Andrew Kocalidis v John Andrews

[2013] HCASL 11

ANDREW KOCALIDIS

v

JOHN ANDREWS

[2013] HCASL 11
M70/2012

1. The respondent commenced proceedings in the County Court of Victoria (Judge Ginnane) arising out of the failure of a joint venture agreement.  The agreement was for the purchase of a residential property with a view to constructing a townhouse development.  The applicant purchased the property and became the sole registered proprietor of it.  The respondent, a builder, engaged planners and surveyors and obtained a planning permit and a demolition permit.  The applicant and the respondent had been friends for many years.  In the event, construction of the proposed townhouse development did not proceed. 

2. Judge Ginnane found that the parties had reached a binding agreement the terms of which included that the applicant was to provide the funds to purchase the property and that all of the construction costs were to be raised through borrowing.  His Honour found that the relationship was a fiduciary one in which the applicant and respondent had been joint venturers in a commercial enterprise with a view to profit.  The profits were to be shared and the property was to be held as a joint venture asset.  His Honour considered that an implied term of the contract allowed the applicant to terminate the joint venture, and that he had done so in the second half of 2007.  His Honour determined that the parties were entitled to repayment of their capital contributions, and that it would be unconscionable, in view of their respective contributions, for them to share equally in the net residual equity.  His Honour ordered a division of the net residual equity as to one-fifth to the respondent and four-fifths to the applicant. 

3. The applicant appealed to the Court of Appeal of Victoria (Maxwell P, Mandie JA and Cavanough AJA) and the respondent cross-appealed.  The appeal and cross-appeal were dismissed subject to two minor variations to the orders made by Judge Ginnane.

4. The applicant applies for special leave to appeal, submitting that important questions of the application of the principles enunciated in Muschinski v Dodds[1] arise.  Concurrent factual findings, including that the property was to be held as a joint venture asset with the profits of the venture being shared equally, make this an unsuitable case in which to consider the first, second and fifth special leave questions.  The Court of Appeal held that Judge Ginnane's findings precluded any contention that the respondent was in breach of the joint venture agreement by not making any monetary contribution to the purchase of the property, not contributing to any interest payments on moneys borrowed in connection with it or by causing or contributing to any delays leading to the failure to complete the project.  This conclusion makes it an unsuitable case in which to consider the fourth special leave question.  The Court of Appeal also held that the primary judge's findings, that both parties let the project drift and that neither brought any urgency to complete the project, precluded any contention that the respondent's conduct was blameworthy.  This makes it an unsuitable case in which to consider the third special leave question.

   [1](1985) 160 CLR 583; [1985] HCA 78.

5. If special leave to appeal were granted the appeal would have insufficient prospects of success. 

6. The application is dismissed. 

7. Pursuant to r 41.11.1 we direct the Registrar to draw up, sign and seal an order dismissing the application with costs. 

J.D. Heydon
26 February 2013 V.M. Bell