Previously the land had been earmarked for rural use only, but following the change the land could also be used for residential development. This substantially increased the land s value. John Jones then purchased a shelf company, XYZ Pty Ltd. XYZ Pty Ltd issued shares to John Jones and his wife Anne Jones. John Jones was appointed the sole director. John Jones then sold the same land to XYZ Pty Ltd. Hendersons Ltd sought specific performance of its contract.
Specific performance is only available if the contract is capable of being performed.
Arguably, if Jones no longer owns the land he can no longer perform the contract. Discuss the likelihood of Hendersons Ltd obtaining specific performance. It is not listed on the Australian Stock Exchange. The preference shares also have priority for repayment of capital in a winding up. These rights are set out in Kendrick Ltd s constitution.