SAB Closed 1 Pty Ltd v Bees & Honey Pty Ltd; Bees & Honey Pty Ltd v SAB Closed 1 Pty Ltd [2015] NSWSC 1019

Supreme Court New South Wales

Medium Neutral Citation: SAB Closed 1 Pty Ltd v Bees & Honey Pty Ltd; Bees & Honey Pty Ltd v SAB Closed 1 Pty Ltd [2015] NSWSC 1019 Hearing dates: 13-16 July 2015 Decision date: 28 July 2015 Jurisdiction: Equity Division - Commercial List Before: Stevenson J Decision: Purchaser entitled to terminate Asset Sale Agreement but not entitled to return of deposit Catchwords: CONTRACT – sale of assets of two businesses – whether completion date extended – whether conditions precedent to completion satisfied or waived by completion date – whether purchaser entitled to terminate – whether purchaser entitled to return of deposit Cases Cited: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; 149 CLR 337 Fitzgerald v Masters [1956] HCA 53; 95 CLR 420 Category: Principal judgment Parties: SAB Closed 1 Pty Ltd as trustee for The Sabbaba Newtown Unit Trust (Plaintiff/Cross-Defendant) Bees & Honey Pty Ltd as trustee for Bees and Honey Unit Trust (Defendant/Cross-Claimant) Representation: Counsel: E A J Hyde (Plaintiff/Cross-Defendant) A Blank (Defendant/Cross-Claimant)

Solicitors: Norton Rose Fulbright (Plaintiff/Cross-Defendant) SLG Lawyers (Defendant/Cross-Claimant) File Number(s): SC 2015/140430

Judgment

Introduction 1. These proceedings concern an Asset Sale Agreement ("the Agreement") dated 3 February 2015 made between the plaintiff (then known as Sabbaba Corporate Stores Pty Ltd) as vendor and the defendant as purchaser. By the Agreement, the defendant agreed to purchase certain "Assets" associated with two food stores branded "Sabbaba". Those stores were in the MLC Centre at 19-29 Martin Place, Sydney and in the Met Centre at 273 George Street, Sydney. 2. The "Assets" the subject of the Agreement comprised "the plant and equipment, fixtures and fittings" of the two stores as described in a schedule to the Agreement, together with "the Stock" at the stores. The "Purchase Price" was defined as "$100,000 (plus GST) plus the Stock Valuation". The Agreement provided for a deposit of $15,000, which the defendant paid on or about 3 February 2015. 3. The plaintiff was the operator of the stores. However, it was not the lessee of either store. At the time of the Agreement, the lessee of the MLC Centre store was Sabbaba Leasing Pty Ltd and the lessee of the Met Centre store was Sumo & Sabbaba Leasing Pty Ltd. Each of the plaintiff, Sabbaba Leasing Pty Ltd and Sumo & Sabbaba Leasing Pty Ltd is a wholly owned subsidiary of Sumo Group Australia Pty Ltd. 4. The defendant purported to terminate the Agreement on 17 April 2015. The plaintiff contends that the defendant was not so entitled and that its purported termination was a repudiation by the defendant of its obligations under the Agreement. 5. Originally, the plaintiff did not accept that repudiation and called on the defendant to perform. Thus, when the plaintiff commenced these proceedings on 11 May 2015, it sought specific performance of the Agreement. However, by an amended summons filed in Court at the outset of the hearing, the plaintiff abandoned that claim and confined its claim to damages. Its damages claim is, in my opinion, confined to the balance of the purchase price: that is, $85,000. The plaintiff made no claim in respect of the stock. It claimed damages for losses associated with the ongoing leases at each store. But, as I have said, it was not the lessee of those stores and has not proved that it, as opposed to those lessees, suffered any loss. By cross-claim, the defendant seeks the return of the $15,000 deposit.