Australian Vintage Limited v Belvino Investments No 2 Pty Ltd [2015] NSWCA 275

Australian Vintage Limited v Belvino Investments No 2 Pty Ltd [2015] NSWCA 275

Clause 4.26 of the lease requires, when production capacity is in issue, a comparison of pre-disaster production capacity for the vintage year in question and post-disaster production capacity for that year; if the difference exceeds 50% of average production capacity, the termination and remedial work provisions of the lease are triggered. The expert's determination was incorrect as it did not apply the formula as required by the contract, rendering the determination reviewable and necessitating a remittal for reconsideration in accordance with the Court's construction.

Parties
Appellant: Australian Vintage Limited; First Respondent: Belvino Investments No. 2 Pty Limited (as trustee of the McGuigan Simeon Trust); Second Respondent: Peter Scholefield; Third Respondent: Scholefield Robinson Horticultural Services Pty Ltd
Jurisdiction
Australia
Judgment Date
11 September 2015
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal allowed
Legal Topics
Expert Determination, Commercial Leases, Dispute Resolution Clause, Contract Construction, Judicial Review of Expert Determination
Contract Law Expert Determination Commercial Leases Dispute Resolution Clause Contract Construction Judicial Review of Expert Determination

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Parties

Australian Vintage Limited

Appellant

Belvino Investments No. 2 Pty Limited (as trustee of the McGuigan Simeon Trust)

First Respondent

Peter Scholefield

Second Respondent

Scholefield Robinson Horticultural Services Pty Ltd

Third Respondent

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 What is the correct construction of clause 4.26(b) and (f) of the lease regarding the threshold for the lessee's election to terminate or undertake remedial works following a natural disaster?
  2. 2 Is the expert's determination under the dispute resolution clause reviewable by the Court?

Ratio Decidendi

Clause 4.26 of the lease requires, when production capacity is in issue, a comparison of pre-disaster production capacity for the vintage year in question and post-disaster production capacity for that year; if the difference exceeds 50% of average production capacity, the termination and remedial work provisions of the lease are triggered. The expert's determination was incorrect as it did not apply the formula as required by the contract, rendering the determination reviewable and necessitating a remittal for reconsideration in accordance with the Court's construction.

Court Disposition

Appeal allowed

Orders

  • Orders 1-3 made by the primary judge on 11 March 2015 be set aside.
  • Matter remitted to the second respondent for determination in accordance with these reasons.