Croftcall Ltd v Morgan & Anor

Croftcall Ltd v Morgan & Anor

On the true construction of the SPA, the stock of properties, Ocean debt, and French property (or its proceeds) are to be excluded from the calculation of net current assets for completion accounts, as their inclusion would result in double payment and is commercially absurd. The SPA must be interpreted in light of the relevant background and business commonsense.

Parties
Claimant: Croftcall Limited; Defendant: Neil Morgan; Defendant: Fiona Morgan
Jurisdiction
England and Wales
Judgment Date
11 July 2008
Procedural Posture
Civil / Judgment
Outcome
Claim allowed
Legal Topics
Interpretation of Commercial Contracts, Rectification, Completion Accounts, Purchase Price Adjustment
Contract Law Commercial Law Interpretation of Commercial Contracts Rectification Completion Accounts Purchase Price Adjustment

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Parties

Croftcall Limited

Claimant

Neil Morgan

Defendant

Fiona Morgan

Defendant

Procedural Posture

Civil / Judgment

Legal Issues

  1. 1 Whether the stock of properties, Ocean debt, and French property should be included in the calculation of net current assets under the SPA
  2. 2 Proper construction of SPA completion accounts mechanism
  3. 3 Entitlement to rectification of SPA

Ratio Decidendi

On the true construction of the SPA, the stock of properties, Ocean debt, and French property (or its proceeds) are to be excluded from the calculation of net current assets for completion accounts, as their inclusion would result in double payment and is commercially absurd. The SPA must be interpreted in light of the relevant background and business commonsense.

Court Disposition

Claim allowed

Orders

  • Declaration that the stock of properties, Ocean debt, and French property (or its proceeds) are excluded from the draft statement of net assets at completion under the SPA.
  • Quantum and balance of account to be determined at a subsequent hearing if not agreed.