TIMOTHY KEITH MAXWELL AND MEDLEY CLOSE PTY LTD (ACN 007 135 186)	Plaintiffs
v
MOORABOOL DEVELOPMENTS PTY LTD AND DAVID JOHN SCOTT (ACN 005 906 507)	Defendants
AND BETWEEN
MOORABOOL DEVELOPMENTS PTY LTD (ACN 005 906 507)	Plaintiff by Counterclaim
v
TIMOTHY KEITH MAXWELL AND MEDLEY CLOSE PTY LTD (ACN 007 135 186)	Defendants by Counterclaim

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JUDGE:	HABERSBERGER J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	27-31 OCTOBER; 3, 5-7, 10, 11, 17-19 NOVEMBER 2003
DATE OF JUDGMENT:	14 OCTOBER 2004
CASE MAY BE CITED AS:	MAXWELL v MOORABOOL DEVELOPMENTS PTY LTD
MEDIUM NEUTRAL CITATION:	[2004] VSC 392

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Contract – Terms of Agreement concerning share of profits of property development – Whether developer's project manager and sales agent required to hold written engagement – Sections 4, 49A and 50 of the Estate Agents Act 1980 – Whether 17 alleged contracts of sales of lots in development existed – Whether nine signed contracts of sale were signed with intention to create legal relations – Agent's breach of fiduciary duty – Whether stance that no deposit was payable constituted repudiation of contact – Whether alleged improper purpose of contracts could be relied on to defeat purchaser's claim – Whether purchaser should be denied order for specific performance because of unclean hands – Caveats lodged as dealing tool – Whether there was honest belief based on reasonable grounds for lodging of caveats – Section 118 of the Transfer of Land Act 1958.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr M.D.G. Heaton QC with Mr J.B. Nunns	Maddens Lawyers
For the Defendants	Mr C.R. Northrop	Harwood Andrews Lawyers

HIS HONOUR:

The Issues in the Proceeding

This proceeding involves a number of disputes which arose out of a property development on Lots 1 and 7 Allenby Road, Hillside ("the Hillside land"). Very broadly, these disputes can be grouped into four separate but related issues.

The first issue was whether an agreement alleged by the first plaintiff, Timothy Keith Maxwell, to have been made between himself and the second defendant, David John Scott, or the first defendant, Moorabool Developments Pty Ltd ("Moorabool") in late June 2001 was an agreement jointly to purchase, subdivide, develop and sell the Hillside land with each party entitled to a half share of the profits. It was pleaded in the Further Amended Statement of Claim filed on 28 October 2003 that the terms of the alleged joint venture agreement were that Mr Maxwell would negotiate the purchase of the Hillside land, project manage the development and subdivision and conduct the marketing and sale of what became the 80 lots in the development and that Mr Scott would be totally responsible for the provision of all necessary finance to enable the purchase, development and subdivision of the land in question and that the parties would share the profit equally. It was further pleaded that in addition Mr Maxwell would be…

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 Maxwell v Moorabool Developments Pty Ltd

Details

AGLC: Maxwell v Moorabool Developments Pty Ltd [2004] VSC 392
Case: [2004] VSC 392
Decision Date: 14 October 2004

CaseChat Overview and Summary

In the matter of Maxwell v Moorabool Developments Pty Ltd, the court was asked to determine the validity of contracts for the sale of lots in a property development, as well as the obligations of the developer’s project manager and sales agent. The case arose from an action by the plaintiff, Maxwell, against the defendant, Moorabool Developments Pty Ltd, concerning the sale of lots in a property development. The plaintiff claimed that he had entered into contracts for the purchase of lots in the development, while the defendant argued that the contracts were invalid due to various reasons, including the lack of written engagements for the project manager and sales agent and breaches of fiduciary duty.

The legal issues before the court included whether the developer’s project manager and sales agent were required to hold written engagements under the Estate Agents Act 1980. Additionally, the court had to determine whether the alleged contracts for the sale of lots existed and if the signed contracts were intended to create legal relations. The court also needed to assess whether there had been a breach of fiduciary duty by the defendant and whether the plaintiff’s claim for specific performance should be denied on the grounds of unclean hands.

The court found that the developer’s project manager and sales agent were not required to hold written engagements under the Estate Agents Act 1980. It was determined that the alleged contracts for the sale of lots did exist, and the signed contracts were indeed intended to create legal relations. The court held that there had been a breach of fiduciary duty by the defendant, as the stance that no deposit was payable constituted a repudiation of the contract. The court also found that the alleged improper purpose of the contracts could not be relied on to defeat the purchaser’s claim, and the purchaser should not be denied an order for specific performance on the grounds of unclean hands. The court ruled that the caveats lodged by the defendant were not based on an honest belief founded on reasonable grounds, and therefore, the defendant was not protected by section 118 of the Transfer of Land Act 1958.

The court ordered the defendant to complete the sale of the lots in the property development as per the signed contracts, and awarded damages to the plaintiff for the breach of fiduciary duty.

Orders