Sedrak v Starr (No 2) [2009] NSWSC 1178

Sedrak v Starr (No 2) [2009] NSWSC 1178

Mr Sedrak's notice of rescission was invalid because he had not provided the landlords with information reasonably required under cl 27.2.1 and had not done all things necessary to obtain landlords' consent as required by special condition 12. The cl 29.4.1 reliance was also premature and conditional upon compliance with cl 27.2. Mr Starr's requirement that Mr Sedrak complete did not waive his rights because the invalid notice of rescission remained a continuing breach, allowing termination under cl 22. The deposit was forfeited under the contract, there was no basis for relief under Conveyancing Act 1919, s 55(2A), and Mr Starr proved entitlement to the balance of the deposit and damages...

Jurisdiction
Australia
Judgment Date
05 November 2009
Procedural Posture
Contract Dispute Concerning Sale of a Pharmacy Business Conducted in Leased Premises / Principal Judgment on Third Amended Summons and Amended First Cross Claim
Outcome
Mr Sedrak's third amended summons dismissed with costs; Mr Starr succeeded on the amended first cross-claim with declarations, damages, interest and costs.
Legal Topics
['sale of Business' 'rescission' 'termination for Breach' 'landlord Consent to Transfer of Lease' 'deposit Forfeiture' 'conveyancing Act 1919, S 55(2 A)' 'damages']
['contracts' 'property' 'equity'] ['sale of Business' 'rescission' 'termination for Breach' 'landlord Consent to Transfer of Lease' 'deposit Forfeiture' 'conveyancing Act 1919, S 55(2 A)' 'damages']

Case Brief

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Procedural Posture

Contract Dispute Concerning Sale of a Pharmacy Business Conducted in Leased Premises / Principal Judgment on Third Amended Summons and Amended First Cross Claim

Legal Issues

  1. 1 ['Whether the plaintiff purchaser breached the contractual obligation to supply references and other information reasonably required by the landlords.' "Whether the plaintiff purchaser was entitled to rescind under special condition 12 because landlords' consent to the mortgage of lease and right of entry had not been obtained by the completion date." 'Whether the plaintiff purchaser was entitled to rescind under cl 29.4.1 because the landlords had not consented to transfer of the lease.' "Whether the defendant vendor, after requiring completion, was entitled to terminate the contract for the purchaser's continuing breach." "Whether the defendant vendor was entitled to retain and recover the deposit and recover damages, including broker's fees." 'Whether the plaintiff purchaser should receive relief for repayment of the deposit under Conveyancing Act 1919, s 55(2A).']

Ratio Decidendi

Mr Sedrak's notice of rescission was invalid because he had not provided the landlords with information reasonably required under cl 27.2.1 and had not done all things necessary to obtain landlords' consent as required by special condition 12. The cl 29.4.1 reliance was also premature and conditional upon compliance with cl 27.2. Mr Starr's requirement that Mr Sedrak complete did not waive his rights because the invalid notice of rescission remained a continuing breach, allowing termination under cl 22. The deposit was forfeited under the contract, there was no basis for relief under Conveyancing Act 1919, s 55(2A), and Mr Starr proved entitlement to the balance of the deposit and damages...

Court Disposition

Mr Sedrak's third amended summons dismissed with costs; Mr Starr succeeded on the amended first cross-claim with declarations, damages, interest and costs.

Orders

  • ["Declarations to be made that Mr Sedrak was not entitled to rescind the contract for sale, that his notice of rescission was invalid, and that Mr Starr's notice of termination was valid." 'Mr Starr was entitled to retain the $201,250 received from the bank guarantee and to recover the balance of the deposit of...