Premier Bay Pty Ltd, a company controlled by Mr Tommaso Montalto, owns a farm on Donnybrook Road, Woodstock, of 263.76 hectares. The farm is broken into three lots. The farm has been rezoned for subdivision as part of a prospective urban development, now approved by the State Government, marketed under the name Peppercorn Hill.
In 2013, Dennis Family Homes, an established property developer, agreed, under a written development agreement, with Premier Bay, to develop the three lots of the farm for subdivision and sale. Mr Montalto and his son, Mauro, signed the agreement on behalf of Premier Bay. They also guaranteed the obligations of Premier Bay under the development agreement. The proposed sale is estimated to earn for Premier Bay something in the order of $350 million dollars.
In 2016, after attending a public planning session concerning the proposed urban development, Mr Montalto claimed that he had caused Premier Bay to enter into the written development agreement under the mistaken belief that the agreement only provided for the development and sale of lots 2 and 3 and that lot 1 was to be subject only to planning approval but not development and sale.
Mr Montalto claims that Dennis Family Homes were aware that Mr Montalto caused Premier Bay to enter into the agreement under this mistaken view, as he claimed he had told Dennis Family Homes in several conversations, and they had agreed, that lot 1 would not be included for development and sale.
The Court is not satisfied that Mr Montalto did cause Premier Bay to enter into the agreement under the mistaken belief alleged, or that he told Dennis Family Homes lot 1 was not to be included for development and sale. The Court finds that Premier Bay is bound to perform the development agreement.
Premier Bay also claims its accountants and solicitors failed in their duty to exclude lot 1 from the development, contrary to the instruction of Mr Montalto, and they failed to advise him that the agreement provided for the development and sale of the three lots. The Court is not satisfied that the accountants and solicitors were so instructed or that they failed in their duties to Premier Bay. The Court dismisses the claim against the accountants and solicitors.
Finally, Mauro seeks to be released from the personal guarantee in the agreement on the grounds of unconscionability. The Court is not satisfied that enforcing the personal guarantee would be unconscionable in the circumstances and dismisses Mauro’s claim.
NOTE: This summary is necessarily incomplete. The only authoritative pronouncement of the Court’s reasons and conclusions is that contained in the published reasons for judgment.