Aymes International Limited v Nutrition4U BV & Ors

An undefined contractual expression such as Turnover ordinarily bears its ordinary commercial meaning, read in the context of the agreement as a whole. A payment for the grant of an option to acquire shares is not turnover merely because it was paid to the target company. It is not consideration received from sales of that company’s goods or services.

The construction should also accord with the agreement’s commercial purpose. A one-off option payment should not inflate, through a valuation multiplier, the price payable by the option holder for the shares. An appeal directed only to adverse factual findings, without any challenge to their legal consequences, will not ordinarily be entertained merely to repair a person’s reputation.

AIL paid €537,500 for an option to acquire all the shares in NutriMedical from its parent, Nutrition4U. It exercised the option. The share consideration depended on NutriMedical’s Company Value, which in turn depended on its Relevant Margin and the meaning of Turnover in Schedule 1.

At first instance, the High Court held that Turnover included the option consideration, producing a positive Company Value: [2023] EWHC 1452 (Ch). It also made adverse findings about AIL’s director, Mr Aymes. AIL appealed both the contractual construction and those findings.

The central issue was whether the option consideration formed part of NutriMedical’s Turnover for the contractual valuation calculation, and whether the Court of Appeal should entertain grounds seeking only to reverse findings affecting Mr Aymes’s reputation.

Appeal allowed in part. The Court allowed ground 1. It held that grounds 2 and 3 should not be entertained, even if the Court had jurisdiction to do so.

1. Construction of the option agreement. The option consideration was not part of NutriMedical’s Turnover. The agreement defined “Option Consideration”, but Schedule 1 did not say that it was to be included in Turnover. In its ordinary meaning, turnover comprises the value of goods and services sold, or money received from sales. The payment was consideration for the option granted by Nutrition4U, not a sale by NutriMedical.

   The direction that the payment be made to NutriMedical did not alter its character. In NutriMedical’s hands it was effectively a gift from its parent. Excluding it also reflected the commercial purpose of valuing expected future earnings. Including it would make AIL’s payment for the option inflate the price it had to pay for the shares, amplified by the valuation multiplier. The agreement’s exclusion of AIL sales and related costs from Relevant Margin reinforced that conclusion. The Company Value was therefore negative and AIL was liable to pay €1 under clause 6.1.

2. Findings concerning Mr Aymes. Applying Cie Noga d’Importation et d’Exportation SA v Australia and New Zealand Banking Group Ltd [2002] EWCA Civ 1142, an appellant cannot appeal against factual findings merely because it dislikes them where it does not challenge the legal decision or consequences to which they relate. AIL did not rely on grounds 2 and 3 to challenge the substantive order. Its purpose was only to restore Mr Aymes’s and AIL’s reputation.

   In Re W (A Child) [2016] EWCA Civ 2415 was distinguishable. The criticised persons there were appellants, had not had an opportunity to answer the criticisms, the judgment had not been made public, and the appeal succeeded for infringement of rights under the European Convention on Human Rights. None of those features was present. Even if an exceptional jurisdiction existed, there were no compelling reasons to exercise it.

• Court of Appeal (Civil Division): Allowed AIL’s appeal on contractual construction in [2024] EWCA Civ 1259. It declined to entertain the challenges to adverse findings about Mr Aymes.
• High Court, Chancery Division: Held that Turnover included the option consideration and ordered specific performance in [2023] EWHC 1452 (Ch). Its rulings on time being of the essence, specific performance, and the proposed employment contract were not challenged on appeal.