Pallak Pty Ltd v Stoneypint Pty Ltd
[2025] VCC 1594
•6 November 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. Cl-23-05465
| PALLAK PTY LTD (ACN 613 628 087) as trustee of COUANGALT FAMILY TRUST | Plaintiff/Defendant by counterclaim |
| V | |
| STONEYPINT PTY LTD (ACN 164 486 926) as trustee of STONEYPINT TRUST | Defendant/Plaintiff by counterclaim |
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JUDGE: | Her Honour Judge A Ryan | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 2, 3, 4 June 2025 | |
DATE OF JUDGMENT: | 6 November 2025 | |
CASE MAY BE CITED AS: | Pallak Pty Ltd v Stoneypint Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 1594 | |
REASONS FOR JUDGMENT
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Subject:CONTRACT - RECEIVERSHIP
Catchwords: Claim for specific performance - whether the parties intended to enter into a legally binding contract by signing an exit agreement to sell a half share of a property held in partnership – relevance of post signature conduct – whether damages be an appropriate remedy – should the partnership be wound up and a receiver appointed
Legislation Cited: Sale of Land Act 1962
Cases Cited:5G Networks Limited v Centralnic Limited [2025] VSC 291; Masters v Cameron (1954) 91 CLR 353; Bauklham Hills Private Hospital Pty Ltd v JR Securities Pty Ltd & Ors [1986] 40 NSWLR 622; TheEdge Development Group Pty Ltd v Jack Road Investments Pty Ltd [2018] VSC 326; Pinegro Products Pty Ltd v Paper Australia Pty Ltd [2025] VSC 453; Steller Vision Operations Pty Ltd v Hills Health Solutions Pty Ltd [2023] NSWCA 102; Patel v Segun Investment Holdings Pty Ltd [2023] VSCA 238; Molonglo Group (Australia) Pty Ltd v Cahill [2018] VSCA 147; Niesmann v Collingridge (1921) 29 CLR 177; Nurisvan Investment Ltd v Anyoption Holdings Limited [2017] VSCA 141
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr L Virgona | G & M Lawyers |
| For the Defendant | Mr H L Redd SC with | Arslan Lawyers |
| Mr A F Solomon-Bridge |
Table of Contents
(1) Overview and summary
(2) Background
(3) Pleadings
(4) Witnesses
(5) Legal principles
(6) Key issues
Issue 1: Is there a legally enforceable exit agreement, and if so, what are its terms?
(a) in particular, does the exit agreement contain:
(i) a term requiring Pallak to prepare and execute a formal contract for the sale of its interest to Stoneypint; and
(ii) the “completion term”?
Issue 2: If there is a legally enforceable exit agreement:
(a) was it agreed, alternatively, represented by Stoneypint, that the exit agreement would not be enforced?
(b) if the answer to 2(a) is “no”, is Pallak otherwise entitled to an order that:
(i) the exit agreement is void ab initio by reason of contraventions of s 18 of the ACL?; and or
(ii) that the exit agreement is rescinded for breach of the alleged “fiduciary duties”?
(c) if the exit agreement remains on foot and includes the completion term, has Stoneypint breached the completion term and/or has Pallak prevented the partnership from completing the project?
(d) if the exit agreement remains on foot, has Pallak breached the exit agreement?
Issue 3: Should there be an order for specific performance of the exit agreement?
Issue 4: Was the partnership dissolved on 11 November 2022 or 1 August 2023?
Issue 5: Should there be an order that the affairs of the partnership be wound up and that a receiver be appointed?
(6) Conclusion
HER HONOUR:
(1) Overview and summary
1In late 2018, the parties entered into a partnership to develop a property located at 36 Rockwell Way, Ravenhall (‘the property’). The parties own the property as tenants in common. In around November 2022, the plaintiff decided to leave the partnership and agreed to sell its half share in the property to the defendant. The defendant drew up a handwritten document (‘the exit agreement’)[1] to record their agreement, which the parties then signed.
[1] Court Book (“CB”) 447 (the words “exit agreement” do not appear in the handwritten agreement but
was the description adopted by the parties)
2The main issue for determination is whether the parties intended the exit agreement to be a legally binding contract. The plaintiff claims the exit agreement is merely an unenforceable agreement to agree. For its part, the defendant contends the agreement is a legally binding contract. If it is binding, the defendant seeks an order for specific performance. If not, the plaintiff seeks orders that the partnership conducted by the parties be wound up and a receiver appointed. The defendant opposes the appointment of a receiver.
