Hawksford Trustees Jersey Ltd v Stella Global UK Ltd & Anor [2012] EWCA Civ 55 (01 February 2012)

Hawksford Trustees Jersey Ltd v Stella Global UK Ltd & Anor [2012] EWCA Civ 55 (01 February 2012)

Where a trustee company enters into a contract on the basis of terms negotiated and agreed by a third party (here, Mr Begg), and the trustee's own decision is a formality dependent on that third party's recommendation, the common intention of the negotiator can be attributed to the company for the purposes of rectification if the company would not have contracted on any other terms and this was apparent to the counterparty.

Citation
[2012] EWCA Civ 55
Parties
Claimant/respondent: Hawksford Trustees Jersey Limited as Trustee of the Bald Eagle Trust; Defendants/appellants: Stella Global UK Limited & Anor
Jurisdiction
England and Wales
Judgment Date
01 February 2012
Procedural Posture
Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (chancery Division)
Outcome
Appeal dismissed
Legal Topics
Rectification of Contract, Attribution of Intention in Corporate Entities, Trustee Powers and Delegation, Earn Out Consideration in Share Purchase Agreements
Equity Contract Law Company Law Rectification of Contract Attribution of Intention in Corporate Entities Trustee Powers and Delegation Earn Out Consideration in Share Purchase Agreements

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Parties

Hawksford Trustees Jersey Limited as Trustee of the Bald Eagle Trust

Claimant/respondent

Stella Global UK Limited & Anor

Defendants/appellants

Procedural Posture

Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (chancery Division)

Legal Issues

  1. 1 Whether rectification of the Amended SPA should be granted to exclude 2007 consultancy payments from the calculation of 2007 EBITDA for the purpose of the Minimum Earn Out.
  2. 2 Whether the intention of Mr Begg, as negotiator and beneficiary, can be attributed to Hawksford Trustees Jersey Limited for the purposes of rectification.

Ratio Decidendi

Where a trustee company enters into a contract on the basis of terms negotiated and agreed by a third party (here, Mr Begg), and the trustee's own decision is a formality dependent on that third party's recommendation, the common intention of the negotiator can be attributed to the company for the purposes of rectification if the company would not have contracted on any other terms and this was apparent to the counterparty.

Court Disposition

Appeal dismissed

Orders

  • Rectification of the Amended SPA to exclude 2007 consultancy payments from the calculation of 2007 EBITDA for the purpose of the Minimum Earn Out.