Altius Pty Ltd v Abignano Nominees Pty Ltd - [2023] NSWCA 177

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Altius Pty Ltd v Abignano Nominees Pty Ltd [2023] NSWCA 177
Hearing dates: 19 July 2023
Decision date: 08 August 2023
Before: Leeming JA at [1]; Adamson JA at [16]; Stern JA at [123]
Decision:
(1)   Allow the appeal.
(2)   Set aside orders 1, 2 and 4 made by Walton J on 21 December 2022 and in lieu thereof make the following orders:
(a)   Judgment for the defendant.
(b)   Order the plaintiffs to pay the defendant’s/cross-claimants’ costs of the proceedings.
(3)   Order the respondents to pay the appellants’ costs of the appeal.

Catchwords:
CONTRACTS — Construction — Context — where unit trust formed to undertake property development joint venture — where parties brought joint venture to an end via an option agreement — where debt was claimed for outstanding amount loaned to unit trust — whether outstanding loan was discharged by option agreement — whether loans were “pursuant to” joint venture agreement — use of context and prior negotiations to demonstrate commercial purpose as an aid to construction

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW), rr 36.16, 42.1

Cases Cited:
Birchill v Premier Holdings Pty Ltd [2011] NSWSC 1020
Cherry v Steele-Park (2017) 96 NSWLR 548; [2017] NSWCA 295
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 61-62; [1984] HCA 64
Hoyt’s Proprietary Ltd v Spencer (1919) 27 CLR 133
Maybury v Atlantic Union Oil Company Limited (1953) 89 CLR 507; [1953] HCA 89
Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1; [2016] HCA 26
Victoria v Tatts Group Ltd [2016] HCA 5; 90 ALJR 392
Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530; [2004] HCA 56

Category: Principal judgment
Parties: Altius Pty Ltd (First Appellant)
Sheridan Claire Peterkin (Second Appellant)
Jerolu Investments Pty Ltd (Third Appellant)
SP Two Pty Ltd (Fourth Appellant)
Abignano Nominees Pty Ltd (First Respondent)
Biagio Abignano (Second Respondent)
Avich Holdings Pty Ltd (Third Respondent)
Gennaro Abignano (Fourth Respondent)
B & J Abignano Pty Ltd (Fifth Respondent)
Representation:
Counsel:
T Lynch SC / M Harker (Appellants)
D Neggo (Respondents)
Solicitors:
Commlex Pty Ltd (Appellants)
Macpherson Kelley Pty Ltd (Respondents)

File Number(s): 2023/2331
Decision under appeal

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law

Citation:

Abignano Nominees Pty Ltd v Altius Pty Ltd [2022] NSWSC 1739

Date of Decision:

21 December 2022

Before:

Walton J

File Number(s):

2017/320112

HEADNOTE

[This headnote is not to be read as part of the judgment]

Altius Pty Ltd (Altius) is the trustee of a unit trust which was created by deed dated 26 March 2012 for the purpose of pursuing the development of a property named Pasadena of which Altius became the registered proprietor. The unitholders in the unit…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NSWCA 177
Decision Date: 08 August 2023

CaseChat Overview and Summary

Altius Pty Ltd (the plaintiff) claimed an outstanding amount loaned to a unit trust, Abignano Nominees Pty Ltd (the defendant), which had been formed for a property development joint venture. The parties had subsequently brought the joint venture to an end via an option agreement. The central dispute concerned whether the outstanding loan was discharged by this option agreement, and whether the loans were made "pursuant to" the joint venture agreement. The appeal was heard in the Court of Appeal of New South Wales, with Leeming, Adamson and Stern JJA presiding.

The primary legal issue before the Court of Appeal was the proper construction of the option agreement and its effect on the outstanding loan. Specifically, the court had to determine whether the terms of the option agreement extinguished the debt owed to the plaintiff, or if the loan remained a valid and enforceable debt. This required an examination of the relationship between the loan agreement and the joint venture agreement, and how the termination of the joint venture through the option agreement impacted the plaintiff's claim for repayment of the loan.

The Court of Appeal allowed the appeal, setting aside the primary judge's orders. The court reasoned that the option agreement did not operate to discharge the debt owed by the defendant to the plaintiff. It held that the loans were not made "pursuant to" the joint venture agreement in a way that would render them subject to the terms of the option agreement for their discharge. The court applied principles of contractual construction, considering the commercial purpose of the agreements and, where appropriate, prior negotiations to aid in demonstrating that purpose. The court found that the loan remained an independent obligation. Consequently, judgment was entered for the defendant, and the plaintiff was ordered to pay the defendant's costs of the proceedings, with the respondents ordered to pay the appellants' costs of the appeal.

Orders

Orders of the court

(1) Allow the appeal.

(2) Set aside orders 1, 2 and 4 made by Walton J on 21 December 2022 and in lieu thereof make the following orders:

(a) Judgment for the defendant.

(b) Order the plaintiffs to pay the defendant’s/cross-claimants’ costs of the proceedings.

(3) Order the respondents to pay the appellants’ costs of the appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Altius Pty Ltd v Abignano Nominees Pty Ltd [2023] NSWCA 177
Hearing dates:	19 July 2023
Decision date:	08 August 2023
Before:	Leeming JA at [1]; Adamson JA at [16]; Stern JA at [123]
Decision:	(1) Allow the appeal. (2) Set aside orders 1, 2 and 4 made by Walton J on 21 December 2022 and in lieu thereof make the following orders: (a) Judgment for the defendant. (b) Order the plaintiffs to pay the defendant’s/cross-claimants’ costs of the proceedings. (3) Order the respondents to pay the appellants’ costs of the appeal.
Catchwords:	CONTRACTS — Construction — Context — where unit trust formed to undertake property development joint venture — where parties brought joint venture to an end via an option agreement — where debt was claimed for outstanding amount loaned to unit trust — whether outstanding loan was discharged by option agreement — whether loans were “pursuant to” joint venture agreement — use of context and prior negotiations to demonstrate commercial purpose as an aid to construction
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW), rr 36.16, 42.1
Cases Cited:	Birchill v Premier Holdings Pty Ltd [2011] NSWSC 1020 Cherry v Steele-Park (2017) 96 NSWLR 548; [2017] NSWCA 295 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 61-62; [1984] HCA 64 Hoyt’s Proprietary Ltd v Spencer (1919) 27 CLR 133 Maybury v Atlantic Union Oil Company Limited (1953) 89 CLR 507; [1953] HCA 89 Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1; [2016] HCA 26 Victoria v Tatts Group Ltd [2016] HCA 5; 90 ALJR 392 Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530; [2004] HCA 56
Category:	Principal judgment
Parties:	Altius Pty Ltd (First Appellant) Sheridan Claire Peterkin (Second Appellant) Jerolu Investments Pty Ltd (Third Appellant) SP Two Pty Ltd (Fourth Appellant) Abignano Nominees Pty Ltd (First Respondent) Biagio Abignano (Second Respondent) Avich Holdings Pty Ltd (Third Respondent) Gennaro Abignano (Fourth Respondent) B & J Abignano Pty Ltd (Fifth Respondent)
Representation:	Counsel: T Lynch SC / M Harker (Appellants) D Neggo (Respondents) Solicitors: Commlex Pty Ltd (Appellants) Macpherson Kelley Pty Ltd (Respondents)
File Number(s):	2023/2331
Decision under appeal	Court or tribunal: Supreme Court Jurisdiction: Common Law Citation: Abignano Nominees Pty Ltd v Altius Pty Ltd [2022] NSWSC 1739 Date of Decision: 21 December 2022 Before: Walton J File Number(s): 2017/320112