Gekko Developments Pty Ltd v Centa Company Pty Ltd (No 3) - [2015] QSC 87

SUPREME COURT OF QUEENSLAND

CITATION:

Gekko Developments Pty Ltd v Centa Company Pty Ltd (No 3) [2015] QSC 87

PARTIES:

GEKKO DEVELOPMENTS PTY LTD
ACN 139 260 674

(plaintiff)

v
CENTA COMPANY PTY LTD
ACN 010 059 944

(defendant)

FILE NO/S:

SC No 7936 of 2012

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

16 April 2015

DELIVERED AT:

Brisbane

HEARING DATE:

2 February 2015; 3 February 2015; 4 February 2015; 5 February 2015

JUDGE:

Philip McMurdo J

ORDER:

Judgment for the defendant.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS – where parties dispute the content and existence of a legal relationship allegedly arising from dealings between the parties – where the defendant had previously granted the plaintiff an option to purchase property belonging to the defendant – where the plaintiff claimed the parties agreed, in consideration of the plaintiff giving up its claim to a contractual entitlement to the property, that the defendant would pay to the plaintiff $3 million – whether the defendant made an agreement to make a conditional or unconditional payment to the plaintiff – where the defendant denies any conversation to that effect and existence of any contract

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSIDERATION – WHAT AMOUNTS TO CONSIDERATION – whether there was an agreement that the defendant would pay the plaintiff $3 million in consideration for giving up its contractual entitlement to the defendant’s property – where the plaintiff’s case was that there would have been consideration by a forbearance to sue – unnecessary to consider whether there was good consideration – it would be sufficient consideration for the agreement upon which it sues if the plaintiff gave up what it genuinely believed to be a legal entitlement – not clear that the plaintiff genuinely believed it had a legal entitlement to the property

EVIDENCE – WITNESSES – where the credibility of witnesses was questionable – where the conclusion resulted not from a favourable impression of the defendant’s witnesses, but from an assessment of the relative probabilities of the respective cases from uncontroversial facts

Corporations Act 2001 (Cth), s 127(3)
Duties Act 2001 (Qld), s 11

Alford v Ebbage [2003] 1 Qd R 343, cited
Butler v Fairclough (1917) 23 CLR 78, cited
Miles v New Zealand Alford Estate Company (1886) 32 Ch D 266, cited

COUNSEL:

A J Morris QC, with V Brennan for the plaintiff

G A Thompson QC with M Trim for the defendant

SOLICITORS:

ClarkeKann Lawyers for the plaintiff

McCullough Robertson Lawyers for the defendant

In the centre of Brisbane there is a shopping centre called Broadway on the Mall. At all relevant times it was owned by the defendant, a company controlled by Mr Henry Yuen. In 2009, the defendant was looking to sell it and to that end the defendant signed documents in the form of an option to purchase granted to the plaintiff, a company controlled by Mr Darren Brown.
From October 2009 until late May…

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: [2015] QSC 87
Decision Date: 16 April 2015

CaseChat Overview and Summary

Gekko Developments Pty Ltd brought an action against Centa Company Pty Ltd, seeking a declaration that a contract was formed between the parties and a payment of $3 million. Gekko alleged that Centa had granted it an option to purchase property and that in August 2010, Centa agreed to pay $3 million to Gekko in consideration of Gekko giving up its claim to the contractual entitlement to the property. Centa denied the existence of any such agreement. The primary dispute was whether there was a binding contract between the parties that obliged Centa to make a payment to Gekko.

The central legal issue was whether there was sufficient consideration for the agreement claimed by Gekko. The court had to determine if Gekko genuinely believed it had a legal entitlement to the property, which would have been sufficient consideration for the agreement. Furthermore, the court had to assess the credibility of the witnesses and the respective probabilities of the parties' cases based on the uncontroversial facts presented.

The court found that Gekko failed to prove the agreement upon which it sues. The suggested contract of August 2010 stipulated that $3 million would be paid only if the property was sold to Mr Al Jibouri and another entity and that contract was completed. However, such a contract was made but not completed. The court concluded that Gekko had not established the existence of a binding agreement as it had not proved the agreement to the required standard.

The court ordered judgment for the defendant, Centa Company Pty Ltd. Gekko’s claim for a declaration that a contract was formed and for the payment of $3 million was dismissed.

Orders

Orders of the court

Judgment for the defendant.

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

The suggested contract of August 2010 was to the effect that $3 million would be paid only in the event that the property was sold to Mr Al Jibouri and another entity and that contract was completed. As already noted, such a contract was made but not completed.Conclusion The plaintiff has failed to prove the agreement upon which it sues. There will be judgment for the defendant.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Gekko Developments Pty Ltd v Centa Company Pty Ltd (No 3) [2015] QSC 87
PARTIES:	GEKKO DEVELOPMENTS PTY LTD ACN 139 260 674 (plaintiff) v CENTA COMPANY PTY LTD ACN 010 059 944 (defendant)
FILE NO/S:	SC No 7936 of 2012
DIVISION:	Trial Division
PROCEEDING:	Trial
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	16 April 2015
DELIVERED AT:	Brisbane
HEARING DATE:	2 February 2015; 3 February 2015; 4 February 2015; 5 February 2015
JUDGE:	Philip McMurdo J
ORDER:	Judgment for the defendant.
CATCHWORDS:	CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS – where parties dispute the content and existence of a legal relationship allegedly arising from dealings between the parties – where the defendant had previously granted the plaintiff an option to purchase property belonging to the defendant – where the plaintiff claimed the parties agreed, in consideration of the plaintiff giving up its claim to a contractual entitlement to the property, that the defendant would pay to the plaintiff $3 million – whether the defendant made an agreement to make a conditional or unconditional payment to the plaintiff – where the defendant denies any conversation to that effect and existence of any contract CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSIDERATION – WHAT AMOUNTS TO CONSIDERATION – whether there was an agreement that the defendant would pay the plaintiff $3 million in consideration for giving up its contractual entitlement to the defendant’s property – where the plaintiff’s case was that there would have been consideration by a forbearance to sue – unnecessary to consider whether there was good consideration – it would be sufficient consideration for the agreement upon which it sues if the plaintiff gave up what it genuinely believed to be a legal entitlement – not clear that the plaintiff genuinely believed it had a legal entitlement to the property EVIDENCE – WITNESSES – where the credibility of witnesses was questionable – where the conclusion resulted not from a favourable impression of the defendant’s witnesses, but from an assessment of the relative probabilities of the respective cases from uncontroversial facts Corporations Act 2001 (Cth), s 127(3) Duties Act 2001 (Qld), s 11 Alford v Ebbage [2003] 1 Qd R 343, cited Butler v Fairclough (1917) 23 CLR 78, cited Miles v New Zealand Alford Estate Company (1886) 32 Ch D 266, cited
COUNSEL:	A J Morris QC, with V Brennan for the plaintiff G A Thompson QC with M Trim for the defendant
SOLICITORS:	ClarkeKann Lawyers for the plaintiff McCullough Robertson Lawyers for the defendant