Medsara Pty Ltd v Sande

Case [2005] NSWCA 40
CITATION:

Medsara Pty Limited v Sande & Ors [2005] NSWCA 40
HEARING DATE(S):

01/03/05
 
JUDGMENT DATE: 


15 March 2005

JUDGMENT OF:

Handley JA at 1; Ipp JA at 2; Young CJ in Eq at 124
DECISION:

(1) The appeal is upheld to the extent that the trial judge's order that Medsara pay the Vendors' indemnity costs be set aside and, in lieu thereof, there be an order that Medsara pay the Vendors' costs of the trial (2) The appeal is otherwise dismissed (3) Medsara to pay 90% of the Vendors' costs of the appeal.
CATCHWORDS:

CONTRACT - Unilateral mistake - Unconscionable conduct in knowingly taking advantage of another party's mistake - Rectification. - COSTS - Indemnity basis - More than unconscionable conduct must be established. - EVIDENCE - Credibility of witnesses - Failure to testify - Rule in Jones v Dunkel (1959) 101 CLR 298 applies. ND
CASES CITED:

Harrison v Schipp [2001] NSWCA 13
Jones v Dunkel (1959) 101 CLR 298
Liebler v Air New Zealand Limited (No 2) [1999] 1 VR 1
Oshlack v Richmond River Council (1998) 193 CLR 72
Taylor v Johnson (1983) 151 CLR 422
Tutt v Doyle (1997) 42 NSWLR 10
PARTIES:

Medsara Pty Limited (Appellant)
Joseph & Diane Sande
Andrew Terides
Esther El-Hage
Tony Dbias
Shane Hugh Mills
James & Sara Moreland (Respondents)

FILE NUMBER(S):

CA 40283/04
COUNSEL:

D F Jackson QC/G Curtin (Appellant)
B Walker SC/M B Evans (Respondents)
SOLICITORS:

Kemp Strang (Appellant)
Mallesons Stephen Jacques (Respondents)

LOWER COURT JURISDICTION:

Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):

SC 4098/03

LOWER COURT JUDICIAL OFFICER:

Burchett AJ



                          CA 40283/04
                          SC 4098/03

                          HANDLEY JA
                          IPP JA
                          YOUNG CJ in Eq

                          Tuesday 15 March 2005
MEDSARA PTY LIMITED v SANDE & ORS
Judgment

1 HANDLEY JA: I agree with Ipp JA.

2 IPP JA:


      The claim for rectification and the findings of the trial judge

3 This appeal involves six separate but mutually inter-dependent sets of contracts for put and call options relating to six adjoining lots of land. These sets of contracts effected “delayed sales” of the properties in question by the six respondents (“the Vendors”) to the appellant, Medsara Pty Limited. Before Burchett AJ the Vendors claimed rectification and specific performance of the contracts as rectified, together with an inquiry as to damages. They also claimed indemnity costs.

4 The claim for rectification was based on the doctrine in Taylor v Johnson (1983) 151 CLR 422 (at 432 to 433). In Tutt v Doyle (1997) 42 NSWLR 10 this Court applied Taylor v Johnson to a claim for rectification. Meagher JA (with whom Brownie AJA agreed) said (at 12 to 13):

          “[T]he real question involved in the case emerges: is it unconscionable for one party knowingly to take advantage of another party’s mistake? An affirmative answer seems to me to flow from the High Court’s decision in Taylor v Johnson …”

      See also Liebler v Air New Zealand Limited (No 2) [1999] 1 VR 1.

5 The trial judge applied…

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AGLC
Medsara Pty Ltd v Sande [2005] NSWCA 40
Case
[2005] NSWCA 40
Decision Date

CaseChat Overview and Summary

Medsara Pty Ltd (Medsara) and the vendors of a property (the Vendors) were the parties involved in a dispute before the New South Wales Court of Appeal. The core of the disagreement concerned a contract for the sale of land, where Medsara sought to rely on a unilateral mistake regarding the property's zoning. Medsara argued that it had entered into the contract under a mistaken belief about the zoning, and that the Vendors had acted unconscionably by knowingly taking advantage of this mistake. Medsara sought rectification of the contract to reflect its mistaken understanding.

The Court of Appeal was required to determine whether Medsara had established a case of unilateral mistake sufficient to warrant rectification of the contract. Furthermore, the court had to consider whether the Vendors' conduct amounted to unconscionable conduct in exploiting Medsara's mistake. Finally, the court was tasked with reviewing the trial judge's order regarding costs, specifically whether indemnity costs were appropriate.

The Court of Appeal found that Medsara had not established the necessary elements for rectification based on unilateral mistake. The court applied the principles governing unilateral mistake, emphasizing the high threshold required to set aside or rectify a contract on this basis. Regarding the unconscionable conduct claim, the court determined that while the Vendors may have been aware of Medsara's mistake, their actions did not rise to the level of unconscionability required to grant relief. The court also considered the rule in *Jones v Dunkel* in relation to the credibility of witnesses.

The appeal was partially successful. The Court of Appeal set aside the trial judge's order for Medsara to pay the Vendors' indemnity costs, substituting it with an order for Medsara to pay the Vendors' costs of the trial. The appeal was otherwise dismissed, and Medsara was ordered to pay 90% of the Vendors' costs of the appeal.

Orders

Orders of the court

(1) The appeal is upheld to the extent that the trial judge's order that Medsara pay the Vendors' indemnity costs be set aside and, in lieu thereof, there be an order that Medsara pay the Vendors' costs of the trial (2) The appeal is otherwise dismissed (3) Medsara to pay 90% of the Vendors' costs of the appeal.

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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