Buckworth v Gladio Pty Ltd - [2016] NSWCA 54

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Buckworth v Gladio Pty Ltd [2016] NSWCA 54
Hearing dates: 19 November 2015
Date of orders: 23 March 2016
Decision date: 23 March 2016
Before: Beazley P at [1]
Bergin CJ in Eq at [2]
Emmett AJA at [151]
Decision:
Appeal dismissed. The appellant is to pay the respondents’ costs of the appeal.

Catchwords:
CONTRACT – purchase of shares in company entitling exclusive use of apartment in company title building – contract requiring written consent of company to transfer of shares to purchaser – whether communication of “approval” satisfied provision of contract – whether the purchaser entitled to terminate contract by reason of breach of a condition that the company’s books not properly kept
CORPORATIONS – whether member of company entitled to sue company for damages for directors’ failure to record a resolution in relation to an aspect of approval by company to install air conditioning in vendor’s unit and in part of company property
Legislation Cited: Corporations Act 2001 (Cth)
Cases Cited: Ardlethan Options Ltd v Easdown (1915) 20 CLR 285
Bailey v New South Wales Medical Defence Union Ltd (1995) 184 CLR 399
Dungowan Manly Pty Ltd v McLaughlin [2012] NSWCA 180; (2012) 98 ACSR 62
Edmond v Ross (1922) SR (NSW) 351
Foss v Harbottle (1843) 2 Hare 461; 67 ER 189
Gladio Pty Ltd v Buckworth [2015] NSWSC 922
Houldsworth v City of Glasgow Bank (1880) 5 App Cas 317
Koompahtoo Local Aboriginal Land Council v Sampine Pty Limited (2007) 233 CLR 115
Moffatt v Farquhar (1877) 7 Ch D 591
State of Victoria v Hodgson & Ors [1992] VR 613
Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48; [2009] 1 AC 61
Category: Principal judgment
Parties: Virginia Louise Buckworth (Appellant)
Gladio Pty Limited (1st Respondent)
Ashdown Home Units Pty Limited (2nd Respondent)
Representation:
Counsel:
DE Grieve QC (Appellant)
G Lucarelli (1st Respondent)
MA Izzo (2nd Respondent)
Solicitors:
Christopher Lane & Associates (Appellant)
Minter Ellison (1st Respondent)
Meridian Lawyers (2nd Respondent)

File Number(s): 2015/247102
Publication restriction: Nil
Decision under appeal

Court or tribunal:

Supreme Court of NSW

Jurisdiction:

Equity

Citation:

[2015] NSWSC 922

Date of Decision:

14 July 2015

Before:

McDougall J

File Number(s):

2013/359269

HEADNOTE

[This headnote is not to be read as part of the judgment]

The appellant, Virginia Louise Buckworth, (as vendor) and the first respondent, Gladio Pty Limited, (as purchaser) entered into a contract for the sale of shares, ownership of which carried the right to exclusive occupancy of a company title home unit in a building owned by the second respondent, Ashdown Home Units Pty Limited (Ashdown).

Gladio rescinded the Contract on the basis, inter alia, that the requisite approval under clause 6.1 of the Contract had not been provided by Ashdown. At trial, Gladio succeeded against the appellant in seeking the recovery of the deposit on two bases: (1) that the requisite approval had not been given under clause 6.1 of the Contract; and (2)…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NSWCA 54
Decision Date: 23 March 2016

CaseChat Overview and Summary

Buckworth v Gladio Pty Ltd concerned a dispute arising from a contract for the purchase of shares in a company that conferred the exclusive right to occupy an apartment in a company title building. The contract stipulated that the transfer of shares to the purchaser required the written consent of the company. The purchaser, Buckworth, alleged that a communication of "approval" satisfied this contractual requirement and also contended that he was entitled to terminate the contract due to a breach of a condition relating to the proper keeping of the company's books. The matter was heard by Beazley P, Bergin CJ in Eq, and Emmett AJA.

The court was required to determine two primary legal issues. Firstly, whether the communication of "approval" by the company constituted sufficient compliance with the contractual provision requiring written consent for the transfer of shares. Secondly, the court had to consider whether the purchaser was entitled to terminate the contract on the grounds that the company's books were not properly kept, which was alleged to be a breach of a contractual condition. Additionally, the court considered whether a member of the company could sue the company for damages arising from the directors' failure to record a resolution concerning the installation of air conditioning in the vendor's unit and in a part of the company's property.

The court reasoned that the communication of "approval" did not satisfy the express contractual requirement for written consent. It was held that the directors' failure to record a resolution regarding the air conditioning installation did not give rise to a claim for damages by a member against the company. The appeal was ultimately dismissed, with the appellant ordered to pay the respondents' costs.

Orders

Orders of the court

Appeal dismissed. The appellant is to pay the respondents’ costs of the appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Buckworth v Gladio Pty Ltd [2016] NSWCA 54
Hearing dates:	19 November 2015
Date of orders:	23 March 2016
Decision date:	23 March 2016
Before:	Beazley P at [1] Bergin CJ in Eq at [2] Emmett AJA at [151]
Decision:	Appeal dismissed. The appellant is to pay the respondents’ costs of the appeal.
Catchwords:	CONTRACT – purchase of shares in company entitling exclusive use of apartment in company title building – contract requiring written consent of company to transfer of shares to purchaser – whether communication of “approval” satisfied provision of contract – whether the purchaser entitled to terminate contract by reason of breach of a condition that the company’s books not properly kept CORPORATIONS – whether member of company entitled to sue company for damages for directors’ failure to record a resolution in relation to an aspect of approval by company to install air conditioning in vendor’s unit and in part of company property
Legislation Cited:	Corporations Act 2001 (Cth)
Cases Cited:	Ardlethan Options Ltd v Easdown (1915) 20 CLR 285 Bailey v New South Wales Medical Defence Union Ltd (1995) 184 CLR 399 Dungowan Manly Pty Ltd v McLaughlin [2012] NSWCA 180; (2012) 98 ACSR 62 Edmond v Ross (1922) SR (NSW) 351 Foss v Harbottle (1843) 2 Hare 461; 67 ER 189 Gladio Pty Ltd v Buckworth [2015] NSWSC 922 Houldsworth v City of Glasgow Bank (1880) 5 App Cas 317 Koompahtoo Local Aboriginal Land Council v Sampine Pty Limited (2007) 233 CLR 115 Moffatt v Farquhar (1877) 7 Ch D 591 State of Victoria v Hodgson & Ors [1992] VR 613 Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48; [2009] 1 AC 61
Category:	Principal judgment
Parties:	Virginia Louise Buckworth (Appellant) Gladio Pty Limited (1st Respondent) Ashdown Home Units Pty Limited (2nd Respondent)
Representation:	Counsel: DE Grieve QC (Appellant) G Lucarelli (1st Respondent) MA Izzo (2nd Respondent) Solicitors: Christopher Lane & Associates (Appellant) Minter Ellison (1st Respondent) Meridian Lawyers (2nd Respondent)
File Number(s):	2015/247102
Publication restriction:	Nil
Decision under appeal	Court or tribunal: Supreme Court of NSW Jurisdiction: Equity Citation: [2015] NSWSC 922 Date of Decision: 14 July 2015 Before: McDougall J File Number(s): 2013/359269