Supreme Court New South Wales Medium Neutral Citation: Prinwalla Holdings Pty Limited –v- Stanton (WA) Pty Limited [2016] NSWSC 963 Hearing dates: 31 March 2016 Decision date: 31 March 2016 Jurisdiction: Equity - Commercial List Before: Hammerschlag J Decision: Judgment against the first defendant in the sum of $945,000 together with interest at the Court rate from 1 July 2014. Catchwords: EQUITY – unjust enrichment – restitution – plaintiffs paid monies to the first defendant or for its benefit in part performance of a sale of shares agreement under which the first defendant was to transfer shares to the plaintiffs – the contract was never performed by the first defendant and it made performance impossible by selling the shares elsewhere - contract abandoned – total failure of consideration - plaintiffs entitled to restitution of monies paid over Category: Principal judgment Parties: Prinwalla Holdings Pty Limited ACN 089 981 402 – First Plaintiff Kandabe Pty Ltd ACN 002 355 062 – Second Plaintiff Stanton (WA) Pty Ltd ACN 126 742 498 – First Defendant Highrock Aust Pty Ltd ACN 123 411 496 – Second Defendant Standez Capital Pty Ltd ACN 126 740 789 – Third Defendant Representation: Counsel: D. Greenberg with E Ball - Solicitors - First and Second Plaintiffs Solicitors: Ashurst File Number(s): 2015/370475 EX TEMPORE Judgment 1. HIS HONOUR: By Share Sale Agreement ("the agreement") entered into on about 11 May 2012, the plaintiffs agreed with the first defendant, Stanton (WA), to purchase 14% of the ordinary shares of Oztran (Aust) Pty Limited ("the company") for total consideration consisting of $1 million in cash plus transfer and/or assignment of certain plant and equipment set out (at least partially) in a Plant and Equipment Schedule attached to the agreement. 2. Prior to the agreement, there had been executed written Heads of Agreement ("the Heads") between the Gower Prinsloo Family Trust or nominated entity and Mr Brent Stanton ("Stanton") or nominated entity. This is reflective of the fact that the plaintiffs are associated with the Prinsloo family and the first defendant is associated with Stanton. The evidence is that on 19 April 2012 an amount of $250,000, referable to the Heads, was paid to Highrock Aust Pty Limited, the second defendant. 3. The agreement records that $250,000 of the purchase price was to be paid on 19 April 2012, clearly a reference to the payment earlier made under the Heads. It is clear that the agreement was intended to, and did replace, the earlier Heads and that the part performance under the agreement was treated by the parties as part performance under the agreement. 4. The evidence further establishes that the plaintiffs paid an additional $695,000 to the second defendant, which it can be safely inferred, was done at the direction and for the benefit of the first defendant. Plant and equipment and certain land was transferred to the first defendant as well. 5. The evidence establishes that the agreement became incapable of being performed because the first defendant sold the entirety of the shares in the company to a group of companies called the Qube Group on about 1 July 2004. The plaintiffs no longer seek to have the agreement enforced (their submissions describe it as defunct). The first defendant no longer intends to, and indeed because of its own act cannot, perform it. I conclude that it has been abandoned and discharged. The consideration paid by the plaintiffs has entirely failed. The first defendant would be unjustly enriched if it were entitled to retain any part of that consideration. The plaintiffs are thus entitled to restitution of what they paid over to or for the benefit of the first defendant. 6. By Summons sued out of this Court, together with an accompanying Commercial List Statement on 17 December 2015, the plaintiffs sue the three defendants for the moneys paid over and for a sum representing the value of land and plant and equipment transferred. 7. I am satisfied that the process has been validly served. The defendants have not appeared to defend the plaintiffs' claim. There is, however, as the evidence currently stands, insufficient material to determine the value of that part of the non-cash consideration paid over. On the application of the plaintiffs, I ordered that that question of the plaintiffs' entitlement to return of the moneys paid be tried separately and before determination of all other questions. 8. The plaintiffs can only be entitled to judgment as against the first defendant with respect to the moneys paid over. In the circumstances, there will be judgment in their favour against the first defendant in the sum of $945,000. 9. The evidence establishes that the agreement became incapable of performance not later than 1 July 2014. I consider that the plaintiffs are entitled to interest at the Court rate on their judgment from that date. The plaintiffs are entitled to the costs of these proceedings as against the first defendant. 10. I stand the remainder of the proceedings over for directions to 27 May 2016. ************ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 July 2016