Redevelopments Pty Limited v Enima Pty Limited - [2010] ACTCA 13

REDEVELOPMENTS PTY LIMITED v ENIMA PTY LIMITED [2010]
ACTCA 13 (25 June 2010)

APPEAL – appeal from orders of a single judge of the Supreme Court.

CONTRACTS – options and contract provisions – failure of contractual terms to reflect objective intention of parties – implied terms – implied duty to co-operate to do acts necessary for contract performance – not essential to performance of obligations by either party – objective theory of contract - terms of option and contract should not be subordinated to common assumption.

REMEDIES – equitable remedies – rectification of a contract – estoppel.

Land (Planning and Environment) Act 1991 (ACT), s 184A

Enima Pty Limited v Redevelopments Pty Limited [2009] ACTSC 95
Secured Income Real Estate (Australia) Ltd v St. Martins Investments Pty Ltd (1979) 144 CLR 596
Himbleton Pty Ltd v Kumagai (NSW) Pty Ltd (1991) 29 NSWLR 44
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
Toll (FGC) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151
B P Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1978) 52 ALJR 20
Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348
Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507
Australian Gypsum Ltd & Australian Plaster Co Ltd v Hume Steel Ltd (1930) 45 CLR 54
Slee v Warke (1949) 86 CLR 271
Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336
Pukallus v Cameron (1982) 180 CLR 447
Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407
Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130
Waltons Stores (Interstate) Ltd v Maher and Anor (1988) 164 CLR 387

Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226
Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

No. ACTCA 22 - 2009
No. SC 691 of 2008

Judges: Gray P, Penfold and Buchanan JJ
Court of Appeal of the Australian Capital Territory
Date: 25 June 2010

IN THE SUPREME COURT OF THE       )          No. ACTCA 22 - 2009
  )          No. SC 691 of 2008
AUSTRALIAN CAPITAL TERRITORY    )
  )

COURT OF APPEAL )

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:REDEVELOPMENTS PTY LIMITED
Appellant

AND:ENIMA PTY LIMITED
Respondent

ORDER

Judges:  Gray P, Penfold and Buchanan JJ
Date:  25 June 2010
Place:  Canberra

THE COURT ORDERS THAT:

The appeal be allowed with costs.
The orders made by Justice Refshauge on 28 July 2009 in this matter be discharged.
The orders made by Justice Refshauge on 1 October 2009 at the conclusion of the trial of this matter be set aside.
The…

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: [2010] ACTCA 13
Decision Date

CaseChat Overview and Summary

The Court of Appeal of the Australian Capital Territory heard an appeal from orders made by a single judge of the Supreme Court. The dispute concerned the purchase of a Crown lease for land at Macquarie, ACT, upon which an hotel was situated. The appellant, Redevelopments Pty Limited, purchased the lease from the respondent, Enima Pty Limited, under a call option deed and subsequent contract of sale. The respondent sought to enforce a higher purchase price than that stipulated in the contract, alleging that the appellant had failed to fulfil an assumed obligation to lodge a development application, which would have triggered a change of use charge and, in the respondent's view, a higher effective purchase price.

The central legal issues before the Court of Appeal were whether the trial judge erred in implying a term into the contract, rectifying the contract, or finding an estoppel against the appellant. Specifically, the court had to determine if a common assumption between the respondent and the original option holder, Mbark Pty Ltd, that a development application would be lodged before the option was exercised, could override the express terms of the option and contract. The court also considered whether the appellant, as a nominee of Mbark, was bound by any equities or assumptions that existed between the respondent and Mbark, and whether there was an implied duty on the appellant to co-operate in achieving a higher purchase price for the respondent.

The Court of Appeal found that the trial judge's conclusions were not sufficiently supported by the evidence. The court held that the express terms of the option and contract did not impose an obligation on Mbark or the appellant to make or pursue a development application. The court applied the objective theory of contract, emphasising that the meaning of contractual terms is determined by what a reasonable person would understand them to convey, rather than by subjective intentions. It was held that the appellant, as a nominee, was entitled to rely on the terms of the option and contract as they stood, and was not bound by prior assumptions between the respondent and Mbark that were not reflected in those terms. The court distinguished between an implied duty to co-operate in fundamental obligations and acts necessary for a party to gain a benefit, finding that the latter did not apply here, and that the contract adequately accommodated the absence of a development application.

The appeal was allowed with costs. The orders made by the trial judge, including the declaration regarding the purchase price, rectification, and estoppel, were discharged and set aside. The originating claim and statement of claim were dismissed with costs.

Orders