3For the reasons that follow, I find the exit agreement is a legally binding contract. I accept and prefer the defendant’s submission that this document fell within the second category identified in Masters v Cameron.[2] In the circumstances, the defendant is entitled to an order for specific performance of the exit agreement. I was not persuaded the appointment of a receiver is necessary.
[2] (1954) 91 CLR 353 (“Masters v Cameron”)
(2) Background
4In around early 2006, Mr Leonidas Konstantinidis (‘Konstantindis’), the plaintiff’s sole director, and Mr Shai Schildkraut (‘Schildkraut’), the defendant’s sole director, first met at a building site in Tullamarine. They subsequently developed a close friendship, which included meeting each other’s families. Both men have considerable experience in the building industry. They discussed doing a building project together at some stage. Schildkraut became a registered builder in 2016.[3]
[3] Transcript (“T”) 35-38; 107
5On 5 September 2018, Schildkraut received an email from Knight Frank Australia alerting him to commercial development opportunities, including the development of the property. Schildkraut pitched to Konstantinidis the idea of buying and developing as partners (through their company vehicles) the property, to construct and then lease warehouses with a good return of income. Konstantinidis said “Let’s do it, I trust you to do it together”.[4]
[4]T44, L25-27
6Konstantinidis and Schildkraut met at Schildkraut’s offices, where they agreed they would carry on in partnership the business of purchasing and developing the property (‘partnership agreement’). The terms of the oral partnership agreement were that the parties would contribute equally to the costs and expenses of the partnership, and would acquire, hold and develop the property jointly and equally for profit.
7It was also agreed that Schildkraut would be primarily responsible for the building and construction of the property, including the proposed 16 commercial warehouses on the property. Schildkraut would not charge the usual builder margin to the partnership, typically 20 per cent. Schildkraut saw it as a long-term income stream once the warehouses had been built and were rented out. He had discussions with Konstantinidis to this effect prior to purchase of the property. The defendant claims the parties also agreed they would let the warehouses constructed on the property and divide the rental returns equally between them. The plaintiff disputes they agreed upon renting the units and sharing the income.
8There was no written partnership agreement created in the dealings between the two men. Their discussions were mainly oral. Occasionally, Schildkraut would email Konstantinidis’ daughter, Effie, as a contact point.
9On 10 September 2018, Schildkraut signed a contract of sale for the property with a purchase price of $1,472,580. The parties contributed equally to the deposit.
10On 4 October 2018, Lowe Lipmann, accountants, registered the partnership for GST and an ABN.
11On 26 October 2018, Schildkraut opened a Westpac bank account to deal with partnership income and expenses. Each partner contributed $450,000 towards the project. A loan was taken out by the partnership from Westpac in the sum of $735,000 to pay the balance payable under the contract of sale. The parties subsequently deposited equal amounts to the partnership bank account to pay for construction costs and outgoings. Payments from the bank account had to be jointly approved by the parties.
12The partnership’s business name, ‘Rockfield Business Park’, was registered on 13 November 2018.
13On 16 November 2018, settlement of the property occurred. The parties became registered proprietors of the property of two equal undivided shares as tenants in common.
14On 26 June 2019, planning approval to construct 16 warehouses was obtained. The stage 1 building permit was granted on 20 December 2019. In 2020, after obtaining building and planning permits, Schildkraut commenced the building and development of the property.
15The stage 2 building permit for construction of the remainder of the warehouses was issued on 16 November 2020 (and later amended on 20 October 2022), with Schildkraut named as builder.
16In various conversations from about August 2022, Konstantinidis told Schildkraut he wanted to leave the partnership. On the defendant’s version of events, Konstantinidis was concerned about the economy, including rising interest rates. Although not accepting the state of the economy and interest rates were motivating factors, Konstantinidis agreed he wanted to leave the partnership as he was suffering from ill-health and was concerned about leaving debts to his children.
