NET PARTS INTERNATIONAL PTY LTD V KENOSS PTY LTD [2008] NSWSC 241

New South Wales Supreme Court

CITATION : NET PARTS INTERNATIONAL PTY LTD V KENOSS PTY LTD [2008] NSWSC 241

HEARING DATE(S) : 15-16 August 2007

JUDGMENT DATE : 27 March 2008

JUDGMENT OF : Hulme J at 1

(i) Verdict and judgment for the Defendants on the Plaintiffs' claim. DECISION : (ii) Order that the Third Defendant pay to the Second Defendant the sum of $255,050. (iii) Stand over the topic of interest until …. (iv) Order the Plaintiffs to pay the Defendants' costs of the proceedings, including proceedings on the Cross-Claim.

PARTIES : Net Parts International Pty Ltd Kenoss Pty Ltd

FILE NUMBER(S) : SC 20373/05

JE Robson SC: JW Dodd (P) COUNSEL : DM Loewenstein (1D) MB Evans (2D)

MGC Lawyers SOLICITORS : Gillespie-Jones & Co Kells The Lawyers

- 16 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

HULME J

Thursday, 27 March 2008

20373/2005 NET PARTS INTERNATIONAL PTY LIMITED AND ORS v KENOSS PTY LIMITED AND ORS JUDGMENT 1 HIS HONOUR: By written agreement dated 28 May 2004, the Plaintiffs in these proceedings agreed to sell to Kenoss Pty Limited and Zantown Pty Limited, 2 of the 3 defendants in the proceedings, shares in Crownview Developments Pty Limited, the principal and perhaps only assets of which were land situate at 2 Parkinson Street, Wollongong and 373 Crown Street, Wollongong. The contract provided for completion of the sale on 30 June 2004 and stipulated that in this respect time should be of the essence. It was common ground that by agreement made or reflected in letters of 16 and 19 July passing between the solicitors for the parties, this time was extended until 5pm on Friday 23 July 2004, time remaining of the essence. 2 There were difficulties in complying with this extended time and the sale of shares was never completed. It is the Plaintiffs' case that the operative default was committed by one or both of the purchasers, that on 14 December 2004 or alternatively by the issue of the Statement of Claim, the Plaintiffs rescinded the contract and that they are entitled to release of the deposit, monies payable under the agreement, and damages in consequence of the defaults of these two Defendants. The Third Defendant is an estate agent to whom the deposit provided for in the agreement was paid and a submitting appearance has been filed on behalf of that party. 3 For their part, Kenoss and Zantown deny that they repudiated the contract, contend that the Plaintiff was not at all relevant times ready, willing and able to complete, that the notice of 14 December amounted to wrongful purported termination by Crownview Developments or repudiation by the Plaintiffs and that they, Kenoss and Zantown, rescinded the contract in consequence. Other contentions advanced by these Defendants, though not pleaded, are that the agreement was abandoned or was illegal because it involved Crownview Developments providing assistance for the purchase of shares in itself. Illegality is required to be specifically pleaded and, both on this account and because the contention was one that could have possibly been met by evidence, I propose not to consider that issue further. 4 In a Cross-Claim the Second Defendant has repeated allegations in its Defence, alleged payment by it of $255,000 by way of deposit moneys under the share sale agreement, asserted that the Plaintiffs have no current entitlement to the deposit monies and seeks an order for the return of such moneys. There seems not to have been a Cross-Claim by the First Defendant. 5 The terms of the 28 May 2004 document seem to have been taken from at least 2 other forms of agreement and are rather less than a shining example of the draftsman's art. As executed, the Agreement included the following:- "RECITALS- A The Vendors are the registered holders or entitled to be the registered holders of issued Ordinary Shares in the capital of the company ("the Shares") in the proportions shown in the First Schedule hereto. B The vendors and the purchaser have agreed that the purchaser shall purchase the vendors' shares in Crownview Developments Pty Limited ("the Company") as outlined in this Agreement. C The principal asset of the company is land situate at 373 Crown Street, Wollongong and 2 Parkinson Street, Wollongong and the notional price of the land is $5,080,000.00.