SSABR Pty Ltd v AMA Group Ltd [2023] NSWSC 1551

Supreme Court New South Wales

Medium Neutral Citation: SSABR Pty Ltd v AMA Group Ltd [2023] NSWSC 1551 Hearing dates: 16-18, 20 October 2023 Date of orders: 15 December 2023 Decision date: 15 December 2023 Jurisdiction: Equity - Commercial List Before: Rees J Decision: Orders made for rectification; summons dismissed with costs. Catchwords: RECTIFICATION – plaintiffs sell smash repair businesses – sale agreement includes 'earn out' to be paid in 2 years time – 'earn out' based on earnings before interest and tax (EBIT) and multiplier – heads of agreement refers to average annual EBIT – sale agreement refers to 'EBIT for the earn-out period' – this meant aggregate EBIT for 2 years, not average annual EBIT – effectively doubled the multiplier – solicitor's error – 'rectificaton by construction' not available – principles at [68], [72]-[76] – inferring actual intention where plaintiffs did not give evidence – inferring actual intention of corporation, principles at [85] - common mistake – contract rectified. CONTRACTS – purchaser makes changes to businesses, said to impair ability to receive 'earn out' – implied term – duty to cooperate – principles at [128]-[130] – purchaser obliged to do all things necessary to ensure plaintiffs received benefits promised by the contract – does not extend to benefits that may occur – purchaser not obliged to operate businesses to ensure vendors receive earn out. MISLEADING OR DECEPTIVE CONDUCT – plaintiffs allege purchaser made oral representation that the businesses' contracts would not be altered post-completion – plaintiffs fail to establish representation made – any representation made at early stage of protracted negotiations not misleading when viewed with the whole of the purchaser's conduct, including terms of contract excluding reliance on any such representations. Legislation Cited: Australian Consumer Law s 18 Cases Cited: Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104 Beerens v Bluescope Distribution Pty Ltd [2012] VSCA 209; (2012) 30 VR 1 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 Chief Commissioner of State Revenue v Adams Bidco Pty Ltd [2019] NSWCA 34 Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544 Fabre v Arenales (1992) 27 NSWLR 437 Fonterra Brands (Aust) Pty Ltd v Bega Cheese Ltd [2021] VSC 75 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 Gulic v Boral Transport Ltd [2016] NSWSCA 269 Halkett v APG & Co Pty Ltd [2023] NSWSC 1058 Ireland v WG Riverview Pty Ltd [2019] NSWCA 307 Krakowski v Eurolnyx Properties Pty Ltd (1995) 183 CLR 563 Laundy Hotels (Quarry) Pty Ltd v Dyco Hotels Pty Ltd [2023] HCA 6 Leibler v Air New Zealand Ltd [1999] 1 VR 1 Marmax Investments Pty Ltd v RPR Maintenance Pty Ltd (2015) 237 FCR 534 Murray Holdings Ltd v Oscatello Investments Ltd [2018] EWHC 162 (Ch) New Standard Energy Pel 570 Pty Ltd v Outback Energy Hunter Pty Ltd [2019] SASCFC 132; (2019) 135 SASR 469 Perpetual Ltd v Myer Pty Ltd [2018] VSC 2 Queenfield Pty Ltd v Gordon Finance Pty Ltd [2019] VSC 857; (2019) 60 VR 118 Secured Income Real Estate (Australia) Ltd v St Martins investments Pty Ltd (1979) 144 CLR 596 Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) [2019] NSWCA 11; (2019) 99 NSWLR 317 Simic v New South Wales Land and Housing Corporation [2016] HCA 47; (2016) 260 CLR 85 Thiess Pty Ltd v Arup Pty Ltd [2012] QSC 185 Trentelman v The Owners - Strata Plan 76700 [2021] NSWSC 155 Viterra Malt Pty Ltd v Cargill Australia Limited [2023] VSCA 157 Watson v Foxman (1995) 49 NSWLR 315 Category: Principal judgment Parties: SSABR Pty Ltd (First Plaintiff) HAAPRC Pty Ltd (Second Plaintiff) AMA Group Ltd (First Defendant) AMA Group Solutions Pty Ltd (Second Defendant) Representation: Counsel: Mr JA Redwood SC / Ms SK Hill (Plaintiffs) Mr MA Robins KC / Mr S Fitzpatrick (Defendants)