Spotpress Pty Ltd v Spotpress Newspapers Pty Ltd - [2025] NSWSC 1094

Supreme Court

New South Wales

Medium Neutral Citation: Spotpress Pty Ltd v Spotpress Newspapers Pty Ltd [2025] NSWSC 1094
Hearing dates: 5–20 May 2025
Date of orders: 25 September 2025
Decision date: 25 September 2025
Jurisdiction: Equity - Commercial List
Before: Williams J
Decision:
See determination at [374]

Catchwords:
CONTRACTS – interpretation – agreement for sale of business – sellers’ warranty that accounts give a true and fair view of the financial position and state of affairs of the business as at each of three accounts dates and of the financial performance of the business for the one-month period ending on each accounts date – where the business sold was a division of a larger business – where no separate management or financial accounts had been maintained for the division – where sellers provided to buyer for due diligence purposes accounts for the division for a three-month period prepared by sellers after attributing parts of the revenue, costs and operating expenses of the larger business to the division in each of those three months – meaning of “true and fair view”
CONTRACTS – breach of warranty – measure of damages – difference between price paid and true value – approaches to assessing true value

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 96
Corporations Act 2001 (Cth), ss 296, 297

Cases Cited:
Australian Karting Association Ltd v Karting (New South Wales) Incorporated [2022] NSWCA 188
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25
Clark v Macourt (2013) 253 CLR 1; [2013] HCA 56
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54
Davis v Perry O’Brien Engineering Pty Ltd [2025] QCA 18
Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
EW Blanch Pty Ltd v Cooper [2005] NSWCA 217
Grant-Taylor v Babcock & Brown Limited (in liq) (2015) 322 ALR 723; [2015] FCA 149
Grant-Taylor v Babcock Brown Limited (in liq) {2016) 330 ALR 642[2016] FCAFC 60
H & Q Café Pty Ltd v Melbourne Café Pty Ltd (2023) 72 VR 53; [2023] VSCA 200
HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; [2024] HCA 54
Keys Consulting Pty Ltd v CAT Enterprises Pty Ltd [2019] VSCA 136
Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257; [2003] HCA 10
Ramsay v BigTinCan Pty Ltd [2014] NSWCA 324; (2014) 101 ACSR 415
Robinson v Harman (1848) 1 Exch 850; 154 ER 363
Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47
Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31
Zhong v Guan (2024) 116 NSWLR 258; [2024] NSWCA 300

Texts Cited:
N/A

Category: Principal judgment
Parties: Spotpress Pty Ltd (ACN 665 474 966) (First Plaintiff/Cross-Defendant)
TMA Australia Pty Ltd (ACN 114 874 690) (Second Plaintiff/Cross-Defendant)
TMA Capital Australia Pty Limited ACN 145 009 785) (Third Plaintiff/Cross-Defendant)
Spotpress Newspapers Pty Ltd (ACN 002 063 676) (First Defendant/Cross-Claimant)
Grasett Investments Pty Ltd (ACN 000 451 276) (Second Defendant/Cross-Claimant)
JG & DG Properties Pty Ltd (ACN 471 381 641) (Third Defendant/Cross-Claimant)
John Georgantzakos (Fourth Defendant)
Representation:
Counsel:
Mr D L Williams SC with Ms A Zheng and Mr D Emmerig (Plaintiffs/Cross-Defendants)
Mr J M Morris SC with Mr J M Kadar (Defendants/Cross-Claimants)
Solicitors:
Thomson Geer Lawyers (Plaintiffs/Cross-Defendants)
Jordan Djundja Lawyers (Defendants/Cross-Claimants)

File Number(s): 2023/432453
Publication restriction: Nil

Judgment

TABLE OF CONTENTS

Introduction

Salient facts

Introductory observations in relation to credit
Negotiations for the sale and purchase of part of the Business
Meeting on 7 March 2023
Asset Sale Agreement
Loan Deed
Lease
Services Agreement
Consulting Services Agreements
Completion
Stocktake
Transfer of the heatset printing operations
Sellers’ failure to transfer specific assets to the Buyer
Sellers’ failure to transfer the hybrid business to the Buyer and services provided by the Buyer to the Spotpress Seller under the Services Agreement after Completion
January 2023 price increase of 7.3% not passed on to all customers
Release of the Side Deed from escrow
Mascot premises
Buyer alleges that the Sellers have breached warranties
Failure to procure releases of Deferred Encumbrances prior to the Sunset Date
Increased electricity rates from 1 January 2024
Change in the metering of electricity consumption at the Marrickville premises and resulting increases in electricity charges

Consideration and determination

Buyer’s claims for alleged breach of Seller Warranties in relation to the Accounts
Introduction
Expert evidence
The parties’ submissions
The proper construction of the Seller Warranties

The Sellers breached the Sellers’ Warranty in clause 3.1
Quantum of damages
Buyer’s claim for damages for Sellers’ failure to transfer the hybrid business in breach of the Asset Sale Agreement
Buyer’s claim for damages in respect of Mr John Georgantzakos’s alleged breaches of the Consulting Services Agreement
Buyer’s claim for allegedly misleading or deceptive price increase representations
Buyer’s claim and Sellers’ cross-claim in relation to Accrued Employee Entitlements
Buyer’s claims for breach of Seller Warranty and misleading or deceptive conduct in relation to necessary assets and Sellers’ cross-claim alleging wrongful deprivation of printing equipment
Buyer’s claim for breach of Sellers’ obligation to procure release of Deferred Encumbrances
Buyer’s claim to recover amounts owing in respect of unpaid invoices
Buyer’s claim for rental contribution in relation to Mascot Premises
Claims by the Buyer and JG & DG Properties in relation to electricity costs under the Lease
Rectification
The Sellers’ cross-claim for outstanding amounts under the Loan Deed and the question of set-off
Other pleaded claims not pressed

Conclusion and orders

Introduction

The first defendant/cross-claimant, Spotpress Newspapers Pty Limited, operated a printing business with three components: the “coldset business”; the “heatset business”; and the “hybrid business”. The coldset business conducted printing for newspapers, and is therefore also referred to as the newspaper business. The heatset business conducted printing for magazines and catalogues. The hybrid business is a term used by the parties to describe printing for publications that require both coldset and heatset printing services, such as newspapers with catalogue inserts.
The second defendant/cross-claimant, Grasett Investments Pty Limited, owned certain assets used in the operation of the business.
The first defendant/cross-claimant operated the business from premises at 24-26 Lillian Fowler Place, Marrickville. At all relevant times until shortly after the commencement of the final hearing of these proceedings, those premises were owned by the third defendant/cross-claimant, JG & DG Properties Pty Ltd.
The fourth defendant, Mr John Georgantzakos, and his brother Mr Dimitri Georgantzakos were and remain the directors of each of the first, second and third defendants.
On 7 March 2023, the first and second defendants/cross-claimants entered into an Asset Sale Agreement for the sale of the heatset and hybrid components of the business to the first plaintiff/cross-defendant, Spotpress Pty Limited. The purchase price was $6,000,000, of which $2,500,000 was payable on completion, and $3,500,000 was the subject of vendor finance under the terms of a Loan Deed between the first and second defendants/cross-claimants as lenders, the first plaintiff/cross-defendant as borrower, and the second and third plaintiffs/cross-defendants, TMA Australia Pty Limited and TMA Capital Australia Pty Limited, as guarantor and limited guarantor (respectively). Various other documents were executed on that day, including a lease of the Marrickville premises in favour of the first plaintiff/cross-defendant and an agreement pursuant to which the first defendant/cross-claimant engaged the first plaintiff/cross-defendant to provide certain services which it would require for a period after completion in order to continue operating the coldset business. Completion occurred simultaneously with execution on 7 March 2023.
Mr Anthony Karam and Ms Corriene Karam were and remain directors of each of the first, second and third plaintiffs/cross-defendants.
These proceedings involve a dispute between the parties concerning alleged breaches of Seller Warranties given by the first and second defendants/cross-claimants in the Asset Sale Agreement, other alleged breaches of contract, alleged misleading or deceptive conduct, and the first plaintiff’s/cross-defendant’s claim to be entitled to set off certain amounts against amounts owing by it under the Loan Deed.
In these reasons, I adopt the parties’ conventions of referring to:

the whole of the business operated by the first defendant/cross-claimant using assets owned by the second defendant/cross-claimant before entering into the Asset Sale Agreement as the Original Business;

the “Business” and the “Assets” sold to the first plaintiff/cross-defendant under the Asset Sale Agreement as the Transferred Business;

the business and assets retained by the first and/or second defendants/cross-claimants following completion of the Asset Sale Agreement as the Retained Business;

the first plaintiff/cross-defendant as the Buyer;

the second plaintiff/cross-defendant as TMA Australia;

the third plaintiff/cross-defendant as TMA Capital;

the first, second and third plaintiffs/cross-defendants, collectively, as the TMA Entities;

the first defendant/cross-claimant as the Spotpress Seller;

the first and second defendants/cross-claimants collectively as the Sellers; and

the third defendant/cross-claimant as JG & DG Properties.

Salient facts

Introductory observations in relation to credit

Almost all of the factual issues in dispute as at the commencement of the final hearing of these proceedings were the subject of evidence given by Mr Anthony Karam and Ms Corriene Karam on behalf of the plaintiffs, and Mr John Georgantzakos on behalf of the defendants.
Almost all of those disputes fell away as a result of concessions made by the defendants, following their decision not to read the five affidavits of Mr John Georgantzakos that they had filed and served in the proceedings.
Notwithstanding the absence of any contest to Mr Anthony Karam’s and Ms Corriene Karam’s evidence from Mr John Georgantzakos, the defendants submitted that the Court should regard their evidence with caution and circumspection where it is inconsistent with contemporaneous documents or with the evidence of other witnesses. That submission relied on the conduct of Mr Karam and Ms Karam in causing the plaintiffs to enter into a Side Deed to the Asset Sale Agreement in order to negate the effect of a clause that the financier had required to be included in the Asset Sale Agreement, and concealing the existence of the Side Deed from their financier, as referred to in more detail at [112]-[114] below. In cross-examination, each of Mr Karam and Ms Karam acknowledged the effect of the Side Deed, attributed it to a recommendation made by their financial advisor, expressed regret for having entered into the Side Deed and described it as a “mistake”. Ms Karam described it as a “mistake” because it would have been possible to structure the transaction in a different way that would not have resulted in the financier requiring the relevant clause in the Asset Sale Deed. Contrary to the plaintiffs’ submissions, neither Mr Karam nor Ms Karam acknowledged that it had been wrong to enter into the Side Deed and to withhold its existence from the financier because this was misleading. In my opinion, that does indicate that Mr Karam and Ms Karam were willing to mislead their financier in that way at a time when they considered that it suited them, and the plaintiffs, to do so. Contrary to the defendants’ submissions, I do not regard this, by itself, as indicating that Mr Karam and Ms Karam may have given untruthful evidence under oath in these proceedings, or as requiring any greater degree of testing of their evidence than would otherwise be the case against any other relevant witness testimony and contemporaneous documents in the context of any undisputed objective facts and having regard to inherent probabilities and improbabilities. I have tested and weighed their evidence in that usual manner in relation to each factual matter that remained in dispute at the conclusion of the hearing.

