SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2016] NSWSC 497

SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2016] NSWSC 497

Because rectification operates retrospectively, the contract was to be treated as always providing for a purchase price of $3.325 million plus GST. The Purchaser did not complete in accordance with those provisions and the failure was not due to Vendor default, so cl 41 applied. The 10 per cent interest obligation was not shown to be out of all proportion to likely loss from delayed settlement of commercial premises, including loss of tenancy opportunity and mortgage servicing. The Vendor's Calderbank offer did not involve substantial compromise and non-acceptance was not unreasonable, so indemnity costs were not justified.

Jurisdiction
Australia
Judgment Date
22 April 2016
Procedural Posture
Equity Expedition List; Contract and Costs Ruling / On the Papers; Submissions as to Interest and Costs After Judgment on Rectification
Outcome
Defendant entitled to interest on the purchase price until completion; cl 41 was not a penalty; Defendant entitled to costs on the ordinary basis but not on an indemnity basis.
Legal Topics
['rectification of Contract' 'interest on Purchase Price' 'penalty Clauses' 'calderbank Offer' 'indemnity Costs']
['contract' 'equity' 'costs'] ['rectification of Contract' 'interest on Purchase Price' 'penalty Clauses' 'calderbank Offer' 'indemnity Costs']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Equity Expedition List; Contract and Costs Ruling / On the Papers; Submissions as to Interest and Costs After Judgment on Rectification

Legal Issues

  1. 1 ['Whether the Purchaser was liable under cl 41 to pay interest on the purchase price of the rectified contract until completion.' 'Whether cl 41 was void as a penalty.' "Whether the Vendor's Calderbank offer justified indemnity costs."]

Ratio Decidendi

Because rectification operates retrospectively, the contract was to be treated as always providing for a purchase price of $3.325 million plus GST. The Purchaser did not complete in accordance with those provisions and the failure was not due to Vendor default, so cl 41 applied. The 10 per cent interest obligation was not shown to be out of all proportion to likely loss from delayed settlement of commercial premises, including loss of tenancy opportunity and mortgage servicing. The Vendor's Calderbank offer did not involve substantial compromise and non-acceptance was not unreasonable, so indemnity costs were not justified.

Court Disposition

Defendant entitled to interest on the purchase price until completion; cl 41 was not a penalty; Defendant entitled to costs on the ordinary basis but not on an indemnity basis.

Orders

  • ['The Purchaser is liable to pay interest on the purchase price in accordance with cl 41.' 'No order for indemnity costs is justified.' "The Purchaser is to pay the Vendor's costs of the proceedings on the ordinary basis." 'The parties should prepare short minutes to give effect to the reasons.']