Melco Engineering Pty Ltd v Ausgroup Pty Ltd [2025] QSC 254

Taylors Solicitors for the plaintiffs and defendants by counterclaim

Twomey Dispute Lawyers for the defendants and plaintiffs by counterclaim

• [1] The defendant added by counterclaim, Mr Clifford, is the sole director of the first plaintiff, whom I will refer to as Melco, and the second plaintiff, who I will refer to as Clifford Group Developments. In 1994 when he was 23 years of age, Mr Clifford commenced the heavy engineering and fabrication business of Melco. The business succeeded.
• [2] By 2024, Clifford Group Developments owned several parcels of industrial land and several parcels of residential land. The heavy engineering and fabrication business of Melco had been conducted from industrial premises at Paget in Mackay, Bowen, and on Hay Point Road. Not only was the business geographically diversified, it was industrially diversified, performing works for the coal mining, sugar cane, and export port industries.
• [3] In early 2024, Mr Clifford began looking for what he termed "exit strategies". At that time, Clifford Group Development's premises on Hay Point Road was sitting idle, and he wanted it utilised. Mr Clifford began negotiations with purchasers for his businesses, who expressed interest only in the businesses being conducted in Paget and Bowen.
• [4] Mr Clifford, who was aware of the operations of the first and second defendants, thought the first and second defendants might be interested in entering into a lease of Clifford Group Development's premises at 1200 Hay Point Road, and so he contacted Jon Byrnes, the principal director of the first and second defendants, to gauge their interest.
• [5] According to Mr Clifford, whose evidence I accept, Mr Byrnes was receptive to the approach concerning a potential leasing of 1200 Hay Point Road, but he also informed Mr Clifford that Ausgroup was "looking for scale" to increase their business.
• [6] Mr Clifford was open with Mr Byrnes, telling him that he was currently discussing the sale of his other two businesses or the premises with another entity, which was not subject to a non-disclosure agreement, but that Mr Clifford had a preference to exit all three sites and all of his businesses.
• [7] According to Mr Clifford, things moved quickly from the time of his initial approach to Mr Byrnes on 20 March 2024, with Mr Clifford agreeing to meet Mr Byrnes and Mr Zach Goodman of the defendants at the bistro at the Austral Hotel on 21 March 2024 to discuss the potential acquisition by Ausgroup of all of Mr Clifford's fabrication businesses. According to Mr Clifford, that meeting took one to two hours, and by that afternoon, the parties had entered into a non-disclosure agreement.
• [8] Mr Clifford then forwarded a basic terms sheet in order to enter into further discussions for the sale of all of Melco's businesses to Ausgroup. Prior to the meeting at the Austral Hotel, Mr Clifford had not met Mr Goodman, who was introduced as a person on the advisory board of Ausgroup. Mr Clifford became aware, at some point, that Mr Goodman had a mortgage finance company, and that it would be Mr Goodman's role to obtain finance for the potential transaction to be entered into.
• [9] Exhibit two shows that Mr Clifford sent the non-disclosure agreement to Mr Byrnes at 3:52pm on 21 March 2024. My Byrnes executed the non-disclosure agreement and returned the following day, Friday 22 March 2024 at 12:41 pm. In that same email, Mr Byrnes asked for the following information: "Lease rates based on a five plus five on all three properties. An equipment list and asking price for the equipment."
• [10] Mr Clifford replied by email, forwarded Friday 22 March 2024 at 5:32 pm, attaching an asset register for the assets at Paget, Bowen and Hay Point, a sale consideration worksheet and an adjusted profit and loss statement. Mr Clifford's email advised of a return to typical revenue budget approximately $3.6 million per annum, and stated "...We are offering access to facility/workshop capacity and strategic location/s, plant and equipment, operational org structure, operational systems and processes and skilled workforce."
• [11] It is clear, therefore, prior to any formal contract being entered into, that it was the intention of Mr Clifford to sell his entire business, not just its plant equipment.
• [12] Things progressed rapidly. Exhibit three contains a bundle of emails between Wednesday 27 March 2024 and Thursday 4 April 2024. In the email from Mr Goodman to Mr Clifford of 4 April 2024, Mr Goodman sought as a part of his information checklist "the full Gray's valuation" as "this will not only assist in our DD, but also in hope the bank may not require another to be completed."
• [13] Exhibit four contains the email of Mr Clifford of 6:45pm on 4 April 2024 with his comments in red concerning the request for the "full Gray's valuation", which stated "This P & E valuation is fully inclusive of all Clifford Group assets and is not suitable to share."
• [14] Exhibit four also contains the email of Mr Parish, accountant for Mr Clifford and his companies, of 3:07 pm 5 April 2004, which forwarded to Mr Goodman considerable financial information, including the year-to-date sales by customer report and aged debtors report.
• [15] On Saturday 6 April 2008 at 8:38 pm, Mr Goodman sent an email to Mr Parish and Mr Clifford seeking further financial information, in particular the historical financials of the business, and information concerning "historical repairs and maintenance" which Mr Parish answered on behalf of Melco that "Historical R & M has been approximately $150K per year."
• [16] Drafts of the contract of business sales were exchanged before finally, on 22 April 2024, a final contract business sale, exhibit six, was entered into.
• [17] The contract of business sale, is contained in some hundreds of pages. It consists of a third edition REIQ contract business sale, followed by the REIQ "Standard Conditions for Sale/Business Sale", two blank pages, then the three leases: that is, the lease of the Bowen premises from Clifford Group Developments, the lease of the Hay Point premises from Clifford Group Developments, and the lease of the Paget premises from a different but associated company, Clifford Group Proprietary Limited ACN 091 035 773. The contract then included Annexure B the Special Conditions, Annexure C the list of the current 42 employees of Melco, and Annexure D, a 20-page list of plant and equipment, which is specifically referred to in clause 37(3) of the special conditions which relates to due diligence.
• [18] Clause 37 of the special conditions provided for a 10-business day due diligence period. As the contract date was 22 April 2024, the due diligence date was set by the contract as 8 May 2024. Oddly enough, the contract provided for the completion date of the 1 May 2024. As that was not feasible, the parties agreed on 30 April 2024 to a second completion date of 10 May 2024, when Ausgroup was to take possession of Melco's businesses. That occurred.
• [19] Clause 18 of the special conditions made provision for the buyer Ausgroup to delay the "seller finance amount" by a period of three months on condition that Ausgroup pay Melco equal monthly instalments of $40,000 plus GST until the seller finance amount had been paid in full.
• [20] In the months of May, June and July 2024, Ausgroup paid $40,000 per month, but it refused to pay the seller finance amount or any further sums. On 9 August 2024, Ausgroup purported to terminate the contract. Ausgroup, however, did not abandon the businesses but continued to trade in the businesses from the three business premises utilising Melco's plant and equipment, former employees contracts, intellectual property and software.
• [21] Melco did not accept that termination was valid and affirmed the contract and sought payment of $2,492,905.16 plus work in progress on 8 August 2024. On 22 November 2024 Melco demanded a sum of $2,720,088 as the adjusted purchase price plus work in progress.
• [22] On 13 December 2024 Melco sued the defendants seeking specific performance of the contracts, the amounts due under the contracts, or alternatively, a claim for unjust enrichment. On 23 May 2025, Melco, as the first plaintiff, assigned to Clifford Group Developments, as second plaintiff, the benefit of the contract and its claim against Ausgroup. Subsequent to the assignment of the contract to the second plaintiff, Clifford Group joined in the suit against the defendants. The defendants set off and counterclaimed against the plaintiffs and Mr Clifford as defendant by counterclaim.
• [23] The parties have identified several issues that need to be decided. These may be addressed in a chronological order.