Negotiations for the sale and purchase of part of the Business

In about late 2019, Mr John Georgantzakos on behalf of the Sellers and Mr Karam on behalf of TMA Australia held informal discussions about a potential acquisition of the Spotpress Business by TMA Australia. In the course of those discussions, Mr John Georgantzakos propounded to Mr Karam certain potential synergies between the Sellers’ business and the business of TMA Australia and its related entities that could result in cost savings and efficiencies if TMA Australia were to acquire the Sellers’ business and move the Sellers’ operations to TMA Australia’s existing premises. However, the discussions ceased shortly thereafter in about April 2020 given the uncertainty caused by the COVID-19 pandemic.
In early 2021, Mr Karam and Mr John Georgantzakos briefly revived their discussions about a potential acquisition of the Sellers’ business by TMA Australia. The discussions stalled again in about July 2021.
In July 2022, Mr John Georgantzakos proposed an alternative transaction under which TMA Australia would acquire only the heatset and hybrid printing operations of the Sellers’ business, with the Sellers retaining the coldset printing operations. Although these different types of printing could be characterised as separate parts of the Sellers’ business, they were part of one business that was operated by the Sellers. This is the business that I have referred to as the Original Business. The accounting systems and processes for the Original Business did not distinguish between the heatset, hybrid and coldset printing operations.
From the outset of these discussions about the potential alternative transaction, it was contemplated by Mr John Georgantzakos and Mr Karam that much of the Spotpress Seller’s workforce would transfer to the purchaser entity within the TMA Group if the transaction proceeded. In discussing the position of those workers and their entitlements, Mr John Georgantzakos and Mr Karam did not differentiate between the workers employed by the Spotpress Seller and workers who were employed by Real Media Pty Limited, which then contracted its employees’ labour to the Spotpress Seller. Mr John Georgantzakos was the sole director of Real Media Pty Limited.
In about late August 2022, Ms Karam began gathering some information about the business proposed to be acquired. As the Chief Financial Officer of the TMA Group, Ms Karam would be responsible for conducting due diligence in relation to the potential acquisition. During discussions leading up to the signing of a Memorandum of Understanding on 9 November 2022, Ms Karam learned that the Spotpress Seller printed newspapers and also printed magazines and catalogues. Ms Karam did not learn at this stage about the different processes and equipment used for printing those different types of products. Ms Karam understood that the newspaper printing and magazine and catalogue printing operations were conducted as one business.
On 9 November 2022, the Sellers signed a non-binding Memorandum of Understanding with TMA Australia setting out the key terms of an agreement to be entered into for the sale of the Sellers’ assets (excluding the assets of the newspaper printing business) to TMA Australia or its nominee.
Clause 11(a) of the Memorandum of Understanding recorded that the parties agreed that the proposed transaction would be on terms that included a purchase price of $6,000,000 plus a price for stock to be determined on the basis of the most recent price paid by the Sellers for the stock as quantified in stocktake to be carried out by the parties jointly after completion. Of the $6,000,000 purchase price, $2,500,000 would be payable on exchange (which was proposed to occur on 31 January 2023) and the balance of $3,500,000 would be payable in 24 monthly instalments of $145,833, each commencing on the seventh month after completion and concluding on the thirtieth month after completion. The parties refer to the $6,000,000 component of the purchase price as the non-stock purchase price and the price to be paid for stock that was to be determined in the joint stocktake immediately following completion as the stock purchase price. I will adopt the same convention. The target date for completion was 1 March 2023.
As recorded in the draft versions of the Memorandum of Understanding that the parties had exchanged over a period of some weeks prior to 28 November 2022, TMA Australia had sought to negotiate a non-stock purchase price equivalent to a multiple of three times EBITDA for the heatset and hybrid components of the Sellers’ business. TMA Australia had proposed that the price of $6,000,000 would be reduced in the event that due diligence revealed an annualised FY2023 EBITDA of less than $2,000,000, extrapolated from a profit and loss statement for the heatset and hybrid components of the business for the three months of September, October and November 2022 that was to be prepared by the Sellers and provided to TMA Australia during due diligence. The Sellers rejected this, and insisted on a fixed non-stock purchase price of $6,000,000. If TMA Australia did not wish to pay that price after completing due diligence, the Sellers would simply not proceed with the transaction.
Consistently with the Sellers’ insistence on a fixed non-stock purchase price, clause 11 of the Memorandum of Understanding signed on 28 November 2022 stated: “Sellers are not bound by performance metrics”.
Clause 11(e) of the Memorandum of Understanding set out the key terms of a proposed lease of the Marrickville Premises to be entered into between the Sellers and the TMA Group entity nominated as the buyer, for a term of three years with two options to renew of one year each. Clause 11(e)(viii) stated:

“Electricity to be invoiced by Sellers to the Purchaser every month at cost price depending to [sic] the electricity consumed by the Purchaser.”

According to Mr Karam’s unchallenged evidence, Mr John Georgantzakos had said to him at some stage in the course of their discussions before the Memorandum of Understanding was signed words to the effect of: “You cannot buy the electricity as cheap as I can. I will supply the electricity”. Mr Karam replied, “ok”.
Clause 14 of the Memorandum of Understanding provided that TMA Australia would issue a list of required due diligence documents to the Sellers within seven days after execution of the confidentiality agreement, and that due diligence documents would be provided for the months of September, October and November 2022.
TMA Australia signed a confidentiality agreement on 28 November 2022.
On 1 December 2022, Ms Karam issued a due diligence questionnaire and established a Dropbox account as a virtual data room for the Sellers to provide due diligence documents. On 2 December 2022, Ms Karam issued a further questionnaire concerning financial matters.
On 13 December 2022, Mr John Georgantzakos sent an email to Ms Karam advising that he had uploaded to the Dropbox account all of the information that she had requested, save for two items which were to follow. Mr John Georgantzakos’ email stated that their respective solicitors would need to start preparing final agreements as a matter of urgency in order to meet the target exchange date of 31 January 2023, having regard to the intervening Christmas holiday period.
The key financial information uploaded by the Sellers to the Dropbox account in December 2022 was an Excel spreadsheet titled “2022-11 Spotpress Detailed Financials v3.xlsx”, which I will refer to as the Financials Spreadsheet. The Financials Spreadsheet contained information concerning the Original Business as a whole, as well as financial information for what would become the Transferred Business, for the months of September, October, and November 2022. The Financials Spreadsheet included a worksheet entitled “TB Original” which presented a profit and loss statement for the Original Business for each of those months (the TB Original Worksheet), and a worksheet entitled “TB Linked” which presented a profit and loss statement for what would become the Transferred Business for each of those three months (the TB Linked Worksheet).

The Financials Spreadsheet was prepared by Mr John Georgantzakos together with Mr Simon Allsop, an accountant who had provided “virtual CFO” services to the Spotpress Seller since about August 2018. As Mr Allsop explained in his affidavit and in cross-examination, the data in the TB Original Worksheet was extracted directly from the Spotpress Seller’s accounting system, and each of the numbered worksheets within the TB Original Worksheet referred to a specific general ledger account within that system. The data in the TB Linked Worksheet was not extracted directly from the Spotpress Seller’s accounting system. Rather, that data was prepared by Mr Allsop and Mr John Georgantzakos extracting from the total revenue of the Original Business for the months of September, October and November 2022 that part of the revenue which they considered to be attributable to what would become the Transferred Business, and extracting from the total expenses incurred by the Original Business during each of those three months those expenses which they considered were directly related to revenue generated by the heatset printing operations. That part of the revenue and those expenses were recorded in the TB Linked Worksheet as attributable to what would become the Transferred Business. Where Mr John Georgantzakos and Mr Allsop did not characterise a category of expense as directly related to revenue generated by the heatset operations, they divided the total expenditure incurred by the Original Business in respect of that expense category in the relevant month by the total printing revenue generated by the Original Business in that month, and then multiplied the resulting percentage by the amount of revenue that they had attributed to the Transferred Business for that month. The amount produced by that calculation was the amount of the expense in the relevant expense category which they allocated to what would become the Transferred Business. This methodology, which I will refer to as the revenue-based expense attribution method for allocating expenses of the Original Business between what would be become the Transferred Business and the Retained Business, assumed that what would become the Transferred Business incurred a proportion of the expenses of the Original Business that corresponded with the proportion of the revenue of the Original Business that was generated by the Transferred Business. The Transferred Business generated approximately two thirds of the revenue of the Original Business.
During the due diligence process, Ms Karam had a number of conversations with Mr John Georgantzakos regarding why only three months of financial data was being provided for due diligence. Ms Karam recalls that the gist of Mr John Georgantzakos’s response to these queries was that he had imposed that limitation because of the large amount of work that was required to be done to separate the accounting entries relating to the Transferred Business from the accounts of the Original Business which incorporated heatset, coldset and hybrid print jobs. Mr John Georgantzakos also told Ms Karam that he was concerned that the accounts for the years where trading was affected by COVID-19 would not provide an accurate view of the financial position of the business at the time of sale. His view was that there was a 12-month recovery period for the business to return to normal trading post-COVID, and so he considered the financial information for the three months from September 2022 to be more representative of the actual financial performance of what would become the Transferred Business.
The revenue-based expense attribution method was disclosed to Ms Karam during the due diligence process at a meeting that she attended with Mr John Georgantzakos and Mr Allsop, who informed her that it was difficult to carve out with mathematical precision the expenses of what would become the Transferred Business from the expenses of the Original Business. Mr John Georgantzakos and Mr Allsop told Ms Karam that expenses which were not clearly referable to either the coldset business to be retained by the Spotpress Seller, or the heatset and hybrid businesses proposed to be sold to the Buyer, had been apportioned between what would become the Retained Business and what would become the Transferred Business in a one-third/two-thirds split, which reflected the proportion of the total revenue of the Original Business generated by the Retained Business and by the Transferred Business, respectively. It was put to Ms Karam in cross-examination that she accepted this as a valid methodology for the allocation of expenses between the Retained Business and the Transferred Business. Ms Karam denied this, adding that the due diligence material provided by the Sellers did not facilitate verification of the manner in which expenses of the Original Business had been attributed to the Retained Business and to the Transferred Business. Ms Karam said that it was very difficult to ascertain from the information on the face of the due diligence documents the part of the Original Business to which any given expense related. I accept Ms Karam’s evidence about this, and I accept her denial that she agreed to the revenue-based expense attribution method. Those aspects of Ms Karam’s evidence are consistent with her analysis set out in her report to the Board of the TMA Group in February 2023 referred to at [58] below, in which she noted that the Sellers had allocated the expenses between the Transferred Business and the Retained Business, and emphasised that the Sellers had agreed to “warranty the accuracy of these numbers”. Mr Allsop’s affidavit sworn on 28 March 2024 contains the only other account of the meeting at which expense allocation was discussed with Ms Karam. Mr Allsop deposed that the methodology had been explained to Ms Karam, but did not suggest that Ms Karam expressed agreement with the methodology. As I have already mentioned, Mr John Georgantzakos did not give evidence. I therefore find on the basis of Ms Karam’s evidence that the revenue-based expense attribution method had been disclosed to, but not accepted or agreed by the Buyer.
The TB Linked Worksheet within the Financials Spreadsheet presented a profit and loss statement for what would become the Transferred Business for each of the months of September, October and November 2022 in the form of an Excel spreadsheet. Each entry in the worksheet was referenced to a particular account number, which corresponded to the relevant account in the general ledger for the Original Business from which Mr John Georgantzakos and Mr Allsop extracted the particular revenue or expense item after attributing it to what would become the Transferred Business using the approach that I have described at [28] above.
The TB Linked Worksheet set out total revenue from print operations for each of the three months, from which itemised costs of sales were deducted to calculate gross profit. Itemised operating expenses were then deducted from gross profit to calculate operating profit. Other revenue (bad debts recovered, insurance claim payments received, and interest income) was then added to arrive at a calculation of Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA). The TB Linked Worksheet recorded no amortisation or depreciation expenses, no interest expenses, and no taxation expenses, meaning that the Earnings Before Interest and Tax (EBIT), the Net Profit Before Tax (NPBT) and the Net Profit After Tax (NPAT) calculations shown in the worksheet were the same as the EBITDA calculation. The worksheet then deducted certain itemised expenses referable to the lease of the Marrickville Premises to calculate Net Profit After Lease.
The cost of sales entries in the TB Linked Worksheet included the following:

