Liberty Grove (Concord) Pty Ltd v Mirvac Projects Pty Ltd

Liberty Grove (Concord) Pty Ltd brought an action against Mirvac Projects Pty Ltd for breach of contract. The dispute arose from a profit share arrangement contained in a written contract between the parties. The court was tasked with interpreting the terms of the agreement and determining whether the parties had complied with their contractual obligations.

The key legal issues included the admissibility of evidence regarding negotiations prior to the execution of the written contract. The court also had to determine whether certain practices, such as the calculation of an internal rate of return, were considered 'accounting practices' or 'the normal accounting practices of the defendant'. Additionally, the court needed to decide whether the contract dictated the manner of calculation of the internal rate of return and whether the discount rate should be compounded on a monthly or annual basis.

In reaching its decision, the court examined the contract and considered the principles of contract interpretation. The court held that evidence of negotiations prior to the execution of the written contract was not admissible. The court also found that the calculation of an internal rate of return and the application of the formula to derive this rate were not properly described as 'an accounting practice' or 'accounting practices'. Furthermore, the court concluded that the contract did not dictate the manner of calculation of the internal rate of return, and the discount rate should be compounded on an annual basis.

The court found in favour of Liberty Grove (Concord) Pty Ltd, awarding damages for breach of contract.