Masonic Homes Ltd v Oppedisano

Case [2016] SASC 196

Supreme Court of South Australia

(Civil)

MASONIC HOMES LTD v OPPEDISANO & PLATINUM PROPERTY RETIREMENT PTY LTD

[2016] SASC 196

Judgment of The Honourable Justice Doyle

16 December 2016

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - ILLEGAL AND VOID CONTRACTS

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS

The plaintiff and the first defendant entered into a contract for the sale and purchase of a portion of a larger parcel of land to be acquired by the first defendant.  The land the subject of the contract was defined in the contract as the land marked “A” on the plan in Annexure B to the contract. The plan in Annexure B to the contract was a copy of the Certificate of Title for the larger parcel of land, with a hand drawn rectangle in the bottom right hand corner containing the words “Masonic Village 4 ha Indicative Only”. 

The plaintiff contended that the contract was void for uncertainty; that the land in the contract was not sufficiently certain as to subject matter in that the area and dimensions of the land were unclear, and were not capable of being ascertained from the terms of the contract (at least not without further agreement between Masonic Homes and PPR); and that it was not sufficiently certain as to price as the purchase price was to be derived by a formula which required the area of the land to be established. The defendants denied that the contract was uncertain.  They also contended that, in any event, the plaintiff had elected to affirm the validity of the contract, or was estopped from asserting that the contract was void for uncertainty.

Held per Doyle J, dismissing the plaintiff’s claim:

1.      The contract is not void for uncertainty.

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; Byrnes v Kendle (2011) 243 CLR 253; Taluja v Shree Shirdi Sai Sansthan Sydney Ltd [2016] NSWCA 158; Ipex Software Services Pty Ltd v Hosking [2000] VSCA 239; Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429; York Air Conditioning and Refrigeration (A/sia) Pty Ltd v The Commonwealth (1949) 80 CLR 11; Equuscorp Pty Ltd v Belperio [2006] VSC 14; Equuscorp Pty Ltd v Antonopoulos [2008] VSCA 179, discussed.
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; White v Australian and New Zealand Theatres Ltd (1943) 67 CLR 266; County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193; Thorby v Goldberg (1964) 112 CLR 597; Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130; Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; Brice v Chambers [2014] QCA 310; Australian Securities and Investments Commission v Fortescue Metals Group Ltd (2011) 190 FCR 364; Hall v Busst

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Masonic Homes Ltd v Oppedisano [2016] SASC 196
Case
[2016] SASC 196
Decision Date

CaseChat Overview and Summary

In the case of Masonic Homes Ltd v Oppedisano, the primary dispute involved the interpretation and validity of a contract between Masonic Homes Ltd and Mr Oppedisano regarding the purchase of a portion of land for the development of a retirement village. The case was heard in the Supreme Court of South Australia. The central issue was whether the contract was void for uncertainty due to the imprecise description of the land to be purchased.

The court was required to decide whether the contract was sufficiently certain to be enforceable and, if so, how the area and dimensions of the land should be determined. The plaintiff argued that the contract was void for uncertainty due to the vague description of the land, while the defendant contended that the contract was clear enough and could be enforced. The court needed to interpret the contract and determine whether it established a mechanism for ascertaining the precise area and dimensions of the land.

The court concluded that the contract was not void for uncertainty. It held that the contract established a mechanism that enabled the location and dimensions of the leasehold land to be ascertained without further agreement between the parties. The court found that the contract allowed for the plaintiff to undertake a survey and prepare a final plan, which provided a means of determining the area and dimensions of the land. The court also noted that the contract included a structure plan that had to be agreed upon by the District Council of Light, which further facilitated the determination of the land's area and dimensions.

As a result, the court dismissed the plaintiff's claim for a declaration that the contract was void for uncertainty and declined to make a declaration as to the area and dimensions of the land. The court ruled that the contract should be enforced according to the construction articulated in its reasons and that any disputes regarding the area and dimensions of the land could be addressed if and when they arose.

