Aysun Pty Ltd v Cregan

[2011] NSWCA 203

NSW Court of Appeal

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Interrogate

Catchwords

1. Contract
2. › Construction
3. › Standard form contracts
4. › Contract for sale of business
5. › Vendor's promises
6. › Promise that vendor 'has complied' with legislative requirements
7. › Whether promise as to past fact or as to state and character of business
8. › Law Society and Real Estate Institute standard form Contract for Sale of Business 2000 edition, cl 10.1.7
1. Contract
2. › Breach
3. › Causation of loss
4. › Vendor's promise of past compliance with legislative requirements
5. › Whether past breach causally connected to loss arising from subsequent enforcement against purchaser
1. Contract
2. › Construction
3. › Commercial contracts
4. › Businesslike construction
5. › Whether commercial construction warrants reading wider meaning into clear words as substitute for absent provision
1. Appeal
2. › New points on appeal
3. › Whether parties should be permitted to raise new arguments on appeal
4. › Arguments that could have been met by evidence below
5. › Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 considered

Quick Take

A vendor's promise in cl 10.1.7 of the Law Society/REINSW standard form Contract for Sale of Business 2000 edition that the vendor 'has complied' with legislative requirements is a promise about the past only, not a promise as to the state, character, or practices of the business. A purchaser who suffers loss from enforcement of a regulatory requirement against the purchaser after completion cannot recover damages for breach of cl 10.1.7 where the loss flows from the purchaser's own breach, not from the vendor's past non-compliance. A broader claim might have been available as misleading or deceptive conduct under the Fair Trading Act.