Bisognin v Hera Project Pty Ltd - [2016] VSC 75

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2015 04285

IN THE MATTER of an Application pursuant to section 49(1) of the Property Law Act 1958

BETWEEN:

GINO ANDREW BISOGNIN and LEAH JOAN BISOGNIN	Plaintiffs
v
HERA PROJECT PTY LTD (ACN 163 685 041)	Defendant

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JUDGE:	SLOSS J
WHERE HELD:	Melbourne
DATES OF HEARING:	7, 8, 9, 10 and 14 December 2015
DATE OF JUDGMENT:	4 March 2016
CASE MAY BE CITED AS:	Bisognin & Anor v Hera Project Pty Ltd
MEDIUM NEUTRAL CITATION:	[2016] VSC 75

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CONTRACT – Sale of Land – Sale of lot on an unregistered plan of subdivision - Construction of terms – Contract contained a special condition specifying date when contract could be terminated if plan of subdivision not registered – Whether the contract could be terminated unilaterally or whether mutual agreement is required – Whether the special condition is ambiguous – Reference to text, context and purpose to aid construction – Alternatively, whether the special condition should be rectified.

CONTRACT – Sale of Land – Sale of lot on an unregistered plan of subdivision – Planning permit required that agreements with relevant authorities for the provision of services to each lot be entered into before the plan of subdivision could be registered – Contract obliged the purchaser to use its best endeavours and do all things reasonably required to expedite and procure the registration of the plan of subdivision – Contract obliged the vendors to use their best endeavours to co-operate with the purchaser and do all acts and things necessary to give effect to the approval of the plan of subdivision – Whether vendors or purchaser were required to enter into agreements and pay fees and bonds for the establishment or provision of services.

CONTRACT – Sale of Land – Best endeavours clause – Whether the vendors were in breach of their obligation to use best endeavours – Plan of subdivision was not registered by date specified in contract – Effect of delay – Whether vendors are disentitled from terminating the contract.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R S Hay QC and Mr W G Stark	Waters Lawyers Pty Ltd
For the Defendant	Mr G S Clarke QC and Mr R E Cook	Russell Kennedy Solicitors

TABLE OF CONTENTS

Introduction........................................................................................................................................ 2

The trial................................................................................................................................................ 2

Factual background........................................................................................................................... 2

Background to the construction questions that arise under the new contract....................... 2

The Sale of Land Act 1962 (Vic)..................................................................................................... 2
The operation of the Sale of Land Act in its current form............................................. 2
The 2012 contract................................................................................................................. 2

Approach to the construction of the new contract....................................................................... 2

Construction of special condition 8................................................................................................ 2

The rival contentions advanced by the respective parties...................................................... 2
Conclusion on the proper construction of special condition 8 of the new contract............ 2

In the alternative, the vendors seek rectification of special condition 8 or rescission of the new contract........................................................................................................................................... 2

Relevant legal principles concerning rectification................................................................... 2
The mutual mistake contended for…

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: [2016] VSC 75
Decision Date: 4 March 2016

CaseChat Overview and Summary

Bisognin sued Hera Project Pty Ltd over the sale of a lot on an unregistered plan of subdivision. The dispute centred on the interpretation of the contract terms, particularly a special condition allowing termination if the plan was not registered by a specified date, and the obligations of the parties to use their best endeavours to achieve registration. The court was tasked with determining whether the special condition could be exercised unilaterally or required mutual agreement, whether it was ambiguous, and whether it should be rectified. Additionally, the court had to decide which party was responsible for entering into agreements and paying fees and bonds for the provision of services, and whether the vendors were in breach of their best endeavours obligations.

The court considered the text, context, and purpose of the contract to interpret the special condition. It examined whether the condition was ambiguous and, if so, whether it should be rectified to reflect the parties' true intentions. The court also looked at the obligations of the parties to use their best endeavours to achieve registration of the plan of subdivision and the consequences of the delay in registration. The court found that the special condition was not ambiguous and could be exercised unilaterally. The court also found that the vendors were not in breach of their best endeavours obligations because the delay in registration was due to factors outside their control.

The court held that the vendors were not entitled to terminate the contract unilaterally as the special condition did not require mutual agreement for termination. The court also held that the vendors were not in breach of their best endeavours obligations, as the delay in registration was due to factors outside their control. The court found that the purchaser was responsible for entering into agreements and paying fees and bonds for the provision of services, as required by the planning permit. The court ordered that the contract remain in force and that the parties continue to negotiate in good faith to achieve registration of the plan of subdivision.

In summary, the court held that the vendors could not terminate the contract unilaterally, that they were not in breach of their best endeavours obligations, and that the purchaser was responsible for entering into agreements and paying fees and bonds for the provision of services. The court ordered that the contract remain in force and that the parties continue to negotiate in good faith to achieve registration of the plan of subdivision.

Orders