Khattar v Khattar; Fayad v Khattar

The proceeding involved two consolidated appeals before the Court of Appeal of New South Wales, brought by the appellants, Mr. and Mrs. Khattar, against orders made by the primary judge concerning a deed of settlement. The dispute arose from the interpretation of the deed, which was intended to resolve family disputes and involved the transfer of property to a trust to be controlled by the respondents. The appellants contended that they had fulfilled their obligations under the deed, while the respondents argued otherwise, leading to the primary judge’s findings in favour of the respondents.

The central legal issues before the Court of Appeal were: first, the proper construction of the deed, particularly the meaning of the word "facilitate" in the context of the appellants' obligations to transfer unencumbered property to the trust, and whether this imposed a mere reasonable endeavours obligation or a more stringent duty; and second, the assessment of damages for breach of contract, specifically whether the respondents had suffered more than nominal loss of bargain damages, and if subsequent events were relevant to this assessment.

The Court of Appeal affirmed the primary judge's interpretation of the deed, holding that the obligation to "facilitate" the transfer of unencumbered property meant more than a mere reasonable endeavours clause. The Court reasoned that the appellants had a positive obligation to take steps to ensure the property was transferred free from encumbrances, and their failure to do so constituted a breach. Regarding damages, the Court found that the respondents had indeed suffered a loss of bargain, as the value of the unencumbered property they were entitled to receive exceeded the value of the encumbered property they ultimately received. The Court also confirmed that subsequent events could be relevant to the assessment of damages in such circumstances.

The appeals were dismissed, and the appellants were ordered to pay the costs of the respondents.