C H LEAMAN INVESTMENTS PTY LTD -v- TUESDAY ENTERPRISES PTY LTD as trustee for THE STEELE INVESTMENT TRUST [2024] WASCA 142 (13 November 2024)

1. The primary judge made comprehensive factual findings as to the parties' dealings: [6] - [30], [129] - [231]. While, as will be seen, there are numerous challenges to her Honour's application of the law to the facts as found, there are very few challenges on appeal to the primary findings of fact. What follows is taken from the primary reasons and is supplemented, where appropriate, with extracts from the documentary record. It is limited to the matters and events that are critical to the issues in the appeal.
2. It may be useful to identify relevant persons in the litigation at the outset of this recitation of the factual background. They comprise:
   1. The appellant, C H Leaman Investments Pty Ltd, an investment company of Christopher Leaman (its sole director): [7].
   2. The third respondent, Matthew Steele (known as Harry Steele), who is the sole director of the first respondent (Tuesday Enterprises Pty Ltd), Rexwells and the second respondent (Complete Field Maintenance Pty Ltd): [9], [11]. The first respondent is the sole shareholder of Rexwells: [9]. The second respondent owns certain intellectual property rights used by Rexwells in its business: [12].
   3. Lark Lawyers, through two solicitors - Peter Lark and Alan Pocock - who acted for the appellant in the commercial transaction between the parties: [21]. Later, when the transaction became disputatious, Bennett + Co acted for the appellant in relation to the dispute: [27].
   4. Zilkens Lawyers, through two solicitors - Alex Zilkens and Sidd Jain - who acted for the respondents in the commercial transaction between the parties: [20] - [21]. However, from late January 2019 the respondents were represented by Lawton Gillon: [28].
3. Rexwells carried on business under the name 'Complete Field Maintenance' providing products for the supply of parts, services and maintenance of mobile and fixed plant and equipment for the mining industry including blast hole drilling rigs: [8]. Among other things it sold specialised built and designed service kits for machinery of original equipment manufacturers.[3] There was said to be minimal competition in its market.[4] The business was profitable: [10]. The primary judge characterised the business as 'a high cash generating business with few physical assets': [276]. In this respect:

It was not in dispute that Rexwells was a business with low capital and assets, and had a good revenue stream. In [the third respondent's] evidence, he confirmed that the sale of Rexwells was essentially the sale of a revenue stream together with a minimal amount of assets [390].

1. The limited physical assets held by Rexwells is emphasised by the primary judge's observation that Rexwells' balance sheet disclosed that it had property, plant and equipment assets of only $105,293 out of net assets of a little over $4 million: [276]. The balance sheet that her Honour was referring to was a balance sheet as of 30 June 2018.[5] As well as the property, plant and equipment, the balance sheet disclosed inventories of $316,218. But otherwise the assets consisted of cash and cash equivalents of $882,714 and trade and other receivables (both current and non-current) of slightly over $3.070 million. Rexwells' total liabilities were a mere $305,740.
2. In terms of profitability, the primary judge recorded that Rexwells had recorded net profit before tax as follows ([10]):
   1. Year ended 30 June 2015 - $646,563.
   2. Year ended 30 June 2016 - $1,510,530.
   3. Year ended 30 June 2017 - $1,847,782.
   4. Year ended 30 June 2018 - $2,065,943.
   5. Year ended 30 June 2019 - $1,795,104.
3. In 2017 the third respondent decided to sell Rexwells' business: [13].
4. At the appeal hearing, counsel for the appellant relied on various aspects of an information memorandum that was prepared to solicit interest in the purchase of Rexwells' assets and undertaking.
5. The information memorandum repeatedly described Rexwells' key features as:
   • High gross Profit margin of 45%.
   • Essential products.
   • Established 2007.
   • Fixed price contracts with all major customers ensure stability of revenues no matter what the state of the economy.
   • Low staff (3 fulltime and one part time).
   • Self-propelled sales.
   • Easy to operate.
   • Low advertising budget.
   • Huge potential to expand, just through marketing and sales.[6]
6. Consistently with Rexwells' balance sheet, the information memorandum put little value on the company's plant and equipment. It described two vehicles, a truck, office equipment, toro cutter and a Komatsu wheel loader with a total value of $200,000.[7] However, the information memorandum suggested a purchase price of $5.9 million. This was justified in two ways. First, by applying a 30% return on investment to a net profit of $1.775 million. Second, by aggregating plant ($200,000), stock ($450,000) and goodwill ($5.250 million).[8]
7. Over 2017 and 2018, Mr Leaman made offers to purchase, at least two of which were accepted, but the purchase did not then proceed. In December 2018 Mr Leaman obtained approval from his bank, NAB, for a $4 million business loan to fund the purchase of the share in Rexwells. The offer required that a number of assets be provided as security. Also, NAB required that Rexwells provide a guarantee and indemnity supported by a security interest and charge over its property and undertaking. The finance offer also required a 'whitewash certificate' before any drawdown of the loan: [14] - [17].
8. The parties entered into the SPA on 21 December 2018: [1], [18].
9. Relevantly, the appellant agreed to purchase the sole issued share in Rexwells from the first respondent: [1], [254]. The purchase price was $3.9 million (referred to as the 'Initial Payment'), a 'Final Payment' and all accounts receivable until 31 January 2019: [256]. The Final Payment was quantified by the primary judge as being - $410,663.75: [480]. In practical terms this meant that the Final Payment resulted in a reduction of the purchase price.
10. The other respondents were also parties to the SPA. The second respondent agreed to transfer the intellectual property rights used in the business for a nominal consideration: [254]. The third respondent (Mr Steele) agreed to provide various warranties and indemnities and otherwise agreed to certain ongoing arrangements in the business post-completion: [254].
11. The completion date for settlement under the SPA was defined to be 31 January 2019 or such further date as the appellant and the first respondent agreed: [18], [257].
12. Some other features of the SPA should be mentioned:
    1. The SPA contemplated Rexwells declaring and paying a dividend to the first respondent (to be franked to the full extent permitted by Rexwells' franking account) immediately before completion. The dividend was to be of an amount equal to all retained profits after allowing for the value of stock and plant and equipment (cl 5.2, cl 6.2(a)(i)).
    2. At completion the first respondent, as seller, was required to provide documentation to the satisfaction of the appellant confirming that there was no indebtedness owed by Rexwells to any third-party other than as allowed in a schedule attached to the SPA (cl 6.2(a)(ii)(A)(1)). The schedule is difficult to interpret. In substance, however, as the third respondent confirmed in cross-examination,[9] this meant that Rexwells' only debts left following completion would be ordinary trading debts with suppliers.
    3. The SPA contemplated the third respondent entering into an 'Executive Services Agreement' with Rexwells. The form of the Executive Services Agreement was annexed to the SPA. It provided that the third respondent was to be employed part-time 7.5 hours per week (or 30 hours per month) for 12 months at an annual salary of $35,000 per annum commencing from 1 May 2019 (cl 6.2(a)(ii)(D), annexure A). The post-completion commencement date is explained by the circumstance that the SPA contained a separate obligation that the third respondent assist with the management of Rexwells' business at no charge for 7.5 hours per week from completion to 30 April 2019: cl 18.6.
    4. The SPA contained a specific disclosure in relation to Rexwells' supply contract with Rio Tinto. It was disclosed that the contract had expired on 5 October 2018 and that a new contract was 'presently under review' by Rio Tinto: sch 4.
13. Accordingly, the SPA contemplated the first respondent, as seller of the single share in Rexwells, receiving the purchase price. The purchase price included all accounts receivable payments (ie the value of accounts receivable as at completion). The first respondent would also receive a dividend, franked to the full extent possible, in respect of Rexwells' retained profits after allowing for the value of stock and plant and equipment. In effect, post-completion the appellant, as the incoming shareholder of Rexwells, would be the sole member of a company that retained Rexwells' business, stock and plant and equipment. It will be recalled that the value of the physical stock and plant and equipment was relatively modest (see [13] - [14] above). Rexwells' net assets were largely comprised of cash and cash equivalents and trade and other receivables. In that respect the value of the accounts receivable and the bulk of Rexwells' retained profits would have been received by the first respondent under the transaction effected by the SPA.
14. Clause 2 of the SPA is important to the proper disposition of the appeal. It is entitled '[c]onditions precedent to completion' and provides ([255]):

(a) Completion of the transactions contemplated by this agreement is subject to and conditional upon the Purchaser [ie the appellant] being satisfied at its sole discretion with its due diligence investigations relating to the Company, the Business, the Shares and the transactions occurring under this agreement.

(b) The duration of this due diligence process will be limited to 30 January 2019.

(c) If the Purchaser has not advised the Seller [ie the first respondent] by 30 January 2019 that this condition 2.1 has not been satisfied, this condition is deemed to be satisfied and cannot be used by the Purchaser to terminate this agreement.

2.2 Conditions - general

Completion of the transactions contemplated by this agreement is subject to and conditional upon:

(a) execution of employment agreements by all Employees on terms satisfactory to the Purchaser;

(b) no material breach of the Warranties;

(c) the Purchaser entering into the New Lease over the Premises on terms acceptable to Purchaser;

(d) consents being obtained to change in control in connection with each material Business Contracts identified during due diligence on terms acceptable to the Purchaser at its sole discretion; and

(e) the Purchaser being satisfied at its absolute discretion that a new contract has been entered into with Rio Tinto Limited on terms acceptable to the Purchaser; and that if the new contract has a change of control clause Rio Tinto Limited has provided to the Purchaser assurance to the satisfaction of the Purchaser at its absolute discretion that Rio Tinto Limited will not seek to terminate this new contract as a consequence of the change in control of the Company which will occur should the sale and purchase of the Shares under this agreement Complete.

2.3 Financial assistance condition

Completion of the transactions contemplated by this agreement is subject to and conditional upon that assistance being approved by Shareholders under section 260B in compliance with required advance notice to the ASIC.

2.4 Best endeavours

The parties must use their best endeavours to satisfy the conditions set out in clauses 2.2 through 2.3.

2.5 Notice

A party must promptly notify the other parties in writing if it becomes aware that any of the conditions in clauses 2.2 through 2.3 are satisfied or become incapable of being satisfied.

2.6 Waiver

(a) The conditions in clauses 2.2 [sic] may only be effectively waived if waived by the Purchaser.

(b) The condition in clauses 2.3 [sic] may only be effectively waived if waived by both of the Purchaser and the Seller.

2.7 Non-fulfilment of conditions

If the conditions in clauses 2.2 through 2.3 are not fulfilled before 30 January 2019 then, this agreement shall cease to have effect and thereafter no party shall have any claim of any nature against the other in relation to this agreement.

1. It is convenient, at this point, to depart from the chronology and say something about the financial assistance condition in cl 2.3 of the SPA.
2. Clause 2.3 is concerned with financial assistance by Rexwells for the purchase of the sole share in the company. Historically, driven by a concern with the maintenance of capital, corporations legislation had prohibited a company providing financial assistance for the acquisition of shares in the company.[10] Now, however, the Corporations Act permits such financial assistance provided that certain conditions are met.[11] By implication, if none of the permitted circumstances apply, the giving of financial assistance is prohibited.
3. It remains important to comply with the conditions that permit the provision of financial assistance. Where a company provides financial assistance in contravention of s 260A of the Corporations Act any person who is involved in the company's contravention of s 260A contravenes s 260D of the Corporations Act.[12] Such a contravention exposes the person to a pecuniary penalty order for contravention of a civil penalty provision.[13] It should also be remembered that a director is not relieved from his or her statutory or fiduciary duties as a director in connection with a transaction merely because the transaction is approved by a resolution approving the giving of financial assistance.[14]
4. Section 260A of the Corporations Act contemplates three permissible means by which a company may financially assist a person to acquire shares in the company:
   1. If giving the assistance does not materially prejudice: (a) the interests of the company or its shareholders; or (b) the company's ability to pay its creditors (s 260A(1)(a)).
   2. If the assistance is approved by shareholders under s 260B (s 260A(1)(b)). This, according to the primary judge, is commonly referred to as 'financial assistance whitewash' or 'whitewash approval': [234]. Accordingly, it was this form of financial assistance that was required by the appellant's NAB business loan.
   3. If the assistance is exempted under s 260C (s 260A(1)(c)).
5. Exempted assistance under s 260C is of no relevance to the present appeal. There only needs to be further consideration of the two permissible means for financial assistance under sub-pars (1)(a) and (1)(b) of s 260A.
6. Permitted financial assistance under sub-pars (1)(a) and (1)(b) of s 260A operates in two distinct circumstances. In the former case, s 260A(1)(a) requires no shareholder approval to the giving of the financial assistance. Rather, the implied prohibition on a company giving financial assistance to acquire its own shares simply does not apply where giving the financial assistance does not cause material prejudice to the interests of the company or its shareholders or to the company's ability to pay its creditors. By contrast, s 260A(1)(b) is based on shareholder approval to the financial assistance under s 260B. Unlike s 260A(1)(a) it is not preconditioned by a lack of material prejudice (as a matter of fact) to the interests of the company or its shareholders and to the company's ability to pay its creditors. But, as will be seen, s 260B prescribes various safeguards that must be observed in obtaining the requisite shareholder approval.
7. Austin and Black explain that:

[B]anks and other financiers, traditionally concerned to avoid being involved in the contravention of the financial assistance prohibition, may not be comfortable in relying on the absence of material prejudice except in a very clear case, and may therefore insist upon a 'whitewashing' special resolution procedure under s 260B if there is doubt as to the application of the prohibition.[15]

1. The primary judge held, and it is not in issue on the appeal, that the reference to 'Shareholders' in cl 2.3 of the SPA was to the first respondent as the owner of the sole share in Rexwells: [274]. Her Honour also concluded, uncontroversially for the purposes of the appeal, that so far as the text of cl 2.3 referred to 's 260B' (meaning s 260B of the Corporations Act) and 'advance notice' to the ASIC, cl 2.3 contemplated the giving of financial assistance in accordance with s 260A(1)(b) of the Act by the mechanism prescribed by s 260B of the Act: [275].
2. It is not necessary to reproduce the terms of s 260B. There was only one shareholder of Rexwells (the first respondent). Accordingly, the financial assistance shareholder approval could be given by a resolution agreed to at a general 'meeting' of that shareholder (s 260B(1)(b)). (We will assume that a single person may relevantly 'meet' insofar as no one contended to the contrary on the appeal.) However, the notice of the meeting had to be accompanied by a statement setting out all the information known to the company (Rexwells) that was material to the decision on how to vote on the resolution (s 260B(4)). Also, before the notice was sent to the member, the company had to lodge with the ASIC the notice of meeting and the statement that was to accompany the notice (s 260B(5)). A prescribed notice stating that financial assistance had been approved under s 260B had to be lodged by the company with the ASIC at least 14 days before giving the financial assistance (s 260B(6)).
3. The primary judge found, and it is not in issue on appeal, that for completion under the SPA to occur on 31 January 2019 the prescribed notice as to financial assistance approval had to be provided to the ASIC by 17 January 2019. Her Honour said that, although 'tight', the required draft documents could be lodged with the ASIC on 17 January 2019, and thereafter, on that same day, there might be notice of the meeting and the meeting itself (the first respondent, as sole shareholder, consenting to short notice). This would permit lodgement of the resolution with the ASIC later on 17 January 2019 - allowing for the 14-days post-lodgement to expire on 31 January 2019: [279] - [280].
4. Neither at trial, nor on appeal, was there any consideration of whether the 14-day requirement under s 260B(6) might be abridged by an order pursuant to s 1322(4)(d) of the Corporations Act. As this is the basis on which the litigation proceeded we will not examine this possibility. For the purpose of the appeal it must be accepted that the prescribed notice under s 260B(6) had to be lodged with the ASIC by or on 17 January 2019 if completion was to occur on 31 January 2019 in accordance with the terms of the SPA.
5. An issue might be thought to arise as to the scope and content of the financial assistance which was to be approved under cl 2.3 of the SPA. The clause says only that completion of the transactions contemplated by the SPA is subject to and conditional upon 'that assistance' being approved. What was included within 'that assistance' does not appear to have been the subject of consideration at trial. Nor was it raised for consideration on appeal. The matter is not unimportant. Only 'that assistance' within the scope and meaning of that term in cl 2.3 need be approved to satisfy the financial assistance condition precedent.
6. One possibility is that the financial assistance simply concerned that component of the purchase price constituted by the accounts receivable payment so far as it was based on collections by Rexwells. The remittance of such collections might be thought to meet the description of 'assistance' as to the transactions contemplated by the SPA. However, as will become apparent from the facts and the way the litigation was contested, the parties must be taken to have accepted that the financial assistance obligation extended to an approval that Rexwells grant security over its assets and undertaking to secure repayment of $4 million to be borrowed by the appellant to fund the payment of the purchase price.
7. Since, on appeal, the respondents accepted the primary judge's finding that they were in breach of cl 2.4's best endeavours obligation to satisfy the financial assistance condition in cl 2.3,[16] there is no need to consider this issue any further. Instead, consistently with the parties' approach to the trial and the appeal, we will proceed on the basis that the contemplated financial assistance under cl 2.3 of the SPA extended to Rexwells granting security over its assets and undertaking to secure repayment of $4 million to be borrowed by the appellant to fund the payment of the purchase price for the Rexwells' share.
8. One further aspect of the cl 2.3 financial assistance condition precedent should be emphasised. The condition is concerned with approval of financial assistance rather than the actual giving of any financial assistance. That distinction is important. Given the strictures of s 260B - in particular the requirement of the ASIC lodgement at least 14 days before giving the financial assistance - the approval of the financial assistance precedes the giving of the financial assistance by at least two weeks.
9. Apart from the temporal difference, there is difference between who approves and who gives the financial assistance. Where the mechanism under s 260A(1)(b) and s 260B is employed the company's shareholders approve the giving of the financial assistance by passing a resolution to that effect in accordance with either s 260B(1)(a) or (b). However, it is the company - not the shareholders - who in fact eventually gives the financial assistance after the shareholders' approval.
10. Ordinarily, subject to well established exceptions, a shareholder may vote in its own interests.[17] In considering whether or not to approve the giving of proposed financial assistance the shareholders are not subject to any statutory or fiduciary duties. And, as should now be appreciated, shareholder approval does not itself effect the giving of financial assistance - it merely provides permission for the company to give financial assistance in due course. So understood it is difficult to see how liability may be visited on a shareholder merely for its participation in a resolution under s 260B of the Corporations Act approving the company financially assisting a person to acquire shares in the company.
11. It might, in the circumstances, be thought that shareholder approval in accordance with cl 2.3 of the SPA would be a relatively simple matter. The first respondent, as sole shareholder of Rexwells, was in a position to pass such shareholder resolutions as it thought fit to satisfy the cl 2.3 financial assistance condition precedent. By virtue of cl 2.4 of the SPA the first respondent was subject to a best endeavours obligation to so satisfy the condition precedent.
12. Where, following shareholder approval, a company gives financial assistance, it will ordinarily act by its directors. The directors are subject to their usual statutory and fiduciary duties in determining whether or not the company should give the financial assistance even if it has been authorised by the shareholders' approval. Also, a company's giving of financial assistance to acquire shares in the company is deemed to constitute the incurring of a debt for the purpose of the directors' duty to prevent insolvent trading as provided for by s 588G of the Corporations Act.[18] So the giving of financial assistance may expose a director to a contravention of s 588G where the various integers in s 588G(1) and (2) are satisfied. Accordingly, unlike shareholder approval for financial assistance, the company's subsequent giving of financial assistance to a person to acquire shares in the company has the potential to visit liability on those officers of the company who bring about the giving of the financial assistance.
13. The cl 2.3 financial assistance condition precedent was solely concerned with approval of financial assistance rather than the actual giving of any financial assistance. That had implications for what had to be done, and by when it had to be done, for satisfaction of the condition precedent. It also had implications for what the parties had to do in terms of cl 2.4 of the SPA in using best endeavours to satisfy the financial assistance condition precedent.
14. The SPA did not expressly deal with the giving of any financial assistance. The matter was not explored at trial and received only cursory attention on appeal when the court directed counsel's attention to the apparent omission in the SPA. Counsel for the appellant suggested, in effect, that the provision of the security to NAB fell within a 'further assurance' type obligation assumed by the first respondent in respect of completion; counsel for the respondents disputed that the further assurance obligation extended that far.[19] It was not suggested that the issue needed to be determined for the purposes of the appeal. That must be correct where the condition precedent is itself only concerned with the approval of the proposed financial assistance. In the circumstances it is not necessary to examine the mechanism by which the eventual giving of the contemplated financial assistance was to be effectuated.
15. Returning to the narrative, the parties' solicitors discussed the financial assistance condition prior to execution of the SPA. On 13 November 2018, at a meeting at Lark Lawyers' offices, Mr Lark told Mr Zilkens that he (Mr Lark) would prepare the financial assistance documents: [132] - [137]. After execution of the SPA, on 4 January 2019, Mr Leaman raised the financial assistance condition with the third respondent. Mr Leaman said that it needed to be done 'ASAP' as it took a minimum of 14 days to be processed and needed to be cleared prior to settlement: [139]. There was then some debate between the parties' lawyers as to preparation of the necessary documents in relation to financial assistance: [144], [146] - [148], [151]. However, following the discussions, on 10 January 2019 Lark Lawyers agreed to prepare initial draft documents to be provided to Zilkens Lawyers for them to review and finalise on behalf of the first respondent: [23], [153].
16. On 11 January 2019 (a Friday) Lark Lawyers sent Zilkens Lawyers an email attaching five draft documents ([156] - [168]). They comprised:
    1. A draft timetable - this, among other things, noted that the prescribed notice had to be lodged with the ASIC at least 14 days before the giving of the financial assistance.
    2. A draft disclosure statement - this, among other things, recorded that the appellant was borrowing $4 million from NAB to purchase the Rexwells' share and that NAB required Rexwells to provide securities for the loan. The draft also stated that:
       1. The above transactions do not lead to any solvency concerns[.]

1. To the best of the knowledge and belief of [the first respondent] the proposed assistance will not materially prejudice [Rexwells'] ability to pay its creditors.
2. [The first respondent] is fully cognisant of the financial position and assets and liabilities of [Rexwells].
3. A draft resolution of the third respondent as the director of the first respondent. This, in substance, consented to and gave approval for the first respondent to approve a resolution that Rexwells provide financial assistance to the appellant to purchase the share in Rexwells. The nature of the financial assistance was specified as the provision of a security over the assets and undertaking of Rexwells for the loan of $4 million. Among other things the draft resolution recited that the transaction as contemplated did 'not lead to any solvency concerns'.
4. A draft resolution of the first respondent as the sole member of Rexwells under s 260B of the Corporations Act (the resolution was said to be a special resolution made under s 260B(1)(a) rather than s 260B(1)(b)).
5. A draft covering letter to the ASIC.

51 Lark Lawyers' email emphasised that it was 'important' that the documents were completed and lodged with the ASIC by no later than 15 January 2019: [157].

1. It should be apparent from our earlier discussion of the financial assistance provisions in the Corporations Act that the draft documents as prepared by Lark Lawyers exhibited a degree of confusion. In particular, while designed to secure shareholder approval under s 260B, the draft documents employed many of the concepts in s 260A(1)(a); for example, the reference to the proposed assistance not materially prejudicing Rexwells' ability to pay its creditors. It will be necessary to return to this feature of Lark Lawyers' draft documents when considering cross-appeal ground 2.
2. Zilkens Lawyers reviewed the draft documents. Mr Zilkens gave evidence that he was concerned that the documents referred to there not being any solvency issues and that the proposed financial assistance would not cause any material prejudice to Rexwells' creditors: [170]. On 14 January 2019, in the afternoon, Zilkens Lawyers wrote to Lark Lawyers requesting further information in order to make an assessment as to whether there would be material prejudice under s 260A of the Corporations Act: [24], [175]. Lark Lawyers responded on 15 January 2019 giving further details as to the proposed NAB loan including additional security being provided by the appellant (one of the additional securities being a mortgage over a Kewdale property valued at approximately $4 million): [24], [178].
3. Lark Lawyers' email dated 15 January 2019 went on to state:

[U]nless your client lodges the relevant documentation today and passes the resolution tomorrow (and otherwise complies with the requirements of section 260 [sic]) the provisions of condition 2.3 (ie the condition regarding financial assistance) will not have been satisfied prior to 31 January 2019.

Could you please confirm that the appropriate steps will now be taken and provide us with copies of the documents prepared and lodged and confirmation that the provisions of section 260 [sic] have been complied with [179].

1. Mr Leaman and the third respondent, with another, met later on 15 January 2019 to discuss the cl 2.3 financial assistance condition: [183].
2. On 16 January 2019, at 11.10 am, Zilkens Lawyers responded to Lark Lawyers: [25], [184]. The email noted that the respondents did not know what plans the appellant had for the business in the future or NAB's intentions regarding how it would enforce security in the event of a default. The email requested a repayment schedule for the loan and concluded:
   1. Accordingly, our client is of the view that based on the information currently available to it, our client cannot form the view and, accordingly, resolve to approve that the provision of financial assistance by Rexwells to the buyer will not materially prejudice the interests of the creditors of Rexwells.
   2. As it is our client that has to approve the financial assistance but the consequences of doing so are solely in the control of your client, our client requires your client (C H Leaman Investments [ie the appellant]) and Chris [ie Mr Leaman] (personally) to provide an indemnity indemnifying Tuesday [ie the first respondent] and Harry [ie the third respondent] for any liability they may [sic] as a result of approving the financial assistance.

Given that the deadline to lodge the necessary documents with ASIC is about to pass, our client proposes that the completion date be pushed back to 14 February 2019.

Please let us have the additional information that our client requires to allow it to give the necessary approval as well as whether we should proceed with preparing the indemnity and varying the completion date in the share purchase agreement [184].

1. Mr Pocock (of Lark Lawyers) and Mr Jain (of Zilkens Lawyers) spoke by telephone on the morning of 17 January 2019. The primary judge accepted Mr Pocock's evidence that he (Mr Pocock) on behalf of the appellant offered an indemnity in lieu of the additional information that the respondents were seeking and that Mr Jain on behalf of the respondents said this was 'acceptable': [188] - [189]. However, Mr Jain said that he would have to take instructions on whether the effective date of the sale was to remain 1 February 2019: [188]. Subsequently, that afternoon, Lark Lawyers sent Zilkens Lawyers an email confirming that 'to simplify matters and get the approval completed your client [ie the respondents] will accept an indemnity'. The email attached a draft indemnity deed. It also informed Zilkens Lawyers that the appellant was prepared to agree to the completion date being after 1 February 2019 on condition that the effective date of the sale would remain 1 February 2019: [25], [190] - [191].
2. There was no response to Lark Lawyers' email of 17 January 2019: [193]. But, at 4.47 pm on 17 January 2019, Zilkens Lawyers sent the communication relied on by the appellant as constituting the renunciation of the SPA: [26], [194]. In a letter sent to Lark Lawyers by email Zilkens Lawyers referred generally to the correspondence between the two firms on the cl 2.3 SPA condition and specifically to the request for information in the email of 16 January 2019. Zilkens Lawyers stated that the information was required by the respondents to allow them to consider and, if possible, resolve to approve the giving of financial assistance for the purpose of the appellant borrowing $4 million from NAB to enable it to pay the purchase price for the Rexwells' share.[20]
3. The 17 January 2019 letter then continued:

We note that your client has refused to provide the information requested and, in the circumstances, our client has concluded that it has insufficient information to be able to resolve that the provision of the financial assistance (to the extent that the details of same are known to our client) will not materially prejudice Rexwells' ability to pay its creditors.

Accordingly, and in light of the fact that notice to ASIC had to be given by 15 January for settlement to occur on 31 January, our client hereby gives notice that the condition in clause 2.3 of the share purchase agreement has become incapable of being satisfied and, under clause 2.7 of the agreement, the agreement ceases to have effect [194]. (emphasis added)

1. After receiving the Zilkens Lawyers' letter of 17 January 2019, Mr Leaman sought to contact the third respondent. A number of attempts were made over 17 and 18 January 2019. However, the third respondent did not respond until Monday, 21 January 2019. The third respondent apologised for not being in contact but said he thought it best to withdraw from the process as he was receiving conflicting advice: [197] - [199].
2. The parties arranged to meet on Friday, 25 January 2019: [200] - [201].
3. In the meantime, on 22 January 2019, Bennett + Co (for the appellant) wrote to Zilkens Lawyers (for the respondents): [27], [202]. The letter stated:

It is plainly the case, in my opinion, that your client's conduct in purporting to rely upon clause 2.3 in the circumstances set out in the correspondence constitutes a wrongful repudiation of the contract. This is particularly the case where:

1. the business being sold but conducted by Rexwells Corporation Pty Ltd, is a solvent profitable business (a matter I deal with below);
2. your client was notified that CH Leaman Investments Pty Ltd [ie the appellant] and its principal Chris Leaman would provide an indemnity for your client as shareholder; and
3. your client was informed that the security to be taken over the shares [sic] in Rexwells Corporations to be purchased by my client and over the assets of Rexwells by way of charge, were part of an extensive portfolio of security which included a charge over my client's other assets, a mortgage over a property in Kewdale valued at approximately $4 million and that my client would make a cash injection of $2 million into Rexwells, of which $1 million was to be held in term deposit with its banker for 12 months as a reserve for Rexwells Corporation Pty Ltd.

In the circumstances my client accepts your client's repudiatory breach and terminates the Deed [ie the SPA] [202].

1. Bennett + Co also sent without prejudice correspondence the same day: [203]. It is not necessary to refer to the contents of that correspondence.
2. There was a series of discussions and communications between the parties between 24 January 2019 and 15 February 2019: [204] - [231]. The details of that conduct are recounted in the primary reasons. It suffices to note that:

1. On 28 January 2019 the third respondent emailed Mr Leaman proposing a sale in which the purchase price was reduced by $400,000 and his (ie the third respondent's) involvement was limited to a three-month handover: [209]. Discussions and communications about an alternate transaction ensued: [211] - [213]. 2. Zilkens Lawyers ceased to act for the respondents on 29 January 2019: [214]. Thereafter Lawton Gillon were appointed to act for the respondents: [215]. 3. Lark Lawyers sent Lawton Gillon a marked up draft amended sale purchase agreement on 6 February 2019: [28], [223]. This was unacceptable to the third respondent because, among other things, $1 million of the purchase price was deferred for 1 year: [224]. Further discussions ensued: [225] - [228]. 4. Lawton Gillon corresponded with Lark Lawyers on 15 February 2019. Among other things Lawton Gillon stated that ([29], [229] - [230]):

(a) the respondents denied that they had repudiated the SPA;
>
> (b) the appellant was 'advantageously seizing' on the 17 January 2019 letter to 'manufacture an artificial legal position' to achieve more favourable terms than agreed in the SPA; and
>
> (c) the respondents offered to reduce the purchase price by $400,000 and for the parties to treat the SPA as if it were on foot with completion on 28 February 2019.

3. The respondents' offer was open for acceptance until 4 pm on 22 February 2019: [29]. It was not accepted. Instead, on 21 February 2019, the appellant commenced the primary proceedings [30], [231].

1. The primary judge briefly summarised the parties' pleaded cases and identified the issues for determination: [36] - [44], [46] - [48].
2. Essentially, the appellant alleged that the first and third respondents had failed to use their best endeavours to satisfy the financial assistance condition in cl 2.3 of the SPA. Moreover, the appellant alleged that the respondents had repudiated the SPA (by Zilkens Lawyers' letter dated 17 January 2019) and it (the appellant) had elected to accept the repudiation. The appellant said that it had thereby suffered loss and damage. This was particularised as follows:

The plaintiff [ie the appellant] has lost the opportunity to acquire all of the issued shares [sic] in Rexwells and thereby [the] benefit thereof [sic] of owning Rexwells.[21]

1. The appellant now accepts, however, that the present case is not a loss of opportunity case in the strict sense - it says, instead, that the loss of opportunity cases provide a 'reference point' on which the court ought to determine damages flexibly based on an unusual set of facts.[22] Thus the appellant's damages case is put more simply than the conventional loss of opportunity case. The appellant contends that it suffered a loss based on the revenue stream it would have obtained had the SPA been performed.[23] The appellant says that this is a proper measure of loss in circumstances where the parties treated the commercial benefit of owning the Rexwells' share as being ownership of a future income flow.[24]
2. The appellant went on to provide extensive particulars as to how the value of its loss was calculated.[25] The appellant sought $5.267 million (low case) to $6.049 million (high case) calculated as the net present value as at 31 January 2019 of ([376]):
   1. The likely future net profits after tax of Rexwells (this was assumed to be fully distributable as dividends). The likely future net profits after tax was calculated for a period of 10 years commencing 1 February 2019.
   2. The residual value of the Rexwells' share assuming a sale of the business after 10 years.
   3. The financial advantage from the appellant's long term bank financing.
   4. Less: the purchase price payable by the appellant.
   5. Less: a $1 million working capital advance to be injected by the appellant into the Rexwells' business at the start of the 10-year period.
3. The appellant's damages case was supported by the expert evidence of an accounting expert, Barry Honey. The respondents called a Darryn Hockley (a chartered accountant and partner of the forensic consulting division of a major accounting firm). The substance of the expert evidence is summarised in the primary reasons: [92] - [95], [397] - [415]. Among other things, Mr Honey quantified the net present value of the likely future net profit after tax of Rexwells over a 10-year period had the sale of the Rexwells' share proceeded in accordance with the SPA. However, given the primary judge's conclusion as to the proper measure of damage, her Honour considered that the expert accounting evidence was of no practical utility in assessing the appellant's damages: [96].
4. It will be necessary to refer to some aspects of the expert evidence before addressing the appellant's grounds of appeal (see [217] - [225] below).
5. The respondents advanced a number of grounds on which they said that the appellant was not entitled to relief. In terms of things that are relevant to the issues now raised on appeal, the respondents said that:
   1. The 17 January 2019 letter, on its proper construction, did not convey a repudiation of the SPA: [42].
   2. As at 22 January 2019 the appellant was not ready, willing and able to perform the SPA and was not entitled to accept any repudiation of the agreement: [43]. Among other things this was because the appellant was also in breach of the best endeavours obligation in cl 2.4 of the SPA: [4].

