Sedrak v Starr [2010] NSWCA 297

Sedrak v Starr [2010] NSWCA 297

The Warranty in Special Condition 12 required the Purchaser to provide the Landlords with references and financial information reasonably required to determine whether to consent to or execute the Right of Entry agreement. The Purchaser failed to do so and was in breach of the Warranty and cl 27.2.1 when he served the notice of rescission. The evidence did not establish that the Landlords' Consent could not have been obtained by the completion date regardless of the Purchaser's breach. The Purchaser's purported rescission was invalid, the Vendor was entitled to terminate, and there was no basis to order return of the deposit under s 55(2A) of the Conveyancing Act 1919.

Jurisdiction
Australia
Judgment Date
10 November 2010
Procedural Posture
Appeal Concerning a Contract for the Sale of a Pharmacy Business and Forfeiture of Deposit / Appeal From the Supreme Court of New South Wales, Equity Division, Decision of Gzell J
Outcome
The appeal is dismissed.
Legal Topics
['rescission of Contract' 'forfeiture of Deposit' 'landlord Consent to Assignment of Lease' 'construction of Contractual Warranty' 'return of Deposit Under S 55(2 A) of the Conveyancing Act 1919']
['vendor and Purchaser' 'contract Law' 'conveyancing' 'commercial Leasing'] ['rescission of Contract' 'forfeiture of Deposit' 'landlord Consent to Assignment of Lease' 'construction of Contractual Warranty' 'return of Deposit Under S 55(2 A) of the Conveyancing Act 1919']

Case Brief

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Procedural Posture

Appeal Concerning a Contract for the Sale of a Pharmacy Business and Forfeiture of Deposit / Appeal From the Supreme Court of New South Wales, Equity Division, Decision of Gzell J

Legal Issues

  1. 1 ["Whether the Purchaser was entitled to rescind the Contract under Special Condition 12 because the Landlords' Consent could not be obtained by the completion date." 'Whether the Warranty in Special Condition 12 required the Purchaser to provide references and financial information reasonably required by the Landlords.' 'Whether any breach by the Purchaser of the Warranty was irrelevant because the Landlords would not have executed the draft Right of Entry agreement in any event.' 'Whether the Purchaser could rely on cl 29.4 of the Contract despite non-compliance with cl 27.2.1.' 'Whether the deposit should be returned under s 55(2A) of the Conveyancing Act 1919.']

Ratio Decidendi

The Warranty in Special Condition 12 required the Purchaser to provide the Landlords with references and financial information reasonably required to determine whether to consent to or execute the Right of Entry agreement. The Purchaser failed to do so and was in breach of the Warranty and cl 27.2.1 when he served the notice of rescission. The evidence did not establish that the Landlords' Consent could not have been obtained by the completion date regardless of the Purchaser's breach. The Purchaser's purported rescission was invalid, the Vendor was entitled to terminate, and there was no basis to order return of the deposit under s 55(2A) of the Conveyancing Act 1919.

Court Disposition

The appeal is dismissed.

Orders

  • ['The appeal is dismissed.' "The appellant is to pay the respondent's costs of the appeal."]