Drane v Aqualyng Holdings - [2017] QSC 233

SUPREME COURT OF QUEENSLAND

CITATION:

Drane v Aqualyng Holdings & Anor [2017] QSC 233

PARTIES:

ROBERT MAXWELL DRANE

(plaintiff)

v
AQUALYNG HOLDINGS AS REG NO 991180958

(first defendant)

and

AQUALYNG O&M PTE LTD REG NO 2014122001Z
(second defendant)

FILE NO/S:

SC No 282 of 2015

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Cairns

DELIVERED ON:

5 October 2017 (ex tempore)

DELIVERED AT:

Cairns

HEARING DATE:

3, 4 & 5 October 2017

JUDGE:

Henry J

ORDERS:

1.     The Court declares that the contracts mentioned in the pleadings and known as:

(a)    the share sale agreement; and

(b)    the agreement in writing constituted by the plaintiff exercised by written notice to the defendants of the option for the sale by the plaintiff to the defendants of one ordinary share held by plaintiff in the capital of Integrated Chemical and Environmental Systems Pty Ltd ACN 086 243 772, being the put option provided for under the terms of the put and call option deed entered into between the plaintiff and defendants;

so far as they have not already been performed, ought to be specifically performed and carried into execution, and orders and adjudges accordingly.

2.     The Court further declares that:

(a)   pursuant to clause 9.7(h) of the share sale agreement, the determination of current year actual EBITDA as $2,255,303 by Mr Ross Walker of the firm Pitcher Partners, as an independent accountant within the meaning and for the purposes of clause 9.7 of the share sale agreement, is and has been final and binding upon the parties with effect from 12 April, 2017; and

(b) the initial purchase price fixed at $5,845,091 became payable in the manner required by clauses 9.3 and 9.5 of the put and call option deed on and from 3 May, 2017.

3.     In performance and execution of the said contracts, the defendants must pay to the plaintiff forthwith:

(a)   the sum of $1,043,810, being the adjusted final payment amount payable under clause 4.5(b) of the share sale agreement and calculated in accordance with clause 8.2 of the share sale agreement;

(b) interest in the sum of $204,701 pursuant to clause 8.4(c) of the share sale agreement; and

(c)   the initial purchase price to a value of $5,845,091 in the manner required by clauses 9.3 and 9.5 of the put and call option deed.

4.     The plaintiff is entitled to damages in addition to specific performance in the sum of $652, 407 being the total of:

(a)    $503,478 calculated on a daily basis at six per cent simple on the value of $5,845,091 over 525 days over the period between 29 July 2014 and 5 December 2016; and

(b)    $148,929 being 155/365 x $5,845,091 x 6/100.

5.     There be liberty to any part to apply on two business days’ written notice.

6.     The counter-claim be wholly dismissed.

7.     The parties have:

(a)   21 days to file and serve written submissions as to costs together with any supporting materials; and

(b)     7 days thereafter to file and…

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 Drane v Aqualyng Holdings

Details

AGLC: Drane v Aqualyng Holdings [2017] QSC 233
Case: [2017] QSC 233
Decision Date: 5 October 2017 (ex tempore)

CaseChat Overview and Summary

Drane v Aqualyng Holdings involved a dispute between the parties concerning the interpretation and enforcement of a share sale agreement. The plaintiff sought specific performance of the agreement, arguing that the defendants had failed to pay the agreed purchase price for shares in Integrated Chemical and Environmental Systems. The defendants contended that the independent accountant's determination of the current year's actual EBITDA involved a manifest error, thereby affecting the purchase price. The Federal Court of Australia was tasked with resolving these issues.

The legal issues before the Court included the proper interpretation of the dispute resolution clause in the share sale agreement, particularly the role of an independent accountant in determining the current year's actual EBITDA and whether any manifest error had occurred in this determination. The Court had to decide whether the determination of the independent accountant was final and binding and whether the defendants were required to pay the specified purchase price.

The Court found that the determination of the independent accountant did not involve manifest error and was final and binding. It ruled that the defendants were required to pay the purchase price as determined, and the contracts should be specifically performed. The Court also awarded damages to the plaintiff for the delayed payment of the purchase price. It dismissed the defendants' counterclaim and outlined a timetable for the filing of written submissions on costs.

In summary, the Court ordered specific performance of the contracts, confirmed the binding nature of the accountant's determination, and mandated the payment of the purchase price along with interest and damages. The counterclaim was dismissed, and the parties were given a deadline to submit written and, potentially, oral submissions on costs.