3, The appellant failed to mitigate its loss by not accepting the offer from the respondents to treat the SPA as if it were on foot with a discount to the purchase price of $400,000: [44].

1. The appellant had not proved that it suffered any loss let alone damages in the amount claimed: [4], [377].
2. A further issue arose that was not addressed by the primary judge other than in passing when dealing with an admissibility dispute: [120] ‑ [127]. The respondents contended that, so far as cl 2.2(e) of the SPA introduced a condition precedent that the appellant be satisfied in its absolute discretion that a new contract had been entered into with Rio Tinto on terms acceptable to the appellant, the condition precedent would not have been fulfilled or waived and the SPA would not have completed in any event. The issue was pressed in the respondents' written[26] and oral[27] closing submissions and dealt with in the appellant's written closing submissions.[28] It was not expressly pleaded in the respondents' defence, but her Honour ruled that it was not a matter that was required to be specifically pleaded: [126].
3. The primary judge held, and it is not in issue on the appeal, that it was necessary under cl 2.4 of the SPA for the appellant to use its best endeavours to provide the respondents with the necessary information about the proposed financial assistance which would be material to a decision by the first respondent to approve it. Once this was provided, cl 2.4 required the respondents to use their best endeavours and do all they reasonably could to achieve satisfaction of the financial assistance condition precedent in cl 2.3: [288].
4. Where the parties parted company at trial was whether the other party was in breach of its obligation to use best endeavours to satisfy the financial assistance condition in cl 2.3.
5. The primary judge was not satisfied that the appellant had breached its obligation to use best endeavours to satisfy cl 2.3: [293] - [295]. This finding is challenged by cross-appeal ground 2. By contrast, the primary judge held that the respondents had failed to use their best endeavours to satisfy the financial assistance condition in cl 2.3. As of 17 January 2019 the respondents were in breach of their obligations under cl 2.4 of the SPA: [296] - [319]. As this finding is not challenged on appeal it is not necessary to develop her Honour's reasons for this conclusion.
6. The primary judge also held that, by the Zilkens Lawyers' letter of 17 January 2019, the respondents evinced an intention not to be bound by the SPA and thereby repudiated the SPA: [320] - [337]. This finding is challenged by cross-appeal ground 1.
7. The appellant established that it was ready, willing and able to perform its obligations under the SPA. This included, in the primary judge's view, that the appellant would have been ready, willing and able to complete the purchase of the Rexwells' share under the SPA by payment of the purchase price had there been no renunciation and termination: [338] - [350].
8. The primary judge rejected the respondents' mitigation case: [358] - [372]. However, more critically to the outcome of the litigation, her Honour also rejected the appellant's case on the assessment of damages: [421] - [431]. The primary judge accepted that the Rexwells' share was not a fungible asset and it was not possible to purchase an alternative share on market: [428]. But nonetheless the appellant's damages case failed for the following reasons:
   1. The SPA, on its face, was a share sale agreement: [422].
   2. As a share sale agreement, the 'usual' measure of damage was the difference between the price of the share under the SPA and the market value of the share at the date of termination: [422].
   3. The rules which apply to cases where a purchaser has paid money for something that has not been delivered cannot be applied where a purchaser has not paid money (here referring to Wenham v Ella)[29]: [423]. In this respect, her Honour stated:

The share in Rexwells was not transferred nor did [the appellant] pay the purchase price to [the respondents]. As a result, I do not consider that [the appellant] is entitled to damages for the loss in not receiving the share in Rexwells, as well as the profit it would have earned from operating Rexwells. [The appellant] is, in my view, only entitled to the loss in not receiving the share [424].

1. It was open to the appellant to prove an alternate basis for its loss. For example, it might have been that the appellant deployed its funds to purchase another business with a lower level of profitability. Alternatively, it was open to seek reliance damages. However, the appellant did not adduce any evidence as to such alternative measures. There was, for example, no evidence of the expenditure the appellant had wasted in respect of the SPA: [425], [427], [429].
2. The conclusion reached as to the appropriate measure of damage was supported by the approach taken where a seller fails to complete a sale of land or fails to supply goods under a contract: [426].
3. There were no authorities on which the appellant relied which supported its contention that the basis on which it sought damages was the appropriate measure - all of the cases on which the appellant relied were contracts for the provision of services where the usual measure of damage is the net profit that would have been realised from the performance of the contract: [426].
4. The primary judge summarised her conclusion on the damages issue as follows:

[The appellant] has not adduced any evidence of the market value of the share in Rexwells as at 22 January 2019 or on 31 January 2019 when Completion was due to occur. None of the expert evidence that has been adduced in this case assists the determination of this issue. The evidence adduced by [the appellant] went solely to the issue of what profits [it] may have earned from the purchase of Rexwells. This might have been relevant if the purchase price had been paid and the benefit not received, however that is not what occurred.

In these circumstances, having not proved the market value of the share in Rexwells as at 22 January 2019, or any alternative amount, [the appellant] is only entitled to nominal damages [430] - [431].

1. While, for these reasons, the appellant's damages case failed, her Honour proceeded to make some provisional findings going to quantification issues: [432] - [480]. Some of these are challenged on appeal. However, given the nature of the findings, it is enough for present purposes to briefly describe the various provisional findings. The basis for the findings will be developed as necessary in dealing with the issues arising on appeal.
2. The primary judge made provisional findings that:
   1. In calculating Rexwells' likely future net profit after tax there should not be a deduction of a full salary of $200,000 for anyone to replace the third respondent: [435]. This finding is challenged by cross-appeal ground 3.
   2. No growth rate should be applied for the purpose of the likely future net profit after tax calculations notwithstanding that both parties' experts allowed a growth rate of 5% per annum: [436]. This finding is challenged by appeal ground 14. Moreover, although the experts' calculations were for a 10-year period, her Honour was not satisfied on the balance of probabilities that the appellant had proved any loss beyond a 5-year period. In this respect the primary judge accepted the respondents' expert's evidence that forecasting for more than a 3 - 5 year period is unreliable, particularly in a volatile industry: [440]. This finding is challenged by appeal ground 16.
   3. No allowance should be included in the appellant's loss for the residual value of the Rexwells' share at the end of the 10-year period: [437]. This finding is challenged by appeal ground 15.
   4. To the extent that counsel for the appellant submitted that the appellant intended to distribute its profit by way of franked dividends there was no evidence of the extent of any franking credits or whether it was possible or likely for Rexwells to pay all dividends as fully franked dividends: [441]. This finding is the subject of appeal ground 17 and notice of contention ground 5.
   5. The 'Final Payment' was negative $410,663.75 (ie the Final Payment resulted in a reduction of the purchase price): [480] (see also [443] - [480]).

Grounds of appeal, notice of contention and grounds of cross-appeal

1. The parties showed little discernment in their challenges to the primary judge's reasoning. The appellant relies on 17 grounds of appeal. The respondents rely on five grounds by way of notice of contention and three grounds of cross-appeal. The grounds of appeal, grounds of contention and grounds of cross-appeal are unnecessarily prolix and repetitive. With minor exceptions the parties conspicuously failed to comply with the requirement to state grounds and contentions succinctly and to give concise particulars.[30] Rather than reproducing the grounds and contentions in full at this point it is convenient to describe the issues raised. For completeness the grounds of appeal, the grounds by way of notice of contention and the grounds of cross-appeal are set out in an annexure to these reasons.
2. The respondents say that the cross-appeal is raised in the event of the court upholding any of the appellant's grounds of appeal and finding that the appellant was entitled to damages calculated on the basis that the appellant contends for.[31]
3. This suggests, somewhat unconventionally, that the cross-appeal is only pressed if the appellant succeeds in its appeal, ie the cross-appeal is dependent on the appellant succeeding in the appeal. Indeed at the appeal hearing counsel for the respondents said that the respondents did not require the cross-appeal to be decided if the judgment below was upheld on appeal.[32] However, as will become apparent, the issues raised by the cross-appeal are logically anterior to the issues raised by the appeal. Accordingly, the issues in the cross-appeal should be stated at the outset.
4. The cross-appeal raises two relevant issues:
   1. Whether the primary judge erred in mixed fact and law in finding that the respondents repudiated the SPA by renunciation thereof (cross-appeal ground 1).
   2. Whether the primary judge erred in mixed fact and law in finding that the respondents alone were in breach of the 'best endeavours' obligation in cl 2.4 of the SPA (cross-appeal ground 2).
5. On cross-appeal ground 2 the respondents did not challenge the finding that they were in breach. The gravamen of the ground was that the primary judge was in error in finding that the respondents alone were in breach. In substance the respondents contended that the appellant was also in breach such that there was a mutual breach of cl 2.4.[33]
6. There is a third ground of cross-appeal. However, the third ground of cross-appeal is directed to quantum issues if the appellant's appeal succeeds; it cannot affect the correctness of the primary judge's order allowing the claim and awarding nominal damages. Accordingly, it is convenient to refer to the third ground of cross-appeal when dealing with the issues raised by the notice of contention (see [103.5] below).
7. The appellant's grounds of appeal are confused and confusing.
8. Grounds 1 - 13 are directed to the primary judge's conclusion that the appellant did not make out its case for non-nominal damages. The primary judge identified the relevant issue in simple terms: '[d]id [the appellant] suffer any loss and damage and if so, what is the quantum of any damage?'.[34] It is, in the circumstances, remarkable and somewhat perplexing that the appellant challenges her Honour's ultimate conclusion on this issue by 13 different grounds of appeal that traverse some nine pages (all the more so when the primary judge's dispositive reasoning is contained in 11 paragraphs over three pages).[35]
9. Many of the appellant's grounds of appeal complain about observations that were immaterial to the primary judge's ultimate conclusion when, as they ought to be, the primary judge's reasons are read fairly and as a whole (see eg grounds 1, 6). Alternatively, the grounds of appeal are concerned with matters which, if established, cannot alone suffice to make out the appellant's case on damages (see eg grounds 2, 5, 7, 8, 10, 11). More critically, some six of the 13 grounds are essentially directed to establishing the same fundamental proposition, namely, that the primary judge should have held that the proper measure of damage in the circumstances of the case was either of two possibilities (see grounds 1, 3, 4, 9, 12.2, 13.2 - 13.3).
10. The two possibilities contended for by the appellant as an appropriate measure of damage comprise:
    1. The difference between the purchase price of the Rexwells' share and the 'true' value of the share.
    2. Alternatively, the discounted net present value of: (a) future net profits after tax of Rexwells over a term of 10 years; (b) plus the residual value of the Rexwells' share; (c) less expenses (including the purchase price).
11. However, although saying at one point that the proper measure is the difference between the purchase price and the 'true' value (ground 3.2), the appellant later goes on to say that the 'true' value is to be calculated or assessed on the basis of the discounted net present value of Rexwells' future net profits after tax over a term of 10 years plus the residual value of the Rexwells' share (grounds 4.1, 9.1). The appellant is driven to do so because of the limited evidence adduced as to the 'true' value of the Rexwells' share.
12. Separately, on multiple occasions the appellant says that there was no market for the Rexwells' share (grounds 9.1, 9.2) and a determination of market value was not possible on the facts (grounds 10, 11, 12.1, 13.1). Inconsistently, by ground 10, the appellant also alleges that the primary judge erred in finding that the appellant had not adduced any evidence of the market value of the Rexwells' share. In that respect ground 10 is plainly without merit and must fail. None of the expert evidence was directed to market value, something accepted in the terms of ground 12.2. The remaining part of ground 10 is then subsumed within a complaint made in various other grounds (eg grounds 11, 12.1, 13.1) that the market value of the share was not a relevant consideration in determining the proper measure of damage.
13. Further confounding the issues with the grounds of appeal, the appellant's written submissions deal with grounds 1 - 13 on an aggregated basis. The appellant seeks to deal with these grounds together, saying that:

[T]he primary judge erred in fact and law by concluding that the appropriate measure of damages in the present case was the difference between the purchase price contained in the Agreement and the market value of the share in Rexwells.

The primary judge ought to have found that the appellant's claim required a more sophisticated approach to the assessment of the proper measure of damages and concluded that the proper measure of damages in the present case was:

16.1 the difference between the purchase price and what has variously been described as the 'true value', 'fair value', 'real value', 'actual value', or ' intrinsic value' of the share in Rexwells' at the date of termination; alternatively

16.2 the discounted net present value of Rexwells' future profits over a term of 10 years plus its residual value, less expenses (including the purchase price contained in the Agreement) that would have been incurred by the appellant had the Agreement been performed.[36] (citations omitted)

1. It is of little assistance to the court to lump together without discrimination the written submissions for 13 grounds of appeal. The Court of Appeal rules are clear as to the requirements for the appellant's written submissions in an appellant's case. The appellant must for each ground of appeal set out its submissions so as to convey the substance of the submissions clearly and succinctly.[37] This requires, ordinarily, that the appellant's submissions address the grounds of appeal individually ground-by-ground. Sometimes it may be necessary or convenient to address two or more grounds together. And, on many occasions, what has been said for an earlier ground may apply equally to a subsequent ground. But that is not to countenance the aggregated approach to submissions in an appellant's case unilaterally adopted by the appellant in this appeal.
2. The way in which the appellant has supported grounds 1 - 13, and the issues that are otherwise manifest in those grounds, mean that it is appropriate to consider and determine grounds 1 - 13 by reference to the appellant's description as reproduced at [95] above.
3. Counsel for the appellant explained that the real point of grounds 1 - 13 was to provide individual building blocks to identify the error as summarised in the written submissions and accepted that the appellant needed to make out the propositions reproduced at [95] above if it was to succeed in[38]he appeal.38 The appellant's restatement of the combined effect of grounds 1 - 13 is admirably succinct and concisely describes the alleged error and the critical issue for determination on appeal. To the extent that there are discrete alleged errors identified in grounds 1 - 13 they are appropriately considered within the rubric of the general proposition advanced by the restated grounds 1 - 13.
4. In addition to the restated grounds 1 - 13, and on the assumption that the restated ground succeeds, the appellant relies on four grounds concerning the quantification of the appellant's loss. The appellant claims that the primary judge erred in mixed fact and law in finding that:
   1. The appellant had not proven that the calculation of Rexwells' future profits should be adjusted by a percentage for growth - the appellant contends that a 5% growth percentage should be applied (ground 14).
   2. The damages as calculated should not include an allowance for the residual value of the Rexwells' share after 10 years - the appellant contends that the court should determine that a residual value in the amount of $1.181 million is applicable (ground 15).
   3. The damages as calculated should be based on Rexwells' future profits being capped after a period of 5 years post-termination - the appellant contends that the discounted net present value of Rexwells' future profits over a term of 10 years is appropriate (ground 16).
   4. Expert evidence as to franking credits was relevant to determining the damages - the appellant contends that evidence relating to the allocation of franking credits is irrelevant to calculating the damages (ground 17).
5. These grounds 14 - 17 are advanced on the 'basis that grounds 1 to 13, or some of them, are upheld'. Accordingly, they fall away if the appellant does not establish the restated grounds 1 - 13.
6. In respect of each ground of appeal, other than grounds 1 and 8, the appellant provided details in a PD 7.4 schedule as if what was being challenged was a finding of fact. Possibly this was because the various grounds were said to constitute errors in fact and law. It is plain, however, that what the appellant was challenging was the primary judge's application of the law to the facts as found - the appellant asserted errors of mixed fact and law. The respondents' responsive Practice Direction 7.4 schedule (PD 7.4 Schedule) recognised as much.
7. There is, in the circumstances, nothing of substance to be derived from either the appellant's or the respondents' PD 7.4 schedules. All that needs to be said is that the appellant sought to emphasise:
   1. First, various aspects of the information memorandum (for example, that Rexwells 'works on extremely low capital, good revenue, a positive cash flow and excellent profits').[39]
   2. Second, the third respondent's acceptance - in cross-examination - that the sale of the Rexwells' share was effectively the sale of a revenue stream together with a minimal amount of assets.[40]
8. The respondents rely on five grounds by way of a notice of contention, and a third ground of cross-appeal, to uphold the primary judge's decision if the appellant establishes the restated grounds 1 - 13. The respondents say that:
   1. The primary judge should have found that the non-fulfilment of the condition precedent as to the Rio Tinto contract was so certain to occur that no damages should be awarded to the appellant other than nominal damages (notice of contention grounds 1 and 2).
   2. The primary judge erred in finding that Mr Leaman accepted that he had not received advice from Lark Lawyers for the new agreement not to be executed until Rio Tinto had renewed its contract with Rexwells (notice of contention ground 3).
   3. The primary judge erred in mixed fact and law in finding that it was not unreasonable for the appellant not to mitigate its loss by rejecting the respondents' offer dated 15 February 2019 (notice of contention ground 4).
   4. The primary judge erred in finding that the assessment of the net present value of the likely net profits of Rexwells was not materially different from the assessment of the appellant's loss in the event that the primary judge had erred in rejecting the measure of damage propounded by the appellant (notice of contention ground 5). Curiously, this contention was made in response to the same finding that was the subject of the appellant's ground 17 - both related to [441] of the primary reasons. In circumstances where both parties sought to challenge the same finding it is convenient to consider ground 17 and notice of contention ground 5 together.
   5. The primary judge erred in mixed fact and law in finding that a deduction of $50,000 per annum for costs associated with the replacement of Mr Steele should be made to Rexwells' gross profits - the respondents contend that $225,000 per annum is appropriate (cross-appeal ground 3).
9. Notice of contention ground 3 should be considered with notice of contention grounds 1 and 2. Essentially they raise whether, having regard to the condition precedent as to the Rio Tinto contract, there was no actual loss of opportunity. The respondents say that the condition precedent would have failed and in support of that contention the respondents rely on the alleged factual error asserted by notice of contention ground 3.

Disposition: cross-appeal ground 1 - whether there was repudiation of the SPA

1. By cross-appeal ground 1 the respondents allege that the primary judge erred in fact and law in finding that they renunciated the SPA by Zilkens Lawyers' letter dated 17 January 2019.
2. The terms of cross-appeal ground 1 go on to develop the basis of the alleged error at length. The respondents allege that the primary judge should have found that they did not repudiate the SPA by the 17 January 2019 letter as:
   1. The respondents had an 'honest apprehension' as to the terms of the SPA. (While the particulars in support of cross-appeal ground 1 were couched in terms of honest 'apprehension' the substance of the argument is to be understood in terms of honest 'misapprehension'.)
   2. The respondents had not acted otherwise than in accordance with a bona fide belief as to the correctness of the interpretation which they sought to place on the SPA.
   3. The respondents' apprehension as to the terms of the SPA was 'open to correction'.
   4. No attempt was made by the appellant to persuade the respondents of the error of their ways or give them any opportunity to reconsider their position based on what the appellant asserted was the correct interpretation.
3. The respondents claim that, in error, the primary judge relied on there being nothing in the 17 January 2019 letter which suggested that the respondents were prepared to perform their obligations under the SPA if they were wrong in their construction of the agreement. The respondents further allege error insofar as the primary judge ascribed no relevance to the respondents' belief that their action in giving 'notice of termination' was justified by the terms of the SPA (the primary judge having held that the test for repudiation or renunciation is objective).

1. The primary judge dealt with the question of whether the respondents repudiated or renounced the SPA as a discrete topic.[41] In focusing on this part of the primary reasons it is possible to lose sight of the fact that earlier, in recounting the background to the dispute, the primary judge made comprehensive and detailed factual findings as to entry into the SPA and the conduct of the parties after execution of the SPA up until 17 January 2019.[42] The primary judge plainly had regard to those more detailed findings in dealing with the question of repudiation.
2. So too the primary judge's findings on the subject of renunciation have to be understood in the background of her Honour's earlier findings on the requirements of cl 2.3 and cl 2.4 of the SPA and whether each party had used its best endeavours to satisfy the financial assistance condition precedent.[43] In this respect the primary judge made findings, uncontested on appeal, that:
   1. Mr Steele took no steps to consider what he or the first respondent were required to do in relation to the financial assistance condition precedent.[44]
   2. Mr Zilkens did not read the specific provisions of the Corporations Act for himself.[45]
   3. Mr Zilkens expressed concerns about the initial draft documents received from Lark Lawyers and the potential liability of Mr Steele.[46] However, Mr Zilkens did not have an intimate knowledge of the Rexwells' business; nor did Mr Zilkens ask Mr Steele about the business or take steps to familiarise himself with it.[47]
   4. The concerns expressed by Zilkens Lawyers on behalf of the respondents as to the s 260B shareholder approval for the proposed financial assistance were, objectively, ill-founded.[48]
   5. The advice from Zilkens Lawyers (and, it may be interposed, the basis for Zilkens Lawyers' expressed concerns) concerned the wrong section of the Corporations Act and was objectively wrong.[49]
   6. The respondents were, as at 17 January 2019, in breach of their cl 2.4 best endeavours obligation to satisfy the financial assistance condition precedent.[50]
3. On turning to the question of renunciation, the primary judge started by describing the applicable legal principles.[51] Among other things, referring to the reliance placed on it by counsel for the respondents, her Honour quoted from the speech of Lord Wilberforce in Woodar Investment Development Ltd v Wimpey Construction UK Ltd.[52] (Counsel for the respondents continued to rely on those passages in oral and written submissions in this court.) There is no complaint to the effect that the primary judge misstated or mistook the applicable legal principles. Rather, in this court the respondents' complaint is that the primary judge misapplied the relevant legal principles.
4. The primary judge identified the issue to be whether a reasonable person in the position of the appellant, on reading the 17 January 2019 letter, would consider that the respondents were evincing an intention not to be bound by the SPA.[53] This aspect of her Honour's reasoning is not challenged by cross-appeal ground 1. Indeed, counsel for the respondents approached the issue in similar terms in oral submissions.[54]
5. The primary judge then referred, briefly, to what had occurred between the execution of the SPA and 17 January 2019.[55] This partial recitation of the background facts cannot be considered in isolation. When the primary reasons are read fairly and as a whole her Honour is plainly reminding the reader of the detailed factual chronology that appears earlier in the reasons. The primary judge did, however, make additional findings. Her Honour found that: (1) a 16 January 2019 proposal by Zilkens Lawyers that completion be pushed back to 14 February 2019 was consistent with the terms of the SPA;[56] (2) a telephone conversation between Mr Jain (of Zilkens Lawyers) and Mr Pocock (of Lark Lawyers) on the morning of 17 January 2019 proceeded on the basis that the SPA was still on foot;[57] (3) there was a misdescription as to the completion date in the 17 January 2019 correspondence from Lark Lawyers that accompanied the indemnity deed - however, nothing turned on that and the appellant clearly considered, at this stage, that it was bound by the SPA.[58]
6. After referring to the contents of the 17 January 2019 letter the primary judge then stated:

Objectively viewed, the words 'the agreement ceases to have effect' conveyed that [the respondents] considered [the SPA] had come to an end and [the respondents] did not intend to continue to perform any obligations under it. In this regard, I do not consider it is relevant whether [the respondents] believed this action was justified by the terms of the contract. As summarised above, the test of whether conduct is repudiatory or a renunciation of [the SPA] is an objective test.

While I do not consider [the respondents] had complied with their obligations under cl 2.3 [sic - meaning cl 2.4] of [the SPA], I accept that as at 4.47 pm on 17 January 2019, it was not possible for the financial assistance provision to be complied with to enable Completion to occur on 31 January 2019. For this reason, I accept that at or about the time the 17 January Notice was sent, the parties were obliged under cl 2.5 of [the SPA] to give notice that they believed cl 2.3 was incapable of being satisfied prior to Completion. However, this is not what the 17 January 2019 [sic] does or purports to do.

The 17 January Notice did not seek to discuss what is required by cl 2.3 of [the SPA]. It is not limited in its terms to an assertion of [the respondents'] view as to the effect on [the SPA] of the inability to comply with cl 2.3. The 17 January Notice went further and stated unilaterally, as a matter of fact and not opinion, that [the SPA] had ceased to have effect. Nothing in this letter suggests [the respondents] were prepared to perform their obligations under [the SPA], even if they were wrong in their construction of cl 2.3 [sic - meaning cl 2.7].

In any event, it is my view that there is no tenable basis upon which [the respondents] could have formed a view that they were entitled prior to 30 January 2019 to give this notice. Even if [the respondents] believed they were not in breach of their obligations in cl 2.3 [sic - meaning cl 2.4] of [the SPA], what was required was to give a notice under cl 2.5 and then, if the matter had not been resolved or the parties had not agreed to an extension of the Completion Date, to give notice after 30 January 2019 that the Agreement ceased to have effect. This is not what occurred. [334] - [337].

1. It will be apparent that the primary judge has used 'cl 2.3' where, in context, it appears that there was an intention to refer either to cl 2.4 or cl 2.7. In any case, as the primary judge confirmed elsewhere, for these reasons her Honour found that there was a renunciation of the SPA by the respondents by Zilkens Lawyers' letter dated 17 January 2019.[59]

1. The respondents' oral and written submissions echo the matters that were raised in development of cross-appeal ground 1 (see [106] - [107] above). Otherwise the respondents submit that:
   1. The respondents were required, by cl 2.5 of the SPA, to inform the appellant that the financial assistance condition precedent in cl 2.3 had become incapable of being satisfied. (This submission should be accepted. It does not, however, bespeak any error in terms of cross-appeal ground 1 - the primary judge made a finding to this effect in addressing the appellant's case as to repudiation.[60])
   2. The 17 January 2019 letter was correct to the extent that it gave notice that 'the condition in clause 2.3 of [the SPA] has become incapable of being satisfied'.
   3. However, Zilkens Lawyers were incorrect - and the letter was premature - so far as the 17 January 2019 letter went on to state that 'and, under clause 2.7 of the agreement, the agreement ceases to have effect' (emphasis added).
   4. Properly understood that additional statement conveyed no more than Zilkens Lawyers' interpretation of the effect of cl 2.7 of the SPA (albeit a mistaken interpretation) and the respondents, by Zilkens Lawyers, were doing no more than relying on the terms of the SPA rather than evincing an intention not to be bound by the SPA. Moreover, the respondents were not purporting to rescind or terminate the SPA based on their erroneous construction. The respondents were saying no more than that the effect of cl 2.7, in the circumstances that had happened, was that the SPA had come to an automatic end.
   5. The interpretation of cl 2.7 revealed by the letter dated 17 January 2019 was honest and tenable - it could not be said that it had been advanced other than in good faith. The respondents were labouring under a mere honest misapprehension as to the effect of cl 2.7. That misapprehension was open to easy correction. The appellant should have informed the respondents what it considered to be the true effect of cl 2.7. No such attempt was made by the appellant or its solicitors.
   6. The primary judge focused too heavily on the terms of the 17 January 2019 letter at the expense of the totality of the circumstances - there should have been consideration of all the acts and conduct of the respondents in their dealings with the appellant.
2. For these reasons the respondents say that the letter dated 17 January 2019 was not renunciatory in effect. They stress the authorities decrying a finding of renunciation in the event of mere honest misapprehension as to the effect of a contractual term, especially where 'open to correction'. The respondents also highlight the necessity of having regard to all of the circumstances. As to these matters counsel for the respondents read from James Shaffer Ltd v Findlay Durham & Brodie[61] and Woodar Investment Development Ltd v Wimpey Construction UK Ltd.[62]
3. Otherwise the respondents revisited the dealings between the parties in relation to the financial assistance condition precedent[63] with a view to establishing that, read in the context of the whole of the material circumstances, the Zilkens Lawyers' letter dated 17 January 2019 did no more than convey a mistaken apprehension as to the operation of the SPA rather than evincing an intention not to be bound by the agreement.
4. The appellant largely relied on the reasoning of the primary judge. The appellant submitted that a contractual party's subjective intention or misapprehension did not mean that its conduct was non-repudiatory. The question was whether, viewed objectively having regard to the whole of the dealings between the parties, the alleged repudiator's conduct as a whole showed an intention to abandon the contract. The appellant said this was met where the respondents, by Zilkens Lawyers, said that the SPA had ceased to have effect. There was no tenable basis for that assertion. Nor was there any cogent evidence in support of the proposition that the respondents remained willing to perform the SPA. To the contrary, in the appellant's submission, the history of the parties' dealings illustrated quite clearly that the respondents were not willing to perform the SPA.
5. In oral submissions, counsel for the appellant relied on Mr Steele's actions in not responding to Mr Leaman's communications after the 17 January 2019 letter. That exceeds the appellant's pleaded case. The appellant's repudiation plea relied on the conduct evinced by the Zilkens Lawyers' letter dated 17 January 2019 in the circumstances that pertained between 9 and 17 January 2019.[64] Accordingly, what happened after the Zilkens Lawyers' letter ought to be put aside.

1. The term 'repudiation' can be used in different senses. When used in the sense of 'renunciation' it refers to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. It is often described as conduct of a party which evinces an intention no longer to be bound by a contract or to fulfil the contract only in a manner substantially inconsistent with the party's obligations.[65] As so described:

The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it.[66]

1. The generally applicable principles as to repudiation by renunciation are well settled:

1. A party will have renunciated a contract where, by words or conduct:

(a) the party evinces an intention no longer to be bound by the contract; or
>
> (b) the party shows that it intends to perform the contract only in a manner substantially inconsistent with its obligations and not in any other way.[67]

1. The test for determining whether conduct is renunciatory is objective[68] - the party's conduct is to be judged objectively by the effect it would be reasonably calculated to have upon a reasonable person in the position of the other party.[69] Accordingly, repudiation is not to be ascertained by an inquiry into the subjective state of mind of the party in default.[70] 2. Renunciation of a contract is a serious matter and is not to be lightly found or inferred.[71] 3. The whole circumstances of the case must be examined to see whether there is a renunciation.[72]
2. Something more should be said about the second proposition in [121] above given the terms of cross-appeal ground 1. At particular 1.5 of cross-appeal ground 1 the respondents allege error in the primary judge's renunciation finding as her Honour did not consider it relevant whether the respondents believed their action was justified by the terms of the SPA. The primary judge stated that the test of whether the conduct is repudiatory or a renunciation of the SPA is an obj[73]tive test.73
3. The authorities cited in support of proposition 2 at [121] above establish that the primary judge was correct to so hold. The objective test of repudiation leaves no room for consideration of whether an alleged repudiator subjectively held an honest belief that its action was justified by the contract. The alleged repudiator's state of mind is irrelevant. What matters is the character of the repudiato[74]s conduct.74
4. Particular 1.5 of cross-appeal ground 1 is wholly without merit. It is difficult to understand why this assertion of error was made. We accept that there are authorities which might be read as suggesting that the defaulting party's bona fides (or lack of bona fides) is a relevant consideration.[75] But at the appeal hearing counsel for the respondents submitted that the test was objective.[76] Counsel for the respondents effectively made the same submission at trial before the primary judge in submitting that Mr Zilkens' actual subjective intention was not relevant.[77]
5. It might be that the respondents are seeking to make a different point. For reasons we will come to, it should be accepted that where an alleged repudiator outwardly manifests an honest belief that its action is justified by the contract, that is conduct to be judged objectively by what it would convey to a reasonable person in the position of the other party. But the primary judge was not dealing with that point at the impugned passage. Her Honour was simply discarding, as irrelevant, the subjective and uncommunicated beliefs of the respondents.
6. Bearing on this point, there are cases in which courts have held that there was no repudiation where a party merely asserted an erroneous interpretation of a contract. That line of authority must now be examined.
7. In Ross T Smyth & Co Ltd v T D Bailey, Son & Co Lord Wright observed that 'a mere honest misapprehension, especially if open to correction, will not justify a charge of repudiation'.[78] In Woodar Investment Development Ltd v Wimpey Construction UK Ltd the members of the House of Lords referred to a series of cases where assertion by one party to another of an honestly held but erroneous view of the validity or effect of a contract did not constitute repudiation. Those cases included Spettabile Consorzio Veneziano di Armamento e Navigazione v Northumberland Shipbuilding Co Ltd;[79] James Shaffer Ltd v Findlay Durham & Brodie; and Sweet & Maxwell Ltd v Universal News Services Ltd.[80]
8. The cases are fact specific. However, out of deference to the argument of counsel for the respondents we will examine the authorities on which counsel specifically relied.
9. James Shaffer Ltd v Findlay Durham & Brodie is said to support the proposition that a party who takes action relying simply on the terms of the contract, and not manifesting by its conduct an ulterior intention to abandon the contract, is not to be treated as repudiating the contract.[81] The case involved a long-term supply contract. The defendants, export distributors, had agreed to pass on orders of not less than £80,000 per year for 10 years with an option for a further 5 years. They failed to do so. The defendants honestly believed that their failure was not a breach of contract. In negotiations the defendants said that the obligation under the contract did not go beyond passing on whatever orders they received. The plaintiff relied on this statement as a repudiation of the contract.
10. The Court of Appeal found that the defendants' construction of the contract was erroneous in law. The Court of Appeal held, however, that the breach did not evince an intention not to be bound by the contract. Importantly, although there was an erroneous construction, there was no reason to doubt that the defendants thought that 'it was a tenable view'.[82]
11. Singleton LJ considered it not possible to say that the defendants had evinced an intention to no longer be bound by the contract because they raised a question as to the construction of the contract.[83] Morris LJ stated that it could not be said that the construction advanced by the defendants was an 'absurd construction' - while erroneous it was not an 'impossible or a stupid point of view to suggest'.[84] Upjohn J agreed that the defendants' construction was 'not absurd or untenable' and that the construction contended for was put forward in complete good faith.[85] In the circumstances each member of the Court of Appeal was not satisfied that the defendants by their acts and conduct evinced an intention to no longer be bound by the contract. As Morris LJ put it: 'I have no doubt that [the defendants] wanted to go on with the contract'.[86]
12. No different principle is at work in James Shaffer Ltd v Findlay Durham & Brodie. The case is decided conformably with the generally applicable principles we have discussed at [120] - [121] above. The case should be understood as an example of the court not being satisfied that a party had evinced an intention to no longer be bound by a contract merely because the party contended that it was able to perform the contract in accordance with an erroneous but tenable construction of its obligations under the contract.
13. The respondents also relied on Woodar Investment Development Ltd v Wimpey Construction UK Ltd.
14. That case concerned a contract to buy certain land. There was a prospect that planning permission for development might be granted. By a special condition the purchasers reserved a right to rescind 'if prior to the date of completion' a relevant authority 'shall have commenced' a process for compulsory acquisition of the property or part thereof. In fact, before entry into the contract the Secretary of State for the Environment had, to the knowledge of both parties, commenced the procedure for compulsory acquisition of part of the land. Subsequently the purchasers sent a notice purporting to rescind based on the pre-contract draft compulsory purchase order. The vendors brought an action for a declaration that the condition gave the purchasers no right to rescind and in subsequent proceedings sought damages. The trial judge, Fox J, held that the purchasers were not entitled to invoke the condition and by doing so had wrongfully repudiated the contract. The Court of Appeal affirmed Fox J's decision that the purchasers had repudiated the contract.
15. In the House of Lords there was no challenge to the trial judge's finding that the special condition could not be invoked because the relevant procedure had started before the date of the contract - it therefore not falling within the words 'shall have commenced'. However, by a majority (Lord Wilberforce, Lord Keith of Kinkel and Lord Scarman; Lord Salmon and Lord Russell of Killowen dissenting) the House of Lords allowed the purchasers' appeal. The majority held that the evidence of the purchasers' conduct was insufficient to support a finding of repudiation.
16. There was general acceptance that in assessing whether there had been repudiatory conduct by one party it was necessary to look at the party's conduct as a whole.[87] A member of the minority also accepted that a party's action or inaction on the basis of a mistaken belief as to its rights under a contract need not amount to a renunciation.[88] The difference between the majority and the minority predominantly arose in characterising the purchasers' conduct as a matter of fact.
17. Lord Wilberforce stated:

