By Simon Philips and Vanessa Thomas -
Key decisions
- Pittmore Pty Ltd v Chan; Chan v Tan [2020] NSWCA 344
- Sydney Local Health District v Macquarie International Health Clinic Pty Ltd [2020] NSWCA 274
DEEDS/EQUITY
Equity – procuring or inducing a breach of trust
Pittmore Pty Ltd v Chan; Chan v Tan [2020] NSWCA 344
Background: On 29 April 2016, Mr Chan and the appellant, Pittmore Pty Ltd (whose sole director was Mr Tan) (‘Pittmore’), executed a Joint Venture Deed for the development of two adjoining properties – Blocks 15 and 17. Mr Chan was the registered proprietor of Block 15 and Pittmore had entered into negotiations for the purchase of Block 17. On the day the Deed was executed, Pittmore exchanged contracts with the vendor of Block 17 for a purchase price of $3 million.
The Deed included a condition precedent that required Pittmore to become the registered proprietor of Block 17 before 30 April 2017. After the Deed was executed, the parties obtained tax advice. As a result, Pittmore approached the vendor of Block 17 to ask whether she would be prepared to rescind the contract for sale and replace it with one naming Pittmore and a company controlled by Mr Chan, as purchasers. She initially indicated she would be willing to do so.
A second Joint Venture Deed, bearing the same date as the first Deed, was executed by the parties in July 2016. The condition precedent was modified so that it provided for a right of termination if Pittmore and a company controlled by Mr Chan did not become registered proprietors in equal shares of both blocks by a certain date, reflecting the tax advice the parties had received.
The vendor of Block 17 later changed her position in relation to rescission. The original contract for sale with Pittmore was completed in December 2016, thereby satisfying the condition precedent to the first Joint Venture Deed.
