Havelaar & Ors v Amey Plc [2005] EWHC 1330 (Ch) (24 June 2005)

Havelaar & Ors v Amey Plc [2005] EWHC 1330 (Ch) (24 June 2005)

The notice exercising the put option was valid in its terms. The price formula in the SPA does not operate where the purchaser made a loss, as the denominator (consolidated post-tax profits) cannot be zero or negative. The contract does not provide a price in these circumstances, subject to the possible implication of a term to provide a price, which must be determined at trial.

Citation
[2005] EWHC 1330 (Ch)
Parties
Claimants: Havelaar & Ors; Defendant: Amey plc
Jurisdiction
England and Wales
Judgment Date
24 June 2005
Procedural Posture
Commercial Contract Dispute (summary Judgment Application) / Application for Summary Judgment Under CPR 24; Preliminary Issues Determined
Outcome
Summary judgment refused on the main issue; certain issues determined as preliminary issues; issue of implied term to proceed to trial.
Legal Topics
Share Purchase Agreements, Put and Call Options, Contract Construction, Implied Terms, Summary Judgment
Contract Law Company Law Share Purchase Agreements Put and Call Options Contract Construction Implied Terms Summary Judgment

Case Brief

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Parties

Havelaar & Ors

Claimants

Amey plc

Defendant

Procedural Posture

Commercial Contract Dispute (summary Judgment Application) / Application for Summary Judgment Under CPR 24; Preliminary Issues Determined

Legal Issues

  1. 1 Whether the notice exercising the put option was valid under the SPA
  2. 2 Whether the price formula in the SPA operates where the purchaser made a loss
  3. 3 Whether a term should be implied to provide a price if the formula fails

Ratio Decidendi

The notice exercising the put option was valid in its terms. The price formula in the SPA does not operate where the purchaser made a loss, as the denominator (consolidated post-tax profits) cannot be zero or negative. The contract does not provide a price in these circumstances, subject to the possible implication of a term to provide a price, which must be determined at trial.

Court Disposition

Summary judgment refused on the main issue; certain issues determined as preliminary issues; issue of implied term to proceed to trial.

Orders

  • Notice exercising the put option held valid as a matter of construction, subject to service and authority issues.
  • Term 'PAT' to be ascertained taking into account losses, not treating losses as zero profit.