In the present case, without taking [the purchasers'] conduct generally into account, [the vendors'] contention, that [the purchasers] had repudiated, would be a difficult one. So far from repudiating the contract, [the purchasers] were relying on it and invoking one of its provisions, to which both parties had given their consent. And unless the invocation of that provision were totally abusive, or lacking in good faith, (neither of which is contended for), the fact that it has proved to be wrong in law cannot turn it into a repudiation.[89]

1. Lord Wilberforce then examined the purchasers' conduct. This included discussions between representatives of the vendors and the purchasers. The purchasers expressed their intention to rely on the special condition. The vendors expressed their intention to seek a judicial determination of the validity of any such notice purportedly given under the contract. His Lordship discerned an assumption on the part of the purchasers, not disputed by the vendors, that both sides would abide by the decision of the court.[90]
2. Lord Wilberforce considered this 'quite insufficient' to support the case for repudiation concluding, as a 'clear conclusion of fact', that the purchasers manifested no intention to abandon, or to refuse future performance of or to repudiate the contract.[91] His Lordship also observed that:

[I]t would be a regrettable development of the law of contract to hold that a party who bona fide relies upon an express stipulation in a contract in order to rescind or terminate a contract should, by that fact alone, be treated as having repudiated his contractual obligations if he turns out to be mistaken as to his rights. Repudiation is a drastic conclusion which should only be held to arise in clear cases of a refusal, in a matter going to the root of the contract, to perform contractual obligations. To uphold [the vendors'] contentions in this case would represent an undesirable extension of the doctrine.[92]

1. The other members of the majority in the House of Lords also found that nothing in the purchasers' conduct evinced an intention to refuse performance of the contract.[93] Separately, Lord Keith of Kinkel identified earlier authorities in which the assertion by one party to the other of an honestly held but erroneous view as to the validity or effect of a contract did not constitute repudiation.[94] Lord Keith concluded:

Where one party, honestly but erroneously, intimates to the other reliance upon a term of the contract which, if properly applicable, would entitle him lawfully to rescind the contract, in circumstances which do not and are not reasonably understood to infer that he will refuse to perform his obligations even if it should be established that he is not so entitled, legal proceedings to decide that issue being in contemplation, I do not consider it in accordance with ordinary concepts of justice that the other party should be allowed to treat such conduct as a repudiation. Nor, in my opinion, are there any considerations of convenience which favour that course.[95]

1. The minority took a different view of the facts. Lord Salmon considered it was obvious from the surrounding circumstances that the purchasers had made up their mind that in no circumstances would they comply with their contractual obligation to buy the land at the contract price.[96] Lord Russell of Killowen thought that the notice of rescission was wholly unequivocal in saying, in effect, that the purchasers would not in any circumstances fulfil the contract.[97]
2. Counsel for the respondents focused on the English authorities to the exclusion of the Australian authorities. There are, however, a number of relevant Australian authorities including High Court of Australia authorities. First in time is Summers v The Commonwealth.[98] There, sitting as a judge at first instance, Issacs J (as his Honour was then) considered whether there had been a mutual abandonment or abrogation of a contract. His Honour approved earlier authority to the effect that the persistent maintenance of an untenable construction of a contract on a matter of essential substance should be regarded as not consistent with a continuing intention to observe the contractual obligations.[99] That observation is not strictly concerned with inferring repudiation. But it inevitably follows that persistence in an untenable construction will ordinarily be regarded as repudiatory.
3. Next is the important case of DTR Nominees Pty Ltd v Mona Homes Pty Ltd.[100]
4. The facts in DTR Nominees Pty Ltd are complicated. For present purposes it is enough to say that the case involved a contract to sell land. The parties to the contract adopted conflicting interpretations as to what was required under the contract. Each party then claimed to rescind the contract on the ground that the other party had repudiated and renounced the contract. On the interpretation found by the plurality (Stephen, Mason and Jacobs JJ; Aickin J agreeing) the vendor was in breach of the contract. However, there was a real constructional issue to be resolved - the trial judge preferred a different construction to that which found favour in the High Court.
5. Having succeeded on the constructional issue, the purchasers submitted that the vendor should be found to have repudiated or renounced the contract as the vendor was acting on an erroneous view of its obligations by its continued adherence to an incorrect interpretation of the contract. The plurality stated:

No doubt there are cases in which a party, by insisting on an incorrect interpretation of a contract, evinces an intention that he will not perform the contract according to its terms. But there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognise his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him.[101]

1. The plurality endorsed observations to the effect that, where parties cannot agree about meaning, the true construction must be determined by the court. Hence a party should not too readily be found to have refused to perform an agreement by contentious observations in the course of discussions or argument.[102] The plurality then stated:

In this case [the vendor] acted on its view of the contract without realising that [the purchasers] were insisting upon a different view until such time as they purported to rescind. It was not a case in which any attempt was made to persuade [the vendor] of the error of its ways or indeed to give it any opportunity to reconsider its position in the light of an assertion of the correct interpretation. There is therefore no basis on which one can infer that [the vendor] was persisting in its interpretation willy nilly in the face of a clear enunciation of the true agreement.[103]

1. DTR Nominees Pty Ltd is properly understood as a case where there was a bona fide dispute as to the true construction of a contract expressed in unclear terms.[104] In those circumstances the court is not justified in drawing an inference that the relevant party intended not to perform the contract according to its terms or that it repudiated the contract.[105] DTR Nominees Pty Ltd is, so understood, consistent with a general principle identified by Mason J, as his Honour was then, (Murphy and Aickin JJ agreeing) in the subsequent case of Green v Sommerville. There Mason J referred to it being a general principle of the law of contract that 'the court will not readily infer from a party's insistence on a wrong construction of a contract that he is unwilling to perform it according to its true construction'.[106] That is all the more so where there is a common mistake and it is sought to infer repudiation from a party's assertion that it intends to perform the contract by doing what both parties erroneously believe to be required by way of performance (at least until the mistake is exposed).[107]
2. Finally, mention should be made of Sopov v Kane Constructions Pty Ltd. There the Court of Appeal in Victoria conducted a comprehensive review of the authorities dealing with repudiation by erroneous interpretation.[108] After reviewing the authorities Maxwell P and Kellam JA stated:

The distinctions drawn in the cases may be summarised as follows:

1. For party A merely to assert, or argue for, a wrong interpretation of the contract will usually not be enough to justify party B drawing an inference of repudiation ...
2. The inference of repudiation can more readily be drawn when the interpretation relied on by party A is clearly or obviously untenable and party A:

(a) acts (or threatens to act) unilaterally on the basis of the interpretation; or

(b) persists in the interpretation in the face of communications from party B pointing out the error.[109] (citations omitted)

1. In addition to the distinctions identified in Sopov v Kane Constructions Pty Ltd, the authorities we have referred to support the following propositions:

1. The generally accepted principles as to repudiation by renunciation[110] remain applicable where a party acts, or threatens to act, based on an erroneous interpretation of the contract and it is claimed that the party thereby repudiated the contract. 2. There are cases in which a party evinces an intention that it will not perform the contract according to its terms by acting or threatening to act on an incorrect interpretation of a contract.[111] This is more likely to be the case where:

(a) the construction adopted by the defaulting party is clearly or obviously 'untenable'[112] - conduct or threatened conduct which cannot reasonably be justified by the terms of the contract may be such as to convey to a reasonable person in the position of the other party a renunciation of the contract or of a fundamental obligation under the contract; or
>
> (b) the erroneous construction adopted by the defaulting party is maintained steadfastly despite correction.[113] In other words the defaulting party is not 'open to correction'.[114]

1. However, the court is not justified in drawing an inference that the relevant party intended not to perform the contract according to its terms - or that it repudiated the contract - where there is nothing more than a bona fide dispute as to the true construction of a contract expressed in unclear terms.[115] Nor where, viewed objectively, the party is willing to perform the contract according to its tenor; to recognise its heresy; or to accept an authoritative exposition of the correct interpretation.[116] 2. The issue is resolved objectively by reference to the effect that the defaulting party's conduct would have on a reasonable person in the position of the other party.[117] It follows that an uncommunicated subjective belief is irrelevant even if the defaulting party honestly believes that its act or threatened act is justified by the contract based on an erroneous interpretation thereof.[118] 3. Where, however, such a belief is made known by the defaulting party to the other party, the expression of that belief is conduct outwardly manifested which is to be taken into account in deciding whether a reasonable person in the position of the other party would infer that the defaulting party had renunciated the contract.[119]

1. Examination of cross-appeal ground 1 should commence with consideration of the contractual context.
2. The parties entered into the SPA on 21 December 2018. Completion was due on 31 January 2019. The date for completion could, however, be extended by agreement (cl 6.1(b)). A series of conditions precedent to performance were contained in cl 2 of the SPA. There was a due diligence condition that was solely for the benefit of the appellant (cl 2.1). Otherwise there were various general conditions (cl 2.2) and the financial assistance condition (cl 2.3). The focus, for present purposes, is on the financial assistance condition. This could only be waived effectively if waived by both the appellant and the first respondent (cl 2.6(b)). Both parties had an obligation to use their best endeavours to satisfy the financial assistance condition (cl 2.4).
3. Clause 2 also contained a notice provision (cl 2.5) and specified what occurred in the event of non-fulfilment of a condition (cl 2.7). Relevantly:

A party must promptly notify the other parties in writing if it becomes aware that any of the conditions in clauses 2.2 through 2.3 are satisfied or become incapable of being satisfied [cl 2.5].

If the conditions in clauses 2.2 through 2.3 are not fulfilled before 30 January 2019 then, this agreement shall cease to have effect and thereafter no party shall have any claim of any nature against the other in relation to this agreement [cl 2.7].

1. Clause 2.5 and cl 2.7 are different in their nature and effect. Clause 2.5 simply provides for notification to the other parties where one party becomes aware of either of two matters - namely, that a condition precedent to performance in cl 2.2 or cl 2.3 has been satisfied or has become incapable of being satisfied. It was common ground, for the purposes of the appeal, that at the time of the 17 January 2019 letter it was necessary that the respondents give notice pursuant to cl 2.5. In compliance with cl 2.5 of the SPA the Zilkens Lawyers' letter provided that notice. Clause 2.7, by contrast to cl 2.5, is not concerned with notice. Instead it provides for the consequences of non-fulfilment of one or more of the cl 2.2 and cl 2.3 conditions before 30 January 2019. If as at 30 January 2019 one or more of the conditions has not been fulfilled (or waived) then - automatically by operation of cl 2.7 - the SPA ceases to have effect and no party has any claim against another party in relation to the SPA.
2. The self-executing effect of cl 2.7 of the SPA cannot operate until 30 January 2019. It does not operate merely because one or more of the conditions in cl 2.2 and cl 2.3 had become incapable of being satisfied.
3. Clause 2.5 and cl 2.7 work harmoniously. The obligation to give notice under cl 2.5 is not triggered by non-fulfilment of a condition. Rather, it arises at an anterior point. The notification obligation arises when a party becomes aware that a condition has become incapable of being satisfied. That then allows the parties to consider what steps, if any, might be taken before automatic termination of the SPA under cl 2.7. (This assumes that the party giving the notice is correct in its assessment that the condition has become incapable of being satisfied. If the party giving notice is incorrect in its assessment - or is potentially incorrect in its assessment - the other party may instead attempt to bring about satisfaction of the condition or seek to persuade the other party to continue to attempt to bring about satisfaction of the condition.)
4. There are steps that might be taken to overcome the circumstance that a condition has become incapable of being satisfied. The condition may be waived. Sometimes waiver is a matter solely for the appellant as purchaser (see eg cl 2.6(a) as to the cl 2.2 conditions). However, the cl 2.3 financial assistance condition can only be waived by both the purchaser and the seller (cl 2.6(b)). Alternatively to waiver, the parties might agree to extend the time for completion - also agreeing to extend the time for fulfilment of the condition.
5. What, then, is to be made of Zilkens Lawyers' letter of 17 January 2019 given this understanding of the contractual context?
6. We accept that the Zilkens Lawyers' letter must be read and evaluated in the context of the circumstances that preceded it. In that respect the respondents complain that the primary judge considered only limited circumstances in finding that, on reading the 17 January 2019 letter, a reasonable person in the appellant's position would consider that the respondents were evincing an intention not to be bound by the SPA.[120] The respondents suggest that the primary judge's consideration was confined to those matters mentioned at primary reasons [328] - [333] and [481]. We reject that submission. It ignores the comprehensive and detailed factual findings that the primary judge made before turning to determine the legal issues.
7. On a fair reading of the primary reasons there is no substance in the respondents' complaint that the primary judge failed to evaluate the question of repudiation by reference to the whole of the acts and conduct of the respondents in their dealings with the appellant.
8. At the appeal hearing counsel for the respondents traversed almost the whole of the communications between the parties and their respective lawyers on the subject of the financial assistance condition (both before and after entry into the SPA). Those communications and the factual findings associated therewith have been summarised above and are detailed comprehensively in the primary reasons (in particular at [19] - [26], [132] - [196], [328] - [332]). It will also be necessary to refer to discrete aspects of the parties' dealings on the financial assistance condition in addressing cross-appeal ground 2. In the circumstances we will resist the call to again restate fully those matters in the manner recounted in counsel's address. What follows assumes familiarity with the whole of the circumstances. In considering the circumstances that provide the more critical context for the 17 January 2019 letter it is, however, instructive to examine how the respondents advanced their pleaded case in answer to the claim of repudiation.
9. By their defence the respondents pleaded that the SPA ceased to have effect on 16 or 17 January 2019 by reason of the financial assistance condition becoming incapable of being satisfied.[121] The respondents did not identify any contractual basis whereby that might be so. There is nothing in the SPA to sustain the contention and it may be put aside. Alternatively, the respondents pleaded that the SPA ceased to have effect on 30 January 2019 'by operation of' the SPA.[122] That effectively assumes that the appellant's purported termination for repudiation was ineffective.
10. Notably, the respondents did not plead a construction of cl 2.7 whereby its automatic effect is said to take effect from the time when a relevant condition became incapable of being satisfied.
11. The respondents pleaded that the 17 January 2019 letter did not and could not amount to a repudiation because it did not convey a repudiation to a reasonable person in the situation of the appellant 'in the circumstances pleaded in sub-paragraphs 19.3 and 19.5 above' in the light of the express terms of cl 2.5 and cl 2.7.[123] Thereafter the highpoint of the pleading is an assertion that a reasonable person in the position of the appellant would not have concluded that the respondents were doing anything other than applying the express terms of the SPA to statements made by Lark Lawyers[124] insofar as:

Zilkens Lawyers, on behalf of [the respondents], relied upon the statements made to them by Larks [sic] Lawyers, pleaded in sub-paragraphs 19.3(a) to 19.3(d) above, and gave [the appellant] the notice, by their letter, dated 17 January 2019, in the bona fide belief that Larks [sic] Lawyers' statements were correct and reflected the view of [the appellant] and that it followed therefrom, that clauses 2.5 and 2.7 of [the SPA] applied.[125] (emphasis added)

1. So, while at trial and on appeal counsel for the respondents pressed consideration of the whole of the communications that passed as to the financial assistance condition, the pleaded case targeted particular statements as pleaded in the respondents' defence at par 19.3 and par 19.5. As to the former, the statements allegedly relied on in giving the notice in the 17 January 2019 letter in the bona fide belief, among other things, that cl 2.7 applied, were said to be contained in Lark Lawyers' communications of:
   1. 7 and 13 November 2018 - to the effect that Mr Lark had significant experience in preparing financial assistance documents and he would prepare the necessary financial assistance documents.[126]
   2. 10 January 2019 - to the effect that Zilkens Lawyers had informed Lark Lawyers that they (ie Zilkens Lawyers) had not done a s 260B application for many years.[127] Self-evidently this plea goes nowhere in establishing the claimed reliance. Lark Lawyers' statement simply repeats information it was provided as to Zilkens Lawyers' lack of relevant experience.
   3. 11 January 2019 - to the effect that it was most important that the requisite documents were duly completed and lodged with the ASIC by no later than 15 January 2019.[128]
   4. 15 January 2019 - to the effect that unless the respondents lodged the relevant documents with the ASIC that day and passed the resolution the following day the provisions of cl 2.3 would not be satisfied prior to 31 January 2019.[129]
2. It is not necessary to repeat the terms of the various communications. The pleas as summarised above are consistent with the written communications that they record. The latter two communications address the timeframe for satisfaction of the cl 2.3 financial assistance condition (the 11 January 2019 communication does so inferentially; the 15 January 2019 communication does so expressly). But none of the communications involve the effect or operation of cl 2.5 or cl 2.7 of the SPA. The statements pointed to could not reasonably ground a belief that cl 2.7 of the SPA applied in the circumstances pertaining when Zilkens Lawyers issued its letter dated 17 January 2019.
3. Paragraph 19.5 of the defence referred to the letter dated 17 January 2019 and asserted that the SPA ceased to have effect on 16 or 17 January 2019 or alternatively 30 January 2019 by reason of the matters pleaded in par 19.3. In that respect par 19.5 did not enlarge the statements relied on. Accordingly, the relevant circumstances that the respondents particularly relied on to make good the contention that there was no repudiation were those pleaded in par 19.3 of the defence together with the contents of the 17 January 2019 letter and the terms of cl 2.5 and cl 2.7 of the SPA.
4. The immediate context for the 17 January 2019 letter commences on 11 January 2019 with Lark Lawyers' initial draft documents to obtain s 260B shareholder approval in satisfaction of the cl 2.3 financial assistance condition. These documents were provided for Zilkens Lawyers' review and finalisation on behalf of the respondents. As has already been observed, and as will be further developed when examining cross-appeal ground 2, the Lark Lawyers' documentation exhibits a degree of confusion. Zilkens Lawyers did not identify the deficiencies in the documentation. Zilkens Lawyers focused instead on the question of material prejudice to the interests of Rexwells' creditors. Zilkens Lawyers sought more information to salve its concerns but eventually, on 16 January 2019, decided to seek an indemnity.
5. The deficiencies in the Lark Lawyers' initial draft documents have no bearing on the 17 January 2019 letter. There is no connection between those documents, or the covering letter of 11 January 2019, and the respondents' invocation of cl 2.7 of the SPA on 17 January 2019. The respondents' insistence to the contrary is no more than an unmeritorious attempt to deflect and distract. In any case Zilkens Lawyers, in accordance with its clients' instructions, assumed responsibility to review and finalise the s 260B documentation.
6. The communications about the indemnity are of significance to the question of repudiation. Zilkens Lawyers sought the indemnity by email dated 16 January 2019 at the same time as seeking further information. Zilkens Lawyers also sought that completion be rescheduled for 14 February 2019.[130] On the morning of 17 January 2019 the appellant, via Mr Pocock, offered to provide the indemnity in lieu of the additional information; Mr Jain (for the respondents) agreed to that proposal (although saying that he would take instruction on whether the 'effective date' of the sale would remain 1 February 2019). That position was confirmed in an email from Lark Lawyers to Zilkens Lawyers sent at 2.00 pm on 17 January 2019. The email attached a draft indemnity deed and indicated a willingness to entertain completion after 1 February 2019 on condition that the effective date of sale remained 1 February 2019.[131]
7. Accordingly, by the afternoon of 17 January 2019 the parties, by their respective lawyers, had reached the position that the respondents' requests for further information were to be satisfied by the provision of an indemnity. Having received Lark Lawyers' 2.00 pm email the respondents did not raise any issues as to the terms of the indemnity as proffered. Nor did the respondents engage on the date for completion and effective date of the sale. The respondents instead caused the Zilkens Lawyers' letter dated 17 January 2019 to be issued at 4.47 pm.
8. The Zilkens Lawyers' letter dated 17 January 2019 is relatively short. Dealing with its various aspects:
   1. In pars 1 and 2 there is reference to the respondents' requests for information in connection with the financial assistance condition under cl 2.3 of the SPA and the appellant's alleged refusal to provide the information as requested - inexplicably this omits mention of the circumstance that the respondents, by Mr Jain, had agreed to accept an indemnity in lieu of the requested information.
   2. At par 2 it is said that the respondents have concluded that they have insufficient information to be able to resolve that the provision of financial assistance will not materially prejudice Rexwells' ability to pay its creditors. Again there is no mention of the agreement reached earlier that day to accept an indemnity in lieu of the requested information. In addition there is no recognition that a resolution of the kind mentioned is not required to satisfy the cl 2.3 financial assistance condition. It should, however, be acknowledged that the latter omission arises in circumstances where there is common confusion between the parties' lawyers as to what was required to bring about satisfaction of cl 2.3. So understood this aspect of the 17 January 2019 letter would not convey to a reasonable person in the position of the appellant an intention no longer to be bound by the SPA or to fulfil the SPA only in a manner substantially inconsistent with the respondents' obligations.
   3. At par 3 notice is given that, in light of the timing, the cl 2.3 financial assistance condition has become incapable of being satisfied. This notice is correctly provided under cl 2.5 of the SPA.
   4. Paragraph 3 then provides further notice, on behalf of the respondents, that 'the agreement [ie the SPA] ceases to have effect' under cl 2.7 of the SPA.
9. Four immediate observations should be made. First, nothing in the SPA required the giving of notice under cl 2.7. Clause 2.7 is self-executing. The purported notice was entirely gratuitous. Second, the statement is in peremptory and emphatic terms - it asserts unequivocally that the SPA ceases to have effect. The statement in the Zilkens Lawyers' letter that 'the condition in clause 2.3 ... has become incapable of being satisfied and, under clause 2.7 of the agreement, the agreement ceases to have effect', read in the context of cl 2 of the SPA and the letter as a whole, conveys unequivocally that the SPA has come to an end. There is nothing suggesting that the parties should be (or will be) furthering the communications of the previous day and the earlier part of that day about deferring the date for completion. Third, the notice that the SPA has ceased to have effect is prefaced by the respondents seeking to justify their position on the s 260B shareholder approval by pointing to the appellant's conduct in not providing requested information. That self-serving justification inexplicably ignores the agreement reached earlier that day to accept an indemnity in lieu of the further information requested. In that respect the purported justification colours and informs what is about to come. Fourth, the reference to cl 2.7 is not said to be grounded on any prior statement by or on behalf the appellant as to the effect or operation of cl 2.7 (something worth mentioning given the respondents' pleaded defence).
10. The respondents say that they were labouring under a mere honest misapprehension - doing no more than acting in accordance with a bona fide but erroneous belief as to how cl 2.7 was to be interpreted - and that they were open to correction.
11. We accept that a reasonable person in the position of the appellant would understand the Zilkens Lawyers' letter dated 17 January 2019 to convey the respondents' professed belief that cl 2.7 of the SPA, on its proper construction, had the effect that the SPA was at an end. That professed belief is implicit in the final part of par 3 of the letter. However, we do not accept that a reasonable person in the position of the appellant would consider that the respondents were open to correction as to the effect or operation of cl 2.7. That possibility is inconsistent with the emphatic terms in which the letter is expressed. That is all the more so where, despite the communications over the last two days, the letter says nothing about the agreement between Mr Pocock and Mr Jain on the morning of 17 January 2019 or about the email from Lark Lawyers to Zilkens Lawyers sent at 2.00 pm on 17 January 2019 or about a post-31 January 2019 completion date. The letter, read and understood in the context of the circumstances of 17 January 2019 and the preceding week, conveys to a reasonable person in the position of the appellant that the respondents have reached a firm and final concluded view that the SPA is at an end by reason of the operation of cl 2.7.
12. Insofar as, objectively, the letter did not convey in the circumstances that the respondents were open to correction, so too it cannot be said that a reasonable person in the position of the appellant ought to have considered that, despite the respondents' erroneous construction of cl 2.7, the respondents remained willing to perform the SPA according to its tenor, to recognise their heresy or to accept an authoritative exposition of the correct interpretation of cl 2.7. Once this point is reached the respondents' complaint that the appellant did not seek to persuade them of their error goes nowhere. Nor does it matter that the appellant did not afford the respondents an opportunity to reconsider their position as to the operation and effect of cl 2.7. The respondents had already evinced their intention, in an unequivocal manner, not to perform the SPA according to its tenor.
13. Consideration must then turn to what a reasonable person in the position of the appellant would have drawn from the respondents' professed belief as to the erroneous interpretation implicitly placed on cl 2.7 of the SPA.
14. It would be one thing if there was a reasonably arguable construction of cl 2.7 that justified the 17 January 2019 letter. Such a construction would necessarily be to the effect that, on its proper construction, cl 2.7 operated so that the SPA immediately ceased to have effect if any of the conditions in cl 2.2 or cl 2.3 became incapable of being satisfied. If such a construction was reasonably arguable the position would then be akin to those cases where there is a bona fide dispute as to the construction of a contract expressed in unclear terms. But the primary judge held that there was no tenable basis on which the respondents could have formed a view that they were entitled to rely on cl 2.7 prior to 30 January 2019.[132] That, in substance, is a finding that the posited construction was untenable.
15. Cross-appeal ground 1 does not directly challenge that finding. Nor, as mentioned, did the respondents plead a construction of cl 2.7 whereby its automatic operation took effect from the time when a relevant condition became incapable of being satisfied. In oral submissions counsel for the respondents asserted that the construction implicit in the Zilkens Lawyers' letter dated 17 January 2019 was tenable in the sense of being honest and in good faith, ie there was not some element of bad faith.[133] This submission was misguided to the extent that it directed attention to subjective considerations. If intended to address whether the construction was clearly and obviously untenable in the sense used in the authorities counsel for the respondents did no more than assert a conclusion. No attempt was made to suggest that the posited construction had any arguable merit. The issue was avoided altogether in the respondents' written submissions.
16. Clause 2.7 of the SPA cannot be read and construed conformably with the respondents' professed belief as to its interpretation as is implicitly stated in the final paragraph of the Zilkens Lawyers' letter dated 17 January 2019. The posited construction is not reasonably arguable - it is an 'absurd' or an 'impossible' construction (to use the terminology employed in James Shaffer Ltd v Findlay Durham & Brodie).
17. The terms of cl 2.7 are expressed simply and clearly. It is the antithesis of a contractual provision expressed in unclear terms about which there could be a bona fide dispute as to its true construction. There is no available constructional choice based on the text read in context and having due regard to the object and purpose of the clause. Clause 2.7 is triggered by the non-fulfilment (or waiver) of any of the conditions in cl 2.2 and cl 2.3 'before 30 January 2019'. Accordingly, it directs attention to the position as at the commencement of 30 January 2019. Then - and only then - the agreement ceases to have effect if cl 2.7 operates. There is no tenable basis on which it might legitimately be contended that the self-executing operation of cl 2.7 in bringing an end to the SPA could occur before 30 January 2019. A construction to that effect is so lacking in merit as to be patently hopeless.
18. A reasonable person in the position of the appellant, reading the Zilkens Lawyers' letter dated 17 January 2019 in the circumstances of the parties' preceding dealings, would have understood the respondents to be stating that the SPA had ceased to have effect by operation of cl 2.7 thereof. The statement that 'the agreement ceases to have effect' is to be seen as being reasonably calculated to convey to a reasonable counterparty that the agreement is at an end and the parties are no longer bound to perform it. The respondents thereby evinced an intention no longer to be bound by the SPA.
19. A reasonable person in the position of the appellant would not view the respondents as doing no more than erroneously misconstruing the terms of cl 2.7 or saying that the SPA will come to an end on 31 January 2019. For the reasons we have given a construction to the effect of that impliedly contended for by Zilkens Lawyers' letter dated 17 January 2019 is clearly and obviously untenable. Clause 2.7 is incapable of justifying the intention evinced by the respondents in the letter. There was simply no basis - or even a faintly arguable basis - for the respondents' conduct that could be justified in the provisions of the SPA. The complete lack of merit in the respondents' professed reliance on cl 2.7 of the SPA is something that would be patently obvious to a reasonable person in the position of the appellant.
20. So far as cl 2.7 was relied on as justifying the contention that the SPA had ceased to have effect, a reasonable person in the position of the appellant would view the professed reliance on that term of the agreement as being spurious. That is particularly so given the other aspects of the letter we have mentioned, namely: (1) the respondents' reliance on the absence of requested information in circumstances where the parties had agreed to an indemnity in lieu of the information; and (2) the peremptory and emphatic terms in which the conclusion is expressed despite the parties having been in discussions on extending the time for completion under the SPA. In all the circumstances a reasonable person in the position of the appellant would infer that the respondents had evinced an intention to no longer be bound by the SPA.
21. Accordingly, the primary judge was correct to find that the respondents repudiated the SPA by their renunciation thereof as manifested in the Zilkens Lawyers' letter dated 17 January 2019. Cross-appeal ground 1 fails.

Disposition: cross-appeal ground 2 - whether appellant also in breach of the cl 2.4 'best endeavours' obligation

1. By cross-appeal ground 2 the respondents allege that the primary judge erred in finding that they - more specifically they alone - were in breach of the cl 2.4 'best endeavours' clause in the SPA. The respondents allege that the primary judge should have found that:
   1. The appellant and the respondents were in mutual breach of the best endeavours clause.
   2. As a result, the appellant was precluded from recovering any damages said to arise from the respondents' renunciation of the SPA or the respondents' breach of cl 2.4 of the SPA.
2. The relevant finding on the part of the primary judge is as follows:

Objectively viewed, I consider that the information provided by [the appellant] by 2.01 pm on 15 January 2019 was sufficient information for [the respondents] to finalise the notice of meeting and explanatory statement. This information was to the effect that the financial assistance being provided by Rexwells was a guarantee and security over all of its assets, the total of the loan was $4 million, and that the security included not only the assets of Rexwells but a property to the value of $4 million (although details of the specific property were not provided) together with a term deposit of $1 million. On the face of this information, these securities were more than sufficient to secure repayment of the loan.

While I accept that this information was provided at a relatively late stage, there was still sufficient time between the provision of this information and the deadline for the lodgement of documents with ASIC for [the respondents], using their best endeavours, to consider this material and finalise the necessary documents. Had [the respondents] finalised the notice of meeting and explanatory statement on the afternoon of 15 January 2019 and lodged these documents with ASIC either that day or the following morning, the financial assistance clause could have been complied with to enable completion to occur on 31 January 2019.

For these reasons, I am not satisfied on the balance of probabilities that [the appellant] failed to use their [sic] best endeavours to satisfy cl 2.3 of the Agreement [293] - [295].

