Johnson Property Group Pty Ltd v Thornton - [2015] NSWSC 1389

Supreme Court

New South Wales

Medium Neutral Citation: Johnson Property Group Pty Ltd v Thornton [2015] NSWSC 1389
Hearing dates: 14, 15, 16, 21 and 22 September 2015
Date of orders: 22 September 2015
Decision date: 22 September 2015
Jurisdiction: Equity
Before: Young AJA
Decision:
Proceedings dismissed with costs

Catchwords: CONTRACT – alleged oral contract to co-operate in good faith with land developer – fails on facts
EQUITY – proprietary estoppel – developer adds value to defendants’ land by his activities after conversation with defendants whether either because of proprietary estoppel or unjust enrichment developer entitled to compensation
WORDS AND PHRASES – co-operate; good faith
Legislation Cited: Conveyancing Act 1919 (NSW)
Corporations Act 2001 (Cth)
Environmental Planning and Assessment Act 1979 (NSW)
Cases Cited: Andrews v Australia and New Zealand Banking Group Ltd [2012] HCA 30; (2012) 247 CLR 203
Anshn v Port Melbourne Authority [1981] HCA; 45 (1981) 147 CLR 589
Cadorange Pty Ltd (in liq) v Tanga Holdings Pty Ltd (1990) 20 NSWLR 26
Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55; [2008] 1 WLR 1752
David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 353; (1992) 175 CLR 343
East India Co v Vincent (1740) 2 Atk 83; (1740) 26 ER 451; [1558-1774] All ER Rep 615
Falcke v Scottish Imperial Insurance Co (1886) 34 ChD 234
Foskett v McKeown [1998] Ch 265; [1998] 2 WLR 298
Leichhardt Municipal Council v Green [2004] NSWCA 341
Guo v Xiao (No 2) [2014] NSWSC 1416
McMahon v National Foods Milk Ltd (2009) 25 VR 251
Paccaccio v ANZ Banking Group Ltd [2015] FCAFC 50
Raphael Shin Enterprises Pty Ltd v Waterpoint Shepherds Bay Pty Ltd [2014] NSWSC 743
Texts Cited: The Law of Proprietary Estoppel, Ben McFarlane (Oxford University Press, 2014)
Category: Principal judgment
Parties: Johnson Property Group Pty Ltd – first plaintiff
Vermont Quays Pty Ltd – second plaintiff
Bona Vista Properties Pty Ltd – third plaintiff
Fernadell Properties Pty Ltd – fourth plaintiff
David Robert Thornton – first defendant
Christopher Michael Thornton – second defendant
Representation:
Counsel:
T S Hale SC with Ms Z Steggall – for the plaintiffs
D L Cook with S Nash – for the defendants
Solicitors:
Andrews and Holm Lawyers – for the plaintiffs
Holding Redlich – for the defendants

File Number(s): 2014/278066

Judgment

The plaintiffs are property developers. The defendants are the proprietors of land which had been used for agricultural purposes for many years. The present dispute concerns land at Pitt Town, an old established village on the Hawkesbury River in the Hawkesbury River County Council area, which council is based in Windsor. Mr Keith Johnson is the controller of the four plaintiffs and he took the view that it would be a worthwhile project to redevelop land at Pitt Town adjoining the river. It is not necessary to go into details, but he spent some time and energy getting together like-minded landowners and with them, fought off pressure groups from other local residents,…

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.

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Details

Case: [2015] NSWSC 1389
Decision Date: 22 September 2015

CaseChat Overview and Summary

In Johnson Property Group Pty Ltd v Thornton, the dispute was between a land developer and the owner of a parcel of land. The developer, Johnson Property Group, claimed that the owner, Thornton, had promised to co-operate in good faith with the development plans. Johnson Property Group further alleged that Thornton had failed to fulfil this obligation, and sought compensation. The matter was heard in the Supreme Court of New South Wales.

The legal issues that the court needed to decide included whether there was an enforceable oral contract between the parties, and if so, whether Thornton had breached it. Additionally, the court needed to consider whether the developer was entitled to compensation under the doctrine of proprietary estoppel or unjust enrichment. The central issue was whether the conversations between the parties gave rise to a legally binding agreement or whether any obligations were owed by Thornton to Johnson Property Group.

The court found that there was no enforceable oral contract between the parties because the term "co-operate in good faith" was too vague to be a binding obligation. The court also found that the developer had not established a proprietary estoppel or unjust enrichment claim. The court reasoned that while Johnson Property Group had added value to Thornton's land through their development activities, there was no representation or assurance made by Thornton that would have induced reliance on the part of Johnson Property Group. Furthermore, there was no evidence of an agreement or understanding that Thornton would benefit from the development activities.

The court dismissed Johnson Property Group's claims in their entirety. As a result, Johnson Property Group was not entitled to any compensation from Thornton.

Orders