Interlink Australia Pty Ltd v Lowe

Case [2015] QCA 211

SUPREME COURT OF QUEENSLAND

CITATION:

Interlink Australia Pty Ltd v Lowe [2015] QCA 211

PARTIES:

INTERLINK AUSTRALIA PTY LTD AS TRUSTEE FOR THE MALONEY SUPERANNUATION FUND
ACN 091 360 020
(appellant)
v
GWENDOLINE ELVA LOWE
(respondent)

FILE NO/S:

Appeal No 8585 of 2014
DC No 2655 of 2012

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:


District Court at Brisbane – Unreported, 15 August 2014

DELIVERED ON:

30 October 2015

DELIVERED AT:

Brisbane

HEARING DATE:

27 March 2015

JUDGES:

Gotterson and Morrison JJA and Dalton J
Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS:

1.   The appeal is dismissed.

2.   The appellant pay the respondent’s costs, of and incidental to the appeal, to be assessed on the standard basis.

CATCHWORDS:

APPEAL AND NEW TRIAL – CONVEYANCING – THE CONTRACT AND CONDITIONS OF SALE – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – IMPLIED TERMS – where the respondent’s home was situated on two adjoining lots – where the appellant sought to purchase the lots from the respondent – where the appellant only required one lot to build a display home, but was content to buy both lots on the basis they would build a display home on one lot and keep the second for an investment – where the intention of the appellant was that the contracts would be in two different names, Interlink Australia Pty Ltd and Interlink Holdings Pty Ltd – where the two executed contracts were mistakenly both in the name of the company – where the appellant sought to have one of the contracts amended to be in the name of the holding company, and also sought that the respondent have the lots split via the title office – where the respondent refused these requests – where initially the appellant sought performance of both contracts, but at trial sought for specific performance of only one contract, or  damages in the alternative – where the trial judge found that subjective intention at the time the contracts were signed was that both lots would be sold together – whether it was the subjective intention of the parties, objectively ascertained, that the contracts be interdependent – whether a term as to contemporaneous settlements should be implied – whether the trial judge gave adequate reasons

Attorney-General (Qld) v Fardon[2013] QCA 64, cited
Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191; [1996] 3 All ER 365; [1996] UKHL 10, cited
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; [1977] HCA 40, cited
Breen v Williams (1996) 186 CLR 71; [1996] HCA 57, cited
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337; [1982] HCA 24, considered
Luxor (Eastbourne) Ltd v Cooper [1941] AC 108; [1941] 1 All ER 33, cited
Reardon Smith Line v Hansen-Tangen [1976] 1 WLR 989; [1976] 3 All ER 570, cited

COUNSEL:

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Interlink Australia Pty Ltd v Lowe [2015] QCA 211
Case
[2015] QCA 211
Decision Date

CaseChat Overview and Summary

The case of Interlink Australia Pty Ltd v Lowe involves a dispute over the sale of two lots of land in Brighton. The appellant, Interlink Australia Pty Ltd, sought to purchase two lots from the respondent, Mrs Lowe, intending to use one lot for a display home and to keep the other as an investment. However, both contracts mistakenly named the purchaser as Interlink Australia Pty Ltd, rather than separately naming the intended holding company, Interlink Holdings Pty Ltd. The appellant requested amendments to the contracts and for the lots to be split, but the respondent refused. The appellant initially sought performance of both contracts, but later sought specific performance of one contract or damages as an alternative. The trial judge found that the contracts were intended to be interdependent, leading to the appeal.

The primary legal issue before the court was whether the contracts were interdependent and if an implied term regarding contemporaneous settlement should be applied. The court considered the subjective intention of the parties, the background circumstances, and the commercial purpose of the contract. The court referenced Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, which outlines that a term may be implied if it is presumed the parties would have agreed to it had they considered it. The court had to determine if the parties' intentions were objectively ascertainable and if those intentions led to the contracts being interdependent.

The court found that the trial judge's cautious approach, while understandable, erred in requiring ambiguity in the contract before considering extrinsic evidence. The court held that ambiguity was not necessary to refer to extrinsic circumstances. The court also concluded that the contracts were interdependent and that an implied term regarding contemporaneous settlement was appropriate. The court found no error in the trial judge's reasoning or in the adequacy of the reasons provided.

The appeal was dismissed, and the appellant was ordered to pay the respondent's costs of and incidental to the appeal, to be assessed on the standard basis. This decision affirms the trial judge's findings and the interdependence of the contracts, upholding the respondent's position.