Account number	Account name	Sep-22	Oct-22	Nov-22
50000	COST OF SALES
…
50101	Paper Used	601,159	597,521	739,219	% based on revenue
…
50301	Sales and marketing	42,444	37,378	34,224
…
50304	Binding and printing services	73,026	73,450	45,679
…
50306	Mailing and distribution	197,614	213,465	295,214	% based on revenue
…
50397	Other graphic services	282,930	256,394	295,214	Based on actuals (Real Media)

The gross profit set out in the TB Linked Worksheet, calculated on the basis of total revenue from print operations less total cost of sales, was:

Account number	Account name	Sep-22	Oct-22	Nov-22
59999	GROSS PROFIT/(LOSS)	733,097	707,452	711,144

The operating expenses entries in the TB Linked Worksheet included the following:

Account number	Account name	Sep-22	Oct-22	Nov-22
60000	OPERATING EXPENSES
…
61410	Workers’ compensation insurance	1,897	1,897	1,897	% based of Salaries
…
61803	Electricity	25,254	27,980	29,833	Linked
…
62000	Payroll tax	1,926	4,068	1,966
…
62201	Salaries and wages	75,244	61,394	66,258	Linked
62202	Superannuation	7,599	6,181	6,640	Linked

The TB Linked Worksheet calculated the operating profit as follows, after deducting all operating expenses itemised in the worksheet from the gross profit amounts referred to above:

Account number	Account name	Sep-22	Oct-22	Nov-22
70000	OPERATING PROFIT/LOSS	459,330	462,797	485,136

After adding other revenue referred to at [32] above, the TB Linked Worksheet set out the following calculations of EBITDA:

Account number	Account name	Sep-22	Oct-22	Nov-22
90300	EARNINGS BEFORE INTEREST, TAX, DEP & AMOR (EBITDA)	475,881	486,407	486,321

As I have already mentioned, the TB Linked Worksheet contained no entries that resulted in any change between the calculation of EBITDA and the calculation of each of EBIT, NPBT and NPAT. Those line items of the worksheet, together with the line items for Net Profit After Lease and “Normalisations”, read as follows:

Account number	Account name	Sep-22	Oct-22	Nov-22
90500	EARNINGS BEFORE INTEREST & TAX (EBIT)	475,881	486,407	486,321
…
90799	NET PROFIT BEFORE TAX (NPBT)	475,881	486,407	486,321
…
99999	NET PROFIT AFTER TAX (NPAT)	475,881	486,407	486,321
Less
Lease of premises Marrickville	126,167	126,167	126,167
Land Tax Marrickville	9,631	9,631	9,631
Council Rates Marrickville	3,207	3,207	3,207
Total lease exp	139,005	139,005	139,005
99999	NET PROFIT AFTER LEASE	336,876	347,403	347,316
Normalisations for consideration
Allowance for 2023 price increases on print 7.3% (1 Jan)	131,663	132,026	137,532
Allowance for 2023 price reduction on paper (est 12.5%)	75,145	74,690	92,402
Allowance for premium paid for lease due to Marrickville location	63,083	63,083	63,083
Total normalisations	269,892	269,800	293,017
NORMALISED NET PROFIT	606,768	617,202	640,333

The due diligence conducted by the TMA Group was overseen by Ms Karam and took place during the period between about mid-December 2022 and about mid-February 2023, in the context of a proposed settlement date of 1 March 2023 if the Buyer proceeded with the acquisition.
It is not in dispute that, during the due diligence process, Ms Karam and her team had access to the Spotpress Seller’s Microsoft Dynamics accounting system. Despite this access, it was not possible to break down the expenses of the Spotpress Seller in order to verify whether the amount of expenses allocated to what would become the Transferred Business in the TB Linked Worksheet was accurate. As stated at [30] above, I accept Ms Karam’s evidence that the due diligence materials provided by the Sellers did not facilitate verification of the manner and amounts in which expenses of the Original Business had been attributed to what would become the Retained Business and to the Transferred Business. Ms Karam gave evidence in cross-examination to the effect that she was unable to verify or test the due diligence materials by speaking with staff of the Spotpress Seller’s business. Ms Karam said that the TMA Entities’ due diligence team was not permitted to speak to any of the staff, or attend the Marrickville premises unsupervised. I accept that evidence, which was not challenged by the cross-examiner, and which is consistent with Mr Karam’s evidence that Mr John Georgantzakos asked him to agree to limit due diligence to the information that he had provided, and to hide the due diligence process from staff, customers and suppliers of the Spotpress Seller, on the basis that the business would be destroyed if they became aware of the proposed sale and if the sale did not proceed for any reason following due diligence. Throughout the due diligence process, Mr John Georgantzakos did not permit TMA Australia to speak to or conduct interviews with key staff of the Spotpress Seller’s business, customers or suppliers, or to conduct a thorough investigation and review of the Spotpress Seller’s property, plant and equipment. Mr Karam was not successfully challenged on that evidence in cross-examination, and the defendants adduced no evidence to the contrary. I also accept Ms Karam’s evidence that she relied upon the fact that the Spotpress Seller would warrant the accuracy and reliability of the accounts provided. That evidence is corroborated by the report that Ms Karam and her team prepared for the TMA Group board meeting on 22 February 2023, to which I refer at [54]-[65] below.
Consistently with Mr John Georgantzakos’s desire for urgency expressed in his 13 December 2022 email to Ms Karam, the parties’ solicitors began preparing a draft asset sale agreement and other documents to give effect to the proposed transaction while the due diligence process was underway. Mr Marc Wyld of Thomson Geer Lawyers was the solicitor acting for the TMA Entities. Mr James Frank of Frank Law was the solicitor acting for the Sellers and their related entities. Mr Wyld was assisted by Ms Stephanie Nomikos and Ms Zoe Wu at Thomson Geer. Mr Frank was assisted by Ms Cathryn Badenhorst and Mr Rhys Lyons at Frank Law. By mid-January 2023, Mr Wyld had provided a draft asset sale agreement and various other transaction documents to Mr Frank for his review and comment.
As stated at [33] above, the costs of sales recorded in the TB Linked Worksheet included an amount described as the cost of paper used.
As Ms Karam acknowledged in cross-examination, she was aware at the time of the due diligence that the Spotpress Seller had purchased a very large stock of paper to enable printing operations to continue in the event of a shortage of paper due to feared disruptions to international supply chains during the COVID-19 pandemic. Ms Karam was aware that the Spotpress Seller had recorded the value of its paper stock in the Original Business accounts based on the prices that it had paid for the paper at the time it was purchased. According to Ms Dawna Wright, a chartered accountant engaged by the plaintiffs to give evidence in these proceedings, whose evidence I discuss in more detail at [223]-[273] below, the costs of paper recorded in the Spotpress Seller’s general ledger account 50101 (paper used) were lower than: (1) paper prices during the period from September to November 2022, as recorded in various documents provided to the Buyer as part of the due diligence process; and (2) the most recent prices paid by the Spotpress Seller which were used in quantifying the stock purchase price during the stocktake that the Spotpress Seller and the Buyer undertook jointly immediately after completion of the transaction on 8 March 2023 which I discuss at [136] below. Email correspondence between Ms Karam and Mr John Georgantzakos on 31 January 2023 records Mr John Georgantzakos’s view that the then-current market prices for paper were “down and coming down further” and, in many cases, materially lower than the most recent price paid by the Spotpress Seller. That view is reflected in the normalising entry included in the TB Linked Worksheet allowing for an estimated 12.5% reduction in the price of paper during 2023.
Ms Karam gave evidence in cross-examination to the effect that, after entering its paper stock in its accounts based on the price it paid to purchase that paper, it was open to the Spotpress Seller to use one of several available methods of accounting for the cost of paper used in the Original Business, including the first-in-first-out, or FIFO, method. As Ms Wright explained in cross-examination, the FIFO method calculates the cost of the paper used on the basis of the price paid to purchase the oldest material forming part of the inventory. The Spotpress Seller’s general ledger account 50101 does not identify the method that was applied. In her first report, Ms Wright noted that the prices recorded in the Original Business general ledger account 50101 for paper used in September 2022, October 2022 and November 2022 were lower than the market prices for paper at those times as recorded in other materials provided to the Buyer during the due diligence process, and noted that this may reflect the use of the FIFO method to account for paper used in the accounts of the Original Business. The expert evidence has proceeded on that basis, and no party has challenged the accuracy of that assumption.
The evidence establishes that the cost of paper used recorded in general ledger account 50101 for the Original Business for each of the months of September, October and November 2022 was allocated between what would become the Transferred Business and the Retained Business by applying the revenue-based expense attribution method. This approach was taken notwithstanding that the heatset and coldset businesses use different types of paper, so that it would have been possible to calculate and record in the TB Linked Worksheet the actual cost of the paper used by what would become the Transferred Business in each of those three months, as Mr Allsop accepted in cross-examination. The approach taken assumed that the proportion of the revenue of the Original Business that was generated by the Transferred Business would be the same as the proportion of the total paper costs of the Original Business that were referable to the printing operations of the Transferred Business. As Mr Allsop accepted in cross-examination, this approach was mathematically flawed and would understate the paper use costs of what would become the Transferred Business if the paper used in the heatset printing operations of the Original Business was generally more expensive than the paper used in the coldset operations which were to be retained by the Spotpress Seller. An analysis undertaken by the plaintiffs’ legal representatives of contemporaneous documents recording prices per tonne for different types of paper, and other documentary evidence identifying paper types used in the Spotpress Seller’s coldset printing operations and in its heatset printing operations, demonstrates that the price per tonne was generally higher for types of paper used in heatset printing than for types of paper used in the coldset printing operations, and that the average price per tonne of all paper types used in heatset printing was approximately 22% higher than the average price per tonne of all paper types used in the coldset printing operations. I accept that analysis, which was not disputed by the defendants.
As stated at [43] above, the cost of paper recorded in the general ledger for the Original Business, from which the cost of paper recorded in the TB Linked Worksheet was extracted, was not calculated on the basis of current paper prices at that time. Paper prices in September, October and November 2022 were higher than those reflected in the cost of paper used figures in the Original Business general ledger account 50101 and in the corresponding account of the TB Linked Worksheet which attributed a percentage of those costs to what would become the Transferred Business by applying the revenue-based expense attribution method. Although the cost of paper used recorded in the TB Linked Worksheet did not reflect current paper prices as at September, October and November 2022, the TB Linked Worksheet applied at 12.5% reduction to the cost of paper used on the basis of the projected estimated reduction to current paper prices during 2023 recorded in the normalisation entries referred to at [38] above.

The normalising entries referred to at [38] above also included a 7.3% price increase on print from 1 January 2023. The due diligence materials uploaded to the Dropbox folder included a document entitled “Executive Summary” which was addressed to Mr Karam and Ms Karam and which stated that the questions had been answered “to the best of our abilities” but outlined “a few considerations”. I assume that the questions referred to were the questions included in the due diligence questionnaires issued by Ms Karam on 1 and 2 December 2022. The “considerations” outlined in the “Executive Summary” included that:

“January price increases
All regular customers have been given notice of a 7.3% price increase effective 1 January.
TMA will receive the benefit of these price increases.
Subject to your input, it is my wish to pass increases every 1 January at the CPI rate of the previous October or November. We can discuss this at a later stage.”

