Bass Hill Investments Pty Ltd v JSJW Real Estate Pty Ltd [2022] NSWSC 1453

Supreme Court New South Wales

Medium Neutral Citation: Bass Hill Investments Pty Ltd v JSJW Real Estate Pty Ltd [2022] NSWSC 1453 Hearing dates: 14-17, 21-23 February, 18-19 July and 29 August 2022 Date of orders: 25 October 2022 Decision date: 25 October 2022 Jurisdiction: Equity Before: Darke J Decision: See [132]-[134] Catchwords: CONTRACTS – contract for sale of land – payment of deposit – contract provides for payment of a deposit of $520,000 to vendor's agent – no payment made to vendor's agent – payments totalling $652,999 made in discharge of vendor's bank loan – whether payments should be characterised as payment of deposit – whether payments should instead be characterised as loans to vendor by shareholders – held that the parties intended the $652,999 to be paid instead of the $520,000 as provided under the contract – held that the payments discharged the purchaser's obligation to pay the deposit – vendor not entitled to terminate contract due to a failure to pay deposit CORPORATIONS – director's duties – duty to act in good faith and in the best interests of the company – duty to exercise powers for a proper purpose – director causes company to enter into lease of its land – lease said to be "manifestly disadvantageous" – not shown that director did not honestly believe he was acting in the best interests of the company – objective circumstances do not show that director was acting contrary to the best interests of the company – no improper purpose identified or established – no loss proven in any event CORPORATIONS – director's duties – duty to act in good faith and in the best interests of the company – duty to exercise powers for a proper purpose – director causes company to enter into contract for sale of its land – sale said to be to a purchaser in which director had an interest – sale not alleged to be at an undervalue – interest of director in purchaser an indirect security interest not an equity interest – not shown that director was acting otherwise than in good faith and in the best interests of the company as he perceived them – objective circumstances do not show that director was acting contrary to the best interests of the company – no improper purpose identified or established – no loss proven in any event Legislation Cited: Corporations Act 2001 (Cth), s 181(1), s 182 Cases Cited: Darvall v North Sydney Brick & Tile Co Ltd (1989) 16 NSWLR 260 Downer EDI Ltd v Gillies (2012) 92 ACSR 373; [2012] NSWCA 333 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 Hart Security Australia Ltd v Boucousis (2016) 117 ACSR 408; [2016] NSWCA 307 Mehmet v Benson (1965) 113 CLR 295 Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 Re IW4U Pty Ltd (in liq) (2021) 150 ACSR 146; [2021] NSWSC 40 Re Smith & Fawcett Ltd [1942] Ch 304 Ruthol Pty Ltd v Tricon (Australia) Pty Ltd (2005) 12 BPR 23,923; [2005] NSWCA 443 Westpac Banking Corporation v The Bell Group Ltd (in liq) (No 3) (2012) 44 WAR 1; [2012] WASCA 157 Category: Principal judgment Parties: Bass Hill Investments Pty Ltd (Plaintiff/First Cross-Defendant) JSJW Real Estate Pty Ltd (Defendant/Cross-Claimant) Ling Hua Zhu (Second Cross-Defendant) Representation: Counsel: Mr J Foley (Plaintiff/First Cross-Defendant) Mr T J Morahan (Defendant/Cross-Claimant) Mr P Lonergan (Second Cross-Defendant)