By Dr Michelle Sharpe -
Key decisions
- Laundy Hotels (Quarry) Pty Limited v Dyco Hotels Pty Limited [2023] HCA 6
- Barnett v Secretary, Department of Communities and Justice [2023] HCA 7
CONTRACT LAW
Construction
In Laundy Hotels (Quarry) Pty Limited v Dyco Hotels Pty Limited [2023] HCA 6 (8 March 2023), the High Court was required to consider the proper construction of a clause in a contract for the sale of a hotel, and associated business, requiring the Vendor to carry on the hotel business until completion.
In January 2020, the appellant (the ‘Vendor’) sold a freehold hotel property in Pyrmont Sydney (‘Quarrymans Hotel’) together with an associated hotel licence under the Liquor Act 2007 (NSW) and nine gaming machine entitlements allocated to that licence and the hotel business (‘Business’). The respondents (the ‘Purchasers’) purchased the Quarrymans Hotel and the Business. Clause 50.1 of the contract provided that from the date of the contract until completion (being 30 and 31 March 2020), the Vendor ‘must carry on the Business in the usual way and ordinary course as regards its nature, scope and manner…’ (at [9]).
On 23 March 2020, in response to the COVID-19 pandemic, the Minister directed that pubs, like the Quarrymans Hotel, must not be open to members of the public except for the purposes of selling food or beverages to consume off the premises. In May 2020, the Minister made two further orders permitting pubs to sell food and beverages to be consumed on the premises but subject to certain limits on the number of patrons. From 26 March until 1 June 2020, the Vendor offered takeaway food and alcohol only from the Quarrymans Hotel. On 25 March 2020, the Purchasers informed the Vendor that they would not complete the contract because the Vendor was not ready, willing and able to complete the contract.