1. There is, as mentioned, no challenge on appeal to the primary judge's finding that the respondents were in breach of cl 2.4 of the SPA (see [76], [87] above). Accordingly, the respondents' breach as found by the primary judge is accepted. The challenge is to the primary judge's finding that the appellant had not breached its obligation to use best endeavours to satisfy the cl 2.3 condition precedent as to approval of financial assistance (see [76] above). The respondents contend that the primary judge should have found that the appellant was in breach of its cl 2.4 best endeavours obligation in this respect.
2. In written submissions the respondents clarified that cross-appeal ground 2 was raised in the event of the court upholding cross-appeal ground 1.[134]
3. The respondents' concession as to the operation of cross-appeal ground 2 is correct. The respondents do not allege that any breach by the appellant of the best endeavours clause precluded the appellant from accepting the respondents' renunciation of the SPA. Cross-appeal ground 2 has no utility unless the respondents first succeed on cross-appeal ground 1. If, in these circumstances, the appellant and the respondents were in mutual breach of the best endeavours clause, the SPA would have come to an end on 30 January 2019 pursuant to cl 2.7 and, as a result, the appellant would not have been entitled to recover any damages said to arise from the respondents' renunciation or the respondents' breach of cl 2.4. In any case, in advancing cross-appeal ground 2 the respondents largely rely on the factual matters raised in support of cross-appeal ground 1.[135] Cross-appeal ground 1 fails. In the circumstances, it is not necessary to determine cross-appeal ground 2. For completeness, however, we will deal with cross-appeal ground 2. In doing so we will not repeat the factual matrix as it has been addressed comprehensively in the primary reasons (see in particular primary reasons [19] - [26], [132] - [196], [328] - [332]) and has been summarised elsewhere in these reasons.
4. In support of cross-appeal ground 2 the respondents submit:
   1. The best endeavours obligation in cl 2.4 of the SPA was mutual.
   2. The respondents acted honestly and reasonably in seeking information from the appellant as to the appellant's financial arrangements with NAB and the source of funds to service and repay the proposed loan (those matters being peculiarly within the knowledge of the appellant and Mr Leaman).
   3. It was appropriate from the dual perspective of corporate governance and discharge of his fiduciary duties to Rexwells that Mr Steele satisfy himself as to the matters on which Lark Lawyers said that he must be satisfied.
   4. All parties relied on their solicitors to ensure that the financial assistance condition was satisfied.
   5. It was unhelpful to try and allocate blame between the solicitors - both firms (ie Lark Lawyers and Zilkens Lawyers) are said to have 'failed miserably' to take the necessary steps to ensure that the relevant provisions of the Corporations Act were complied with such that the financial assistance condition precedent was fulfilled before 30 January 2019.
   6. Imputing the conduct of the solicitors to their respective clients: (a) each party was in breach of its obligations to exercise best endeavours; and (b) neither party - as a party in breach of its obligations under the SPA - could rely on the other party being in breach given the causal connection between the parties' respective breaches.
5. In relation to par 1 of the passage reproduced at [186] above the respondents submit that it was Lark Lawyers who had induced Zilkens Lawyers to understand that Mr Steele had to be satisfied that the proposed financial assistance would not materially prejudice Rexwells' ability to pay its creditors.
6. The respondents put considerable emphasis on the pre-SPA discussion, in mid-November 2018, where Mr Zilkens said that he did not have any recent experience in preparing documentation under the Corporations Act to authorise the giving of financial assistance and Mr Lark said that he would prepare the documents. That was a matter between the solicitors; it was not reflected in the mutually agreed obligations in the SPA. In any case, by 8 January 2019 Zilkens Lawyers put this only in terms that it 'may be the best course of action' if Lark Lawyers prepared the documentation.[136] Mr Pocock, for Lark Lawyers, saw a conflict in this but - in the spirit of professional collegiality - offered by email dated 10 January 2019 to prepare 'initial draft documents' on the basis that Lark Lawyers had 'no liability whatsoever to' Zilkens Lawyers or the respondents and that Zilkens Lawyers was to 'review and finalise on behalf of your client'.[137] Zilkens Lawyers agreed to proceed on this basis.[138] Zilkens Lawyers did so '[i]n accordance with the instructions from [its] client'.[139]
7. Accordingly, while Lark Lawyers was to prepare initial draft documents, finalisation thereof was the responsibility of Zilkens Lawyers. Moreover, that was something Zilkens Lawyers had been instructed to do by its clients. That is unsurprising when it is recalled that the first respondent - Zilkens Lawyers' client - was the sole shareholder of Rexwells and, as such, was the relevant person for the purpose of any approval of financial assistance under s 260B (thereby enabling the giving of financial assistance in terms of s 260A(1)(b)). The shareholder resolution was a matter for the first respondent rather than the appellant.
8. In particulars in support of cross-appeal ground 2 the respondents say that the financial assistance condition precedent in cl 2.3 of the SPA did not require a special resolution. Nor did it require resolutions as to solvency or that the proposed financial assistance to be provided would not materially prejudice Rexwells' ability to pay its creditors. And, so far as the initial draft documents prepared by Lark Lawyers provided for completion and lodgement by no later than 15 January 2019, the actual date - as found by the primary judge - was 17 January 2019. All of that may be accepted. The draft documents as prepared by Lark Lawyers and circulated on 11 January 2019 (as summarised at [50] above) unnecessarily imported a number of the features of s 260A(1)(a) rather than simply providing for shareholder approval under s 260B in accordance with s 260A(1)(b). In so doing the initial draft documents as prepared by Lark Lawyers might be thought to have confused the criteria under s 260A(1)(a) with what was required in terms of s 260A(1)(b) and s 260B.
9. We do not accept, however, that this failure on the part of Lark Lawyers suffices to ground a breach of the cl 2.4 best endeavours obligation by the appellant. Lark Lawyers was only preparing initial draft documents out of a sense of professional collegiality. The ultimate responsibility for the preparation of the cl 2.3 financial assistance approval documentation was assumed by Zilkens Lawyers for the respondents.
10. Zilkens Lawyers did not identify the deficiencies in the draft documents prepared by Lark Lawyers. In evidence-in-chief Mr Zilkens said that he had no 'intimate knowledge' of the financial assistance provisions of the Corporations Act - Mr Zilkens could not remember a specific instance where he had looked at or dealt with the provisions.[140] Nor had Mr Zilkens ever prepared any of the documents required by s 260A or s 260B of the Corporations Act.[141] In cross-examination Mr Zilkens said that he did not look up the legislation in the Corporations Act. Nor did he look up a textbook or seek any online assistance.[142] It continued to be the case that Mr Zilkens did not read the legislation until after the termination of the SPA.[143] Mr Zilkens did, however, ask a junior lawyer to do some research on the concept of material prejudice under s 260A(1)(a).[144] That research was misdirected given the terms of cl 2.3 of the SPA.
11. Thereafter Mr Zilkens' communications with Lark Lawyers exhibit a focus on the question of material prejudice to the interests of Rexwells' creditors. For example:
    1. On 14 January 2019 Zilkens Lawyers sought information as to the terms of the NAB loan and the source of the funds to be used to meet the appellant's repayment requirements under the loan so as '[t]o make an assessment as to whether there will be material prejudice under s 260A'.[145]
    2. On 16 January 2019 Zilkens Lawyers stated that, on the basis of the information currently available, its client was of the view that it 'cannot form the view and, accordingly, resolve ... that the provision of financial assistance by Rexwells to the buyer will not materially prejudice the interests of the creditors of Rexwells'. Zilkens Lawyers sought an indemnity to indemnify the first and third respondents against any liability they may incur as a result of approving the financial assistance.[146]
    3. On 17 January 2019 Zilkens Lawyers stated that its client had concluded that it had insufficient information to be able to resolve that the provision of the financial assistance would not materially prejudice Rexwells' ability to pay its creditors.[147]
12. It is plain, in the circumstances, that Zilkens Lawyers did not direct itself to the requirements under s 260A(1)(b) and s 260B for shareholder approval for financial assistance. Zilkens Lawyers was concerned, instead, with the question of material prejudice to the company's ability to pay its creditors and - on the giving of financial assistance - whether the first and third respondents may be exposed to any liabilities. The misdirected nature of Zilkens Lawyers' concerns are particularly self-evident in the latter. The time for the giving of the financial assistance had not arrived and would not arrive before completion under the SPA. That was, as at 17 January 2019, scheduled for 14 days in the future. If there was a real concern as to whether the giving of the proposed financial assistance might involve Mr Steele in some breach of his obligations as a director the matter could be examined and addressed post-shareholder approval and before completion under the SPA.
13. It may be accepted that the initial draft documents received from Lark Lawyers partially contributed to Zilkens Lawyers' misdirected concerns. But that is not to the point. Zilkens Lawyers was to review and finalise the cl 2.3 financial assistance approval documentation for the respondents. Zilkens Lawyers could not simply rely on the initial draft documents prepared by Lark Lawyers.
14. Whether, in the circumstances, the appellant used its best endeavours to satisfy the cl 2.3 financial assistance condition depends on whether the appellant provided Zilkens Lawyers with (or caused Zilkens Lawyers to be provided with) sufficient information so that the requirements for s 260B shareholder approval could have been completed by 17 January 2019.
15. This, in substance, is the question that the primary judge asked herself, and answered in the affirmative, in the passage of the primary reasons reproduced at [186] above. The respondents have not demonstrated any error in that reasoning or her Honour's conclusion. To the contrary we are satisfied that the primary judge was correct for at least the reasons given by her Honour. While the primary judge's reasons are perfectly adequate we will supplement them a little. Three main considerations arise. First is identification of the necessary materials to obtain the s 260B shareholder approval. This inquiry may omit identification of formal documents such as consents to short notice and the ASIC prescribed forms. These are formalities which would be attended to in the normal course of things by professional advisers. Second is identification of which of those matters, if any, was outside the knowledge of the respondents and Zilkens Lawyers and had to be supplied by or on behalf of the appellant. Third is whether any information to be supplied by or on behalf of the appellant was provided in sufficient time before 17 January 2019.
16. Effectively two substantive documents were required. First was a notice of the meeting for the shareholder resolution to approve the giving of financial assistance. Such a notice of meeting must specify the proposed resolution. Accordingly, the nature of the proposed financial assistance had to be specified. Second was the disclosure statement required under s 260B(4) of the Corporations Act.
17. Zilkens Lawyers were in possession of sufficient information to prepare the notice of meeting from at least 1.50 pm on 11 January 2019. At that time, in the initial draft documents prepared by Lark Lawyers, there was adequate specification of the financial assistance to be given by Rexwells, namely, a security over the assets and undertaking of the company to secure repayment of a loan from NAB in the amount of $4 million to purchase the Rexwells' share.[148] Indeed, arguably Zilkens Lawyers had sufficient information to identify the proposed financial assistance as and from 9 January 2019 when Lark Lawyers sent an email referring to the intended loan amount and security.[149] While that might be so we will use the 11 January 2019 date as that is when Lark Lawyers sent the initial draft documents it had agreed to provide.
18. In terms of the disclosure statement, a company that calls a meeting to approve financial assistance must include with the notice of meeting a statement setting out all the information known to it that is material to the decision on how to vote on the resolution (s 260B(4)). The disclosure requirement is plainly intended to ensure the members make an informed decision how to vote on the resolution. However, the company does not have to disclose information if it would be unreasonable to require it to do so, because it has previously disclosed information to its members (s 260B(4)).
19. The requirement is only to disclose all information 'known' to the company - the statutory language does not extend to information the company ought to have known.
20. For reasons we will come to it is not necessary to examine the concept of materiality in s 260B(4). Generally, one consideration will be whether the information is required to inform the shareholder fully and fairly about the matter upon which he or she will have to vote. Thus, what is 'material' may go beyond whether the proposed financial assistance will materially prejudice the interests of the company or its shareholders or the company's ability to pay its creditors. It may, for example, include some of the matters prescribed under the predecessor to s 260B(4) - those matters including the nature of the proposed financial assistance, the reason for the proposed financial assistance and the anticipated effect of the proposed financial assistance on the company's financial position.[150]
21. In the present case, however, the question of materiality raises a false issue. The requirement was to disclose the information 'known to the company' that was material to the decision. That is something that Zilkens Lawyers could and should have ascertained from Rexwells and its clients (one of those clients, the first respondent, being the sole shareholder of Rexwells and another, the third respondent, being the directing mind and will of Rexwells). It was not something that required disclosure by Lark Lawyers or the appellant. For example, Zilkens Lawyers was plainly in a position to describe the reason for and the anticipated effect of the proposed financial assistance. Once the nature of the proposed financial assistance was known - as it was by 11 January 2019 - Rexwells' financial position post-completion was something determined by the operation of the SPA and was also readily ascertainable by Zilkens Lawyers.
22. The added feature in the present case is that the first respondent - who was to be the recipient of the disclosure statement - was the sole shareholder of Rexwells and the third respondent (Mr Steele) was the sole director of both the first respondent and Rexwells. It may well be that, in terms of the second sentence of s 260B(4), the common knowledge attributable to the first respondent and Rexwells means that Rexwells may be taken to have previously disclosed the material information known to Rexwells to its members. However, as no submissions were made on this possibility, we will leave the point undecided.
23. From at least 15 January 2019 (on the primary judge's reasoning) or earlier from 11 January 2019 (in our opinion) the appellant had met its obligation to provide Zilkens Lawyers with (or cause Zilkens Lawyers to be provided with) sufficient information for the purpose of bringing about the s 260B shareholder approval. In either case the necessary information was provided in sufficient time before 17 January 2019 to have enabled the respondents to satisfy the cl 2.3 financial assistance condition precedent. The appellant was not in breach of its best endeavours obligation under cl 2.4 of the SPA.
24. Cross-appeal ground 2 fails.

The sequence for consideration of the remaining issues before the court

1. The respondents' failure on cross-appeal grounds 1 and 2 means that it is necessary to consider the appellant's damages case.
2. Consistently with the way in which counsel for the appellant presented the damages case, it is convenient to consider the damages case at two levels. First, in the next section of these reasons, at the point of principle. This is largely concerned with whether the measure of damage contended for by the appellant is legally coherent. It concerns the restated grounds 1 - 13 as summarised at [95] above. Second are grounds 14 - 17. Those grounds address specific provisional findings that the primary judge made on the evidence against the possibility that her Honour's legal conclusion on the measure of damage was in error.
3. After dealing with the appellant's damages case it will be necessary to examine the various notice of contention points raised by the respondents. These are mainly concerned with discrete issues connected with damages. We have also left cross-appeal ground 3 to be dealt with in this context. Cross-appeal ground 3 also concerns a discrete quantification issue and is conveniently addressed after dealing with the various notice of contention points.

Disposition: grounds 1 - 13 - the appellant's measure of damage

1. The primary judge's rejection of the appellant's measure of damage was the central legal issue in the appeal. For that reason we have summarised the primary judge's reasoning on this point in addressing the primary decision (see [79] - [80] above). Critically, the primary judge held that the appellant was only entitled to nominal damages in circumstances where it had not proved the market value of the Rexwells' share or any alternative amount.
2. So too we have summarised the effect of the appellant's miscellany of appeal grounds in relation to the rejection of the appellant's measure of damage (see [90] - [98] above). We will, as explained in that earlier portion of these reasons, not be dealing with each of grounds 1 - 13 seriatim. Many of the individual grounds are misconceived; others cannot, even if upheld, result in the appeal being allowed. Rather, the alleged error and critical issue for determination is identified in that part of the appellant's written submissions that restates grounds 1 - 13 as is reproduced at [95] above.
3. It is, however, necessary to examine how the appellant developed its measure of damage both in its evidence and in legal submissions.

The appellant's measure of damage - the expert evidence

1. We have mentioned that the primary judge summarised the substance of the expert evidence. However, her Honour considered the expert evidence was of no practical utility. That was due to the view the primary judge took as to the correct measure of the appellant's loss. On appeal the appellant contended for an order quantifying its loss based on calculations provided by Mr Honey. Also, the appellant's legal argument on appeal was advanced conformably with Mr Honey's analysis. Accordingly, it is useful to describe the substance of the expert evidence, particularly that of Mr Honey.
2. Mr Honey was instructed to express his opinion on the value of the loss of opportunity to acquire Rexwells, including: (1) the net profit likely to be generated by the business operated by Rexwells; and (2) the likely net present value of that profit factoring in the purchase price and financing costs.[151]
3. Relevantly, while Mr Honey considered a number of scenarios, the most pertinent of Mr Honey's scenarios involved assumptions whereby:
   1. Mr Honey assumed a 5% annual growth in Rexwells' net profits.[152]
   2. Mr Honey assumed a sale of the Rexwells' business after 10 years at a price based on the implied earning multiple that applied to the appellant's purchase of the Rexwells' share.[153]
4. Mr Honey reasoned that measurement of the appellant's loss required determination of the sum to put the appellant in the 'proximate' financial position in which it would have been had the SPA completed. In that event the appellant would have held the sole issued share in Rexwells and would have been entitled to all distributable profits earned by Rexwells. Mr Honey concluded that, in the circumstances, the value to the appellant of the opportunity lost was 'the net present value of future dividend entitlements after allowing for the purchase price of the shares and any financing cash inflows and outflows associated with the purchase of the shares'.[154] Accordingly, in performing his calculation Mr Honey assumed that Rexwells' annual net profit after tax was distributed each year to the appellant.[155]
5. Mr Honey then proceeded to assess the various components to perform that net present value calculation. This involved assessing (and in one case assuming): (1) future dividend distributions - Mr Honey equated these to his assessment of Rexwells' likely future net profits after tax having regard to past profits and various adjustments; (2) the financing of the purchase price and its repayment; (3) a 'residual value' for the appellant's investment in Rexwells after 10 years; and (4) a discount rate to be applied to the notional inflows and outflows.[156]
6. The integer largely assumed, rather than assessed, was the residual value of the Rexwells' share after 10 years. In this respect Mr Honey stated:

For practical purposes, I assume that [the appellant] holds its investment in Rexwells for a period of ten years at which time the investment will be sold at a price using the same implied earnings multiple that applied to [the appellant's] purchase of Rexwells. This is a convenience recognising that the discount applying after ten years in the net present value calculation results in variations in this assumption not being material for the purpose of this report.[157] (emphasis added)

1. The expert evidence has different calculations of the net present value of the Rexwells' share at the time of its notional sale after 10 years. The amount sought in the appellant's written submissions on appeal is $1.181 million.[158] That is consistent with the figure in the appellant's further and better particulars of damage.[159]
2. Until now we have refrained from discussing Mr Hockley's evidence. Mr Hockley's instructions were more limited than those of Mr Honey. In substance, Mr Hockley was instructed to opine on the appropriate methodology to determine Rexwells' likely net profits after tax for the 10 years from 1 February 2019 and, thereafter, to provide a calculation of that amount. Hence Mr Hockley did not consider the residual value of the Rexwells' shares.
3. It is not necessary at this point to address all of the differences between the two experts. As to an 'outset' level of financial performance (ie before adjustments) Mr Honey arrived at an annual net profit figure before tax of $1.835 million whereas Mr Hockley calculated an amount of $1.836 million.[160] While that difference is inconsequential the primary judge preferred Mr Hockley's figure.[161] There is no challenge to that finding on appeal. Also, while the experts had different preferred discount rates, following the expert conclave they agreed a discount rate of 20.5%.[162] The primary judge accepted the 20.5% integer was an appropriate discount rate.[163] The main difference of opinion between Mr Honey and Mr Hockley concerned whether there should be an adjustment to allow for additional expenses of a managerial replacement for the third respondent.[164] The primary judge's resolution of this dispute is the subject of cross-appeal ground 3.
4. It should be apparent from the foregoing that the appellant's measure of damage was firmly grounded in Mr Honey's methodology and calculations (see [92.2] above).

The appellant's measure of damage - the parties' submissions

1. In support of the restated appeal grounds 1 - 13 the appellant submitted that:
   1. The substance of what it was purchasing under the SPA was the benefit of the revenue stream to be derived from holding the share in Rexwells.
   2. It had suffered a loss so far as it would not receive the benefit of the revenue stream.
   3. The loss of the benefit of the revenue stream was plainly within the contemplation of the parties in terms of the first limb of Hadley v Baxendale.[165]
2. Counsel for the appellant emphasised the primary judge's finding that the Rexwells' share was not a fungible asset and it was not possible to purchase an alternate share on market. This, in counsel's submission, meant it was a unique situation. Counsel for the appellant acknowledged that the normal measure of damage for non-delivery on the sale of shares was the market price of the shares at the contractual time for delivery less the contract price. Counsel said this was consistent with the appellant's position. If the share had been a listed security on the Australian Securities Exchange the appellant could have bought a like share on market and thereby replaced the lost revenue stream on a like-for-like basis. The only possible loss was any capital loss to the extent that the market price for the replacement share was more than the purchase price under the contract. But that was not possible in the present case. The benefit of the revenue stream from the Rexwells' share had been lost and could not be replaced.
3. The appellant submitted that the primary judge erred by treating the normal measure as a rigid rule of universal application when the unusual facts of this case called for a more flexible approach to the quantification of damages. In this case the loss could be quantified by discounting the revenue stream to obtain a net present value as has been done in the expert evidence. This, as we have summarised in describing the substance of grounds 1 - 13 at [92] - [93] and [95] above, was said to give the 'true' value of the Rexwells' share for the purpose of determining the difference between the purchase price and the 'true' value of the share.
4. The respondents essentially supported the reasoning of the primary judge. They submitted that:
   1. It is critical to identify the subject matter of the SPA so as to determine the benefit the appellant would have obtained had the contract been performed.
   2. The SPA was a contract for the sale of a share.
   3. The value of a share and the price paid for a share includes a component for future prospectivity or profitability. So too the likely rate of return, and the degree to which risk affected the likely rate of return, is built into the value of a share and its price.
   4. The loss suffered by a purchaser on non-completion of a contract to purchase the sole share in a private company cannot be quantified by simply discounting and arriving at a net present value of the company's likely net profits after tax over an arbitrary 10-year period and adding to that a further amount for the residual value of the share.
   5. The appellant's measure of damage for quantification of its loss was flawed because it treated the SPA as a contract for the purchase of an income stream that was certain in timing and amount.
   6. The appellant had to prove the 'true' or 'real' value of the Rexwells' share as at the date of the breach but failed to adduce any evidence that might allow the court to make such a determination.
5. The respondents contended that, where the subject matter of a contract for sale was the sole share in a private company, loss was only recoverable by an innocent purchaser in the event of repudiation by the seller measured by the difference, if any, between the purchase price and the 'true' or 'real' value of the share (there only being a loss if the 'true' or 'real' value of the share was more than the purchase price). If, as in the present case, the purchaser failed to prove its loss in that way, the purchaser could recover no more than nominal damages.
6. In so stating the respondents essentially echoed the conclusion of the primary judge (although, as can be seen at [79] - [80] above, her Honour expressed the conclusion in terms of necessity to prove the 'market' value of the share rather than its 'true' or real' value).
7. Counsel for the respondents emphasised four matters. First, the SPA was not a contract to provide services; nor was it an annuity. It was a contract to purchase a share. Second, as a corollary of the first matter, the benefit the appellant had contracted for was not a future revenue stream, whether viewed as a dividend stream or something else. It was the Rexwells' share - something that had an ascertainable value. Third, the respondents had not provided any relevant warranty as to Rexwells' future performance or profitability. Fourth, the appellant had not paid anything towards the purchase price under the SPA. The appellant had all of its resources and skills intact, uncommitted and available for use.
8. The respondents also criticised Mr Honey's reports as being no more than a series of arithmetic calculations based on assumptions and instructions, rather than a valuation per se.
9. Each party referred to many authorities said to support its submissions. Both parties relied on Wenham v Ella. It is convenient to deal with Wenham v Ella separately. We will do so after making some initial observations and then identifying the general compensatory principle that applies to an award of damages for breach of contract.

The appellant's measure of damage - an initial observation

1. It is useful to reflect on the essential facts and the claim propounded by the appellant. The appellant entered into an agreement to purchase a share in a company. Ignoring the accounts receivable payments (which as a matter of commercial reality were to be funded by Rexwells) the purchase price was some $3.489 million (an amount calculated by deducting the Final Payment from the Initial Payment). No amount was ever paid towards the purchase price. The appellant never received the share it had contracted to purchase. Nor, consistently with not becoming the owner of the share, did the appellant ever receive any distributions or other receipts as owner of the share.
2. While, no doubt, the appellant incurred wasted expenditure, there is no claim made for any loss of that kind.
3. The appellant instead pursues recovery based on the future revenue stream the appellant contends it would have received had the agreement been performed. At trial the damages the appellant sought on this basis were quantified at between $5.267 million and $6.049 million.[166] Now, on appeal, the amount sought is some $3.700 million.[167]
4. A substantial component of the difference between the amount sought at trial and the amount sought on appeal is explained by the appellant no longer pursuing an amount described as the 'financial advantage from long term bank financing'. The claim at trial included $860,000 in this respect. The appellant's further and better particulars of loss and damage reveal that this amount was the calculated net present value of a contemplated financing transaction whereby the appellant was to borrow $4 million to fund the purchase of the share. The appellant contended that this resulted in a net benefit of $860,000 being an immediate positive cash inflow in respect of $4 million in loan proceeds which outweighed the present value of future negative cash outflows in the form of principal repayments, interest and other financing costs.[168]
5. Accordingly, the appellant's chosen method for quantification of its damages for the loss suffered was said to result in an additional loss of $860,000 because the appellant did not proceed to borrow $4 million to fund the purchase of the share. The suggestion that a loss of $860,000 can be seen to result from not proceeding with a loan for $4 million is at best difficult to comprehend. The circumstance that this claim was thought to be consistent with the appellant's damages case is indicative of the caution that ought to be exercised in evaluating the appellant's chosen method for quantification of its damages.
6. Two other aspects of the appellant's chosen method for quantification of the loss suffered should be recognised.
7. The appellant's chosen method for quantification altered the allocation of risk attributable to the notional purchase. Accepting, of course, that in any net present value calculation the discount rate adjusts for risk, the respondents nevertheless become responsible for the discounted net present value of the projected future net profits after tax of the Rexwells' business as well as the projected residual value of the Rexwells' share after 10 years. That is so despite the appellant not making any payment on account of the purchase price - thereby meaning that it remained able to deploy its resources in some other investment.
8. The appellant's chosen method of quantification would also, if correct, result in damages that either well exceeded the purchase price[169] or amounted to a multiple of 1.5 - 1.7 more than the purchase price.[170] Obviously, even sophisticated businesspersons make bad bargains from time to time. Accordingly, the mere disparity between the damages as quantified and the amount of the purchase price is not of itself a reason to reject the appellant's quantification method. It is, however, again something that highlights the caution that ought to be exercised in evaluating the appellant's chosen method.
9. That said, it is implicit in the primary judge's provisional findings that her Honour considered that the appellant's chosen method of quantification exaggerated the appellant's claim. The primary judge considered that the damages claimed were not proven in material respects. It might simply be that the appellant's methodology is sound but that the figures as calculated do not bear scrutiny on an examination of the evidence.

The appellant's measure of damage - the general compensatory principle

1. At all times a claimant bears the legal burden of establishing the existence and amount of the loss or damage it suffered by reason of a breach of contract.[171]
2. It is necessary to distinguish between a 'loss' - meaning the phenomenon or the subject of compensation in respect of which the court may make an award of damages - and the assessment or quantification of the damages to be awarded for the loss.[172] The former is concerned with the harm and other foreseeable consequences suffered by a claimant by reason of the breach; the latter is concerned with the remedy that might be awarded by the court.[173] As Gageler CJ has recently explained, the loss in respect of which a claimant is entitled to be compensated by an award of damages does not lie in mere non-performance of a contract. Rather, the loss lies in the 'legally cognisable' respects in which the position of the claimant has been made worse by non-performance of the contract in comparison to the position which the claimant would have been in had the contract been performed.[174]
3. Where damages are awarded for breach of contract the vast majority of awards are compensatory in nature. One notable exception is an award of nominal damages. But, so far as contractual damages are concerned with expectation loss, the basic measure of damage was set out long ago by Baron Parke in Robinson v Harman:

[W]here a party sustains loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.[175]

1. So stated, the innocent party's loss is to be measured by the difference between the position the innocent party is in and the position the innocent party would have been in had the wrongdoer performed its contractual obligations. The damages to be paid are ordinarily assessed at the date of the breach of contract. In a contract for the sale and purchase of property, where the seller fails to deliver as promised, this gives 'the purchaser the economic value of the performance of the contract at the time that performance was promised ... the measure of damages captur[ing] for the purchaser the benefit of the bargain and so compensat[ing] the purchaser for the loss of that benefit'.[176]
2. The corollary of the compensatory principle in Robinson v Harman is that a claimant is not to be placed in a better position, by an award of damages, than it would have been in had the contract been performed.[177] A claimant cannot recover more than it has lost.[178]
3. The High Court of Australia has confirmed the general compensatory principle as stated in Robinson v Harman on many occasions.[179] It has been referred to as the 'ruling principle'.[180] On occasions the general compensatory principle has been slightly restated.[181] It has never been suggested that such restatement affects the underlying general compensatory principle as stated in Robinson v Harman. But the principle in Robinson v Harman 'does not in one sentence encapsulate the totality of the necessary analysis'.[182] It is, for example, critical to identify what 'loss' is being compensated. In that respect, in Clark v Macourt Hayne J explained that damages for breach of contract must be measured by reference to 'the loss of the value of what the promisee would have received if the promise had been performed'[183] (original emphasis). The answer to such an inquiry depends upon determining the content of the unperformed promise.[184]
4. In certain categories of case the ruling principle in Robinson v Harman is said to give rise to a 'normal' or 'usual' measure of damage. For example, the learned author of McGregor on Damages (22nd Ed) says of a seller's breach of contract by non-delivery on a sale of shares that '[t]he normal measure of damages is the market price of the shares at the contractual time for delivery less the contract price'.[185] This represents the amount required to put the buyer in the position it would have been in had the contract been carried out since to do so the buyer must purchase equivalent shares on the market.[186] Similarly, the normal measure of damage for a seller's non-delivery of goods sold is the market price of the goods at the contractual time for delivery less the contract price;[187] and the normal measure of damage where a seller fails to complete a contract for the sale of land is the market value of the property at the contractual time for completion less the contract price.[188]
5. Accordingly, contrary to ground 3, the primary judge was not in error in concluding that there is a normal measure of damage that applies to a seller's breach of contract for the sale of shares by non-delivery.
6. Such a 'normal' or 'usual' measure is ordinarily appropriate in the standard category of case to which it is said to apply. But that will not always be the position. The 'normal' or 'usual' measure is designed to apply the ruling principle to a standard category of case. Not every factual scenario will fit neatly within a standard category of case. Nor will every commercial contract fit neatly within a standard category of case.
7. The real question raised by the appeal is whether the normal measure of damage was appropriate to the present case and the SPA. The primary judge adopted the 'usual' measure[189] and determined that the appellant failed to prove its case having not adduced any evidence of the market value of the Rexwells' share at the time of termination.[190] In the circumstances, not having proved the market value of the share, the primary judge found that the appellant was only entitled to nominal damages.[191] On appeal, arguing that the 'normal' measure of damage had been displaced, the appellant presses for the alternate measures of damage summarised at [92] - [95] above (see also grounds 1, 3, 4, 9, 12.2, 13.2 - 13.3).
8. In this regard, it is accepted that the practical operation of the ruling principle may vary depending on the commercial context; and the principle is to be applied with a view to assuring to the innocent party the monetary value of faithful performance by the counterparty of the bargain.[192] Likewise, in Clark v Macourt Gageler J (as his Honour was then) stated:

[S]tatements of subsidiary principle framed in the context of working out the ruling principle in standard categories of case must be approached with circumspection. There is, as has often been pointed out, 'a danger in elevating into general principles what are in truth mere applications to particular facts or situations of the overriding general principle'. The measure appropriate in a particular case 'cannot be divorced from the [claimant's] personal position and obligations, both legal and moral, or from what the [claimant] ought reasonably to do by way of mitigation', and a rigid distinction cannot always be drawn between measure and mitigation.[193] (citations omitted)

1. Gageler J dissented in the result in Clark v Macourt. There is, however, no reason to doubt this recitation of principle. It is well supported by the various authorities that Gageler J referred to and is consistent with observations of Walsh J in Wenham v Ella (see [271] below).
2. One of the limitations of the 'normal' or 'usual' measures of damage is the assumption that there is an available market value. In the scenarios covered by the standard categories of case to which a 'normal' or 'usual' measure of damage applies 'market value is taken because it is presumed to be the true value of [the property] to the purchaser'[194] (emphasis added). Accordingly on a sale of goods:

In the case of non-delivery, where the purchaser does not get the goods he purchased, it is assumed that these would be worth to him, if he had them, what they would fetch in the open market; and that, if he wanted to get others in their stead, he could obtain them in that market at that price.[195]

1. Market value must be differentiated from the concept of 'true' or 'real' value. In HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd,[196] when explaining why the rule in Potts v Miller[197] is not universal or inflexible or rigid, the High Court stated:

One key qualification of the rule which prevents it from being inflexible is that the test depends not on the difference between price and 'market value', but price and 'real value' or 'fair value' or 'fair or real value' or 'intrinsic' value or 'true value' or 'actual value' or what the asset was 'truly worth' or 'really worth' or 'what would have been a fair price to be paid ... in the circumstances ... at the time of the purchase'. This distinction is sometimes difficult to draw, but it is old and fundamental.[198] (citations omitted)

1. HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd involved a claim for damages pursuant to the then applicable s 82 of the Trade Practices Act 1974 (Cth). The High Court observed that there were a number of reasons why the law did not limit recovery by reference to market value. One was that there may not be a market.[199] Although that observation was made in the context of a claim for statutory misleading or deceptive conduct it is equally applicable to the present context.
2. Insofar as the ruling principle applies to the measure of damage on breach by a seller of shares of its contractual promise to transfer the shares, the principle ought to be understood as being concerned with such a 'true' or 'real' value of the shares. The 'normal' measure of damage we have referred to is framed in terms of market value (such a market value being ascertainable by a market price) because ordinarily it may be presumed that the market value is the 'true' or 'real' value.
3. The 'true' or 'real' value of an income producing asset will include a component for future prospectivity or profitability as the 'true' or 'real' value of the asset will reflect the income likely to be produced by the asset in the future. As Dawson J explained in Gould v Vaggelas:

The difference between the price paid and the actual value at the time of purchase should reflect the future profitability or unprofitability of the business because the actual value of the business at the time of purchase must depend upon its potential as well as its present returns ... If, as prima facie it is, the subsequent profitability or unprofitability of the business is to be taken into account in the calculation of its actual value at the time of purchase, then care must be exercised in the calculation of consequential losses to ensure that the same ground is not covered twice.[200]

1. It has been said that the right to damages that arises on termination for repudiatory breach is slightly different from the right that arises on breach without termination.[201] The difference is only as to the subject matter of the right to damages. As is explained in Photo Production Ltd v Securicor Transport Ltd,[202] the right to damages in this instance is for the lost bargain and is not merely to compensate for the breach that has occurred. Where damages are awarded on termination for repudiatory breach:

[T]here is substituted by implication of law for the primary obligations of the party in default which remain unperformed a secondary obligation to pay monetary compensation to the other party for the loss sustained by him in consequence of their non-performance in the future.[203]

1. The goal remains the same: the claimant is to be put in the same position as if the contract had been performed.[204]

1. Both parties referred extensively to Wenham v Ella at the appeal hearing. The primary judge also quoted from the case[205] and relied on it in rejecting the appellant's measure of damage[206] (saying among other things that the appellant's expert evidence might have been relevant if, contrary to what occurred, the purchase price had been paid and the benefit not received).[207] In the circumstances it is appropriate to say something about the decision. Properly understood, however, Wenham v Ella is a very different case from the present case and is of little assistance in the disposition of the appeal.
2. Wenham v Ella concerned a contract pursuant to which, among other things, the appellant/vendor was to transfer to the respondent/purchaser a partial interest in certain income producing land. The purchaser completed its obligations under the contract. Among other things it satisfied the purchase consideration under the contract. However, the vendor failed to transfer the purchased interest to the purchaser. The purchaser sought specific performance. By trial the interest in land the subject of the contract had been sold and transferred to a third-party making it impossible to grant specific performance. The trial judge awarded damages of $26,794.78. This was based on two components: (1) $21,400 for the capital value of the interest in the land which the purchaser was entitled to have transferred to him (this was a net figure after allowing for a set-off of $5,000 payable by the purchaser under a separate loan agreement); and (2) $5,394.78 on account of profits that would have been received by the purchaser had the interest in the land been transferred in accordance with the contract.
3. Two points should be made about these facts:
   1. The purchaser had provided the vendor with the 'full consideration' under the contract for the purchase of the interest in the land. (This alone distinguishes Wenham v Ella from the present case.)
   2. Wenham v Ella concerned a contractual subject matter which, on failure of delivery, could not be replaced by a purchase in the market.
4. On appeal in the High Court the vendor/appellant argued that the measure of damage was confined to the value of the interest in the land - it was said there should not be a double recovery for the lost profits as well as the capital loss. The appeal was dismissed. The purchaser/respondent was held to be entitled to recover, in addition to the value of the interest in the land at the date of the breach, damages for loss of income from that interest.[208]
5. Barwick CJ referred to the ruling principle.[209] In this court, after referring to that passage from Barwick CJ's reasons, counsel for the respondents stressed that the principle was to put the innocent party into the 'same position' as if the contract had been performed. It was not to put the innocent party into the same financial position. Counsel for the respondents said that if the appellant was to be put in the same position in the present case it would be enough if the appellant was put in the same position, by an award of damages, as if the appellant had received a share of a certain value for which the appellant had paid a certain amount. This, it was said, supported the measure of damage adopted by the primary judge.
6. There is support in the authorities for the distinction counsel for the respondents drew between: (1) being placed in the 'same situation', with respect to damages, as if the contract had been performed; and (2) being placed 'in as good a financial position' as if the contract had been performed.[210] Sometimes the two coincide.[211] But that is not always the case, particularly where the contract is not one for the sale of a marketable commodity.[212] The ruling principle requires coherence to the former rather than the latter.
7. Returning to Wenham v Ella, in holding that the purchaser/respondent could recover both the value of the interest in the land of which it had been deprived and the lost profits, various members of the High Court relied on the circumstances of the case that took it outside the standard category of case. Gibbs J (as his Honour was then) said the situation would have been different if the purchase consideration had not already fully passed to the vendor.[213] Menzies J stated:

Rules which operate satisfactorily in cases where purchasers have not paid money, cannot be applied automatically to cases where purchasers have paid money for what has not been delivered to them.[214]

1. Walsh J observed, in effect, that in 'many cases' damages should be ascertained in accordance with the normal measure and there would be no justification for adding a further sum representing the return the purchaser might have obtained from the ownership of the asset. There could, in his Honour's view, in many situations be no warrant for allowing 'damages for delay' as well as 'damages for the failure to perform' or, in the absence of special circumstances, both a capital loss suffered by not obtaining an asset and the profits the disappointed purchaser would have derived from the asset.[215] Walsh J then stated:

But, in my opinion, there could be circumstances which would require that the purchaser be held entitled to some loss of profits in addition to an amount measured by the difference between the contract price and the value ... at the date of breach, if those circumstances were capable of being regarded as within the contemplation of the parties.

