Decision Inc Holdings Proprietary Ltd v Garbett

Subject Matter

CONTRACT — Construction — Warranty — Agreement warranting accuracy of company’s financial and other records and absence of material adverse change in its turnover and prospects — Whether warranty extending to all records created by company in course of conduct of its operations — Proper approach to establishing whether turnover and/or prospects warranty breached — Correct test of materiality — Relevance of short-term interruption in earnings — Whether warranties breached

[2023] EWHC 588 (Ch); [2023] Bus LR 951; [2023] WLR(D) 138, Ch D

CONTRACT — Construction — Warranty — Agreement warranting accuracy of company’s financial and other records and absence of material adverse change in its turnover and prospects — Proper approach to establishing whether turnover and/or prospects warranty breached — Whether judge erring in focussing on expectation that a reasonable buyer would have had — Whether warranties breached

[2023] EWCA Civ 1284; [2024] Bus LR 719; [2024] 2 All ER 581; [2023] 2 All ER (Comm) 800; [2024] 1 All ER (Comm) 431; [2023] WLR(D) 452, CA

PRACTICE — Judgment — Pleadings — Judgment failing to reflect basis on which case pleaded — Judge ultimately holding contractual warranty breached on different basis to that put by claimant in notice of claim, pleadings and submissions — Judge failing to raise new basis of claim during trial — Whether defendant having fair opportunity to address basis on which judge holding warranty breached — Whether appropriate for judge to introduce new basis of claim in judgment

[2023] EWCA Civ 1284; [2024] Bus LR 719; [2024] 2 All ER 581; [2023] 2 All ER (Comm) 800; [2024] 1 All ER (Comm) 431; [2023] WLR(D) 452, CA

CONTRACT — Construction — Warranty — Parties entering into agreement for sale and purchase of company — Agreement warranting absence of material adverse change in company’s prospects — Seller’s liability for breach of warranty excluded unless buyer’s notice of claim stating amount claimed — Proper approach to establishing whether prospects warranty breached — Whether seller’s liability excluded if buyer giving omnibus figure in notice of claim rather than amount claimed for each breach — Whether in circumstances possible for buyer to give amount for each breach

[2023] EWCA Civ 1284; [2024] Bus LR 719; [2024] 2 All ER 581; [2023] 2 All ER (Comm) 800; [2024] 1 All ER (Comm) 431; [2023] WLR(D) 452, CA

Appellate History

Commentary

Out-Law
UK appeal court dismisses £1.3m award over share purchase agreement wording Case comment