Salter & Ors v Gilbertson & Ors

(2003) 6 VR 466; [2003] VSCA 1

Victorian Court of Appeal

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For Australian Law.

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Interrogate

Catchwords

1. Contract
2. › Construction
3. › Sale of shares
4. › Nominee clause
5. › 'And/or nominee'
6. › Whether nominee clause authorises substitution of new contracting party or merely nomination of transferee
7. › Whether 'compelling language' required for substitution
1. Contract
2. › Construction
3. › Sale of shares
4. › Nominee clause
5. › Nomination of company as purchaser of its own shares
6. › Whether nomination effective where buy-back arrangement inconsistent with original contracting parties' continuing liability
1. Corporations
2. › Share buy-back
3. › Selective buy-back
4. › Whether company can be nominated as purchaser under share sale contract
5. › Whether buy-back arrangement creates substitute purchaser inconsistent with original contract
6. › Corporations Law, Pt 2J.1 Div 2, ss 257A-257H

Quick Take

An 'and/or nominee' clause in a share sale contract authorises only the nomination of a transferee to take a transfer by direction of the original purchaser, not the substitution of a new contracting party, unless 'compelling language' indicates otherwise. Nomination of the company itself as purchaser is ineffective where the only means of effecting the transfer is a share buy-back arrangement that would create a substitute purchaser inconsistent with the original purchasers' continuing liability for the purchase price.