In 2003, experienced car salesman Peter Fulmer was employed to acquire and on-sell cars for a profit of approximately $200k. His employer, Australian Motors, was owned and directed by Grahame and Shane Thompson.
After 12 months Fulmer was approached by Grahame Thompson to join him in a similar operation in Townsville.
Fulmer agreed to contribute $550k to the proposed business for a 30% shareholding by way of a $150k upfront deposit and the remaining $400k to be sourced from profits generated by the business.
Fulmer paid his deposit in April 2006 and his interest in the business was due to crystallise once the profit target was reached.
The profit target was – by everyone’s account – reached in January 2010, but when the Thompsons failed to sign over a share in the business, Fulmer sued.
The Supreme Court in Cairns heard the Thompsons’ contention that the business had in fact fallen short of the target sum, despite an earlier admission to the contrary.
Justice James Henry rejected that assertion ruling the business records established the true revenue position. He considered the defendants’ argument an entirely unconvincing attempt to avoid their financial liability.
He assessed Fulmer’s loss of the chance to profit from the deal, and the loss of the value of the shares that ought to have been awarded to him, at $993k.
In delivering its judgment, the court noted that ‘so far as money can allow it, the party is to be placed in the same position as if the contract had been performed’.
Fulmer’s claim for damages for loss of income were dismissed on the basis that such an award would unfairly place him in a position superior to where he would be had the breach not occurred, as such damages would overlap with loss of chance to profit damages.
For more details on the case, visit:
Fulmer v Thompson & Ors (No 2) [2017] QSC 256
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