Taylor Square TT Pty Ltd v Kinselas Pty Ltd - [2024] NSWSC 799

Supreme Court

New South Wales

Medium Neutral Citation: Taylor Square TT Pty Ltd v Kinselas Pty Ltd [2024] NSWSC 799
Hearing dates: 18 June 2024
Date of orders: 28 June 2024
Decision date: 28 June 2024
Jurisdiction: Equity - Expedition List
Before: Rees J
Decision:
Decline to order specific performance against guarantor at the same time as principal obligors; adjourn proceedings until after date for specific performance by obligors.

Catchwords:
SPECIFIC PERFORMANCE – contracts for sale of land and businesses for $61M – director of corporate purchasers gives guarantee – purchasers fail to complete – portion of deposit also unpaid – orders for specific performance made against purchasers –whether specific performance should be ordered against guarantor as well – authorities considered at [57]-[66] – whether concurrent liability of purchasers and guarantor exists – whether guarantor directly liable to vendors – decline to order specific performance by guarantor until after date for specific performance by purchasers – adjourn proceedings.

Cases Cited:
Baeg v Wink Singh Pty Ltd [2024] NSWSC 589
Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 223 CLR 660
Bowman Development Corporation Pty Ltd v Young Forever Property Pty Ltd [2020] QDC 73
Bowman Development Corporation Pty Ltd v Young Forever Property Pty Ltd (No 2) [2020] QDC 77
Coulls v Bagot’s Executor & Trustee Co Ltd (1967) 119 CLR 460
Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349
Fairborne Pty Ltd v Strata Store Noosa Pty Ltd [2009] QSC 250
J C Williamson v Lukey [1931] VLR 221
Lucas Stuart Pty Ltd v Hemmes Hermitage Pty Ltd (2012) 28 BCL 226; [2010] NSWCA 283
McGuinness v Norwich and Peterborough Building Society [2012] 2 All ER (Comm) 265
Paolucci v Makedyn Pty Ltd (2021) 20 BPR 41,749
Ryan v UPG 322 Pty Ltd [2023] NSWSC 1293
Sunbay Projects Pty Ltd v PR Wieland Holdings Pty Ltd [2010] QSC 368
Sunbird Plaza Pty Limited v Maloney (1989) 166 CLR 245; [1988] HCA 11
TullettPrebon (Australia) Pty Ltd v Purcell (2008) 175 IR 424; [2008] NSWSC 852

Texts Cited:
R E Megarry (1960) 76(302) The Law Quarterly Review
Debra Ronan, Conveyancing Law and Practice (2nd ed, 2021, Lawbook Co)

Category: Costs
Parties: Taylor Square TT Pty Ltd (First Plaintiff)
Taylor Square Fund Pty Ltd (Second Plaintiff)
Kinselas Pty Ltd (First Defendant)
Kinselas Management Pty Ltd (Second Defendant)
The Courthouse (NSW) Pty Ltd (Third Defendant)
The Courthouse Management Pty Ltd (Fourth Defendant)
Mark Toma (Fifth Defendant)
Representation:
Counsel:
V Whittaker SC/ TJ Boyle (Plaintiffs)
M Pesman SC/ DA Allen (Defendants)
Solicitors:
Arnold Bloch Leibler (Plaintiffs)
Kekatos Lawyers (Defendants)

File Number(s): 2024/189586

JUDGMENT

HER HONOUR: In September 2023, the plaintiffs sold the Kinselas Hotel and the Courthouse Hotel in Darlinghurst – both the land and businesses – to the first to fourth defendants for $61 million. The sale was effected by four contracts, in relevantly identical terms. The purchasers’ obligations were guaranteed by the fifth defendant, Mark Toma.
The time for completion was six months…

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: [2024] NSWSC 799
Decision Date: 28 June 2024

CaseChat Overview and Summary

The matter before the court involved a dispute between Taylor Square TT Pty Ltd, the vendor, and Kinselas Pty Ltd, the purchaser, regarding the sale of a property for $61 million. The vendor sought specific performance of the contract for sale of land and businesses, as the purchasers failed to complete the transaction and paid only a portion of the deposit. The director of Kinselas Pty Ltd provided a guarantee for the purchasers' obligations. The court had to determine whether specific performance should be ordered against the guarantor as well as the purchasers. The court examined the authorities and concluded that there was no concurrent liability between the purchasers and the guarantor, and the guarantor was not directly liable to the vendors. The court declined to order specific performance by the guarantor until after the date for specific performance by the purchasers and adjourned the proceedings.

The legal issues before the court were whether specific performance should be ordered against the guarantor, whether there was concurrent liability between the purchasers and the guarantor, and whether the guarantor was directly liable to the vendors. The court examined the authorities and concluded that the guarantor was not concurrently liable with the purchasers and was not directly liable to the vendors. The court noted that the guarantee was a secondary obligation and that the primary obligation lay with the purchasers. The court also noted that ordering specific performance against the guarantor before the purchasers would not be appropriate as it would place the guarantor in a better position than the vendors. The court adjourned the proceedings to allow the purchasers to complete the transaction before considering specific performance against the guarantor.

Orders