On 10 January 2023, Ms Karam sent an email to Mr John Georgantzakos requesting further information that she required to verify the data and the Spotpress Seller’s current business performance as disclosed in the due diligence materials that had been provided so far, which included the TB Linked Worksheet contained in the Financials Spreadsheet. The further information requested on 10 January 2023 included current “Customer Agreements” and “Price increases passed on to the customer” for the past five years. Mr John Georgantzakos replied promptly by email that same morning that current customer agreements were “Non available for heatset”. In answer to Ms Karam’s question about “Price increases passed on to the customer” for the past five years, Mr John Georgantzakos wrote: “1 Jan 2023 @7.3% (Oct 2022 CPI). 1 Jan 2022 negotiated increases around 15-20% to all periodical customers”.
On 30 January 2023, Mr John Georgantzakos forwarded to Ms Karam a copy of an example of an email he had sent to a customer in February 2022 advising of a temporary price increase to reflect the increasing costs of paper, being the first price increase implemented by the Spotpress Seller since 2018. The email advised that the customer’s Spotpress account manager would be in touch “to explore all options available to overcome these financial challenges and ensure you meet your budgets”. Mr John Georgantzakos’s email to Ms Karam stated that the Spotpress Seller had engaged in “a lot of back and forth” with customers after sending this email “to provide financially viable options that also retained our margins”. He wrote that, in contrast: “the most recent price increase notification was a very short and brutal email. I gave them 2 months notice and a soft, CPI only increase. I believe I have submitted a sample of this to you somewhere. My thinking was to consistently do this every 1 Jan, with a prior notice every 30 October.”
Mr John Georgantzakos has admitted that:

“… the email I sent to Ms Karam on 10 January 2023 and 30 January 2023 [was] inaccurate in that [it] suggested that all customers of Spotpress Seller had received a notice of a 7.3% price increase and that I did not clarify that increase notices had only been sent to customers with recurring publications and had not been sent to customers:
a. who were separately quoted for each individual job; or
b. who had only recently become customers of Spotpress Seller.”

In her affidavit sworn on 27 February 2024, Ms Karam deposed that she understood the third normalisation entry in the TB Linked Worksheet referred to at [38] above – Allowance for premium paid for lease due to Marrickville location – to be an allowance for future rent expenses of the Transferred Business to be reduced by 50% if the Buyer chose to relocate the factory and business premises to a location with cheaper rent.
The parties did not enter into any agreement by the target exchange date of 31 January 2023.
The parties’ solicitors continued to prepare and negotiate the terms of draft transaction documents throughout February 2023.
Ms Karam and her team prepared a report concerning the proposed acquisition for the purpose of a TMA Group board meeting on 22 February 2023 (the TMA Board Report).
Mr Karam gave evidence under cross-examination that there were a number of reasons why the potential acquisition of the Spotpress heatset and hybrid printing business was attractive to TMA Australia. The principal reason was that the market for magazine and catalogue printing services in Australia had effectively become a duopoly between the Spotpress Seller and another company, IVE. A third printer, Ovato, had recently gone into administration and had been acquired by IVE. There was another printer in South Australia, but it was a much smaller business which did not provide significant competition for IVE and Spotpress due to its size and geographical distance from many printing clients.
The TMA Board Report stated:

“The consolidation of Ovato and IVE presents and opportunity to service the smaller customers of Ovato which would be unprofitable to IVE due to the smaller runs but will deliver a healthy margin to Spotpress.”

The TMA Board Report continued:

“The overall strategy is to create a scalable and adaptable print business in its current market segments. The industry is mature and has gone through substantial consolidation. The acquisition of the Spotpress assets is aimed at creating additional print capacity, diversify the revenue streams and increase overall TMA Group profitability.
TMA sees the following growth opportunities in the Catalogue, Commercial and Magazine segment:
Client acquisition due to the acquisition of Ovato by IVA – due to the consolidation of the market, Spotpress will take on the client base of Ovato that will be unprofitable for IVE due to the smaller runs but perfect for Spotpress.
Other publishers are expected to outsource their printing requirements to industry firms to reduce costs and capital outlays.
Synergistic benefits using TMA’s Web to print services – a print-on-demand portal to enable semi-automatic printing service (Which Spotpress currently does not have).
Additional capabilities of the upgraded M600 printing press, and the new Fuji-Xerox digital press will increase volume.
Spotpress will take on the client base and workload of smaller printers who will exit the market as they struggle to complete.”

The TMA Board report reproduced the profit and loss statement for the proposed Transferred Business (which the report describes as including the heatset and hybrid components of the Original Business, but defines simply as the “Heatset Business”) for the months of September, October and November 2022 that had been presented in the TB Linked Worksheet, up to and including the Normalised Net Profit. The report set out Ms Karam’s analysis of that profit and loss statement in the following terms:

“Analysis
Spotpress operates both a Heatset and Coldset division and the financial reporting for both divisions is combined in the General ledger. There is no separate Divisional reporting.
The financials provided are for the Heatset Division only. The allocation of expenses between Heatset and Coldset has been done by Spotpress.
Due to the highly unusual and limited nature of the due diligence process insisted on by Spotpress. Spotpress’ Shareholders have agreed to warranty the accuracy of these numbers.
Based on the P&L provided for 3 months:
The normalised average monthly EBITDA was $621k.
This annualises to an EBITDA of $7.452m.”

The TMA Board Report then set out a profit and loss statement for the Transferred Business for the months of September, October and November 2022, incorporating certain adjustments which Ms Karam recommended the Board make to the “Normalised Net Profit” in the TB Linked Worksheet, namely: (1) an adjustment described as “Heatset Material from Stock take Repriced at Open PO Price or last buy price if not on order”, to which no monetary amount was ascribed; (2) an adjustment described as “Binding and Printing Services”, to which no monetary amount was ascribed; (3) reversing the normalisation entry for a 50% reduction in rental costs; and (4) increasing the amounts allowed for certain categories of expenses (the TMA Adjusted P&L).
The TMA Board Report stated that those adjustments resulted in: (1) a downgrade of normalised average monthly EBITDA from $621,000 in the TB Linked Worksheet to $429,268, which should be reduced further to $373,830 to allow for seasonality; and (2) a downgrade of normalised annual EBITDA from $7,452,000, being the figure extrapolated from the September 2022 to November 2022 period in the TB Linked Worksheet, to $5,151,215, which should be reduced further to $4,485,965 after allowing for seasonality.
The TMA Board Report then set out a three-year forecast for the proposed Transferred Business based on the TMA Adjusted P&L for the three-month period from September to November 2022, incorporating Ms Karam’s forecasted growth in the market share of the Transferred Business and a consequential uplift in revenue which was modelled as giving rise to an increase in annualised EBITDA from $4,952,862 in FY2024 to $5,920,450 in FY2025 and $6,309,457 in FY2026. Ms Karam’s analysis accompanying this three-year forecast explained that:

“Since separate Divisional reporting was not provided or was able to be scrutinised between Heatset and Coldset Divisions, expenses were provided by Spotpress as a percentage of Revenue. These percentages have been applied to the forecast along with TMA’s adjustments.”

In support of her recommendation that the Board approve the proposed acquisition for the non-stock purchase price of $6,000,000, Ms Karam offered the following analysis:

“Financial Analysis:
Our forecasts factors an increase in revenue over the forecasted period as the market is a duopoly with Spotpress’ current market share being approx. 4%.
The consolidation of the market (OVATO acquisition by IVE), Spotpress will be able to increase market share by taking on the smaller clients of OVATO. The revenue is expected to grow steadily over the forecasted period as Spotpress gains market share in a declining market.
The forecast has been adjusted for contingent cost increases post settlement.
The Board can expect Spotpress to deliver a profit before tax (PBT) of $1.165m for the period from March to June 2023 (expected settlement 1 March 2023).
For the financial year 2024, the board can expect a PBT of $4.352m.
For the financial year 2025, the board can expect a PBT of $5.320m.
The acquisition cost of $6m represents an EBITDA multiple of 1.21 times. The purchase price of Spotpress is fair and reasonable with the EBITDA multiple within a reasonable range for a business in the declining Printing Industry.
There has been no synergistical benefits accounted in the forecast.”

The EBITDA multiple of 1.21 calculated by Ms Karam appears to be based on the projected EBITDA of $4,952,862 in FY2024 under the TMA Adjusted P&L, (being the first full financial year after completion of the proposed transaction), and is more favourable to the Buyer than the non-stock purchase price of 3 x EBITDA that TMA Australia had sought to negotiate, subject to due diligence, in the non-binding Memorandum of Understanding. [1]
1. See [19] above.
At the time that they were conducting due diligence for the proposed acquisition of the Transferred Business, the TMA Entities had a contract to provide printing solutions to Australia Post, which they performed by outsourcing aspects of the work to third parties. I accept the evidence given by Mr Karam and Ms Karam under cross-examination that they did not decide to proceed with the acquisition of the Transferred Business with a view to acquiring equipment and resources that would allow the TMA Entities to print catalogues for Australia Post in-house. Mr Karam gave evidence that the Australia Post work required equipment that neither TMA Australia nor the Transferred Business owned, and that he and Ms Karam did not do any analysis before proceeding with the acquisition to determine whether or not it would be profitable to acquire the necessary additional equipment in due course in order to produce the whole of the Australia Post product in-house. Ms Karam gave evidence that she was not focused on Australia Post, and that “it made no surface in any of my due diligence or analysis”. That evidence of Mr Karam and Ms Karam is consistent with the strategic considerations discussed and the financial analysis set out in the TMA Board Report.
The TMA Group board resolved to proceed with the acquisition at its meeting on 22 February 2023.

Meeting on 7 March 2023

Following the resolution of the TMA Group board to proceed with the acquisition, the parties’ solicitors were continuing to discuss draft iterations of an asset sale agreement and various other documents to give effect to the proposed transaction. Mr Karam and Ms Karam together with Mr Wyld and Ms Nomikos of Thomson Geer attended a meeting on 2 March 2023 with Mr John Georgantzakos and Mr Dimitri Georgantzakos together with Mr Lyons of Frank Law. They discussed the latest drafts of the documents, with the exception of a lease for the Marrickville premises which was yet to be drafted, and a proposed services agreement for the Buyer to provide heatset and bindery services to the Spotpress Seller for the purpose of the Spotpress Seller servicing its coldset printing customers whose publications had heatset-printed inserts during a transitional period in which the Buyer intended to wind down its coldset printing operations. Those present at the meeting on 2 March 2023 discussed numerous changes to the documents and agreed that they should be finalised in order to be executed and exchanged at a meeting to be held at Thomson Geer’s offices at 12:00pm on 7 March 2023, with completion to occur simultaneously.
By 7 March 2023, the following transaction documents had been prepared, and the latest round of proposed amendments to some of those documents were yet to be discussed (collectively, the Transaction Documents):

an Asset Sale Agreement, which provided for the sale of the heatset and hybrid components of the Sellers’ Business to the Buyer for a price of $6,000,000, of which $2,500,000 was payable on Completion and $3,500,000 was the subject of vendor finance on the terms of the Loan Deed, to be repaid by the Buyer to the Sellers in monthly instalments over a period of 30 months following Completion, subject to certain adjustments to be deducted from the amount owing by the Buyer under the Loan Deed, plus an amount for stock to be agreed following a stocktake required to be carried out by the Buyer and Sellers jointly immediately after Completion;

a Loan Deed, which provided for the vendor finance referred to immediately above and pursuant to which TMA Australia (as Guarantor) and TMA Capital (as Limited Guarantor) jointly and severally guaranteed the obligations of the Buyer (as Borrower) to make the payments and perform its other obligations under the Loan Deed;

a Specific Security Agreement between the Buyer (as Grantor) and the Sellers (as Grantee) pursuant to which the Buyer granted the Sellers a security interest over the plant and equipment that was to be sold to the Buyer under the Asset Sale Agreement as security for the performance of the Buyer’s obligations as Borrower under the Loan Deed;

a further Specific Security Agreement between TMA Capital (as Grantor) and the Sellers (as Grantee) pursuant to which TMA Capital granted the Sellers a security interest over the Spotpress trademark, which was to be assigned from the Spotpress Seller to TMA Capital under a Deed of Assignment to be entered into at the same time as the Asset Sale Agreement, as security for performance of TMA Capital’s obligations as Limited Guarantor under the Loan Deed;

a Side Deed by which the parties agreed that a particular reduction to that part of the purchase price that was the subject of vendor finance repayable under the Loan Deed was nil, effectively overriding the clause in the Asset Sale Agreement that allowed for that reduction (the Side Deed);

a lease of the Marrickville premises from JG & DG Properties to the Buyer for a term of 3 years commencing on 7 March 2023 in registrable form (the Lease);

a Side Deed to the Lease which conferred on the Buyer (as lessee) the right to terminate the Lease on 12 months’ written notice to the lessor at any time during the first year of the term, and on six months’ written notice at any time thereafter (the Lease Side Deed);

a Services Agreement pursuant to which the Buyer was engaged to provide certain services to the Spotpress Seller, including “Heatset Works”, on a cost-recovery basis, from the completion of the Buyer’s acquisition of the Transferred Business until such time as the Spotpress Seller terminated the agreement by providing two months’ written notice;