• [24] Issue one is the two market value representations alleged to be made on or around 21 March 2024. By paragraph 8(d) of the counterclaim the defendants allege that on 21 March 2024, Mr Clifford made a market value representation to Zak Goodman alleging "Mark said orally to Mr Goodman words to the effect that the first plaintiff had recently completed a valuation and that all the first plaintiff's assets could be easily consolidated". It was not explained what the second part of the alleged representation meant. To "consolidate" means to bring together or combine. Although in his evidence Mr Goodman said the word "consolidated" twice,[1] he did not use it in the context of the pleaded case.
• [25] In paragraph 8(b) of the counterclaim, the defendants allege that Mr Clifford made a market value representation to Jon Byrnes sometime after Ausgroup received the "asset register".
• [26] The Plaintiff admits paragraph 8(b)(i) that "Jon of the first defendant said orally to Mark of the first plaintiff words to the effect that the first defendant would need to procure a valuation of each of the assets on the asset register to validate the market value to ensure his finance would be satisfied with the future purchase price being reasonable."
• [27] However, the plaintiffs deny the market value representation to Jon alleged in paragraph 8(b)(ii) of the counterclaim as follows:

"In response, Mark represented to Jon orally to the effect that there was no need for the first defendant to obtain its own valuation because the assets on the asset register had already been valued by "Grays".

• [28] Mr Clifford denied making such representations. Mr Clifford, Mr Byrnes and Mr Goodman did not have any notes of any conversation. Mr Byrnes did not swear any evidence to support paragraph 8(b)(ii) representation.
• [29] Mr Clifford's evidence in chief as to what occurred at the lunch meeting at the bistro at Austral Hotel commences[2] with Mr Clifford asserting that the three men "talked for somewhere between an hour and two hours".[3] And importantly, Mr Clifford had never met Zac Goodman before. According to Mr Clifford, Mr Clifford made it plain that he wished to exit his businesses, whereas Mr Byrnes spoke of Ausgroup's desire to scale up their business. On Mr Clifford's version, Mr Clifford disclosed that there were other parties that were interested in his Paget and Bowen facilities, but not his Hay Point Road facility, and he had a preference for "someone that was interested in taking over leases over all Melco premises".
• [30] According to Mr Clifford "They did say they would need to get finance to settle the deal"[4]. And it was Mr Goodman who "indicated that he would be looking after the finance for the acquisition"[5]. Mr Clifford was adamant that he was not at that first meeting asked if he had previous valuations of the business, but said that "following the meeting, I said, we had - I had one done for the entire group, and it was not suitable to hand over as, ah, an equipment or an asset valuation for this particular court, and would not be handed over."[6]
• [31] Under cross-examination Mr Clifford swore that he did not believe that price was discussed at the first meeting, that he did confirm he was selling the operational businesses from the three premises, that the structure for any potential sale had not been agreed at that point in time.[7]
• [32] Mr Clifford denied that informed Mr Goodman or Mr Byrnes that he sought $2.6 million or any other sum of money at the first meeting. He denied that at that lunch meeting he had said that he had a valuer look at Melco's equipment and provided a value for that equipment. Mr Clifford explained "at that particular time we had not signed anything or entered into any agreement. So I do not think I am going to disclose any value right there and then." Mr Clifford did not say, and it was not put to Mr Clifford that he did not have any or any good recollection of what was said at the meeting at the Austral Hotel.

"We continue to finance support of Ausgroup Industrial Services in our capacity as Mortar Finance. I also helped Jon form a strategic committee as part of his internal stakeholder group, which I chair... with a group of executives within Jon's business often or sometimes bringing in external participants to those meetings and we help with strategic direction decision-making of his company... I would be an advisor or a consultant to that organisation, not a part of that organisation... to create some independence around this discussion."

• [34] Mr Goodman confirmed that all of the important discussions that he had with Mr Clifford were summarised back into emails.[10] However, it is apparent that nothing that was said at the Austral meeting was summarised back into an email. An inference which arises from this is that there was nothing particularly important that was said at the Austral meeting.
• [35] Mr Goodman confirmed that he could not recall the exact conversation that occurred at the meeting, as it was 12 months ago.[11] Mr Goodman was therefore, appropriately vague as to what was discussed. I conclude that Mr Goodman was reconstructing or guessing as to a number of matters. For example, Mr Goodman asserted[12] that "we would not have discussed our strategic direction with Mr Clifford on the day, ...but certainly discussed the conversation around the leases and the equipment."
• [36] Mr Goodman said he "believed" that there was another buyer interested but not interested in the Hay Point premises.[13] Mr Goodman accepted that Mr Clifford did say words to the effect that he had a preference to get a buyer that wanted all three premises.[14] Mr Goodman agreed that all men discussed the fact that they would need to get a non-disclosure agreement signed.[15] Mr Goodman was asked[16] "can you explain the words that were said by Mr Clifford that you recall? Answer: Yeah - ah - I recall that - the - that the equipment was to be ah - ah - sold at a value that was being developed by a valuer. That the asset list had been created by a valuer and that that was the asset list that was for the sale".
• [37] On cross-examination, Mr Goodman said "the valuation was mentioned. I mentioned yesterday I was not sure of the word Grays, whether that was from Mr Clifford or Mr Byrnes. But the valuation was mentioned a number of times. That is correct." Mr Goodman's evidence is also that at the meeting Mr Clifford said the sale price was $2.62 million.
• [38] Despite not having a note of what was said, admitting to an inability to recall the exact words said as it was over a year ago, Mr Goodman did confidently assert[17] "the immediate representation that was made was still being relied upon, that the value of the equipment was done by a valuation firm, and we were relying on that for both value and consolidation of those assets".

