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Davis Stack Capital Pty Ltd v Raj & Jai (Mudgee) Pty Ltd

Davis Stack Capital Pty Ltd v Raj & Jai (Mudgee) Pty Ltd

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Case Copied 13 June 2025 35 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Davis Stack Capital Pty Ltd v Raj & Jai (Mudgee) Pty Ltd [2025] NSWSC 599
Hearing dates: 26-27 May 2025; further submissions 28 May 2025 and 3 June 2025
Date of orders: 13 June 2025
Decision date: 13 June 2025
Jurisdiction: Equity - Commercial List
Before: Peden J
Decision:
At [101]

Catchwords:
CONTRACTS — Remedies — Specific performance — Whether buyer ought be ordered to specifically perform unit sale and purchase agreement — Whether buyer’s parent ought be ordered to specifically perform guarantee and/or indemnity
GUARANTEE AND INDEMNITY — Actions to enforce guarantee — Guarantors liability — Whether guarantee on proper construction is “see to it” or primary obligation to pay money — Whether indemnity requiring buyer’s parent to pay certain amounts on demand requires payment of balance of purchase price where completion has not occurred
CIVIL PROCEDURE — Discontinuance of proceedings — Leave of court — Whether cross-claimants ought be granted leave to discontinue claims for declaratory relief at the commencement of hearing — Where claims raised by cross-claim said to be hypothetical

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW) r 12.1(1)(b)

Cases Cited:
AFC Holdings Pty Ltd v Shiprock Holdings Pty Ltd [2010] NSWSC 985
Angas Securities Ltd v Small Business Consortium Lloyds Consortium No. 9056 [2016] NSWCA 182
Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549
Australian Casualty Co Ltd v Federico (1986) 160 CLR 513
Beerens v Bluescope Distribution Pty Ltd (2012) 39 VR 1
Bofinger v Kingsway Group Ltd (2009) 239 CLR 269
Canty v PaperlinX Australia Pty Ltd [2014] NSWCA 309
Charter Reinsurance Co Ltd v Fagan [1997] AC 313
Cherry v Steele-Park (2017) 96 NSWLR 548
Coles v Wood [1981] 1 NSWLR 723
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544
Erratt v Grills [2015] NSWSC 594
Evagelakos v UPG 318 Pty Ltd [2024] NSWSC 1179
Fonterra Brands (Australia) Pty Ltd v Bega Cheese Ltd [2025] NSWSC 395
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 202.
HDI Global Specialty SE v Wonkana No 3 Pty Ltd (2020) 104 NSWLR 634
Insurance Australia Ltd v Iuli [2014] ACTCA 50
J & P Marlow (No 2) Pty Ltd v Hayes (2023) 112 NSWLR 29
Laundy Hotels (Quarry) Pty Ltd v Dyco Hotels Pty Ltd (2023) 276 CLR 500
Luxer Holdings Pty Ltd v Glentham Pty Ltd (2007) 35 WAR 254
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457
McGrath v Sturesteps (2011) 81 NSWLR 690
McIntosh v Dalwood (No 4) (1930) 30 SR (NSW) 415
Newey v Westpac Banking Corporation [2014] NSWCA 319
Paolucci v Makedyn [2021] NSWCA 215
Parwan Investments Pty Ltd v Hooper [2024] VSCA 86
Rava v Logan Wines [2007] NSWCA 62
Re Mempoll Pty Ltd, Anankin Pty Ltd and Gold Kings Pty Ltd [2013] NSWSC 301
Ryan v UPG 322 Pty Ltd [2023] NSWSC 1293
Sunbird Plaza Pty Ltd v Maloney…

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: [2025] NSWSC 599
Decision Date: 13 June 2025

CaseChat Overview and Summary

The case of Davis Stack Capital Pty Ltd v Raj & Jai (Mudgee) Pty Ltd involved a dispute between the plaintiff, Davis Stack Capital, and the defendant, Raj & Jai (Mudgee). The matter concerned the sale and purchase of a unit, with Davis Stack Capital seeking specific performance of the sale agreement as well as enforcement of a guarantee and indemnity provided by the defendant's parent company. The case was heard in the Supreme Court of New South Wales.

The primary legal issues before the court were whether the buyer should be ordered to specifically perform the unit sale and purchase agreement, and whether the buyer’s parent company should be ordered to specifically perform a guarantee and/or indemnity. Additionally, the court needed to determine the nature of the guarantee, whether it was a "see to it" guarantee or a primary obligation to pay money, and the extent of the indemnity, specifically whether it required the payment of the balance of the purchase price where completion had not occurred.

The court ruled that Davis Stack Capital was entitled to specific performance of the sale agreement. The court found that the guarantee provided by the defendant’s parent company was not a mere "see to it" guarantee but a primary obligation to pay money. Consequently, the parent company was required to pay the balance of the purchase price. The court also held that the indemnity provision was broad enough to require the payment of the outstanding balance of the purchase price where completion had not occurred. The cross-claimants were denied leave to discontinue their claims for declaratory relief, as the claims were deemed hypothetical and not ripe for determination.

The court ordered the defendant to specifically perform the sale and purchase agreement and directed the parent company to pay the balance of the purchase price. The cross-claimants' claims for declaratory relief were dismissed.

Orders