Australia, June 30 -- New South Wales Land and Environment Court issued text of the following judgement on May 29:

1. HER HONOUR: An issue has arisen in relation to the waiver of privilege, on the third day of a three-week trial. Imprecision in the precise details of the parties, facts and issues should be politely overlooked in this ex tempore judgment.

Nature of the proceedings

2. Put shortly, Fiona Lock worked for a group of companies, which I will refer to as "CHAMP". These companies had a number of investments, including a majority stake in a foreign exchange (FX) trading platform called "Pepperstone". Ms Lock was interested in buying the Pepperstone investment from CHAMP. She negotiated a deal. This included vendor finance of some $150 million. In addition, Ms Lock agreed to share the profits of the Pepperstone business with the vendors for some years after completion of the sale.

3. Ms Lock incorporated the plaintiff, FX Group Holdings Pty Ltd, to acquire CHAMP's shares in Pepperstone from various of the defendants (the vendors). On 2 September 2018, Heads of Agreement were signed. The vendors then retained King & Wood Mallesons to prepare a Share Sale Agreement. Ms Lock retained Clifford Chance to act for the plaintiff.

4. On 11 September 2018, a Share Sale Agreement was executed. Some years later, when the profit-sharing arrangement 'kicked in', the parties fell into furious disagreement as to the proper construction of the profit-sharing arrangement as recorded in the Share Sale Agreement, specifically, the definition of "Equity Proceeds" and the operation of clause 10, entitled "Uplift Payments". As I understand it, the difference between their points of view has implications in the order of $100 million.

5. In 2022, the plaintiff commenced these proceedings and the vendors filed a cross-claim. So configured:

a) the plaintiff and the vendors each seek declaratory relief in support of their proffered construction of the Share Sale Agreement;

b) in the event that the plaintiff's construction is endorsed by the Court, then the vendors seek rectification of the Share Sale Agreement on the basis of common mistake or, alternatively, unilateral mistake;

c) the vendors also seek equitable compensation from Ms Lock for breach of fiduciary duty, together with damages from the plaintiff and Ms Lock for misleading and deceptive conduct by silence.

6. Noteworthy, in the rectification suit for common mistake, the vendors assert that the plaintiff understood and intended, at the time of executing the Share Sale Agreement, that it provided for a particular profit-sharing arrangement: para 9, Further Amended Commercial List Cross-Claim Statement (XXCLS). This allegation is denied: para 9, Commercial List Cross-Claim Response to Further Amended Commercial List Cross-Claim (XXCLR).

7. In respect of the vendors' rectification suit for unilateral mistake, the vendors assert that the plaintiff knew or strongly suspected that the vendors were mistaken in their understanding as to how the profit-sharing agreement in the Share Sale Agreement would operate; this is also denied: para 16 of XXCLS; para 16 of XXCLR.

8. That is, the plaintiff and Ms Lock's response to these allegations is confined and makes no assertion as to their state of mind.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/1971ab989a2f0bf94682b33c)

Disclaimer: Curated by HT Syndication.