• [84] In Ausgroup's correspondence[28] and by its defence, Ausgroup allege that Melco were in breach of contract by preventing Ausgroup from conducting sufficient and satisfactory due diligence. The allegation specifically made was that Ausgroup restricted access to a single hour of access at Paget, four hours' access at Bowen and two hours at Hay Point and that restriction of access prevented Ausgroup from undertaking sufficient and satisfactory inspections and testing of the plant and equipment.
• [85] In respect of the Bowen premises inspected on 24 April 2024, I accept Mr Rasaratnam's evidence that there was no restriction at all placed upon Mr Byrnes of any Ausgroup employees with respect to the inspection at Bowen.
• [86] Similarly in respect of the inspections of the Paget premises on 25 April 2024 and Hay Point on 26 April 2024, I accept Mr Clifford's evidence that there was no restriction placed upon the inspection of the sites at those dates. I therefore reject Ausgroup's allegation of breach of contract in preventing Ausgroup from undertaking sufficient due diligence. I further note that if that in fact did occur, then the right provided in the contract for Ausgroup was to terminate the contract. The failure of Ausgroup to prove its allegation of a restriction or prevention of inspection for the purposes of due diligence adversely affects my assessment of Mr Byrnes' credit.

Issue Three - Extended Due Diligence Representation

• [87] The extended due diligence representation is pleaded in paragraph 6(a) of the second amended defence with reference to the content of an email of 8 May 2024 sent from Mr Clifford to Mr Byrnes. As that correspondence refers to the equipment list, it is important to have reference to the correspondence between the parties between 22 April 2024 and 9 May 2024.
• [88] In his email of 24 April 2024 at 2:04 pm, Mr Clifford advised Mr Byrnes, and another officer of Ausgroup, Mr Vanags, that he had uploaded Melco's plant and equipment folder to SharePoint and that folder:

"[H]as a mountain of information in it. Note: Some of the registers do not fully reconcile with the attached asset list that was originally sent, as that list was compiled by third party equipment valuer and did not include all items."[29]

• [89] The uploaded information concerning plant and equipment was included in exhibit 7. Exhibit 7 also includes the preceding email of Mr Goodman of Ausgroup to Mr Clifford seeking detailed information about the equipment and assets including maintenance reports, maintenance schedules, service agreements, test and tag records and inspection reports in respect of equipment, lifting and rigging, EWP, forklifts and compressors.
• [90] As discussed above, Ausgroup's representatives carried out inspections of plant and equipment as a part of its due diligence procedure on 24, 25 and 26 April 2024.
• [91] Exhibit 10 consists of two emails. The first email is from Mr Mellish of Ausgroup to Mr Clifford. This email is important as it identifies 14 specific assets by asset number and description out of the extensive list that had been provided by Mr Clifford on 24 April 2024. In his email, Mr Mellish wrote:

"Hi Mark, can you please chase up the attached list of items that have been unsighted. There are a few big ticket items on there that will need to get checked off. Appreciate if you can get some photos of these after our last discussion that some of these may have been on site. Also there was ME 27 that you mentioned that may have been sold already..."

• [92] Reference to plant number ME 27 is a reference to a Mitsubishi Triton identified as asset 3-1 said to be at Melco Engineering Bowen. In respect of each of the 14 pieces of plant out of the three hundred and fifty or so of items of plant contained in the schedule in exhibit seven, Mr Mellish indicated that only 11 of the 14 items had been unsighted in the due diligence inspections.
• [93] One item, asset number 7-29 the maxi trans flat top trailer, was commented by Mr Mellish that "Investigate - trailer in shed outside, not the same brand and no rego".
• [94] One item, asset 8-71 Ercolina pipe bender, did not have a comment and another item asset 3-1, the Mitsubishi Triton plate number ME 27 contained Mr Mellish's note "Possibly sold? M C to confirm".
• [95] I conclude from Mr Mellish's email of 22 April 2024 seeking detailed information upon plant and equipment and Mr Clifford's response in providing a detailed equipment list as set out in exhibit seven and Mr Mellish's email of 1 May 2014, with specific comments on each of the only 14 items of the large list of items which concerned the defendant, that the Ausgroup employees had undertaken a thorough investigation of plant and equipment.
• [96] Exhibit 10 also includes Mr Clifford's reply stating that he was away travelling, and that he would track down and reply after he returned over the weekend, but advising Mr Mellish that "FYI, several of the larger items on the list were actually in the Paget workshop during your visit last Thursday."
• [97] Exhibit 11 contains three further emails. The first is 2 May 2024 8:01 am from Mr Clifford to Mr Mellish confirming that the Mitsubishi Triton ME 27 had been sold and would be removed from the list. The second email was sent by Mr Mellish to Mr Clifford at 9:40 am on 2 May 2024, in which Mr Mellish wrote:

"Thanks, Mark, just a couple of things you may be able to clear up easily. One. The trailer that is on the list, The maxi trans triaxial we do not see on the walk around. Can you confirm if this is the freighter trailer that is stickered to Steel Central, or is there another trailer? Two. Just want to confirm that two x Air Vantage 800 as well. I believe you said these were on site work at the time."

• [98] Mr Clifford's prompt reply at 9:48 am on 2 May 2024 informed Mr Mellish both of the Air Vantage 800 welder generator compressors were on site, one at Wilmar, one at Incitec. Mr Clifford said he would check the trailers over the weekend and confirm.
• [99] The next important email is exhibit 13, the email from Mr Byrnes to Mr Clifford sent at 2:00 pm on 8 May 2024. This is an important email as the due diligence date was 8 May 2024. The email from Mr Byrnes to Mr Clifford simply said:

"Please find attached a table outlining our equipment DD queries ... Kindly review the following list of items provided in the asset list for verification or removal. Your prompt attention to verifying the items in question is necessary to complete the due diligence process."

