fourth Defendants were liable under their guarantee of King Enterprises' obligations." 'Whether payment for stock in trade should be entered in Australian dollars or both United States dollars and Australian dollars.' 'What interest should apply to the unpaid amount.']

Ratio Decidendi

The sale documents contained clear drafting errors: the parties intended the Plaintiffs, as the selling shareholders, to receive the business sale proceeds, and the parties later agreed the stock in trade items and prices. King Enterprises was therefore bound to pay the unpaid stock amount in Australian dollars, and the Third and Fourth Defendants were liable as guarantors after demand by service of the Statement of Claim.

Court Disposition

Judgment for Plaintiffs.

Orders

  • ['The business sale agreement was to be rectified to require the purchaser to pay the purchase price to the Plaintiffs rather than Carlington.' 'Judgment was to be entered for the Plaintiffs for the Australian dollar amount calculated as payable on 24 September 2000 for stock in trade.' 'Interest was to be...