Ringrow Pty Ltd v BP Australia Ltd

The case of Ringrow Pty Ltd v BP Australia Ltd dealt with the determination of the purchase price for the sale of a property, which was the subject of an option deed between the parties. The dispute arose from the interpretation of Clause 2 of the option deed, which outlines the method for determining the purchase price based on the market valuation of the property as an operational service station by an independent valuer. The core issue was whether the valuer should consider the goodwill of the business when determining the market valuation, as the option deed explicitly excluded any such allowance.

The court was tasked with interpreting Clause 2.5 of the option deed, which instructs the valuer to consider all relevant factors but specifically excludes goodwill from the valuation. The court also had to consider the role of the POSA (Petroleum Operator Site Agreement) and its impact on the market valuation. BP argued that the POSA, which imposed certain obligations on Ringrow, should be considered by the valuer when determining the market valuation. The court had to decide whether the terms of the POSA, including the obligations placed on Ringrow, should be factored into the market valuation of the property.

The court held that the valuer was not permitted to consider goodwill or any obligations arising from the POSA when determining the market valuation. The court emphasised that the exclusion of goodwill from the valuation was clear and unambiguous, and the terms of the POSA did not alter this requirement. The court found that the POSA, while relevant to the operational aspects of the property, did not affect the valuation process for determining the purchase price under the option deed. The court ordered BP to appoint an independent valuer to determine the market valuation in accordance with Clause 2 of the option deed, without considering goodwill or the terms of the POSA.

The court also ordered BP to bring in short minutes of order to give effect to this decision, ensuring that the valuation process would proceed without the inclusion of disallowed factors.