Orders

Orders of the court

1. The appeal is dismissed.

2. The appellant pay the respondent’s costs, of and incidental to the appeal, to be assessed on the standard basis.

Background

Background to the litigation

This type of implied term was described by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales:[30]“… with implication the term is one which it is presumed that the parties would have agreed upon had they turned their minds to it – it is not a term that they have actually agreed upon. Thus, in the case of the implied term the deficiency in the expression of the consensual agreement is caused by the failure of the parties to direct their minds to a particular eventuality and to make explicit provision for it.”[30](1981-1982) 149 CLR 337, 346.Background Circumstances In deciding whether or not to imply a term into a contract the Court may consider the terms of the contract and the relevant background circumstances or setting in which the contract is made.[31] As to what surrounding circumstances the Court may take into account, Mason J in Codelfa adopted a line of reasoning from Lord Wilberforce in Reardon Smith.[32]The Court may have regard to the commercial purpose of the contract, including the genesis of the transaction and the background, context and market in which the parties are operating. While the Court does not have regard to the subjective actual intention of the parties, it has regard to the intention which reasonable people would have in that background or context. Mason J dealt with negotiations towards a contract, saying, “Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But insofar as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable.” – p 352.[31]Codelfa (above) p 348; Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191, 212.[32]Reardon Smith Line v Hansen-Tangen [1976] 1 WLR 989, extracted at p 350 ff of Codelfa. The trial judge thought that the parties’ actual intention was to buy and sell two lots. However, he was alive to the prohibition on having regard to the parties’ actual subjective intention when determining whether or not to imply a term. He had considerable reference to the law on this subject, and was concerned not to have regard to extrinsic evidence impermissibly. For that reason he took an approach that he ought first decide whether or not the contract for the sale of lot 99 was ambiguous. He decided that it was, and thus thought it permissible to refer to extrinsic evidence. In my view, in order to consider whether to imply a term, it was not necessary to find ambiguity in the written contract before reference could be had to the type of background circumstances just discussed. Nonetheless, insofar as his Honour was in error, that error was one which favoured the appellant. The cautious approach by the trial judge was understandable, particularly given the emphasis in the judgment of Mason J in Codelfa on cases dealing with the introduction of parol evidence. I think, however, that when Mason J turned to consider whether, in that case, it was permissible to look at extrinsic materials (p 354 ff), he proceeded without identifying any ambiguity. I think the position is as stated by Brennan J at pp 402-403 of Codelfa, that “… where the term propounded is said to be implied in a contract, that term must inhere in its express terms, and reference to extrinsic circumstances is permissible only to construe the contract and to understand its operation. … Although the necessity for the term to be implied must appear from and in the express terms of a contract, not from extrinsic circumstances, those circumstances may aid in ascertaining the meaning of the express terms and in identifying the matters to which they relate. The meaning and operation of the express terms, thus established, are the sole foundation for implying a term which the parties have not expressed.”

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Since preparing the reasons above I have had the advantage of reading the draft reasons of Dalton J. I agree with what her Honour has said in relation to the application of Codelfa and the implication of the term as to contemporaneous settlement.Conclusion For the reasons expressed above I would dismiss the appeal. I would propose the following orders:1.The appeal is dismissed.2.The appellant is to pay the respondent’s costs, of and incidental to the appeal, to be assessed on the standard basis. DALTON J: Mrs Lowe owns two lots of land – 97 and 99 on Registered Plan 29101. The address for both is 57 Seaview Street, Brighton. She lives in a house which is built so that part of it is on lot 97, and part of it on lot 99. Mrs Lowe told the Court she was 77‑and-a-half years old at the time of trial. She had lived in her house for 38 years. Mr Brian Maloney was the director of three companies:(a)Interlink Australia Pty Ltd (Interlink), which was trustee for the Maloney Superannuation Fund;(b)Interlink Holdings Pty Ltd (Holdings) which was trustee for the Maloney Family Trust; and(c)Urban Homes Pty Ltd (Urban Homes), which carried on business as a builder.Mr Maloney’s business strategy was that Holdings would buy a piece of land which Urban Homes would lease. Urban Homes would build a house on the land and use it as a display home for a short period of time – perhaps two years – and then the trustee company would either sell or let the ex-display home. In December 2011 or January 2012, Mr Maloney was actively looking for sites in the Brighton area. He wished to have Urban Homes construct a display home there, as many of that company’s enquiries came from that geographical area. Mr Maloney thought that 57 Seaview Street was a suitable block for this purpose. He had searches carried out and discovered that it was two lots – 97 and 99. He made approaches through the real estate agent who had the listing, but received no response. He then telephoned Mrs Lowe. He told Mrs Lowe he was interested in building a display home, which would involve bulldozing the existing dwelling – her home. According to Mr Maloney, Mrs Lowe said that she was looking forward to selling because she wanted to move to a retirement home. She expressed no emotional attachment to her home. This evidence was led by the plaintiff/appellant at trial. Mrs Lowe’s home was listed with a real estate agent named Coronis. Mr Maloney enquired of Elders Real Estate whether they had any properties listed that would suit his purpose. The salesman, Brodie Roselle, offered some suggestions, but they were not suitable to Mr Maloney. Mr Maloney asked Mr Roselle to approach Mrs Lowe. Mr Roselle did so and found that Mrs Lowe’s agency with Coronis was about to expire. Mr Roselle then approached Mrs Lowe and became her agent. He “took” her property to Mr Maloney. Having already made extensive enquiries as to the cost of developing Mrs Lowe’s blocks of land, Mr Maloney gave Mr Roselle two unconditional REIQ contracts, one for each lot. On one the purchaser was Holdings; on the other, Interlink. They were signed by Mr Maloney on behalf of his companies and were to be presented to Mrs Lowe by way of offer.

Ratio Decidendi

Legal Principle Established

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