Mackenzie v Kentcade Properties Pty Ltd

Case [2012] QSC 299

SUPREME COURT OF QUEENSLAND

CITATION:

Mackenzie v Kentcade Properties Pty Ltd [2012] QSC 299

PARTIES:

DAVID JOHN MACKENZIE AND VICKI ELIZABETH MACKENZIE IN THEIR OWN CAPACITY AND AS TRUSTEES FOR THE VEMAC TRUST
(plaintiffs)
v
KENTCADE PROPERTIES PTY LTD
ACN 081 619 089
(defendant)

FILE NO:

5438 of 2012

DIVISION:

Trial Division

PROCEEDING:

Claim

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

5 October 2012

DELIVERED AT:

Brisbane

HEARING DATE:

17 September 2012

JUDGE:

Applegarth J

ORDER:

The Management Rights Contract and the Property Contract referred to in the Claim be specifically performed.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – OTHER MATTERS – where plaintiffs own Lot 9 and hold management rights associated with a  resort developed by the defendant – where plaintiffs entered into an Option Agreement granting them the option to sell Lot 9 and the management rights to the defendant on the happening of certain “put option events” – where plaintiffs contend certain put options occurred, entitling them to exercise the option – whether put option events occurred within the meaning of the Option Agreement – whether plaintiffs validly exercised their option

EQUITY – EQUITABLE REMEDIES – SPECIFIC PERFORMANCE – DEFENCES – From conduct of parties – Want of fairness – where plaintiffs entitled to order for specific performance – whether plaintiffs exercised option in breach of implied obligation of good faith – whether discretion not to order specific performance should be exercised on the grounds of unfairness to the defendant and third parties

Acts Interpretation Act 1954 (Qld), s 49
Corporations Act 2001 (Cth), s 601ED

Property Agents and Motor Dealers Act 2000 (Qld), ss 114, 115

AMCO Wrangler Ltd v Sukkar (1985) 1 NSWLR 577, cited
Antaios Compania Naviera SA v Salen Rederierna AB  [1985] AC 191, cited
Blackett v Clutterbuck Bros (Adelaide) Ltd [1923] SASR 301, cited
Blomley v Ryan (1956) 99 CLR 362, cited
Bowman v Durham Holdings Pty Ltd  (1973) 131 CLR 8, cited
Edwards v Stocks [2008] TASSC 12, cited

Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471, cited

Ex parte Lesiputty (1947) 47 SR(NSW) 433, cited
Flowers v Vescio [2006] NSWCA 342, cited
Larter v Skone James [1976] 1 WLR 607, cited

Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, cited

R v Arkwright (1848) 12 QB 96, cited
R v Fairford Justices; ex parte Brewster [1976] QB 600, cited

Rainy Sky S.A. and ORs v Kookmin Bank [2011] UKSC 50, cited

Ruzeu v Massey-Ferguson (Aust) Ltd [1982] VR 529, cited

Toll (FGCT) Pty Limited v Alphapharm Pty Ltd (2004) 219 CLR 165, cited

COUNSEL:

G A Thompson SC and D M Turner for the plaintiffs
F L Harrison QC and M P Amerena for the defendant

SOLICITORS:

MacGillivrays Solicitors for the plaintiffs
Greenhalgh Pickard Solicitors for the defendant

  1. The plaintiffs (“the Mackenzies”) hold the management rights associated with the Coolum Seaside Resort, which…

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AGLC
Mackenzie v Kentcade Properties Pty Ltd [2012] QSC 299
Case
[2012] QSC 299
Decision Date

CaseChat Overview and Summary

The case of Mackenzie v Kentcade Properties Pty Ltd involved the plaintiffs, who own Lot 9 and hold management rights associated with a resort developed by the defendant, Kentcade Properties Pty Ltd. The plaintiffs had entered into an Option Agreement with the defendant, granting them the option to sell Lot 9 and the management rights to the defendant upon the occurrence of certain "put option events". The plaintiffs claimed that certain put option events had occurred, entitling them to exercise the option. The court had to determine whether these events occurred within the meaning of the Option Agreement and whether the plaintiffs validly exercised their option.

The legal issues before the court were whether the put option events occurred as defined in the Option Agreement and whether the plaintiffs had validly exercised their option. The court examined the terms of the Option Agreement and the evidence presented to determine the occurrence of the put option events. Additionally, the court considered the plaintiffs' conduct in exercising the option and whether they breached any implied obligation of good faith. The plaintiffs sought an order for specific performance of the Management Rights Contract and the Property Contract, which the defendant opposed on the grounds of unfairness and alleged breaches of the implied duty of good faith.

The court found that the put option events had indeed occurred as defined in the Option Agreement. The court further held that the plaintiffs had validly exercised their option. The court determined that the plaintiffs' conduct in exercising the option did not breach any implied obligation of good faith. The court found that the discretion not to order specific performance should not be exercised on the grounds of unfairness to the defendant and third parties. Therefore, the court ordered specific performance of the Management Rights Contract and the Property Contract.

In summary, the court ruled in favour of the plaintiffs, finding that the put option events had occurred and that the plaintiffs had validly exercised their option. The court rejected the defendant's defences and ordered specific performance of the contracts. The plaintiffs were entitled to proceed with the sale of Lot 9 and the management rights to the defendant.

Orders

Orders of the court

The Management Rights Contract and the Property Contract referred to in the Claim be specifically performed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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