Australia, July 14 -- New South Wales Land and Environment Court issued text of the following judgement on June 13:

1. Davis Stack Capital Pty Ltd, PCL Corp Pty Ltd, Enveedee Investments Pty Ltd and Caerleon Mudgee Pty Ltd (the sellers) hold units in a trust over a partially developed land estate in Mudgee, New South Wales.

2. On 28 November 2022, the sellers agreed to sell those units to the first defendant, Raj & Jai (Mudgee) Pty Ltd (the buyer) for $70 million under a Unit Sale and Purchase Agreement (USPA).

3. Under the USPA, the buyer was to pay the first deposit of $3.5 million on the date of contract, a second deposit of $3.5 million on or before 1 October 2023, and the balance on the scheduled date of completion on 1 July 2024.

4. The second defendant, Raj & Jai Construction Pty Ltd, is the parent company of the buyer. It guaranteed the buyer's obligations under the USPA and the payment of all sums that were or might become payable by the buyer to the sellers.

5. Completion under the USPA did not take place on the due date of 1 July 2024 due to the buyer's default.

6. On 2 July 2024, the sellers served a notice on the buyer, which required the buyer to complete the purchase of the units within 20 business days. Further demand was made for default interest on the unpaid portion of the purchase price.

7. On 2 July 2024, the sellers also served a notice on the buyer's parent, and demanded that the buyer's parent "pay to the [s]ellers an amount equal to the amount of the Buyer Guaranteed Money", referencing clause 27 of the USPA.

8. Completion did not occur within the time specified in the notice to the buyer.

9. Over several months in 2024, the sellers served notices of demand on the buyer and buyer's parent, which, inter alia, demanded the payment of default interest due because of the buyer's default in completing.

10. On 17 October 2024, the sellers commenced these proceedings against the buyer, the buyer's parent and Caerleon Mudgee Pty Ltd, the trustee of the trust, which filed a submitting appearance.

11 The buyer accepted that the sellers are entitled to a judgment against it for default interest payable under the USPA from 1 July 2024 to date, and neither consents nor opposes an order for specific performance being made against it. The buyer's parent accepted that the sellers are entitled to an order against it to indemnify the sellers for the amount of default interest payable by the buyer, but nothing else.

12 It is necessary to determine whether:

1) The buyer should be ordered to specifically perform the USPA; and/or

2) The buyer's parent should be ordered to specifically perform the guarantee and/or indemnity to ensure completion of the sale, based on the proper construction of the guarantee and indemnity.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/1975cfbb46a3e55b0b4324bb)

Disclaimer: Curated by HT Syndication.