Background
Two trust companies—Frankford Ave Pty Limited and Minas Anor Pty Limited—each held 5,000 ordinary shares in Northhaven Private Wealth Pty Ltd, a financial advisory business. On 29 July 2024, they entered into a written contract to sell 6,000 of their 10,000 combined shares to H & H Family Office Holdings Pty Ltd in two tranches. The first tranche (3,500 shares for $3,022,835.91) completed on 1 August 2024 as scheduled.
The second tranche, comprising 2,500 shares due on 1 August 2025, required payment calculated under a formula derived from the Company’s Recurring Revenue minus defined liabilities. The Plaintiffs’ solicitors provided written notice of the calculated amount—$2,204,922.38 total ($440,984.48 to the First Plaintiff and $1,763,937.90 to the Second Plaintiff)—in letters dated 25 July, 30 July, 6 August, and 14 August 2025, confirming they were ready, willing, and able to perform. The Defendant did not complete.
The Plaintiffs filed suit seeking specific performance on 30 September 2025. The Defendant disputed the claim, asserting an alleged variation of the contract with unfulfilled conditions precedent and denial of the Plaintiffs’ readiness to perform. The Defendant also filed cross-claims against the Plaintiffs and individual shareholders, alleging breach of fiduciary duty. The Defendant’s solicitors ceased acting shortly before trial, and the Defendant failed to appear at the hearing on 1 July 2026.
The Court’s Holding
Chief Judge Hammerschlag in Equity granted the Plaintiffs’ application for specific performance. The court ordered that the written Contract for Sale of Shares be specifically performed and carried into execution. The Defendant was directed to attend at the completion venue on 10 July 2026 at 10:00 am to pay the Plaintiffs and receive transfer of the shares.
The court was satisfied that the Plaintiffs had established the correct amount due for the second tranche at $2,204,922.38. The court rejected the Defendant’s assertion that the parties had varied the contract or that conditions precedent remained unfulfilled. The Defendant’s cross-claims, including the assertion that the Plaintiffs should repurchase the Defendant’s shares and claims of fiduciary breach, were dismissed in their entirety.
The Defendant was ordered to pay the Plaintiffs’ and Cross-Defendants’ costs of the proceedings.
Key Takeaways
- Specific performance is available to enforce share sale contracts when a buyer breaches its obligation to complete, even where the precise purchase price must be calculated under a contractual formula.
- Clear written notice from vendors confirming readiness and ability to perform, coupled with the buyer’s failure to appear or defend at trial, supports an order for specific performance.
- Cross-claims by a defaulting buyer alleging conduct by the sellers or shareholders—even serious claims such as fiduciary breach—do not defeat specific performance when the underlying contract is valid and enforceable.
- Failure to appear at trial and abandonment of legal representation may result in orders adverse to the absent party without further opportunity to be heard.
Why It Matters
This decision reinforces that specific performance remains an available remedy for breach of share sale contracts in Australia, particularly where the seller has demonstrated genuine readiness to perform and the buyer has defaulted without valid legal excuse. The court’s willingness to proceed to judgment despite the buyer’s non-appearance reflects the equitable principle that a party cannot benefit from its own breach or procedural default.
The decision also clarifies that formula-based purchase prices—common in corporate transactions tied to performance metrics—do not render a contract unenforceable or preclude specific performance. The Plaintiffs’ detailed written communications calculating the price under the contractual formula satisfied the court that the consideration was certain and ascertainable, removing a potential objection to equitable relief.