ACT CIVIL & ADMINISTRATIVE TRIBUNAL
LE v NGUYEN (Appeal) [2017] ACAT 55
AA 48/2016
Catchwords: APPEAL – sale of business – compliance with agreement – failure by purchaser to complete – claim by purchaser for improvements and deposit – whether deposit of 50% of purchase price a penalty – principles of agent of necessity – unjust enrichment – claim by vendor for damages for breach of contract – expectation loss
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 18, 21
Cases cited: AMEV-UDC Finance Ltd v Austin (1986) 162 CLR 170
Burns Philip & Co Ltd v Gillespie Brothers Pty Ltd (1947) 74 CLR 148
Coates v Sarich [1964] WAR 2
Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64
Dunlop Pneumatic Tyre Company Limited v New Garage and Motor Company Limited [1915] AC 79Smyth v Jessup [1956] VLR 230
State of Tasmania v Leighton Contractors Pty Ltd (No 3) [2004] TASSC 132
State of Tasmania v Leighton Contractors Pty Ltd [2005] TASSC 133
Stern v McArthur (1988) 165 CLR 489
Workers Trust and Merchant Bank Ltd v Dojap Investments Ltd [1993] AC 573
Yardly v Saunders (1982) WAR 231
List of
Texts/Papers cited: JW Carter, Carter’s Guide to Australian Contract Law (3rd ed, 2016)
JW Carter, Elisabeth Peden and GJ Tolhurst, Contract Law in Australia (5th ed, 2007)
DW Greig and JR Davis, The Law of Contract (1987)
Appeal Tribunal: Acting Presidential Member R Orr QC
Date of Orders: 1 August 2017
Date of Reasons for Decision: 1 August 2017
AUSTRALIAN CAPITAL TERRITORY ) AA 48/2016
CIVIL & ADMINISTRATIVE TRIBUNAL )
BETWEEN:
THOA KIM THI LE
Applicant
AND:
TOAN NGUYEN
Respondent
TRIBUNAL:Acting Presidential Member R Orr QC
DATE:1 August 2017
ORDER
The Tribunal orders that:
1.The orders of the tribunal made on 13 July 2016 in this matter are set aside.
2.The provision in clause 12.5(1) of the Agreement dated 11 January 2015 between Mr Nguyen and Ms Le for payment of the deposit to Mr Nguyen as vendor is declared to be a penalty and will not be enforced. Subject to order 4, the deposit should be repaid to Ms Le as purchaser.
3. The appeal by Ms Le is otherwise dismissed.
4.The counter claim by Mr Nguyen for damages for breach of the Agreement by Ms Le is allowed in an amount of $29,120.
5.In implementation of orders 2 and 4, Carden & Co, Law Practice, stakeholder of the deposit, is to release the deposit of $75,000 held under the Agreement as follows:
(a) $29,120 is to be paid to Mr Nguyen;
(b) the balance is to be paid to Ms Le.
6. Order 4 is stayed for 28 days from the date of this order.
………………………………..
Acting Presidential Member R Orr QC
REASONS FOR DECISION
A.Introduction
1.On 11 January 2015 the appellant and original applicant, Thoa Kim Thi Le (Ms Le, purchaser or appellant),[1] entered into an…
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- AGLC
- Le v Nguyen (Appeal) [2017] ACAT 55
- Case
- [2017] ACAT 55
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the court was whether the deposit payment clause in the agreement constituted a penalty clause, which if found to be unenforceable, would result in the deposit being returned to Ms Le. Additionally, the court needed to determine the appropriate damages payable by Ms Le to Mr Nguyen for breach of contract, if any.
In its decision, the Tribunal held that the deposit payment clause was a penalty and thus unenforceable. The Tribunal found that the clause disproportionately punished Ms Le for breach of contract, serving as a deterrent rather than a genuine pre-estimate of loss. Consequently, the Tribunal ordered that the deposit be returned to Ms Le, less the amount of damages owed to Mr Nguyen for breach of contract. The Tribunal assessed the damages at $29,120, which was to be paid by Ms Le to Mr Nguyen. The Tribunal also dismissed Ms Le's appeal and allowed Mr Nguyen's counterclaim for damages. The Tribunal directed that the deposit held by Carden & Co, Law Practice be released, with $29,120 paid to Mr Nguyen and the remainder to Ms Le. The order for payment of damages was stayed for 28 days to allow for any further appeal.
Orders
Orders of the court
The Tribunal orders that:
1. The orders of the tribunal made on 13 July 2016 in this matter are set aside.
2. The provision in clause 12.5(1) of the Agreement dated 11 January 2015 between Mr Nguyen and Ms Le for payment of the deposit to Mr Nguyen as vendor is declared to be a penalty and will not be enforced. Subject to order 4, the deposit should be repaid to Ms Le as purchaser.
3. The appeal by Ms Le is otherwise dismissed.
4. The counter claim by Mr Nguyen for damages for breach of the Agreement by Ms Le is allowed in an amount of $29,120.
5. In implementation of orders 2 and 4, Carden & Co, Law Practice, stakeholder of the deposit, is to release the deposit of $75,000 held under the Agreement as follows:
(a) $29,120 is to be paid to Mr Nguyen;
(b) the balance is to be paid to Ms Le.
6. Order 4 is stayed for 28 days from the date of this order.
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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