Aston Martin MENA Limited v Aston Martin Lagonda Limited
[2023] EWHC 3285 (Comm)
Aston Martin Lagonda Limited v Premier International Motors Group Co WLL
19 February 2024
[2024] EWHC 284 (Comm)
High Court
Two companies argued over the sale of old Aston Martins. A judge decided Aston Martin had mostly followed the rules of their agreement and didn't owe the other company more money. While some things weren't done perfectly, it didn't make a big difference to the overall result.
Key Facts
- •Aston Martin Lagonda Limited (AML) sued Premier International Motors Group Co. W.L.L. (PIMG) for shortfalls in two agreements concerning the sale of 33 heritage Aston Martin vehicles.
- •The 2015 Agreement involved 8 vehicles, aiming to repay PIMG and RST's debts to AML.
- •The 2016 Agreement involved 25 vehicles, with AML issuing a £14.3 million credit note to PIMG in exchange.
- •AML claimed shortfalls of £1,721,361.51 and £5,724,953.34 under the 2015 and 2016 agreements respectively, plus storage costs.
- •PIMG denied the shortfalls, counterclaiming for AML's alleged breaches of contract and conversion.
- •The case involved complex issues of contract construction, expert evidence on the classic car market, and witness testimony.
Legal Principles
Contractual interpretation involves identifying the parties' intention based on what a reasonable person would understand.
Marks & Spencer Plc v BNP Paribas Securities Services Trust Company Ltd [2015] UKSC 72, Investors Compensation Scheme Limited v West Bromwich Building Society [1998] 1 WLR 896, Rainy Sky SA v Kookmin Bank [2011] UKSC 50, Arnold v Britton [2015] UKSC 36, Wood v Capita Insurance Services Ltd [2017] UKSC 24
In cases of ambiguity, the court prefers the construction consistent with business common sense.
Rainy Sky SA v Kookmin Bank [2011] UKSC 50
To imply a term, it must be necessary for business efficacy, obvious, clearly expressed, and not contradict express terms.
Marks & Spencer Plc v BNP Paribas Securities Services Trust Company Ltd [2015] UKSC 72
Whether a contractual mechanism creates a condition precedent is a question of construction.
Astrazeneca UK Ltd v Albemarle International Corp [2011] 6 WLUK 473
The burden of proving facts lies on the party asserting them.
Hughes-Holland v BPE Solicitors [2017] UKSC 21
A ‘best endeavours’ obligation requires a party to subordinate their financial interests to achieving the result.
Lewison, The Interpretation of Contracts (7th edition, 2020), Jet2.com Ltd v Blackpool Airport Ltd [2012] EWCA Civ 417
Outcomes
AML was entitled to recover the 2015 shortfall and storage costs, but the exchange rate for the debt was that at the time of the claim, not the 2015 agreement.
The 2015 agreement did not specify a fixed exchange rate; AML's power of sale was not contingent on 5-day notice; and the prevailing market price was to be determined at the time of sale.
AML's obligation to achieve APC for the 2016 vehicles was not a condition precedent to sale, and there was no demonstrable loss from the lack of APC.
The contract's language was permissive, not mandatory; and achieving APC was less important when AMW sold the vehicles.
AML's best endeavours obligation in the 2016 Agreement was met, and AML's sale strategy was not a fire sale.
AML outperformed the market, and any delays in selling were due to market factors and internal constraints.
AML was entitled to recover commissions, at a rate of 5% for retail sales and £5,000 for auction sales, under both agreements.
The parties contemplated commissions, and the amounts charged were reasonable.
The credit note was exhausted, and PIMG's counterclaim for a balance was rejected.
The 2016 agreement did not restrict the use of the credit note; other debts were legitimately offset; and no final agreement existed on the application of the note.
PIMG's claims for damages for breach of contract and conversion were dismissed.
AML's actions were consistent with the agreements, and PIMG failed to demonstrate any loss.