Court of Appeal
Supreme Court
New South Wales
- Summary available
Medium Neutral Citation: Elite Realty Development Pty Ltd v Sadek [2023] NSWCA 165 Hearing dates: 15 June 2023 Date of orders: 19 July 2023 Decision date: 19 July 2023 Before: Payne JA at [1]
Mitchelmore JA at [113]
Stern JA at [114]Decision: In the Maroubra Appeal (2022/318509)
(1) Leave refused to amend the notice of appeal.
(2) Appeal dismissed.
(3) Appellants to pay the respondents’ costs.
In the Avoca Appeal (2022/318527)
(1) Appeal dismissed.
(2) Appellants to pay the respondents’ costs.
Catchwords: CONTRACTS – Duress – Illegitimate pressure – Affirmation – agreement to terminate property development joint venture – where one party entered agreement under duress – duress from gun attack – agreement performed by both parties – whether duress ended – whether performing agreement constituted affirmation – whether rescission barred by affirmation
CIVIL PROCEDURE – Hearings – Procedural fairness – whether affirmation pleaded at first instance – whether parties below conducted case on basis of affirmation
PARTNERSHIPS AND JOINT VENTURES – Joint venture agreements – Rights and duties between joint venturers – assets of joint venture – tracing – whether properties bought with joint venture funds
APPEALS – Point not taken below – Pleadings – new arguments raised on appeal – whether Court should hear new arguments – whether leave should be granted to amend notice of appeal
CORPORATIONS – Directors and officers – Directors’ duties – Fiduciary duties – where director personally entered deed – company not party to deed – where company involved in a joint venture – whether deed terminated joint venture – whether director breached duties – whether relief available - whether loss shown
Legislation Cited: Civil Liability Act 2002 (NSW) s 5O
Civil Procedure Act 2005 (NSW) Pt 6
Corporations Act 2001 (Cth) ss 180-182, 1317H
Evidence Act 1995 (NSW) s 136
Cases Cited: Barton v Armstrong [1976] AC 104
Bryant v Quinn [2022] NSWCA 163
Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40
Elite Realty Development Pty Ltd v Sadek [2022] NSWSC 1333
Hawker Pacific v Helicopter Charter (1991) 22 NSWLR 298
Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26
Maroubra Road Developments Pty Ltd v Afyouni [2019] NSWSC 1639
Russell Gould Pty Ltd v Ramangkura (2014) 87 NSWLR 552; [2014] NSWCA 310
South Western Sydney Local Health District v Gould (2018) 97 NSWLR 513; [2018] NSWCA 69
United Dominions Corporation v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49
University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481
Texts Cited: J Edelman, “Understanding Tracing Rules” (2016) 16(2) QUT Law Review 1
Category: Principal judgment Parties: 2022/318509:
Elite Realty Development Pty Ltd (First Appellant)
Hazem Abdallah Afyouni (Second Appellant)
Afyouni Holdings Pty Ltd as Trustee…
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- AGLC
- Elite Realty Development Pty Ltd v Sadek [2023] NSWCA 165
- Case
- [2023] NSWCA 165
- Decision Date
CaseChat Overview and Summary
The Court of Appeal was required to determine whether the appellants could successfully argue that the termination agreement was voidable due to duress, notwithstanding their subsequent performance of its terms. Key legal issues included whether the duress, if established, had ceased to operate at the time of performance, and whether that performance amounted to an affirmation of the agreement. The Court also considered whether the issue of affirmation had been adequately pleaded and argued at first instance, and whether new arguments regarding affirmation should be permitted on appeal. Further, the Court examined whether a director had breached fiduciary duties in relation to the termination deed, and whether the company, not being a party to the deed, had suffered any loss.
The Court of Appeal reasoned that the appellants' conduct in performing the termination agreement, including making payments and transferring property, demonstrated an intention to be bound by its terms after the alleged duress had ceased. This conduct was held to constitute affirmation of the agreement, thereby precluding rescission. The Court found that the issue of affirmation was sufficiently canvassed at trial, even if not explicitly pleaded, and declined to grant leave to amend the notice of appeal to raise new arguments on this point. Consequently, the appeals were dismissed.
In the Maroubra Appeal, leave to amend the notice of appeal was refused, and the appeal was dismissed, with the appellants ordered to pay the respondents’ costs. In the Avoca Appeal, the appeal was also dismissed, with the appellants ordered to pay the respondents’ costs.
Orders
Orders of the court
In the Maroubra Appeal (2022/318509)
(1) Leave refused to amend the notice of appeal.
(2) Appeal dismissed.
(3) Appellants to pay the respondents’ costs.
In the Avoca Appeal (2022/318527)
(1) Appeal dismissed.
(2) Appellants to pay the respondents’ costs.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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