Lakatoi Universal Pty Ltd v Walker

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.