Forbes Engineering (Asia) Pte Limited v Forbes (No 4) [2009] FCA 675

FEDERAL COURT OF AUSTRALIA

Forbes Engineering (Asia) Pte Limited v Forbes (No 4) [2009] FCA 675

CONTRACTS – breach of guarantee – damages claimed from respondents for breach of guarantee of profit shortfall of company – profit guarantee originally given by vendor companies in share sale agreement – respondents guaranteed any profit shortfall of company the subject of share sale agreement in 1998 and 1999 – applicants leased property from respondents - any profit shortfall to be made up by reduction of rent payable to applicants in respect of lease – profit shortfall claimed by applicants in 1998 and 1999 – respondents failed to refund rent to purchaser company in amounts of profit shortfall – whether oral variation of agreed profit shortfall for year ending 1998 – whether audit report for 1999 compliant with machinery of calculation in share sale agreement – whether profit shortfall for 1998 understated – whether change in control of company discharged respondents from guarantee – whether acquisition of a new business by the company discharged respondents from guarantee – whether valid consideration for guarantee – whether written variations to the principal share sale agreement discharged guarantee – whether applicants' claim statute barred – whether managing director of first applicant represented that guarantee would not be enforced – Order 20 rule 2 of the Federal Court Rules – whether claim was abuse of process due to missing source financial material

EVIDENCE – whether audit report detailing profit shortfall in 1999 admissible – whether audit report akin to a banker's certificate – whether provision for audit report in relation to profit shortfall in share sale agreement a "Dobbs Clause" – audit report on 1999 profit shortfall based on source financial source material now missing – whether audit report prejudicial to respondents and inadmissible under section 135 and section 136 of the Evidence Act 1995 (Cth) – whether audit report a business record under section 69 of the Evidence Act 1995 (Cth) – whether subsequent report created for the purpose of litigation and inadmissible under section 69(3) of the Evidence Act 1995 (Cth)