• [100] As discussed above, exhibit 10 contained Mr Mellish's due diligence enquiries regarding plant raising queries in respect to 14 pieces of plant, seven of which were said to be located at Mackay and seven in Bowen. In comparison with that list in exhibit 10 and Mr Byrnes' list in exhibit 13, it shows that in respect of the original list in exhibit 10, Ausgroup was satisfied with respect to the responses regarding the two Lincoln Air Vantage 800 welder compressor generators, which Mr Clifford said were on site at Wilmar and Incitec and Ausgroup had also removed item 8-71, the Ercolina pipe bender, such that in respect of the hundreds of pieces of plant at the Mackay premises, there were only four remaining items subject to due diligence: the Isuzu dual cab utility, the Maxi trans flat top trailer, an elevating work platform, and a welding positioner.
• [101] The due diligence queries that remained outstanding on 8 May in respect to those four items at Mackay were different.
• [102] In respect of the Isuzu dual cab utility, said to be valued at $41,000, Mr Byrnes' comment was that it was unsighted and requested a confirmation from Mr Clifford, who said to have a market value of $41,000. I infer that Mr Clifford provided that confirmation as exhibit 17 contains numerous vehicle registration transfer applications and the particular Isuzu D-Max XS registered number 078ZPM carrying VIN number MPATFS85JKT014753 was transferred from Melco to Ausgroup on 24 May 2024.
• [103] In respect of the second item, the maxi trans flat top trailer, Mr Byrnes' comment was "trailer viewed not the same manufacturer - label Steel Central confirmation from MC requested". I again conclude that Mr Clifford confirmed that the trailer although labelled Steel Central was in fact an asset of Melco as that asset is shown in the photographs in figures 17 and 18 to Mr Petit's report being utilised by Ausgroup over a year later.
• [104] The third item, an elevated work platform, said to have a market value of $2,000, received the following comment from Mr Byrnes: "unsighted only viewed four off [sic] in workshop. Remove from list if not confirmed."
• [105] The fourth item, item 8-111, is a welder positioner unbranded, dismantled, not in use, condition unknown said to have a market value of $5,000, to which Mr Byrnes commented "Unsighted remove from list".

"Hi Jon, thanks for the list. I would think any changes, amendments to the equipment list for whatever the reason can be sorted after the commencement date. There is also going to be something out of service etc at any given time. The contract makes provisions for in working order etc... And obviously if something no longer exists then it is automatically off the list. I am comfortable we will sort between ourselves, any technicalities etc as you commence. We can keep you [sic] list on official record."

• [118] Mr Byrnes' response, also in exhibit 14, sent at 4:38 pm on 8 May 2024 was "Mark, yes, I agree the few items remaining as listed in the table supplied can be sorted out between the settlement and payment."
• [119] As discussed below, the contract for sale included pursuant to clause 37, a due diligence period and a right for the purchaser Ausgroup to remove plant and equipment from the Annexure D list to the contract prior to the due diligence note date by sending a defect notice.
• [120] It is plain that exhibit 13 is the only document which comes close to being a defect notice. Clause 37.1 expressly provided that if the buyer was not satisfied in its sole discretion in all respects with the business and business assets by 6:00 pm on the day 10 business days after the contract date, that is the due diligence date of 8 May 2024, Ausgroup as buyer could terminate the contract. It did not do so.
• [121] With the contract value of $2.62 million and very minor items valued in the vicinity of 1% in issue, Ausgroup as buyer had a right to terminate the contract, although that would make little sense given the extremely small nature of the queries raised in respect of plant and equipment.
• [122] The defence case upon the extended due diligence representation and its effect is set out in paragraph 6 of the defendant's second amended defence as follows:

"6. Further to the matters pleaded in the preceding paragraph above:

(a) in response to the 8 May defect notice issued on 8 May 2024, the first plaintiff represented to the first defendant:

"...I would think any changes, amendments to equipment list for whatever the reason can be sorted after commencement date ... The contract makes provisions for in working order etc and obviously if something no longer exists then it is automatically off the list. I am comfortable we will sort between ourselves any technicalities etc as you commence.";

(i) Email from Mark for the plaintiff to Jon for the first defendant dated 8 May 2024.

(b) the Extended Due Diligence Representation amounted to a representation by the first plaintiff to the first defendant to the effect that:

(i) the time for completion of Due Diligence enquiries under the Sale Contract was extended until the first plaintiff and the first defendant, acting reasonably, had:

(1) agreed on the Plant and Equipment which did not meet the Condition Warranty;

(2) removed the same from the list of Plant and Equipment in Annexure D of the Sale Contract; and

(3) reduced the purchase price by the fair market value of the aforesaid Plant and Equipment removed from the Sale Contract;

(ii) the parties were able to agree, acting reasonably, to any changes or amendments to the list of Plant and Equipment in Annexure D of the Sale Contract and appropriate reduction of the purchase price, after the Commencement Date; and

(iii) by inference, implication or silence, the first plaintiff would not rely on the strict time requirement in the Due Diligence Condition for the first defendant to terminate the Sale Contract prior to the Due Diligence Expiry;

(c) the Extended Due Diligence Representation caused the first defendant to assume the matters pleaded in subparagraph (b) [the due diligence assumption];

(d) the conduct of the first plaintiff pleaded in subparagraphs (a) and (b) above induced the first defendant to adopt the due diligence assumption;

(e) further or alternatively to subparagraph (d):

(i) the first plaintiff and the first defendant proceeded with the Sale Contract on and from 8 May 2024 on the basis of an assumption (being the due diligence assumption) which was either shared by them or adopted by the first defendant and acquiesced in by the first plaintiff; and

(ii) in the further alternative, the first plaintiff and the first defendant respectively requested and agreed to vary the Sale Contract to the effect of the matters pleaded in subparagraph (b);

(f) by reason of adopting the due diligence assumption, the first defendant did not exercise its right to terminate the Sale Contract on 9 May 2024 or, alternatively, require a written variation to the Sale Contract reflecting the due diligence assumption to be executed, which the first plaintiff would or alternatively may have agreed;

(h) in the alternative to subparagraphs (b) to (g):

(i) the Extended Due Diligence Representation amounted to a written offer to vary the Sale Contract to the effect that:

(1) the time for completion of Due Diligence enquiries under the Sale Contract was extended until the first plaintiff and the first defendant, acting reasonably, had:

(A) agreed on the Plant and Equipment which did not meet the Condition Warranty;

(B) removed the same from the list of Plant and Equipment in Annexure D of the Sale Contract; and

(C) reduced the purchase price by the fair market value of the aforesaid Plant and Equipment removed from the Sale Contract;

(2) the parties were able to agree, acting reasonably, to any changes or amendments to the list of Plant and Equipment in Annexure D of the Sale Contract and appropriate reduction of the purchase price, after the Commencement Date;

(ii) the Sale Contract was varied to give effect to the aforesaid matters by Jon of the first defendant accepting the offer in writing by reply email dated 8 May 2024."

