FBHS (Aust) Pty Ltd v Stone Homes Pty Ltd

FBHS (Aust) Pty Ltd appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning the construction of a contract. The dispute centred on whether Stone Homes Pty Ltd had breached a covenant in restraint of trade by engaging in "similar" business activities.

The Court of Appeal was required to determine two primary legal issues. First, it had to consider the appropriate level of appellate deference to be given to the primary judge's construction of the contract, particularly in light of the principles established in *Galcif Pty Ltd v Dudley's Corner Pty Ltd*. Second, the Court had to construe the meaning of the prohibition on engaging in "similar" concepts within the restraint of trade clause, considering the text, purpose, and object of the transaction, and distinguishing between a sale of business agreement and a distributor agreement. The Court also considered whether the primary judge erred in refusing an amendment late in the hearing.

The Court of Appeal applied principles of contractual construction, emphasising the importance of considering the contract as a whole and its commercial context. It held that the primary judge's construction was correct, finding that the activities undertaken by Stone Homes did not breach the restraint of trade covenant. The Court also found no error in the refusal of the late amendment.

The appeal was dismissed, and FBHS (Aust) Pty Ltd was ordered to pay the costs of the appeal.