SSABR Pty Ltd v AMA Group Limited

The appeal concerned the interpretation and rectification of clause 5.1 of a Business Sale Agreement between SSABR Pty Ltd (appellants) and AMA Group Limited (respondents). The dispute centred on whether the clause, as written, provided for an earn-out calculation based on "average annual" earnings before interest and tax, or if it should be rectified to reflect a different common intention of the parties. The primary judge had ordered rectification of the clause.

The Court of Appeal was required to determine whether the primary judge erred in failing to find that the agreement, properly construed, provided for an average annual earn-out calculation. It also had to consider whether the respondents had discharged the onus of proving by clear and convincing evidence that clause 5.1 did not accurately record the parties' common intention, thereby justifying equitable rectification. Furthermore, the court was asked to assess whether the primary judge erred in drawing certain inferences under the principles established in *Jones v Dunkel* regarding the failure of parties to call specific witnesses.

The Court of Appeal allowed the appeal, finding that the primary judge had erred in ordering rectification. The court determined that the language of clause 5.1, when properly construed, did not support the respondents' claim for an average annual earn-out calculation. The court also found that the respondents had not met the high standard of proof required for equitable rectification, as they had not demonstrated by clear and convincing evidence that the written agreement failed to reflect the parties' true common intention. The court set aside the primary judge's orders for rectification and remitted certain aspects of the proceedings to the primary judge for determination.