• [123] As to the defendant's case, I would conclude by the plain words of Mr Clifford's email of 8 May 2024 as set out in exhibit 14 that those words are not capable of and did not in fact amount to a representation that:
  • the time for completion of due diligence enquiries under the sale contract was extended until the first plaintiff and the first defendant acting reasonably had undertaken any of the matters referred to in paragraphs 6(b)(i)(1), (2), (3); or
  • that it amounted to a representation the parties were (a) to agree, acting reasonably, to any changes to the amendments to the list of plant equipment, Annexure D of the sale price, an appropriate reduction of the purchase price after the commencement date and (b) that by inference, implication or silence, the first plaintiff would not rely on the strict time requirements in the due diligence conditions for the first defendant to terminate the sale contract prior to the due diligence expiry.
• [124] What is also important to bear in mind the mechanism contained in special condition 37.3 for the removal of defective assets by mechanism of a defect notice prior to completion.
• [125] In clause 8.1(c), as modified by special condition 6 to the contract, and clause 8.2 of the contract made provisions for the buyer's rights where there was a breach of clause 8.1(c). As discussed below, clause 8.1(c) amended the standard provisions concerning the status of plant and equipment states that, Melco, "warrants that at completion, the plant and equipment will be in reasonable working order and condition and fit for its purpose".
• [126] As discussed below, as special condition 6 nominates clause 8.1(c) as a warranty and not a condition, and reading that the contract as a whole together with clause 37.3, it is the correct interpretation of the contract that the term in clause 8.1(c) is a warranty, it does not provide the buyer, Ausgroup, with a right under clause 8.2(a) to terminate the contract; but rather the buyer Ausgroup's rights are limited to clause 8.2. That is, to sue the seller for damages for loss suffered arising from the breach or a right to require specific performance of the contract, that is, have the seller, Melco, put the plant in reasonable working order and condition fit for its purpose.
• [127] The completion and possession date for the contract was on 10 May 2024, and Ausgroup conducted the business formerly conducted by Melco from its premises with its plant and equipment after that date. Accordingly, if I am incorrect in my interpretation of clause 8.1(c) being a warranty, and if it were in fact a condition of the contract, the breach of which allowed a buyer to exercise its rights under clause 8.2(a) to terminate the contract, then Ausgroup has waived its rights as it has acted in an extremely inconsistent manner with a purported act of termination of the contract.

Issue Four - Condition Warranty in Clause 8-1(c)

• [132] Perhaps it is a predictable outcome of the extremely fast way in which the contract was put together for execution that there are some anomalies in the contract. Clause 1.1 of the standard conditions defines plant and equipment as "plant and equipment means the plant equipment referred to in item N."
• [133] The schedule to the standard conditions in item N, plant and equipment makes reference to note four which defines the plant and equipment as follows:

(b) lease - refer to schedule "B"

(c) rental agreements - refer schedule "C"."

• [134] As discussed above, schedules A, B and C of the standard conditions do not exist. However, there is an Annexure B, special conditions, and Annexure C being the list of employees. Plant and equipment in item N, however, refers to note four. Note four provides "Note four: separate schedules to form part of the contract if and when required and referred to in the special conditions." Annexure D lists the plant and equipment.
• [135] Clause 3.1 of the standard conditions defines the business as follows

"The business includes goodwill, fixtures, fittings, furniture, chattels and the plant and equipment, industrial and intellectual property, work in progress (if any), and the stock and trade, permits, licenses and other assets set out in any schedules attached to this contract (but excluding any excluded assets and which assets are in this contract referred to as business assets)."

• [136] However, clause one of the special conditions provides that:

"1. Clause 3.1 is amended to read: The business includes the goodwill, fixtures, fittings, furniture, chattels and the plant and equipment, industrial and intellectual property, work in progress, permits and licenses and includes those assets set out in Annexure D to this contract, but does not include the trading name of the business."

• [137] The amended clause 3.1 nominates the assets set at an Annexure D as being included in the business but does not limit the sale of the business to those pieces of plant equipment identified in Annexure D. Accordingly, I conclude that all of the plant and equipment owned by the business as at the contract date was subject to the sale from Melco to Ausgroup.
• [138] In terms of the plant and equipment relevantly clause 8.1(b) of the standard conditions provided:

"The seller states and assures the buyer that except as otherwise disclosed in this contract (c) that all plant and equipment will, at the date of completion, be in good working order and condition."

• [139] However, clause six of the special conditions provided as follows:

"Clause 8.1(c) is amended to read: Warrants that at completion, the plant and equipment will be in reasonable working order and condition and fit for its purpose." [my underline]

• [140] Clause 8.2 of the standard conditions of contract provided where there is a breach of clause 8.1:

"(a) the buyer may terminate this contract by notice in writing to the seller, and may sue the seller for the damages for the loss suffered arising from the breach; or

(b) the buyer may affirm this contract and:

(i) may sue the seller for damages for the loss suffered arising from the breach; and

(ii) may seek specific performance of this contract or damages as an adjunct to or instead of specific performance of this contract (or both)

(c) nothing in clause 8.2 limits the rights or remedies of the buyer under other provisions of this contract, or at law or in equity."

• [141] Clause six of the special conditions in specifying clause 8.1(c) as a warranty is, in my view, important. No other of the sub-clauses in clause 8.1 from (a) through to (k) is nominated as a warranty, and clause 8.2, as set out above, operates to deem the sub-clauses in 8.1(a) through to (k) as if they were a condition rather than a warranty.
• [142] There is, therefore, significant tension between special condition six, which specifies that the new clause 8.1(c) is a warranty, and clause 8.2, which operates to deem breaches of clause 8.1 as if it were a breach of a condition and also clause 38.1 of the standard conditions which has a similar effect.
• [143] The principles of construction relevant to the interpretation of a commercial contract are well summarised by Kelly J in QNI Resources Pty Ltd v North Queensland Pipeline No 1 Pty Ltd (2022) 11 QR 648 as follows:

"[53] The principles of construction relevant to the interpretation of a commercial contract were not in dispute. Unless a contrary intention is indicated in a contract, a Court is entitled to approach the task of giving a commercial contract a business-like interpretation on the assumption "that the parties ... intended to produce a commercial result". There is no contrary intention indicated in the GTA. Further, a commercial contract is to be interpreted so as to avoid "making commercial nonsense or working commercial inconvenience". The commercial purpose of the contract is the purpose of reasonable persons in the position of the parties at the time of a contract. Hence, in determining meaning, the Court has to ask "what a reasonable businessperson would have understood" the contract to mean. This question directs the Court to consider "the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract". The whole of the contract has to be considered as the meaning of one part may be revealed by other parts. Literal interpretations which lack commercial efficacy or common sense are, where possible, to be avoided."

