Regreen Asset Holdings Pty Ltd v Castricum Brothers Australia Pty Ltd

Regreen Asset Holdings Pty Ltd (the applicant) appealed against a decision of the Supreme Court of Victoria, which had dismissed its application for relief from a judgment that it owed the Castricum Brothers Australia Pty Ltd (the respondent) approximately $300,000. The applicant and the respondent had entered into a contract for the sale of rendering equipment, while the respondent and the sole director of the applicant had separately entered into a contract for the sale of the land on which the equipment was situated. The applicant argued that there was an implied term in the equipment contract that its obligation to complete was subject to the settlement of the land contract. The Supreme Court had rejected this argument and dismissed the applicant’s application for relief from the judgment.

The central issue for the Court of Appeal was whether the Supreme Court judge had correctly applied the principles of implication of terms in contract law. Specifically, the Court of Appeal needed to determine whether the Supreme Court judge had misapplied the decision in BP Refinery (Westernport) Pty Ltd v Shire of Hastings. The Court of Appeal also needed to consider whether the Supreme Court judge had erred in taking into account evidence of pre-contractual conduct and in failing to take into account evidence of post-contractual conduct. The Court of Appeal held that the Supreme Court judge had misapplied the principles in BP Refinery by failing to consider the context of the contracts and the conduct of the parties. The Court of Appeal further held that the Supreme Court judge had erred in failing to take into account evidence of post-contractual conduct.

The Court of Appeal allowed the applicant’s appeal, setting aside the decision of the Supreme Court. The Court of Appeal held that there was an implied term in the equipment contract that the applicant’s obligation to complete was subject to the settlement of the land contract. The Court of Appeal remitted the matter to the Supreme Court for further consideration of the applicant’s application for relief from the judgment. The Court of Appeal did not make any orders as to costs.