Naaman v Sleiman

Case [2015] NSWCA 259


Court of Appeal
Supreme Court

New South Wales

Case Name: 

Naaman v Sleiman

Medium Neutral Citation: 

[2015] NSWCA 259

Hearing Date(s): 

12 August 2015

Decision Date: 

1 September 2015

Before: 

Meagher JA at [1];
Ward JA at [2];
Gleeson JA at [3]

Decision: 

(1)   Appeal as against the first respondent dismissed with costs.
(2) Leave is granted to the appellant to proceed with the appeal against the third respondent, Jaken Property Group Pty Ltd (in liquidation), pursuant to s 500(2) of the Corporations Act 2001 (Cth).
(3)   Appeal allowed as against the second and third respondents.
(4)   Set aside the orders made by Stevenson J on 24 December 2014, insofar as the plaintiff’s claim for damages for loss of bargain following termination of the Deed was dismissed as against the second and third defendants.
(5)   Set aside order 4 made by Stevenson J on 10 March 2015, insofar as the plaintiff was ordered to pay the second defendant’s costs of the proceedings.
(6)   Each of the appellant and the second respondent pay their own costs of the appeal.
(7)   The proceedings be remitted to the Equity Division of the Supreme Court for determination of the quantification of damages for loss of bargain following termination of the Deed.
(8)   The costs at first instance as between the plaintiff and the second defendant be determined following the outcome of the retrial on the quantification of damages.

Catchwords: 

DAMAGES – contract – whether promisee had an accrued right to payment in the future following termination for promisor’s repudiation – promisee’s right to payment in the future contingent upon his further performance of executory obligations – no unconditional right to payment vested as at date of termination – whether payment obligations survived termination – payment obligations not intended to survive termination – loss of bargain damages – absence of claim for wrongful dismissal does not preclude claim for damages for loss of bargain following termination
 
PROCEDURE – pleadings – whether claim for loss of bargain damages pleaded – loss of bargain damages necessary and immediate consequence of claim for damages for breach where it is alleged that termination is in response to anticipatory breach
 
CORPORATIONS – leave to proceed against company in liquidation – whether company under creditor’s voluntary winding up when deregistered is re-instated in same form – no order made that form of winding up upon reinstatement to differ from that before the company was deregistered

Legislation Cited: 

Corporations Act 2001 (Cth) ss 471B, 500, 601AH
Uniform Civil Procedure Rules 2005 (NSW) rr 42.1, 51.53

Cases Cited: 

ACN 078 272 867 Pty Ltd (in liq) v Deputy Commissioner of Taxation; Binetter v Deputy Commissioner of Taxation [2011] HCA 46; 86 ALJR 4
Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; 72 CLR 435
Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd [1990] HCA 11; 169 CLR 279
Barnes v Forty Two International Pty Ltd [2014] FCAFC 152; 316 ALR 408
Binetter v Federal Commissioner of…

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AGLC
Naaman v Sleiman [2015] NSWCA 259
Case
[2015] NSWCA 259
Decision Date

CaseChat Overview and Summary

The appeal concerned a dispute arising from the termination of a deed. The appellant, Mr. Naaman, was the promisee under the deed, and the respondents included Mr. Sleiman and Jaken Property Group Pty Ltd (in liquidation). The central issue was whether Mr. Naaman had an accrued right to future payments under the deed despite its termination due to the promisor's repudiation. The Court of Appeal of the Supreme Court of New South Wales was required to determine if payment obligations were intended to survive the termination and whether a claim for loss of bargain damages was properly pleaded.

The court considered whether the promisee's right to future payment was contingent upon his own future performance of executory obligations, meaning no unconditional right to payment had vested at the date of termination. It also examined whether the payment obligations were intended to survive the termination of the deed and whether the pleadings adequately encompassed a claim for loss of bargain damages as a necessary and immediate consequence of the alleged anticipatory breach. Furthermore, the court addressed the procedural matter of granting leave to proceed against a company in liquidation and whether the company, upon reinstatement, would be in the same form of winding up as before its deregistration.

The Court of Appeal reasoned that the promisee's right to future payment was indeed contingent on his further performance, and therefore, no unconditional right had vested at the time of termination. The court found that the payment obligations were not intended to survive the termination of the deed. It also determined that a claim for loss of bargain damages was sufficiently pleaded, as it was a necessary and immediate consequence of the claim for damages for breach where termination was alleged to be in response to an anticipatory breach. Leave was granted to proceed against the third respondent, Jaken Property Group Pty Ltd, in liquidation.

The appeal was allowed in part. The court dismissed the appeal against the first respondent but allowed it against the second and third respondents. Orders made at first instance dismissing the plaintiff's claim for damages for loss of bargain against the second and third defendants were set aside. The proceedings were remitted to the Supreme Court for the quantification of damages for loss of bargain, and costs at first instance were to be determined after the retrial.

Orders

Orders of the court

(1) Appeal as against the first respondent dismissed with costs.

(2) Leave is granted to the appellant to proceed with the appeal against the third respondent, Jaken Property Group Pty Ltd (in liquidation), pursuant to s 500(2) of the Corporations Act 2001 (Cth).

(3) Appeal allowed as against the second and third respondents.

(4) Set aside the orders made by Stevenson J on 24 December 2014, insofar as the plaintiff’s claim for damages for loss of bargain following termination of the Deed was dismissed as against the second and third defendants.

(5) Set aside order 4 made by Stevenson J on 10 March 2015, insofar as the plaintiff was ordered to pay the second defendant’s costs of the proceedings.

(6) Each of the appellant and the second respondent pay their own costs of the appeal.

(7) The proceedings be remitted to the Equity Division of the Supreme Court for determination of the quantification of damages for loss of bargain following termination of the Deed.

(8) The costs at first instance as between the plaintiff and the second defendant be determined following the outcome of the retrial on the quantification of damages.

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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