Nicholson v Hilldove Pty Ltd & Ors - [2012] VSC 598

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

List C
S CI 2012 2198

BETWEEN

JOHN DAVID NICHOLSON	Plaintiff
And
HILLDOVE PTY LTD (ACN 114 760 771)	First Defendant
TERRABRIDGE PTY LTD (ACN 115 615 097)	Second Defendant
BENJAMIN PATRICK NIALL	Third Defendant
STEPHEN ALEXANDER CROPLEY	First Third Party
CROPLEY COMMERCIAL PTY LTD (ACN 141 601 890)	Second Third Party

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JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATE OF HEARING:	25-28 June 2012, 17-19 July 2012, 13-14 August 2012
DATE OF JUDGMENT:	14 December 2012
CASE MAY BE CITED AS:	Nicholson v Hilldove Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2012] VSC 598

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CONTRACT – Formation of contract – Whether contract executed by both parties – Whether parties intended to create legal relations – Whether contract was to be held in escrow pending approval of investors of vendor.

CONTRACT – Whether sole director of vendor had authority to execute the contract – Knowledge of purchaser of restrictions on authority – Corporations Act 2001 (Cth) ss 128 and 129.

CONTRACT – Whether the parties intended to abandon the contract.

CONTRACT – Whether lease terms were vague and uncertain – effect on contract.

MISLEADING AND DECEPTIVE CONDUCT – Whether representation made by vendor that it would procure a lease from the landlord – Reliance on representation.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr. K. Hanscombe SC Ms. K. Bowshell	Williams Winter Solicitors
For the Defendants	Mr. T. Woodward SC Mr. J. Mereine	Minter Ellison
For the Third Parties	Mr. S. Horgan SC Ms. R. Sion	Rigby Cooke

HIS HONOUR:

A. Introduction

The Crown Hotel is located at 273 Main Street, Lilydale. It has 68 electronic gaming machines. It has other facilities including a liquor licence. By all accounts it is a profitable venue.

The Crown Hotel (“the Business”) is owned by Hilldove Pty Ltd (“Hilldove”). The majority of the share capital in Hilldove is and was at all relevant times owned by Blackwood Capital Partners Fund 1 Pty Ltd as trustee for BCP Fund 1 and Blackwood Capital Partners Fund 1A as trustee for BCP Fund 1A (“the Trust”). The Trust has a number of investors. Benjamin Patrick Niall (“Niall”) is the sole director of Hilldove.

The freehold situated at 273 Main Street, Lilydale is owned by Terrabridge Pty Ltd (“Terrabridge”). Niall is also the sole director of Terrabridge.

John David Nicholson (“Nicholson”) is a business broker. He has substantial experience in gaming venues and is always on the lookout for new venues to acquire on behalf of others.

Nicholson alleges that he purchased the Crown Hotel from Hilldove. He alleges that a Heads of Agreement (“the Agreement”) signed by him and Niall on behalf of Hilldove on 15 December 2011 is binding.

Hilldove denies that there is a binding contract. It contends that although each party separately signed the Agreement, a binding contract was not to take effect until Niall had obtained the approval of the investors in the Trust. Until…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] VSC 598
Decision Date: 14 December 2012

CaseChat Overview and Summary

Nicholson v Hilldove Pty Ltd & Ors involved a dispute over the formation of a contract, specifically whether a contract had been executed by both parties, whether the parties intended to create legal relations, and whether the contract was to be held in escrow pending approval from investors. The case was heard in the Supreme Court of Victoria.

The primary legal issues the court had to decide were whether the contract had been executed by both parties, whether the sole director of the vendor had the authority to execute the contract, and whether the purchaser had knowledge of restrictions on the authority. The court also considered whether the parties intended to abandon the contract, whether the lease terms were vague and uncertain, and whether there was misleading and deceptive conduct in relation to a representation made by the vendor.

The court found that the contract had been executed by both parties, and the sole director had the authority to execute the contract, despite the restrictions on their authority. The court held that there was no evidence that the parties intended to abandon the contract, and the lease terms were not vague or uncertain. Additionally, the court found that there was misleading and deceptive conduct in relation to the representation made by the vendor regarding procuring a lease from the landlord, and the purchaser relied on that representation.

The court ordered that the contract be enforced and that the vendor procure a lease from the landlord. The court also ordered that the vendor pay damages to the purchaser for the misleading and deceptive conduct.

Orders