La Fontaine v La Fontaine - [2009] VSCA 305

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No 3911 of 2008

RAYMOND LEONARD LA FONTAINE
	Appellant
v
PETER FRANCIS LA FONTAINE	Respondent

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JUDGES:	MAXWELL P, NETTLE JA and BYRNE AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	24 November 2009
DATE OF JUDGMENT:	18 December 2009
MEDIUM NEUTRAL CITATION:	[2009] VSCA 305
JUDGMENT APPEALED FROM:	La Fontaine v La Fontaine (Unreported, County Court of Victoria, Judge Lewitan, 27 November 2008)

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CONTRACT – Repudiation – Sale of units in unit trust – Agreed purchase price $120,000 – Appellant withheld $5,000 – Whether conduct evinced intention not to perform contract – Repudiation established – Appeal dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr La Fontaine appeared in person
For the Respondent	Dr P T Vout	Francis V Gallichio

MAXWELL P
NETTLE JA
BYRNE AJA:

This is an appeal from a decision of Judge Lewitan, who held that the respondent (Peter) had validly terminated an agreement with the appellant (his brother, Raymond) based on Raymond’s repudiatory conduct. Under the agreement, Peter was to transfer to Raymond his units in a trust in which the brothers were equal unit holders, and Raymond was to pay Peter the sum of $120,000. As will appear, Raymond did not pay the sum in full. Peter treated the refusal to pay in full as a repudiation and terminated the agreement.

Raymond, who appeared in person at the hearing, appeals on the ground that her Honour was wrong to characterise his conduct as repudiatory and misapplied the law relating to repudiation of contract. In our view, for reasons which follow, her Honour’s decision was correct in fact and law, and the appeal must be dismissed.

Factual circumstances

On behalf of their respective family trusts, Peter and Raymond are equal unit holders in the Melbourne Development Unit Trust (‘the Trust’). The Melbourne Development Company Pty Ltd (‘MDC’ or ‘the development company’) is trustee of the Trust. Raymond and Peter are directors of and equal shareholders in MDC. Raymond was sole shareholder and director of another company, which traded as Melbourne Building Company (‘MBC’).

In May 2002, MDC purchased land in Black Rock for the purpose of a building development. On 22 August 2002, Raymond and Peter entered a partnership to complete that development; and MDC engaged MBC as builder to carry out the development.

Over the following months, the brothers’ business relationship broke down. They entered negotiations to terminate the partnership. An agreement was brokered by their father, Barry La Fontaine, whereby Raymond was to pay Peter $140,000.00 and Peter would relinquish his share of MDC. This agreement was not performed.

On 21 September 2004, Raymond and Peter entered a contract (‘the agreement’) under which Peter agreed to transfer his units in the Trust to Raymond for $120,000.00. Raymond agreed to make that payment within 60 days of the agreement, or earlier if he obtained finance before that date. On 20 November 2004 (the last day for payment), Raymond paid Peter $10,000.

In mid-December 2004 Peter’s solicitor wrote…

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: [2009] VSCA 305
Decision Date: 18 December 2009

CaseChat Overview and Summary

In the case of La Fontaine v La Fontaine, the appellant, the buyer, was in dispute with the respondent, the seller, over the sale of units in a unit trust. The agreed purchase price was $120,000, but the appellant withheld $5,000, claiming to be protecting themselves against a potential shortfall in the trust. The court was tasked with determining whether the conduct of the appellant amounted to a repudiation of the contract.

The primary legal issue before the court was whether the appellant's conduct demonstrated an intention not to perform the contract. The court examined the circumstances and the language used by the appellant to understand their intentions. The appellant's assertion that they were withholding the money to protect themselves against a shortfall in the trust was scrutinised to determine if it constituted a repudiation of the contract. The court held that the conduct and communications of the appellant did indeed evince an intention not to perform the contract, establishing a repudiation.

Upon careful consideration of the evidence and the applicable legal principles, the court found that the appellant's actions amounted to a repudiation of the contract. The court dismissed the appeal, affirming the decision that the appellant had repudiated the contract. This decision underscores the importance of clear and unequivocal communication in contractual relationships and the consequences of failing to perform as agreed.

The final orders of the court were to dismiss the appeal and affirm the decision of the lower court that the appellant had repudiated the contract, with no further orders for costs or otherwise.

Orders