In my opinion the error that is contained in the argument for the appellant consists in treating rules which constitute useful guidance in the ascertainment of damages as rigid rules of universal application, instead of treating them as prima facie rules which may be displaced or modified whenever it is necessary to do so in order to achieve a result which provides reasonable compensation for a breach of contract without imposing a liability upon the other party exceeding that which he could fairly be regarded as having contemplated and been willing to accept.[216]

1. Counsel for the appellant relied on the first paragraph of this passage, emphasising that the Rexwells' business and share was marketed and sold on the basis of its revenue stream.
2. We accept that Wenham v Ella is a case where a purchaser recovered damages on a seller's failure to complete a contract for the sale of property based, in part, on a measure grounded in loss of profit. The purchaser recovered that loss in addition to the capital loss on non-performance of the promise to transfer the partial interest in land. Accordingly, it should not be thought that a disappointed purchaser on non-completion of a contract of sale is always precluded from recovering damages based on a measure of damage that includes loss of profit. But one does not need to look to Wenham v Ella to establish that this is the case. There is at least one other example of damages being awarded for loss of the profits that a buyer would have made where a seller breached by failing to complete a contract for the sale of a business.[217]
3. Wenham v Ella confirms that the 'normal' measure of damage may be displaced or modified. That, however, is consistent with authority. The 'normal' or 'usual' measures are no more than prima facie rules which provide 'useful guidance' rather than being 'rigid rules of universal application'. Nothing in Wenham v Ella affects the accepted position that the ultimate touchstone is the ruling principle in Robinson v Harman. Nor, in our opinion, does the outcome in Wenham v Ella have implications for the proper disposition of the present appeal. Wenham v Ella is a very different case from the present appeal. In Wenham v Ella the purchaser provided the full purchase consideration. That is not the present case. At all times the appellant continued to be in a position to deploy the resources that it would otherwise have had to commit to the completion of the purchase of the Rexwells' share.

The appellant's measure of damage - consideration and determination

1. A number of issues raised by the appellant in relation to restated grounds 1 - 13 serve only to deflect or distract from consideration of the real question raised by the appeal (see [254] above). It is appropriate to deal with these matters at the outset. First is whether, in terms of ground 2, the primary judge erred in concluding that the SPA was in substance a share sale agreement.
2. The primary judge was undoubtedly correct to characterise the SPA as a share sale agreement. That characterisation was consistent with the transaction contemplated by the SPA: the first respondent was selling the sole share in Rexwells; the appellant was purchasing the share in Rexwells. Viewed at an appropriate level of generality the SPA was an agreement for the sale of the share and the benefit that the appellant stood to obtain by the performance of the SPA was ownership of that share.
3. The appellant seeks to look through ownership of the share to identify the expected consequences thereof as the benefits it bargained for under the SPA. That approach is erroneous. There was no contractual promise as to those expected consequences. The appellant did not contract to purchase a revenue stream; it contracted to purchase a share. The relevant contractual promise was the first respondent's agreement to transfer the sole share in Rexwells to the appellant in consideration of payment of the purchase price.
4. However, as will be seen, this does not mean that the only permissible measure of the appellant's damage is the amount, if any, by which the market value of the Rexwells' share exceeded the purchase price under the SPA.
5. The reasons for rejection of ground 2 have a wider importance to the disposition of restated grounds 1 - 13. There is a significance that attaches to correctly identifying the true object of the parties' contractual bargain. The measure of damage must compensate the innocent party for its loss of the benefit of the bargain. Accordingly, as Hayne J put it in Clark v Macourt, there must be identification of 'the content of the unperformed promise'.[218] Here the relevant content of the unperformed promise is transfer of the ownership of the first respondent's share in Rexwells; it is not, contrary to the appellant's primary submission, the benefit of a revenue stream to be derived from ownership of the share. The appellant did not contract to receive a revenue stream. The appellant contracted for the transfer of the share in Rexwells.
6. The determination of the content of the unperformed promise is dispositive of much of the appellant's argument in support of restated grounds 1 - 13. The appropriate measure of damage could only be that described at [92.2] above (ie the discounted net present value of Rexwells' future net profits after tax, plus the residual value of the share, less expenses including the purchase price) if the content of the first respondent's unperformed promise was characterised as a promise to transfer the future revenue stream to be derived from the Rexwells' share. Once it is accepted, as it must be, that the content of the unperformed promise was simply to transfer the Rexwells' share, the only viable option of the appellant's two suggested measures of damage is that described at [92.1] above - namely, the difference between the purchase price of the Rexwells' share and the 'true' value of the share. Grounds 1.2, 3.3, 4.2, 9.2 and 13.3 must be dismissed (as must grounds 8, 9.4, 9.5, 12.2 and 13.4 so far as they rely on this measure of damage).
7. This identification of the content of the unperformed promise also answers ground 7. The primary judge did not err by failing to draw an analogy between the present case and authorities relating to contracts for the provision of services or the sale of a business as a going concern. The appellant contracted for the transfer of the share.
8. Similarly, this conclusion as to the content of the unperformed promise provides an answer to ground 8. Ground 8 challenges the primary judge's finding that there are no cases on which the appellant relied which supported its contention that the basis on which it sought damages is the appropriate measure. The appellant attacked the generality of this statement. It pointed to the broadness of the ruling principle and the accepted circumstance that the 'normal' or 'usual' measure of damage may be displaced. But this is not what the primary judge was addressing in the impugned passage. Her Honour was simply saying that none of the cases cited by the appellant involved non-delivery on a sale of shares where the purchaser had recovered based on a measure of damage as contended for by the appellant. That was undoubtedly correct. There are no such cases because of the disconnect between the posited measure of damage and the content of the unperformed promise.
9. Second, the issue raised by restated grounds of appeal 1 - 13 does not involve questions of remoteness of damage and the principles in Hadley v Baxendale. Nor, contrary to ground 1, did the primary judge find that the first limb of the rule in Hadley v Baxendale limited the measure of damage that the appellant might recover. The appellant failed because the primary judge rejected the appellant's case as to how damages should be calculated - the primary judge found that the damages were to be quantified based on the extent to which the market value of the Rexwells' share exceeded its purchase price under the SPA at the time of termination.[219] The appellant lost because the primary judge rejected its measure of damage rather than losing because the damage claimed was too remote in a Hadley v Baxendale sense.
10. Third, it matters not that there may be an alternative measure of damage whereby the appellant might have proved a loss. The primary judge posited that the appellant might have had a loss of opportunity claim had the appellant deployed its funds in an alternative investment. Alternatively, according to the primary judge, the appellant might have sought reliance-based damages. That might be so; but it is not necessary to determine whether some other loss might have been claimed by employing some other measure of damage. The possibility that some other measure of damage for some other kind of loss may have been pursued does not mean that the measure contended for by the appellant in respect of the loss it claimed for is unavailable as a matter of law. Nor did the primary judge suggest that this was the case. For that reason ground 6 goes nowhere and need not be discussed further. Grounds 9.3 and 9.5 fail for the same reason.
11. Fourth, contrary to what the appellant contends by grounds 4 and 5, the primary judge did not find that the appellant was seeking damages for two distinct losses, namely: (1) the appellant's loss in not receiving the Rexwells' share; and (2) the lost profits the appellant would have earned from operating Rexwells. The appellant has misconstrued the primary judge's reasons. The primary judge found that the appellant was only entitled to its loss in respect of the non-transfer of the Rexwells' share. For the reasons given at [276] - [281] above the primary judge was correct to so hold. Grounds 4 and 5 are misconceived.
12. We turn then to what we have described as the real question raised by the appeal - namely, whether the primary judge erred in adopting the 'normal' or 'usual' measure of damage and concluding that the appellant was only entitled to nominal damages in circumstances where it did not prove the market value of the Rexwells' share.
13. In our respectful view the primary judge was in error in adopting the 'normal' or 'usual' measure of damage for non-delivery of shares in a contract for the sale of shares. The primary judge recognised, correctly, that the Rexwells' share was not a fungible asset.[220] Her Honour also stated that it was not possible to purchase an alternative share on market.[221] There was, in the circumstances, no available market. Nor was there a market price by which market value might be ascertained. The 'normal' or 'usual' measure of damage presupposes an available market and market price whereby market value may be ascertained. The use of the 'normal' or 'usual' measure of damage as a surrogate for the ruling principle was inappropriate in the circumstances of this case where there was no available market value to serve as proxy for the 'true' or 'real' value of the Rexwells' share. Grounds 9, 11, 12.1, 13 and 13.1 are established. So too is ground 3 to the extent that this ground alleges that the primary judge erred in holding that the normal measure of damage was appropriate in the circumstances of the case.
14. It then becomes necessary to determine the appropriate measure of damage.
15. We have already rejected the appellant's measure based on the discounted net present value of: (a) future net profits after tax of Rexwells over a term of 10 years; (b) plus the residual value of the Rexwells' share; (c) less expenses (including the purchase price). That suggested measure has its provenance in the appellant's contention that the substance of what it was purchasing under the SPA was the benefit of the revenue stream to be derived from holding the share in Rexwells. It is a measure that mistakes the content of the first respondent's unperformed promise under the SPA.
16. In determining the appropriate measure of damage it is necessary to go back to the ruling principle in Robinson v Harman. The appropriate measure of damage must, so far as money can do so, place the appellant in the same situation as if the SPA had been performed. The appellant should be put in the same position, so far as money can do so, as if the appellant had paid the purchase price under the SPA and received a transfer of the Rexwells' share at the time for completion under the SPA. This is achieved, in our opinion, by a measure of damage that awards to the appellant the amount, if any, by which the 'true' or 'real' value of the Rexwells' share exceeded the purchase price of the Rexwells' share under the SPA. Such a measure gives the appellant the economic value of the performance of the SPA at the time that performance was promised.
17. Accordingly, the appellant has in substance made out each of grounds 3.2 and 13.2.[222]
18. The favourable conclusions for the appellant to this point do not suffice to make out restated grounds 1 - 13. The primary judge erred in adopting the 'normal' or 'usual' measure of damage. Accordingly, the primary judge erred in concluding that the appellant was only entitled to nominal damages because it had not proved the market value of the Rexwells' share. We have accepted that one of the measures of damage advanced by the appellant on appeal is an appropriate measure of damage. That measure requires the court to determine the 'true' or 'real' value of the Rexwells' share at the time for completion under the SPA and compare that assessed value against the purchase price payable under the SPA. But, as has been seen, the expert evidence adduced by the appellant at trial was not directed in terms to the 'true' or 'real' value of the Rexwells' share. As the primary judge observed, neither of the experts purported to give an opinion valuing the Rexwells' share.[223]
19. Mr Honey was instructed to carry out a different exercise (see [218] above). He eventually opined on the net present value of identified cash flows including the purchase price, finance applicable to the purchase and the proceeds of an assumed disposal after 10 years. But in carrying out that task Mr Honey provided his assessment of the net present value of notional future dividends attributable to the Rexwells' share (see [220] above). Her Honour readily appreciated that the expert evidence adduced by the appellant went 'to the issue of what profits [the appellant] might have earned from th[224]urchase of Rexwells'.224
20. The appellant's grounds of appeal correctly recognise that it is not enough to succeed in the appeal that the court find that the appropriate measure of damage is the amount, if any, by which the 'true' or 'real' value of the Rexwells' share exceeds the purchase price of the Rexwells' share under the SPA. Rather, it remains necessary for the appellant to establish that the expert evidence at trial is sufficient to determine the appellant's damages based on that measure of damage. For example, ground 4.1 provides that the primary judge should have found that:

[T]he proper measure of the appellant's damages, based on its loss in not receiving the share in the second respondent [sic - meaning Rexwells], was the difference between the purchase price and the 'true' value of the share, calculated or assessed on the basis of the discounted net present value of the second respondent's [sic - meaning Rexwells'] future profits over a term of 10 years plus its residual value.

1. Grounds 9.1, 9.4, 12.2 and 13.4 similarly acknowledge the calculation issue and contend that the expert evidence at trial sufficed to discharge the appellant's onus to prove its damages on the basis of the measure of damage it advanced on appeal.
2. The calculation issue received minimal consideration in the parties' written and oral submissions. The appellant asserted that Mr Honey's evidence sufficed. The appellant said, without explication, that its evidence led at trial was a 'principled and sensible approximation' of the 'true' or 'real' value of the share.[225] By contrast the respondents characterised Mr Honey's evidence as no more than a series of arithmetic calculations.[226]
3. The limited written and oral submissions on the calculation issue resulted in the court inviting the parties to file supplementary submissions. The appellant filed supplementary submissions on 10 October 2024 and the respondents filed supplementary submissions on 25 October 2024.
4. The appellant relied on Messrs Honey's and Hockley's evidence as, in substance, comprising net present value calculations based on a discounted cashflow model. The respondents submitted that, at trial, the appellant did not adduce any evidence of the market value of the Rexwells' share. That may be accepted. It does not, however, answer whether the evidence as adduced at trial was sufficient to discharge the appellant's onus to prove the 'true' or 'real' value of the share. The respondents further submitted that the measure of damage advanced by the appellant at trial, and on appeal, was not propounded on the basis of the capital value of the Rexwells' share at the relevant date as compared to the price under the SPA. It may be accepted that this was not the measure of damage advanced by the appellant at trial. But on appeal the appellant advances a case based on the difference between the purchase price of the Rexwells' share and the 'true' or 'real' value of the share. Accordingly, contrary to the respondents' submission, it is not correct to say that the measure of damage advanced by the appellant on appeal was not propounded on the basis of the capital value of the Rexwells' share at the relevant date.
5. The respondents then submitted that the expert evidence adduced at trial was insufficient to discharge the appellant's burden of proof. The respondents contended that:
   1. Insofar as a discounted cashflow methodology involves the capitalised value of future cash flows, neither expert gave evidence of the profit likely, in fact, to be generated by the Rexwells' business. Rather the experts performed a future maintainable earnings calculation.
   2. In applying a net present value calculation to the future maintainable earnings calculation the experts inappropriately combined two disparate methods for calculating the present capital value of an income producing asset.
6. The respondents also asserted that the experts lacked expertise to predict the future profits of Rexwells. There was no such objection at trial. There was good reason why Mr Honey's and Mr Hockley's opinion evidence was adduced at trial without objection as to their expertise. Both experts had substantial specialised accounting expertise to give evidence as to the likely future profits which would have been earned by Rexwells. The suggestion that the experts lacked expertise to opine on the likely future profits of the Rexwells' business is without merit and must be rejected.
7. The remainder of the respondents' supplementary submissions are, with respect, impossible to reconcile with the position that the respondents took at trial. In the agreed expert evidence schedule the respondents said that the nature of the proposed expert evidence would be a forensic accounting exercise to determine:

[T]he quantum of the net profit, after tax, likely to have been generated by the business operated by Rexwells, from and including 1 February 2019, for a 10 year period.[227]

1. Mr Hockley was instructed on behalf of the respondents to opine on the likely net present value of Rexwells' likely net profit after tax for the 10 years post-1 February 2019 conformably with the respondents' then understanding of the nature of Mr Hockley's intended evidence and his expertise.[228] Unsurprisingly Mr Hockley gave expert evidence in answer to the questions asked of him - he opined on the net profit, after tax, likely to be generated by Rexwells' business over the 10 years post-1 February 2019[229] and the likely net present value of that likely profit after tax.[230]
2. So too Mr Honey's evidence was more than a series of arithmetic calculations. Mr Honey performed a sequence of net present value calculations. He did so having reasoned that the appellant's 'opportunity lost' was the net present value of future dividend entitlements (having also made allowance for the purchase price and various other matters). For present purposes we will ignore those other matters: on appeal there is no reliance on the financing component of Mr Honey's calculations; the residual value of the Rexwells' share is considered separately under the rubric of ground 15. The relevant assessment for present purposes is Mr Honey's calculation of the 'net present value of [notional] future dividend entitlements'.[231]
3. Two critical integers formed the basis for Mr Honey's assessment of the net present value of the notional future dividend entitlements. First was Mr Honey's assessment of Rexwells' likely future net profits after tax. This figure formed the basis for the future dividend entitlements insofar as Mr Honey assumed that post-acquisition the annual net profit after tax was distributed in full each year to the appellant as the sole shareholder of Rexwells. Second was the discount rate to be applied to the various inflows and outflows.
4. It should be recalled that there was broad agreement between Mr Honey and Mr Hockley on these two critical integers.
5. Before adjustments there was only a difference of $1,000 per annum on the assessment of Rexwells' likely future profit before tax (the primary judge preferring Mr Hockley's $1.836 million per annum over Mr Honey's $1.835 million). The main point of departure concerned whether there should be an additional allowance for a managerial replacement for Mr Steele. That contest has been raised again on appeal and is considered and determined below in the context of cross-appeal ground 3. The discount rate was uncontentious at trial. The experts halved their 1% difference on the appropriate discount rate to arrive at a discount rate of 20.5% which was accepted by the primary judge.
6. In these circumstances, the expert evidence adduced at trial allows the court to calculate the net present value of future dividends expected to be derived from the Rexwells' share (assuming that Rexwells' annual net profit after tax is distributed in full each year to the appellant as the sole shareholder of Rexwells). In summary, adopting the primary judge's provisional findings as either upheld or substituted in the context of appeal grounds 14 - 17 and cross-appeal ground 3, the net present value calculations are to the following effect:[232]

1. The discounting of future cash flows to arrive at the value of an income producing asset is an established valuation methodology. For example, as long ago as 1972, in Wenham v Ella, Stephen J observed that as a matter of theory one constituent of the market value of an income producing asset reflects the discounted value of the future income which it will bring in.[239] Since that time the use of a discounted cashflow valuation methodology has become ubiquitous. In this court Steytler P (McLure JA and Murray AJA agreeing) has referred to a discounted cashflow analysis as a standard basis for valuing an income producing asset.[240] Steytler P explained that a discounted cashflow analysis involves estimating future cashflows and then discounting them (having regard to the fact that the income will be earned over a long period) in order to arrive at the present capital value of the future income stream.[241]
2. The accepted understanding that the current value of an income producing asset is equal to the present value of its expected future cashflows discounted for time, risks and uncertainties is confirmed in standard texts on the valuation of shares[242] and other Australian[243] and overseas authorities.[244] It was uncontroversial for the purposes of the appeal. In their supplementary submissions the respondents observed that the standard way of determining the capital value of an income producing asset is to estimate its future cash flows and discount them to arrive at their net present value.[245]
3. There was no direct evidence as to the 'true' or 'real' value of the Rexwells' share at the time for completion under the SPA. But, when it comes to assessing damages, the court must do the best it can even where there is no direct evidence. The estimation of market value may be an inexact process; so too may be an assessment of damages based on an estimate of 'true' value.[246] At trial there was expert evidence - about which there was very little dispute between the two experts - which readily permits the court to determine the net present value of the notional future dividend entitlements attributable to the sole share in Rexwells. That figure, according to long-standing and accepted economic theory, provides a present capital value. It may, in our opinion, be accepted as the 'true' or 'real' value of the Rexwells' share as proven by the expert evidence adduced at trial.
4. In summary:
   1. The likely future cashflows attributable to ownership of the Rexwells' share are determinable by the calculations and evidence adduced through Mr Honey and Mr Hockley - the expert evidence having addressed the notional future dividend entitlements attributable to the sole share in Rexwells assuming that Rexwells' annual net profit after tax was distributed in full to its sole shareholder.
   2. The 'true' or 'real' value of the Rexwells' share is ascertainable by application of the accepted principle that underlies the discounted cashflow methodology of valuation that the value of an asset today is equal to the present value of the future cashflows expected to be provided by the asset over its life - the experts having in this case agreed the relevant discount rate and the primary judge having accepted the discount rate as so agreed.
5. There are some possible objections to this analysis. First, Mr Hockley was careful in his expert report to point out the timing differences that may arise between recognition of net profits and net cashflows. The experts' calculations were as to future net profits after tax rather than discounted cashflows.[247] That, to our mind, is of no weight where the net present value calculation is directed to notional future dividends. The dividends cannot be greater than the net profits determined on an accounting basis. And, insofar as it is effectively assumed that the notional dividend distribution occurs at year end, the annual deferred distribution favours the respondents - a sole shareholder in control of a company could in fact be making cash distributions throughout the year. Second, as will be seen in dealing with notice of contention ground 5, the respondents contend that there was no evidence that the appellant intended that Rexwells would distribute all of its net profits by way of dividends. That may be put aside. In assessing the 'true' or 'real' value it is permissible to determine the present value of the future cashflows that may be provided. To the extent that Rexwells did not in fact distribute some of its net profits after tax as a dividend it would retain an asset that contributed to its value and the value of the Rexwells' share.
6. A more powerful consideration is that the appellant did not advance this measure of damage at trial in the terms and with the precision with which it was formulated on appeal.
7. We have considered whether the more limited case advanced at trial precludes the case that the appellant now advances on appeal as to a measure of damage based on the 'true' or 'real' value of the Rexwells' share. We would not dismiss the restated grounds 1 - 13 on the basis that it constitutes a new point not taken at trial. Lead counsel for the respondents is a very experienced counsel. He was counsel for the respondents at trial as well as appearing for the respondents on appeal. On appeal the respondents were assiduous in advancing whatever could be said against the case presented by the appellant as well as taking issue by notice of contention and cross-appeal as considered fit. We infer that insofar as the appellant has pursued a new point on appeal by the measure of damage based on the 'true' or 'real' value of the Rexwells' share this is not a case where the point could possibly have been met by calling evidence at the trial. Nor does the different case cause prejudice to or work an injustice on the respondents in the relevant sense. The present appeal is instead one of those exceptional circumstances where the relevant facts have been established beyond controversy and it is in the interests of justice to allow the new point to be raised.
8. The expert evidence at trial is sufficient to assess the appellant's damages based on that measure of damage whereby the appellant's loss is quantified as the amount, if any, by which the 'true' or 'real' value of the Rexwells' share as at the date for completion under the SPA exceeds the purchase price of the Rexwells' share under the SPA. The appellant is not precluded from advancing that case on appeal. In the circumstances grounds 4.1, 9.1, 9.4, 12.2 and 13.4 should be upheld. It follows that the appellant's restated grounds 1 - 13 succeed. Subject to the notice of contention points the appeal should be allowed, cross-appeal grounds 1 and 2 having already been dismissed.
9. We will not, however, proceed to assess the damages at this point. That assessment may be affected by the determination of appeal grounds 14 - 17, the notice of contention points or cross-appeal ground 3. We will return to what ought to be done by way of assessing the damages after having considered the remainder of those outstanding issues. In addition, as we will come to, the appellant sought leave to reopen to adduce additional evidence on the appeal. That application also has potential implications for the assessment of damages.

Disposition: grounds 14 - 17 - the alleged quantification errors

1. Grounds 14 -17 allege that the primary judge erred in a number of respects in making the provisional findings relating to how the appellant's loss and damages should have been quantified. The alleged errors are discrete. They presuppose that the appellant has been successful on the central legal issue as to the appellant's measure of damage as raised by the restated grounds 1 -13.

Ground 14: disallowance of adjustment to future profits by annual 5% growth

1. By ground 14 the appellant challenges the primary judge's finding that the appellant had not proven that any annual growth rate should be applied to Rexwells' future net profits.[248] The primary judge reached this finding having accepted Mr Honey's and Mr Hockley's evidence that they did not have the expertise to express an opinion on the growth rate to be applied.[249] By ground 14 the appellant alleged that the respondents had conceded that an annual growth rate of 5% should be applied and, there being no evidence to the contrary, that growth rate could and should have been applied to the calculation of Rexwells' future net profits.
2. The appellant identified the concession as being contained in Mr Hockley's letter of instructions dated 3 February 2020.[250] Among other things, in briefing Mr Hockley the respondents' solicitors stated:

In providing your opinions ... please make the following assumptions:

...

1. If the share sale had been completed in accordance with the terms of [the SPA]:

1. Rexwells' profitability would have grown at the rate of 5% per annum from 1 February 2019 for a period of 10 years.[251]
2. Mr Honey had already provided two reports by the time that the respondents' solicitors briefed Mr Hockley. In those reports Mr Honey adopted a like assumption to the assumption Mr Hockley was instructed to adopt.[252] Thus each expert was providing an opinion based on a common assumption. The assumption was recorded in an expert evidence schedule dated 16 December 2019. That schedule records that the respondents contended that it was appropriate for the experts to make an assumption that Rexwells' profitability would grow at a rate of 5% per annum.[253] But nowhere was this adopted as an agreed fact for the purpose of the proceedings.
3. Mr Honey and Mr Hockley participated in an expert conclave after their expert reports were exchanged. This resulted in the JER. The JER stated that Mr Honey and Mr Hockley agreed that both applied a 5% annual growth rate but went on to state that the appellant and the respondents were 'yet to agree on this growth rate'.[254]
4. Accordingly, there was no relevant concession by the respondents as at the date of the JER. The annual growth rate had not been agreed as at 19 June 2020.
5. At the appeal hearing counsel for the appellant was asked to identify any agreement, or concession on the part of the respondents, after the JER. Counsel was unable to identify any such agreement or concession.[255] Indeed, to the contrary, in opening the respondents' case at trial counsel for the respondents stated, without objection, that if the primary judge accepted the appellant's measure of damage particular issues would arise on calculation. Counsel for the respondents went on to explain that one of those issues was 'if any growth ... should be allowed'.[256]
6. Accordingly, while Mr Hockley clearly adopted an assumption that an annual 5% growth rate should be applied to Rexwells' future net profits, there was no relevant agreement or concession on the part of the respondents that excused the appellant from having to prove the assumption (it not being, in effect, an agreed factual assumption for the purpose of the experts' opinions).
7. In the absence of any relevant concession on the part of the respondents it was well open to the primary judge to conclude that the assumption of 5% annual growth in future net profits had not been established on the balance of probabilities. Relevantly:
   1. In the JER the experts stated that neither of them had the expertise to opine on the rate of growth that would likely be achieved by the Rexwells' business during the 10-year period of the analysis.[257]
   2. In oral evidence Mr Honey confirmed that he did not have the necessary expertise to express an opinion on the growth rate of Rexwells' business.[258] Mr Hockley's evidence is a little more difficult to understand. Ultimately Mr Hockley confirmed that the reality was that the experts had been instructed to assume 5% annual growth.[259]
8. The appellant also submitted that, irrespective of whether there was a concession by the respondents, there was sufficient evidence to support the assumed growth rate. The appellant relied on the information memorandum, Mr Leaman's evidence and Mr Steele's evidence. In oral submissions reference was made to Mr Honey's report - that can be of little moment given Mr Honey's self-acknowledged lack of expertise. The appellant also said that Mr Hockley gave evidence from which it might be inferred that a growth rate was appropriate. Again, that submission is without merit given the self-expressed lack of relevant expertise on the part of Mr Hockley. More generally the appellant submitted that the growth rate assumed by the experts allowed, in effect, for inflation and changes in the value of money.
9. The appellant's alternate submission is outside the scope of ground 14. Ground 14 is premised on there being error so far as the primary judge ought to have made the contended for finding as there was a relevant concession on the part of the respondents. There being no such concession ground 14 necessarily fails.
10. Ground 14 must be dismissed.

Ground 15: disallowance of residual value of Rexwells' share after 10 years

1. By ground 15 the appellant challenges the primary judge's finding that the calculation of the appellant's loss should not include an allowance for the residual value of the Rexwells' share after 10 years. The appellant contended that: (1) the residual value was an appropriate head of damage; and (2) there was sufficient evidence before the court to determine that the residual value would have been in the amount of $1.181 million.
2. It is important to understand the basis of the primary judge's provisional finding that no allowance for the residual value of the Rexwells' share should be included in the appellant's loss.
3. The primary judge accepted that the Rexwells' share would have a residual value at the end of the 10-year period. Accordingly, while the primary judge rejected the appellant's measure of its loss, it is apparent that had her Honour accepted that damages could be quantified consistently with the appellant's case that there would have been damage suffered based on the loss of the revenue attributable to the residual value of the Rexwells' share. However, her Honour was not satisfied that the appellant had proven that residual value. The primary judge stated:

While I accept that at the end of the 10-year period, there is a business which has a value, there was insufficient evidence before me on which I could be satisfied that the method by which Mr Honey calculated this value was correct. I also note that this assumption is inconsistent with the evidence of Mr Leaman that he intended to own the business indefinitely. On this basis, I do not consider that any allowance should be included in the calculation of [the appellant's] loss for its receipt of any amount from the potential sale of Rexwells.[260]

1. Accordingly, this provisional finding was determined adversely to the appellant for two reasons. First, because her Honour was not satisfied with Mr Honey's calculation of the residual value. Second, because the assumption that the Rexwells' share would be sold after 10 years was inconsistent with Mr Leaman's evidence.
2. The second of her Honour's reasons may be put to one side. Logically, if a residual value is not brought to account, it is necessary to allow for continuing distributions of Rexwells' net profit after tax into the future. Mr Honey explained why it is convenient to assume instead that the investment terminated after 10 years (see [218] above). Similar statements were made in Mr Honey's or[261]evidence.261 That is a conventional approach when undertaking a discounted cashfl[262]analysis.262 In circumstances where this aspect of Mr Honey's evidence was uncontradicted, and the approach was justified by convention, the evidence on the part of Mr Leaman to which the primary judge had regard was not to the point.
3. However, the appellant has not demonstrated error in terms of the first of the primary judge's reasons for rejecting Mr Honey's determination of the residual value.
4. There are two immediate problems with the $1.181 million figure. First, the $1.181 million figure is based on a future net profit after tax figure at the time of the notional realisation of the Rexwells' share (ie 10 years after the notional completion) calculated applying 5% annual growth. The primary judge rejected the 5% annual growth integer, finding that no growth rate should be applied.[263] The appellant's challenge to that finding by ground 14 has failed. Second, insofar as the $1.181 million figure is based on projected future net profitability after tax at a point 10 years after the notional completion, the primary judge held that forecasting for more than a three-to-five-year period was unreliable. Her Honour was not satisfied on the balance of probabilities that the appellant had proved any loss beyond a five-year period.[264] As will be seen, the challenge to these findings, by ground 16, fails. It follows that the appellant cannot establish one of the critical elements for the contended residual value of the Rexwells' share - having not proved loss beyond a five-year period the appellant has not satisfactorily established Rexwells' likely future net profit after tax at the 10-year post-completion time for determination of the residual value.
5. There is a further difficulty with the $1.181 million figure: properly understood it is no more than an unproven assumption.
6. The basis for Mr Honey's approach to the calculation of the residual value of the Rexwells' share is reproduced at [222] above. Mr Honey assumed that the share was sold at a price using the same implied earnings multiple that applied to the appellant's purchase of the share. The nature of this assumption is illustrated by a net present value calculation Mr Honey described as 'scenario 1'. Here Mr Honey assumed no annual growth in net profits after tax. Accordingly, before discounting, Mr Honey's residual value of the share on an assumed sale at the end of year 10 was the same as the assumed purchase price at [265]r 0.265 The approach of adopting an assumed residual value based on projected profitability and an implied earning multiple is also evident in Mr Honey's 'scenario 2' applying 5% annual growth to net profit[266]fter tax.266
7. Mr Honey's resort to an assumption is understandable when it is recalled that Mr Honey is a chartered accountant and registered liquidator. As an accounting expert Mr Honey was well qualified to give evidence quantifying Rexwells' likely net profits after tax. However, Mr Honey did not claim to hold expertise as a valuer of shares in a private company.[267] (Mr Hockley, by contrast, was an accredited business valuer.[268] But Mr Hockley did not opine on the residual value of the Rexwells' share after 10 years. That is perhaps unsurprising when it was Mr Hockley's evidence that due to volatility in the mining services industry forecasting more than three years was 'very problematic' and ordinarily one could not look at any more than three to five years at the absolute maximum. [269])
8. Insofar as Mr Honey derived the suggested residual value by a process of assumption - and there was no attempt to prove the correctness of that assumption - the primary judge was plainly correct to conclude that there was insufficient evidence to be satisfied that the method by which Mr Honey calculated the value was correct.
9. Ground 15 fails.

