Russo v Resource Developments International Pty Ltd (No 3) [2003] NSWSC 838

Russo v Resource Developments International Pty Ltd (No 3) [2003] NSWSC 838

The share sale agreement was not frustrated because it was a contract for the sale of shares in a holding company and the depletion of assets through the trading companies did not defeat the main purpose of the contract. There was no effective rescission, termination or abandonment before the relevant instalments became due, because the plaintiff had continued to seek enforcement. The defendants were therefore liable for the two $100,000 instalments, the stamp duty, and indemnity damages for guaranteed equipment that remained within clause 22, excluding the Cedarapids crusher item outside the agreement.

Jurisdiction
Australia
Judgment Date
12 September 2003
Procedural Posture
Contract Claim for Damages Arising From a Share Sale Agreement / Determination of Quantum of Damages After Earlier Judgment
Outcome
Verdict for the plaintiff against the first and fourth defendants for $658,180.86, with costs of the damages proceedings.
Legal Topics
['share Sale Agreement' 'frustration' 'rescission and Termination' 'abandonment of Contract' 'damages' 'indemnity Against Guarantees' 'stamp Duty']
['contract Law' 'equity'] ['share Sale Agreement' 'frustration' 'rescission and Termination' 'abandonment of Contract' 'damages' 'indemnity Against Guarantees' 'stamp Duty']

Case Brief

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Procedural Posture

Contract Claim for Damages Arising From a Share Sale Agreement / Determination of Quantum of Damages After Earlier Judgment

Legal Issues

  1. 1 ['Whether the share sale agreement was frustrated by the cessation of trading or winding up of trading companies connected with the business.' 'Whether the first and fourth defendants had rescinded, terminated or could rely on abandonment of the share sale agreement.' 'Whether the first and second instalments of $100,000 each were due and payable under the share sale agreement.' 'Whether stamp duty paid on the share sale agreement was recoverable as damages.' 'Whether the first and fourth defendants were liable to indemnify the plaintiff in respect of guarantees connected with business equipment under clauses 20 and 22 of the share sale agreement.']

Ratio Decidendi

The share sale agreement was not frustrated because it was a contract for the sale of shares in a holding company and the depletion of assets through the trading companies did not defeat the main purpose of the contract. There was no effective rescission, termination or abandonment before the relevant instalments became due, because the plaintiff had continued to seek enforcement. The defendants were therefore liable for the two $100,000 instalments, the stamp duty, and indemnity damages for guaranteed equipment that remained within clause 22, excluding the Cedarapids crusher item outside the agreement.

Court Disposition

Verdict for the plaintiff against the first and fourth defendants for $658,180.86, with costs of the damages proceedings.

Orders

  • ['The first and fourth defendants are liable to the plaintiff for $658,180.86.' 'The first and fourth defendants must pay the costs of these damages proceedings.']