• [144] It seems to me that what a reasonable businessperson would have understood when reading the numerous terms of the contract, in particular with respect to the circumstances addressed by the contract, is that the nature of the contract was for the purchase and sale of a heavy engineering fabrication business. As an example of the types of items manufactured at the Paget factory, Mr Clifford described the manufacture of numerous dragline buckets which were in size similar to the courtroom.
• [145] Mr Clifford explained that the nature of a heavy engineering workshop is that it involves a very harsh environment, especially for electrical equipment with lots of metal filings in the air, lots of grinding sparks, lots of dust such that it is often the case that pieces of machinery were not operating and needed repairs.[30]
• [146] Mr Clifford explained how he had a team working on repairs of equipment which included a qualified electrician, a qualified service fitter and a storeman such that the annual budget to perform repairs and maintenance was in the vicinity of $150,000 per year.[31] Mr Clifford's evidence was not subject to any challenge in this regard.
• [147] Similarly, Mr Robart Jacob provided evidence of several pieces of plant, including two welders and four wire feeders being not operational as at 10 May 2024. Exhibit 14 includes the email of Mr Clifford of 8 May 2024, which states in part "there is always going to be something out of service, etc at any given time."
• [148] The various equipment lists provided show numerous welders and associated plant equipment. Mr Byrnes had worked in heavy workshops for many years and was familiar with that type of business. Accordingly, it seems to me that any reasonable business person involved in the circumstances addressed by the contract would have expected that there would be items of plant equipment which were not operational at any particular point in time.
• [149] In those circumstances, it seems to me that a reasonable business person would not read clause 8.1(c) of the contract as amended by special condition 6 in conjunction with clause 8.2 and clause 38.1 as if that term were a condition of the contract, the breach of which would entitle the buyer to terminate the contract. The reason for this is so that it is certain that on any date including completion date, there would be plant and equipment which would not be in reasonable working order and condition fit for the purpose.

"The inspection of the Imperial 1000 tonne press brake found that the height control on one of the hydraulic rams of the press brake was not operating. Figure three shows the hydraulic rams at different heights, the left ram had reached a zero location all fully retracted. The right ram continued to retract beyond the zero level as it could not detect location it was supposed to stop. Therefore, the plant could not finish the start up process, rendering the machine inoperable."

• [161] I am conscious that Mr Petty's comments on the condition of the thousand tonne brake press as at 30 July 2025 is not direct evidence of whether or not the piece of plant was "in reasonable working order and condition and fit for its purpose" on the handover date of 10 May 2024.
• [162] I consider the more reliable evidence is the observations of Mr Jacob, a quality assurance manager, that worked out "on the floor" at Melco at the time of the completion on 10 May 2024. Although Mr Jacob's evidence is not particularly clear, it appears to be his observation that the 1000 tonne press had stopped operating one to two weeks before the completion date. In respect of the breakdown, Mr Jacob did state that "I did not see Ausgroup also using that one. It was repaired after Ausgroup took over".[32]
• [163] Again, the contemporaneous records are of assistance in this regard. Exhibit 19 contains the email of Mr Byrnes to Mr Clifford of 20 May 2024, informing Mr Clifford that the thousand tonne brake press had not been working for a few weeks and was not working at settlement. Mr Byrnes' email recorded that they had:

"...[S]omeone inspect it on Friday. It seems water has caused damage when you hosed around the machine. It now needs a new board at cost $4-5k. I will forward the quote one [sic] we have it."

• [164] That email evidence is that an inspection made on Friday 17 May 2024 confirmed that seven days after the handover day the press was not working. Mr Clifford's response also of Friday 24 May 2024, also in exhibit 19 not to dispute there was a problem with the press. Mr Clifford wrote:

"As far as I was informed, yes, a foot control got wet when I was cleaning of [sic] which I believe this was rectified ... I was certainly not aware of an ongoing fault as this machine typically works non-stop on day shift, so the machine being down would, should be addressed immediately. I am certainly happy to review any quotes, report received and rectify any issue related to Melco and or myself."

• [165] In his evidence,[33] Mr Byrnes confirmed that he went down and saw the press was not operating and spoke to the press operator, and so he called a company called Rapid Electrical who came and performed the inspection. Mr Byrnes said that Rapid Electrical "diagnosed the problem... a fried circuit board" and they had to source one and order one to replace it. Mr Byrnes said that the that repair occurred and the press did operate, but he observed a problem with the operation that "the blade couldn't be controlled correctly by that computer system."[34]
• [166] In his evidence-in-chief, Mr Byrnes did provide did state that he had received "an indication" from Rapid Electrical that "it could that could cost anything up to $250,000 to get it operational."[35]
• [167] Mr Byrnes was cross-examined about this and changed his evidence to state that it was an initial estimate of $250,000[36] before being asked what Rapid Electrical said about the price of $250,000, which Mr Byrnes responded "Rapid said that... it's a basket case and not worth fixing."[37]
• [168] The quotation and tax invoice of Rapid Electrical exhibits 84 and 85, however, tell a different story. The quotation, exhibit 84, dated 31 May 2024, records that Rapid Electrical had carried out what appeared to be a thorough inspection of the machine, as inspection costs were $3,930.89 plus GST. It was decided as step one that a new amplifier card had to be installed. That was in fact installed, it would appear, as part of the testing and quotation process.
• [169] The entire quotation including the inspection costs was $13,430.89, which consisted of essentially two types of work, that is, fault finding the press, and the installation of a new amplifier card as one job, and then installation of two new Heidenhain scales at a cost of $8,548, together with $952 for installation. The quote indicates that with that repair for the works to be undertaken that they would be in a position to "check correct operation of press."
• [170] Exhibit 85 the tax invoice of 14 June 2024 shows that Ausgroup did not proceed with the second part of the repair, that is the installation of the new linear scales and associated works. So the total cost of the original work relating to the inspection and installation of the amplifier card together with a further fee for writing up a report with recommendations as requested, was provided with the tax invoice showing a total of $4,578.36.

Asset 3-1 Mitsubishi Triton 437 SAF (Plant number ME27)

Asset/s 7-13, 7-14, 7-15 or 7-16 2 elevating work platforms at Paget

Asset 4-3 is a Miller Syncrowave 253 phase welding power source

• [197] In conclusion, I conclude that Ausgroup has proved that Melco is in breach of clause 8.1(c) of the contract. However, I conclude that clause 8.1(c) is a warranty such that its breach does not enliven in Ausgroup a right to terminate the contract. Damages to be set off are calculated at $48,980.89. This is remarkably close to Melco's offer in exhibit 30 to reduce the total price by $45,100 "in relation to plant and equipment issues".

• [198] Ausgroup further argues that it had a right to terminate the contract because of the breach of the standard conditions in clause 8.1(b), 8.1(d)(iii) and 8.1(k)(iv).
• [199] Clauses 8.1(b), 8.1(d)(iii) and 8.1(k)(iv) are, by clause 8.2 conditions of the contract, the breach of which entitles Ausgroup to terminate the contract.
• [200] Clause 8.1, where relevant, provides:

"8.1. The seller states and assures that except as otherwise disclosed in this contract:

(b) To the best of the seller's knowledge and belief, the seller has applied for and obtained all licenses, permits, patents, certificates, consents or other approvals from any competent authority necessary for the proper carrying on of the business and that there is not, and at the date of completion there will not be, any subsisting contravention of any licence, permit, patent, certificate, consent or other approval obtained by the seller in relation to the premises for the carrying on of the business.