17The parties discussed a few options. This included Schildkraut putting to Konstantinidis that he (Konstantinidis) should sell one of his other properties, although Konstantinidis did not wish to do so. Konstantinidis also suggested selling units to third parties and for Schildkraut to buy one of them to maintain majority control, but Schildkraut was not interested in selling to third parties because that meant his builder’s warranty would become more exposed. Konstantinidis suggested that he sell his share in the property to another business partner but Schildkraut would not agree to this. Ultimately, it became clear to both of them that the defendant would have to buy the plaintiff’s share. The parties agreed to meet at Schildkraut’s Port Melbourne offices where they could “sit down together, work out a price and finish it off”.[5]
[5]T52-8, T129
18On 11 November 2022, Konstantinidis and Schildkraut met at Schildkraut’s offices to finalise the plaintiff’s exit from the partnership. The meeting lasted for about one and a half hours to two hours.
19Konstantinidis agreed the purpose of the meeting was to discuss the price which Schildkraut would pay for the plaintiff’s interest in the property. After some discussions about price, they settled on the figure of $4 million. Schildkraut handwrote the exit agreement, a two-page document, during the course of their discussions. He read out the terms of the document to see if Konstantinidis wanted to change anything or if he had missed anything. According to him, Konstantinidis said “No, it’s okay, I’ll sign”. Schildkraut then gave him the document and both he and Konstantinidis signed it. Konstantinidis gave evidence he could not read the document as he did not have his glasses with him at the meeting. He denies Schildkraut read out the terms of the document to him but accepts he signed it and the price agreed upon was $4 million.
20According to Schildkraut, the arrangement was that Konstantinidis, as vendor, would take the written contract away so that his solicitor could prepare a proper contract of sale. Schildkraut got his son to come into the office and to take a photocopy of the handwritten agreement which was then given to Konstantinidis.[6]
[6]T55, L28-31
21The exit agreement reads as follows:
AGREEMENT (HOA) BETWEEN:
STONEYPINT P/L AND PALAK [sic] P/LAS THE TWO ENTITIES OWNES [sic] 36 ROCKFIELD WAY RAVENHALL IN 50/50 PARTNERSHIP AND PALAK [sic] WANT TO EXIT THE PARTNERSHIP, IT WAS AGREED THAT STONEYPINT WILL BUY PALAK’S [sic] SHARE.
AGREED PRICE $4,000,000 – (FOUR MILLION DOLLARS) + GST.
PALAK [sic] & STONEYPINT WILL COMPLETE THE PROJECT AS PARTNERS.PAYMENT TERMS.
- ON SIGNING THE CONTRAT [sic] OF SALE, STONEYPINT WILL PAY PALAK [sic] $200,000 + GST
- 30 DAYS AFTER OCCUPANCY PERMIT, NOT LATER THAN 28.02.23 STONEYPINT WILL PAY PALAK [sic] $1,800,000 + GST
- $2,000,000 WILL BE PAID IN 12 MONTHS AFTER THE $1,800,000 DEPOSIT PAID AND NO LATER THAN 28.02.24, TO BE CLEAR NO INTEREST TO BE PAID FOR THE TERMS
STONEYPINT AGREE TO RELEASE THE DEPOSIT TO PALAK [sic] AT PAYMEN [sic].- PALAK [sic] WILL ALLOW STONEYPINT FULL CONTROL ON THE PROPERTY FROM DAY CONTRACT OF SALE SIGNED. STONEYPINT WILL BE RESPONSIBLE TO ALL OUTGOINGS AND ENTITLE [sic] TO ALL INCOM [sic] RELATED TO THE PROPERTY FORM [sic] DAY OF SIGNING THE CONTRACT OF SALE.
- TO BE CLEAR, ALL TRANSACTION BETWEEN PARTIES WILL BE COVERED WIT [sic] TAX INVOICES ON OR BEFORE PAYMENT.
22About one and a half hours after signing the exit agreement, Konstantinidis read the document at home. He said he immediately telephoned Schildkraut. Konstantinidis told Schildkraut that “This document has a lot of thorns in it, it has a lot of errors”.[7] In response, Schildkraut purportedly laughed and said “don’t worry”,[8] after which the call ended.
[7] T115, L28-31
[8] Ibid
23Schildkraut denies Konstantinidis called him on 11 November 2022 following their meeting. He said the next time he and Konstantinidis discussed the exit agreement was approximately three weeks later. Konstantinidis visited Schildkraut’s offices and said he wanted to return to the partnership. Schildkraut responded by insisting on performance of the exit agreement and asking Konstantinidis to provide the contract of sale for the plaintiff’s interest in the property.[9] Konstantinidis denies this conversation occurred.[10]
[9] T56
[10] T138, L22-T139, L11
24On 22 February 2023, the partnership leased one of the units with the rental income being paid into the partnership bank account at Westpac. The parties agree these funds remain in the bank account and have not been distributed.
