Newcrest Mining Limited v Thornton

Newcrest Mining Limited (Newcrest) appealed to the Full Federal Court against a decision of a single judge that found it liable for breaches of contract and misleading and deceptive conduct in relation to a share purchase agreement with Mr. Thornton. The dispute concerned Newcrest's obligation to pay Mr. Thornton deferred consideration for shares he sold to Newcrest, which Newcrest had sought to reduce or avoid on the basis of alleged breaches of warranties by Mr. Thornton.

The Full Federal Court was required to determine whether Newcrest had established that Mr. Thornton had breached certain warranties contained within the share purchase agreement, and if so, whether those breaches entitled Newcrest to reduce or set off the deferred consideration payable. The court also considered whether Newcrest's conduct in seeking to reduce the deferred consideration constituted misleading or deceptive conduct in contravention of the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)).

The court found that Newcrest had failed to establish that Mr. Thornton had breached the warranties in question. In reaching this conclusion, the judges applied principles of contractual interpretation, emphasising the need to give effect to the plain meaning of the words used in the agreement. They also considered the evidence presented by both parties regarding the alleged breaches. Furthermore, the court determined that Newcrest's conduct in asserting its right to reduce the deferred consideration, without a proper contractual basis, amounted to misleading and deceptive conduct. The court reasoned that Newcrest's actions created a false impression that it had a legal right to withhold payment, which was not supported by the terms of the agreement.

The Full Federal Court dismissed Newcrest's appeal and affirmed the primary judge's orders, requiring Newcrest to pay Mr. Thornton the full amount of the deferred consideration, along with interest and costs.