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Ringrow V. Bp Australia Notes

BCL Law Notes > Commercial Remedies BCL Notes

This is an extract of our Ringrow V. Bp Australia document, which we sell as part of our Commercial Remedies BCL Notes collection written by the top tier of Oxford students.

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RINGROW V. BP AUSTRALIA FACTS On 27 May 1999, Ringrow Pty Ltd ("the appellant") entered a contract with BP Australia Pty Ltd ("the respondent") to buy a service station known as BP Lansvale ("Contract for Sale of Site"). The appellant, or persons connected with it, had conducted a service station business on that site since 1988 as franchisee. On 28 July 1999, the contract to buy BP Lansvale was completed, and certain related transactions were entered, including an Option Deed dated 28 July 1999 and a BP Branded Privately Owned Sites Agreement ("POSA"). At various times in 2002 the appellant purchased fuel from a supplier other than the respondent, and on-sold the fuel to the public. This was a breach of cl A4.2 of the POSA. The respondent gave the appellant Notices of Breach of Condition. These were followed by a Notice of Termination of Contract on 2 December 2002, with effect from 1 January 2003, pursuant to cl A13.2.1(a) of the POSA. On 17 December 2002, the solicitors for the respondent informed the solicitors for the appellant that the respondent intended to exercise its contractual rights under the Option Deed to buy back the BP Lansvale site. Clause 38.1 of the Contract for Sale of Site provided that, in consideration of the respondent agreeing to sell BP Lansvale to the appellant, the appellant "HEREBY GRANTS to the [respondent] an irrevocable option to purchase [BP Lansvale] on the terms set out in the option to purchase", a copy of which was annexed, and which on execution became the Option Deed. Clause 1.2(a) of the Option Deed provided that the option was only exercisable if the POSA "is terminated". Clause 2.1 of the Option Deed provided that the price payable for BP Lansvale by the respondent was its "market valuation ... as an operational service station as determined by an independent valuer". Clause 2.5 provided: "The valuer shall be instructed to determine the market valuation of [BP Lansvale] ... and in making the determination shall have regard to all factors the valuer considers relevant but shall not include in the determination of the market valuation of [BP Lansvale] any allowance for any goodwill attaching to any business conducted at [BP Lansvale]." The question here was whether Clause 2.5 is a penalty clause. HOLDING Methodology in cases where the clause provides for something other than payment of money

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