This article was written by Nancy Wang Principal Solicitor at W & G Lawyers.
Introduction
A recent Queensland Supreme Court decision contains a warning that every business owner, director, and commercial operator in Queensland should take seriously. The case is about a share buy-back — but the legal principles at the heart of it apply to virtually any commercial agreement where one party performs their side of the deal and the other uses contractual timing language to avoid or delay payment.
The decision is CBP Centre Pty Ltd v VentureCrowd Pty Ltd [2024] QSC 139, decided by Justice Freeburn in June 2024. The core message is simple: if you take the benefit of a transaction, you cannot hide behind a timing clause to avoid paying for it — particularly if you control when that timing clause is triggered.
The Facts
CBP Centre Pty Ltd held shares in VentureCrowd Holdings Pty Ltd, a fintech investment platform. In mid-2022, VentureCrowd offered to buy back CBP’s shares for approximately $2.43 million. Both parties signed a formal Share Buy-Back Agreement.
Payment was tied to something called the “Completion Date” — defined as whichever happened first:
- the second business day after VentureCrowd closed its next external capital raising; or
- any other date that VentureCrowd itself chose to nominate in writing.
Both triggers were entirely within VentureCrowd’s control. The Completion Date might never arrive.
In early 2023, both parties signed and processed a share transfer form. VentureCrowd registered the transfer with ASIC. Under the Corporations Act, the shares were automatically and permanently cancelled the moment registration occurred. CBP’s shares were gone — and CBP had received nothing.
VentureCrowd then refused to pay, arguing that the Completion Date had not yet occurred and therefore its payment obligation had not yet arisen.
The Queensland Supreme Court disagreed. VentureCrowd was ordered to pay the full $2.43 million plus interest. An appeal was filed but subsequently dismissed by agreement in January 2025.
The Legal Principles — And Why They Matter Beyond This Case
The court’s reasoning in this case did not depend on the fact that shares were involved. It drew on foundational principles of Australian commercial contract law that apply across the board. Here are the principles that matter for your business.
1. Commercial contracts are read by reference to their purpose, not just their words
Courts interpret commercial contracts by asking what a reasonable businessperson would have understood the agreement to mean — looking at the language, the context of the whole contract, and the purpose the contract was designed to achieve.
In this case, the purpose was obvious: exchange shares for money. But the same approach applies to any commercial deal. A service contract exists to deliver services in exchange for payment. A supply agreement exists to deliver goods in exchange for a price. A business sale agreement exists to transfer a business in exchange for the purchase price. When a timing clause produces a result that is fundamentally inconsistent with that purpose, courts will not simply apply the clause mechanically.
This matters for your business because contracts — particularly standard form or template agreements — often contain timing provisions that were never designed to deal with the situation that actually arises. The court’s approach gives you a basis to argue that those provisions should not operate to defeat the main purpose of the deal.
2. You cannot take the benefit without performing your obligation
The court found that clause 4(d) of the contract linked the transfer of the shares and the payment of the price. The words “in consideration of the transfer” made the two obligations dependent on each other. The price is paid for the transfer. One cannot be taken without the other being given.
This is a general principle of contract law. Where a contract involves a mutual exchange — goods for money, services for fees, property for a price — the obligations on each side are linked. A party who receives what they bargained for cannot use a timing clause, a condition precedent, or any other contractual mechanism to withhold what the other party bargained for in return. To allow that would be to give one party something for nothing.
This applies directly to common commercial disputes — a client who receives completed work and then refuses to pay because an invoice was not in the required format; a buyer who takes delivery of goods and then claims a payment condition has not been met; a developer who takes the benefit of professional services and then disputes the fee on technical grounds.
3. Timing clauses are machinery, not escape routes
The court drew a clear distinction between the event of completing a transaction and the date on which it was scheduled to occur. The Completion Date in this contract was the scheduled date — it was machinery designed to coordinate when performance would happen. It was not intended to be, and should not be read as, a condition that allowed one party to take everything and give nothing if that date never arrived.