Ground 16: disallowance of future profits after 5 years

1. By ground 16 the appellant challenges the primary judge's finding that the appellant had not proved any loss beyond a five-year period - it necessarily following that any assessment of loss should be confined to that period. The appellant contended that the primary judge should have found that it was appropriate for the loss to be assessed over 10 years as: (1) that was a period agreed between the parties; and (2) a significant discount had been applied by the experts in calculating the loss up to 10 years.
2. The suggestion of a relevant agreement between the parties goes nowhere. The parties agreed an assumed period for the experts' calculations. But there was no agreement as to the validity and correctness of the assumption.
3. We accept that the experts applied a discount rate. Further, consistently with all net present value calculations, the discount rate was cumulative. Accordingly, the likely net profits after tax from year 6 to year 10 were heavily discounted. The JER suggests a discount rate of 0.3266 in year 6 and a discount rate of 0.1549 in year 10.[270] Ordinarily, when calculating a net present value, projected likely cash flows are discounted to account for both: (1) the time value of money; and (2) business and financial risks. In determining a discount rate consideration of the business and financial risks will necessarily involve an assessment of volatility. All other things being equal, the greater the volatility, the greater the uncertainty and the greater the discount rate to compensate for the risks.
4. In this case Mr Hockley gave evidence of the volatility in the mining services industry.[271] That evidence prompted this exchange:

[COUNSEL FOR THE RESPONDENTS]: ... Now, Mr Hockley, you mentioned that the - I believe you mentioned the mining services industry is a volatile industry. In that industry, what time period do you consider you could make predictions for with any level of confidence?

WITNESS, HOCKLEY: I - I guess, forecasting for any business, regardless of whether it's the mining services industry, that the further you go out, the more - the more guess - you know, guess work, effectively, that is involved. Ordinarily, I think you couldn't look any more than, say, three - three to five years at the absolute maximum. And certainly, in mining services I think any more than three years would be very problematic, given the volatility of the business.[272]

1. Mr Honey was asked whether he agreed with that statement. Mr Honey said that the experts had been asked to consider the likely net profits after tax over 10 years.[273] Mr Honey went on to explain:

In relation to the work that has been done, I haven't turned my mind to that issue for two reasons: (1) is, I wasn't asked to address that specific question, and, (2) if I was asked to address that specific question I wouldn't hold out that I have the expertise to talk about volatility in the mining industry - the mining services industry over a period of 10 years.[274]

1. Accordingly, Mr Honey did not contradict Mr Hockley's evidence. Mr Honey made plain that he had calculated the likely net profits after tax over 10 years because that is what he had been instructed to do.
2. The primary judge accepted Mr Hockley's evidence that forecasting for more than a three-to-five-year period is unreliable, particularly in a volatile industry. On that basis, were her Honour to have made findings as to Rexwells' net profits, because of the inherent uncertainty in the calculations the primary judge would not have been satisfied on the balance of probabilities that the appellant had proved any loss beyond a five-year period.[275]
3. The appellant has not demonstrated error in the primary judge's finding in the sense that we are satisfied that her Honour was wrong to conclude that the appellant had not established on the balance of probabilities that the appellant had proved any loss beyond a five-year period. The finding was well open given Mr Hockley's uncontradicted expert evidence. There was no attempt to establish that in accepting Mr Hockley's evidence the primary judge was in error having regard to incontrovertible facts or uncontested testimony, because Mr Hockley's evidence was glaringly improbable or contrary to compelling inferences or because the primary judge failed to use, or palpably misused, her Honour's advantage as the trial judge. The appellant said no more than that the discount rate also served to address future risk.
4. While in theory it may be accepted that the application of a discount rate ordinarily accommodates volatility, Mr Honey's reports did not expressly identify any connection between the discount rate and one or both of volatility and the period over which projections ought to be taken into account. In arriving at a discount rate Mr Honey instead predominantly relied on the before tax return on investment of 30% mentioned in the information memorandum.[276] Mr Hockley undertook a broader analysis but also did not specifically mention volatility.[277] In circumstances where the experts agreed a mid-point discount rate - one that reflected considerations broader than the issue of volatility - there was no error in the primary judge accepting Mr Hockley's uncontradicted evidence and the available inference that arose from it. Mr Hockley's evidence provided a proper basis for the primary judge's finding, one that we too would arrive at in circumstances where the evidence was uncontradicted, notwithstanding the application of a discount rate that heavily discounted the likely net profits after tax from years 6 to 10.
5. Ground 16 fails.

Ground 17: expert evidence as to franking credits irrelevant to determination

1. For reasons previously explained it is appropriate to consider ground 17 when addressing notice of contention ground 5 (see [424] - [428] below).

Disposition: notice of contention points and cross-appeal ground 3

1. It now becomes necessary to address the miscellany of complaints raised by the respondents against the possibility that the appellant was successful in demonstrating error in the primary judge's approach to the measure of damage. Some of these, if upheld, might mean that the appellant is confined to nominal damages. Others would reduce the damages to which the appellant is potentially entitled.

Notice of contention grounds 1 - 3: the contingency arising in relation to the Rio Tinto contract

1. Notice of contention grounds 1 - 3 are concerned with the condition precedent concerning the Rio Tinto contract. It will be recalled that:
   1. Clause 2.2(e) of the SPA contained a condition precedent to the effect that the appellant was satisfied in its absolute discretion that a new contract had been entered into with Rio Tinto on terms acceptable to the appellant. This condition precedent was for the benefit of the appellant and could only be waived by the appellant (cl 2.6(a)). See [27] above.
   2. The SPA disclosed that Rexwells' contract with Rio Tinto had expired (on 5 October 2018) and that a new contract was presently under review (sch 4). See [25.4] above.
   3. At trial the respondents contended that the Rio Tinto condition precedent would not have been fulfilled or waived and the SPA would not have completed irrespective of the respondents' alleged breaches of the SPA. While the issue concerning the Rio Tinto condition precedent was not specifically pleaded the primary judge ruled it was not necessary for the respondents to have done so. The issue was raised in the parties' written and oral closing submissions. However, despite accepting that the issue concerning the Rio Tinto condition precedent went to the value of any opportunity lost by the appellant and the probability that the matters relied on by the appellant to establish its claim would have occurred, the primary judge did not consider and determine the issue. See [73] above.
2. The last of these three matters means that notice of contention ground 1 is established. In stating this conclusion we reject the appellant's submission that the primary judge considered the issues relating to the Rio Tinto contract and preferred Mr Leaman's evidence as to its significance at the relevant time. That submission is not open on a fair reading of the passages of the primary reasons that the appellant relies on (ie primary reasons [207] - [228], [370]).
3. Success on notice of contention ground 1 cannot alone justify the primary judge's decision being upheld on another ground. The respondents must also establish notice of contention ground 2. In this respect the respondents rely, in part, on notice of contention ground 3. Notice of contention ground 3 involves a discrete factual matter that is best addressed when we arrive at the relevant part of the narrative.
4. In substance, by notice of contention ground 2 the respondents contend that non-fulfilment of the Rio Tinto condition precedent was so certain to occur that no damages should be awarded to the appellant other than nominal damages. The contention assumed a hypothetical where there had been no termination of the SPA for repudiation. Then, according to the respondents, the SPA would necessarily have terminated in any event, by operation of cl 2.7 of the SPA, due to non-fulfilment of the Rio Tinto condition precedent before 30 January 2019. The respondents said there was no reasonable possibility that the appellant would have waived the Rio Tinto condition precedent, no reasonable possibility that the Rio Tinto condition precedent would have been fulfilled and no reasonable possibility that the parties would have extended the date for satisfaction of the Rio Tinto condition precedent and extended the Completion Date.
5. Accordingly, to succeed on notice of contention ground 2 the respondents must establish - as a matter of fact - that in the hypothetical counterfactual where there were no breaches of the SPA: (1) the Rio Tinto condition precedent would not have been fulfilled before 30 January 2019; (2) the appellant would not have waived the Rio Tinto condition precedent before 30 January 2019; and (3) the parties would not have extended the date for satisfaction of the Rio Tinto condition precedent and would not have extended the Completion Date. Alternatively, the degree of probability or possibility of those events occurring was such that the court should adjust its award of damages to reflect that degree of probability or possibility.
6. The inquiry thus requires this court to review the trial record and form a conclusion - if it can - on factual issues on which the primary judge made no findings.
7. We are satisfied, and we find, that in the counterfactual the Rio Tinto condition precedent would not have been fulfilled before 30 January 2019. The chronology we will now come to establishes as a matter of fact that there was no confirmation of a new contract between Rexwells and Rio Tinto before 30 January 2019. The absence of such a contract was a matter of discussion between the parties. As events transpired Rexwells and the third respondent did not obtain confirmation of the new contract with Rio Tinto until the afternoon of 15 April 2019 (at which time Rio Tinto informed the third respondent that the contract had been extended in its internal SAP system and no new signing was required).[278] The delay in notification of the new contract occurred despite a series of emails between the third respondent and Rio Tinto employees that commenced on 28 November 2018 and extended to the early morning of 15 April 2019.[279] In the interim the status of the contract was characterised by Rexwells as an 'expired agreement'[280] and Rio Tinto confirmed that it was 'awaiting further approval' for award of the contract.[281]
8. It is possible to infer the likely position that would have prevailed in the hypothetical where there had been no termination of the SPA for repudiation based on the course of events both before and after the actual termination. The overwhelming inference, based on what actually happened, is that there would have been no confirmation of any new contract between Rexwells and Rio Tinto before 30 January 2019. That is all the more so given the limited time available between termination on 22 January 2019 and 30 January 2019 (the date by which the Rio Tinto condition precedent would have had to be fulfilled).
9. Accordingly, the critical question is whether or not the appellant would have waived the Rio Tinto condition precedent before 30 January 2019.
10. There is some important factual context to this question. The inclusion of the cl 2.2(e) condition precedent as to the Rio Tinto contract establishes the significance of the Rio Tinto contract to the appellant. The appellant bargained for and obtained a condition precedent that it be satisfied 'at its absolute discretion' that a new contract had been entered into with Rio Tinto 'on terms acceptable' to the appellant. The commercial imperative for the condition precedent is readily apparent. The information memorandum disclosed that Rio Tinto had been a customer of the Rexwells' business for 10 years and accounted for approx. 80% of Rexwells' annual sales.[282]
11. Mr Leaman was aware of Rio Tinto's significance to the Rexwells' business at the material time. In cross-examination he acknowledged the 80% figure and said that Rio Tinto was a 'very significant part' of the business.[283] It struck Mr Leaman, in reading the information memorandum, that 80% of the business was dependent on one customer.[284] If Rio Tinto ceased its relationship with Rexwells the profitability of its business would be fairly traumatically impaired.[285] Mr Leaman, consistently with this evidence, agreed that the cl 2.2(e) Rio Tinto condition precedent was 'important'[286] or 'vital'[287] and that the Rio Tinto contract was 'crucial'.[288]
12. It was put to Mr Leaman by counsel for the respondents that he, Mr Leaman, would not have been prepared to cause the appellant to complete the SPA unless and until the Rio Tinto contract was in place. Mr Leaman responded:

It was certainly a clause that was put there to my benefit. And I had not actually finalised my opinion at that stage, because - if I may explain why, if that's okay - Mr Steele was in long negotiations with Rio about increasing the size of the agreement. From recollection, Rio were in the process, through India, of adding more than 750 new inventory lines to the agreement that they were going to be placing to make, potentially, future purchases for from Rexwells. My experience is that Rio don't start having those conversations with people unless they have an intention of keeping the relationship.[289] (emphasis added)

1. Mr Leaman had prior experience with Rio Tinto through managing a business that had a supply agreement with Rio Tinto (as well as various other large mining enterprises).[290]
2. It should be observed that the cross-examiner did not, in terms, put to Mr Leaman the proposition that, in the hypothetical scenario where the SPA had not purportedly been repudiated and terminated, he would not have caused the appellant to waive the Rio Tinto condition precedent before 30 January 2019 (assuming the condition had not been fulfilled). That, in substance, is the finding that the respondents now contend for. The cross-examiner instead advanced a more general proposition that Mr Leaman would not have been prepared to cause the appellant to complete the SPA unless and until the Rio Tinto contract had been concluded (presumably on terms acceptable to Mr Leaman).
3. The distinction is material. The options were not simply either: (1) waive the Rio Tinto condition precedent before 30 January 2019 and proceed to completion; or (2) not waive the Rio Tinto condition precedent before 30 January 2019 and allow the SPA to come to an end on 30 January 2019 by operation of cl 2.7. It was also possible that the parties might have agreed to extend the time for completion and the time for fulfilment (or waiver) of the condition precedent. The SPA specifically contemplated the former (cl 6.1(b)). The contemporaneous correspondence demonstrates that the parties were well aware of the possibility of extending the time for completion to allow further time for other matters to resolve.[291]
4. Mr Leaman's evidence as to completion under the SPA without Rexwells having first obtained a new contract with Rio Tinto was only that 'I had not actually finalised my opinion at that stage'. In other words Mr Leaman had not made up his mind. That evidence alone, if accepted at face value, cannot make good the respondents' contention.
5. Mr Leaman gave further evidence on the subject in the context of post-termination correspondence when the parties were discussing the possibility of a new share purchase agreement. Mr Leaman said that, by 31 January 2019, there were discussions between him and Mr Lark around whether he would be willing to progress the transaction without a condition precedent that the Rio Tinto contract had concluded on acceptable terms.[292] Mr Leaman's evidence was that:

My answer was, 'Obviously I need to make that decision at the time but my inkling is, yes, I'm getting more comfort as days go by.' I think it's important to understand that what these contracts - which is the incorrect term - are and how they roll forward.[293] (emphasis added)

1. In re-examination Mr Leaman was asked to explain what he meant by the reference to how this kind of contract was rolled forward. He replied:

What I mean is that they are not actually a true contract as in a mutual obligation on - on each party. It is more an agreement to supply that is very one-sided whereby the document is not reissued as a new document on its anniversary. It merely has the expiration date changed in Rio's purchasing system in India or London, wherever the main system is at that time.[294]

1. At the appeal hearing, counsel for the respondents submitted that the court should not accept this evidence. Counsel submitted that it was only on 15 April 2019 that Mr Steele was informed by email from Rio Tinto that no new signed contract would be required; Mr Leaman would not have known otherwise at the material time. Counsel for the respondents, in written submissions, contended that it may be inferred that Mr Leaman - who appeared in cross-examination to be very familiar with the contents of the trial bundle - simply read the Rio Tinto email of 15 April 2019 for the purposes of preparing to give his evidence.[295]
2. Accordingly, counsel for the respondents invited this court to reject Mr Leaman's evidence as being untruthful and unreliable - counsel effectively suggested that this aspect of Mr Leaman's evidence was moulded by an after-the-event review of the trial bundle rather than being a truthful recollection of what Mr Leaman was thinking at the material time based on what Mr Leaman then knew.
3. Counsel for the respondents also relied on some of the contemporaneous correspondence between Mr Leaman and Mr Steele in the context of the post-termination discussions between them about entering into a replacement share purchase agreement. First was an email from Mr Leaman to Mr Steele dated 24 January 2019. This followed a meeting that day between Mr Leaman, Mr Steele and another.[296] In the email Mr Leaman set out a number of concerns that he considered needed to be addressed within any new agreement. These included that:
   • We will need to add a clause around the Rio contract to allow for the sale agreement to be extended if there is a delay here.
   • We modify the completion to still show the completion date dates [sic] to be 31st of Jan for completion, but final completion (payments etc) can be extended for up to 30 days after this date without penalty. The effect of this being that we are not penalised for the expected delay and get to enjoy the profit benefits of the business for the month of Feb whilst we tidy things up.[297]
4. Next was an email from Mr Leaman to Mr Steele dated 28 January 2019 (sent at 12.10 pm). This responded to a 28 January 2019 email from Mr Steele proposing a price reduction of $400,000 to avoid the threat of legal action.[298] Mr Steele's offer was on the basis of a 31 January 2019 settlement and him providing a 3-month handover and then finishing up. Mr Leaman set out bullet point terms that he proposed by way of response. These included that:

The agreement is extended so that settlement shows 31st Jan, but final completion (payments, Rio etc) can be extended without penalty for 30 days. There is still the issue around the possible Rio delay, and we would like to get some advice/ideas on how best to accommodate for this.[299]

1. Mr Steele responded with a reply email on 28 January 2019 (sent at 12.47 pm). As to the Rio Tinto contract Mr Steele said:

The Rio agreement isnt [sic] a problem its [sic] just time and I can show communication line with us moving towards an outcome.[300]

1. Mr Steele's comment to Mr Leaman was consistent with Mr Steele's oral evidence. In cross-examination Mr Steele acknowledged that the relationship with Rio Tino was continuing. Rexwells continued to obtain orders from the Rio Tinto mine sites that were its customers.[301] Mr Steele acknowledged that it was 'business as usual'.[302] In this respect Mr Steele confirmed that, each year, Rio Tinto took four months or more just to agree on new pricing.[303] Mr Steele had informed Mr Leaman of as much in late November 2018 when negotiating the SPA.[304]
2. The issue raised by notice of contention ground 3 arises at this point in the chronology.
3. Mr Leaman sent Mr Steele an email on 31 January 2019 (ie the day after the date for fulfilment or waiver of the conditions precedent). Among other things the email stated:

Lark's [sic] are expecting to get a modified contract, with tracked changes, to me today. The only change in it that you won't be expecting to see is that Larks are wanting to delete Rio being a condition of the sale. They felt that with everything that both side [sic] have been through so far the idea of putting more conditions around Rio would just put more undue pressure on yourself. Their idea is to delete that clause and then have us simply not put a signature on it [ie the replacement contract] until Rio have renewed the price agreement.[305] (emphasis added)

1. The contents of this email were the subject of close cross-examination of Mr Leaman. The respondents relied on this cross-examination, both at trial and on appeal, to suggest that Mr Leaman was, in substance, dissembling in relation to the Rio Tinto condition precedent to avoid making concessions that might adversely affect the appellant's damages claim. Given the importance counsel for the respondents attached to Mr Leaman's evidence in cross-examination it is necessary to repeat it in full.
2. Mr Leaman mentioned in cross-examination that he was told by Mr Lark that it was wrong to suggest that the new share purchase agreement should not be signed until the Rio Tinto contract was concluded.[306] Shortly thereafter counsel for the respondents read the passage of the 31 January 2019 email reproduced at [378] above. There was then the following exchange:

Are you saying they didn't give you that advice?---The words should read 'the idea is to delete the clause'. It was my idea, which, as I started, Mr Lark told me that, 'You don't get to do that'.

So they say, 'Their idea is to delete that clause and then have us simply not put a signature on it'. You're saying they didn't give you that advice?---Peter Lark did definitely not give me that advice.

Are you saying this is untruthful?---I've got a typo in there; yes.

Sorry. So explain to me what the typo is?---I believe the word 'their', t-h-e-i-r, being the ownership 'their', should read the word 'the'.

Should read 'the'?---The word 'the'.

Okay. So let's go back. 'The only changes that you won't be expecting to see is that Larks are wanting'. Now, did you want to change the word 'Lark' there at all? Should we write something else for 'Larks' there?---No, I don't believe you should.

Okay. So:

Larks are wanting to delete Rio being a condition of the sale. They -

should that be 'the' or is 'they' correct there?---'They felt'. That is correct.

That's correct. So:

They felt that everything that both sides had been through so far, the idea of putting more conditions around Rio would just put more undue pressure on yourself. Their idea -

it's clear you're saying it's Lark's idea, Mr Leaman?---It does read that way, yes.

Yes. And you saying now they didn't tell you to do that?---No, Mr Lark actually did the opposite of that.

So he said, 'Just take out the condition precedent. Rio is vital to you but that's fine. Just sign the agreement and pay the money and don't worry. If you don't get Rio, you don't get Rio'. Is that what - was that the advice?---No. That would be silly advice.

Well, he deleted it so what was going to happen there?---We had - already had conversations around it and the conversations were - - -[307]

1. At trial counsel for the respondents described this evidence as 'egregiously untruthful'.[308]
2. It is, with respect, difficult to understand why counsel for the respondents attached so much forensic importance to the contention that this passage established that Mr Leaman was an untruthful and unreliable witness who was not to be believed on this evidence. The respondents were suggesting that Mr Lark had advised Mr Leaman that the Rio Tinto condition precedent should be removed and execution of a new share purchase agreement should await renewal of the Rio Tinto contract. Mr Leaman's evidence was that the email contained a typographical error and that in fact this was his idea. Whatever version was correct is of little moment to the critical issue. Either the appellant's lawyer or its directing mind and will considered that the Rio Tinto contract was of such commercial significance to the proposed transaction that a new share purchase agreement should await conclusion of the Rio Tinto contract. Indeed, it might be thought that Mr Leaman's evidence that this was his idea, rather than Mr Lark's advice, was more damaging to the appellant's interests given the nature of the issue.
3. We are, in the circumstances, unpersuaded that Mr Leaman was guilty of dissembling. That is all the more so when Mr Leaman was quick to discard as 'silly advice' the suggestion that Mr Lark might have advised him to delete the Rio Tinto condition precedent and not be worried about whether or not Rio Tinto renewed its contract. It is also inconsistent with the tenor of Mr Leaman's evidence on the issue of the Rio Tinto contract more generally.
4. In terms of notice of contention ground 3, the respondents complained that the primary judge erred in finding that Mr Leaman 'accepted' that he had not received advice from Lark Lawyers to defer executing the new share purchase agreement pending renewal of the Rio Tinto contract. The respondents said that her Honour missed the point of the cross-examination. The respondents' complaint misconstrues the primary judge's reasons and overlooks how questions were put and answered in the relevant passage of cross-examination. At [217] of the primary reasons her Honour is not finding, as fact, that the appellant did not receive such advice from Lark Lawyers. The primary judge is simply recording what Mr Leaman accepted - or stated - in cross-examination. It is clear from the italicised passage of the cross-examination at [380] above that Mr Leaman did accept the relevant proposition - in that respect Mr Leaman was asked whether he was saying that Lark Lawyers did not provide advice as recorded in the email of 31 January 2019.
5. While, in alleging error of that kind, notice of contention ground 3 is misconceived, the contention goes on to suggest that the true version of events is as stated in the email of 31 January 2019.
6. The primary judge made no finding either way. Nor, for the reasons we have given, is the issue of significant forensic importance to the disposition of notice of contention ground 2. It was, however, pressed vigorously by counsel for the respondents. Implicit in this further aspect of notice of contention ground 3 is that this court should reject Mr Leaman's evidence on this point. In so submitting counsel for the respondents failed to acknowledge the limitations of appellate review and the difficulties that arise given that this court has not seen and heard Mr Leaman give evidence. That is all the more so where the primary judge made no adverse credit findings against Mr Leaman (although acknowledging that, in considering Mr Leaman's evidence, the contemporaneous documents were the most reliable evidence).[309]
7. Plainly the contemporaneous documents, in the form of the email dated 31 January 2019, support the further factual finding contended for by the respondents. The respondents also sought an adverse Jones v Dunkel[310] inference so far as the appellant did not lead evidence on this issue from Mr Lark. We would not draw such an inference in circumstances where: (1) the respondents did not plead the issue concerning the Rio Tinto condition precedent; (2) the issue was one that gained significance during the course of the trial rather than being one that was central at the outset of the trial; and (3) Mr Lark was called as a witness by the appellant - giving evidence after Mr Leaman - and available for cross-examination on the issue if the respondents wished to explore the point.
8. This being the state of the evidence, on the trial record, we are not satisfied that this court is able to determine properly and justly whether or not there should be a finding to the effect that Mr Lark advised Mr Leaman that the Rio Tinto condition precedent should be removed and execution of a new share purchase agreement should await renewal of the Rio Tinto contract.
9. It would be a large step to reject Mr Leaman's evidence without having seen and heard him give evidence in circumstances where the primary judge made no adverse credibility findings against him. We acknowledge, of course, the force of her Honour's observation that in considering Mr Leaman's evidence the contemporaneous documents are the most reliable evidence. But, in this instance, Mr Leaman's oral evidence is arguably more damaging to the appellant's interests than what is stated in the email. Also, Mr Leaman's evidence to the effect that Mr Lark informed him that 'you don't do business like that'[311] strikes us as inherently plausible.
10. Accordingly, we would dismiss the initial aspect of notice of contention ground 3 (that part in the first sentence of notice of contention ground 3). However, we are unable to come to a conclusion on the factual finding sought as to the remainder of notice of contention ground 3. This has consequences for the appropriate disposition of the appeal that we will come to when considering the orders to be made to give effect to these reasons.
11. Turning back to notice of contention ground 2, counsel for the respondents submitted that this court had sufficient material to make a finding on the point that the primary judge left undecided. Counsel pressed for a finding that in the hypothetical scenario where the SPA had not been terminated the appellant, through Mr Leaman, would not have waived the Rio Tinto condition precedent before 30 January 2019 and the SPA would have come to an end by operation of cl 2.7. In that event no party had any claim of any nature against the other in relation to the SPA.
12. In support of the contention, counsel for the respondents submitted that it was clear that Mr Leaman was not prepared to cause the appellant to undertake the obligations under the SPA unless the Rio Tinto contract was concluded on terms that were acceptable to the appellant in its absolute discretion. Counsel went as far as to submit that there was direct evidence to the effect that 'I would not have proceeded'.[312]
13. The submission made by counsel for the respondents overstates the effect of Mr Leaman's evidence (which, in any case, did not deal with the question of waiver directly given the way in which counsel for the respondents chose to conduct the cross-examination). Mr Leaman's evidence was not that he would not have proceeded; it was that Mr Leaman had not finalised his opinion on the issue. And, while Mr Leaman had not made up his mind at the time of the termination, he was getting more comfort as time went on. That state of 'more comfort' was consistent with Mr Steele's evidence and contemporaneous assurance to Mr Leaman that the Rio Tinto contract was not a problem but just a matter of time.
14. The issue cannot be resolved on Mr Leaman's evidence alone. That is all the more so where Mr Leaman's evidence was not directed to the question of waiver - or, for that matter, the possibility that the parties might have agreed to extend the time for completion and the time for fulfilment (or waiver) of the Rio Tinto condition precedent. The accepted approach that fact-finding ought to be based, as far as possible, on contemporary materials, objectively established facts and the apparent logic of events, has more than its usual force where the evidence is directed to a hypothetical scenario and oral evidence as to what a witness would or might have done may be self-serving or affected by hindsight bias.
15. While in this respect the limitations of appellate review are not as marked as might otherwise be the case, counsel for the respondents has invited this court to reject salient aspects of Mr Leaman's evidence as being untruthful and unreliable. We are not satisfied that this court is able to assess that submission properly and justly in circumstances where it has not seen and heard Mr Leaman give evidence. Nor, for reasons already given, are we satisfied that this court is able to determine properly and justly on the trial record whether, in relation to the 31 January 2019 email, the proposal was Mr Leaman's idea or the outcome of Mr Lark's advice - another intermediate finding sought by the respondents. The contemporary materials, objectively established facts and apparent logic of events have been developed above. What falls out of that matrix is not so obvious that the resolution of the remaining issues posed by notice of contention ground 2 are incapable of being influenced by Mr Leaman's evidence and whether or not it is accepted or rejected. That is particularly the case where the hypothetical does not simply involve a binary choice of: (1) waiver and proceed to completion; as against (2) non-waiver and allow the SPA to come to an end. In particular, it is necessary to determine whether or not the parties would have extended the date for satisfaction of the Rio Tinto condition precedent and extended the Completion Date. It may be, in that regard, that Mr Steele would not have been willing to extend those dates because, as may be inferred from the Zilkens Lawyers' letter of 17 January 2019, Mr Steele wanted the SPA to come to an end.
16. It follows, in our opinion, that if the appeal is otherwise to be allowed, the remaining issues raised by notice of contention ground 2 will need to be remitted to the primary judge for hearing and determination. We note, in this respect, that both parties accepted that such remittal, if necessary, should be to the primary judge.[313]

Notice of contention ground 4: whether the appellant failed to mitigate

1. By notice of contention ground 4 the respondents challenge the primary judge's adverse finding on their plea that the appellant failed to mitigate its loss by not accepting the respondents' offer to treat the SPA as if it were on foot with a discount to the purchase price of $400,000 (see [72.4] and [79] above).
2. The respondents' offer was made in a letter from Lawton Gillon to Lark Lawyers dated 15 February 2019 (see [64] - [65] above). It was preceded by a series of post-termination discussions and communications about entry into a new share purchase agreement. Those post-termination discussions and communications have been summarised at [64] above and are traversed at length at [204] - [228] of the primary reasons. It is not necessary to repeat those matters. It is, however, necessary to refer to the contents[314] the 15 February 2019 offer.314
3. The 15 February 2019 letter presents itself, by its tone, structure and content, to be a formal lawyer's letter designed to preserve a position as opposed to a commercial offer designed to bring about a commercial outcome. The letter is combative. Under the heading 'Background' the letter refers to Zilkens Lawyers' letter dated 17 January 2019 and says that 'instead of [the appellant] simply disputing' the assertion that the SPA ceased to have effect, the appellant had asserted a wrongful repudiation of the SPA. The letter then says '[t]he bona fides of [the appellant's] response was, at best, questionable' given the parties subsequent discussions. After referring to a proposed new share purchase agreement forwarded on 6 February 2019 the letter goes on:

[I]t is clear that [the appellant] still wants to purchase the shares but:

(a) may require different payment terms in order to be able to settle under [the SPA]; and/or

(b) wants more favourable terms than what was agreed in [the SPA].

It appears to us that [the appellant] is advantageously seizing on the wording of Zilkens Lawyers' letter to manufacture an artificial legal position in order to achieve this.[315]

1. To state the obvious, if a party has an aim of bringing about a commercial resolution it seldom assists to commence by attacking the bona fides of the proposed counterparty and then going on to accuse the proposed counterparty of 'advantageously seizing' on the party's lawyer's action to 'manufacture an artificial legal position'.
2. Lawton Gillon, for the respondents, then say that in their opinion it would be a complete answer to any claim for the respondents to simply offer that the parties treat the SPA as on foot without amendment (except perhaps with an extended completion date). It is said that there would be no reasonable basis for the appellant to refuse this offer. Lawton Gillon then remind the appellant of an 'obligation to mitigate its loss and damage' and refer to a series of legal authorities. Lawton Gillon asserts that a failure to accept an offer that the parties treat the SPA as on foot 'would amount to a total failure by [the appellant] to mitigate its loss and damage'.[316]
3. Ultimately, however, the 15 February 2019 letter goes on to make an offer as follows:

Accordingly, [the respondents] make the following open offer to [the appellant]:

(a) the parties treat [the SPA] as on foot with the variations referred to in (b) and (c) below (or execute a further agreement on the same terms and conditions except as provided in paragraph (b) and (c) below);

(b) the purchase price payable at completion is reduced by $400,000.00; and

(c) the parties proceed to completion on 28 February 2019.

We note that if [the appellant] requires further time to complete (beyond the extended completion date of 28 February 2019 proposed above), [the respondents] will entertain reasonable offers for such an extension.

