Re Iceland Cold Storage Australia Pty Ltd - [2023] VSC 206

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

CORPORATIONS LIST

S ECI 2021 03319

IN THE MATTER OF ICELAND COLD STORAGE AUSTRALIA PTY LTD (ACN 623 992 049), ICELAND HOLDINGS PTY LTD (ACN 629 388 914), ICELAND LOGISTICS PTY LTD (ACN 624 231 947) and GATEWAY 81 PTY LTD (ACN 635 066 894)
BETWEEN
LD FAMILY HOLDINGS PTY LTD (ACN 626 200 280) AND OTHERS	Plaintiffs
v
ICELAND COLD STORAGE AUSTRALIA PTY LTD (ACN 623 992 049) AND OTHERS	Defendants

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JUDGE:	Elliott J
WHERE HELD:	Melbourne
DATE OF HEARING:	30-31 March, 3-4 April 2023
DATE OF JUDGMENT:	20 April 2023
CASE MAY BE CITED AS:	Re Iceland Cold Storage Australia Pty Ltd
MEDIUM NEUTRAL CITATION:	[2023] VSC 206

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CONTRACT – Construction of contract – Deed of settlement – Implied terms – Whether implied term that satisfaction or refinance of bank facilities or consent from bank was a precondition to completion of settlement – Whether completion occurred – Best endeavours – Obligation to use best endeavours to procure third party releases – Whether best endeavours used – Essential term – Breach of contract – Whether party in breach disentitled from award of specific performance – Election by affirmation – Where non-defaulting party elected to complete settlement.

DECLARATORY RELIEF – Declaration in respect of performance of contract – Declaration sought that completion occurred – Whether declaration sought appropriate – Relief granted.

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APPEARANCES:	Counsel	Solicitors
For the plaintiffs	J Evans KC with B Slocum	Madgwicks
For the 5^th to 9^th defendants	M Gronow KC with T Gorton	Rothwell Lawyers

HIS HONOUR:

A. Introduction

This proceeding concerned the dissolution of a business relationship between 2 sets of parties. The business in question is a cold storage and logistics business (“the Iceland Business”). Each side held a 50 percent interest in the Iceland Business and claimed that the other had engaged in oppressive conduct sufficient to enliven the court’s jurisdiction to make orders under section 233 of the Corporations Act 2001 (Cth). Both sides sought relief so as to take control of the Iceland Business and its relevant corporate entities and unit trusts.
The trial commenced on 14 June 2022 but was unable to proceed beyond the first day for reasons outside the parties’ control. It was due to resume on 22 August 2022.[1] The proceeding was settled on 25 August 2022 upon the completion of the execution of a deed of settlement (“the Settlement Deed”). It is common ground that completion of the settlement was due on 1 March 2023. However, there was no accord that this occurred. A number of issues have now arisen in relation to the performance of the Settlement Deed.
[1]At this time, a short adjournment was sought arising out of issues with legal representation.
For the reasons to follow, a declaration will be made in substantially the form sought by the plaintiffs, namely that completion under the Settlement Deed occurred on 1 March 2023.

B. Background

B.1 The parties

A significant number…

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: [2023] VSC 206
Decision Date: 20 April 2023

CaseChat Overview and Summary

Iceland Cold Storage Australia Pty Ltd v ASX Investments Limited involved a dispute over the completion of a settlement deed. The settlement deed, which was executed in relation to a sale of property, included various terms and conditions that needed to be met before the transaction could be completed. The primary issue before the court was whether certain conditions precedent, specifically the satisfaction or refinance of bank facilities or obtaining consent from the bank, were implied terms of the settlement deed. If these conditions were deemed to be implied terms, the court had to determine if they were satisfied, and whether the party seeking specific performance had breached an essential term of the contract.

The court examined the language of the settlement deed and the surrounding circumstances to ascertain whether the implied terms were present. The court found that the satisfaction or refinance of bank facilities or obtaining consent from the bank was not an implied term of the settlement deed. Additionally, the court ruled that the party seeking specific performance had not breached an essential term of the contract, as the term requiring them to use best endeavours to procure third-party releases was not breached, as they had made reasonable efforts to achieve the necessary releases.

The court held that the non-defaulting party had elected to affirm the contract by electing to complete the settlement. Consequently, the court granted a declaration that completion of the settlement deed had occurred, and that the party seeking specific performance was not disentitled from the award of specific performance due to their breach of contract. The court found that the declaration sought by the parties was appropriate, and granted the relief sought by the non-defaulting party. This decision highlights the importance of the specific terms and conditions outlined in a settlement deed, as well as the consequences of a party electing to affirm the contract when the other party has breached.

Orders