The applicant and respondent entered a Business Sale Agreement (“BSA”) whereby the respondent agreed to pay for a Business and certain associated assets in instalments.
The parties agreed to a potential pro-rata reduction of the instalments depending on the average annual gross profit of the Business. There was a disagreement about how “average annual gross profit” would be determined for the reduction and the parties referred the dispute for an expert determination pursuant to the dispute resolution provision of the contract.
Following the determination by the expert (who agreed with the construction propounded by the applicant with the result that there was no relevant reduction for a relevant year), the applicant sought a summary judgement for the respondent to pay a lump sum comprising the remainder of the first instalment in full plus the total amount of the second instalment with no reduction.
The Court had to determine, inter alia, the enforceability of the result of the expert determination, the proper construction of the contract and the meaning of the expression ‘gross profit’ to establish whether the instalments were payable in full under the BSA.
The Court found that the applicant was entitled to summary judgment, subject to “certain intricacies” addressed in the reasons.
Michael Trim appeared for the applicant, instructed by HWL Ebsworth.
The judgment is published here.