The court was prepared to read the words “on the Completion Date” as “by the Completion Date” — a small adjustment in language that gave effect to the contract’s actual purpose rather than producing a commercially absurd outcome.
The lesson here is that timing provisions in commercial contracts should be understood as procedural tools that facilitate performance, not as conditions that one party can manipulate to avoid their obligations altogether. If you are on the receiving end of an argument that a timing clause excuses non-payment, this case supports the position that such an argument is unlikely to succeed where performance has already been accepted.
4. Payment conditions within the other party’s control are a serious risk
Perhaps the most practically important point in this case is the court’s observation that the Completion Date was entirely within VentureCrowd’s control. VentureCrowd decided whether and when to close its capital raising. VentureCrowd decided whether to nominate another date. The Completion Date might never come — and VentureCrowd knew that when it signed the contract.
Courts are deeply reluctant to enforce contractual arrangements that allow one party to unilaterally determine whether and when their own payment obligation arises — particularly after they have already received what they bargained for. This is a point worth considering carefully in any commercial negotiation.
If you are on the selling side of any transaction and payment is tied to an event the buyer controls — obtaining finance, closing a fundraising round, receiving regulatory approval, or simply nominating a date — you are exposed. You need express protections: a sunset date, security for the obligation, or clear wording that the payment obligation arises upon your performance regardless of whether the triggering event has occurred.
5. Where the literal meaning of a clause produces a commercially nonsensical result, courts will override it
As a second and independent basis for its decision, the court applied the principle that words or even whole clauses in a contract can be set aside if applying them literally would produce a result so inconsistent with the main purpose of the contract that it cannot have been intended.
The court described what had happened here as “commercially nonsensical” — one party had permanently parted with an asset worth $2.4 million and received nothing; the other had received an equivalent benefit and paid not one dollar. That outcome was so obviously at odds with the purpose of the transaction that the timing clause could not be allowed to produce it.
This principle is applied cautiously by courts — they are not in the business of rewriting contracts — but it is available where the facts genuinely call for it. The threshold the court identified is not that the result must be technically “absurd.” It is enough that applying the clause literally would be commercially nonsensical, would flout business common sense, or would be aberrant in the context of the agreement as a whole.
What This Means for Your Business
Whether you are a business owner, a director, a service provider, a supplier, or an investor, this case has practical implications for how you approach commercial agreements.
If you are the party performing first — delivering goods, providing services, transferring assets, or completing works before payment is received — make sure your payment obligation is not tied to a condition the other party controls. If it is, insist on a backstop date, security, or an express term that payment is triggered by your performance regardless of other conditions.
If you are in a dispute where you have performed your side of a contract and the other party is using a timing clause or unfulfilled condition to avoid payment, this case supports the argument that such a clause cannot be used to deny you what you bargained for — particularly where the other party has already taken the benefit of your performance.
If you are drafting or reviewing a commercial contract, pay close attention to how payment conditions are structured. Ask yourself: what happens if the triggering condition is delayed or never occurs? What happens if one party performs before the scheduled date? Does the contract address those situations clearly? If not, it should.
And if you are a company director overseeing a transaction where your company is accepting a benefit from another party — whether that is shares, goods, services, or property — be aware that your company’s obligation to pay for that benefit does not disappear simply because a contractual date has not yet arrived. Proceeding with a transaction and then refusing to pay is precisely the conduct this case says courts will not condone.
How W & G Lawyers Can Help
Commercial contracts that seem straightforward at the time of signing can give rise to significant disputes when circumstances change or when one party tries to exploit a technical provision at the other’s expense. Getting your contracts properly reviewed before you sign — and getting advice quickly if a dispute arises — is almost always less costly than litigating the consequences.
Our business and commercial team assists clients with drafting, reviewing and negotiating commercial agreements, identifying and addressing payment risk, and resolving commercial disputes when they arise.
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Disclaimer
This article is general information only and does not constitute legal advice under Australian law. For advice specific to your situation, please contact W & G Lawyers. For further details, please click here to view our disclaimer.