Mercator Property Consultants Pty Ltd v Sumampow

The case of Mercator Property Consultants Pty Ltd v Sumampow was heard by the Supreme Court of Victoria. The dispute arose from a sale of shares in a company operating a casino and resort complex. The purchaser, Sumampow, contended that there was no effective contract after the deadline for the fulfilment of conditions precedent, or, in the alternative, that the vendor breached an implied term to preserve the subject matter of the purchase. The vendor, Mercator Property Consultants, sought payment of the balance of the purchase price and interest.

The central legal issues were whether the conditions precedent had been met and, if so, whether the vendor breached an implied term to preserve the subject matter of the purchase. The court had to determine if the conditions precedent were satisfied after the specified date and if the subsequent payment and acceptance of instalments of the purchase price constituted a novation of the original contract. Additionally, the court needed to consider whether the vendor's application for the appointment of a receiver and manager of the company, leading to the cancellation of the casino licence, constituted a breach of an implied term.

The court found that the conditions precedent were fulfilled after the specified date, and the subsequent payment and acceptance of instalments of the purchase price did not amount to a novation of the original contract. The court held that the purchaser's argument that there was no effective contract after the deadline for fulfilment of conditions precedent was without merit. Furthermore, the court dismissed the alternative pleading of breach by the vendor of an implied term to preserve the subject matter of the purchase. The court held that the vendor's actions did not amount to a breach of such an implied term.

Accordingly, judgment was entered for the plaintiff for the balance of the purchase price and interest. The counterclaim was dismissed. The court ruled that the purchaser was liable to pay the outstanding amount of the purchase price, along with interest, to the vendor. The court did not find any merit in the purchaser's alternative argument, and the counterclaim was accordingly dismissed.