This offer is open for acceptance by [the appellant] until 4pm on 22 February 2019. If it is not accepted by that time it is automatically withdrawn.[317] (original emphasis)

1. The mechanics of the offer are unexplained. In particular the offer is silent on whether it is intended that the revived SPA, as varied, will be subject to the various conditions precedent in cl 2; and, if so, the date for fulfilment or waiver of those conditions precedent. That could have been productive of substantial uncertainty. Presumably, the SPA having been revived, it would not be treated as having automatically ended on 30 January 2019 by operation of cl 2.7. But this would mean that the appellant became locked into the revived SPA without the protection of any of the conditions precedent. This should be compared to the 6 February 2019 draft replacement share purchase agreement prepared by Lark Lawyers as sent to Lawton Gillon. There, as might reasonably be expected, while there was an extension of the completion date to 28 February 2019 there was also an extension of the time for fulfilment or waiver of the conditions precedent.[318]
2. The structural inadequacies of the 15 February 2019 offer might itself have meant that the appellant did not act unreasonably in not accepting the offer.
3. Lawton Gillon then assert that there is no reasonable basis for the appellant to refuse the offer and subsequently issue proceedings against the respondents for damages. It is said, consistently with the letter being a formal lawyer's letter designed to preserve a position, that the letter is intended to have costs consequences. The respondents, by Lawton Gillon, say that, if the offer is not accepted and proceedings are commenced, the letter will be produced to the court. The respondents foreshadowed applying for summary dismissal and seeking indemnity costs on the faith of the letter.[319]
4. The offer was not accepted. Instead the appellant commenced proceedings.
5. The legal principles applicable to mitigation of loss in the context of a claim for damages for breach of contract are well settled. They are discussed by reference to the leading authorities in Netline Pty Ltd v QAV Pty Ltd.[320] Relevantly:
   1. The innocent party bears the onus of proving, according to the applicable measure, that it has suffered damage and that the loss it claims was caused by the wrongdoer's breach.
   2. The innocent party is not under a 'duty' or 'obligation' to mitigate its loss. The innocent party may act as it thinks fit. But the wrongdoer is only liable for that part of the innocent party's loss that has been caused by the wrongdoer's breach. Accordingly, the innocent party cannot recover loss that could, by the taking of reasonable steps, have been avoided. That loss is not regarded as loss caused by the wrongdoer.
   3. The onus is on the wrongdoer to prove that the innocent party has failed to take reasonable steps to mitigate its damage; and, if so, to demonstrate the extent to which there has been a failure to mitigate.
   4. The innocent party is not required to take all possible steps to mitigate its loss, but only those steps that are reasonable.
   5. The test of reasonableness which is applied to the steps taken or not taken by the innocent party is not a high standard because the defendant is a wrongdoer. The innocent party will not have acted unreasonably merely because the wrongdoer can suggest other and more beneficial action if it was reasonable for the innocent party to act as it did.
   6. Whether the innocent party took reasonable steps to mitigate its loss is a question of fact which depends upon the facts and circumstances of the particular case.
6. As to the last point, it is a question of fact whether, in a particular case, the innocent party acted reasonably in refusing to enter into a new contract with the wrongdoer after the innocent party terminated the contract in question for breach.[321]
7. In considering the issue of mitigation of loss the primary judge referred to the authorities in orthodox terms.[322] The primary judge then referred to the parties' respective contentions, the 15 February 2019 letter and Mr Leaman's evidence.[323] Mr Leaman, among other things, said that the respondents' offer did not take account of the 'adjusted risk' of the transaction.[324] This adjusted risk was built around Mr Leaman's lack of trust in Mr Steele including in completing his obligations in handover.[325]
8. The primary judge held that the respondents had not discharged their burden of proving that the appellant failed to mitigate its loss by unreasonably rejecting the respondents' offer. Her Honour accepted that the requirement that Mr Steele continue working at Rexwells one day a week for at least four months post-completion for handover was an important term. The primary judge also referred to the appellant not receiving the benefit of revenue from Rexwells' operations for the month of February 2019. Her Honour considered it was not unreasonable for the appellant to form the view that there were additional risks around the maintenance of client relationships due to the events that had occurred. That, coupled with the loss of a month's revenue and additional expenses, meant that the offer was not on substantially the same terms as the original bargain and it was not unreasonable for the appellant to reject it.[326]
9. There is no error in the primary judge's reasoning or in the primary judge's conclusion.
10. The respondents contended that the appellant's failure to accept their offer was a stark example of a failure of fairness and responsibility. They said that the $400,000 discount on the purchase price more than ameliorated any potential loss (comparing this against expected net profits for February 2019, additional costs associated with engaging a general manager post-completion and accounting and legal costs associated with the delayed settlement). In any event, as the respondents correctly observed, if the $400,000 did not satisfy such loss it remained open to the appellant to commence proceedings. Counsel for the respondents also read from Payzu Ltd v Saunders[327] saying that the case was authority for the proposition that the innocent party will generally be required to accept an offer of alternative performance from the wrongdoer. Insofar as the appellant relied on a lack of confidence in Mr Steele the respondents said that the primary judge gave no or insufficient weight to six matters.
11. Those six matters were that:
    1. The Executive Services Agreement only required Mr Steele to work 7.5 hours per week.
    2. Working with Mr Steele was not, at the relevant time, an issue for Mr Leaman in any case - the 6 February 2019 draft replacement share purchase agreement showed that Mr Leaman was 'quite happy' to have Mr Steele for a 3-month handover period provided that $1 million of the purchase price was deferred for a year. The respondents accused the appellant of being motivated by a desire to extract more favourable terms than those contained in the original SPA.
    3. The parties met and spoke post-termination and their correspondence did not evince any element of hostility. (By 'their' correspondence we understand the respondents to be referring to the email communications between Mr Leaman and Mr Steele. There was, plainly, a degree of hostility, accusation and threat implicit in the Lawton Gillon letter of offer dated 15 February 2019.)
    4. Mr Steele was selling the Rexwells' business so that he could retire.
    5. In the circumstances there was no realistic possibility of Mr Steele starting up a competitive business.
    6. The post-termination correspondence demonstrated that Mr Steele did not want to become embroiled in litigation. Rather, he wanted to reach a settlement. It was said that, in the circumstances, the prospect of Mr Steele breaching relatively benign handover obligations was remote.
12. Points 1 and 3 to 5 may be accepted. However, individually and collectively they do not bespeak that the appellant acted unreasonably in failing to accept the respondents' offer. The appellant was not concerned with whether Mr Steele might pursue a business in competition with Rexwells but rather with Mr Steele's likely degree of post-completion commitment to an efficient and effective handover. In any case, as we will develop, these are only part of the facts and circumstances relevant to the issue of mitigation.
13. As to point 2, there is no finding that Mr Leaman was acting in an attempt to extract more favourable terms than those as originally bargained for in the SPA. And, even accepting that Mr Leaman was willing to confine Mr Steele's handover obligations to a three-month period, that was in the context of negotiations where there was to be a one-year deferral of $1 million of the purchase price. The appellant's risk was being ameliorated by a different mechanism. That mechanism was not proffered under the respondents' 15 February 2019 offer. The willingness to accept the handover arrangements under the 6 February 2019 draft replacement share purchase agreement does not have the consequences the respondents contend for in the different context of the 15 February 2019 offer.
14. As to point 6, we accept that the post-termination email correspondence on the part of Mr Steele personally was conciliatory. For example, in late January 2019 Mr Steele commenced discussions by saying that he would like the deal to go ahead,[328] suggested that he would rather get things 'sorted ... than the lawyer route',[329] sought to avoid the possible threat of being sued and made a proposal centred around a $400,000 purchase price reduction[330] and - when Mr Leaman made a detailed proposal on 28 January 2019 at 12.10 pm[331] - said that Mr Leaman's proposal sounded like a 'clearer way to go'.[332] Mr Steele also sought Mr Leaman's input on end of month matters.[333]
15. These matters must, however, be considered in the full context of the relationship between the parties. There are other relevant facts and circumstances as follows:
    1. Mr Steele acknowledged that, if he was to sell the Rexwells business, he would have to fully train a purchaser on all aspects of running the business. He would also need to transfer crucial information to the purchaser. For example, Mr Steele had personal knowledge of who Rexwells was dealing with on each of the mine sites where it serviced its customers. Mr Steele would have to transfer that information to enable the purchaser to make contact with them.[334]
    2. In the course of negotiating the SPA there were three occasions where Mr Steele had walked away from an understanding he had reached with Mr Leaman. One of these included an occasion where Mr Steele reneged on an understanding and walked away from the deal having earlier shaken hands with Mr Leaman.[335]
    3. In late November 2018 Mr Steele threatened to walk away from the transaction for a fourth time.[336]
    4. Zilkens Lawyers' letter of 17 January 2019 arrived without warning in circumstances where the appellant had sought to ameliorate the respondents' concern about the giving of financial assistance by offering an indemnity (as had been requested the previous day).[337]
    5. Mr Steele went incommunicado, ignoring Mr Leaman's attempts to contact him by phone, text message and email, after Zilkens Lawyers' letter dated 17 January 2019. This continued for three days.[338]
    6. From the commencement of the post-termination discussions Mr Leaman made it clear that he was concerned about handover. That concern was reasonable in the circumstances. In a 24 January 2019 email Mr Leaman informed Mr Steele:

We have concerns around handover and performance of obligations. We need a tangible and real retention to support this. Please provide your retention offer. Please understand we are not asking to change the purchase price with this concern, but that we need a retention value for a period of time.[339]

1. On 28 January 2019, as evidenced by the exchange of emails on that day, Mr Leaman proposed among other things that $1 million of the purchase price be deferred for one year; Mr Steele responded to the proposal positively, saying '[i]t sounds like a clearer way to go'.[340] The new share purchase agreement was prepared on this basis and sent to the respondents' lawyers on 6 February 2019.[341] But, on 8 February 2019, Mr Steele then did an about face by informing the appellant, through their respective lawyers, that he was no longer comfortable with a $1 million deferred component of the purchase price.[342] As has been seen, the 15 February 2019 offer was prepared without the $1 million deferral.
2. Mr Leaman viewed this as a matter of concern as it was 'another deal broken'.[343]
3. The 15 February 2019 offer was, for the reasons we have given, properly to be viewed as a formal lawyer's letter designed to preserve a position as opposed to a commercial offer designed to bring about a commercial outcome. It questioned the appellant's bona fides and accused the appellant of acting advantageously by manufacturing an artificial legal position. A reasonable business person reading the letter would undoubtedly question whether Mr Steele and Mr Leaman would be able to work together productively.
4. Moreover, from the outset of the post-termination discussions Mr Leaman had made clear to Mr Steele the importance Mr Leaman placed on some of the purchase price being deferred to protect against perceived risks concerning handover and the performance of the respondents' obligations. Mr Steele had tacitly conceded that position. But the 15 February 2019 offer characterised the appellant as seeking more favourable terms - perhaps because it 'may require different payment terms in order to be able to settle'[344] - and by necessary implication rejected the possibility of any retention payment.
5. Mr Leaman's evidence was that he no longer had any trust in Mr Steele to meet his future obligations under a new share purchase agreement - Mr Leaman felt that Mr Steele had broken their agreements on numerous occasions.[345] There was, objectively, a reasonable basis for that view given the facts and circumstances we have recounted. Mr Steele's assistance during a handover period would on any view be crucial to ensure that the appellant obtained the full benefit of a multi-million dollar transaction in relation to a highly specialised business. Mr Leaman had attempted to ameliorate the risk concerning handover and performance of the respondents' obligations by the introduction of a deferred component to the purchase price. Mr Steele was aware of that and the reason for the proposal. Mr Steele was initially receptive to that proposal and tacitly agreed to it. Mr Steele then reneged. Ultimately, rather than attempt to reach a commercial outcome by conciliatory means, the respondents chose to make an offer by a combative formal lawyer's letter that was designed to preserve a position rather than reach a commercial solution. The offer was pregnant with uncertainty.
6. In the circumstances the respondents have not demonstrated error in the primary judge's conclusion that the respondents did not discharge their burden of proving that the appellant failed to mitigate its loss by not accepting the 15 February 2019 offer. To the contrary, when regard is had to the whole of the relevant facts and circumstances - not just those facts and circumstances selectively pressed by the respondents - the appellant acted reasonably in not accepting the 15 February 2019 offer.
7. We will deal briefly with the two remaining aspects of the respondents' submissions on the issue of mitigation. First, contrary to counsel for the respondents' implicit submission, the test is not one of 'fairness and responsibility'. The question is whether the respondents discharged their onus to prove that the appellant failed to take reasonable steps to mitigate its damage.
8. Second, we do not accept that Payzu Ltd v Saunders is authority for the proposition that the innocent party will generally be required to accept an offer of alternative performance from the wrongdoer. At least two members of the Court of Appeal expressly confirmed that the test was one of reasonableness and it was always a question of fact.[346] There can, in any case, be no such hard and fast rule as that suggested by the respondents where the test is one of reasonableness. Everything depends on the specific facts. So far as the respondents relied on the outcome in the case, the facts in Payzu Ltd v Saunders were very different from the present case. Payzu Ltd v Saunders was concerned with a contract to supply goods - namely, silk crêpe de chine. There was no need to rely on the continuing endeavours and integrity of an outgoing counterparty as arises in the present facts and circumstances.
9. Notice of contention ground 4 fails.

Ground 17 and notice of contention ground 5: the dividend distribution and franking credit issue

1. Ground 17 and notice of contention ground 5 should be dealt with together insofar as both are directed to the same finding. The impugned finding is as follows:

[A]s was submitted by [the respondents], the calculation that was undertaken by the experts considered the net present value of the likely net profits of Rexwells. Neither of the experts expressed an opinion of [sic] the calculation of the loss of [the appellant]. Counsel for [the appellant] accepted this was the case but disputed the assessment was materially different. This was because [the appellant] intended that Rexwells would distribute its profit by way of franked dividends to [the appellant], a corporation. While I accept this may be the case, there was no evidence of the extent of any franking credits or whether it was possible or likely for Rexwells to pay all dividends as fully franked dividends [441]. (original emphasis)

1. Ground 17 alleges that the primary judge erred by concluding that expert evidence relating to franking credits was relevant to a determination of the appellant's loss and damage. The simple answer to ground 17 is that the primary judge made no such finding. The primary judge merely observed that there was no evidence of the available franking credits or whether it was possible or likely for Rexwells to pay all dividends as fully franked dividends. That observation was correct. There was no such evidence. Ground 17 goes nowhere and must be dismissed.
2. In any case the reference to the distribution of franked dividends raises a false issue. The appellant sought to quantify its loss by advancing a measure of damage based, in part, on a calculated net present value of the amount that would be available for distribution to it as a dividend had the transaction proceeded. This, for practical purposes, was approximated by reference to Rexwells' likely net profits after tax.
3. Where the court finds damage has occurred it must do its best, if reasonably possible, to quantify the loss on the available material. Where, as here, damages are being quantified on the hypothesis that a company has a sole shareholder - and that shareholder is thereby in a position to ensure that the company's net profits after tax are distributed to it as dividends - the company's likely net profits after tax are an adequate proxy for the amount that would be available for future distributions to the shareholder as dividends. At least that is so in the absence of any evidence which raises an issue to be negated as to a possible legal or financial impediment to the distribution of such dividends. No such issue arose on the evidence in the present appeal. The respondents accepted as much in conceding that the primary judge was correct in her Honour's observation accepting the appellant's submission that the assessment of the net present value of the likely net profits of Rexwells and the assessment of the appellant's loss were not materially different.[347]
4. To the extent, if any, that there is a concern that an overinflated figure may result from approximating the amount available to a sole shareholder for future dividend distribution by reference to the company's likely net profits after tax, a trial judge assessing damages may consider it appropriate to apply a discount to allow for possible contingencies in the notional future dividend distributions.
5. Whether or not franking credits are available - and whether or not the notional dividends are fully franked - does not affect the analysis. The appellant did not advance a case that its damages should be increased by the availability of franking credits and the receipt of a franked dividend (either fully or in part). There is, in the circumstances, no occasion to consider this possibility.
6. The respondents' notice of contention ground 5 implicitly recognises the limitations for their case of the finding at primary reasons [441]. The respondents therefore contend that:
   1. The primary judge erred in finding that the assessment of the net present value of Rexwells' likely net profits after tax was not materially different from the assessment of the appellant's loss (assuming her Honour erred in rejecting the appellant's measure of damage).
   2. The primary judge should have rejected the appellant's submission to that effect on the basis that, aside from the franking credit issue, there was no evidence to support the appellant's submission that the appellant intended that Rexwells would distribute all of its profits by way of dividend, franked or otherwise.
7. The respondents supported notice of contention ground 5 by referring to a series of evidentiary materials from which it was said the court would draw the inference that had the transaction under the SPA proceeded Rexwells would not have distributed all of its net profits after tax as dividends.
8. The difficulty with the respondents' submission, and notice of contention ground 5 more generally, is that it presupposes that the appellant's measure of damage requires proof on the balance of probabilities that Rexwells would in fact have distributed all net profits after tax as dividends. No such proof is required. Counsel for the respondents obliquely recognised as much when he observed that the difficulty with assimilating the net present value of Rexwells' likely net profits after tax and the appellant's loss merely manifested the problem with the measure of damage.[348]
9. So understood, the evidentiary matters relied on by the respondents raise a false issue. The true issue is whether Rexwells' likely net profits after tax are an adequate proxy for the amount that would be available for future distributions by way of dividend to the appellant as shareholder. For reasons previously explained it should be accepted that this is the case. The primary judge accepted the appellant's submission that there was no material difference between the assessments. As a matter of principle, once the appellant's measure of damage is accepted, her Honour was correct to so hold. Once this is appreciated notice of contention ground 5 has no independent operation and must be taken to be subsumed within the measure of damage question raised by grounds 1 - 13.
10. Notice of contention ground 5 fails.

Cross-appeal ground 3: the amount of the deduction on account of Mr Steele's replacement

1. Cross-appeal ground 3 concerns a provisional finding that the primary judge made in relation to the quantification of damages. In assessing Rexwells' likely net profits after tax the experts made different allowances for a replacement in relation to Mr Steele. Mr Honey made no allowance, on the basis that Mr Leaman would replace Mr Steele, whereas Mr Hockley included an amount of $225,000 per annum. The $225,000 per annum amounted to a historical net adjustment of $175,000 per annum because a $50,000 per annum superannuation payment had been received by Mr Steele and associated parties for each of the three financial years ending 30 June 2017, 2018 and 2019.[349]
2. In providing for an allowance of $225,000 per annum, Mr Hockley's evidence was that:[350]
   1. In valuing a business it was standard practice to include a salary for the owner as a cost of the business.
   2. The expense should be provided for to take account of the possibility that a purchaser of Rexwells may be an investor who will bring in a management team to run the business.
3. Mr Honey accepted that it was standard valuation practice to include a cost for anyone working in the business. However, Mr Honey did not consider that an adjustment was required in the present case. This was because Mr Leaman was replacing Mr Steele in the business. Hence any payments could be taken as dividends.[351]
4. The primary judge adopted a third course, effectively maintaining the status quo by providing for an allowance of $50,000 per annum. Her Honour reasoned:

While I accept, consistent with the views expressed by both experts, that it would be standard valuation practice to include an allowance for a salary of the business owner in the valuation of the business, this was not the task that the experts were asked to do. Neither of the experts purported to give an opinion as to the valuation of Rexwells as at 31 January 2019 (or 22 January 2019). Mr Hockley ultimately accepted that this was irrelevant to the task they had been asked to perform.

I accept Mr Leaman's evidence that he did not intend to employ anyone to replace Mr Steele. I also accept, consistent with Mr Hockley's [sic] evidence, that Mr Leaman would have taken any payments from the business in dividends as opposed to salary. For these reasons, I consider that a deduction of only $50,000 should be made from the gross profit for the costs associated with Mr Steele and that a further deduction of a full salary of $200,000 should not be made.[352]

1. It is not apparent where the primary judge's reference to $200,000 per annum comes from. In the JER there was only reference to an amount of $225,000 per annum. Moreover, the substituted finding sought in cross-appeal ground 3 refers to a deduction of a salary of $225,000 per annum.
2. By cross-appeal ground 3 the respondents challenge the primary judge's provisional finding limiting the deduction on account of replacing Mr Steele to $50,000 per annum. The respondents contend that the primary judge should have made a deduction of $225,000 per annum.
3. The respondents made three submissions in support of cross-appeal ground 3. First, in principle there should be an allowance for the reasonable expense of any owner/manager working in the business - otherwise the likely net profit after tax would be artificially inflated. Second, and relatedly, the quantification exercise ought to be considered objectively rather than subjectively. Third, the evidence did not sustain the finding that Mr Leaman did not intend to employ anyone to replace Mr Steele.
4. The appellant acknowledged that an allowance for the reasonable expense of an owner/manager working in the business would be necessary in the event of a business valuation. But, according to the appellant, that was not what was being quantified. The appellant's measure of damage was based on the likely net profits after tax. There was, in the circumstances, no warrant for any notional allowance for the expense of an owner/manager where such an expense would not in fact be incurred.
5. It should be remembered that, although the appellant sought to quantify its loss on particular bases, the critical matter for determination was the 'true' or 'real' value of the Rexwells' share. There is only one 'true' or 'real' value of the share. Such a 'true' or 'real' value is something to be determined objectively - not idiosyncratically based on whether or not an owner/manager intended to be remunerated for services rendered in his or her managerial capacity. Nor is the 'true' or 'real' value affected by historical practices. Rather, consistent with Mr Hockley's approach, so far as the critical matter for determination was the 'true' or 'real' value of the Rexwells' share, it was appropriate to adjust the likely net profit after tax by providing for a reasonable market remuneration for the owner/manager. Both experts accepted that this was the standard practice for a business valuation. The underlying principle that informs that accepted standard practice in the context of a business valuation - that there is a necessary role to be fulfilled at a cost - applies equally in determining the 'true' or 'real' value of the share.
6. Accordingly, in our respectful view, the primary judge erred as a matter of principle in assessing whether there should be a deduction on account of Mr Steele's replacement by simply accepting that Mr Leaman did not intend to employ anyone to replace Mr Steele.
7. It is, in the circumstances, not necessary to consider whether - as the respondents also contended - the primary judge erred in fact in finding that Mr Leaman did not intend to employ anyone to replace Mr Steele in the business. But it is necessary to determine what deduction ought to be allowed in substitution for the $50,000 per annum allowance as accepted by the primary judge.
8. Mr Hockley assessed the fair market remuneration for the replacement for the services historically performed by Mr Steele to be $225,000 per annum (inclusive of superannuation).[353] However, Mr Hockley also said that this determination was outside his expertise.[354] He was not a remuneration expert.[355] In the circumstances Mr Hockley's evidence, standing alone, is of little probative value even though he was not cross-examined with a view to challenging this aspect of his evidence.
9. There is, however, some available evidence in the form of the amount that was to be paid to Mr Steele under the Executive Services Agreement - an amount of $35,000 per annum (exclusive of superannuation) for one day a week. Adjusted to a fulltime salary, and allowing superannuation at the then statutory rate of 9.5%,[356] this equates to $191,625 per annum. This appears to be a little low insofar as the experts agreed a figure of $164,000 per annum (inclusive of superannuation) for a new general manager.[357] It is probably a little low as Mr Steele's role under the Executive Services Agreement is in the nature of a consultancy rather than the role performed by an owner/manager - a role akin to that of a managing director or chief executive officer. To reflect that fact there should be some uplift for the $191,625 per annum. This analysis supports the reasonableness of Mr Hockley's $225,000 per annum. Accordingly, despite Mr Hockley's lack of expertise, we would accept $225,000 per annum as a reasonable market remuneration for the owner/manager of Rexwells working full‑time (ie five days a week) during the financial year ended 30 June 2019.
10. Mr Hockley's $225,000 per annum was based on an owner/manager working full-time (ie five days a week).[358] The information memorandum provides that the owner/manager only worked approximately 25 - 30 hours per week in the business.[359] The deduction should be reduced proportionately. The allowance so calculated is $150,000 per annum (inclusive of superannuation).[360]
11. Accordingly, we would allow cross-appeal ground 3. The primary judge's provisional finding that there should be a $50,000 per annum deduction for a replacement in relation to Mr Steele is too low. We would substitute for that finding a finding that there should be a $150,000 per annum deduction.

1. For these reasons the appeal must be allowed in part. So too the respondents have succeeded on one aspect of their cross-appeal (cross-appeal ground 3) and two aspects of the notice of contention (notice of contention grounds 1 and 2). We are able to make and have made a substituted finding in relation to the matter the subject of cross-appeal ground 3. Regrettably, however, this court is not in a position to make all of the necessary factual findings on notice of contention grounds 2 and 3 as to the contingency arising in relation to the cl 2.2(e) condition precedent concerning the Rio Tinto contract.
2. Well after the appeal hearing, just before the time the court had indicated to the parties it was likely to deliver judgment on the appeal, the appellant applied for leave to reopen so that it might adduce additional evidence on the appeal. The appellant sought leave to adduce an affidavit of Barry John Honey sworn 12 September 2024. That affidavit provided a further assessment of the quantum of the appellant's damages - one that was purportedly based on the findings of the primary judge. The appellant noted that the primary judge had said that, had her Honour accepted the appellant's measure of damage, the primary judge would have asked the parties to confer and attempt to agree the calculation of the appellant's damages on the basis of her Honour's findings as to the damages calculation. The additional evidence of Mr Honey was said to be provided to enable this court to perform the necessary calculations and thus avoid the necessity for any remittal to the primary judge.
3. The court made programming orders for submissions on the appellant's application so that it might be determined on the papers as part of the court's reasons for decision on the appeal.
4. In this respect, in addition to Mr Honey's affidavit and a supporting solicitor's affidavit sworn 18 September 2024, the court received the appellant's submissions in support of the application dated 20 September 2024, the respondents' submissions in opposition to the application dated 18 October 2024 and the appellant's submissions in reply dated 25 October 2024. We will not summarise those submissions. There is a practical reason why this court should refuse the application for leave to reopen. It should, however, be observed that the respondents' submissions went well beyond what was permitted by the court's programming orders. The respondents' submissions were meant to be in opposition to the appellant's application for leave to reopen. Instead the respondents' submissions repeated and developed much that had been said on the various quantum issues that arose in the course of the appeal proper. That should not have occurred. For the avoidance of doubt those additional submissions, made without leave, have not been taken into account in coming to the conclusions previously expressed in these reasons.
5. The outcome as to notice of contention grounds 1 - 3 necessitates that the proceedings be remitted to the primary judge for a limited rehearing. That being the case it is convenient that the assessment of damages necessitated by the upholding of restated grounds 1 - 13 also be remitted to the primary judge (the Rio Tinto contract contingency point being relevant to that assessment in any event). There is, in the circumstances, no practical utility in allowing the appellant's application for leave to reopen. We would refuse the appellant's application on the basis that the appellant has not established that the reopening as sought is in the interests of justice. As the proceedings must be remitted to the primary judge in any event there will be no significant savings to the parties in time or costs were this court to receive Mr Honey's additional affidavit for the purpose of assessing the appellant's damages. To the contrary such a bifurcation of the steps required to bring the dispute to a final conclusion would be likely to increase the parties' costs and delay the ultimate resolution of the dispute.
6. The appellant's application in an appeal dated 20 September 2024 for leave to reopen and leave to adduce Mr Honey's affidavit sworn 12 September 2024 should be dismissed.
7. The proceedings must be remitted to the primary judge for a limited rehearing. One aspect of the rehearing will be to address the unresolved issues concerning the Rio Tinto contract. The other aspect of the rehearing will involve an assessment of the appellant's damages. The primary judge should conduct the assessment of the appellant's damages in accordance with the reasons of this court. The rehearing before her Honour should proceed on the evidence adduced at the trial together with such further evidence as her Honour may admit limited to the outstanding issues for determination as described in the reasons of this court.
8. There is one other outstanding issue affecting the assessment of damages. Both at trial and on appeal the appellant assumed that in quantifying damages there should be a $1 million allowance for working capital that the appellant intended to introduce into Rexwells on its purchase of the share. The $1 million deduction was included in the appellant's further and better particulars of loss and damage[361] and was mentioned in the appellant's written closing submissions at trial.[362] It is also included as a deduction in the quantum of damages sought in the appellant's submissions on appeal.[363]
9. Accordingly, on the appellant's case the $1 million cash outflow needs to be taken into account in the assessment of damages. Prima facie it is something that the appellant accepts to be relevant to the 'true' or 'real' value of the Rexwells' share. Why this is so was not the subject of any submissions. Nor is it obvious on the evidence. There was mention that the appellant intended to introduce the working capital. But beyond that there was no explanation for the deduction as part of the determination of 'true' or 'real' value.
10. It is also not obvious whether the appellant contends that the $1 million in working capital will be recouped at the end of the effective life of the investment (five years according to the primary judge's finding as upheld on appeal). If so, appropriately discounted, this might mean that there is a further cash inflow to be taken into account on the determination of the 'true' or 'real' value of the share. Conceivably it is also possible that a different discount rate might apply to this amount.
11. Had the $1 million in working capital been the only outstanding issue we would have been minded to hear from the parties on the matter on delivering judgment with a view to any issue being considered and determined by this court. Given what is proposed by way of remitter the implications of the advancing and any recouping of the $1 million in working capital should be considered and determined by the primary judge in assessing damages on the limited rehearing as must now proceed.
12. Accordingly, while counsel for the parties should be heard on the precise terms of the orders, we would make orders to the following effect:

(a) The appeal is allowed in part.
>
> (b) The cross-appeal is allowed in part.
>
> (c) Paragraphs 1 - 3 of the order of the Supreme Court of Western Australia made 16 December 2022 in action CIV/1323/2019 are set aside.
>
> (d) The proceedings in action CIV/1323/2019 are remitted to Hill J in the General Division of the Supreme Court of Western Australia for a rehearing and final determination in accordance with the reasons of this court.
>
> (e) The rehearing before Hill J proceed on the evidence adduced at the trial of the proceedings before her Honour on 24, 27 - 31 July 2020 and 20 August 2020 together with such further evidence as her Honour may admit limited to the outstanding issues for determination as described in the reasons of this court.
>
> (f) The appellant's application in an appeal dated 20 September 2024 is dismissed.

(a) The appellant has leave to appeal against the orders of the Supreme Court of Western Australia made 23 March 2023 in action CIV/1323/2019 if and to the extent that leave to appeal is required.
>
> (b) The appeal is allowed.
>
> (c) The orders of the Supreme Court of Western Australia made 23 March 2023 in action CIV/1323/2019 are set aside.

13. The orders in appeal CACV/42/2023 follow from appeal CACV/1/2023 being allowed in part.
14. The parties should be heard on the costs of the appeal and the cross-appeal. The parties should also be heard on the costs of the primary proceedings. On a provisional basis, however, there may be merit in reserving the costs of the primary proceedings to the primary judge. The appropriate costs order may be affected by the outcome of the limited rehearing before the primary judge.

Annexure: grounds of appeal, notice of contention and grounds of cross‑appeal Grounds of cross-appeal

1. The primary judge erred in fact and law in finding that the respondents renunciated the Share Purchase Agreement (Agreement) by a letter, dated 17 January 2019, from their solicitors to the appellant's solicitors, (Letter) in that:

1.1 the primary judge accepted that, as at 4.47 pm on 17 January 2019, when the Letter was sent[364], it was not possible for cl 2.3 of the Agreement[365] to be complied with to enable completion to occur on 31 January 2019;

1.2 the primary judge accepted that, at or about the time the Letter was sent, the parties were obliged under cl 2.5 of the Agreement[366] to give notice that they believed cl 2.3 was incapable of being satisfied prior to completion.[367]

1.3 the primary judge placed reliance on the Letter asserting the respondents' view as a fact and not seeking to discuss what was required by cl 2.3 of the Agreement,[368] instead of the primary judge asking and determining:

1.3.1 whether there was an honest apprehension by the respondents as to the terms of the Agreement;

1.3.2 whether the respondents had acted otherwise than in accordance with a bona fide belief as to the correctness of the interpretation which they sought to place upon the Agreement;

1.3.3 whether the respondents' apprehension as to the terms of the Agreement were open to correction; and

1.3.4 whether any attempt was made by the appellant, CH Leaman Investments Pty Ltd, (CH Leaman) to persuade the respondents of the error of their ways or give them any opportunity to reconsider their position in the light of an assertion of the correct interpretation.

1.4 the primary judge relied, in error, upon there being nothing in the Letter which suggested the respondents were prepared to perform their obligations under the Agreement, even if they were wrong in their construction of its terms;[369] and

1.5 the primary judge found, in error, that whether the respondents believed that their action in giving notice of termination under the Letter was justified by the terms of the Agreement was not relevant because the test of whether conduct is repudiatory or a renunciation is objective.[370]

The primary judge ought to have found that the respondents did not, by the Letter, renunciate the Agreement, in that:

1.6 there was an honest apprehension by the respondents as to the terms of the Agreement;

1.7 the respondents had not acted otherwise than in accordance with a bona fide belief as to the correctness of the interpretation which they sought to place upon the Agreement;

1.8 the respondents' apprehension as to the terms of the Agreement were open to correction;

1.9 no attempt was made by CH Leaman to persuade the respondents of the error of their ways or give them any opportunity to reconsider their position in the light of an assertion of the correct interpretation; and

1.10 the contents of the Letter did not, in the circumstances, evince an intention, which would convey to a reasonable person, in the situation of CH Leaman, no longer to be bound by the terms of the Agreement.

1. The primary judge erred in fact and law in finding that the respondents alone were in breach of the best endeavours clause (clause 2.4) in the Agreement,[371] in that the finding was against the evidence or the weight of evidence.[372] The primary judge ought to have found that CH Leaman and the respondents were in mutual breach of the best endeavours clause (clause 2.4) in the Agreement and, as a consequence, that CH Leaman was precluded from recovering any damages said to arise from the respondents' renunciation of the Agreement or their breach of clause 2.4 of the Agreement.