25On 12 May 2023, the defendant’s solicitors sent a letter to the plaintiff. The letter set out the background facts relating to the partnership. Reference was then made to the exit agreement which the solicitors said “was intended to be binding.” The letter noted that a proposal by the plaintiff in early 2023 to sell his 8 units in the property was not agreed by the defendant. The property should be dealt with as a whole “as noted in the Heads of Agreement.”[11]
[11] CB 611-614
26The letter then referred to a breach of the partnership agreement because the plaintiff had refused to sign any documents approving the rental of the units on the property. It was said the defendant is keen on continuing with the partnership agreement and would consent to a sale of the units in the property or the property as a whole. In terms of moving forward, the defendant’s solicitors requested confirmation from the plaintiff that he do all things required under the partnership agreement. Upon receipt of this conformation, the defendant required the parties to enter into a written partnership agreement to govern the rental of the units and distribution of revenue from the leased units. The partnership agreement “will also include an exit clause which will include a buyout of your shares in the partnership on the same price as that contained in the Heads of Agreement.” In the event that the confirmation sought was not provided, the solicitors gave notice that their client would have no choice but to escalate the matter further, including but not limited to “enforcing the Heads of Agreement by seeking specific performance of the same and any loss and damage suffered by it in the appropriate Court…...”
27The plaintiff’s solicitors responded on 14 June 2023.[12] They disputed the terms of the partnership agreement alleged by the defendant’s solicitors. The plaintiff’s solicitors confirmed that the plaintiff intended to dissolve the partnership. However, the exit agreement did not record what was discussed at the 11 November 2022 meeting. The plaintiff did not accept that the terms of the exit agreement as drawn by the defendant were correct. Given the ongoing dispute, the plaintiff’s solicitors noted it appeared appropriate that the partnership be dissolved. The plaintiff’s solicitors said it was a matter for the defendant as to whether it wished to enforce the exit agreement but pointed out that various steps had not taken place. Consequently, even if it was valid, it had been repudiated by the defendant which was accepted by the plaintiff in seeking to sell eight of the 16 factory units.
[12] Ibid 658-660
28The defendant’s solicitors replied on 14 July 2023.[13] They reiterated the terms of the partnership agreement and said the plaintiff had repudiated this agreement by seeking to dissolve the partnership. The defendant reserved its rights as to whether it accepted the plaintiff’s repudiation. The defendant’s solicitors disputed the allegation made that their client had repudiated the exit agreement and set out various reasons why that proposition was incorrect. The defendant’s solicitors then put forward an open offer to resolve the dispute amicably. The offer was that the parties would affirm the partnership agreement and the heads of agreement relating to the sale of the plaintiff’s share with an amended timetable. Alternatively, there be an independent valuation made of the plaintiff’s share of the partnership and the defendant would have a right of first refusal to buy the plaintiff’s share, less a deduction of $2 million of costs that would have been incurred if the parties had engaged a third party builder to undertake the development on an arms-length basis.
[13] Ibid 725-728
29In July 2023, Konstantinidis stopped authorising payments from the partnership’s Westpac bank account to pay for the completion of the development. Konstantinidis accepted in evidence that he also told Schildkraut he was not allowed to pay out anything from the partnership bank account because the partnership did not exist anymore. The development remains incomplete.
30On 1 August 2023, the plaintiff served the defendant with a notice purporting to dissolve the partnership.
31This proceeding was commenced by writ on 5 October 2023.
(3) Pleadings
32The plaintiff’s claim is straightforward. By its statement of claim dated 5 October 2023, the plaintiff alleges the partnership was dissolved on 1 August 2023 upon giving a notice of dissolution to the defendant. The defendant has refused to accept the plaintiff’s notice and has carried on the business of the partnership without accounting to the plaintiff for the plaintiff’s share of the partnership. The relief sought includes orders that the partnership be wound up and a receiver appointed.
