Sande v Medsara Pty Limited - [2004] NSWSC 147

CITATION: Sande v Medsara Pty Limited [2004] NSWSC 147

HEARING DATE(S): 15/12/03, 16/12/03, 17/12/03, 18/12/03, 19/12/03.
Written submissions 5/1/04, 7/1/04.

JUDGMENT DATE:
11 March 2004

JUDGMENT OF: Burchett AJ at 1

DECISION: Orders to be made for rectification, specific performance and an inquiry as to damages.

CATCHWORDS: RECTIFICATION - unilateral mistake - put and call options and contracts arising from their exercise - meaning and purpose of put and call options - mistake of one party's solicitor as to terms of contract known to the other party who concluded contract avoiding drawing attention to the mistake - unconscionable conduct.

LEGISLATION CITED: Supreme Court Act 1970, s 68.

CASES CITED: Anderson v Brouwer Claims Canada & Co Ltd [2002] BCSC 1043
Downtown King West Development Corp v Massey Ferguson Industries Ltd 28 OR (3d) 327
Enfield Corp., Re (1990) 48 Bus.LR. 134
Jones v Dunkel (1959) 101 CLR 298
Leibler v Air New Zealand Ltd (No. 2) [1999] 1 VR 1
Pukallus v Cameron (1982) 180 CLR 447
Riverlate Properties Ltd v Paul [1975] Ch 133
Taylor v Johnson (1983) 151 CLR 422
Thomas Bates and Son Ltd v Wyndham's (Lingerie) Ltd [1981] 1 WLR 505
Tutt v Doyle (1997) 42 NSWLR 10

PARTIES :
Joseph Sande and Diana Sande (first plaintiffs)
Andrew Terides (second plaintiff)
Esther El-Hage (third plaintiff)
Tony Dbais (fourth plaintiff)
Shane Hugh Mills (fifth plaintiff)
James Moreland and Sara Wendy Moreland (sixth plaintiffs)
Medsara Pty Limited (Defendant)

FILE NUMBER(S): SC 4098/03

COUNSEL: N. Hutley SC / M.B. Evans (Plantiffs)
G. Curtin (Defendant)

SOLICITORS: Mallesons Stephen Jaques (Plaintiffs)
Kemp Strang (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Burchett AJ

11 March 2004

4098/03 Joseph Sande and Diana Sande (first plaintiffs), Andrew Terides (second plaintiff), Esther El-Hage (third plaintiff), Tony Dbais (fourth plaintiff), Shane Hugh Mills (fifth plaintiff), and James Moreland and Sara Wendy Moreland (sixth plaintiffs) v Medsara Pty Limited

JUDGMENT

1 His Honour: The six individual or paired plaintiffs owned, between them, eight adjoining lots of land on which houses are erected, being numbers 82, 82A, 84, 86, 88, 90, 92 and 94 James Ruse Drive Rosehill. By six separate but mutually interdependent sets of contracts, they all virtually simultaneously arranged for delayed sales of these properties to the defendant, Medsara Pty Limited. A dispute having arisen about two of the terms contained in each set of documents, the plaintiffs have brought this expedited proceeding in which they seek relief (inter alia) by way of rectification and specific performance of the contracts as rectified, together with an inquiry as to damages. What is alleged to have given rise to a right to rectification is that species of mistake as to a serious term of the contracts which the law calls “unilateral mistake”.

2 Before proceeding to the detail of the circumstances, I find it convenient to make some statement of the legal doctrine involved. In Taylor v Johnson (1983) 151 CLR 422 at 432-433 Mason ACJ, Murphy and Deane JJ said:

“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.

Continue reading Sande v Medsara Pty Limited

Details

AGLC: Sande v Medsara Pty Limited [2004] NSWSC 147
Case: [2004] NSWSC 147
Decision Date: 11 March 2004

CaseChat Overview and Summary

The matter of Sande v Medsara Pty Limited involved the plaintiff, Mr Sande, seeking rectification of contracts that arose from the exercise of put and call options due to a unilateral mistake. The defendants, Medsara Pty Limited, had argued that the contracts should not be rectified as the mistake was not mutual and they had not acted unconscionably. The case was heard in the Federal Court of Australia.

The central legal issues were whether the unilateral mistake was significant enough to warrant rectification and whether the defendants' conduct could be considered unconscionable. The court had to consider the nature and purpose of put and call options, and the extent to which one party's knowledge of the mistake could be held against the other. Additionally, the court needed to determine if the defendants' actions in concluding the contract without addressing the mistake amounted to unconscionable conduct.

The court found that the unilateral mistake was indeed significant and the defendants had knowledge of the mistake but did not take steps to correct it. The court emphasised the importance of the meaning and purpose of the put and call options in reaching this conclusion. Furthermore, the court held that the defendants' conduct was unconscionable as they exploited the plaintiff's mistake for their benefit. Consequently, the contracts were rectified to reflect the true intentions of the parties.

The court ordered that the contracts be rectified to reflect the true intentions of the parties, effectively nullifying the transactions that occurred due to the unilateral mistake. This decision underscored the importance of clarity in contractual terms and the duty to act in good faith, particularly in complex financial arrangements.

Orders