Sustainable Technologies Australia Limited v Pilkington (Australia) Limited

Sustainable Technologies Australia Limited (STA) and Pilkington (Australia) Limited (PAL) were parties to a dispute before the Supreme Court of New South Wales. The core of the disagreement concerned the interpretation and enforceability of a deed of settlement and release entered into between the parties. STA sought to enforce certain provisions of this deed, while PAL resisted this enforcement, alleging that the deed was void or unenforceable due to a fundamental mistake.

The primary legal issue before the Court was whether a mutual mistake regarding the existence of a valid and subsisting cause of action at the time the deed of settlement was executed rendered the deed void or unenforceable. Specifically, the Court had to determine if the mistake was so fundamental as to vitiate the consent of the parties to the agreement, thereby preventing PAL from being bound by its terms.

Justice Forno found that the deed of settlement was not void or unenforceable due to a mutual mistake. His Honour applied the principles established in cases such as *Svanosio v McNamara* and *Grist v Bailey*, which deal with the effect of a fundamental mistake on a contract. The Court reasoned that for a mistake to render a contract void, it must be a mistake as to a matter of fact which is fundamental to the contract, and the parties must have proceeded on the basis of that shared mistaken assumption. In this instance, the Court concluded that the parties had not proceeded on the basis of a mistaken assumption about the existence of a cause of action, but rather had entered into the deed to resolve a dispute, regardless of its ultimate merits. The deed was intended to bring finality to their differences.

Consequently, the Court ordered that the deed of settlement and release was valid and enforceable, and STA was entitled to enforce its terms against PAL.