New Image Group Ltd v Dart Industries Inc - [2025] VSC 88

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

COMMERCIAL LIST

S ECI 2023 00048

NEW IMAGE GROUP LIMITED (NZBN 9429035158509)	Plaintiff
v
DART INDUSTRIES INC. & ORS (according to the schedule attached)	Defendants

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JUDGE:	Waller J
WHERE HELD:	Melbourne
DATE OF HEARING:	10 February 2025
DATE OF JUDGMENT:	11 March 2025
CASE MAY BE CITED AS:	New Image Group Ltd v Dart Industries Inc
MEDIUM NEUTRAL CITATION:	[2025] VSC 88

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CONTRACT — Contract for purchase of businesses — Share Sale and Purchase Agreement — Working capital adjustment provisions — Post-completion obligations — Dispute resolution process as precondition to payment claim — Whether dispute resolution process fully engaged — Claim unsuccessful.

CONTRACT — Breach of contract — Failure to provide audited accounts by contractual deadline — Non-disclosure of transfer pricing liability — Misrepresentation regarding working capital — Causation of loss not established — Whether opportunity to prevent transfer payment existed — Claims unsuccessful.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	N Dragojlovic	Hall & Wilcox
No appearance for the Defendants

HIS HONOUR:

A. INTRODUCTION

This proceeding arises out of an agreement for the purchase of the ‘Nutrimetics’ business, a multilevel marketing skincare and cosmetics brand. The plaintiff, New Image Group Limited (‘New Image’), purchased the business from the defendants, Dart Industries Inc. (‘Dart Industries’), Tupperware Nederland B.V. (‘Tupperware Nederland’) and Tupperware Products AG (‘TPAG’).

The principal claim is for the sum of NZD1,671,000, representing the difference between what New Image submits was the actual Completion Working Capital[1] and the Minimum Working Capital specified in the Sale Agreement. New Image also advanced alternative claims relating to breaches of warranty, misrepresentation and failure to provide audited accounts in a timely manner.
[1]Capitalised terms are defined in the Sale Agreement referred to in [21] below (‘Sale Agreement’).

The first and second defendants initially defended the proceeding but subsequently ceased to be legally represented and did not appear at trial. The plaintiff’s claim against the third defendant was dismissed by consent prior to the trial.

The central question in this proceeding is whether the first and second defendants are contractually obligated to pay New Image the amount claimed under the working capital adjustment provisions of the Sale Agreement or, alternatively, damages for breach of contract or misrepresentation.

B. THE ABSENCE OF THE DEFENDANTS AT TRIAL

On 10 May 2024, I fixed this proceeding for trial to commence on 10 February 2025 on an estimated duration of 4 days.

On 1 November 2024, I made orders granting leave for Aptum Legal to cease acting for the first and second defendants pursuant to r 20.03(1) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’).

At the directions hearing on 8 November 2024 there were no appearances for the first and second defendants, nor were any appearances expected.[2] On the plaintiff’s application, I dismissed its claims against the third defendant, with no order as to costs. I further…

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.

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Details

Case: [2025] VSC 88
Decision Date: 11 March 2025

CaseChat Overview and Summary

New Image Group Ltd brought proceedings against Dart Industries Inc in the Supreme Court of Victoria, alleging breaches of a Share Sale and Purchase Agreement. The central dispute revolved around the interpretation and execution of the agreement, particularly the working capital adjustment provisions, and whether there were failures to provide audited accounts, non-disclosure of a transfer pricing liability, and misrepresentation regarding working capital. The case also contested the causation of loss and the existence of an opportunity to prevent the transfer payment.

The court had to determine whether the dispute resolution process outlined in the agreement was fully engaged before allowing any claim for payment. Additionally, it had to assess whether the failure to provide audited accounts and non-disclosure of the transfer pricing liability constituted breaches of contract and whether these breaches caused the claimed losses. The court also examined whether New Image Group Ltd had an opportunity to prevent the transfer payment, thereby mitigating their losses.

The Supreme Court found that the dispute resolution process was not fully engaged, as required by the agreement, before the claim for payment was made. The court also held that the failure to provide audited accounts and the non-disclosure of the transfer pricing liability did not amount to breaches of contract. Furthermore, the causation of loss was not established as New Image Group Ltd did not demonstrate that they had an opportunity to prevent the transfer payment. Consequently, the claims were unsuccessful.

The court dismissed New Image Group Ltd's claims and awarded costs to Dart Industries Inc.

Orders