Consulting Services Agreements with each of Mr John Georgantzakos and Mr Dimitri Georgantzakos, pursuant to which each of them agreed to provide certain consulting services to the Buyer for a period of three years and six months (respectively) following completion of the Buyer’s acquisition of the Transferred Business;

a licence pursuant to which the Spotpress Seller (as licensor) permitted the Buyer to occupy premises that the Spotpress Seller was sub-leasing at Kingsgrove (the Kingsgrove Licence); and

various other documents connected to the Asset Sale Agreement which are not directly relevant to the issues to be determined in these proceedings.

The first draft of the Lease was prepared by Ms Badenhorst of Frank Law and sent to Mr Wyld of Thomson Geer on the evening of 2 March 2023, together with the first draft of the Lease Side Deed. Schedule 1 of the draft lease contained the following provision in clause 2:

“2. Electricity Supply
2.1   Despite any other provision of the Lease, the Lessee is not obliged to procure the provision of electricity services to the Premises.
2.2   Each month, the Lessor shall invoice the Lessee for the electricity consumed by the Lessee in the Premises during the preceding month/billing cycle at the cost price to the Lessor of such electricity.
2.3   The Lessee must pay such invoice in respect of electricity costs to the Lessor in the same manner and together with its next payment of Rent.”

That draft clause is broadly consistent with the conversation that Mr Karam says Mr John Georgantzakos had earlier initiated with him about the electricity supply for the Marrickville premises. [2]
2. See [22] above.
At about 8:40am on the morning of 7 March 2023, Mr Wyld circulated by email to Mr Lyons (copied to Mr Frank and Ms Badenhorst) a completion agenda for the parties to work through at the meeting later that day. Mr Wyld’s email recorded the status of the various transaction documents that the parties had been negotiating. In relation to the Lease, the email stated that Thomson Geer had reviewed and discussed the draft with the Buyer and was in the process of updating the draft.
At about 9:37am on the morning of 7 March 2023, Mr Wyld sent an email to Ms Nomikos directing her to print eight copies of the marked-up versions of the Transaction Documents which were still the subject of negotiation. Those documents included the Lease.
The marked-up version of the Lease as at 7 March 2023 contained numerous marked-up amendments proposed by Thomson Geer on behalf of the TMA Entities, including an amendment to clause 2 of Schedule 1 to the first draft received from Ms Badenhorst on 2 March 2023 referred to above. Schedule 1 in the first draft had been re-numbered as Schedule 2 in the revised draft. Clause 2 of Schedule 2 had been amended as follows (bold emphasis added, underlining in original):

“2. Electricity Supply
2.1 Despite any other provision of the Lease:
2.1.1 the Lessor must at all times procure, maintain and ensure the provision of electricity services to the Premises at the cost price to the Lessor of such electricity applicable as at the Commencement Date; and

2.1.2 the Lessee is not obliged to procure the provision of electricity services to the Premises.

2.2 Each month, the Lessor shall invoice the Lessee for the electricity consumed by the Lessee in the Premises during the preceding month/billing cycle at the cost price to the Lessor of such electricity.
2.3 The Lessee must pay such invoice in respect of electricity costs to the Lessor in the same manner and together with its next payment of Rent”.

Mr Wyld did not circulate that revised draft Lease, or the most recent iterations of any of the draft Transaction Documents containing his clients’ latest proposed amendments, to Frank Law prior to the commencement of the meeting at 12:00pm on 7 March 2023.
Mr Wyld, Ms Nomikos, Mr Karam, Ms Karam, Mr Lyons, Mr John Georgantzakos, and Mr Dimitri Georgantzakos attended that meeting. There is a difference of recollection between some of those attendees who gave evidence as to whether or not a Mr Lee Barnsley, who worked for the Spotpress Seller and who was an acquaintance of Mr Karam, was also in attendance. Nothing turns on that.
It is common ground that the meeting commenced at about 12:00pm and lasted for several hours, during which time marked-up versions of the Transaction Documents yet to be finalised were displayed on a projector screen and the proposed amendments were discussed and resolved. It is common ground that the Transactions Documents displayed on the projector screen during this process included the Lease. At the conclusion of the meeting, clean copies of the Transaction Documents were prepared and executed by the parties.
I accept Mr Wyld’s evidence that he adopted his usual practice of using the “Next Change” function in Microsoft Word to move through each marked-up amendment in each Transaction Document displayed on the screen, and that he spoke to each proposed amendment as it was displayed and made final changes (which were also displayed on the screen) to reflect the outcome of the parties’ discussion of the particular amendment in the meeting. That evidence is consistent with the evidence of Mr Karam, Ms Karam, Mr Lyons, and Mr Dimitri Georgantzakos, and was not challenged in cross-examination except insofar as it concerned the marked-up amendment to clause 2 of Schedule 2 of the Lease referred to at [72] above.
The defendants contend that Mr Wyld inadvertently failed during this process to draw to the attention of Mr John Georgantzakos, Mr Dimitri Georgantzakos, and Mr Lyons the amendment to clause 2 of Schedule 2 of the Lease that Mr Wyld had drafted shortly before the meeting on 7 March 2023, and which he had not circulated to or discussed with Ms Badenhorst or Mr Lyons prior to the meeting.
In support of that contention, the defendants rely on the evidence of Mr Dimitri Georgantzakos, Mr Lyons and Ms Badenhorst. Mr John Georgantzakos was present at the meeting, but did not give evidence.
In his affidavit sworn on 11 April 2024, Mr Dimitri Georgantzakos deposed that he did not recall any discussion about electricity charges at the meeting and that he did not agree to any changes to the Lease that involved JG & DG Properties having to bear any increase in electricity costs for the Marrickville premises. Mr Dimitri Georgantzakos deposed that he would have remembered such a significant amendment if it had been proposed, and that he would not have agreed to it.
In cross-examination, however, Mr Dimitri Georgantzakos said he had arrived at the meeting expecting to simply sign the documents and that his attention wandered during the several hours in which Mr Wyld displayed the Transaction Documents on the screen and identified the amendments which were then discussed between the parties. Mr Dimitri Georgantzakos said that Mr John Georgantzakos did all of the talking in relation to what was displayed on the screen. Mr Dimitri Georgantzakos did not participate in those discussions, and he does not recall Mr Lyons saying anything. At one point during his cross-examination, Mr Dimitri Georgantzakos said that he didn’t think there were any amendments that were displayed on the screen and discussed. That was inconsistent with his own affidavit, and was plainly a lie, as the cross-examiner put to him. Mr Dimitri Georgantzakos then asserted that there were only two or three amendments, before acknowledging that Mr Wyld went through all of the contracts and spoke to the various amendments proposed as each one was displayed on the screen, briefly describing what each amendment was about. Mr John Georgantzakos spoke on behalf of the Sellers and JG & DG Properties in relation to each amendment. Mr Dimitri Georgantzakos could not remember any amendment that his brother had not agreed with. Ultimately, Mr Dimitri Georgantzakos gave evidence that he is “not aware” whether Mr Wyld failed to bring up any of the amendments on the screen, and he is “not aware” whether Mr Wyld misled him and his brother at the meeting.
I reject Mr Dimitri Georgantzakos’s affidavit evidence concerning the 7 March 2023 meeting, which was exposed in cross-examination as having no basis in any recollection that he has of that meeting. I reject as untruthful his evidence in cross-examination suggesting that only two or three amendments to the Transaction Documents were discussed. Mr Dimitri Georgantzakos effectively recanted from that evidence in any event. The final iteration of his evidence of the meeting in cross-examination provides no support for the defendants’ contention that the proposed amendment to the electricity supply provision in clause 2 of Schedule 2 of the Lease was not drawn to their attention at the meeting.
Both in his affidavit and in cross-examination, Mr Lyons acknowledged that he did not have much of a memory of what happened at the meeting on 7 March 2023.
In his affidavit sworn on 3 April 2024, Mr Lyons had deposed that he recalled telephoning Ms Badenhorst during the meeting to discuss amendments that Mr Wyld had proposed to the lease, and that he recalled discussing three particular topics with Ms Badenhorst. Those topics did not include the electricity supply clause in Schedule 2 of the Lease. Mr Lyons also deposed that did not recall Mr Wyld bringing to his attention the proposed amendment to the electricity supply clause, that he would have wanted to discuss any such proposed amendment with Ms Badenhorst if it had been brought to his attention and he had no recollection of doing so, and that he would have also sought specific instructions in relation to any such proposed amendment and he had no recollection of doing so.
In cross-examination, however, Mr Lyons said that he had prepared his affidavit after trying to reconstruct for himself an understanding of the transaction as a whole. Mr Lyons recalled that Mr Wyld said during the meeting that his property partner had drafted a proposed amendment to the Lease. That was the extent of Mr Lyons’ recollection of specific words being said during the meeting. He did recall that each of the Transaction Documents containing proposed amendments were brought up on the screen and that there was some discussion about them, but he had no recollection of what particular clauses were drawn to his attention during that process. Schedule 2 to the draft of the Lease discussed at the meeting contained several proposed amendments, and Mr Lyons did not recall whether Mr John Georgantzakos agreed or disagreed with those amendments. Mr Lyons gave evidence that he definitely recalled speaking with Ms Badenhorst by telephone during the meeting, but that he had no recollection (as opposed to reconstruction) of the topics he had discussed with her.
Mr Lyons’ affidavit evidence to the effect that that did not recall Mr Wyld directing his attention to the electricity supply clause amendment during the 7 March 2023 meeting has no bearing on the question whether that amendment was discussed during the meeting when that affidavit evidence is understood in the context of Mr Lyons’ candid evidence during cross-examination that he had no recollection of any particular proposed amendment being brought to his attention during the process of Mr Wyld displaying on screen and discussing proposed amendments to the Transaction Documents during the three-hour meeting. Similarly, Mr Lyons’ affidavit evidence to the effect that he would have discussed any such amendment with Ms Badenhorst and sought instructions about it from Mr John Georgantzakos, and that he had no recollection of doing so, is irrelevant when understood in the context of his acceptance during cross-examination that he had no recollection of any of the topics that he discussed with Ms Badenhorst and no recollection of Mr John Georgantzakos’s response to any of the proposed amendments. I reject the defendants’ submission that Mr Lyons evidence renders it likely that the proposed amendment to the electricity supply clause was not discussed at the meeting.
Ms Badenhorst, who was not present at the meeting, deposed in her affidavit sworn on 17 April 2024 that she had ascertained from her telephone records that Mr Lyons had called her at 12:13pm and at 12:59pm on 7 March 2023. In the first call, which lasted for 24 seconds, Mr Lyons requested a copy of the floor plans for the Marrickville premises, which Ms Badenhorst emailed to him a few minutes after that call. Ms Badenhorst deposed that the second call lasted for 4 minutes and 43 seconds, that they discussed matters relating to the Lease, and that she could recall discussing during that call a proposed amendment to the definition of “outgoings” in the Lease. Ms Badenhorst deposed that she had no recollection of any discussion with Mr Lyons regarding any proposed amendment to the electricity supply clause in the Lease. Ms Badenhorst’s lack of recollection of any such discussion has no bearing on the question whether that particular amendment was brought to the attention of the persons in the meeting because Ms Badenhorst agreed in cross-examination that she had no recollection of anything that Mr Lyons said to her in their telephone conversations on that day, save that he had mentioned an amendment to the definition of “outgoings”. Ms Badenhorst has no file note of her telephone conversations with Mr Lyons.
Considered as a whole, the evidence of Mr Dimitri Georgantzakos, Mr Lyons, and Ms Badenhorst does not support the defendants’ contention that Mr Wyld inadvertently failed to bring to the attention of Mr John Georgantzakos, Mr Dimitri Georgantzakos and Mr Lyons the proposed amendment to clause 2 of Schedule 2 of the Lease during the meeting on 7 March 2023.
Ms Karam gave evidence that she recalls being taken to clause 2 of Schedule 2 during the meeting because this was the first time that she had heard that the electricity supply was to be the responsibility of the lessor, and she found that most unusual.
In his affidavit sworn on 21 June 2024, Mr Karam deposed that there was a discussion at the meeting about electricity charges in the context of amendments to the Lease, during which he understood Mr John Georgantzakos to have agreed that JG & DG Properties would charge the Buyer (as lessee) the current cost of electricity for the term of the Lease. Mr Karam deposed that he could not recall precisely what Mr John Georgantzakos had said.
In cross-examination, Mr Karam purported to give a detailed account of what had been said about the proposed amendment to the electricity supply clause at the meeting on 7 March 2023. I place no weight on that account, which I consider to be a reconstruction given Mr Karam’s sworn evidence almost one year earlier that he was unable to recall that level of detail. I do not suggest that Mr Karam’s evidence of his reconstructed memory was untruthful.
Mr Wyld deposed that he recalled discussing the proposed amendment to clause 2 of Schedule 2 with Mr John Georgantzakos, who agreed with that proposed amendment. That evidence of Mr Wyld was not successfully challenged in cross-examination, although he acknowledged that he did not recall the precise terms of that conversation.. Mr Wyld denied that his memory of displaying the schedules to the Lease on the screen during the process of discussing proposed amendments was mistaken.
I accept the evidence of Ms Karam, Mr Karam, and Mr Wyld, that the proposed amendment to the electricity supply provision in clause 2 of Schedule 2 of the Lease was discussed at the meeting on 7 March 2023 and was thereby drawn to the attention of Mr John Georgantzakos and Mr Dimitri Georgantzakos before they caused JG & DG Properties to execute the Lease at the conclusion of that meeting. The evidence of each of Ms Karam, Mr Karam and Mr Wyld on that subject corroborates the evidence of the others. Ms Karam’s evidence that she recalls the discussion about the electricity supply clause because she considered it most unusual for a lessor to be taking on responsibility for the supply of electricity to the leased premises is inherently plausible. It is, indeed, most unusual for a lessor to take on that responsibility. As Mr Dimitri Georgantzakos accepted in cross-examination, it exposes the lessor to the risk of having to discharge its liability to pay the charges to the electricity supplier even if the lessee has failed to comply with its obligation under the lease to reimburse the lessor for those charges. In the absence of the amendment, the clause would have exposed the lessee to the risk of any increases in the lessor’s electricity costs without the lessee having any ability to control or mitigate the circumstances that might result in such increases.
Contrary to the defendants’ submissions, the unusual nature of the arrangement, and the additional risk that the proposed amendment created for the lessor if electricity prices increased, does not render it improbable that Mr John Georgantzakos was aware of and agreed to the proposed amendment in this case. As referred to earlier in these reasons, it was Mr John Georgantzakos who proposed to Mr Karam that the lessor would supply the electricity to the Marrickville premises because “[y]ou cannot buy the electricity as cheap as I can”. [3] Mr Dimitri Georgantzakos gave evidence in cross-examination that the market rate at the time was 18 cents per kilowatt-hour but JG & DG Properties had an electricity supply contract at the rate of 11 cents. Mr Dimitri Georgantzakos said that it “did not make commercial sense” for JG & DG Properties to terminate that contract, and for the lessee to enter into a new contract at 18 cents.
3. See [22] above.
On the basis of the evidence of Ms Karam, Mr Karam, and Mr Wyld, and in the absence of any evidence from Mr John Georgantzakos to the contrary, I find that Mr John Georgantzakos did agree to the amendment to clause 2 of Schedule 2 of the Lease after it was brought to his attention and discussed at the meeting on 7 March 2023.
I now turn to the salient terms of the Transaction Documents executed by the parties at the conclusion of that meeting.