Orders

Orders of the court

1. The Court declares that the contracts mentioned in the pleadings and known as:

(a) the share sale agreement; and

(b) the agreement in writing constituted by the plaintiff exercised by written notice to the defendants of the option for the sale by the plaintiff to the defendants of one ordinary share held by plaintiff in the capital of Integrated Chemical and Environmental Systems Pty Ltd ACN 086 243 772, being the put option provided for under the terms of the put and call option deed entered into between the plaintiff and defendants;

so far as they have not already been performed, ought to be specifically performed and carried into execution, and orders and adjudges accordingly.

2. The Court further declares that:

(a) pursuant to clause 9.7(h) of the share sale agreement, the determination of current year actual EBITDA as $2,255,303 by Mr Ross Walker of the firm Pitcher Partners, as an independent accountant within the meaning and for the purposes of clause 9.7 of the share sale agreement, is and has been final and binding upon the parties with effect from 12 April, 2017; and

(b) the initial purchase price fixed at $5,845,091 became payable in the manner required by clauses 9.3 and 9.5 of the put and call option deed on and from 3 May, 2017.

3. In performance and execution of the said contracts, the defendants must pay to the plaintiff forthwith:

(a) the sum of $1,043,810, being the adjusted final payment amount payable under clause 4.5(b) of the share sale agreement and calculated in accordance with clause 8.2 of the share sale agreement;

(b) interest in the sum of $204,701 pursuant to clause 8.4(c) of the share sale agreement; and

(c) the initial purchase price to a value of $5,845,091 in the manner required by clauses 9.3 and 9.5 of the put and call option deed.

4. The plaintiff is entitled to damages in addition to specific performance in the sum of $652, 407 being the total of:

(a) $503,478 calculated on a daily basis at six per cent simple on the value of $5,845,091 over 525 days over the period between 29 July 2014 and 5 December 2016; and

(b) $148,929 being 155/365 x $5,845,091 x 6/100.

5. There be liberty to any part to apply on two business days’ written notice.

6. The counter-claim be wholly dismissed.

7. The parties have:

(a) 21 days to file and serve written submissions as to costs together with any supporting materials; and

(b) 7 days thereafter to file and serve any written submissions in reply on the understanding the Court will decide costs on the papers unless on receipt of the written submissions the Court decides and notifies the parties that it also requires oral submissions.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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CITATION:	Drane v Aqualyng Holdings & Anor [2017] QSC 233
PARTIES:	ROBERT MAXWELL DRANE (plaintiff) v AQUALYNG HOLDINGS AS REG NO 991180958 (first defendant) and AQUALYNG O&M PTE LTD REG NO 2014122001Z (second defendant)
FILE NO/S:	SC No 282 of 2015
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Cairns
DELIVERED ON:	5 October 2017 (ex tempore)
DELIVERED AT:	Cairns
HEARING DATE:	3, 4 & 5 October 2017
JUDGE:	Henry J
ORDERS:	1. The Court declares that the contracts mentioned in the pleadings and known as: (a) the share sale agreement; and (b) the agreement in writing constituted by the plaintiff exercised by written notice to the defendants of the option for the sale by the plaintiff to the defendants of one ordinary share held by plaintiff in the capital of Integrated Chemical and Environmental Systems Pty Ltd ACN 086 243 772, being the put option provided for under the terms of the put and call option deed entered into between the plaintiff and defendants; so far as they have not already been performed, ought to be specifically performed and carried into execution, and orders and adjudges accordingly. 2. The Court further declares that: (a) pursuant to clause 9.7(h) of the share sale agreement, the determination of current year actual EBITDA as $2,255,303 by Mr Ross Walker of the firm Pitcher Partners, as an independent accountant within the meaning and for the purposes of clause 9.7 of the share sale agreement, is and has been final and binding upon the parties with effect from 12 April, 2017; and (b) the initial purchase price fixed at $5,845,091 became payable in the manner required by clauses 9.3 and 9.5 of the put and call option deed on and from 3 May, 2017. 3. In performance and execution of the said contracts, the defendants must pay to the plaintiff forthwith: (a) the sum of $1,043,810, being the adjusted final payment amount payable under clause 4.5(b) of the share sale agreement and calculated in accordance with clause 8.2 of the share sale agreement; (b) interest in the sum of $204,701 pursuant to clause 8.4(c) of the share sale agreement; and (c) the initial purchase price to a value of $5,845,091 in the manner required by clauses 9.3 and 9.5 of the put and call option deed. 4. The plaintiff is entitled to damages in addition to specific performance in the sum of $652, 407 being the total of: (a) $503,478 calculated on a daily basis at six per cent simple on the value of $5,845,091 over 525 days over the period between 29 July 2014 and 5 December 2016; and (b) $148,929 being 155/365 x $5,845,091 x 6/100. 5. There be liberty to any part to apply on two business days’ written notice. 6. The counter-claim be wholly dismissed. 7. The parties have: (a) 21 days to file and serve written submissions as to costs together with any supporting materials; and (b) 7 days thereafter to file and…