Mrs Justice Joanna Smith has yesterday handed down judgment in Inspired Education Online Ltd v Crombie [2025] EWHC 1236 (Ch), an SPA dispute.
Tom Crombie, the Defendant, founded My Online Schooling Ltd (“MOS”) in 2016. Following MOS’ significant growth over the COVID-19 pandemic, Mr Crombie sold the business to the Claimant (“Inspired”) in November 2022.
Following the sale, Inspired discovered emails sent between Mr Crombie and MOS’ COO (Mr Crombie’s close friend) which it described as “highly offensive, obscene, vulgar, racist, sexist and discriminatory”. Mr Crombie’s explanation that the emails were (obvious) jokes was not accepted by Inspired, which brought a claim against Mr Crombie for breach of warranty and fraudulent misrepresentation, alleging that the true value of MOS was well under 50% of the SPA price (based on an enterprise valuation of £9 million).
Inspired also alleged that Mr Crombie had been involved in a plan by a former MOS employee to set up a rival online school, and claimed for breach of non-compete provisions in the SPA.
Mr Crombie counterclaimed for declaratory relief in respect of (i) completion accounts under the SPA and (ii) deferred consideration under the SPA.
The judgment firmly dismissed Inspired’s claims against Mr Crombie, finding that the emails were plainly intended as jokes, and granted the declaratory relief sought by Mr Crombie.
Despite her findings on liability, the Judge fully considered the quantum cases put forward by the parties, whose valuation experts had taken very different approaches. This section of the judgment ([237]-[286]) is likely to be of general interest to litigators and experts, as the Judge found that Inspired’s expert’s evidence was fatally undermined by: (i) his instructions, which were not consistent with commonly used definitions of market value; (ii) a lack of rigor in his approach to the evidence; and (iii) a “somewhat partial approach”, particularly in relation to the sources relied on in his report. The Judge ultimately concluded that, if she were wrong about liability, any damages would fall below £75,000 and thus below the liability exclusion limit in the SPA.
Also of general interest are the Judge’s analysis of the provisions of the SPA dealing with completion accounts ([350]-[375]), which raised issues around compliance with the SPA’s notice provisions and the operation of deeming provisions.
Anna Boase KC and Joyce Arnold acted for Mr Crombie, instructed by Howard Kennedy LLP.
View Judgment