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Verrocchi v Messinis

Verrocchi v Messinis

Case [2016] VSC 490 17 August 2016

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2016 2688

MARIO VERROCCHI	First Plaintiff
and
ANTHONY BASSALY	Second Plaintiff
v
THEO MESSINIS	Defendant

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JUDGE:	RIORDAN J
WHERE HELD:	MELBOURNE
DATES OF HEARING:	8 and 9 AUGUST 2016
DATE OF JUDGMENT:	17 AUGUST 2016
CASE MAY BE CITED AS:	VERROCCHI v MESSINIS
MEDIUM NEUTRAL CITATION:	[2016] VSC 490

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CONTRACT – Formation – Intention to create legal relations for sale of business – Masters v Cameron (1954) 91 CLR 353 – Document stated ‘This Offer is intended to be legally binding upon the Vendor and the Purchaser’ and was ‘Executed as an Agreement’ – Where plaintiff purchaser sought specific performance of the contract – Where defendant alleged agreement to negotiate, rather than sell – Contemplation of future ‘formal’ contract of sale – Failure of parties to agree to ‘formal’ terms – The relevance of the post agreement communications – Vendor later signs contract with third party.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr Robins QC	Rotstein Commercial Lawyers
For the Defendant	Mr Panna QC	Hercules Constan Lawyers

HIS HONOUR:

The plaintiffs in this proceeding seek the following orders in performance of an alleged agreement, with respect to the pharmacy business known as Melbourne City Pharmacy (‘the pharmacy business’), which is conducted at shop 7, 108 Bourke Street, Melbourne, contained in a document entitled ‘Offer to Purchase Melbourne City Pharmacy’ (‘the alleged contract’) dated 27 May 2016:

A.A declaration that the Agreement dated 27 May 2016 is and was effective at law and binds the defendant to convey to the second plaintiff, as nominee for the first plaintiff, the pharmacy business … .
B.An order that the defendant specifically perform the Agreement dated 27 May 2016 and do all things necessary to convey to the second plaintiff in accordance therewith the pharmacy business … .
C.An interlocutory and permanent injunction restraining the defendant by himself, his servants or agents or howsoever from:
(1)entering into any contract of sale, or completing or settling any contract of sale, or any other arrangement transferring or disposing, of the business …, other than to the second plaintiff; and
(2)otherwise encumbering the said Business or the assets thereof, or dealing with the Business in any way, other than in the ordinary course of business, save as necessary to convey the said Business to the second plaintiff.

D. Alternatively to B above, damages in lieu of specific performance.

The defendant defends the proceeding on the basis that the alleged contract was not enforceable because at the time of its execution there was no intention to enter into a legally binding contract to sell the pharmacy business.[1]
[1]On the second day of the trial, the defendant withdrew its pleaded defences based on repudiation and estoppel.

Relevant facts

In May 2016, negotiations between Mr John Pamouktsis of Administration and Marketing Solutions Pty Ltd, as agent for the first plaintiff, and Mr Robert Whelan of Australian Pharmacy Sales Pty Ltd, as agent for…

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 Verrocchi v Messinis

Details

AGLC: Verrocchi v Messinis [2016] VSC 490
Case: [2016] VSC 490
Decision Date: 17 AUGUST 2016

CaseChat Overview and Summary

Verrocchi v Messinis involved a dispute between the plaintiff, Verrocchi, and the defendant, Messinis, concerning the sale of a business. The plaintiff sought specific performance of an agreement that he claimed was a binding contract for the sale of the business, while the defendant argued that the agreement was merely an agreement to negotiate and not a binding sale agreement. The case was heard in the Supreme Court of Victoria.

The central legal issue was whether the document signed by the parties constituted a binding contract for the sale of the business or if it was merely an agreement to negotiate the terms of a future formal contract. The court had to consider the language of the document, the intention of the parties as evidenced by their post-agreement communications, and the context in which the agreement was made. The court also had to determine the relevance of the defendant’s subsequent sale of the business to a third party in the context of the dispute.

The court examined the language of the document, which stated that it was intended to be legally binding and was executed as an agreement. The court noted that the document’s language suggested a binding agreement rather than an agreement to negotiate. The court also considered the post-agreement communications between the parties, which indicated that they were working towards a final agreement. The court held that the document was a binding contract for the sale of the business, and the failure to reach a formal agreement did not negate the existence of the binding contract. The court found that the subsequent sale of the business to a third party did not affect the binding nature of the original agreement. The court ordered specific performance of the contract.

The court's final orders required the defendant to complete the sale of the business to the plaintiff in accordance with the terms of the signed agreement.

Orders