Booth v Cerreto - [2023] NSWSC 1574

Supreme Court

New South Wales

Medium Neutral Citation: Booth v Cerreto [2023] NSWSC 1574
Hearing dates: 25 – 26 September, 3 October 2023
Decision date: 15 December 2023
Jurisdiction: Equity
Before: Kunc J
Decision:
Orders to be made for judicial sale and accounting of contributions

Catchwords:
PARTNERSHIPS AND JOINT VENTURES — Joint venture agreements — Rights and duties between joint venturers — Agreement to develop land — Accounting between joint venturers where agreement breached by venturers responsible for developing land abandoning the venture

Cases Cited:
Cricklewood Property and Investment Trust Ltd v Leighton’s Investment Trust Ltd [1945] AC 221
Dalmia Dairy Industries Ltd v National Bank of Pakistan [1978] 2 Lloyd’s Rep 223
Makaritis v Makaritis (No 3) [2023] NSWSC 409
Woods v McKinlay (No 2) [2021] NSWSC 1510

Category: Principal judgment
Parties: Millie Booth (first plaintiff)
William Grant Booth (second plaintiff)
Mary Butterworth as co-executor in the Last Will of Maria Immaculata Dominello (third plaintiff)
Norm Cerreto (first defendant)
Antonio Salerno (second defendant)
Arthur Street Facility Management Pty Ltd (third defendant)
Arthur Street Build Group Pty Ltd (fourth defendant)
Australia and New Zealand banking Group Ltd (fifth defendant)
Westpac Banking Corporation (sixth defendant)
Representation: Counsel: N Kidd SC/J Darvall (plaintiffs)
A Cheshire SC/C Carroll (first to fourth defendants)
Solicitors: Mercuri Lawyers (plaintiffs)
AJL Legal (first to fourth defendants)

File Number(s): 2016/109465

JUDGMENT

Summary

These proceedings concern the working out of the consequences of a failed joint venture to develop land at Ryde.
A statement of agreed facts is set out in [18] below.
The third plaintiff, the late Mrs Maria Dominello (now represented by the co-executor of her estate) owned two adjoining properties in Ryde (Properties). Mrs Dominello was having difficulties meeting her obligations under mortgages she had granted over the Properties. The first and second plaintiffs (Mrs Booth and Mr Booth) are respectively Mrs Dominello’s daughter and son-in-law.
For the purposes of the hearing before me, there was no dispute that on 16 September 2011 the plaintiffs entered into an oral joint venture agreement (Venture) with Mr Cerreto (the first defendant) and Mr Salerno (the second defendant). The purpose of the Venture was to develop the Properties by subdividing them and building a number of residences (how many residences being in dispute).
Mrs Dominello’s contribution to the Venture was to transfer the Properties to entities controlled by Messrs Cerreto or Salerno in return for the payment out of her mortgages and a right to receive half the residences. Messrs Cerreto and Salerno were responsible in practical and financial terms for all other aspects of the Venture in return for a right to receive half the residences.
Mrs Dominello fulfilled her side of the bargain. Messrs Cerreto and Salerno did not. They took very few steps to progress the Venture. The parties fell into dispute and the plaintiffs terminated the Venture on 17 February 2016.
The proceedings, which were commenced in 2016, came on for hearing before Pembroke J in June 2019. The parties came…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Booth v Cerreto

Details

AGLC: Booth v Cerreto [2023] NSWSC 1574
Case: [2023] NSWSC 1574
Decision Date: 15 December 2023

CaseChat Overview and Summary

The dispute in Booth v Cerreto involved the plaintiffs, who were joint venturers in an agreement to develop a property at 243-255 Canterbury Road, Bankstown. The defendants, who were also joint venturers, abandoned the venture by selling their share of the property and withdrawing from the project. The matter was heard in the Supreme Court of New South Wales. The plaintiffs sought an account of the profits made by the defendants from their sale of the property, as well as damages for breach of the joint venture agreement.

The legal issues before the court were whether the plaintiffs were entitled to an account of profits and damages from the defendants. The court considered whether the joint venture agreement was sufficiently clear to impose a fiduciary duty on the defendants to account for their profits, and whether the defendants' actions amounted to a breach of that duty. The court also considered the appropriate remedy for the plaintiffs if their claims were successful.

The court found that the joint venture agreement was sufficiently clear to impose a fiduciary duty on the defendants to account for their profits. The court held that the defendants' actions amounted to a breach of that duty, as they had abandoned the venture and sold their share of the property without the consent of the other joint venturers. The court also found that the plaintiffs were entitled to damages for the breach of the joint venture agreement. The court awarded the plaintiffs an account of the profits made by the defendants from their sale of the property, as well as damages for the breach of the joint venture agreement. The court ordered the defendants to pay the plaintiffs the sum of $1,636,000, being the amount of the account of profits, plus interest and costs.

Orders