In October 2017 Preston Law successfully represented the Plaintiff in the Cairns Supreme Court in Drane v Aqualyng Holdings and Anor [2017 QS3233].
By the Judgment the Court ordered that the Defendants:
- Specifically perform a number of contracts;
- And in doing so:
- pay the Plaintiff $5,845,091.00 pursuant to the contract;
- pay the Plaintiff in excess of $700,000.00 in damages.
The Issues in Dispute
The legal proceedings arose out of a complicated share transaction by which a multinational corporation purchased the shares in an Australian chemically engineering company owned by a North Queensland resident.
Whilst the proceedings initially involved the determination of several matters, the sole issue that was left to the Court to determine at the hearing was whether or not the determination of an independent accounting expert appointed under a dispute resolution mechanism contained a “manifest error” which would have resulted in the decision being set aside.
At the trial the Court was presented with additional expert evidence from Pricewaterhouse Coopers and BDO Accountants, in addition to considering the independent expert Mr Ross Walker of Pitcher Partners’ determination.
His Honour accepted our client’s position that the independent accounting expert’s determination did not contain a manifest error and thus the Defendants were found to be in breach of the provisions of the Share Sale Agreement, ordering the Defendants to specifically perform the contracts and pay the Plaintiff approximately $5.8 million in purchase price plus an additional $700,000.00 in damages arising from the Defendants’ unlawful delay in refusing to perform the contract whilst it sought to press its position regarding the expert’s manifest error.
The case is largely accepted to be only the second time in Australia (and the first time in Queensland) that the concepts of manifest error in respect of an Accountant’s determination under a dispute resolution mechanism of a contract has been considered and determined.
As at the date of writing this article the Defendants have not sought to challenge the Court’s determination by an appeal and thus the legal judgment is likely to constitute a binding precedent in Queensland for the foreseeable future.