Joint Venture Dispute – Claim for Specific Performance – Estoppel – Restitution – Damages – Costs
Surry Partners acted for Metropolitan Local Aboriginal Land Council (MLALC) in its defence of Supreme Court of NSW proceedings commenced by CBD Prestige Property Holdings (No.3) Pty Ltd (CBD3). The proceedings were heard on 18 and 19 July 2013.
In 2003, MLALC was the owner of certain land in Asquith and Frenchs Forest. On 4 August 2003, MLALC entered into a joint venture agreement (JVA) with CBD Prestige Property Holdings Pty Ltd (CBD1) in respect of the development of MLALC’s Asquith land. In December 2003, the scope of the JVA was extended to incorporate MLALC’s Frenchs Forest land.
Pursuant to the terms of the JVA, between December 2003 and June 2008 CBD1 incurred expenses in obtaining development approval in respect of the Frenchs Forest land. That approval was granted on 3 June 2008.
On 3 July 2008, CBD1 and CBD3 entered into a “Deed of Transfer” which purported to transfer from CBD1 to CBD3 certain rights that were said to have accrued in favour of CBD1 as a consequence of the development approval that had been obtained in respect of the Frenchs Forest land. The consideration for the transfer of those rights was $1.00.
CBD1 was subsequently placed in to liquidation and was deregistered on 23 January 2011.
On 10 January 2013, MLALC entered into a put and call option with a third party in respect of the Frenchs Forest land.
CBD3’s primary claim was that:
- the JVA remained on foot;
- that CBD1 had assigned its rights under the JVA to CBD3 pursuant to July 2008 “Deed of Transfer”; and
- that MLALC had breached the JVA by entering into a put and call option with a third party.
CBD3 claimed that it was entitled to damages in respect of the alleged breaches of the JVA, such damages being in a sum equivalent to the expenses incurred by CBD1 in obtaining development approval for the Frenchs Forest land.
CBD3 also claimed in the alternative that MLALC was estopped from denying that CBD3 was entitled to be “refunded” the expenses incurred by CBD1 in obtaining development approval for the Frenchs Forest land and/or that CBD3 was entitled to the “refund” of those expenses by way of restitution on the basis that the expenses incurred by CBD1 had been for the benefit of, and at the request of, MLALC.
In its judgment (CBD Prestige Property Holdings No 3 Pty Ltd v Metropolitan Local Aboriginal Land Council [2013] NSWSC 1005) delivered on 30 July 2013, the Court found that the JVA had been terminated as a consequence of a Project Delivery Agreement (PDA) entered into by CBD1 and MLALC in respect of MLALC’s Asquith land on 14 September 2006. The PDA contained a provision that expressly terminated the JVA as at the date of the PDA. The Court also noted that, in any event, it was impossible for CBD1 to have unilaterally assigned any rights that it may have had to CBD3. There could be no assignment of rights without there also being an assignment of obligations and any such assignment would have required the consent of MLALC, which had not been obtained.
As to CBD3’s estoppel and restitution claims, the Court found that as CBD3 did not have anything to do with the Frenchs Forest land until at least 3 July 2008 (that is, after development approval had been obtained), it could not have relied on any representations made by MLALC prior to development approval being granted. Any representations that may have been made were made to CBD1, not CBD3. Further, any funds that were expended in obtaining development approval for the Frenchs Forest land had expended by CBD1, not by CBD3. The Court also found that in incurring those expenses CBD1 was seeking to further its own interests, as opposed to spending money at the request of MLALC, as CBD3 claimed.
Accordingly, the Court dismissed the proceedings and ordered that CBD3 pay MLALC’s costs. Those costs are currently being assessed.
For more information, contact Luke Mitchell (luke.mitchell@surrypartners.com.au) or Peter English (peter.english@surrypartners.com.au).