Legal Research
Cases
Delaney v Delaney

Delaney v Delaney

Case [2022] VSCA 48 4 April 2022

Contract Formation

Specific Performance

Contract Law

Type to search within this case.

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2021 0093

PATRICK JOSEPH DELANEY	First applicant
PAT DELANEY CONSTRUCTIONS PTY LTD	Second applicant
v
SEAN ANTHONY DELANEY	First respondent
SKILDALE PTY LTD	Second respondent

---

JUDGES:	McLEISH, KENNEDY and MACAULAY JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	11 February 2022
DATE OF JUDGMENT:	4 April 2022
MEDIUM NEUTRAL CITATION:	[2022] VSCA 48
JUDGMENTS APPEALED FROM:	[2021] VSC 365; [2021] VSC 399 (Lyons J)

---

CONTRACT – Heads of agreement – Agreement to purchase interests in group entities – Provision for further negotiations – Tax implications of purchase unresolved – Whether complete purchase agreement or agreement to negotiate – Complete purchase agreement – Masters v Cameron (1954) 91 CLR 353, Nurisvan Investment Ltd v Anyoption Holdings Ltd [2017] VSCA 141, considered – Intention to be bound – Relevance of omission of important but inessential terms – Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106, applied – Leave to appeal granted – Appeal dismissed.

CONTRACT – Specific performance – Agreement to purchase shares and units – Default by vendor – Purchaser obtaining order for specific performance – Whether vendor entitled to interest on purchase price since date for completion – No evidence as to purchaser’s receipt of income from sale property in interim – Open to judge to refuse order for interest – Harvela Investments Ltd v Royal Trust Coof Canada (CI) Ltd [1986] AC 207, applied – Leave to appeal refused.

---

APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr I D Martindale QC and	MW Law
Mr A T Schlicht
For the Respondents	Mr P W Collinson QC and	Lander & Rogers
Ms E Dias

McLEISH JA
KENNEDY JA
MACAULAY JA:

The first applicant (‘Patrick’) and the first respondent (‘Sean’) are brothers. They are co-owners of the Delplant group, which consists of a number of interconnected companies and trusts. Sean is the managing director of the group. Until recently, Patrick was the operations manager. Patrick’s and Sean’s interests in the group are largely held through their respective family trusts. The second applicant (‘PDC’) and the second respondent (‘Skildale’) are the trustees of those trusts.[1]
[1]In what follows, references to Patrick’s interests in the group include his interests held through his family trust and PDC, and references to Sean’s interests include his interests held through his family trust and Skildale.

In the decade after they bought a third brother (’Joseph’) out of the group, the relationship between Patrick and Sean deteriorated. On 25 May 2020, Sean made Patrick redundant. Two days later, Sean and Patrick executed a heads of agreement. In broad terms, the agreement provided for Sean to buy Patrick out of the group for $10 million. It also provided for further negotiations (including as to tax issues) and allowed a short period of time in which a more formal agreement might be concluded.

Further…

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.

Continue reading Delaney v Delaney

Details

AGLC: Delaney v Delaney [2022] VSCA 48
Case: [2022] VSCA 48
Decision Date: 4 April 2022

CaseChat Overview and Summary

In the matter of Delaney v Delaney, the dispute centred on the enforceability of a heads of agreement for the purchase of interests in several group entities. The case was heard and determined by the High Court of Australia. The primary issue was whether the heads of agreement constituted a complete purchase agreement or merely an agreement to negotiate further. This distinction was crucial as it would determine the enforceability of the agreement and the rights and obligations of the parties.

The court had to consider whether the omission of certain terms, such as the tax implications of the purchase, rendered the agreement incomplete or whether the parties' intention to be bound by the agreement was evident from the context. The court referenced several precedents to assist in its determination, including Masters v Cameron, Nurisvan Investment Ltd v Anyoption Holdings Ltd, Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd, and Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd. Ultimately, the court concluded that the heads of agreement was a complete purchase agreement, as evidenced by the parties' clear intention to be bound and the absence of any material terms that would prevent the agreement from being enforced.

The court found that the heads of agreement constituted a complete purchase agreement, thereby rejecting the vendor's contention that the agreement was merely an agreement to negotiate. The court granted leave to appeal but dismissed the appeal on the grounds that the vendor's arguments were unconvincing. The court also addressed the issue of specific performance, ruling that the purchaser was entitled to an order for specific performance in the event of the vendor's default. However, the court left open the possibility that the vendor may be entitled to interest on the purchase price since the date for completion, depending on the evidence regarding the purchaser's receipt of income from the sale property in the interim. The court refused leave to appeal on this issue.

Orders