Medsara Pty Ltd v Sande

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.