Recent Cases

Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd [2021] NSWCA 332 (21 December 2021) (Bathurst CJ, Basten and Brereton JJA)


Catchwords:


CONTRACTS – construction – interpretation – contract for the sale of a hotel and associated business – where cl 50.1 required the business to be conducted in its “usual and ordinary course” – the meaning of “usual and ordinary course” – whether the phrase refers to the usual and ordinary course of hotel businesses generally or to the particular business – whether the business was required to be carried on in an identical manner to the way it was carried on pre-contract – objective intention of the parties – purpose of the transaction

CONTRACTS – construction – interpretation – contract for the sale of a hotel and associated business – COVID-19 pandemic – restrictions on trading – where risk passed on completion not on contract – whether such risk would include the significant restriction on trading resulting from the Public Health Orders – Public Health Act 2010 (NSW), ss 7, 10 – Public Health (COVID-19 Places of Social Gathering) Order 2020 (NSW)

CONTRACTS – construction – interpretation – contract for the sale of a hotel and associated business – COVID 19 pandemic – restrictions on trading – severability – where cl 63.7 dealt with severance – whether cl 63.7 operated to sever cl 50.1 in the contract of a temporary supervening illegality – whether the Public Health Order rendered cl 50.1 unenforceable – whether cl 50.1 formed part of an indivisible whole by which the hotel and business was to be transferred as going concern – Public Health Act 2010 (NSW), ss 7, 10 – Public Health (COVID-19 Places of Social Gathering) Order 2020 (NSW)

CONTRACTS – implied terms – terms implied in law – contract for the sale of a hotel and associated business – whether there was an implied term to the effect that the obligation in cl 50.1 of the contract was limited to the extent permitted by law – Public Health Act 2010 (NSW), ss 7, 10 – Public Health (COVID-19 Places of Social Gathering) Order 2020 (NSW)

CONTRACTS – termination – repudiation of contract – wrongful termination – contract for the sale of a hotel and associated business – COVID-19 pandemic – restrictions on trading – whether the respondent was entitled to issue a notice to complete and a notice of termination – whether the conduct of the respondent amounted to repudiation of the contract – whether the conduct of the respondent was such as to convey to a reasonable person in the position of the appellants renunciation either of the contract as a whole or a fundamental obligation under it

CONTRACTS – termination – frustration – supervening illegality – contract for the sale of a hotel and associated business – COVID-19 – restrictions on trading – whether compliance with cl 50.1 was illegal because of the operation of the Public Health Order – where the effect of the temporary supervening illegality of cl 50.1 rendered the sale of the business not as a going concern – whether the respondent was entitled to demand completion in circumstances where it was not able to deliver possession of the hotel as a going concern – whether cl 50.1 of the contract made it a condition that the business be sold as a going concern – whether cl 50.1 was an essential term in that a purchaser would not have entered into the contract without the business being sold as a going concern – Public Health Act 2010 (NSW), ss 7, 10 – Public Health (COVID-19 Places of Social Gathering) Order 2020 (NSW)