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  • In Laundy Hotels (Quarry) Pty Limited v Dyco Hotels Pty Limited, the High Court examined what constitutes carrying ‘on the business in the usual and ordinary course’ and the circumstances where a contract can be validly terminated.
  • Due to Public Health Orders in place during the pandemic, the hotel had to change the way it operated and the courts were required to determine whether the vendor had complied with its contractual obligations.
  • The High Court found the obligation to carry on the Business until completion is moulded by, and subject to, the operation of the law from time to time.

In Laundy Hotels (Quarry) Pty Limited v Dyco Hotels Pty Limited [2023] HCA 6, the High Court examined the sale of the Quarryman’s Hotel in Pyrmont, the terms of which were challenged by the purchaser due to the financial impact of Public Health Orders (‘PHOs’) introduced in relation to the pandemic on the hotel business.

The High Court overturned the decision of the NSW Court of Appeal, finding that the contract had not been repudiated by the vendor.


Laundy Hotels (Quarry) Pty Limited (‘Laundy’) entered into a contract for sale with Dyco Hotels Pty Limited and Quarryman Hotel Operations Pty Limited (together, ‘Dyco’) in respect of the freehold hotel property, together with the associated hotel licence, gaming machine entitlements and hotel business.

The contract was exchanged on 31 January 2020 with a purchase price of $11,250,000 (apportioned between the various assets) and a 5 per cent deposit was paid on exchange. The contract provided for completion to be staggered as follows:

  1. subject to satisfaction of conditions precedent, completion of the sale of business assets was to take place on the 55th day after the contract date or such other date as agreed in writing; and
  2. subject to completion of the sale of the business assets, completion of the sale of the freehold property, the hotel licence and gaming machine entitlements was to take place on the 56th day after the contract date, or such other date as agreed in writing.

For logistical reasons, the parties’ representatives agreed on completion dates of 30 March 2020 for the business sale assets, and 31 March 2020 for the remaining assets.

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