Legal Research
Cases
Jafari v 23 Developments Pty Ltd

Jafari v 23 Developments Pty Ltd

Case [2019] VSCA 201 19 September 2019

Breach of Contract

Misleading or Deceptive Conduct

Compensatory Damages

Contract Law

Consumer Law

Type to search within this case.

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2018 0110

KOUROSH JAFARI (on his own behalf and as trustee of the Essence Unit Trust)	Applicant
v
23 DEVELOPMENTS PTY LTD (ACN 112 616 976) & ORS (According to the Schedule)	Respondents

---

JUDGES:	WHELAN, NIALL JJA, SIFRIS AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	6 June 2019
DATE OF JUDGMENT:	19 September 2019
MEDIUM NEUTRAL CITATION:	[2019] VSCA 201 First Revision: 23 September 2019
JUDGMENT APPEALED FROM:	[2018] VSC 404 (Elliott J)

---

PARTNERSHIP – Existence – Nature of agreement – Whether partnership agreement entered into by parties – Agreement not consistent with intention to create a partnership – Intention to enter into profit sharing agreement only – Parties were not in a partnership.

CONTRACT – Termination or abandonment – Inability of proposed vendors to deliver clear title to purchasers as required pursuant to first agreement because mortgagee in possession appointed – New agreement between purchasers and mortgagee in possession – Whether first agreement abandoned or terminated because it could not be performed – Whether first agreement varied – No variation of first agreement – First agreement abandoned or terminated.

TRADE PRACTICES – Misleading or deceptive conduct – Whether representation as to ease with which properties could be decontaminated was misleading or deceptive – Causation – Whether respondents were induced by representation to purchase properties – Fair Trading Act 1999 (Vic) s 9 – Trade Practices Act 1974 (Cth) s 52.

EQUITY – Vendor’s lien – Whether holders of vendor’s lien entitled to interest – Matter not raised before trial judge – No basis for claim to interest.

EQUITY – Trusts –Whether unit trust created by applicant – Time of creation of unit trust by the applicant – Whether company held properties as trustee of unit trust before liquidation.

---

APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr P G Willis SC with Mr J A Barrington	George Liberogiannis & Associates
For the First and Second Respondents	Mr M Clarke QC with Ms C J Dawes	Holman Webb Lawyers

WHELAN JA
NIALL JA
SIFRIS AJA:

Introduction

The applicant, Kourosh Jafari (‘Jafari’)[1] was the registered proprietor of 59 Buckley Street, Seddon. He was the sole director and shareholder of 63 Buckley Street Pty Ltd (‘63 Buckley’), the registered proprietor of 61 and 63-67 Buckley Street, Seddon (together, ‘the Properties’).
[1]The applicant and Jafari are used interchangeably.

Having undertaken a development at 69-79 Buckley Street, Jafari proposed to develop a multi-storey student apartment complex on the Properties (‘the Development’) which are close to Victoria University of Technology.

Jafari and 63 Buckley ran into financial difficulties and on 21 April 2008 Perpetual Nominees Ltd (‘Perpetual’) served notices of default under a mortgage that it held over the Properties to secure a loan in the sum of $840,000.[2] Perpetual also held a registered charge over the assets of 63 Buckley.[3]
[2]The loan was made by Colonial First State Investment Ltd (‘Colonial’) as manager of…

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 Jafari v 23 Developments Pty Ltd

Details

AGLC: Jafari v 23 Developments Pty Ltd [2019] VSCA 201
Case: [2019] VSCA 201
Decision Date: 19 September 2019

CaseChat Overview and Summary

The plaintiff, Jafari, initiated proceedings against 23 Developments Pty Ltd, seeking a declaration that a partnership existed between the parties, damages for misleading and deceptive conduct, and other equitable remedies. The case involved a complex set of agreements and transactions concerning property development and sale. The central dispute centred on the nature of the relationship between the parties, whether a partnership existed, the effect of an inability to deliver clear title to purchasers, the applicability of misleading or deceptive conduct, and the rights under vendor’s lien and unit trusts.

The legal issues before the court included whether the parties had entered into a partnership agreement, the effect of the inability to deliver clear title to purchasers, whether the initial agreement was varied or terminated, and whether the respondents were induced by misleading representations regarding the ease of decontaminating properties. The court had to determine if the first agreement was abandoned or terminated due to the impossibility of performance and if it was varied. Additionally, the court needed to assess if the representations made by the respondents regarding the ease of decontamination were misleading or deceptive under the Fair Trading Act 1999 (Vic) and Trade Practices Act 1974 (Cth).

The court found that no partnership existed between the parties, as the agreement was inconsistent with an intention to create a partnership and was rather a profit-sharing arrangement. The first agreement was terminated because the proposed vendors could not deliver clear title due to the mortgagee in possession being appointed. There was no variation of the first agreement, only its termination. The court held that the respondents were not induced by the alleged misleading representations regarding the ease of decontamination, thus dismissing the claims of misleading or deceptive conduct. The court also found that the matter of interest under the vendor’s lien was not raised before the trial judge, and there was no basis for a claim to interest. Finally, the court ruled that the applicant did not create a unit trust, and the company did not hold the properties as a trustee before liquidation.

The court ordered that the plaintiff's claims for a declaration of partnership, damages for misleading or deceptive conduct, and other equitable remedies were dismissed. The court further found that there was no basis for a claim to interest under the vendor’s lien and that no unit trust was created by the applicant.

Orders