2.1 The primary judge failed to take into account, or give sufficient weight to, the following circumstances:

2.1.1 on 7 November 2018 and 13 November 2018, Peter Lark, of Lark Lawyers, CH Leaman's then solicitors, said to Sidd Jain and Alex Zilkens, respectively, of Zilkens Lawyers, the respondents' then solicitors, that he, or his firm, would draft the financial assistance documents;

2.1.2 by 9 January 2019, Mr Lark and Lark Lawyers had taken no steps to prepare the financial assistance documents;

2.1.3 on 9 January 2019, Lark Lawyers notified Zilkens Lawyers, as if Zilkens Lawyers were to draft the financial assistance documents, that CH Leaman expects to be able to service and repay the borrowings, referring to the $4m loan from NAB which CH Leaman was using to fund the purchase price for the share in Rexwells under the Agreement;[373]

2.1.4 after a telephone conversation and email correspondence between Lark Lawyers and Zilkens Lawyers, it was agreed, as originally arranged, that Lark Lawyers would prepare the financial assistance documents;[374]

2.1.5 on 11 January 2019, Zilkens Lawyers sent draft financial assistance documents to Zilkens Lawyers;[375]

2.1.6 Lark Lawyer's [sic] email of 11 January 2019 warned that the requisite documents had to be duly completed and lodged with ASIC by no later than 15 January 2019;[376]

2.1.7 the draft resolution of the third respondent, Mr Steele, as the sole director of the first respondent, Tuesday Enterprises Pty Ltd (Tuesday Ents), prepared by Lark Lawyers, to approve it resolving to approve the provision by Rexwells Corporations Pty Ltd (Rexwells) of financial assistance to CH Leaman, provided that the financial assistance transaction did not lead to any solvency concerns for Rexwells;[377]

2.1.8 the draft resolution of the sole shareholder of Rexwells, Tuesday Ents, to approve the provision of financial assistance by Rexwells to CH Leaman, prepared by Lark Lawyers, provided that the financial assistance transaction did not lead to any solvency concerns for Rexwells and for it to be passed in accordance with s 260B(1)(a) of the Corporations Act 2001 (Cth) (Act) as a special resolution;[378]

2.1.9 the draft disclosure statement, in accordance with s 260B(4) of the Act, prepared by Lark Lawyers, provided that the transactions did not lead to any solvency concerns for Rexwells and [t]o the best of the knowledge and belief of Tuesday Enterprises, the proposed financial assistance to be provided by Rexwells would not materially prejudice Rexwell's [sic] ability to pay its creditors;[379]

2.1.10 the condition in clause 2.3 of the Agreement[380] required approval by the shareholders under s 260B of the Act and s 260B(1)(b) did not require a special resolution or any issues as to solvency or prejudice to creditors to be resolved and the primary judge found that the requisite documents had to be duly completed and lodged with ASIC by no later than 17 January 2019, rather than 15 January 2019;[381]

2.1.11 on 14 January 2019, Zilkens Lawyers sought financial information from CH Leaman in order for the respondents and Rexwells to determine whether the provision of financial assistance by Rexwells would materially prejudice the ability of Rexwells to pay its creditors, as they were enjoined to do by Lark Lawyers' draft documents;[382]

2.1.12 on 15 January 2019, the date Lark Lawyers had previously said was the deadline for completing and lodging the documents with ASIC, Lark Lawyers told Zilkens Lawyers that CH Leaman expected NAB to be flexible with regard to repayments under their $4m loan until Rexwells' income reached a sustainable level; the security which NAB was taking; if additional funds were required, they would be sourced from CH Leaman's other resources; and the documents had to be lodged with ASIC that day and the resolution passed the next day;[383]

2.1.13 in relation to the finding at J [293], the explanation, on 16 January 2019, provided by Zilkens Lawyers, of the continuing concerns of the respondents and why the financial information provided by CH Leaman was inadequate; and the request for further information from CH Leaman to enable the respondents and Rexwells to form the requisite view (required according to Lark Lawyers) as to the absence of prejudice to Rexwells' ability to pay its creditors;[384]

2.1.14 on 17 January 2019, in lieu of providing further information, which it was said would take too long,[385] despite CH Leaman having just secured a $4m loan from NAB, Lark Lawyers sent to Zilkens Lawyers an indemnity from CH Leaman and Mr Leaman for Mr Steele. The recitals to the draft indemnity deed provided that the Act required that, before financial assistance was provided, it had to be approved by the members of the company on the basis that the proposed financial assistance would not materially prejudice the company's ability to pay its creditors and that Mr Steele was so satisfied on the information provided to him;[386]

2.1.15 Mr Pocock, of Lark Lawyers, gave evidence that his understanding, when he drafted the recitals to the draft indemnity deed, was that it would be inappropriate for Tuesday Ents to pass a resolution approving the provision of financial assistance, unless Mr Steele was satisfied that the proposed financial assistance would not materially prejudice Rexwells' ability to pay its creditors;[387] and

2.1.16 Mr Leaman and Lark Lawyers knew that Zilkens Lawyers and Mr Steele were relying on Lark Lawyers to guide them through the s 260B process.[388]

1. The primary judge erred in law (at [385]) in concluding (implicitly) that the first limb of the rule in Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 (Hadley v Baxendale) limited the appellant's ability to recover damages for breach of contract to the difference between the purchase price and the market value of the asset the subject of the contract. The primary judge ought to have found that the first limb of the rule in Hadley v Baxendale contemplated a flexible approach to determining the proper measure of damages reasonably in the contemplation of the parties at the date they entered into the contract, alternatively at the date of termination, which could include (amongst other things) either:

1.1 the difference between the purchase price and the 'true' value of the asset the subject of the contract;

1.2 alternatively, on the facts as found by the primary judge, the discounted net present value of future profits of the second respondent over a term of 10 years plus its residual value, less expenses (including the purchase price contained in the Agreement) that would have been incurred by the appellant had the Agreement been performed.

1. The primary judge erred in fact and law (at [421] to [422]) in concluding that the Agreement was, in substance, a share sale agreement. The primary judge ought to have found that the Agreement, having regard to (amongst other things) the express provisions for the adjustment of the purchase price, was, in substance, for the purchase of a profitable business as a going concern, purchase of the single share being a mechanism for the sale of the business.

1. The primary judge erred in fact and law by concluding (at [382], [421], and [422]) that the 'ordinary', or 'normal' or 'usual' measure of damages for a share sale agreement is the difference between the price of the share under the agreement and the market value of the share at the date of the contract, alternatively the date of the termination, and that that measure of damages was appropriate in the present case. The primary judge ought to have found that:

3.1 in determining the proper measure of damages, the Court was required to be flexible and identify an appropriate amount to place the injured party in the position it would have been in had the contract been fully performed and thus the Court was required to identify the actual loss suffered by the innocent party; and

3.2 the proper measure of damages in the present case was the difference between the purchase price and the 'true' value of the share at the date of termination;

3.3 in the alternative to paragraph 3.2 above, the appropriate measure of damages was the discounted net present value of the second respondent's future profits over a term of 10 years plus its residual value, less expenses (including the purchase price contained in the Agreement) that would have been incurred by the appellant had the Agreement been performed.

1. The primary judge erred in fact and law by concluding (at [423] to [424]) that the appellant was not entitled to damages for the loss in not receiving the share in the second respondent as well as the profit it would have earned from operating the second respondent and that the appellant was only entitled to its loss for not receiving the share. The primary judge ought to have found that:

4.1 the proper measure of the appellant's damages, based on its loss in not receiving the share in the second respondent, was the difference between the purchase price and the 'true' value of the share, calculated or assessed on the basis of the discounted net present value of the second respondent's future profits over a term of 10 years plus its residual value; alternatively

4.2 the proper measure of the appellant's damages was the discounted net present value of the second respondent's future profits over a term of 10 years plus its residual value, less expenses (including the purchase price contained in the Agreement) that would have been incurred by the appellant had the Agreement been performed.

1. The primary judge erred in fact and law by concluding (at [423] to [424]) that the appellant was not entitled to recover damages for both its loss in not receiving the share in the second respondent and the profit it would have earned from operating the second respondent, implicitly finding that the appellant was, in fact, seeking both heads of damage. The Primary Judge ought to have found that the appellant was only seeking damages on the basis of either its loss in not receiving the share in the second respondent or the profit it would have earned from operating the second respondent, but not both.

1. The primary judge erred in fact and law by concluding (at [425]) that it was open to the appellant to prove an alternative basis of its loss by adducing evidence that it had deployed its funds to purchase another business which had a lower level of profitability and seeking the difference between the profit it would have received from the purchase of the second respondent's share and the alternative business. The primary judge ought to have found:

6.1 consistent with her Honour's observations in [425], that a loss of profits was an appropriate measure of damages; and

6.2 in the absence of any evidence as to an alternate use of the purchase funds (for which the primary judge should have held the defendants bore an evidential onus to adduce), there should be no reduction to the calculation of the appellant's losses.

1. The primary judge erred in fact and law by concluding (at [426]) that in determining the appropriate measure of damages in the present case, the facts relied upon by Her Honour were analogous to authorities in which a seller fails to complete a sale of land or fails to supply goods under a contract. The primary judge ought to have found that, to the extent that any analogy with authority could be drawn, the present case was analogous to authorities relating to contracts for the provision of services or the sale of a business as a going concern.

1. The primary judge erred in law by concluding (at [426]) that there were no authorities that supported the appellant's contention that the basis on which it sought damages was the appropriate measure. The primary judge ought to have found that the relevant authorities prescribed a flexible approach to assessing damages for breach of contract including the measure of damages asserted by the appellant and the appellant's contention was consistent with the applied relevant principles, being the assessment necessary to put the appellant in the position the appellant would have been in had the contract been performed.

1. The primary judge erred in fact and law by concluding (at [427] to [428]) that, notwithstanding that the share in the second respondent was not a fungible asset and it was not possible to purchase an alternative share on market, as the plaintiff had failed to adduce evidence of the market value of the share in the second respondent; alternatively the lesser amount of profits it would have earned from the purchase of an alternative business; alternatively its wasted expenditure, the appellant had failed to prove it had suffered any loss. The primary judge ought to have found that:

9.1 as the share in the second respondent was not fungible and there was no market for the share, the appropriate measure of damages was the difference between the purchase price and the 'true' value of the business, valued by a discounted net present value of future profits of the second respondent over a 10 year period, plus its residual value;

9.2 in the alternative to 9.1 above, as the share in the second respondent was not fungible and there was no market for the share, the appropriate measure of damages was the discounted net present value of future profits of the second respondent over 10 years plus its residual value, less expenses (including the purchase price contained in the Agreement) that would have been incurred by the appellant had the Agreement been performed.

9.3 as there was no evidence of an alternative business purchased by the appellant, no deduction should be made from the true value of the second respondent; alternatively no deduction should be made from the discounted net present value of future profits of the second respondent;

9.4 the Court was satisfied by the evidence before it that the appellant had discharged its onus to prove its damages (on the basis of either the measure of damages outlined in 9.1, alternatively 9.2) beyond nominal damages;

9.5 the appellant correctly sought and proved its damages on the basis set out in 9.1, alternatively 9.2 above, to the exclusion of claiming any wasted expenditure, as it would not be entitled to recover both.

1. The primary judge erred in fact and law by finding (at [430] to [431]) that the appellant had not adduced any evidence of the market value of the share in the second respondent as at 22 January 2019 or 31 January 2019. The primary judge ought to have found that a determination of market value of the share in the second respondent was neither possible on the facts, nor a relevant consideration in determining the proper measure of damages.

1. The primary judge erred in fact and law by finding (at [430] to [431]) that the appellant's failure to adduce evidence of market value was relevant or material to the determination of damages. The primary judge ought to have found that a determination of market value of the share in the second respondent was neither possible on the facts, nor a relevant consideration in determining the proper measure of damages.

1. The primary judge erred in fact and law by finding (at [430] to [431]) that the expert evidence led by the appellant would only have been relevant had the purchase price been paid and the benefit not received. The primary judge ought to have found that:

12.1 a determination of market value of the share in the second respondent was neither possible on the facts, nor a relevant consideration in determining the proper measure of damages; and

12.2 the expert evidence was relevant to determining either the true value of the share of the second respondent, alternatively the discounted net present value of the second respondent's future profits over a term of 10 years plus its residual value, less expenses (including the purchase price contained in the Agreement) that would have been incurred by the appellant had the Agreement been performed.

1. The primary judge erred in fact and law by concluding (at [431]) that, as the appellant had not proved the market value of the share in the second respondent, or any other amount, the appellant was entitled to only nominal damages. The primary judge ought to have found that:

13.1 a determination of market value of the share in the second respondent was neither possible on the facts, nor a relevant consideration in determining the proper measure of damages;

13.2 the proper measure of damages was the difference between the purchase price and the 'true' value of the share in the second respondent;

13.3 in the alternative to paragraph 13.2 above, the proper measure of damages was the discounted net present value of the second respondent's future profits over a term of 10 years plus its residual value, less expenses (including the purchase price contained in the Agreement) that would have been incurred by the appellant had the Agreement been performed;

13.4 the expert evidence adduced by both parties was sufficient to determine the appellant's damages based on the measures outlined in either paragraph 13.2 or 13.3 above.

1. Upon the basis that Grounds 1 to 13, or some of them, are upheld, the primary judge erred in fact and law by concluding (at [436]) that the appellant had not proven that the calculations of the second respondents' [sic] future profits should be adjusted by a percentage for growth. The primary judge ought to have found that, as the respondents had conceded that a growth percentage of 5% should be applied, in the absence of evidence to the contrary, a growth rate of 5% could and should have been applied to the calculation of the second respondent's future profits.

1. Upon the basis that Grounds 1 to 13, or some of them, are upheld, the primary judge erred in fact and law by concluding (at [437]) that the calculation of the appellant's loss and damage should not include an allowance for the residual value of the second respondent after 10 years. The primary judge ought to have found that the residual value or terminal value was an appropriate head of damage when quantifying loss and damage based on either the true value of the share in the second respondent, alternatively, the discounted net present value of the second respondent's future profits over a term of 10 years plus its residual value, less expenses (including the purchase price contained in the Agreement) that would have been incurred by the appellant if the Agreement had been performed, and there was sufficient evidence before the Court to determine that that residual or terminal value would have been in the amount of $1,181,000.

1. Upon the basis that Grounds 1 to 13, or some of them, are upheld, the primary judge erred in fact and law by concluding (at [440]) that any assessment of the second respondent's future profits should be capped after a period of 5 years following termination. The primary judge ought to have found that, as the period of 10 years loss of profits was a period agreed between the parties, and that a significant (cumulative) discount rate had been applied by both of the experts in calculating loss of profits up to 10 years, that it was appropriate for the second respondent's losses to be assessed up to 10 years from the date of termination.

1. Upon the basis that Grounds 1 to 13, or some of them, are upheld, the primary judge erred in fact and law by concluding (at [441]) that expert evidence relating to franking credits was relevant to a determination of the appellant's loss and damage. The primary judge ought to have found that the evidence before the Court was sufficient to determine that the loss of profit (as assessed by the expert evidence) of the second respondent was sufficiently connected to the loss and damage suffered by the appellant (as the sole shareholder) and that evidence of relating to the allocation of franking credits was irrelevant to the calculation of that loss and damage.

1. The primary judge omitted to determine the question of whether, as a result of the termination of the Agreement, the appellant had lost the opportunity to acquire all of the issued shares in Rexwells and, thereby, the benefit thereof of owning the shares, such that such opportunity had some value, other than a nominal value.

(a) The appellant provided particulars of the loss and damage it pleaded it had suffered, as a result of the termination of the Agreement, namely, that it had lost the opportunity to acquire all of the issued shares in Rexwells and thereby the benefit of owning the shares.[389]

(b) The appellant further particularised the value of the loss and damage it alleged it suffered, as a result of the termination of the Agreement, in the following respects:

(i) it lost the likely net present value, as at 22 January 2019, (the date of notice of termination)[390] of the likely future profit of Rexwells from 1 February 2019 (the completion date under the Agreement was 31 January 2019)[391] for a period of 10 years, 'if the sale had been completed in accordance with the' (emphasis added) Agreement;[392]

(ii) plus the residual capital value of Rexwells at the end of the 10[-]year period;

(iii) less the purchase price under the Agreement;

(iv) less bank financing and financing costs; and

(v) less the appellant's investment.

(c) Completion of the Agreement was subject to and conditional upon, inter alia, the appellant being satisfied, at its absolute discretion, that a new contract had been entered into by Rexwells with Rio Tinto Ltd (Rio Tinto) on terms acceptable to the appellant, at its sole discretion (Condition Precedent).[393]

(d) The respondents raised in opening address,[394] in cross‑examination[395] and in their written[396] and oral[397] closing submissions, for determination the issue of whether or not the sale of the share in Rexwells pursuant to the Agreement would have completed, but for the appellant's termination of the Agreement.[398] The appellant itself, in its opening address, stressed the importance of the fact that Rexwells had not entered into the Rio Tinto contract when the parties were trying to resurrect the Agreement after the notice of termination had been issued by the appellant.[399]

(e) The primary judge found, in effect, that an issue for determination was whether the appellant had lost the opportunity it relied upon and that such opportunity had some value, with particular reference to the Rio Tinto contract.[400]

(f) The primary judge failed to determine the issue of whether, pursuant to the Agreement, the sale of the share in Rexwells would have completed, or what contingency should be applied in that regard, but for the appellant's termination of the Agreement.

1. If the primary judge had determined the issue of whether, pursuant to the Agreement, the sale of the share in Rexwells would have completed, but for the appellant's termination of the Agreement, the primary judge should have found that:

2.1 the Condition Precedent would not have been fulfilled, but for the termination of the Agreement;

2.2 had the appellant proved that it had suffered any loss as a result of a loss of opportunity, or otherwise as a result of the termination of the Agreement, the primary judge was required to take into account, in the assessment of damages, the contingency in relation to the non‑fulfilment of the Condition Precedent; and

2.3 had the appellant proved that it had suffered any loss as a result of a loss of opportunity, or otherwise as a result of the termination of the Agreement, the contingency in relation to the non‑fulfilment of the Condition Precedent was so certain to occur, that no damages should be awarded to the appellant, other than nominal damages.

1. The primary judge erred in finding that Mr Leaman accepted that he had not received advice from Lark Lawyers for the Agreement, as varied, not to be signed until Rio Tinto had renewed the agreement with Rexwells.[401] The primary judge should have found that the correct version was, as noted contemporaneously by Mr Leaman in his email to Mr Steele, dated 31 January 2019 (the completion date) at 10:05am,[402] that Lark Lawyers' advice was to delete the condition precedent as to the entry into of the Agreement, as varied, with Rio Tinto, but the Agreement, as varied, should not be signed until Rio Tinto had entered into the agreement with Rexwells.

1. The primary judge erred in fact and law in finding that it was not unreasonable for the appellant not to mitigate its loss by rejecting the respondents' offer, dated 15 February 2019,[403] to reduce the purchase price of the sole issued share in Rexwell[s] by $400,000 and for the parties to treat the Agreement as if it were on foot with completion on 28 February 2019, in that the finding was against the evidence or the weight of evidence.[404] The primary judge ought to have found that, in not accepting the respondents' offer, set out in an open letter from the respondents' solicitors, Lawton Gillon, to the appellant's then lawyers, Lark Lawyers, the appellant failed to take all reasonable steps to mitigate the loss consequent on the termination of the Agreement.

1. The primary judge erred in finding that the assessment of the net present value of the likely net profits of Rexwells was not materially different to the assessment of the loss of the appellant, in the event that the primary judge had erred in rejecting the measure of damages propounded by the appellant.[405] The primary judge should have rejected the appellant's submission that the calculation of the loss of the appellant was not materially different to the calculation of the loss of Rexwells, on the basis that, aside from the franking credits issue, there was no evidence to support the appellant's submission that the appellant intended that Rexwells would distribute all of its profit by way of dividends, franked or otherwise, to the appellant.

1. If the Court upholds CH Leaman's appeal in relation to the measure of damages, the primary judge erred in fact and law in finding, obiter, that a deduction of only $50,000.00 should be made from the gross profit of Rexwells for the costs associated with the replacement of Mr Steele by Mr Leaman in the conduct of Rexwells' business (Business) after completion of the Agreement.[406] The primary judge ought to have found that a deduction of a full salary of $225,000.00 per annum for Mr Leaman, or some other person, in managing the business of Rexwells after completion of the Agreement, should be made.

3.1 The primary judge stated at J [435] that her Honour accepted the evidence of Mr Leaman that he did not intend to employ anyone to replace Mr Steele in the Business.[407] The primary judge relied upon exh 1.108E for the finding, which did not support it.

3.2 The primary judge also stated at J [435] that her Honour accepted that Mr Leaman would have taken payments from the Business in the form of dividends as opposed to a full salary.

3.3 In making those findings, the primary judge appeared to accept the assumption made by CH Leaman's expert, Mr Barry Honey,[408] that Mr Leaman would have himself replaced Mr Steele in the Business and taken payments from the Business in the form of dividends. There was no evidence to either of those effects. Such evidence as there was to the latter effect, which the primary judge failed to take into account, was that Mr Leaman intended to expand Rexwells' business and, for that purpose, reinvest profits and distribute relatively nominal dividends.[409]

3.4 In finding that a deduction of only $50,000.00 should be made for the employment of Mr Leaman in the Business the primary judge erred because:

(a) there was no evidence supporting the findings referred to in sub‑paragraphs 3.1 and 3.2 above;

(b) there was no evidence supporting the assumption made by Mr Honey, referred to in sub‑paragraph 3.3 above, which assumption appeared to underpin the primary judge's findings referred to in sub‑paragraphs 3.1 and 3.2 above;

(c) in any event, the question of the loss suffered by CH Leaman, by reason of the Agreement having been renunciated (if the Court so finds), by the respondents, is to be assessed objectively and the findings referred to in sub‑paragraphs 3.1 to 3.3 above are subjective matters and ought not to have been taken into account by the primary judge.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] C H Leaman Investments Pty Ltd v Tuesday Enterprises Pty Ltd [2022] WASC 447 (primary reasons).

[2] C H Leaman Investments Pty Ltd v Tuesday Enterprises Pty Ltd [2022] WASC 447 (S) [51.1].

[10] The legislative history is discussed in Connective Services Pty Ltd v Slea Pty Ltd [2019] HCA 33; (2019) 267 CLR 461 [9] - [20].

[11] Corporations Act s 260A.

[12] Corporations Act s 260D(2).

[13] Corporations Act s 1317E, s 1317G.

[14] Corporations Act s 260E.

[15] Austin and Black's Annotations to the Corporations Act [2J.260A].

[16] Appeal ts 152, 171 - 172. See primary reasons [296] - [319].

[17] Peters' American Delicacy Co Ltd v Heath [1939] HCA 2; (1939) 61 CLR 457, 481 - 482, 504.

[18] Corporations Act s 588G(1A) item 6.

[21] Amended statement of claim dated 9 March 2020 (ASC) par 23(a) BAB 154.

[22] Appellant's submissions in answer to notice of contention par 7 WAB 175.

[23] Appellant's submissions par 7 WAB 24.

[24] Appellant's submissions par 57 WAB 35.

[25] ASC pars 23(b) - (f) BAB 154 - 156; appellant's further and better particulars of loss and damage dated 2 July 2020 BAB 157 - 172.

[26] Respondents' outline of closing submissions pars 1.4, 137 - 149 BAB 272, 304 - 306.

[28] Appellant's closing submissions pars 121 - 123 BAB 256 - 257.

[29] Wenham v Ella [1972] HCA 43; (1972) 127 CLR 454.

[30] Compare Supreme Court (Court of Appeal) Rules 2005 (WA) r 32(4)(b), r 33(7).

[31] Respondents' grounds of cross-appeal WAB 215.

[33] Appeal ts 121, 152, 171 - 172, 175, 191.

[35] Primary reasons [421] - [431].

[36] Appellant's submissions pars 15 - 16 WAB 26 - 27.

[37] Supreme Court (Court of Appeal) Rules r 32(5)(a).

[41] Primary reasons [320] - [337]. But see also primary reasons [5](b), [339], [481].

[42] Primary reasons [129] - [193].

[43] Primary reasons [233] - [319].

[46] Primary reasons [304] - [305].

[48] Primary reasons [305] - [310].

[51] Primary reasons [321] - [326].

[52] Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] UKHL 11; [1980] 1 WLR 277.

[54] Appeal ts 158. See also respondents' submissions on the cross-appeal par 10 WAB 224.

[55] Primary reasons [328] - [332].

[59] Primary reasons [5](b), [339], [481].

[60] Primary reasons [335] (reproduced at [113] above).

[61] James Shaffer Ltd v Findlay Durham & Brodie [1953] 1 WLR 106, 120 - 121, 123.

[62] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (283).

[63] See respondents' submissions on the cross-appeal pars 15 - 35, 38 - 44 WAB 226 - 231, 232 - 233.

[64] Appellant's amended statement of claim dated 9 March 2019 par 21 BAB 153.

[65] Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115 [44].

[66] Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [44].

[67] Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620, 625 ‑ 626; Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17, 33, 40; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623, 634, 643, 647 ‑ 648, 658, 666.

[68] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (281), (294).

[69] Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (648), (657 - 658); Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [44].

[70] Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (647), (657).

[71] Ross T Smyth & Co Ltd v T D Bailey Son & Co [1940] 3 All ER 60, 71. See also: Woodar Investment Development Ltd v Wimpey Construction UK Ltd (292); Shevill v Builders Licensing Board (633); Progressive Mailing House Pty Ltd v Tabali Pty Ltd (32); Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (643), (657).

[72] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (280 - 281), (292), (294 - 296), (299); Shevill v Builders Licensing Board (633).

[74] Sopov v Kane Constructions Pty Ltd [2007] VSCA 257; (2007) 20 VR 127 [9]. See also [10] - [17].

[75] See eg R & A Cab Co Ltd v Kotzman [2008] VSCA 68 [49]. Woodar Investment Development Ltd v Wimpey Construction UK Ltd also refers to bona fides: (283).

[78] Ross T Smyth & Co Ltd v T D Bailey, Son & Co (72).

[79] Spettabile Consorzio Veneziano di Armamento e Navigazione v Northumberland Shipbuilding Co Ltd (1919) 121 LT 628.

[80] Sweet & Maxwell Ltd v Universal News Services Ltd [1964] 2 QB 699.

[81] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (283).

[82] James Shaffer Ltd v Findlay Durham & Brodie (118).

[83] James Shaffer Ltd v Findlay Durham & Brodie (121).

[84] James Shaffer Ltd v Findlay Durham & Brodie (123).

[85] James Shaffer Ltd v Findlay Durham & Brodie (126).

[86] James Shaffer Ltd v Findlay Durham & Brodie (124).

[87] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (280), (289 - 290), (292), (294), (298 - 299).

[88] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (291 -292).

[89] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (280).

[90] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (281 - 282).

[91] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (282).

[92] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (283). Compare, however, the contrary observations of Lord Russell of Killowen: (293).

[93] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (296) Lord Keith of Kinkel, (299) Lord Scarman.

[94] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (295 - 296).

[95] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (297).

[96] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (289 - 290).

[97] Woodar Investment Development Ltd v Wimpey Construction UK Ltd (292).

[98] Summers v The Commonwealth [1918] HCA 33; (1918) 25 CLR 144.

[100] DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423.

[101] DTR Nominees Pty Ltd v Mona Homes Pty Ltd (432).

[102] DTR Nominees Pty Ltd v Mona Homes Pty Ltd (432).

[103] DTR Nominees Pty Ltd v Mona Homes Pty Ltd (432).

[104] Progressive Mailing House Pty Ltd v Tabali Pty Ltd (37). See also DTR Nominees Pty Ltd v Mona Homes Pty Ltd (432).

[105] DTR Nominees Pty Ltd v Mona Homes Pty Ltd (433).

[106] Green v Sommerville [1979] HCA 60; (1979) 141 CLR 594, 611.

[107] Dainford Ltd v Smith [1985] HCA 23; (1985) 155 CLR 342, 366.

[108] Sopov v Kane Constructions Pty Ltd [7] - [17].

[109] Sopov v Kane Constructions Pty Ltd [17].

[110] See [120] - [121] above.

[111] DTR Nominees Pty Ltd v Mona Homes Pty Ltd (432).

[112] Sopov v Kane Constructions Pty Ltd [17]. See also [18], [123], [129] - [141], [148]. Compare: James Shaffer Ltd v Findlay Durham & Brodie (118), (123), (126); Woodar Investment Development Ltd v Wimpey Construction UK Ltd (280), (283).

[113] Summers v The Commonwealth (152); DTR Nominees Pty Ltd v Mona Homes Pty Ltd (432).

[114] Ross T Smyth & Co Ltd v T D Bailey, Son & Co (72).

[115] DTR Nominees Pty Ltd v Mona Homes Pty Ltd (432 ‑ 433).

[116] DTR Nominees Pty Ltd v Mona Homes Pty Ltd (432).

[117] See the generally applicable principles discussed at [121.2] and [123] above.

[118] Sopov v Kane Constructions Pty Ltd [9] - [11].

[119] See eg: Woodar Investment Development Ltd v Wimpey Construction UK Ltd (280 - 283), (297); DTR Nominees Pty Ltd v Mona Homes Pty Ltd (432 - 433).

[120] Respondents' submissions on the cross-appeal par 14 WAB 226.

[121] Respondents' amended substituted defence dated 9 March 2020 pars 19.4(a) - (b), 21.2(a) BAB 181, 194.

[122] Respondents' amended substituted defence dated 9 March 2020 par 19.4(c) BAB 181.

[123] Respondents' amended substituted defence dated 9 March 2020 par 21.2(c) BAB 195.

[124] Respondents' amended substituted defence dated 9 March 2020 pars 21.2(c) - (d) BAB 195.

[125] Respondents' amended substituted defence dated 9 March 2020 par 21.2(g) BAB 196.

[126] Respondents' amended substituted defence dated 9 March 2020 par 19.3(a) BAB 180. The relevant findings as to this plea are at primary reasons [132] - [137]. See also [49] above.

[127] Respondents' amended substituted defence dated 9 March 2020 par 19.3(b) BAB 180. The relevant findings as to this plea are at primary reasons [153]. See also [49] above.

[128] Respondents' amended substituted defence dated 9 March 2020 par 19.3(c) BAB 180 - 181. The relevant findings as to this plea are at primary reasons [156] - [168]. See also [50] - [51] above.

[129] Respondents' amended substituted defence dated 9 March 2020 par 19.4(d) BAB 181. The relevant findings as to this plea are at primary reasons [178] - [179]. See also [54] above.

[130] Primary reasons [25], [184].

[131] Primary reasons [25], [188] - [191].

[134] Respondents' submissions on the cross-appeal par 51 WAB 235.

[135] Respondents' submissions on the cross-appeal par 54 WAB 236; particulars to cross-appeal ground 2 WAB 217 - 220. See also appeal ts 172, 175.

[150] See also the discussion in Milburn v Pivot Ltd (1997) 78 FCR 472, 514 - 522.

[152] See eg GAB 692 - 693, 720, 731. This continued to be the case for Mr Honey's calculations in the joint expert report: see eg GAB 1042, 1044, 1060.

[153] See eg GAB 686, 698, 721, 732, 734.

[156] GAB 693 - 699. See also GAB 731 - 737.

[157] GAB 698. See also GAB 721 (note 10), 724 (note 7), 726 (note 7), 732 (note 7), 734 (note 7).

[158] Appellant's submissions par 90 WAB 42.

[159] Appellant's further and better particulars of loss and damage dated 2 July 2020 row 2 (table headed 'Elements of Calculation') BAB 159 - 160.

[160] GAB 1046; primary reasons [433].

[162] GAB 1051; primary reasons [403].

[164] GAB 1046 - 1047; primary reasons [399] - [400].

[165] Hadley v Baxendale (1854) 9 Exch 341, 354; 156 ER 145, 151.

[167] Appellant's submissions par 90 WAB 42.

[168] Appellant's further and better particulars of loss and damage dated 2 July 2020 row 4 (table headed 'Elements of Calculation') and annexure C BAB 162 - 163, 166. Prima facie the $860,000 is understated insofar as annexure C records the $4 million being received at the end of year 1 (ie the year ended 31 January 2020) and therefore being discounted at 20.5% when it should be recorded as having been received at year 0 (ie on 31 January 2019) and thus not being subject to any discount.

[169] Based on the $3.7 million sought on appeal.

[170] Based on the $5.267 million to $6.049 million sought at trial.

[171] Cessnock City Council v 123 259 932 Pty Ltd [2024] HCA 17; (2024) 98 ALJR 719 [49], [61], [127].

[172] Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344, 367.

[173] Paciocco v Australia & New Zealand Banking Group Ltd [2016] HCA 28; (2016) 258 CLR 525 [283].

[174] Cessnock City Council v 123 259 932 Pty Ltd [7].

[175] Robinson v Harman (1848) 1 Ex Rep 850, 855; [1848] EngR 135; 154 ER 363, 365.

[176] Clark v Macourt [2013] HCA 56; (2013) 253 CLR 1 [109].

[177] The Commonwealth of Australia v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64, 82; Cessnock City Council v 123 259 932 Pty Ltd [6], [48], [191].

[178] Haines v Bendall [1991] HCA 15; (1991) 172 CLR 60, 63.

[179] See eg Wenham v Ella (460), (471); The Commonwealth of Australia v Amann Aviation Pty Ltd (80), (98), (134), (148), (161); Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272 [13]; Clark v Macourt [7], [26], [60], [106]; Cessnock City Council v 123 259 932 Pty Ltd [6], [48], [117], [190].

[180] See eg Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [13]; Clark v Macourt [60] - [61], [106] ‑ [111], [129] - [130]; Cessnock City Council v 123 259 932 Pty Ltd [6].

[181] See eg The Commonwealth of Australia v Amann Aviation Pty Ltd (116).

[182] Cessnock City Council v 123 259 932 Pty Ltd [7].

[183] Clark v Macourt [10]. See also [25], [111].

[185] J Edelman, McGregor on Damages (22nd ed, 2024) [30-003].

[189] Primary reasons [422], [425].

[190] Primary reasons [427], [430].

[192] Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613, 617 - 618.

[194] Wertheim v Chicoutimi Pulp Co Ltd [1911] AC 301, 307.

[195] Wertheim v Chicoutimi Pulp Co Ltd (307).

[196] HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; (2004) 217 CLR 640.

[197] Potts v Miller [1940] HCA 43; (1940) 64 CLR 282.

[198] HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [36].

[199] HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [37].

[200] Gould v Vaggelas [1985] HCA 75; (1985) 157 CLR 215, 266 - 267.

[201] A Kramer QC, The Law of Contract Damages (3rd ed, 2022) [1-22].

[202] Photo Production Ltd v Securicor Transport Ltd [1980] UKHL 2; [1980] AC 827.

[203] Photo Production Ltd v Securicor Transport Ltd (849).

[204] Cessnock City Council v 123 259 932 Pty Ltd [120.1].

[206] Primary reasons [424], [430].

[208] Wenham v Ella (461) (Barwick CJ), (462 - 464) (Menzies J), (465), (467) (Walsh J), (471 ‑ 473) (Gibbs J), (474 ‑ 476) (Stephen J).

[210] Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [13] (referring to Radford v De Froberville [1977] 1 WLR 1262, 1273).

[211] Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [13].

[212] Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [13] (referring to Ruxley Electronics and Construction Ltd v Forsyth Laddingford Enclosures Ltd [1994] 1 WLR 650, 655).

[217] Straits Engineering Contracting Pte Ltd v Merteks Pte Ltd [1996] 4 LRC 259.

[219] Primary reasons [422], [425] - [427], [430] - [431].

[222] Although, as to ground 3.2, we consider the assessment of the 'true' or 'real' value of the Rexwells' share ought to be determined as at the date for performance under the SPA rather than the date of termination. This distinction makes no difference to the disposition of the appeal. Both experts performed their net present value calculations as at 31 January 2019 for convenience and agreed that the difference between a calculation as at 22 January 2019 and 31 January 2019 was immaterial: GAB 1051.

[225] Appellant's submissions par 57 WAB 35.

[227] Agreed expert evidence schedule dated 16 December 2019 par 1.1 BAB 226.

[228] GAB 866 pars 1.1, 1.2, 2.1. See also agreed expert evidence schedule dated 16 December 2019 pars 2.1 - 2.3 BAB 226 - 227.

[229] GAB 817 - 819 pars 5 - 11; GAB 842 - 847 pars 128 - 140.

[230] GAB 819 pars 12 - 13; GAB 847 - 853 pars 141 - 169.

[232] The calculation is provided to illustrate the point that it is possible to make the net present value calculation rather than to provide a definitive net present value calculation. The parties have not had the opportunity to consider the arithmetical accuracy of the calculations. This illustration is not intended to foreclose the parties interrogating matters of arithmetical accuracy and bringing them to the attention of the court.