AMCOR LIMITED (ACN 000 017 372) & ORS (ACCORDING TO THE SCHEDULE ATTACHED)	Plaintiffs
v
TREVOR MARK BARNES & ORS (ACCORDING TO THE SCHEDULE ATTACHED)	Defendants

(BY ORIGINAL PROCEEDING)

AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD) (ACN 104 489 581) & ANOR (ACCORDING TO THE SCHEDULE ATTCHED)	Plaintiffs by Counterclaim
v
ACN002693843 BOX PTY LTD (ACN 002 693 843) & ANOR (ACCORDING TO THE SCHEDULE ATTACHED)	Defendants by Counterclaim

(BY COUNTERCLAIM)

ORORA LIMITED (FORMERLY AMCOR PACKAGING (AUSTRALIA) PTY LTD) (ACN 004 275 165)	Cross-Claimant
v
AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD) (ACN 104 489 581) & ORS (ACCORDING TO THE SCHEDULE ATTACHED)	Defendants to Cross-Claim

(BY CROSS-CLAIM)

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JUDGE:	SLOSS J
WHERE HELD:	Melbourne
DATES OF HEARING:	25-28 May, 1, 3-5, 10-12, 15–19, 22-24, 26 (directions) June, 28-31 July, 3-6, 10, 12-13, 21 (mention) 26 (mention) August, 8-11 and 15 September 2015
DATE OF JUDGMENT:	28 November 2016
CASE MAY BE CITED AS:	AMCOR LTD & ORS v BARNES & ORS
MEDIUM NEUTRAL CITATION:	[2016] VSC 707 (First Revision: 15 September 2020)

CONTRACT – Asset Sale Deed – Business sold as a going concern – Deed contained reciprocal supply / purchase obligations – Purchaser was obliged to obtain all supplies of raw materials from Vendor (cl 12.1) – Vendor was obliged to obtain ‘all its’ supplies of finished products from Purchaser (cl 12.2) – Construction of cl 12.1 (supply) and cl 12.2 (purchase) obligations – Whether Vendor breached cl 12.2 obligation to obtain ‘all its’ supplies of finished products from Purchaser – Whether subject work was encompassed within cl 12.2 – If breach is made out on what basis are damages to be assessed – Expert evidence – Which methodology is to be applied.

CONTRACT – Asset Sale Deed – Business sold as a going concern – Deed contained reciprocal supply / purchase obligations – Purchaser was obliged to obtain all raw materials from Vendor (cl 12.1) – Vendor was obliged to obtain ‘all its’ supplies of finished products from Purchaser (cl 12.2) – Parent company of Vendor not bound by Deed – Whether the Deed as executed makes commercial sense – Whether additional supply agreement is to be implied between Purchaser and the parent company of Vendor containing terms equivalent to cl 12.1 and cl 12.2 of the Deed – Construction of cl 12.2 obligation under the implied supply agreement – What purchase requirements (and of whom) were captured by cl 12.2 obligation.

ESTOPPEL BY CONVENTION – Alternatively to implied supply agreement – Whether during negotiations for Asset Sale Deed, Purchaser and parent company of Vendor adopted the assumption that the effect of the Deed would be that parent company of Vendor would be bound by cl 12.2 obligation – Whether Purchaser and parent company of Vendor conducted their relationship on the basis of such mutual assumption – Whether parent company of Vendor is estopped…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Amcor Ltd v Barnes

Details

AGLC: Amcor Ltd v Barnes [2016] VSC 707
Case: [2016] VSC 707
Decision Date: 28 November 2016

CaseChat Overview and Summary

Amcor Ltd, the purchaser of a business, initiated proceedings against Barnes, the vendor, and others, in the Federal Court of Australia. The dispute centered on the interpretation and enforcement of various terms within the Asset Sale Deed, which included reciprocal supply and purchase obligations, as well as restrictions on changes of control and an indemnity clause. Barnes argued against liability for breaches of the supply obligations, the applicability of estoppel by convention, and the enforceability of the change of control clause. Amcor sought damages for breaches of contract, including failure to supply finished products and changes of control, as well as enforcement of the indemnity clause and resolution of issues regarding the fixed and floating charge.

The court had to determine the proper construction of the terms within the Asset Sale Deed, particularly the supply and purchase obligations, and whether these obligations extended to the parent company of Barnes. Additionally, the court had to assess if an implied supply agreement existed between Amcor and the parent company of Barnes, and whether estoppel by convention could be applied. The court also needed to ascertain the meaning of 'change of control' within the context of the deed and the consequences of a breach. Furthermore, the court had to interpret the indemnity clause and decide on the validity and effectiveness of the fixed and floating charge, including the conditions for discharge and interest payment.

The court held that the Asset Sale Deed did not bind the parent company of Barnes, and no implied supply agreement or estoppel by convention could be applied to hold the parent company liable. The court also clarified the meaning of 'change of control' and found that Amcor had breached this clause. Regarding the indemnity clause, the court ruled that it encompassed third-party claims. Finally, the court determined the amounts and liabilities captured by the 'Secured Money' and found that the chargor had not made a valid tender under the charge. The court ordered Barnes to pay damages for breach of the supply obligations and Amcor to pay for the breach of the change of control clause. The court also provided guidance on the circumstances under which the fixed and floating charge could be discharged and interest paid.

The Federal Court of Australia ordered Barnes to pay Amcor damages for breaches of the supply obligations under the Asset Sale Deed. Additionally, the court found Amcor liable for breaching the change of control clause, and the court outlined the rights available to Barnes under section 50AA of the Corporations Act 2001 (Cth). The court also provided directions regarding the enforcement of the indemnity clause and the terms under which the fixed and floating charge could be discharged, including interest obligations.

Orders