(d) that on completion...

(iii) the lease will be valid and subsisting...

(k) if the seller is a corporation within the meaning of the Corporations Act 2001 (Cth) or any similar legislation in the seller's place of incorporation:

(iv) an administrator, controller or managing controller has not been appointed to the seller or in respect of the whole of any part of the business or business assets; ..."

• [201] As to clause 8.1(b) whilst there is an allegation and particulars of licenses and approvals not being provided in exhibit 25, there is no proof of that fact in the evidence. Ausgroup cannot succeed in respect of that allegation.
• [202] Ausgroup alleges that Melco is in breach of clause 8.1(d)(iii) that on completion there was not a "valid and subsisting" lease for the Paget premise. Item R of the items schedule of the contract shows that a requirement of the buyer was for new leases and not an assignment of any existing lease. Item S, particulars of existing lease is blank. Item T provided in respect of the name of the lessors "See annexure A - leases for premises at Paget, Bowen and Hay Point" and item "O" of item T provides in respect of the new leases that they had special conditions.
• [203] Annexure A shows that in respect of the Paget premises, the lessor is Clifford Group Pty Ltd (ACN 091 035 773). In exhibit 6, it may be observed that Mr Byrnes signed that lease on 22 April 2024. However, in exhibit 15A, a copy of the executed lease, it is shown that both Mr Byrnes and Mr Clifford executed the lease on 9 May 2024.
• [204] Exhibit 55, the current and historical company extract for Clifford Group Pty Ltd (ACN 091 035 773) shows that on 26 March 2024, Mr Colwell and Ms Coneyworth from KPMG were appointed as a receiver and manager to the company. Page four of exhibit 55 records that on 9 April 2024, a form 505B Notice of External Administration appointment was received. The document number 7ECQ89800 is exhibit 56. That document confirms that Mr Colwell and Ms Coneyworth were appointed jointly and severally as "receiver and manager of the property described in the schedule of property" and that those persons were "appointed by an instrument" being a "general security agreement".
• [205] The schedule of property is said to be "See attached schedule of property." The document does not, however, attach a "schedule of property" but rather has a security schedule which records registered mortgages over properties in Progress Drive, Paget, and Mitchelmore Street, Paget, as well as general security agreements.
• [206] Although exhibits 55 and 56 do not make it clear, it would be inconceivable that Clifford Group Pty Ltd's land at Mitchelmore Street, Paget, being the Melco workshop was an asset that was not secured by the NAB security. I therefore infer that Mr Colwell and Ms Coneyworth were appointed as receiver and manager in respect of the land at Paget.

• [211] Clause 1.1 of the standard conditions of sale relevantly defined work in progress as follows:

1. The benefit of any contract or other arrangement under which the seller has provided any services to third parties for which the payment is to be made by or on behalf of a third party, whether in whole or in part, and which services have been provided in connection with the business;
2. Any goods (excepting stock and trade) owned or agreed to be bought by the seller, which are used in or subject to any process of manufacture, culmination, treatment, production, application or other procedure which alone or in combination with any other goods or inputs, adds value to the goods for the purpose of applying or using them in the course of conducting the business or any activity which is a step in conducting the business:-..."

• [212] Clause 4.2 of the standard conditions of contract provided for a mechanism for the quantification of work in progress. However, special condition 2 of the contract provided for a variation of standard condition for the contract and stated:

"(1) The parties agree that despite any other conditions to this Contract, the WIP is to be determined as the WIP value for each job that exists in the Businesses' software as at the Date of Completion.

(2) The parties acknowledge that it may take up to fourteen (14) days following Completion to determine the final WIP amount, the parties therefore agree as follows:

1. At least three (3) Business Days before Completion, the Seller will provide to the Buyer its calculation of the estimated WIP as at the Date of Completion, together with the supporting documents for that calculation ("Estimated WIP Notice").
2. At least one (1) Business Day before Completion, the Buyer must advise the Seller, in writing of any objection to the Estimated WIP Notice, including the reasons for such objections.
3. If a notice is given as required by (b) above, then the parties will act reasonably to try to resolve the dispute.
4. The parties agree that following Completion, they will review the Estimated WIP calculations required by this clause and determine the actual WIP value as at the Date of Completion ("Final WIP Amount") within fourteen (14) days of Completion, the Seller and Buyer will act reasonably and agree to provide each other with all necessary documents and information required to calculate the Final WIP Amount.
5. If after 14 days the Final WIP Amount is not agreed, then an independent third party valuer will be appointed by the parties (or failing agreement, by the president of the Chartered Accountants Australia organisation) who will act as an arbitrator and determine the Final WIP Amount in accordance with the usual methods used to calculate WIP in the Business and in accordance with the Australian Accounting Standards, the independent 3rd party valuer's determination will be final and binding on the parties."

• [213] The mechanism for the resolution of WIP provided for in special condition 2(2) was not utilised by the parties. The value, therefore, of the WIP is to be determined in accordance with special condition 2(1). That is, it is deemed to be determined as the WIP value for each job that exists in the business's software as at the date of completion.
• [214] The difficulty for Melco is that there is no evidence to enable any determination of "the WIP value for each job that exists in the business software as of the date of completion". Whilst there is evidence from Mr Clifford that the business had software, called Job Cost, there is no evidence as to what the job cost software program calculated as the WIP for each job at each of the premises. Exhibits 65 and 78 appear to contain WIP calculations but they are not evidence of what exists in the business software.
• [215] On behalf of Melco it is submitted that exhibit 30 provides the proof. However, all that exhibit 30 does is exhibit correspondence and a schedule calculating WIP at $282,115.36 based on a "WIP per report for Paget, Bowen and 'process'". I conclude that plaintiff has not proven its case in respect of WIP. The defendant has, however, made an admission to reference to exhibit 55 and has contained in paragraph 48 of Ausgroup's written submissions that "the Ausgroup entities submit that Melco's contractual entitlement to WIP was in the order of $136,899.70. I conclude on the basis of the defendant's admission that WIP ought to be calculated $136,899.70.

