Flynn v PPK Mining Equipment Pty Ltd (No 2) [2022] NSWSC 1640

Supreme Court New South Wales

Medium Neutral Citation: Flynn v PPK Mining Equipment Pty Ltd (No 2) [2022] NSWSC 1640 Hearing dates: 18-22, 25-27 July 2022, 1-2 August 2022; final submissions received 26 August 2022. Date of orders: 2 December 2022 Decision date: 02 December 2022 Jurisdiction: Equity - Commercial List Before: Rees J Decision: Declare agreement as varied. Otherwise dismiss Summons with costs. Catchwords: CONTRACTS – share purchase agreement – earnout clause based on profit – oral agreement to change earnout to revenue – contract contains 'no oral modification' clause – principles at [96]-[97] –contract varied – variation effective on date of agreement to vary, at [105] – plaintiff did not satisfy earnout clause as varied in any event. EXPERT DETERMINATION – jurisdiction of the Court – dispute resolution clause requires parties to perform preliminary steps before expert determination – defendant fails to perform preliminary step – expert determination clause discharged by breach – Court has jurisdiction. WORDS AND PHRASES – 'generally accepted accounting principles' at [138] – 'business' and 'carry on business' at [186]. Legislation Cited: Corporations Act 2001 (Cth) pt 2M.3, ss 45A, 292(2) Electronic Transactions Act 2000 (NSW) Cases Cited: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 Brand v Digi-Tech (Australia) Ltd [2002] NSWSC 416 Bundanoon Sandstone Pty Ltd v Cenric Group Pty Ltd [2019] NSWCA 87; (2019) 373 ALR 591 Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1992] QB 656 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251 GC NSW Pty Ltd v Galati [2020] NSWCA 326 GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1; [2003] FCA 50 Green v AMP Life Ltd [2005] NSWCA 354 Hawcroft General Trading Co Pty Ltd v Hawcroft [2017] NSWCA 91 Hope v Bathurst City Council (1980) 144 CLR 1 Hungier v Grace & Bent (1972) 127 CLR 210 In the matter of Australian Mortgage Finance Limited (Administrator Appointed) [2021] FCA 189 Ipoh v TPS Property No 2 Pty Ltd [2004] NSWSC 289 Martin v Dee-Tech Pty Ltd [2021] NSWSC 434 Mathews Capital Partners Pty Ltd v Coal of Queensland Holdings Limited [2012] NSWSC 462 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 Onley v Catlin Syndicate Ltd (as the underwriting member of Lloyd's Syndicate 2003) (2018) 360 ALR 92; [2018] FCAFC 119 Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 Queensland Phosphate Pty Limited v Korda and Shepard (as joint and several liquidators of Legend International Holdings Inc (in liq)) [2017] VSCA 269 Siam Steel International Plc v Compass (Australia) Pty Ltd (2014) 293 FCR 260; [2014] WASC 415 Smith v Capewell (1979) 142 CLR 509 Straits Exploration (Australia) Pty Ltd v Murchison United NL (2005) 31 WAR 187; [2005] WASCA 241 Strategic Publishing Group Pty Ltd v John Fairfax Publications Pty Ltd [2003] NSWSC 1134 WCX M4-M5 Link AT Pty Ltd v Acciona Infrastructure Projects Australia Pty Ltd (No 2) [2022] NSWSC 505 Westco Air Conditioning Ltd v Sui Chong Construction & Engineering Co Ltd [1998] HKCFI 946; [1998] 1 HKC 254 Texts Cited: Australian Accounting Standards Board, Standard 15 – "Revenue from Contracts with Customers" Australian Accounting Standards Board – Standard 102 – "Inventories" Australian Accounting Standards Board, Standard 118 – "Revenue" Bhimani, Alnoor, et al, Management Accounting and Cost Accounting (7th ed, 2018, Pearson) Encyclopaedic Australian Legal Dictionary McDougall, Robert, 'Recent Developments in Commercial Law' (Law Society Annual Specialist Accreditation Conference, 10 August 2018) Shim, Jae K, et al, CFO Fundamentals (2012, Wiley) Hansen, Don R, et al, Cost Management Accounting and Control (6th ed, 2007, South West College ISE) Category: Principal judgment Parties: Daniel Flynn (First Plaintiff) Flynfam Pty Ltd as trustee for the Flynn Family Trust (Second Plaintiff) PPK Mining Equipment Pty Ltd (First Defendant) PPK Group Ltd (Second Defendant) Representation: Counsel: Mr CD Wood SC / Mr AD Justice (Plaintiffs) Mr TM Faulkner SC / Mr AJ Bulley (Defendants)