33In its defence dated 10 November 2023, the defendant claims the exit agreement provided for the dissolution of the partnership and winding up of its affairs. It pleads the terms of the exit agreement were as follows:
(a) the partnership would be immediately dissolved and its affairs wound up, subject to the terms of the exit agreement;
(b) Stoneypint would pay $4,000,000 plus GST for Pallak’s share in the partnership on the following terms:
(i)$200,000 plus GST upon the signing of the contract of sale for the property;
(ii)$1,800,000 plus GST 30 days after the certificates of occupancy for the warehouses constructed on the property had been issued, not later than 28 February 2023;
(iii)$2,000,000 plus GST 12 months after the second payment had been made, not later than 28 February 2024;
(c) Pallak would prepare and execute a formal contract for the sale of its interest in the property to Stoneypint (‘contract of sale’) in accordance with the terms agreed in the exit agreement;
(d) Pallak would allow Stoneypint full control of the property from the day the contract of sale was signed;
(e) Stoneypint would be responsible for all outgoings and entitled to all income related to the property from the day of signing the contract of sale;
(f) tax invoices would be raised by Pallak on or before each instalment payment of the purchase price by Stoneypint; and
(g) Pallak and Stoneypint would each cooperate with the other and do all such things as are necessary on its part to enable the other party to have the benefit of the exit agreement;
34By counterclaim, the defendant alleges the plaintiff has wrongfully and in breach of the exit agreement:
(a) denied the validity of the exit agreement;
(b) failed and/or refused to prepare and execute a formal contract for the sale of its interest in the property to Stoneypint in accordance with the terms alleged in the exit agreement;
(c) failed and/or refused to raise tax invoices to facilitate the payment of the agreed purchase price by Stoneypint for Pallak’s interest in the property;
(d) failed and/or refused to cooperate and do all such things as are necessary on its part to enable Stoneypint to have the benefit of the exit agreement.
35The defendant seeks an order for specific performance of the exit agreement, alternatively, damages.
36In its amended reply and defence to counterclaim dated 3 June 2025, the plaintiff claims the exit agreement is not an enforceable agreement. The plaintiff denies the exit agreement contained the express terms alleged by the defendant.
37Alternatively, if the Court finds the exit agreement is enforceable, the plaintiff says:
(a) the exit agreement does not correctly record the matters orally negotiated between the parties on 11 November 2022, including, without limitation, that:
(i) the defendant would make an immediate payment to the plaintiff of $200,000, not $200,000 on signing the contract of sale as recorded;
(ii) the parties proposed that the defendant would make a further payment to the plaintiff of $1,800,000 upon signing the contract of sale; and
(iii) the balance of $2,000,000 was to be paid within 12 months of the date of the contract of sale with interest, not without interest as purportedly recorded in the exit agreement.
38It is then pleaded that Schildkraut made two representations. The first being that Schildkraut told Konstantinidis the exit agreement accurately reflected the discussions between them in circumstances where the latter did not have his glasses with him. The second representation alleged is that Schildkraut told Konstantinidis the agreement was of no effect when he apparently laughed and said “don’t worry” on 11 November 2022, after the exit agreement had been signed. These representations were relied upon for claims under section 18 of the Australian Consumer Law (‘ACL’) and or breach of fiduciary duty. In oral closing submissions, counsel for the plaintiff informed the Court that these claims were no longer pressed.[14]
[14] T147
39Further and in the alternative, the plaintiff pleads:
(a) it was a term of the exit agreement that prior to any sale of the plaintiff’s interest, the plaintiff and defendant would complete the project as partners (‘completion term’); and
(b) the defendant is in breach of the completion term because it has failed and refused to complete the project by failing to sign and progress an application for subdivision and contribute to construction and public insurance.
(4) Witnesses
40Konstantinidis and Schildkraut gave evidence. Their accounts of events differed in some respects as identified above. Such differences may well be explained by the accepted fallibility of human memory and the tendency to remember matters on terms that best suit the party concerned.
41I was asked to make an adverse credit finding against Konstantinidis on the basis that some of his answers beggared belief. Having observed him, I was not persuaded that he was deliberately giving untruthful evidence but he was somewhat dogmatic and argumentative at times. He himself conceded that his memory was poor. To the extent that it is necessary to resolve a conflict in the evidence given by the two men, I would prefer the account given by Schildkraut as he had a better recall of the events in question and was more reliable.
