Lynam v Arthur J Gallagher Australasia Holdings Pty Ltd

In the matter of Lynam v Arthur J Gallagher Australasia Holdings Pty Ltd, the plaintiffs sought to challenge the construction of a share sale contract that governed the sale of all shares in a company from the plaintiffs to the defendants. The plaintiffs sought a declaration as to the proper construction of the contract and, in the alternative, rectification of the contract to reflect the parties' common intentions. The defendant argued that the contract was carefully drafted, unambiguous, and that the plaintiffs' claims had no reasonable cause of action.

The court was required to decide whether the plaintiffs' claims were so untenable that they could not possibly succeed and, if so, whether the plaintiffs' statement of claim should be struck out. Additionally, the court needed to determine whether extrinsic evidence, such as negotiations and a non-binding term sheet, could be admitted to interpret the contract and establish the parties' intentions.

The court found that the plaintiffs' claims were not so untenable as to be struck out, and that the court could take into account the negotiations and the non-binding term sheet in interpreting the contract. The court reasoned that, while the contract was carefully drafted, it did not preclude the court from considering the parties' intentions in light of the negotiations and the non-binding term sheet. However, the court ultimately found in favour of the defendant, concluding that the contract was unambiguous and that the parties' common intention did not support the plaintiffs' argued construction.

The court dismissed the application, and no further orders were made.