An August 2020 agreement for the sale of a Sovereign Island double block at $4.95 mil is before the courts after the seller upped the price to $5.25 mil in December and now wants the arrangement crashed as the buyer claims repudiation relief.
Just a month after Jenny Karananos inked the deal, the buyer sought her consent to substitute another entity – La Costa D Oro Pty Ltd – as purchaser at the same price on substantially the same terms with settlement to occur at the end of January 2021, one month earlier than under the original sale terms.
Having agreed in principle, a Deed of Rescission was prepared to note that the third instalment of the deposit was payable on 16 November 2020.
That sum was paid on the due date but was not receipted by the buyer until the following day, presumably because that was the day it was received into the deposit holder account by EFT.
Asserting that the deposit instalment had been paid late, the seller purported to terminate the original contract and offered to conclude a sale with La Costa D Oro only at an increased price of $5.25 million.
When Ms Karananos failed to retract the purported termination as demanded, the original buyer lodged a caveat.
Her solicitors then notified the buyer’s solicitors in January 2021 of her “withdrawal” of the purported termination but the seller declined to execute a Deed of Novation and the new contract of sale in favour of the substitute buyer to put the arrangement into effect.
The original buyer and La Costa D Oro promptly filed suit by way of Originating Application and in February prepared and Amended Claim seeking declarations that the parties were bound by the Deed of Rescission that Ms Karananos had repudiated.
She responded with a cross-application to have the caveats removed.
It was that application and that of the buyers to amend their Claim, that came before Justice Frances Williams in the Supreme Court at Brisbane in June.
Her Honour was satisfied that the caveat was justified on the basis that there were serious issues to be tried.
She dismissed the seller’s application that the caveat be removed and granted the application that the buyers’ Claim be amended so as to include the prayers for the grant of the declarations.
The substantive contest as to the efficacy of the unexecuted Deed of Rescission and Deed of Novation will come before the court in the coming months over which period by all predictions, the market will continue to roar higher.