A second Supreme Court judgement in as many months has shed further light on the multi-billion dollar AVWest Aircraft business run by Perth rich lister Tim Roberts, who is in dispute with law firm Clayton Utz and Canadian manufacturer Bombardier.
A second Supreme Court judgement in as many months has shed further light on the multi-billion dollar AVWest Aircraft business run by Perth rich lister Tim Roberts, who is in dispute with law firm Clayton Utz and Canadian manufacturer Bombardier.
Mr Roberts is one of Western Australia’s wealthiest people with a fortune of $1.09 billion, according to The Australian Financial Review’s latest rich list.
Perth-based AVWest business has its own fleet of aircraft and is also a selling agent for Bombardier, and in that capacity has bought 67 aircraft worth $US3.17 billion since 2009.
A ruling handed down today by Justice John Vaughan disallowed an objection from Clayton Utz, which called into question evidence given by Mr Roberts and AVWest director Timothy Burton.
The case with Clayton Utz, represented by King & Wood Mallesons, is focused on a contract for the refurbishment of a $US31 million ($40 million) aircraft owned by AVWest, which was destroyed in a fire during the refurbishment process in 2010.
Within the agreement with Switzerland-based Comlux was an indemnity clause relieving the contractor of damages associated with the fire, which occurred at its Indiana hangar.
AVWest, which is represented by Herbert Smith Freehills, claims Clayton Utz was negligent in not providing details of the indemnity clause, saying it would not have proceeded with the contract if it was aware of the specifics of the clause.
Mr Roberts is seeking compensation for a perceived loss of profits.
“The plaintiff claims damage by reference to alleged deprivation of additional capacity to purchase and on-sell aircraft by reason of not having the capital that was applied in the purchase of the Bombardier Global Express SRS aircraft following the plaintiff entering into the cabin modification agreement with Comlux,” Justice Vaughan said in today’s ruling.
The company has already received a $US30 million payment from its insurers, along with a $US5 million compensation payment from Comlux.
The news comes a month after a Supreme Court ruling ensured a dispute between AVWest and Bombardier would be heard in WA, after the Canadian company had requested the case be heard in New York or Quebec.
The ruling revealed the details of dealings between the two companies from 2009 to 2015.
In order to obtain large up-front payments from AVWest, Bombardier sold aircraft to AVWest (for on-sale to third party buyers) on generous terms including by way of discounted pricing, credit memoranda and other inducements.
It also provided undertakings to find the third party buyers for the aircraft, to facilitate the sale of aircraft to those third party buyers and to pay AVWest net profits and other amounts paid by AVWest to Bombardier on account of the purchase price of the aircraft, Master Craig Sanderson explained in his ruling.
“In the period between April 10 2009 and September 30 2015, AVWest purchased from Bombardier 67 new and used aircraft usually in batches of four or more aircraft with a total price of $US3,174,655,843 and made payments to Bombardier totalling $US912,294,409," the ruling stated.
“Fifty eight of those aircraft were sold to third party buyers for $US2,919,058,698 and AVWest received a total of $1,113,516,839 which included a net profit of $US218,550,640.”
The dispute surrounds 15 agreements between the companies, including three made verbally.
“It is AVWest's position that Bombardier has refused to wholly honour its undertakings to AVWest, including a number of undertakings which were instrumental in obtaining AVWest's agreement to make upfront payments of tens of millions of US dollars to Bombardier,” Master Sanderson said.
“The proceedings concerned claims by AVWest for declaratory relief and damages for breach of various contracts made in Western Australia.”