Orders

Orders of the court

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Background

Background to the litigation

The parties otherwise relied upon documentary evidence in support of their respective cases. The narrative that follows constitutes the findings I have made based upon those documents.Factual Background As mentioned, Mr Oppedisano purchased the Development Land in 2007. It is an approximately 67 hectare parcel of land to the south of Roseworthy. Mr Oppedisano planned to develop the land. While the evidence only reveals some aspects of the communications between the parties, it is apparent that from as early as October 2008 there were communications between Masonic Homes and Mr Oppedisano in relation to the possibility of Masonic Homes purchasing a portion of the Development Land for the purpose of developing a retirement village, as part of the larger development contemplated by Mr Oppedisano. These communications included an email dated 20 October 2008 from Mr Doug Strain (the chief executive officer of Masonic Homes) to Mr Oppedisano, in which he confirmed Masonic Homes’ interest in progressing its consideration of the purchase of a portion of the Development Land with a view to developing a retirement village in the Roseworthy region. He went on to describe Masonic Homes’ commitment to expanding the retirement living options in South Australia by purchasing and developing sites of approximately 3 hectares to enable communities to be established in close proximity to relevant facilities, explaining that the Development Land appeared to be suitable for the type of retirement village contemplated by Masonic Homes. Mr Strain added that he expected to be able to provide an indicative price within a few days, but that if Masonic Homes did agree to an acquisition, the development of the retirement village would not commence until all appropriate infrastructure, planning approval and rezoning was in place for Mr Oppedisano’s larger development. By email dated 22 October 2008, Mr Strain provided Mr Oppedisano with an “indicative, non-binding pricing offer for the acquisition of a 3 hectare or so parcel of land within your proposed Roseworthy development site”. A range of indicative prices (or formulae for determining price) were given, which included a figure of $65 per square metre once planning approval had been gained for a retirement village of up to 120 living units. There is no evidence of the parties’ communications between this email and 24 April 2009. By letter dated 24 April 2009 from Mr Strain to Mr Oppedisano, Mr Strain set out the terms of an indicative non-binding offer from Masonic Homes. The letter identified a number of preconditions, which included a precondition that Mr Oppedisano obtain approval for the rezoning of the whole site to enable the progression of the larger development proposed by Mr Oppedisano. It also included a precondition that:You produc[e] a structure plan that facilitates the development and that has been agreed by the District Council of Light as being suitable for the development of a Statement of Intent and ultimate Development Plan Application, to allow development approval for a retirement living development on the subject land. Within that structure plan the location and relationship of the retirement living site must be identified in context to retail and service centres, access and transport, along with all other infrastructure to the site being identified.

Evidence

Evidence Before The Court

His Honour concluded that the lease, by providing for the plaintiff to undertake a survey and prepare a final plan, established a mechanism that enabled the location and dimensions of the leasehold land to be ascertained without further agreement between the parties, and was therefore valid.Evidence of Mr Pohl The plaintiff in these proceedings relied upon an expert report obtained from a surveyor, Mr Pohl. Mr Pohl was asked to determine the boundaries and area of the rectangle depicted in the plan in Annexure B to the Contract. Mr Pohl’s report explained that as the scale bar and dimensions of allotments 4 and 5[30] on the plan were barely legible, he purchased Lands Titles Office DP 45110, which was the source of the Certificate of Title Volume 5346 Folio 756 that had been copied to create Annexure B. From this, Mr Pohl was able to confirm that the scale was 1:8000.[31] Mr Pohl’s comparison of the plan with the Certificate of Title also revealed a northerly distortion in the plan relative to the Certificate of Title of about 3 per cent.[32][30] Allotments 4 and 5 together constitute the Development Land.[31] As this scale could be derived from the plan in annexure B, I do not consider that its use involved recourse to extrinsic materials that it would be impermissible to use in construing the Contract.[32] Which resulted in a difference for the north/south length of the entire Development Land (allotments 4 and 5) of about 45 metres, but significantly less for the north/south length of the Land. In determining the boundaries of the rectangle depicted on the plan, Mr Pohl used a 1:400 graduated ruler to measure and scale distances, thus resulting in rounding of plus or minus 5 metres. He used a 23 centimetre protractor, measuring angles to the nearest half a degree (or 30 minutes). Using the scale of 1:8000, and measurements as described in the preceding paragraph, Mr Pohl’s calculations produced a figure that did not mathematically close. Noting that this was to be expected due to the scaling limitations, Mr Pohl applied the “commonly used Bowditch adjustment” to the scaled dimensions to remove (in a manner involving proportional adjustments to the boundaries and angles) the misclosure.[33] Mr Pohl’s calculations produced a scaled version of the rectangle shown in the plan, with an area of 4.24 hectares.[33] The adjustments to the boundaries were between 0.51 metres and 1.68 metres. Mr Pohl added that if one were to factor in the plus or minus 5 metres rounding in the measurements he used, then the area of the rectangle was between 4.04 hectares and 4.46 hectares. Mr Pohl added that his calculation assumed the rectangle was drawn on a version of the plan that already contained the northerly distortion. If, on the other hand, he were to assume that the distortion occurred after the rectangle was drawn on the plan, then correction for this would result in reduced dimensions and an area of 4.16 hectares. In oral evidence it was confirmed that the distortion existed in the version of the plan annexed to the original version of the Contract.

Decision

Reasons for decision

For these reasons, if the Contract had been void for uncertainty, I do not consider that the defendants could have avoided a declaration to this effect on the basis of their contentions that the plaintiff elected to affirm the contract or that the plaintiff is estopped from asserting that the Contract is void for uncertainty. Conclusion Having concluded that the Contract is not void for uncertainty, it is appropriate that I dismiss the plaintiff’s claim for a declaration to the effect that the contract is void. The plaintiff seeks, in the alternative, a declaration as to the area and dimensions of the Land to be sold and purchased in accordance with the Contract. In my view it is not appropriate that I make an order to this effect. It will be apparent from my reasons the meaning that I consider the Contract relevantly bears, and hence the process by which the area and dimensions of the Land are to be determined. It is neither possible on the information available to me, nor desirable, that I go further than this. The appropriate course is for the Contract to run its course in accordance with the construction articulated in my reasons. If and when any dispute arises as to the area and dimensions of the Land thus arrived at, it may be appropriate for the parties to return to the Court for further orders. For the reasons set out, I dismiss the plaintiff’s claim.

Ratio Decidendi

Legal Principle Established

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