In the matter of Two Italian Boys Holdings Pty Limited (ACN 158 310 671)
[2015] NSWSC 2100
•10 August 2015
Supreme Court
New South Wales
Medium Neutral Citation: In the matter of Two Italian Boys Holdings Pty Limited (ACN 158 310 671) [2015] NSWSC 2100 Hearing dates: 10 August 2015 Date of orders: 10 August 2015 Decision date: 10 August 2015 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Specific performance ordered.
Catchwords: EQUITY – specific performance – deed of settlement – where first defendant has set-offs against plaintiffs’ claims – where deed of settlement may be amended to account for set-offs – whether enforcement of deed would require ongoing supervision of Court. Category: Procedural and other rulings Parties: Domenic Guglielmino (first plaintiff)
Dorothy Guglielmino (second plaintiff)
Two Italian Boys Holdings Pty Ltd (ACN 158 310 671) (first defendant)
Domenic Piromalli (second defendant)
Donna Piromalli (third defendant)
Michael Pillon (fourth defendant)
Julie Pillon (fifth defendant)
The Winery Pty Ltd (ACN 078 484 447) (sixth defendant)Representation: Counsel:
Solicitors:
G Stapleton (plaintiffs)
D Thackeray (first defendant)
D Bello (second, third, fourth and fifth defendants)
Theunissen Trollip Pty Ltd (first and second plaintiffs)
Chapman Thackeray Law (first defendant)
Birch & Warner Lawyers (second, third, fourth and fifth defendants)
File Number(s): 2015/151764
Judgment (ex tempore)
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HIS HONOUR: On 10 June 2015, the parties to these proceedings entered into a deed of settlement resolving the substantive proceedings before the Court. The terms of that deed included, by cl 1.1, that Domenic Guglielmino and Dorothy Guglielmino agreed to buy, and Domenic Piromalli agreed to sell, 118,768 ordinary shares in The Winery Pty Limited held by Domenic Piromalli, for $500,000; by cl 2.1, that Domenic Guglielmino and Dorothy Guglielmino agreed to sell and Domenic Piromalli agreed to buy 20 ordinary shares in Two Italian Boys Holdings Pty Limited, for $40,000; and, by cl 5.1, that Two Italian Boys Holdings would purchase all the bottled wine that is the property of The Winery as at 1 July 2015 that is branded “Two Italian Boys”, for $245,000, to be paid in full on or before 1 July 2015.
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On 26 June, the Guglielminos, who are the plaintiffs, complained to the solicitors for the second defendant Mr Piromalli, that various representations and warranties made by the second defendant had been breached. Subsequently, on 26 June, the plaintiffs complained to the solicitors then acting for the first defendant, which is now separately represented, that royalties and commissions had been incorrectly paid by the sixth defendant to the first defendant. Throughout all of this, however, it was tolerably clear that the plaintiffs were not seeking to rescind, but to enforce, the deed of settlement.
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On 24 July 2015, the plaintiffs filed an interlocutory process seeking a declaration that various of the representations and warranties given by the second defendant in the deed of settlement were not true and correct and had resulted in loss; secondly, an order granting leave to bring proceedings on behalf of the sixth defendant to recover royalties and commissions said to have been wrongly paid by it to the first defendant; and then, subject to adjustments on those accounts, specific performance of the first defendant's obligations to pay the amounts referred to in cl 5.1 of the deed of settlement, as the purchase price for the wine and specific performance of the plaintiffs' obligations to pay for the second defendant's shares in the sixth defendant and of the second defendant's obligations to transfer those shares.
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When the interlocutory process came before the Court, it appeared clear enough that no one was seeking to have the deed of settlement rescinded and that, in truth, what the plaintiffs sought to do was to bring proceedings to recover damages or other compensation as well as enforcing the deed of settlement. In those circumstances, it seemed preferable that the deed be enforced and the parties then left to litigate, if so advised, over the alleged breach of warranty and misrepresentations. The matter was adjourned to today to enable that course to be considered.
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Today, the plaintiffs press for a decree of specific performance. The second to fifth defendants support that position. The first defendant company Two Italian Boys Holdings, puts as a matter of discretion that the Court would not order specific performance on two grounds. First, attention is drawn to what appears to be an admitted amount to be set off against the purchase price for royalties and commissions, reducing it to about $193,000. The plaintiffs concede that amount is properly set-off against the purchase price, and that the amount actually payable should be or may be reduced accordingly. That disposes of the first objection.
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The second matter raised was that cl 10.1 of the deed is a non-disparagement provision, which might require the ongoing supervision of the Court. It seems to me that in the context of what is both a deed of settlement and a contract for sale of various assets, the mere inclusion of such a provision would not deter the Court from ordering specific performance.
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No other reason for declining to make an order for specific performance has been advanced. It is true that the sale in cl 5.1 is of personal property in the nature of what appears to be stock in trade, but in a context where that is part of an overall settlement of litigious proceedings, it seems to me that that of itself is not reason to decline to make an order for specific performance.
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The Court therefore orders that:
The deed of settlement dated 10 June 2015 be specifically enforced and carried into execution insofar as it has not already been performed, and in particular:
pursuant to cl 1.1 of the said deed, the plaintiffs pay to the second defendant the sum of $500,000 and the second defendant thereupon execute and deliver to the plaintiffs a transfer in registrable form of his 118,768 ordinary shares in The Winery Pty Limited;
pursuant to cl 5.1 of the said deed, the first defendant pay to the plaintiffs the sum of $193,888.71 (being the sum of $245,000 referred to in cl 5.1 less agreed adjustments) and the plaintiffs thereupon transfer to the first defendant the wine referred to in cl 5.1; and
upon completion of the transactions referred to in paragraphs 1.1 and 1.2, the plaintiffs file a notice of discontinuance and the injunction granted in these proceedings be dissolved.
There be liberty to apply in the event of any difficulty arising in the implementation of these orders.
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The Court notes that the disposition of these proceedings in this manner is not intended to and does not resolve any question pertaining to, nor forecloses the further litigation in subsequent proceedings of, any question concerning the representations or warranties referred to in the deed of settlement.
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The Court orders that the first defendant pay one half of the plaintiffs' costs of the interlocutory process
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Decision last updated: 08 September 2016
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