Palgo Holding Pty Ltd v Gowans

Palgo Holding Pty Ltd (the appellant) appealed to the High Court of Australia against a decision of the Supreme Court of Victoria, Court of Appeal. The dispute concerned the interpretation and enforceability of a contract for the sale of land, specifically whether the contract was void for uncertainty or for contravention of the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)). The primary issue was whether a clause requiring the vendor to obtain a "satisfactory development approval" from the local council rendered the contract void.

The High Court was required to determine whether the term "satisfactory development approval" was sufficiently certain to be enforceable. It also had to consider whether, if the term was uncertain, the contract was void ab initio, or if the uncertainty could be severed. Furthermore, the Court had to assess whether the conduct of the parties in entering into the contract, or in their subsequent dealings, contravened any provisions of the *Trade Practices Act 1974*, particularly concerning misleading or deceptive conduct.

The High Court held that the term "satisfactory development approval" was not void for uncertainty. The majority reasoned that the term imposed a contractual obligation on the vendor to take reasonable steps to obtain the approval, and that the standard of "satisfactory" was to be assessed objectively, considering what a reasonable council would approve in the circumstances. The Court found that the vendor had not acted in breach of this obligation. Regarding the *Trade Practices Act*, the Court found no contravention, as there was no evidence of misleading or deceptive conduct by the vendor.

The appeal was dismissed.