Daniel Stewart & Company Plc v Environmental Waste Controls Plc

Daniel Stewart & Company Plc v Environmental Waste Controls Plc

The abort fee was contractually due because EWC aborted the listing for reasons unconnected to any breach or failure of performance by Daniel Stewart, and the contract did not require Daniel Stewart to act reasonably in withholding agreement to abort. The obligation was only to act in good faith and not capriciously, and there was no evidence of bad faith. The marketing and book build process had not been completed, and EWC did not request Daniel Stewart's agreement to abort. The legal expenses were capped at £30,000 plus VAT, and only expenses for searches on new directors were recoverable. Additional VAT and certain disbursements were not recoverable. Interest was limited to the...

Parties
Claimant: Daniel Stewart & Company PLC; Defendant: Environmental Waste Controls PLC
Jurisdiction
England and Wales
Judgment Date
25 June 2013
Procedural Posture
Commercial Contract Dispute / High Court Trial Judgment
Outcome
Claim allowed in part; judgment for claimant for abort fee, capped legal expenses, limited disbursements, and contractual interest; other claims dismissed.
Legal Topics
Construction of Contract Terms, Implied Terms, Abort Fee Clauses, Legal Expenses, Interest on Commercial Debts
Contract Law Commercial Law Construction of Contract Terms Implied Terms Abort Fee Clauses Legal Expenses Interest on Commercial Debts

Case Brief

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Parties

Daniel Stewart & Company PLC

Claimant

Environmental Waste Controls PLC

Defendant

Procedural Posture

Commercial Contract Dispute / High Court Trial Judgment

Legal Issues

  1. 1 Whether the claimant is entitled to an abort fee under the engagement letter after the defendant aborted the AIM listing.
  2. 2 Whether the abort fee clause required the claimant to act reasonably in withholding agreement to abort the listing.
  3. 3 Whether the defendant's reasons for aborting the listing were connected to the claimant's performance.

Ratio Decidendi

The abort fee was contractually due because EWC aborted the listing for reasons unconnected to any breach or failure of performance by Daniel Stewart, and the contract did not require Daniel Stewart to act reasonably in withholding agreement to abort. The obligation was only to act in good faith and not capriciously, and there was no evidence of bad faith. The marketing and book build process had not been completed, and EWC did not request Daniel Stewart's agreement to abort. The legal expenses were capped at £30,000 plus VAT, and only expenses for searches on new directors were recoverable. Additional VAT and certain disbursements were not recoverable. Interest was limited to the...

Court Disposition

Claim allowed in part; judgment for claimant for abort fee, capped legal expenses, limited disbursements, and contractual interest; other claims dismissed.

Orders

  • EWC to pay Daniel Stewart £150,000 plus VAT as abort fee.
  • EWC to pay £36,000 (inclusive of VAT) for legal services; no recovery for printing costs or additional VAT.