Laminates Acquisition Co v BTR Australia Ltd.

A contractual notice barring claims unless specified requirements are met must be understood as a reasonable recipient, knowing the contractual context, would understand it. A notice that a warranty claim may arise does not notify an actual claim where the contract establishes separate regimes for potential third-party matters and claims against the warrantor.

A compliant claim notice must identify the underlying matter, the nature and contractual basis of the claim, and the amount claimed, with a calculation or at least the available heads of loss. Information or assumptions independently available to the recipient cannot cure the sender’s failure to supply the required particulars. Where compliance is a condition precedent, the claimant bears the burden of establishing it.

The claimant acquired a corporate group from the defendant under a share sale and purchase agreement containing warranties about compliance with competition law. After a United States antitrust investigation into possible price fixing, the claimant sent correspondence notifying the defendant of the investigation and stating that it might result in claims under the warranties.

Schedule 8 established separate notice regimes. Paragraph 3 concerned third-party claims or other matters that might produce a warranty claim. Paragraph 2 required notice of an actual warranty claim by 31 March 2000 and prescribed the information to be supplied. The preliminary issue was whether the claimant’s correspondence complied with paragraph 2, permitting it to pursue an alleged breach of the competition-law warranty in paragraph 10(D) of Schedule 7.

1. The preliminary issue was determined for the defendant. The claimant was precluded from pursuing the alleged breach of paragraph 10(D) because it had not complied with paragraph 2 of Schedule 8.

2. Paragraph 2 imposed conditions precedent to the defendant’s warranty liability. Although the provision was construed according to the principles applicable to exclusion clauses, the claimant bore the burden of proving compliance. Its commercial purpose was to warn the defendant of intended proceedings and provide enough information for an informed assessment, protective action, accounting provision, settlement or preparation of a defence.

3. Paragraphs 2 and 3 created distinct regimes. Paragraph 3 addressed a third-party claim, demand or other matter which might result in a warranty claim. Paragraph 2 required notice that a claim against the defendant was actually being pursued. A claim could depend upon a future contingency, but the notice still had to state that the claim was being lodged. The distinction between an actual and a possible claim was supported by The Catherine Helen [1998] 2 LLR 511.

4. A paragraph 2 notice had to identify the warranty claim in writing and specify: the underlying facts, events or circumstances; the nature and contractual basis of the claim; and the amount claimed, including the purchaser’s calculation of loss. These particulars were required in reasonable detail to the extent that the information was available. The commercial-purpose reasoning in Senate Electrical Wholesalers Ltd v Alcatel Submarine Networks [1999] 2 Lloyd’s Reports 243 was apposite.

5. The correspondence expressly followed paragraph 3 and stated only that the investigation might result in claims. It neither asserted an existing claim nor identified the warranty allegedly breached. It also failed to identify the alleged agreement or arrangement and provided no calculation or heads of prospective loss beyond investigation costs. Knowledge or assumptions that the defendant might obtain independently could not replace the particulars which the claimant was contractually required to give.

6. The claimant possessed enough information to notify a contingent claim, identify paragraph 10(D), state that details of the alleged arrangement were unknown, and identify investigation costs and prospective civil liabilities. Its failure to provide such a notice was therefore not excused by the qualification concerning available information.

not stated in the judgment.