ISS Facility Management Pty Ltd & Anor v Quality Bakers Australia Pty Ltd & Ors [2020] NSWDC 447

ISS Facility Management Pty Ltd & Anor v Quality Bakers Australia Pty Ltd & Ors [2020] NSWDC 447

The exception in clause 10 of the Due Diligence Agreement requires, during the agreement term, that ISS must either have made an offer or insisted on a term that was less financially favourable to Goodman Fielder than the Key Terms, for the exception to apply. ISS did not submit such an offer or insist upon such terms before the Expiry Date of the Due Diligence Agreement. Therefore, Goodman Fielder was obliged by clause 8 to reimburse ISS's due diligence costs, limited to the contractual cap, as the preconditions for the exception were not met.

Jurisdiction
Australia
Judgment Date
14 August 2020
Procedural Posture
Civil Proceeding / Principal Judgment
Outcome
Judgment for the plaintiffs.
Legal Topics
['interpretation of Commercial Contracts' 'construction of Exception Clauses' 'due Diligence Agreements' 'reimbursement Obligations' 'good Faith Negotiations']
['contract Law' 'commercial Law'] ['interpretation of Commercial Contracts' 'construction of Exception Clauses' 'due Diligence Agreements' 'reimbursement Obligations' 'good Faith Negotiations']

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Procedural Posture

Civil Proceeding / Principal Judgment

Legal Issues

  1. 1 ['Whether the defendant is liable to reimburse the plaintiff for due diligence costs under the Due Diligence Agreement after parties failed to enter into a long term agreement.' "How the exception in clause 10 (relating to 'revised offer' or 'insistence' on terms less financially favourable) should be construed and applied."]

Ratio Decidendi

The exception in clause 10 of the Due Diligence Agreement requires, during the agreement term, that ISS must either have made an offer or insisted on a term that was less financially favourable to Goodman Fielder than the Key Terms, for the exception to apply. ISS did not submit such an offer or insist upon such terms before the Expiry Date of the Due Diligence Agreement. Therefore, Goodman Fielder was obliged by clause 8 to reimburse ISS's due diligence costs, limited to the contractual cap, as the preconditions for the exception were not met.

Court Disposition

Judgment for the plaintiffs.

Orders

  • ['Plaintiffs are to prepare and serve proposed short minutes of order providing for verdict and judgment for the sum of $600,000 plus interest and costs.' 'Defendants may serve submissions disputing content of short minutes within 5 days.' 'If parties agree, agreed short minutes to be supplied so that orders may be...