(5) Legal principles
42The principles relating to the construction of contracts are well-settled. They were recently summarised by the Court of Appeal in 5G Networks Limited v Centralnic Limited [15] as follows:
In brief, a commercial contract is to be construed objectively, by reference to its text, context, and commercial purpose. Ordinarily, the relevant context is confined to the contract itself, and any other contract or document referred to in the text of the contract. In addition, recourse may be had to surrounding circumstances known to the parties to identify the commercial purpose of the contract, or to assist in determining the proper construction where there is a constructional choice to be made. The contract should be construed so as to avoid making it commercial nonsense or working commercial inconvenience by asking what a reasonable businessperson would have understood its terms to mean. (citations omitted)
[15] [2025] VSCA 253, [58]
43A person’s intention to be legally bound by a contract is to be determined objectively and not by reference to uncommunicated subjective motives or intentions of the parties. Intention is manifested by the subject matter of the contract, the parties’ status to it, their relationship with each other and other surrounding circumstances.[16]
[16]Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, 105 [25] [1954] HCA 72
44In TheEdge Development Group Pty Ltd v Jack Road Investments Pty Ltd,[17] Riordan J set out some matters which courts have considered relevant in determining whether parties intended to be contractually bound, namely:
[17][2018] VSC 326, [45]-[47] (upheld by the Court of Appeal in The Edge Development Group Pty Ltd v Jack Road Investments Pty Ltd [2019] VSCA 91)
(a) Where the disputed agreement is in writing, the words used by the parties must be the strongest indicator of whether the parties intended to be legally bound. If, on proper construction of the document, it is sufficiently clear that the parties were content to be bound immediately, then the matter is resolved irrespective of the subject matter, magnitude or complexity of the transaction or whether the parties contemplated a further contract in substitution for the first contract.
(b) Whether the informal agreement is expressed to be ‘subject to contract’ or the absence of such words.
(c) The presence of the parties’ signatures on a document said to contain the terms of the agreement suggests an intention to form binding relations; though the effect of the signature cannot, of itself, give rise to a binding agreement if the terms of the signed document do not otherwise support the characterisation of the agreement as binding.
(d) The detail of the terms, to which the parties descended in the informal agreement, may indicate whether the parties did or did not intend to be immediately bound. As was stated by Powell JA in Liquorland (Australia) Pty Ltd v GYG Holdings Pty Ltd:
In carrying out the task of determining ... what was the relevant intention of the parties, a court may have regard, not only to the matters upon which the parties have reached their consensus, but also to the areas in respect of which they have failed to reach any consensus.
(e) An informal agreement which deals with a transaction of great magnitude or complexity ‘may suggest that the informal agreement was not intended to constitute a binding contract’.
(f)The established or common practice with respect to agreements of the type in question may indicate that the parties did not intend to be finally bound until the completion of a formal contract. An example of such a practice is with respect to the sale of real estate.
(g)The fact that the parties did not use solicitors for the informal agreement but proposed to do so for the formal contract, may be a factor indicating that the parties did not intend to be bound by the informal agreement.
With respect to the effect of post agreement communications, the courts have considered that such communications may be relevant to the following:
(a) Admissions by conduct of the existence or non-existence of a legally binding contract.
(b) Throwing light upon the meaning of the language in the informal agreement for the purpose of determining whether the language expresses an intention to enter or not enter contractual relations.
(c) Whether and to what extent there were uncompleted negotiations between the parties; and the significance of the uncompleted issues.
45The parties also referred to the well-known categories described by the High Court in Masters v Cameron[18] as stated by Dixon CJ, McTiernan and Kitto JJ at paragraph 9:
Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.
[18] Masters v Cameron, [9]
46It has since been recognised judicially that there is also a fourth category.[19] This was referred to by McLelland J in Bauklham Hills Private Hospital Pty Ltd v JR Securities Pty Ltd & Ors[20] where his Honour said:
… there is in reality a fourth class of case additional to the three mentioned in Masters v Cameron as recognised by Knox CJ and Ridge J and Dixon
J in Sinclair Scott & Co v Naughton [1929] HCA 34; (129) 43 CLR 310 at 317 namely ‘one in which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract and substitution for the first contract containing, by consent, additional terms’. Their Honours referred to the speech of Lord Lorbun in Love & StewartvInstone & Co (1917) 33 TLR 475 at 476, where his Lordship said that: ‘It was quite lawful to make a bargain containing certain terms with which one was content with dealing with what one regarded as essentials, and at the same time to say that one would have a formal document drawn up with the full expectation that one would by consent insert in it a number of further terms. If that were the intention of the parties, then a bargain had been made, nonetheless that both parties felt quite sure that the formal document could comprise more than was contained in the preliminary bargain’.