Asset Sale Agreement

The Asset Sale Agreement between the Sellers, the Buyer and TMA Australia (as Guarantor) provided:

“2   Sale and purchase
2.1   Agreement to sell and purchase
With effect from the Completion Date the Sellers must sell and transfer to the Buyer the Assets subject to the Buyer assuming liability for the Accrued Employee Entitlements:
(a)    free of any Encumbrance (subject to clause 5(a)(ii));
(b)   for the Purchase Price (to be paid in accordance with clause    2.3); and
(c)   subject to this agreement.”

The “Assets” were defined as including:

the “Goodwill”, which was defined as the goodwill of the Sellers attaching to the “Business”, which was in turn defined as “the heatset and other printing business including all types of print but excluding newspaper print, conducted by the Sellers as at the date of this agreement”;

the “Plant and Equipment”, which was defined by reference to numbered assets identified in a valuation report prepared by Hymans Valuers & Auctioneers which was annexed to the Asset Sale Agreement as Annexure A;

the “Stock”; and

the “Customer List”, which was defined as a list containing the information requested by the Buyer in respect of each customer of the Business in the two-year period prior to the Completion Date.

The Purchase Price payable under clause 2.1 had five components, which were set out in clause 2.3 of the Asset Sale Agreement:

a “Cash Completion Payment” of $2,500,000 which was payable to the Sellers on Completion;

a “Borrowed Completion Payment” of $3,500,000 which was funded by a loan made by the Sellers to the Buyer under the Loan Agreement to be entered into on Completion;

the “Encumbered Stock Value” – being the aggregate value of all stock of the Business that was subject to a mortgage, charge or any other encumbrance or security interest, as determined by the parties by jointly carrying out a stocktake in accordance with clause 6 of the Asset Sale Agreement – which was payable to the Sellers two business days after they determined that aggregate value;

the “Unencumbered Stock Value” – being the aggregate value of all unencumbered stock of the Business as determined through the joint stocktake referred to immediately above – which was also payable to the Sellers two business days after the parties determined that aggregate value, but which was funded by a loan made by the Sellers to the Buyer under the Loan Agreement; and

the “Accrued Employee Entitlements” and other Purchase Price reductions set out in clause 7 of the Asset Sale Agreement which were to be deducted from the amount owing under the Loan Agreement in accordance with clause 7.4 of the Asset Sale Agreement.

As I have already mentioned, the parties had agreed upon simultaneous exchange and completion of the Transaction Documents. Accordingly, the Asset Sale Agreement defined the “Completion Date” as the date of the agreement.
Clause 5 of the Asset Sale Agreement provided:

“5    Fundamental Seller Obligations
(a)    The Sellers must, prior to or as soon as is reasonably practicable after Completion and in no event later than the Sunset Date:
(i)    without limiting clause 9, procure the assignment or novation of all Contracts the Buyer requires to be novated or assigned on terms acceptable to the Buyer (acting reasonably); and
(ii)    procure the repayment of all remaining Stock Debt and the release of all Deferred Encumbrances over the Assets.

(b)   If any Asset remains encumbered as at the Sunset Date, the Buyer may by notice in writing to the Sellers:
(i)   exclude that Asset from the sale contemplated in this agreement; and
(ii)    deduct the value of that Asset from the Purchase Price (Encumbered Asset Deduction). The Encumbered Asset Deduction will be made in accordance with clause 7.4.”

The “Sunset Date” was defined as nine months after the Completion Date.
Clause 6 of the Asset Sale Agreement required the Sellers and the Buyer to carry out a stocktake of all Stock commencing at 6:00am on the day following the Completion Date, and to jointly prepare a statement setting out specified matters, including a description of all Stock, and the value of each item of Stock determined on the basis of the most recent price paid by the Sellers for the relevant grade of stock (excluding GST).
Clause 8.1(a) of the Asset Sale Agreement required the Buyer to procure Spotpress Web Pty Limited (defined as the “Employing Entity”) to make offers of employment to each of the “Employees” – defined as “each of the employees that are engaged for the operation of the Business” as at the date of the Asset Sale Agreement, as listed in Schedule 2 – on terms “no less favourable than their current terms and conditions of employment”.
In respect of those Employees who accepted the Buyer’s offer under clause 8.1(a) (defined as the “Transferring Employees”), clause 8.2(a) required the Sellers to accept their resignation with effect on Completion, and to release them from their employment with the Sellers (defined as the “Transfer Date”).

The task of assessing the true value of the Transferred Business necessarily involves a degree of estimation and I consider that the plaintiffs have adduced such evidence as was reasonably available to them in the circumstances by presenting and comparing Ms Wright’s three approaches to that assessment in her second and third reports. I accept the plaintiffs’ submission that each of the Additional Documents Approach (as varied in Ms Wright’s third report and in her letter of 12 May 2025) and the Alternative Approach provides a reasonable measure of corroboration of the other because each of those approaches arrives at substantially the same outcome as the other after addressing the same question from a different perspective, and that the two approaches taken together provide a rational basis for assessing true value and estimating loss. In relation to the Additional Documents approach, I prefer Scenario 2 in Ms Wright’s third report for the reasons explained at [212]-[217] above. [49]
49. Commonwealth v Amann at 83 (Mason CJ and Dawson J), 125 (Deane J) and 153 (Gaudron J); Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257; [2003] HCA 10 at [38] (Hayne J); Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31 at [135]-[137] (Beazley JA, Basten JA agreeing); Ramsay v BigTinCan Pty Ltd (2014) 101 ACSR 415; [2014] NSWCA 324 at [82] (Macfarlan JA, McColl and Gleeson JJA agreeing).
On that basis, doing the best I can on the basis of the available evidence, I assess the true value of the Transferred Business as at Completion as $1,125,000 and the Buyer’s loss as $4,875,000 (being the difference between the non-stock purchase price of $6,000,000 and the assessed true value).
I have arrived at that assessment by placing equal weight on the Additional Documents Approach and the Alternative Approach, relying on the shortcomings in each approach to be effectively ameliorated by corroboration of its outcome against the outcome arrived at by the other approach. My assessment of the loss as $4,875,000 must therefore be regarded as inclusive of the loss that flowed from the Sellers’ overstatement of estimated future revenue by the normalising entry relating to the 7.3% price increase to be passed on to customers (which was incorporated in Ms Wright’s Additional Documents Approach). [50]
50. See [257]-[260] and [271]-[273] above.
For all of those reasons, there will be an order requiring the Sellers to pay damages to the Buyer in the sum of $4,875,000 in respect of the Sellers’ breach of the Seller Warranty in clause 3.1 of Schedule 1 of the Asset Sale Agreement.

