The legal battle between Laundy Hotels and Colin Parras has finally concluded, seeing the High Court rule that the sale three years ago of the Quarryman’s Hotel should have proceeded.
Arthur Laundy and co bought the Quarryman’s in 2011 for around $3.5 million, shortly after selling the nearby Harlequin. In late 2019 Laundy Hotels listed the pub, having built a reputation for it as a mecca for craft beer, and late February 2020 a deal was done for $11.25 million to Dyco Hotels, owned by Colin Michael Parras, in partnership with his mother, Daphne.
Completion was set for 31 March – not knowing at the time that pubs around the country would be forced to close a week prior, in response to the COVID pandemic. Advent of restrictive public health orders prompted Dyco to attempt to pull out of the deal and recover the five per cent deposit of $562k.
The case dragged on until mid-2021, when the NSW supreme court ruled in favour of the vendors, and ordered the deal proceed.
But exercising their right to appeal, Dyco successfully put the process on hold again in 2022 when the NSW Court of Appeals overturned the trial verdict. Similarly, the Laundys appealed, this time to the High Court.
After three years of manoeuvres, last week the High Court ruled that the orders of the Court of Appeal be set aside and the appeal be dismissed, with costs to Dyco Hotels, saying the contract had not been frustrated and that the public health order was not a permissible “supervening event”.
The judgement explained that the question raised by the appeal was whether the vendor was “ready, willing and able to complete” – and therefore not in default of the agreement – while on restricted operations required by the public health order.
It was noted the Quarryman’s had continued to trade the permitted take-away and was indeed ‘ready, willing and able’ to complete, obliged to “carry on the Business in the manner it was being conducted at the time of contract to the extent that doing so was lawful”. To do otherwise, could be seen as requiring the seller to act outside the law.
“There was no obligation (and could not have been an obligation) imposed on the Vendor to carry on the Business unlawfully. It follows that the appeal should be allowed, and consequential orders sought by the appellant should be made.”
Plaintiff at the High Court, Laundy Hotels is entitled to keep the deposit and recover damages for loss on the deal, although the pub is arguably worth considerably more now than it was in 2020. The Laundys were awarded costs, estimated to exceed $1.5 million for each party, plus interest.
A unanimous (5-0) decision was granted in favour of Laundy Hotels and partner Patrick Maguire, who will continue operations.
Arthur Laundy has said he feels for the Parras’, suggesting it was simply “a bad decision” to have changed their minds after signing the contract to buy.
Patrick Maguire told PubTIC they plan to retain and grow the Pyrmont pub, which is looking to installation of a new Metro station to the rear, to be completed in coming years.
The partnership report they have no plans to relist the pub at this stage, but in a red-hot market, “who knows”.
