Phillips Contracting v Yensong [2008] NSWSC 769

Phillips Contracting v Yensong [2008] NSWSC 769

The plaintiff's claim failed because, although some earlier statements were misleading, the plaintiff knew the true position before entering the contract and did not rely on the incorrect portfolio statements or the 21 July 2005 annual turnover statement. The 3 August 2005 oral and written statements about the Bulga Coal contract were not misleading or deceptive. The plaintiff also obtained the benefit of the Bulga Coal contractual arrangements, so no deduction from goodwill was available under special condition 15. The defendant was therefore entitled to the goodwill price, payment out of moneys paid into court with interest, and costs.

Jurisdiction
Australia
Judgment Date
29 July 2008
Procedural Posture
Equity Proceedings Alleging Misleading and Deceptive Conduct in the Sale of an Electrical Contracting Business, With a Cross Claim for the Balance of the Purchase Price / Principal Judgment After Hearing
Outcome
Plaintiff's claim dismissed in substance; defendant entitled on cross-claim to the whole goodwill price, payment out of moneys paid into court and costs; short minutes of order to be brought in.
Legal Topics
['misleading and Deceptive Conduct' 'reliance' 'purchase of Business' 'goodwill' 'variation of Purchase Price Under S 87 of the Trade Practices Act 1974 (cth)' 'non Reliance Clause' 'assignment or Novation of Client Contract' 'cross Claim for Purchase Price']
['trade and Commerce' 'contract' 'equity'] ['misleading and Deceptive Conduct' 'reliance' 'purchase of Business' 'goodwill' 'variation of Purchase Price Under S 87 of the Trade Practices Act 1974 (cth)' 'non Reliance Clause' 'assignment or Novation of Client Contract' 'cross Claim for Purchase Price']

Case Brief

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Procedural Posture

Equity Proceedings Alleging Misleading and Deceptive Conduct in the Sale of an Electrical Contracting Business, With a Cross Claim for the Balance of the Purchase Price / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether representations in the portfolio document about workforce, contracts, turnover, profit and assets were misleading or deceptive and caused loss' 'Whether statements made by Mr Bryan Gay at the meeting on 21 July 2005 about income and annual turnover were misleading or deceptive and relied upon' 'Whether oral and written representations on 3 August 2005 about the profitability of the Bulga Coal contract were misleading or deceptive' 'Whether the plaintiff relied on any misleading representations when entering the contract on 5 August 2005' 'Whether any amount should be deducted from the goodwill price under special condition 15 because of the Bulga Coal contract' 'Whether the defendant was entitled on its cross-claim to payment of the balance of the purchase price and costs']

Ratio Decidendi

The plaintiff's claim failed because, although some earlier statements were misleading, the plaintiff knew the true position before entering the contract and did not rely on the incorrect portfolio statements or the 21 July 2005 annual turnover statement. The 3 August 2005 oral and written statements about the Bulga Coal contract were not misleading or deceptive. The plaintiff also obtained the benefit of the Bulga Coal contractual arrangements, so no deduction from goodwill was available under special condition 15. The defendant was therefore entitled to the goodwill price, payment out of moneys paid into court with interest, and costs.

Court Disposition

Plaintiff's claim dismissed in substance; defendant entitled on cross-claim to the whole goodwill price, payment out of moneys paid into court and costs; short minutes of order to be brought in.

Orders

  • ['Counsel for the defendant to bring in short minutes of order in accordance with the reasons.' 'The whole of the price payable for goodwill is payable to the defendant.' 'The defendant is entitled to payment out of the moneys paid into court and to any interest earned on those moneys.' 'If there is a dispute about...