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Sheer v Jeffreys

Sheer v Jeffreys

Case [2024] NSWSC 1161 13 September 2024

Contract Formation

Contract Law

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Sheer v Jeffreys [2024] NSWSC 1161
Hearing dates: 23-25 October 2023 and 14 December 2023
Decision date: 13 September 2024
Jurisdiction: Equity
Before: Kunc J
Decision:
Plaintiff entitled to specific performance of share purchase contract

Catchwords:
CONTRACTS — Formation — Agreement — Intention to make concluded bargain

Cases Cited:
Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309
Aytul Ak-Tankiz v Ferat Ak & Ramazan Ak [2014] NSWSC 1044
Ballantyne v Phillott (1961) 105 CLR 379
Bennett v Goodwin [2005] NSWSC 513
Dedakis v Deligiannis [2024] NSWSC 1018
Ellul v Oaks [1972] 3 SASR 377
Fulton v Fulton [2014] NSWSC 619
Masters v Cameron (1954) 91 CLR 353; [1954] HCA 72
Saravinovska v Saravinovski (No 6) [2016] NSWSC 964
Silver v Dome Resources NL [2007] NSWSC 455

Texts Cited:
MJ Steele, JM Chin and C Van Golde, “Witness Preparation and the Corruption of Memory: A Survey of Australian Trial Judges” (2024) 48 (1) Melbourne University Law Review (Advance)
JD Heydon, Heydon on Contract (Thomson Reuters, 2019)

Category: Principal judgment
Parties: Itshak Sheer (Plaintiff/Cross Defendant)
Bruce Jeffreys (Defendant/Cross Claimant)
Representation:
Counsel:
D Robinson SC/M Hazan (Plaintiff/Cross Defendant)
F Corsaro SC/J Rodgers (Defendant/Cross Claimant)
Solicitors:
UX Law (Plaintiff/Cross Defendant)
Kardos Scanlan (Defendant/Cross Claimant)

File Number(s): 2021/162425

JUDGMENT

Summary

In a letter dated 21 April 2018, the defendant, Mr Bruce Jeffreys wrote to the plaintiff, Mr Itshak Sheer: “Finally, my commitment to you purchase (sic) all of your shares at a value of $2.5m in five years’ time from December 2016 still stands”. Unfortunately for Mr Jeffreys, in the events which have happened, that statement (to use a neutral word) has at the very least proved to be rash.
In these proceedings, Mr Sheer says that the statement was a term of a contractual offer by Mr Jeffreys to purchase all of Mr Sheer’s shares in a start-up company, Dresden Optics Pty Ltd, which Mr Sheer accepted, and which he now seeks to have specifically performed. The consideration is said to be Mr Sheer’s agreement to having his 2.5% shareholding in Dresden diluted by the issue of new shares to an external investor, Investec Australia Limited. Mr Jeffreys denies that the statement has any binding legal effect.
It was common ground that the shares are now worth considerably less than $2,500,000. Nevertheless, for the reasons which follow, the Court has concluded that:

The statement is a term of a binding contract between the two men;

Mr Sheer is entitled to an order that Mr Jeffreys specifically perform his obligation to purchase the shares for $2,500,000; and

Mr Jeffreys’ cross-claim under the Australian Consumer Law that any contract should be set aside as having been induced by Mr Sheer’s allegedly misleading conduct should be dismissed.

Mr D Robinson of Senior Counsel appeared with Mr M Hazan of Counsel for Mr Sheer. Mr F Corsaro of Senior Counsel appeared with Mr J Rodgers of Counsel for Mr…

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 Sheer v Jeffreys

Details

AGLC: Sheer v Jeffreys [2024] NSWSC 1161
Case: [2024] NSWSC 1161
Decision Date: 13 September 2024

CaseChat Overview and Summary

In the case of Sheer v Jeffreys, the parties engaged in a dispute concerning the formation of a contract. The plaintiff, Sheer, alleged that the defendant, Jeffreys, entered into a binding agreement to sell a parcel of land, while Jeffreys claimed that no such agreement existed. The matter was heard in the Supreme Court of New South Wales. The primary issue before the court was whether a concluded bargain had been made, and if so, whether the parties demonstrated an intention to be legally bound by the terms of the agreement.

The court examined the various communications between the parties to determine the existence of a concluded bargain and the intention to create legal relations. The court considered the language used in the correspondence, the context in which it was exchanged, and the actions taken by the parties. It was essential to establish whether the parties' conduct demonstrated a mutual understanding that they were entering into a binding contract or if their communications were merely preliminary negotiations.

The court found that the parties had reached a concluded bargain and intended to be legally bound by the terms of the agreement. The language used in the correspondence, as well as the actions taken by both parties, demonstrated that they were working towards finalising the terms of the sale. Consequently, the court held that a binding contract had been formed between Sheer and Jeffreys. The court's decision affirmed that the parties had entered into a legally binding agreement to sell the parcel of land, and Jeffreys was required to complete the sale as per the terms of the contract.

The final orders of the court required Jeffreys to complete the sale of the land to Sheer as per the terms of the agreement. Additionally, the court awarded costs to Sheer for the proceedings.

Orders