SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd - [2016] NSWSC 362

Supreme Court

New South Wales

Medium Neutral Citation: SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2016] NSWSC 362
Hearing dates: 29 and 30 March 2016
Decision date: 04 April 2016
Jurisdiction: Equity - Expedition List
Before: Stevenson J
Decision:
Contract to be rectified

Catchwords: CONTRACT – rectification – auction – where contract specified purchase price to be inclusive of GST -whether common intention that purchase price be exclusive of GST
Cases Cited: Ashton v Monteleone [2010] NSWSC 258
Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603
Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336
Pukallus v Cameron (1982) 180 CLR 447
Category: Principal judgment
Parties: SAMM Property Holdings Pty Ltd (Plaintiff)
Shaye Properties Pty Ltd (Defendant)
Representation:
Counsel:
G George with J Bennett (Plaintiff)
M P Cleary (Defendant)
Solicitors:
Reimer Winter Williamson (Plaintiff)
Newhouse & Arnold Solicitors (Defendant)

File Number(s): SC 2015/322545

Judgment

The defendant, who I will call the “Vendor”, listed its industrial property at Wetherill Park for public auction on 19 August 2015.
The plaintiff, who I will call the “Purchaser”, sent its agent, Mr Jody (referred to in the evidence as “Joe”) Parker, to the auction to bid on its behalf.
Ultimately, Mr Parker bid $3.325 million to purchase the property. The auctioneer, Mr Jesse Davidson (who I will call the “Auctioneer”) accepted that bid.
Contracts were executed and exchanged in the form of a draft that had been circulated prior to the auction.
The box on the front page of the contract marked “GST: Taxable supply…yes in full” was crossed “X”.
Clause 13.2 of the contract read:

“Normally, if a party must pay the price…to the other party under this contract, GST is not to be added to the price...”.

Clause 1 of the contract defined “normally” as “subject to any other provision of this contract”.
There was no “other provision” in the contract modifying the effect of cl 13.2.
Thus, the effect of the contract, as executed, was to provide for a purchase price of $3.325 million inclusive of GST.
The Vendor alleges that, despite the form of the contract as executed, the “clear and common intention” of the parties was that the contract price be $3.325 million plus GST and seeks rectification of the contract accordingly.
This case raises issues similar to those considered by Gzell J in Ashton vMonteleone [2010] NSWSC 258.

Test of rectification

Rectification is available where there is “clear and convincing proof” (see the cases gathered at Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [451] per Campbell JA) that by reason of the common mistake of the parties, the document they have signed does not “embody the final intention of the parties” (per Wilson J in Pukallus v Cameron (1982) 180 CLR 447 at 452).
In Pukallus v Cameron Wilson J also said at 452, citing Mason J’s familiar observations in Maralinga Pty Ltd v Major Enterprises…

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.

Continue reading SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd

Details

AGLC: SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2016] NSWSC 362
Case: [2016] NSWSC 362
Decision Date: 04 April 2016

CaseChat Overview and Summary

In the matter of SAMM Property Holdings Pty Ltd versus Shaye Properties Pty Ltd, the court considered the application of a rectification of a contract for the sale of a property. The dispute arose following an auction sale where the contract for sale indicated a purchase price that included GST, while the parties had a common understanding that the price was to be exclusive of GST. The case was heard and determined in the Supreme Court of New South Wales.

The central legal issue before the court was whether the contract could be rectified to reflect the parties' common intention that the purchase price was to be exclusive of GST. This required the court to consider the circumstances surrounding the formation of the contract, the evidence of the parties' communications, and whether there was a mutual mistake in the written contract. The court had to determine if it was appropriate to rectify the written contract to align with the parties' common intention.

The court found that there was indeed a mutual mistake in the written contract, which omitted the fact that the purchase price was to be exclusive of GST. The evidence presented by both parties demonstrated a clear common intention that the price was exclusive of GST. Given the mutual mistake and the parties' common intention, the court exercised its equitable jurisdiction to rectify the contract. The court ordered that the contract be amended to reflect that the purchase price was exclusive of GST.

As a result of the court's determination, the contract for the sale of the property was rectified to specify that the purchase price was exclusive of GST. The court's order ensured that the written contract accurately reflected the parties' common intention, thereby providing clarity and finality to the transaction.

Orders