Buyer’s claim for damages for Sellers’ failure to transfer the hybrid business in breach of the Asset Sale Agreement

The Buyer claims damages for the Sellers’ admitted failure to transfer the hybrid business to the Buyer on Completion, in breach of clause 2 of the Asset Sale Agreement. [51]
51. See [165] above.
The Sellers do not dispute the $600,000 quantum of the loss claimed by the Buyer based on Ms Wright’s evidence estimating the future maintainable earnings of the hybrid business. [52] The Buyer is therefore entitled to damages in that amount.

Buyer’s claim for damages in respect of Mr John Georgantzakos’s alleged breaches of the Consulting Services Agreement

52. See [260] above.

The Buyer claims that the Sellers’ failure to transfer the hybrid business on Completion also constituted a breach by Mr John Georgantzakos of clause 15.4 of the Consulting Services Agreement that he entered into with the Buyer (as Principal).
Clause 15.4(a) of the Consulting Services Agreement relevantly provided:

“During the Engagement and for the Restraint Period … the Consultant must not (without the Principal’s prior written consent, which may be withheld in its sole and absolute discretion) in any capacity, on its own account, or as a consultant or contractor to, or as a partner, agent or shareholder of any other person, business or entity, either directly or indirectly:
(i)    participate, establish, or otherwise be directly or indirectly involved in any way whatsoever, in any Commercial Printing Business;
(ii)    solicit, canvass, approach or accept an approach from a Customer with a view to obtaining their custom in a business that is the same or similar to the Business, or is in competition with the business of the Principal or an Associated Entity of the Principal;
…
(iv)   interfere or cause to interfere directly or indirectly with the relationship between the business of the Principal … and its customers … which includes employing, soliciting or enticing away from the business of the Principal … any of its … customers …;
…”

The term “Business” is defined in the Consulting Services Agreement in the same way as in the Asset Sale Agreement. The “Restraint Period” is defined in clause 1 of the Consulting Services Agreement as a period of at least one year after the Completion Date.
Mr John Georgantzakos gave evidence in paragraph 153 of his affidavit sworn on 11 April 2024, which the plaintiffs tendered as an admission, that the Spotpress Seller continued to invoice the hybrid printing customers in the period between 7 March 2023 and September 2023, and that the Spotpress Seller paid the Spotpress Buyer for the heatset printing components of that hybrid work at cost price. I accept the plaintiffs’ submission that this admission demonstrates that Mr John Georgantzakos personally caused the Spotpress Seller to continue undertaking work for hybrid printing customers that had formed part of the Transferred Business, and caused the Spotpress Seller to retain the profits earned from that work. That is to say, he approached or accepted approaches from hybrid customers and obtained their custom for the Spotpress Seller in breach of clause 15.4 of the Consulting Services Agreement.
The Buyer claims damages in the amount of $347,109, being the profit margin that it would have earned from the hybrid business but for Mr John Georgantzakos’s breach of the Consulting Services Agreement. That margin is the starting point for Ms Wright’s calculation of the annualised lost margin of $400,000 and the lost future maintainable earnings of the hybrid business of $600,000. The plaintiffs accept that the Buyer is not entitled to recover those lost future maintainable earnings of $600,000 from the Sellers and also recover the lost profit of $347,109 from Mr John Georgantzakos.
There will therefore be an award of damages of $347,109 in favour of the Buyer against Mr John Georgantzakos on account of his breach of clause 15.4 of the Consulting Services Agreement, subject to a further order preventing double-recovery.

Buyer’s claim for allegedly misleading or deceptive price increase representations

The plaintiffs submit that, in the due diligence materials and January 2023 email correspondence between Ms Karam and Mr John Georgantzakos referred to at [47]-[49] above, Mr John Georgantzakos represented on behalf of the Sellers that: (1) all customers of the Spotpress Seller had been notified of a 7.3% price increase effective from 1 January 2023; (2) the price increase had been passed on to all customers; and (3) the Buyer would receive the benefit of the price increase.
I accept the plaintiffs’ submission that the due diligence materials referred to at [47] above, read together with the emails referred at [48]-[49] above, conveyed the first representation. Mr John Georgantzakos has admitted as much in part of his affidavit sworn on 11 April 2024 which I have extracted at [50] above. The case has been conducted on the basis of that admission, and I reject the defendants’ submission that the plaintiffs are confined to a narrower pleaded case that the Sellers represented that the 7.3% price increase had been passed on to all regular customers. For at least a year prior to the final hearing, it has been clear to the defendants – from Mr John Georgantzakos’s admission, from the manner in which the defendants themselves had calculated the normalising entry for the 7.3% price increase, and from the lay and expert evidence served by the plaintiffs calculating the difference between a 7.3% price increase passed on to all customers (being the alleged represented scenario) and a 7.3% price increase passed on to some customers only (being the actual scenario) – that the case was being conducted on the basis of an alleged representation that a 7.3% price increase had been passed on to all customers. Procedural fairness does not require that the plaintiffs’ pleading be read strictly so as to confine the case in a manner that is contrary to the way in which all parties have approached it prior to and during the hearing.
I accept the plaintiffs’ submission that the emails referred at [48]-[49] above conveyed the second representation.
I accept the plaintiffs’ submission that the third representation is implied from the first and the second representations. I reject the defendants’ submission that the third representation was not implied, or could not have been relied on, due to the nature of the Transferred Business in which prices for printing jobs were estimated and quoted with an eye to the pricing being offered by competitors. In my opinion, that submission misunderstands the nature of the representation alleged. As I understand the plaintiffs’ case and Ms Karam’s evidence, the alleged third representation is that the Buyer would get the benefit of taking over the Transferred Business with the Spotpress Seller having already informed customers about increased prices, and the Buyer would be able to get straight on with operating the Transferred Business quoting for jobs on the basis of those increased prices.
I accept the plaintiffs’ submissions that the price increase representations were misleading, because they had not in fact been notified and passed on to all customers at the time the representations were made, and there is no evidence that Mr John Georgantzakos had any reason to believe that they would be notified and passed on to all customers prior to completion of the sale of the Transferred Business to the Buyer.
As I have mentioned earlier in these reasons, Ms Karam was not cross-examined on her evidence that she relied on the price increase representations, and her evidence about the purchase price reduction of approximately $260,000 that she would have negotiated if she had known the true extent to which the price increase had been passed on to customers prior to Completion, as revealed by her subsequent analysis. [53]
53. See [167]-[171] above.
I accept that the sum of $260,000 represents the loss of a purchase price reduction that the plaintiffs did not negotiate by reason of the misleading price increase representations. However, the plaintiffs have already been awarded damages for that loss in the form of the 4.34% adjustment incorporated in Ms Wright’s Additional Documents Approach to estimating the loss flowing to the Buyer from the breach of the Seller Warranty in clause 3.1 of Schedule 1 of the Asset Sale Agreement. [54] Accordingly, there will be no separate award of damages against the Sellers in favour of the Buyer for misleading or deceptive conduct in respect of the price increase representations.

Buyer’s claim and Sellers’ cross-claim in relation to Accrued Employee Entitlements

54. See [271] and [325] above.

As referred to at [111] above, it is now common ground that that the Buyer is entitled pursuant to clause 7.1 of the Asset Sale Agreement and clause 4.3 of the Loan Deed to reduce the purchase price by deducting from the amount owing under the Loan Deed the sum of $1,221,972.05 in respect of the Accrued Employee Entitlements of those employees of the Spotpress Seller and Real Media who commenced employment with the Buyer on Completion. A declaration will be made to that effect. The Spotpress Sellers do not press their cross-claim for a declaration to the contrary in prayer 7A of their Amended Cross-Summons.

Buyer’s claims for breach of Seller Warranty and misleading or deceptive conduct in relation to necessary assets and Sellers’ cross-claim alleging wrongful deprivation of printing equipment

For the reasons explained at [149]-[164] above, I accept the plaintiffs’ submission that the Sellers breached the Seller Warranty in clause 5.1 of Schedule 1 of the Asset Sale Agreement by failing to include in the Assets transferred to the Buyer the Wohlenberg Guillotine, the Shoei Machinery Folder, the Rima Crash Folder and the Rima Stacker purchased by the Sellers in December 2022 and known as the “New Stacker”.
It was common ground between the parties that the appropriate remedy for any such breach of that warranty would be an order rectifying the Asset Sale Agreement to include those items of equipment in the definitions of “Assets”, which will have the effect of entitling the Buyer to retain those items which are already in its possession at the Marrickville premises. An order will be made to that effect.
For the same reasons as I have upheld the Buyer’s claim for breach of the Seller Warranty in clause 5.1 of Schedule 1 to the Asset Sale Agreement, I reject the Sellers’ cross-claim in prayer 7E of their Amended Cross-Summons for an order requiring the Buyer to deliver up those items of equipment to the Sellers.
It is not necessary to address the Buyer’s alternative claim for misleading or deceptive conduct.

Buyer’s claim for breach of Sellers’ obligation to procure release of Deferred Encumbrances

For the reasons explained at [181]-[185] above, there will be a declaration to the effect that the purchase price payable by the Buyer to the Sellers under the Asset Sale Agreement is to be reduced by the value of those Assets that were the subject of the Deferred Encumbrances that are returned by the Buyer to the Sellers within 14 days of the making of orders and declarations giving effect to these reasons for judgment.

Buyer’s claim to recover amounts owing in respect of unpaid invoices

As explained at [165]-[166] above, this claim was not the subject of any dispute by the conclusion of the hearing, with the exception of the following three Category 4 invoices for shared services:

invoice 2301052 issued by the Buyer to the Spotpress Seller on 14 September 2023 in the amount of $187.11 for “Recharge for Sameday Laser Printer Service”;

invoice 2301639 issued by the Buyer to the Spotpress Seller on 29 December 2023 in the amount of $976.12 for “Recharge for Remondis Australia”; and

invoice 2301822 issued by the Buyer to the Spotpress Seller on 21 February 2024 in the amount of $849.48 for “Recharge for Remondis Australia”.

