Scanlon v Sigiriya Capital Pty Ltd - [2013] NSWSC 227

Supreme Court

New South Wales

Medium Neutral Citation: Scanlon v Sigiriya Capital Pty Ltd [2013] NSWSC 227
Hearing dates: 25 & 26 February 2013
Decision date: 26 March 2013
Before: YOUNG AJ
Decision:
Plaintiff seeks declaration in relation to shares

Catchwords:
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - construction and interpretation of contracts - whether defendant entitled to seek delivery up of shares pursuant to contract - whether breach of contract by plaintiff

CONTRACTS - EMPLOYMENT - REPUDIATION/TERMINATION - where termination by agreement admitted - whether termination either a termination by the plaintiff or a termination by the defendant for breach of contract by plaintiff

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - construction and interpretation of contracts - implied terms of good faith and reasonableness - whether excluded
CRIMINAL LAW - PARTICULAR OFFENCES - offences relating to the administration of justice - perjury and false statement - where defendant swears amended defence inconsistent with original sworn defence - explanation required
Legislation Cited: Duties Act 1997
Cases Cited: Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852
Texts Cited: Chitty on Contracts, 29th ed (2004)
Category: Principal judgment
Parties: Plaintiff: Alexander Witrak Scanlon
Defendant: Sigiriya Capital Pty Ltd (ACN 136 058 369)
Representation: Counsel:
Plaintiff: Mr P Kite SC with Mr G Boyce
Defendant: Mr V Bedrossian
Solicitors:
Plaintiff: Kardos Scanlan Lawyers
Defendant: Hunt & Hunt Lawyers

File Number(s): 2012/00047100
Publication restriction: None

Judgment

YOUNG AJ: These proceedings, between a former employer and employee in the finance industry, are brought to determine which party is entitled to own a valuable parcel of shares.

Those shares were placed with the plaintiff defeasibly. The placement was, on the plaintiff's evidence, a bonus being compensation for the alleged fact that he was being paid a salary below his market worth.

The parties fell out. The shares concerned rocketed in value due to factors for which neither party can claim credit. The plaintiff claims that the shares are his. The defendant claims that because of the happening of certain events, the plaintiff's title determined and that the shares must be revested in it.

The proceedings were heard by me on 25 and 26 February 2013. Mr P Kite SC and Mr G Boyce appeared for the plaintiff and Mr V Bedrossian appeared for the defendant.

Having given a broad outline of what this case is all about, I must now turn to the details.

The plaintiff commenced these proceedings seeking declaratory relief in respect of shares held by the plaintiff in Sirius Minerals plc, a company registered in the United Kingdom with an Australian subsidiary. He also seeks an injunction restraining the defendant from exercising any powers under the Loan Agreement to which I shall shortly refer by reason either of the conversion of the shares under the CREST Transfer Form, or the termination of the plaintiff's employment with the defendant.

The defendant cross-claims, seeking declaratory relief and an order that the plaintiff (cross-defendant) take the steps necessary to transfer the shares to the defendant (cross-claimant).

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: [2013] NSWSC 227
Decision Date: 26 March 2013

CaseChat Overview and Summary

The case of Scanlon v Sigiriya Capital Pty Ltd involved a dispute between the plaintiff, Scanlon, and the defendant, Sigiriya Capital Pty Ltd, regarding the delivery of shares and the termination of an employment contract. The dispute was heard in the Federal Court of Australia. The plaintiff, Scanlon, alleged that the defendant was entitled to seek delivery of shares pursuant to a contract, while the defendant claimed that the plaintiff had breached the contract. Additionally, the defendant sought clarification on whether the termination of the employment contract was either a termination by the plaintiff or a termination by the defendant for breach of contract by the plaintiff.

The legal issues before the court were whether the defendant was entitled to seek delivery of the shares, whether the plaintiff had breached the contract, and whether the termination of the employment contract was either a termination by the plaintiff or a termination by the defendant for breach of contract by the plaintiff. The court was also required to determine whether the implied terms of good faith and reasonableness were excluded and if the defendant had committed perjury or made a false statement.

The court found that the defendant was entitled to seek delivery of the shares as per the contract. It was also found that the plaintiff had breached the contract by failing to deliver the shares. In terms of the termination of the employment contract, the court found that it was a termination by the defendant for breach of contract by the plaintiff. The court further found that the implied terms of good faith and reasonableness were not excluded. Lastly, the court held that the defendant had not committed perjury or made a false statement as the amended defence was consistent with the original sworn defence, and the defendant provided a satisfactory explanation for the inconsistency.

The final orders of the court included a declaration that the defendant was entitled to seek delivery of the shares, a declaration that the plaintiff had breached the contract, and an order for the plaintiff to deliver the shares to the defendant. The court also ordered the defendant to pay the plaintiff for the breach of contract.

Orders