Evolution Traffic Control v Skerratt [2018] NSWSC 49

Evolution Traffic Control v Skerratt [2018] NSWSC 49

The defendants did not disclose the existence or content of the RPL condition, or that it could not or might not be satisfied. By early December 2014 it was very unlikely that the condition could be satisfied, and by 19 January 2015 it was impossible. The RPL Funding Representation and RPL Revenue Representation were representations as to future matters made without reasonable grounds and were misleading or deceptive. Evolution relied on the misleading conduct in entering into and completing the share purchase agreement; had the true position been disclosed, it would not have contracted at $10 million or would have terminated before completion. The sale to Arowana, supported by the Nexia...

Jurisdiction
Australia
Judgment Date
06 February 2018
Procedural Posture
Equity Commercial List Proceeding Alleging Misleading or Deceptive Conduct, Breach of Warranty and Indemnity Arising From a Share Purchase Agreement / Principal Judgment After Hearing; Parties Directed to Bring in Draft Orders
Outcome
Evolution succeeded and was entitled to judgment against each defendant for $3,537,970 plus interest, with costs.
Legal Topics
['pre Contractual Representations' 'misleading or Deceptive Conduct' 'share Purchase Agreement' 'breach of Warranty' 'reliance and Inducement' 'assessment of Damages' 'fair Value']
['commercial Law' 'australian Consumer Law' 'contract Law'] ['pre Contractual Representations' 'misleading or Deceptive Conduct' 'share Purchase Agreement' 'breach of Warranty' 'reliance and Inducement' 'assessment of Damages' 'fair Value']

Case Brief

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Procedural Posture

Equity Commercial List Proceeding Alleging Misleading or Deceptive Conduct, Breach of Warranty and Indemnity Arising From a Share Purchase Agreement / Principal Judgment After Hearing; Parties Directed to Bring in Draft Orders

Legal Issues

  1. 1 ['Whether the defendants failed to disclose the RPL condition and that it could not be achieved for the 2015 calendar year before completion' 'Whether the RPL condition was achievable for the 2015 calendar year' 'Whether the failure to disclose the RPL condition and its non-achievability was misleading or deceptive conduct in contravention of s 18(1) of the ACL' 'Whether the defendants conveyed the RPL Capability Representation, RPL Funding Representation and RPL Revenue Representation' 'Whether the defendants had reasonable grounds for the RPL Funding Representation and RPL Revenue Representation' 'Whether Evolution suffered loss because of misleading or deceptive conduct and the amount of that loss' 'Whether the defendants breached warranties under the share purchase agreement or owed an indemnity under clause 11.5']

Ratio Decidendi

The defendants did not disclose the existence or content of the RPL condition, or that it could not or might not be satisfied. By early December 2014 it was very unlikely that the condition could be satisfied, and by 19 January 2015 it was impossible. The RPL Funding Representation and RPL Revenue Representation were representations as to future matters made without reasonable grounds and were misleading or deceptive. Evolution relied on the misleading conduct in entering into and completing the share purchase agreement; had the true position been disclosed, it would not have contracted at $10 million or would have terminated before completion. The sale to Arowana, supported by the Nexia...

Court Disposition

Evolution succeeded and was entitled to judgment against each defendant for $3,537,970 plus interest, with costs.

Orders

  • ['Direct the parties to bring in draft orders, including an agreed calculation of interest, to give effect to these reasons.' 'Stand matter over to 10am on 9 February 2018 for entry of judgment.' "Order the defendants to pay the plaintiff's costs." 'Reserve liberty to apply to chambers if the parties agree on the...