Forrest v Appleyard & 2 ors [2006] NSWSC 281

Forrest v Appleyard & 2 ors [2006] NSWSC 281

The parties made an enforceable oral agreement, outside the Shareholders' Agreement but incorporating its relevant terms, that Mr Forrest would retire with effect from 17 December 1999 without the need for notice, and the defendants would purchase his interest according to the valuation method in the Shareholders' Agreement without any discount; the agreement was sufficiently certain as the incorporated terms supplied the content on proportions and purchase obligations, and specific performance should be ordered with a referral to a suitably qualified referee for valuation as at the reference date.

Parties
Plaintiff: John James Forrest; First Defendant: Leigh Davern Appleyard; Second Defendant: Geoffrey Martin Pryke; Third Defendant: Bruce Anthony Kenny
Jurisdiction
Australia
Judgment Date
13 April 2006
Procedural Posture
Civil / Judgment After Trial
Outcome
Declarations granted; specific performance ordered; valuation referred to a referee; costs to plaintiff; directions for further orders upon referee report.
Legal Topics
Shareholders' Agreements, Specific Performance, Company Law, Partnership Dissolution, Retirement of Participants, Contract Construction, Uncertainty and Incompleteness in Contracts
Contract Law Equity Shareholders' Agreements Specific Performance Company Law Partnership Dissolution Retirement of Participants Contract Construction +1 more

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Parties

John James Forrest

Plaintiff

Leigh Davern Appleyard

First Defendant

Geoffrey Martin Pryke

Second Defendant

Bruce Anthony Kenny

Third Defendant

Procedural Posture

Civil / Judgment After Trial

Legal Issues

  1. 1 Whether there was a binding and enforceable agreement for the purchase of the plaintiff's interest in the Practice
  2. 2 Whether the agreement fails for uncertainty or incompleteness
  3. 3 Whether a discount applies to the valuation of the plaintiff's interest

Ratio Decidendi

The parties made an enforceable oral agreement, outside the Shareholders' Agreement but incorporating its relevant terms, that Mr Forrest would retire with effect from 17 December 1999 without the need for notice, and the defendants would purchase his interest according to the valuation method in the Shareholders' Agreement without any discount; the agreement was sufficiently certain as the incorporated terms supplied the content on proportions and purchase obligations, and specific performance should be ordered with a referral to a suitably qualified referee for valuation as at the reference date.

Court Disposition

Declarations granted; specific performance ordered; valuation referred to a referee; costs to plaintiff; directions for further orders upon referee report.

Orders

  • Declare a binding and enforceable agreement that the plaintiff retire as of 17 December 1999 for compensation purposes.
  • Declare entitlement to payment of 45% of the fair market value as at 17 December 1999, in four equal instalments at specified intervals.