Richmond v Moore Stephens Adelaide Pty Ltd

This case concerned an appeal from a decision of the District Court of South Australia. The parties were Richmond and Moore Stephens Adelaide Pty Ltd. The dispute arose from a Business Sale Agreement and a Service Agreement, where Richmond sold his accountancy business to Moore Stephens. The core of the disagreement involved the calculation of "Achieved Fees" and subsequent adjustments to the purchase price, leading to allegations of breach and repudiation of the agreements.

The court was required to determine several legal issues, including whether the parties had agreed to extend time for Moore Stephens to provide notice of Achieved Fees, the validity of the notice provided by Moore Stephens, and the validity of a subsequent notice of disagreement from Richmond's company, WKYA. Further issues included whether the quantum of Achieved Fees was fixed, whether Moore Stephens breached the agreement by ceasing to pay interest, and whether WKYA was entitled to accelerate payment of the balance of the purchase price. The court also had to consider whether the agreements were validly terminated by WKYA and Mr Richmond, and crucially, whether restraint clauses within the agreements survived such termination, particularly if termination was due to breach or repudiation by Moore Stephens. Finally, the court was asked to consider whether the restraint clauses were void for uncertainty or restraint of trade, and if the terms of any injunction sought were too wide.

The trial judge found that the parties had agreed to extend the time for Moore Stephens to provide notice of Achieved Fees, and that the notice given on 21 November 2013 was valid. The judge also determined that WKYA's response was not a valid notice of disagreement, leading to deemed agreement on Moore Stephens' calculation of Achieved Fees. Consequently, Moore Stephens was entitled to cease paying interest and set off amounts. The judge concluded that WKYA and Mr Richmond, not Moore Stephens, breached the Business Sale Agreement and repudiated their obligations, meaning the agreements were validly terminated by Moore Stephens for repudiation.

The trial judge held that the restraint clauses did not survive the termination of the agreements effected by WKYA and Mr Richmond for breach or repudiation. The judge further found that there were no discretionary reasons in equity not to enforce the restraint clauses, and that the restraint clauses were not void for uncertainty or as being in restraint of trade. The court ultimately granted an injunction restraining Mr Richmond from acting in breach of the restraint clauses until 4 February 2016.