Gye & Associates (Plaintiffs) Perkes & Stone (Defendants)
CATCHWORDS:
Environmental Law - Environmental Planning and Assessment Act 1979 - Process necessary to obtain a rezoning of land - Commission of Inquiry - Failure to properly prepare for or present submissions to Commission of Inquiry - Contract - Joint venture contract related to lands proposed to be initially rezoned to permit redevelopment as residential subdivision - Oral representations inducing entry into Heads of Agreement subsequently followed by formal agreement - Construction of Contract - Commercial and business transaction - Whether defendants warranted that rezoning would be achieved - Whether defendants strictly liable for failure to obtain rezoning - Defendants' covenant to provide their expertise at cost to promptly secure rezoning of land - Obligation construed as obligation to use best endeavours [this is the promise] to secure the rezoning of the land promptly [this is the intended result of the promise] by the use of their expertise [this is the tool by the medium of which the best endeavours are to be applied] - Alternatively term to be implied into subject agreements to the same effect - Parole Evidence Rule - General rule that contract be interpreted objectively - Relevant intention is intention manifested in the words of contract or conduct of the parties as reasonably understood by the other party - Evidence of negotiations prior to execution of Heads of Agreement and formal agreement not admissible to establish subjective intention and expectations of parties, but admissible to establish objective background facts known to both parties and the subject matter of the contract - Rectification - Implied Terms - Oral evidence of parties' actual intention not admissible to establish implied term - Oral evidence admissible to negative implication of a term - Causation - Breach of contract need only be a cause of damage - Need not be sole or predominant cause - Causal relationship between individual breaches and ultimate loss - Breaches of Heads of Agreement and formal agreement both causes of the loss - Presumption against wrongdoers - Applicable where action of parties have made…
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
AGLC
Lakatoi Universal Pty Ltd v Walker [2000] NSWSC 113
Case
[2000] NSWSC 113
Decision Date
CaseChat Overview and Summary
Lakatoi Universal Pty Ltd, the plaintiff, sought relief against Walker and others, the defendants, over a failed joint venture related to a residential subdivision project. The plaintiff alleged that the defendants breached a joint venture agreement by failing to secure the necessary rezoning of the land. The case was heard in the Supreme Court of New South Wales. The primary legal issues before the court were whether the defendants warranted that rezoning would be achieved, whether they were strictly liable for the failure to obtain rezoning, and the appropriate measure of damages for the breach of the contract.
The court found that the defendants did not warrant rezoning but were under an obligation to use their best endeavours to secure it. This obligation was construed as an implied term in the agreement. The court also ruled that the plaintiff's loss of commercial opportunity due to the defendants' failure to secure rezoning entitled the plaintiff to damages, even if the chance of success was less than 50%. The court rejected the notion that the breach needed to be the sole or predominant cause of the loss, holding that any causal relationship between the breaches and the ultimate loss was sufficient. The court further found that the plaintiff's loss of chance was of some value, necessitating an assessment of damages based on possibilities and probabilities.
The court awarded damages to the plaintiff, taking into account the potential commercial opportunities that were lost due to the defendants' breaches. The court also examined the relationship between the parties, noting that a joint venture could give rise to fiduciary obligations even before the precise terms of the joint venture arrangements were settled. The court held that the defendants breached these fiduciary duties by failing to act in the best interests of the joint venture. Finally, the court made orders for the defendants to pay damages to the plaintiff and for costs.