Principal Strategic Options v Coshott [2000] NSWSC 310

Principal Strategic Options v Coshott [2000] NSWSC 310

The parties objectively treated the conditions precedent in clause 3.2(b) and (e) as fulfilled on their effective transaction dates, including 28 August 1998 for the allotment of 98 shares, transfer of 50 shares to Strategic, and equitable assignment of the debt. Clause 13.11 was not void for uncertainty because Strategic could elect to exercise the option under clause 13.11(a)(i) when both triggering events had occurred. Strategic's notice of 29 April 1999 was therefore within time, and because the company had not traded and the shares and debt were of little or no value, Strategic was entitled to specific performance and judgment for the agreed sum including interest.

Jurisdiction
Australia
Judgment Date
28 March 2000
Procedural Posture
Contract; Construction of Put Option Clause; Specific Performance / Judgment After Hearing in the Equity Division, Commercial List
Outcome
Option agreement specifically enforceable; judgment for the plaintiff in the sum of $1,355,239.74 with costs.
Legal Topics
['construction of Shareholders Deed' 'put Option' 'specific Performance' 'uncertainty of Contract' 'conditions Precedent' 'share Transfer' 'equitable Assignment of Debt']
['contract Law' 'equity' 'corporations'] ['construction of Shareholders Deed' 'put Option' 'specific Performance' 'uncertainty of Contract' 'conditions Precedent' 'share Transfer' 'equitable Assignment of Debt']

Case Brief

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Procedural Posture

Contract; Construction of Put Option Clause; Specific Performance / Judgment After Hearing in the Equity Division, Commercial List

Legal Issues

  1. 1 ['Whether the conditions precedent in clause 3.2 of the shareholders deed were satisfied by 28 August 1998 so that the option notice given on 29 April 1999 was within time.' 'Whether clause 13.11 of the shareholders deed was void for uncertainty where both triggering events for the put option had occurred and different price formulae were provided.' 'Whether the equitable assignment of the $40,000 debt satisfied clause 3.2(e) and could be reassigned without a written assignment.' 'Whether Strategic was entitled to specific performance of the option agreement.']

Ratio Decidendi

The parties objectively treated the conditions precedent in clause 3.2(b) and (e) as fulfilled on their effective transaction dates, including 28 August 1998 for the allotment of 98 shares, transfer of 50 shares to Strategic, and equitable assignment of the debt. Clause 13.11 was not void for uncertainty because Strategic could elect to exercise the option under clause 13.11(a)(i) when both triggering events had occurred. Strategic's notice of 29 April 1999 was therefore within time, and because the company had not traded and the shares and debt were of little or no value, Strategic was entitled to specific performance and judgment for the agreed sum including interest.

Court Disposition

Option agreement specifically enforceable; judgment for the plaintiff in the sum of $1,355,239.74 with costs.

Orders

  • ['Judgment for the plaintiff in the sum of $1,355,239.74.' 'Specific performance of the option agreement contained in clause 13.11 of the Shareholders Deed of 21 August 1998 between NSW Master Franchise Pty Ltd, Robert Gilbert Coshott and Principal Strategic Options Pty Ltd by the execution and delivery of a share...