This is a very practical business sale case. The parties were not fighting about an abstract clause. They were fighting about cranes, finance contracts, payout figures and whether a vendor should receive an extra $361,058 because the purchaser took over the financed equipment instead of the vendor paying out the security.
The contract said the purchase price would be reduced by encumbrances and that the figures would be updated when payout figures were received for all financed equipment. The Court read that commercially. The object was to price the unencumbered equity in the equipment. If the purchaser was taking equipment subject to finance, the adjustment needed to reflect what had to be paid to free the equipment from that security.
The vendor's argument would have produced a windfall. The Court noted that the payout amount was the same immediately before and after the novation. The finance arrangements were transferred, not discharged. For small businesses buying or selling asset-heavy businesses, the lesson is clear: sale contracts need a proper completion adjustment mechanism, a lender payout process and a written allocation of who bears finance costs.