Shandong Delisi Food Co Ltd v Yolarno Pty Ltd - [2022] NSWSC 17

Supreme Court

New South Wales

Medium Neutral Citation: Shandong Delisi Food Co Ltd v Yolarno Pty Ltd [2022] NSWSC 17
Hearing dates: 6, 7 December 2021
Date of orders: 17 January 2022
Decision date: 17 January 2022
Jurisdiction: Equity - Commercial List
Before: Parker J
Decision:
See [132]-[135]

Catchwords:
CONTRACTS – construction – interpretation – contract for the acquisition of a 45% shareholding in the defendant – plaintiff made an advance payment of $6 million pursuant to the contract – contract required delivery of an audited set of accounts by a specified date – parties under joint obligation to work in good faith to procure the delivery of the audited accounts – accounts not provided in time – purported termination by the plaintiff – claim for repayment of the advanced payment – validity of the plaintiff’s notice of termination – whether the plaintiff complied with its obligation to act in good faith

Cases Cited:
Antaios Cia Naviera SA v SalenRederierna AB [1985] AC 191
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
City of Gosford v Marim Pty Ltd (1990) 6 BPR 13,871
Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640
Jones v Dunkel (1959) 101 CLR 298
Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104
Nina’s Bar Bistro v MBE Corporation [1984] 3 NSWLR 613
Plumor Pty Ltd v Handley (1996) 41 NSWLR 30
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596

Texts Cited:
Carter, J W, Contract Law in Australia (7th ed, 2018, LexisNexis Butterworths)

Category: Principal judgment
Parties: Shandong Delisi Food Co Limited (Plaintiff)
Yolarno Pty Limited (Defendant)
Representation:
Counsel:
JC Giles SC/S H Hartford Davis/C Marshall (Plaintiff)
S Nixon SC/H Atkin (Defendant)
Solicitors:
Corrs Chambers Westgarth (Plaintiff)
King & Wood Mallesons (Defendant)

File Number(s): 2020/106935
Publication restriction: Nil

Judgment

These proceedings arise out of a dispute involving the interpretation of a commercial contract. The plaintiff seeks recovery of $6 million paid pursuant to an agreement to make an investment in shares of the defendant. The investment did not proceed.
The plaintiff, Shandong Delisi Food Co Limited, is a company incorporated in the People’s Republic of China. Its business includes manufacture and sale of frozen and chilled meat products. In this judgment I will refer to it as “Delisi”.
The defendant, Yolarno Pty Limited, is an Australian company. It operates a feed-lot, an abattoir and meat processing plants. In this judgment I will refer to it as “Yolarno”.
Yolarno is a member of a group of companies referred to in the evidence as the “Bindaree Group”. The Group is described as an integrated beef processing, sales and trading business.

Issues for determination

There were two relevant contractual documents between the parties. The first was a written contract dated…

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 Shandong Delisi Food Co Ltd v Yolarno Pty Ltd

Details

AGLC: Shandong Delisi Food Co Ltd v Yolarno Pty Ltd [2022] NSWSC 17
Case: [2022] NSWSC 17
Decision Date: 17 January 2022

CaseChat Overview and Summary

The plaintiff, Shandong Delisi Food Co Ltd, brought an action against the defendant, Yolarno Pty Ltd, seeking the repayment of an advance payment of $6 million made under a contract for the acquisition of a 45% shareholding. The contract contained an obligation for the parties to work in good faith to deliver an audited set of accounts by a specified date. As the accounts were not provided on time, the plaintiff issued a notice of termination and demanded repayment of the advance. The defendant contested the validity of the notice of termination and the plaintiff's compliance with the obligation to act in good faith. The court was required to determine the validity of the termination notice and whether the plaintiff had acted in good faith in terminating the contract.

The court examined the terms of the contract and the obligations of the parties. It was established that the plaintiff had a right to terminate the contract if the audited accounts were not delivered by the specified date. The court found that the plaintiff had issued a valid notice of termination in accordance with the contract terms. The court also considered the requirement for the parties to act in good faith. It was held that the plaintiff had acted in good faith by issuing the notice of termination as it was justified by the defendant's failure to deliver the audited accounts on time.

The court concluded that the termination of the contract was valid and that the plaintiff was entitled to the repayment of the advance payment. The court found that the plaintiff had fulfilled its obligation to act in good faith by issuing the notice of termination in accordance with the contract terms. The plaintiff was ordered to repay the $6 million advance payment to the defendant within 28 days of the judgment. The court also ordered that the contract be terminated and that both parties bear their own costs of the proceedings.

Orders