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Sedrak v Starr (No 2)

Sedrak v Starr (No 2)

Case [2009] NSWSC 1178 5 November 2009

Contract Formation

Breach of Contract

Repudiation & Termination

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CITATION: Sedrak v Starr (No 2) [2009] NSWSC 1178
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 28 September 2009

JUDGMENT DATE :
5 November 2009

JUDGMENT OF: Gzell J

DECISION: Summons to be dismissed wtih costs. Declarations, damages and costs to be awarded on cross-claim.

CATCHWORDS: CONTRACTS - General Contractual Principles - Discharge, Breach and Defences to Actions for Breach - contract for sale of business conducted in leased premises - whether plaintiff purchaser in breach of standard term to provide landlord with information - whether plaintiff entitled to rely on special term or standard term to rescind for failure of landlords' consent - whether both provisions conditional upon plaintiff providing the landlord with required information - whether plaintiff's notice of rescission invalid - vendor defendant elects to continue contract and then issues notice of termination - whether entitled to do so - whether defendant cross-claimant entitled to damages including balance of deposit and broker's fees - whether an order should be made in favour of the plaintiff under the Conveyancing Act 1919, s 55(2A)

LEGISLATION CITED: Conveyancing Act 1919

CATEGORY: Principal judgment

CASES CITED: Shimden Pty Ltd v Rona [2006] NSWCA 256; (2006) 12 BPR 23,831
Turnstila Pty Ltd v North Shore Gas Co Ltd (1981) 2 BPR 9,105
Havyn Pty Ltd v Webster [2005] NSWCA 182; (2005) 12 BPR 22,837
Nassif & ors v Caminer [2009] NSWCA 45
Romanos v Pentagold Investments Pty Ltd [2003] HCA 58; (2003) 217 CLR 367
Jampco Pty Ltd v Cameron (No 2) (1986) NSW ConvR 55-275
Buchanan v Dunstan [2007] NSWSC 248; (2007) 13 BPR 24,521
Hearse & Anor v Pallister & Ors [2008] NSWSC 504

TEXTS CITED: J W Carter, Elisabeth Peden and G J Tolhurst, Contract Law in Australia, 5th ed (2007) Butterworths Australia

PARTIES: Maged Sedrak (Plaintiff/Cross-Defendant)
Gavin Mark Starr (Defendant/Cross-Claimant)

FILE NUMBER(S): SC 5407/08

COUNSEL: F Santisi (Plaintiff/Cross-Defendant)
J Gormly SC/D Shoebridge (Defendant/Cross-Claimant)

SOLICITORS: JN Legal Solicitors & Attorneys (Plaintiff/Cross-Defendant)
FCB Workplace Lawyers & Consultants (Defendant/Cross-Claimant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

THURSDAY 5 NOVEMBER 2009

5407/08 MAGED SEDRAK v GAVIN MARK STARR (NO 2)

JUDGMENT

Synopsis

1 The plaintiff, Maged Sedrak, executed a contract to purchase the pharmacy business of the defendant, Gavin Mark Starr, conducted from leased premises in Lane Cove. The contract for sale contained a special condition 12 that the sale was conditional upon the consent of the landlords. It was in the following terms:

The “Landlords Consent”

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.

Continue reading Sedrak v Starr (No 2)

Details

AGLC: Sedrak v Starr (No 2) [2009] NSWSC 1178
Case: [2009] NSWSC 1178
Decision Date: 5 November 2009

CaseChat Overview and Summary

In the matter of Sedrak v Starr (No 2), the parties involved were Sedrak, the purchaser, and Starr, the vendor, engaged in a dispute concerning the sale of a business conducted in leased premises. The case was heard and determined in the Supreme Court of New South Wales. The primary issue at hand was whether the purchaser had breached a contractual term that required them to provide the landlord with certain information. Additionally, the court had to decide whether the purchaser was entitled to rely on a special term or a standard term to rescind the contract due to the landlord's failure to consent, considering both provisions were contingent on the purchaser providing the necessary information to the landlord. The court also needed to determine if the purchaser's notice of rescission was invalid and if the vendor, as the defendant, was entitled to continue the contract and subsequently issue a notice of termination. Lastly, the court examined whether the defendant was entitled to damages, including the balance of the deposit and broker's fees, and if an order should be made in favor of the purchaser under the Conveyancing Act 1919, s 55(2A).

The court meticulously examined the terms of the contract, focusing on the conditions precedent that required the purchaser to provide the landlord with information before the vendor could consent to the transaction. The court found that the purchaser had not fulfilled this obligation, rendering their notice of rescission invalid. Furthermore, the court ruled that the vendor was entitled to continue with the contract and issue a notice of termination. The vendor was also granted the right to seek damages, which included the remaining balance of the deposit and broker's fees. The court ultimately concluded that no order should be made in favor of the purchaser under the Conveyancing Act 1919, s 55(2A), as the purchaser had not satisfied the conditions precedent necessary for such an order.

In summary, the court determined that the purchaser had breached the contractual terms by failing to provide the required information to the landlord, which invalidated their notice of rescission. The vendor was allowed to proceed with the contract and issue a notice of termination, and was granted the right to claim damages, including the balance of the deposit and broker's fees. The court also found that no order should be made in favor of the purchaser under the Conveyancing Act 1919, s 55(2A). This decision underscores the importance of adhering to the conditions precedent in a contract and the potential consequences of failing to do so.

Orders