Anaconda Nickel Ltd v Edensor Nominees Pty Ltd

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Citation: [2004] VSCA 167

This information can be found in the Textbook: Paterson, Robertson & Duke, Principles of Contract Law (Lawbook Co, 3rd ed, 2009), pp. 169-70 [9.195]

Background facts

  • Parties entered a contract for sale of shares in a company
  • Clause 4.1(a) gives buyer the rights to make an inspection before buying
  • On day of completion, buyer requests a 6-month extension, but promises that the transaction will be completed (serious representation)
  • On the faith of the sale being completed in the future, control of the board was transferred to the buyer
  • In the 6 months, company deteriorated and seller suffered detriment in form of dealing with other buyers and preserving company resources etc.
  • End of the extension, buyer invoked s clause 4.1(a) and refused to complete the transaction

Legal issues

Judgment

  • Buyer induced seller to believe that it would not invoke clause 4.1(a) through his representation. Seller then suffered detriment in reliance on that belief.
  • This gives rise to Equitable Estoppel
  • Making the buyer complete the purchase (make good of the promise) is the minimum equity to do justice.
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