Scald Pty Ltd v Turner Developments Pty Ltd - [2014] ACTSC 72

SCALD PTY LTD v TURNER DEVELOPMENTS PTY LTD AND OTHERS
[2014] ACTSC 72 (30 April 2014)

EQUITY – rectification – multi-party loan agreement – mistake in documentation provided to solicitors – whether common intention between parties established – court not satisfied that common intention existed – rectification refused

Catanzariti v Romano [2009] ACTSC 38
Green v AMP Life [2005] NSWSC 370
Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603
Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603
Waldorf Australia Pty Ltd v Elias Construction Group Pty Ltd [2010] NSWSC 164
Slee v Warke (1952) 86 CLR 271
Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603
Jones v Dunkel (1959) 101 CLR 298
Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389

No. SC 823 of 2009

Master Harper
Supreme Court of the ACT

Date: 30 April 2014

IN THE SUPREME COURT OF THE     )
  )          No. SC 823 of 2009
AUSTRALIAN CAPITAL TERRITORY           )

BETWEEN: SCALD PTY LTD
Plaintiff

AND: TURNER DEVELOPMENTS PTY LTD AND OTHERS
Defendants

ORDER

Judge:   Master Harper
Date:   30 April 2014
Place:   Canberra

THE COURT ORDERS THAT:

the counterclaim be dismissed.

the action be stood over to 7 May 2014 for mention and the fixing of a date for submissions as to the directions to be made for the further hearing of the action.

This proceeding arises out of a dispute between companies and persons involved in a joint venture for the development of the Space apartment complex in Turner. The plaintiff company was a party to the joint venture, and was also a lender to the joint venture. The first defendant company, Turner Developments Pty Ltd, was the joint venture vehicle, and was incorporated for that purpose.

Most of the persons behind the parties which were participants in the joint venture were experienced in the construction industry, and in many cases did work for the joint venture for which they were paid at commercial rates. The sole director of the plaintiff company, Scald Pty Ltd, is Mr Scott Kovacs. He had the company incorporated for the purpose of the joint venture. His expertise was in electrical design. His company undertook electrical design work for the joint venture and was paid for it. There is no complaint in that regard.

The company, in its capacity as trustee for the Scald settlement, lent money to the joint venture at interest. A number of other companies and some individuals also made loans in the same way.

The expectation of all concerned was that the venture would generate a profit sufficient to pay back the borrowed moneys and interest, and in addition to provide a return to the joint venture participants. In the event the venture did not make a profit. Not only was there no profit for distribution to the participants, but there was, and remains, insufficient to repay the borrowings and interest in full.

In the circumstances it is common ground that…

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 Scald Pty Ltd v Turner Developments Pty Ltd

Details

AGLC: Scald Pty Ltd v Turner Developments Pty Ltd [2014] ACTSC 72
Case: [2014] ACTSC 72
Decision Date: 30 April 2014

CaseChat Overview and Summary

The case of Scald Pty Ltd v Turner Developments Pty Ltd involved a dispute between the two parties regarding a multi-party loan agreement. Scald sought rectification of the agreement on the basis of a mistake in the documentation provided to their solicitors. The case was heard in the Supreme Court of New South Wales. The central legal issues revolved around whether the common intention of the parties was established to warrant the court granting the remedy of rectification.

The court examined the circumstances surrounding the alleged mistake and the extent to which the parties had a shared understanding of the terms of the agreement. It was necessary to determine if the common intention could be discerned from the conduct and communications of the parties. The court found that Scald had not sufficiently demonstrated a shared understanding between the parties that would justify altering the agreement through rectification. The evidence presented did not establish a clear and common intention to include the terms Scald sought to have rectified.

Consequently, the court was not satisfied that the common intention existed between the parties to warrant the granting of rectification. The counterclaim was dismissed, and the action was stood over to a later date to allow for further submissions and directions for the hearing of the action. The court did not find sufficient grounds to alter the loan agreement through the remedy of rectification as sought by Scald.

Orders

Orders of the court

1. the counterclaim be dismissed.

2. the action be stood over to 7 May 2014 for mention and the fixing of a date for submissions as to the directions to be made for the further hearing of the action.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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