JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATES OF HEARING:	16, 20–23, 27–30 NOVEMBER, 4 DECEMBER 2017
DATE OF JUDGMENT:	30 JULY 2018
CASE MAY BE CITED AS:	JAFARI v 23 DEVELOPMENTS PTY LTD
MEDIUM NEUTRAL CITATION:	[2018] VSC 404

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JOINT VENTURE – Nature and extent of agreement – Inability of proposed vendors to perform – Agreement terminated or abandoned – New agreement between purchaser and third party – Whether new or amended agreement between pre-existing parties – No binding agreement.

MISLEADING AND DECEPTIVE CONDUCT – Whether representations made – Whether omission committed – Reliance – Loss – Fair Trading Act 1999 (Vic), s 9.

LEGAL PRACTITIONERS – Sale of property – Joint venture – Solicitor acting for purchaser – Alleged representations – Alleged failure to inform proposed vendors – Whether solicitor liable to proposed vendors – Whether vendors separately represented.

EQUITY – Sale by mortgagee in possession – Registered proprietors provided effective vendor finance for amount of residue – Whether vendor’s lien in favour of registered proprietors – Transfer of Land Act 1958 (Vic), s 77(3)(d).

REAL PROPERTY – Sale – Alleged non-disclosure of pre-existing use – Alleged non-disclosure of risk of contamination – Whether misleading or deceptive conduct – Fair Trading Act 1999 (Vic), s 9 – Trade Practices Act 1974 (Cth), s 52.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Willis SC with Mr J Barrington	George Liberogiannis & Associates
For the First and Second Defendants	Mr M Clarke QC	Holman Webb Lawyers
For the Third Defendant	Mr P Booth	Obst Legal

TABLE OF CONTENTS

A.. Introduction.................................................................................................................................. 1

B.. Background................................................................................................................................... 3

C.. Earlier attempts to rescue the Development........................................................................... 6

D.. The Original Agreement and related dealings..................................................................... 11

E... The ultimate agreement and related dealings...................................................................... 56

F... Post-contractual events............................................................................................................. 70

G.. Jafari’s claims: principal issues............................................................................................ 121

G.1... Did Pizarro represent to Jafari, in or around September 2008, that he could assist Jafari and 63 Buckley to obtain finance for the Development, in particular by quickly selling units in the Development through Melbourne Properties (“the Pizarro Representation”) and, if so, was the Pizarro Representation misleading or deceptive or likely to mislead or deceive within the meaning of s 9 of the Fair Trading Act 1999 (Vic)?................................... 121
G.2... What was the nature of the relationship between Jafari and Fetter and, in particular: 124
G.2.1.. Did Fetter act for Jafari at any time?................................................................. 124
G.2.2.. Did Jafari have independent solicitors acting for him in respect of his dealings with Pizarro until August 2009?................................................................................. 124
G.2.3.. Did Jafari represent to Fetter that he had independent solicitors acting for him and 63 Buckley, and that he had obtained legal advice in respect of his dealings with Pizarro until August 2009?............................................................................................... 125
G.2.4.. Did Fetter advise…

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 [2018] VSC 404
Case: [2018] VSC 404
Decision Date: 30 JULY 2018

CaseChat Overview and Summary

Jafari v 23 Developments Pty Ltd was a case heard in the Supreme Court of Victoria where the primary issue was the nature and extent of an agreement between the parties, alongside claims of misleading and deceptive conduct under the Fair Trading Act 1999 (Vic) and the Trade Practices Act 1974 (Cth). Jafari, the plaintiff, was involved in a joint venture with 23 Developments Pty Ltd, the defendant, for the purchase of a property. Jafari alleged that the proposed vendors were unable to perform, leading to the termination or abandonment of the original agreement, and subsequently, a new agreement was formed between the purchaser and a third party. Jafari sought to establish whether this new agreement constituted a binding agreement between the pre-existing parties.

The court had to decide several legal issues, including whether there was a binding agreement between the pre-existing parties and whether misleading and deceptive conduct occurred. Jafari argued that the purchaser's solicitor, who was acting on behalf of Jafari, had made representations to the proposed vendors and failed to inform them of the new agreement, leading to alleged liability of the solicitor to the proposed vendors. Additionally, Jafari contended that there was a failure to disclose the pre-existing use of the property and the risk of contamination, which constituted misleading and deceptive conduct. The court also had to determine whether the registered proprietors, who provided effective vendor finance, had a lien over the property under the Transfer of Land Act 1958 (Vic).

The court concluded that there was no binding agreement between the pre-existing parties, as the new agreement was with a third party. The court found that the alleged representations by the solicitor did not result in any liability towards the proposed vendors, as they were not separately represented. The court also determined that there was no misleading or deceptive conduct under the Fair Trading Act 1999 (Vic) and the Trade Practices Act 1974 (Cth), as there was no omission or reliance that led to a loss. Furthermore, the court held that the registered proprietors did not have a lien over the property, as they provided effective vendor finance for the amount of the residue.

The final orders of the court were in favour of 23 Developments Pty Ltd, dismissing Jafari's claims and finding no liability on the part of the solicitor or the registered proprietors. The court held that there was no binding agreement between the pre-existing parties, no misleading or deceptive conduct, and no lien over the property.

Orders