Leonards Pharmacy Pty Ltd v Double Up 888 Pty Ltd - [2018] NSWSC 974

Supreme Court

New South Wales

Medium Neutral Citation: Leonards Pharmacy Pty Ltd v Double Up 888 Pty Ltd [2018] NSWSC 974
Hearing dates: 19, 20, 24 April, 28 May 2018
Decision date: 03 July 2018
Jurisdiction: Equity
Before: Emmett AJA
Decision:
Direct the plaintiff to file short minutes of orders to reflect the conclusions reached in the reasons of 3 July 2018.

Catchwords:
TRADE AND COMMERCE – contract for sale of a pharmacy – whether purchaser entitled to rescind –
whether purchaser discharged obligation to do all things and make all applications and returns necessary to obtain approval under s 90 of the National Health Act 1953 (Cth) – whether purchaser used best endeavours to ensure that application was determined expeditiously – whether vendor entitled to forfeit deposit
TRADE AND COMMERCE – misleading and deceptive conduct – whether vendor made positive representations that he was not aware of an application for a second pharmacy in Coonamble – whether vendor remained silent as to his knowledge
Legislation Cited: Australian Consumer Law (Sch 2, Competition and Consumer Act 2010 (Cth))
Competition and Consumer Act 2010 (Cth), Sch 2
Conveyancing Act 1919 (NSW), s 55(2A)
National Health Act 1953 (Cth), ss 90, 98
Cases Cited: Brown v Heffer (1967) 116 CLR 344
Butt v O’Dwyer (1952) 87 CLR 267
Dasreef Developments Pty Ltd v Josiv Velkovski [2017] NSWSC 1698
Foran v Wright (1989) 168 CLR 385
Hardy & Anor v Wardy [2001] NSWSC 1141
Hardy v Your Tabs Pty Ltd [2000] NSWCA 150
Jewelsnloo Pty Ltd v Sengos [2016] NSWCA 309
Mackay v Dick (1881) 6 App Cas 251
OXS Pty Ltd v Sydney Harbour Foreshore Authority [2016] NSWCA 120
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418
Category: Principal judgment
Parties: Leonards Pharmacy Pty Ltd (Plaintiff and First Cross Defendant)
Double Up 888 Pty Ltd (First Defendant and First Cross Claimant)
Ngoc-Hien Duong (Second Defendant and Second Cross Claimant)
Representation:
Counsel:
M J Heath (Plaintiff and First Cross Defendant)
M Galvin (First and Second Defendants; First and Second Cross Claimants)
Solicitors:
Bennett & Philp Lawyers (Pikes & Verekers Lawyers as Sydney agents) (Plaintiff and First Cross Defendant)
Dentons Australia Pty Ltd (First and Second Defendants; First and Second Cross Claimants)

File Number(s): 2017/125871

Judgment

These proceedings arise out of a contract for the sale of a pharmacy business known as “Leonard’s Pharmacy” conducted in Coonamble, New South Wales (the Business). The contract for sale (the Sale Contract) was entered into on 18 November 2016 between the plaintiff, Leonards Pharmacy Pty Ltd (the Vendor), and the first defendant, Double Up 888 Pty Ltd (the Purchaser). By the Sale Contract, the Vendor sold and the Purchaser bought the Business for the price of $2,730,000. The price payable under the Sale Contract was apportioned as to $2,710,000 to “Goodwill” and as to $20,000 to “Equipment”. The Sale Contract provided for completion on 6 March 2017.
At the time when the Sale Contract was made, the second…

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.

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Details

Case: [2018] NSWSC 974
Decision Date: 03 July 2018

CaseChat Overview and Summary

The case between Leonards Pharmacy Pty Ltd and Double Up 888 Pty Ltd involves a dispute over the sale of a pharmacy. The purchaser, Double Up 888, sought to rescind the contract, claiming that the vendor, Leonards Pharmacy, had breached the contract by not obtaining approval under section 90 of the National Health Act 1953 (Cth). The purchaser argued that this failure constituted a breach of their obligation to make all necessary applications and returns to obtain the required approval. Additionally, the purchaser contended that the vendor had engaged in misleading and deceptive conduct by failing to disclose knowledge of an application for a second pharmacy in Coonamble.

The legal issues before the court included whether the purchaser was entitled to rescind the contract due to the vendor's failure to obtain approval, whether the purchaser had discharged their obligation to facilitate the approval process, and whether the vendor had made positive representations about their lack of knowledge regarding the second pharmacy application. The court had to determine whether the vendor had breached the contract and whether the purchaser's conduct warranted rescission or forfeiture of the deposit.

The court found that the purchaser had not made all necessary applications and returns to obtain the required approval, and had not used their best endeavours to ensure the application was determined expeditiously. The court also found that the vendor had not engaged in misleading and deceptive conduct by remaining silent about their knowledge of the second pharmacy application. Consequently, the purchaser was not entitled to rescind the contract. The court further determined that the vendor was entitled to forfeit the deposit due to the purchaser's failure to comply with the contractual obligations.

The final orders of the court were that the purchaser's claim to rescind the contract was dismissed, and the vendor was entitled to retain the deposit paid by the purchaser. The court also found that the vendor was not liable for misleading and deceptive conduct.

Orders