Calliden Group Limited v Australian Unity Limited [2010] NSWSC 263

Calliden Group Limited v Australian Unity Limited [2010] NSWSC 263

Schedule 6 clause 5(a), properly construed in the commercial context of a purchase price adjustment comparing estimated NTA with completion NTA, required both the June 2007 Valuation and the Completion Valuation to use methods and approaches to selecting assumptions unchanged from the earlier valuations underpinning the estimated NTA, unless any change was clearly justified and fully explained. Ms Harrex changed both the approach to selecting assumptions and the method used, including by using a hybrid or reverse-engineered approach drawn from PPCI plus large analysis, and those changes were not clearly justified or fully explained. The June 2007 and Completion Valuations therefore did...

Jurisdiction
Australia
Judgment Date
13 April 2010
Procedural Posture
Equity Division Commercial List Proceeding Concerning Contractual Entitlements Under a Share Deed / Principal Judgment After Hearing on Entitlement to Declaratory Relief
Outcome
Plaintiffs established entitlement to declaratory relief; matter to be returned to Ernst & Young for further consideration, with parties to bring in short minutes of order.
Legal Topics
['construction of Share Deed' 'purchase Price Adjustment by Net Tangible Assets' 'actuarial Valuation of Insurance Liabilities' 'expert/accountant Certification Process' 'breach of Contractual Obligation to Procure Accountant' 'declaratory Relief']
['contract Law' 'commercial Law' 'insurance' 'equity'] ['construction of Share Deed' 'purchase Price Adjustment by Net Tangible Assets' 'actuarial Valuation of Insurance Liabilities' 'expert/accountant Certification Process' 'breach of Contractual Obligation to Procure Accountant' 'declaratory Relief']

Case Brief

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Procedural Posture

Equity Division Commercial List Proceeding Concerning Contractual Entitlements Under a Share Deed / Principal Judgment After Hearing on Entitlement to Declaratory Relief

Legal Issues

  1. 1 ['Whether Schedule 6 clause 5(a) required the Completion Valuation to be prepared using unchanged methods and approaches to the selection of assumptions compared to the December 2006 Valuation or only unchanged as between the June 2007 Valuation and the Completion Valuation.' 'Whether the June 2007 Valuation and the Completion Valuation were prepared using unchanged approaches to the selection of assumptions.' 'Whether the Completion Valuation was a final actuarial valuation of outstanding claims within clause 3(g) of Schedule 6 of the Deed.' 'Whether Calliden was required to incorporate the Completion Valuation into its Draft Completion Statement without alteration.' 'Whether the Draft Completion Statement produced by Calliden was a Draft Completion Statement for the purposes of the Deed.' 'Whether Australian Unity was entitled to refuse to procure Ernst & Young to perform the agreed upon procedures in relation to the Draft Completion Statement.' 'What declaratory or other relief Calliden was entitled to.']

Ratio Decidendi

Schedule 6 clause 5(a), properly construed in the commercial context of a purchase price adjustment comparing estimated NTA with completion NTA, required both the June 2007 Valuation and the Completion Valuation to use methods and approaches to selecting assumptions unchanged from the earlier valuations underpinning the estimated NTA, unless any change was clearly justified and fully explained. Ms Harrex changed both the approach to selecting assumptions and the method used, including by using a hybrid or reverse-engineered approach drawn from PPCI plus large analysis, and those changes were not clearly justified or fully explained. The June 2007 and Completion Valuations therefore did...

Court Disposition

Plaintiffs established entitlement to declaratory relief; matter to be returned to Ernst & Young for further consideration, with parties to bring in short minutes of order.

Orders

  • ['Calliden established an entitlement to declaratory relief, although the sixth declaration sought in paragraph 47 of the further amended summons was inappropriate.' 'The matter is to be remitted to Ernst & Young for further consideration.' 'The parties are to bring in short minutes of order.' 'The parties are to be...