Ms Karam has given evidence that all invoices for “Recharge for Same day Laser Printer Service” related to the costs of a shared office printer in the space of the Marrickville premises that was shared by the Buyer and the Spotpress Seller in the period after Completion. Ms Karam says that invoices for the use of that printer were issued to the Spotpress Seller in accordance with an agreement to equally share outgoings of the office space. These aspects of Ms Karam’s evidence were not the subject of cross-examination. The Spotpress Seller disputes invoice 2301052 on the basis that there is no evidence that it utilised the shared printer. I reject that submission, which misses the point of Ms Karam’s unchallenged evidence that the shared printer was part of the shared office space facilities which the Buyer and the Spotpress Seller had agreed to pay equally.
Ms Karam has given evidence that all invoices for “Recharge for Remondis Australia” related to the costs of removing rubbish from the Marrickville premises, and that the Buyer invoiced the Spotpress Seller for 30% of those costs on the basis of an informal agreement made at about the time of Completion that those costs would be shared between them in that manner. Ms Karam has also given evidence that the Spotpress Seller continued to generate rubbish at the Marrickville premises until at least December 2023. Those aspects of Ms Karam’s evidence were not the subject of cross-examination. The Spotpress Seller submits that it is not liable to pay invoices 2301639 and 2301822 because there is no evidence that it was responsible for generating 30% of the rubbish at the Marrickville premises at that time. I reject that submission having regard to Ms Karam’s unchallenged evidence and in the absence of any evidence adduced by the defendants to the contrary of Ms Karam’s evidence.
The plaintiffs correctly accept that, if the Buyer succeeds on its claim for loss of $600,000 for the Sellers’ failure to transfer the hybrid business to the Buyer on Completion, [55] then the Buyer is not entitled to recover, in addition to that loss, their charges to the Spotpress Seller for a 25% margin on the heatset printing services performed for the Spotpress Seller under the Services Agreement in the period after Completion. In order to avoid double recovery in this scenario, the plaintiffs accept that the Buyer is not entitled to recover the whole of the Category 1 invoices (totalling $92,760.87) and the 25% margin component of the Category 2 invoices (being $52,939.16).
55. See [327]-[328] above.
The defendants did not dispute the accuracy of any of the plaintiffs’ calculations of the unpaid invoice amounts, including the plaintiffs’ calculation of the total amount of $145,700.03 to be excluded from the damages awarded to the Buyer in respect of the unpaid invoices claim if the Buyer is awarded damages for the Sellers’ failure to transfer the hybrid business.
There will therefore be an award of damages against the Spotpress Seller in favour of the Buyer in the sum of $422,609.11, being the plaintiffs’ calculation of the total amount owing in respect of the undisputed and disputed unpaid invoices, excluding the Category 1 invoices and the 25% margin component of the Category 2.

Buyer’s claim for rental contribution in relation to Mascot Premises

For the reasons explained at [173]-[178] above, there will be an award of damages against the Spotpress Seller in favour of the Buyer for damages in the sum of $77,000 in respect of the Spotpress Seller’s breach of the oral agreement to pay a one-third contribution to the rent for the Mascot premises leased by the Buyer and used by both the Buyer and the Spotpress Seller.

Claims by the Buyer and JG & DG Properties in relation to electricity costs under the Lease

I accept the plaintiffs’ submission that, properly construed, Clause 2 of Schedule 2 to the Lease requires JG & DG Properties to procure the supply of electricity to the Marrickville premises at the cost price to the Lessor applicable as at the date of commencement of the Lease (being 7 March 2023) and to invoice the Buyer monthly for the electricity that it has consumed in the preceding month at that cost price to the Lessor. [56] The defendants did not propound an alternative construction.
56. See [129]-[130] above.
For the reasons explained at [66]-[94] above, JG & DG Properties has failed to establish that the solicitor acting for the plaintiffs in the negotiation of the Lease inadvertently failed to draw the terms of that clause, which included amendments proposed by the Buyer, to the attention of the representatives of JG & DG Properties during the negotiation of the Lease and the other Transaction Documents on 7 March 2023. JG & DG Properties has also failed to establish that Mr John Georgantzakos did not agree to the terms of clause 2 of Schedule 2 of the Lease on behalf of JG & DG Properties before executing the Lease and the other Transaction Documents later that day. Their claim for rectification of that clause in the Lease as a remedy for alleged misleading or deceptive conduct therefore fails.
As the plaintiffs submitted, it follows that the Buyer is entitled to be charged for electricity that it consumes at the Marrickville premises only at the rates that were payable by JG & DG Properties as at 7 March 2023. JG & DG Properties breached the terms of the Lease when it failed to calculate the electricity supply charged to the Buyer at those rates, as referred to at [189] above.

I accept the plaintiffs’ submission that the Buyer is therefore entitled to be indemnified by JG & DG Properties in an amount to be calculated as the difference between what JG & DG Properties has charged to the Buyer for electricity since 1 January 2024 which the Buyer has paid directly to the electricity supplier, and the amount that JG & DG Properties was entitled to charge under clause 2 of Schedule 2 of the Lease, up to the date of entry of orders. There is no dispute that the amount of that difference is $292,811.48 in respect of the period from January 2024 to March 2025, as referred to at [190] above. It remains for the parties to calculate the amount of the difference in the period after March 2025.

Rectification

It is common ground between the parties that the Loan Deed should be rectified to address obvious errors by:

replacing the words “Seller Fundamental Obligations” in clause 4.1 of the Loan Deed with the words “Fundamental Seller Obligations”; and

replacing the reference to clause 15.5 of the Asset Sale Agreement in clause 4.6 of the Loan Deed with a reference to clause 18.5 of the Asset Sale Agreement.

Orders will be made to that effect.

The Sellers’ cross-claim for outstanding amounts under the Loan Deed and the question of set-off

The provisions of the Loan Deed are summarised at [125]-[128] above.
It is common ground that the Buyer made payments under the Loan Deed totalling $920,294.34 in the period up to 12 October 2023.
There is now no dispute that clause 4.3 of the Loan Deed entitles the Buyer to set-off the Accrued Employee Entitlements in the amount of $1,221,972.05 against the amount owing under the Loan Deed. [57]
57. See [342] above.
The plaintiffs have calculated that, after setting off the Accrued Employee Entitlements, the balance owing under the Loan Deed is reduced to $2,670,182.25, subject to an adjustment that will be required if the value of the Assets to deducted from the stock purchase price after being returned to the Sellers as referred to at [347] above is something more or less than $221,890.03. I did not understand the defendants to dispute that calculation.
As referred to at [179] above, the Buyer gave notice to the Sellers on 8 November 2023 that it was exercising its right under clause 4.6 of the Loan Deed to set-off against amounts owing under the Loan Deed the losses incurred by the Buyer as a result of the breaches of the Seller Warranties under the Asset Sale Agreement (the Notice).
Clause 4.6 of the Loan Deed, as rectified, provides:

“The Borrower shall make any payment required under this Agreement without any set-off, whether on account of taxes or otherwise, except as provided for pursuant to clause 18.5 of the Asset Sale Agreement.”

Clause 18.5 of the Asset Sale Agreement provides:

“The Sellers acknowledge and agree that the Buyer may set off and deduct any amounts owing by the Sellers to the Buyer under this agreement from any amounts owing by the Buyer to the Sellers under the Related Agreements.”

The Sellers do not dispute that the Buyer is entitled to set-off against the remaining amount of $2,670,182.25 owing under the Loan Deed (subject to any adjustment referred to at [364] above):

the amount of any damages awarded to the Buyer in respect of its claims for breaches of the Seller Warranties, which I have now determined in the amount of $4,875,000; and

the amount of any damages awarded to the Buyer in respect of its claims for the Sellers’ breach of the Asset Sale Agreement in failing to transfer the hybrid business to the Buyer on Completion, which I have now determined in the amount of $600,000.

The Sellers do not dispute that the Buyer has a procedural right of set-off under s 96 of the Civil Procedure Act 2005 (NSW) in respect of:

the amount of any damages awarded to the Buyer in respect of the unpaid invoices, which I have now determined in the amount of $422,609.11; and

the $77,000 rental contribution for the Mascot premises.

Declarations will be made to that effect.

Other pleaded claims not pressed

The parties pleaded numerous claims and cross-claims in addition to those addressed at [218]-[370] above. Those other claims and cross-claims were not pressed by the conclusion of the final hearing.

Conclusion and orders

At the conclusion of the final hearing the parties indicated that, and I accepted, that they would wish to be heard about the precise terms of the orders to be made to give effect to my reasons for judgment once published.
The Schedule to these reasons contains a draft form of orders which, subject to hearing from the parties, seem to me to give effect to these reasons. I gratefully acknowledge the work undertaken by the plaintiffs in preparing a first draft of those orders during closing submissions. Much of that first draft is now reflected in the Schedule. I am nevertheless content to afford the parties an opportunity to review the Schedule after considering these reasons and be heard in relation to the precise terms of the orders.
There will be directions for the parties to bring in within 14 days short minutes of order giving effect to these reasons for judgment. Those orders should provide for the parties to exchange and send to my Associate short written submissions in relation to the question of costs within a further 28 days, unless the parties reach an agreed position. In the absence of agreement, the question of costs will be determined on the papers.

Schedule (1.03 MB, pdf)

**********

Endnotes

Decision last updated: 25 September 2025

Medium Neutral Citation:	Spotpress Pty Ltd v Spotpress Newspapers Pty Ltd [2025] NSWSC 1094
Hearing dates:	5–20 May 2025
Date of orders:	25 September 2025
Decision date:	25 September 2025
Jurisdiction:	Equity - Commercial List
Before:	Williams J
Decision:	See determination at [374]
Catchwords:	CONTRACTS – interpretation – agreement for sale of business – sellers’ warranty that accounts give a true and fair view of the financial position and state of affairs of the business as at each of three accounts dates and of the financial performance of the business for the one-month period ending on each accounts date – where the business sold was a division of a larger business – where no separate management or financial accounts had been maintained for the division – where sellers provided to buyer for due diligence purposes accounts for the division for a three-month period prepared by sellers after attributing parts of the revenue, costs and operating expenses of the larger business to the division in each of those three months – meaning of “true and fair view” CONTRACTS – breach of warranty – measure of damages – difference between price paid and true value – approaches to assessing true value
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 96 Corporations Act 2001 (Cth), ss 296, 297
Cases Cited:	Australian Karting Association Ltd v Karting (New South Wales) Incorporated [2022] NSWCA 188 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 Clark v Macourt (2013) 253 CLR 1; [2013] HCA 56 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 Davis v Perry O’Brien Engineering Pty Ltd [2025] QCA 18 Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 EW Blanch Pty Ltd v Cooper [2005] NSWCA 217 Grant-Taylor v Babcock & Brown Limited (in liq) (2015) 322 ALR 723; [2015] FCA 149 Grant-Taylor v Babcock Brown Limited (in liq) {2016) 330 ALR 642[2016] FCAFC 60 H & Q Café Pty Ltd v Melbourne Café Pty Ltd (2023) 72 VR 53; [2023] VSCA 200 HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; [2024] HCA 54 Keys Consulting Pty Ltd v CAT Enterprises Pty Ltd [2019] VSCA 136 Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257; [2003] HCA 10 Ramsay v BigTinCan Pty Ltd [2014] NSWCA 324; (2014) 101 ACSR 415 Robinson v Harman (1848) 1 Exch 850; 154 ER 363 Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31 Zhong v Guan (2024) 116 NSWLR 258; [2024] NSWCA 300
Texts Cited:	N/A
Category:	Principal judgment
Parties:	Spotpress Pty Ltd (ACN 665 474 966) (First Plaintiff/Cross-Defendant) TMA Australia Pty Ltd (ACN 114 874 690) (Second Plaintiff/Cross-Defendant) TMA Capital Australia Pty Limited ACN 145 009 785) (Third Plaintiff/Cross-Defendant) Spotpress Newspapers Pty Ltd (ACN 002 063 676) (First Defendant/Cross-Claimant) Grasett Investments Pty Ltd (ACN 000 451 276) (Second Defendant/Cross-Claimant) JG & DG Properties Pty Ltd (ACN 471 381 641) (Third Defendant/Cross-Claimant) John Georgantzakos (Fourth Defendant)
Representation:	Counsel: Mr D L Williams SC with Ms A Zheng and Mr D Emmerig (Plaintiffs/Cross-Defendants) Mr J M Morris SC with Mr J M Kadar (Defendants/Cross-Claimants) Solicitors: Thomson Geer Lawyers (Plaintiffs/Cross-Defendants) Jordan Djundja Lawyers (Defendants/Cross-Claimants)
File Number(s):	2023/432453
Publication restriction:	Nil