Lonedale Ltd & Ors v Scottish Motor Auctions (Holdings) Ltd [2011] ScotCS CSOH_4 (14 January 2011)

Lonedale Ltd & Ors v Scottish Motor Auctions (Holdings) Ltd [2011] ScotCS CSOH_4 (14 January 2011)

The court held that, on the facts, the defenders (through Mr Rijkse) did not have actual knowledge of the change of control provision in MSAL's Articles prior to completion, nor were they aware that their agents/advisers had such knowledge. Therefore, clause 5.3 of the SPA did not bar the defenders' claim for breach of warranty. The pursuers were found to be in breach of warranties 1.8.1, 2.7.3, 3.3, and 10.1.13. The defenders' claim was not time-barred. Damages were to be assessed for the loss suffered as a result of the breach.

Citation
[2011] ScotCS CSOH_4
Parties
Pursuer: Lonedale Limited and Others; Defender: Scottish Motor Auctions (Holdings) Limited
Jurisdiction
Scotland
Judgment Date
14 January 2011
Procedural Posture
Commercial Action (breach of Warranty Claim) / Judgment After Proof Before Answer
Outcome
Defenders' counterclaim for breach of warranty succeeds; pursuers' clause 5.3 and time-bar defences fail.
Legal Topics
Share Purchase Agreement, Breach of Warranty, Disclosure Obligations, Change of Control Provisions, Imputed Knowledge, Damages
Contract Law Company Law Share Purchase Agreement Breach of Warranty Disclosure Obligations Change of Control Provisions Imputed Knowledge Damages

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Parties

Lonedale Limited and Others

Pursuer

Scottish Motor Auctions (Holdings) Limited

Defender

Procedural Posture

Commercial Action (breach of Warranty Claim) / Judgment After Proof Before Answer

Legal Issues

  1. 1 Whether the defenders were barred from claiming for breach of warranty under clause 5.3 of the SPA due to knowledge of the change of control provision in MSAL's Articles
  2. 2 Whether the pursuers breached warranties 1.8.1, 2.7.3, and 10.1.13 in addition to 3.3
  3. 3 Whether the defenders' claim was time-barred

Ratio Decidendi

The court held that, on the facts, the defenders (through Mr Rijkse) did not have actual knowledge of the change of control provision in MSAL's Articles prior to completion, nor were they aware that their agents/advisers had such knowledge. Therefore, clause 5.3 of the SPA did not bar the defenders' claim for breach of warranty. The pursuers were found to be in breach of warranties 1.8.1, 2.7.3, 3.3, and 10.1.13. The defenders' claim was not time-barred. Damages were to be assessed for the loss suffered as a result of the breach.

Court Disposition

Defenders' counterclaim for breach of warranty succeeds; pursuers' clause 5.3 and time-bar defences fail.

Orders

  • Pursuers found in breach of warranties 1.8.1, 2.7.3, 3.3, and 10.1.13 of the SPA.
  • Defenders entitled to damages for breach of warranty; quantum to be assessed.