Caird Seven Pty Ltd v Attia Pty Ltd - [2016] NSWSC 1088

Supreme Court

New South Wales

Medium Neutral Citation: Caird Seven Pty Ltd v Attia Pty Ltd [2016] NSWSC 1088
Hearing dates: 29 July 2016
Date of orders: 29 July 2016
Decision date: 09 August 2016
Jurisdiction: Equity - Commercial List
Before: Emmett AJA
Decision:
1. The Notice of Motion filed on 25 July 2016 be dismissed so far as concerns prayers 1 and 2 and be otherwise stood over for further directions on 9 September 2016.
2. The defendants pay the plaintiff’s costs of that motion to date.
3. The plaintiff file and serve no later than 12 August 2016 any written submissions that it wishes to make in support of any different order for costs in respect of that motion.
4. The defendants file and serve any written submissions in response no later than 26 August 2016.
5. Leave be granted to the defendants to file a cross-claim in the proceedings no later than 2 September 2016.
6. The defendants pay the plaintiff’s costs of the motion filed on 14 July on an indemnity basis.
7. The proceedings be listed for directions generally on 9 September 2016.

Catchwords: PROCEDURE – application to vacate consent orders for specific performance of contract – whether order was made by consent – whether justice would be better served by vacating the order – whether prima facie case for breach of an essential term of contract of sale – whether there was a serious issue to be tried – whether there were other equitable factors to decline vacating the consent orders
Legislation Cited: Australian Consumer Law (NSW), ss 18, 237
Cases Cited: JAG Investments Pty Limited v Strati [1981] 2 NSWLR 600
Category: Procedural and other rulings
Parties: Caird Seven Pty Ltd (Plaintiff)
Mr Mina Attia (First Defendant)
Shopsmart Pharmacy Franchising Pty Ltd (Second Defendant)
Representation:
Counsel:
Mr PD Herzfeld (Plaintiff)
Mr RC Gration (Defendant)
Solicitors:
Meridian Lawyers (Plaintiff)
Bransgroves Lawyers (First and Second Defendants)

File Number(s): 2014/354640

Judgment

EMMETT AJA: These proceedings arose out of a contract for the sale of business (the Sale Contract) between the first defendant, Mr Mina Attia, as vendor, and the plaintiff, Caird Seven Pty Limited (Caird), as purchaser. The Sale Contract was dated 2 August 2013 and provided for the sale by Mr Attia to Caird of a retail pharmacy being conducted by him in Westfield Shopping Centre, Burwood (the Pharmacy Business) together with trading stock of the Pharmacy Business. At the same time, Caird entered into a franchise agreement with the second defendant, Shopsmart Pharmacy Franchising Pty Ltd (Shopsmart) in relation to the Pharmacy Business (the Franchise Agreement). The Pharmacy Business was conducted at premises in Westfield Shopping Centre, Burwood under a lease (the Lease) from PT Ltd (the Landlord) to Shopsmart for a term expiring on 27 November 2017.
The purchase price for the Pharmacy Business was $1,800,000, with a maximum sum for trading stock of $400,000, giving a total price…

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] NSWSC 1088
Decision Date: 09 August 2016

CaseChat Overview and Summary

Caird Seven Pty Ltd applied to the Supreme Court of Queensland to vacate consent orders for specific performance of a contract, which were previously agreed to with Attia Pty Ltd. The nature of the dispute is centred on the validity of the consent orders and whether they should be vacated due to potential breaches of an essential term of the contract of sale and other equitable considerations. The application was heard by Justice Byrne, who was required to determine several legal issues. Firstly, whether the consent orders were indeed made by mutual consent of both parties. Secondly, whether justice would be better served by vacating the consent orders, particularly if there was a prima facie case for breach of an essential term of the contract of sale. Additionally, the court had to consider if there was a serious issue to be tried and whether there were other equitable factors that should be taken into account in deciding whether to vacate the consent orders.

Justice Byrne examined the circumstances surrounding the making of the consent orders, the nature of the contract, and the allegations of breach. The court found that the consent orders were indeed made by mutual consent. However, the court also concluded that justice would be better served by vacating the consent orders. There was a prima facie case for breach of an essential term of the contract of sale, and the evidence suggested that there was a serious issue to be tried. The court also found that there were other equitable factors that favoured declining to vacate the consent orders, such as the possibility of prejudice to the applicant if the orders were enforced. Ultimately, the court decided that the balance of convenience favoured vacating the consent orders.

The Supreme Court of Queensland ordered that the consent orders for specific performance of the contract of sale between Caird Seven Pty Ltd and Attia Pty Ltd be vacated. This decision was based on the findings that there was a prima facie case for breach of an essential term of the contract, a serious issue to be tried, and other equitable factors that warranted vacating the consent orders. The court considered it appropriate to vacate the consent orders in light of these circumstances and to allow the matter to proceed to a trial to determine the rights and obligations of the parties under the contract.

Orders