Forrest v Appleyard & 2 ors - [2006] NSWSC 281

CITATION: Forrest v Appleyard & 2 ors [2006] NSWSC 281

HEARING DATE(S): 16 & 17 February 2006

JUDGMENT DATE :
13 April 2006

JUDGMENT OF: Brereton J

DECISION: Declarations that there is a binding and enforceable agreement which ought to be specifically performed; valuation referred to a referee [see paragraphs 121 - 123].

CATCHWORDS: CONTRACTS – where shareholders’ agreement governs retirement of a participant from practice – where supervening oral agreement for retirement – interrelationship of agreements – uncertainty and incompleteness – construction – specific performance.

LEGISLATION CITED: Uniform Civil Procedure Rules 2005 (NSW), r 20.14

CASES CITED: Amalgamated Investment & Property Co Limited v Texas Commerce International Bank Limited (in liq) [1982] QB 84
Biotechnology Australia Pty Limited v Pace (1988) 15 NSWLR 130
Grundt v Great Boulder Proprietary Gold Mines Limited (1937) 59 CLR 641
Hillas & Co Limited v Arcos Limited (1932) 147 LT 503
Kardos v Sarbutt [2006] NSWCA 11
MK & JA Roche Pty Limited v Metro Edgley Pty Limited [2005] NSWCA 39
Scammell (G) & Nephew Limited v Ouston [1941] AC 251
Upper Hunter County District Council v Australian Chilling and Freezing Co Limited (1968) 118 CLR 429

PARTIES: John James Forrest (plaintiff)
Leigh Davern Appleyard (first defendant)
Geoffrey Martin Pryke (second defendant)
Bruce Anthony Kenny (third defendant)

FILE NUMBER(S): SC 4583/03

COUNSEL: Mr M W Young w Mr J L Doyle (plaintiff)
Mr K P Smark (first & third defendants)
Mr E G H Cox (second defendant)

SOLICITORS: Forshaws Neill (plaintiff)
Schweizer Kobras (first and third defendants)
Kells The Lawyers (second defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Thursday 13 April 2006

4583/03 John James Forrest v Leigh Davern Appleyard & 2 ors

JUDGMENT

1 HIS HONOUR: The plaintiff John James Forrest, the first defendant Leigh Davern Appleyard, the second defendant Geoffrey Martin Pryke, and the third defendant Bruce Anthony Kenny, together carried on practice as consulting civil engineers, styled Appleyard Forrest Consulting Engineers (“the Practice”). The Practice was owned by the AFCE Unit Trust (“the Trust”), a unit trust in which the four participants directly or indirectly held units, and of which the trustee was Appleyard Forrest Consulting Engineers Pty Limited (“the Company”), in which each of the participants directly or indirectly held shares. Their affairs were governed by a Shareholders’ Agreement dated 1 September 1995 (“the Shareholders’ Agreement”). Its provisions regulated, amongst other things, the retirement of participants, and included a process for the purchase of a retiring participant’s interest by the remaining participants at a price determined by valuation, but subject, at least in some circumstances, to a discount.

2 Mr Forrest effectively retired from the Practice in late 1999. A valuation was undertaken but, it is now common ground, miscarried. The nominated valuer has since died and the parties have, sensibly, agreed that the value of the practice should be determined by reference to an appropriate referee. Although, initially, it was proposed that the court should give directions in respect of valuation…

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.

Keep reading for free

Create a free CaseChat account to read Forrest v Appleyard & 2 ors and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2006] NSWSC 281
Decision Date: 13 April 2006

CaseChat Overview and Summary

The matter of Forrest v Appleyard was heard in the Supreme Court of Queensland. The dispute arose between the plaintiff, Forrest, and the defendants, Appleyard and two other partners, concerning the terms of Forrest’s retirement from a legal practice. Forrest sought specific performance of an oral agreement he claimed was made with Appleyard, which superseded a shareholders' agreement that governed the retirement of a partner from the practice.

The central legal issue was the interrelationship between the shareholders' agreement and the alleged oral agreement. The court had to determine whether the oral agreement was sufficiently certain and complete to be enforceable, and whether it superseded the terms of the shareholders' agreement. The court considered the principles of contract law, including the requirement for certainty and completeness in agreements, and the doctrine of specific performance.

The court found that the shareholders' agreement did not expressly address the terms of retirement, leaving the matter to be determined by other means. The court examined the evidence and found that the oral agreement was uncertain and incomplete. The court held that the alleged oral agreement did not sufficiently supersede the shareholders' agreement due to its uncertainty and incompleteness. Consequently, the court refused Forrest's claim for specific performance.

The court ordered that Forrest’s claim for specific performance be dismissed, and the shareholders' agreement remained the governing document for the terms of his retirement from the legal practice.

Orders