• [216] Exhibit 58 is the valuation report of Mr Kirkham. It is a detailed report of some 561 pages in which Mr Kirkham valued the plant and equipment the subject of the contract of sale as at the date of the contract, 22 April 2024, in the sum of $2,428,670.
• [217] One of the significant assets the subject of the sale transaction was asset 8-92, the 2005 Imperial 1000 tonne, 6-metre bed industrial specific purpose built heavy steel brake press. Mr Kirkham undertook research and established whilst there were much smaller brake presses available for sale in Australia there was no similar machine available in Australia and accordingly he could not directly establish a current market value.
• [218] Mr Kirkham was aware of many brake presses in Australia, but none at the same capacity and with the large 6-metre bed size. Mr Kirkham therefore contacted a specialist brake press dealer in Western Australia to provide email quotations. That firm was Accurpress of Yokine, Western Australia.
• [219] Mr Kirkham valued the brake press using a replacement value of a smaller machine with a 4 metre working bed length. He noted that the 2024 price for such a smaller machine was $1,569,605. Mr Kirkham then reasoned that these types of brake presses have 30 to 50 year working life and picked the midpoint of 40 years to provide a value for the brake press, which is 19 years old to quantify replacement value as the total cost of $1,569,605 less depreciated value of 19 years divided by 40 years multiplied by $1,569,605 to quantify replacement cost value of $824,043.
• [220] Mr Kirkham's second approach was historical cost approach, using a quote for a smaller machine in 2005 at $500,000. Adjusting for inflation and installation costs calculates a total historical cost approach in 2024 at $1,030,761 and then again depreciating by 19 of the 40 years to arrive at a cost value of $641,149.
• [221] The average of these two calculations is $732,595.
• [222] Mr Kirkham therefore valued the brake press conservatively at $700,000, again noting that the comparator presses used for the initial quantification were smaller presses. Mr Kirkham's approach was logical and conservative, and I accept his evidence.
• [223] With respect to the brake press and the balance of the plant and equipment, Mr Kirkham valued a market value for existing use. Mr Kirkham, set out his assumptions in paragraphs 8.1.3, 8.1.4 and 8.1.5.

• [240] Ausgroup concedes the assignment was valid and enforceable under s 199 of the Property Law Act 1974 (Qld). Ausgroup, however, contends that the purported assignment was unenforceable as it amounted to maintenance or champerty.
• [241] Exhibit 41 is the deed of assignment of the chosen action, and exhibit 42 is the notice of assignment of debt from the first plaintiff Melco Engineering Pty Ltd to the second plaintiff, Clifford Group Developments Pty Ltd. The documents show that on 23 May 2025, Melco assigned the debt documents which were defined in the assignment by reference to the business contract of 22 April 2024 and the whole of the cause of action in relation to that contract for the consideration of the assignment sum.
• [242] The assignment sum was defined to be 70% of the amount recovered by the assignee from Ausgroup, and that was payable within 14 days of receipt with the valid assignment of the chose in action, Clifford Group Developments Pty Ltd as second plaintiff, becomes responsible for the ongoing costs of litigation and any adverse costs orders made in respect of the litigation.
• [243] In Murphy Operators Pty Ltd v Gladstone Ports Corporation Ltd No 4 I set out the modern approach to the tort of maintenance and champerty.[49] In this case, the deed of assignment does evidence a share in the outcome of the action. However, it is not a case where a maintainer financially assists (and hides behind) a plaintiff. To the contrary, in the present case the cause of action is assigned so that the putative maintainer, the second plaintiff Clifford Group Developments Pty Ltd, in fact becomes the plaintiff.
• [244] There is no proof of, nor suggestion of, any disadvantage to Ausgroup in terms of its ability to protect itself from any unfair costs burden in the case of substantive success by the defendant. To the contrary, Ausgroup's case is that although it has purchased a business for $2.5 million, because of the plaintiff's breaches of contract, it ought to pay only $1,065,950.30 plus interests to the plaintiff.

• [246] Clause 18(1) of the special conditions defines the seller finance amount as the purchase price as adjusted in accordance with the standard conditions and special conditions. The contract purchase price was $2,500,000. The contract obliged Ausgroup as purchaser to make an adjustment for motor vehicle registration costs paid. That is an additional $10,683.59. The contract provided for Ausgroup to pay WIP, which is calculated at $136,899.70. The contract provided for Melco to pay employee entitlements of $254,792.99, which must be deducted from the purchase price. The balance is $2,392,760.30.
• [247] However, Ausgroup is entitled to set off the sum of $47,380 as compensation for the plant and equipment that did not meet the condition warranty as at the date of completion. Seller finance amount therefore is quantified at $2,343,780 ($2,392,760 - ($48,980).
• [248] In addition to the above, the Melco seeks interest and monthly payments pursuant to clause 4 and 18. Clause 18(10)(a)(ii) provides that Ausgroup is required to pay $40,000 plus GST per month until the seller finance amount is paid.
• [249] As discussed above, Melco is in breach of the condition set out in paragraph 8.1(k)(iv) of the standard conditions of sale, such that Ausgroup's notice of termination of contract dated 9 August 2024[50] was a righteous termination. The effect of the righteous termination is that the "rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected"[51].
• [250] As at 9 August 2024, the contract had been performed in all respects, with the exception of the payment from Ausgroup to Melco of monies properly owing under the contract. Special condition 18 of the contract inserted clause 41 with respect to the delayed payment of the purchase price. As discussed above, that required a payment of $40,000 plus GST for each month between the signing of the contract and "until the seller finance amount is paid in full."
• [251] In accordance with that condition, Ausgroup has paid $40,000 on 15 April 2024, 15 June 2024, and 15 July 2024. It was due to pay a further sum of $40,000 on 15 August 2024, however, the contract was terminated on 9 August 2024. In that case, clause 41(1)(a)(ii) provided "the parties agree that the monthly payments required herein will be prorated for any broken periods and calculated and payable on the approximate number of days in that broken period."

[24] There is no criticism of defence counsel in these observations as it was apparent that Mr Byrnes evidence was grossly inconsistent with the defence case as set out in the pleadings and Mr Byrnes chose to be absent while the plaintiff gave evidence.

[29] Similarity in exhibit 4, Mr Clifford said "the sale assets list was complied by 3rd party valuers as items were either missed, unsighted and or located at a worksite and did not make the compiled valuation list". As Mr Clifford discussed at T4-5, lines 20-30 he "cut and paste" the Gray's valuation as a starting point and altered the "forced liquidation" values (T4-7, line 6) to what he though was a fair market value (T4-7 to T4-12). I accept his evidence in this regard.

[40] I infer they were repaired in the workshop in accordance with the normal procedure, but there is no evidence of the cost of that repair.

[47] Corporations Act 2001 (Cth), s 198G(1), s 437A, s 437B and s 437D.

[49] [2019] QSC 228, at [72] to [150].

[51] McDonald v Dennys Lascelles Ltd [1933] HCA 25; (1993) 48 CLR 457 at 447 per Dixon J.