[19] The Edge Development Group Pty Ltd v Jack Road Investments Pty Ltd (“The
Edge”), [22]
[20] [1986] 40 NSWLR 622, 628
47An “agreement” which falls under the first, second or fourth category is an immediately binding contract, whereas the third category is not.
48In a recent decision of Croft J in Pinegro Products Pty Ltd v Paper Australia Pty Ltd, [21] his Honour observed after referring to the Masters v Cameron categories:
The authorities indicate that these categories are not to be applied strictly, and the Court is to determine the objective intention of the parties. This objective intent is ascertained having regard to the language and conduct of the parties, and requires consideration as to what this would objectively convey in all the circumstances
…
In Rossi Recycling Pty Ltd v Buckland Valley Pty Ltd & Anor, Connock J emphasised that the words used by the parties, where the alleged agreement is in writing, are the strongest indicators of the parties’ intention to be immediately bound.[22]
[21] Pinegro Products Pty Ltd v Paper Australia Pty Ltd [2025] VSC 453
[22] Ibid, [77]-[78], citing Molonglo Group (Australia) Pty Ltd v Cahill [2018] VSCA 147, [148]; Radovanovic
v Stekovic NSWCA 129, [22]; Pavlovic v Universal Music Australia Pty Ltd (2015) 90 NSWLR 605, [15]; Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, 105-6; Rossi Recycling Pty Ltd v Buckland Valley Pty Ltd & Anor [2022] VSC 467, [131]
49His Honour referred to the following passage from Steller Vision Operations Pty Ltd v Hills Health Solutions Pty Ltd, a decision of the NSW Court of Appeal:
The existence of matters of importance on which the parties have not reached consensus in their informal agreement will render it less likely that they intended immediately to be bound before the execution of a formal document. That the terms have not been fully or well stated is material to whether a contract has been made. The more important the term, the less likely it is that the parties will have left it over for future decision, but there is no legal obstacle which prevents the parties agreeing to be bound now while deferring important matters.[23]
[23] Pinegro Products Pty Ltd v Paper Australia Pty Ltd [2025] VSC 453, [79] quoting Steller Vision
Operations Pty Ltd v Hills Health Solutions Pty Ltd [2023] NSWCA 102, [67]
50Croft J concluded:
What is clear from these authorities, and numerous others, is that the assessment of the parties’ intent is to be drawn from the language employed; the particularity and specificity of the ‘agreement’; the importance of the terms ‘agreed’ upon; and any leftover or additional terms to be subsequently dealt with.[24]
[24] Pinegro Products Pty Ltd v Paper Australia Pty Ltd [2025] VSC 453, [80]
51The parties helpfully referred the Court to a number of decisions dealing with similar issues to those raised in this proceeding. Whilst it can be accepted that each case turns on its own facts, these cases provide useful guidance on the approach to be undertaken. In particular, the parties relied upon Patel v Segun Investment Holdings Pty Ltd (‘Patel’),[25] Molonglo Group (Australia) Pty Ltd v Cahill & Anor (‘Molonglo’),[26] Niesmann v Collingridge (‘Niesmann’)[27] and Nurisvan Investment Ltd v Anyoption Holdings Limited (‘Nurisvan’).[28]
[25] [2023] VSCA 238
[26] [2018] VSCA 147
[27] (1921) 29 CLR 177
[28] [2017] VSCA 141
(6) Key issues
52The parties agreed upon the following key issues for determination.
Issue 1: Is there a legally enforceable exit agreement, and if so, what are its terms?
(a) in particular, does the exit agreement contain:
(i) a term requiring Pallak to prepare and execute a formal contract for the sale of its interest to Stoneypint; and
(ii) the “Completion Term”?
Defendant’s submissions
53The defendant contends the exit agreement has a number of features which compel a conclusion that the parties intended to enter into a binding legal contract for the sale of the plaintiff’s share in the property to the defendant.
54First, the exit agreement contains all the terms that would be essential to the constitution of agreement for the sale of land: the parties to the agreement; the property; the price; the manner in which the contract price was to be paid; and the settlement date of the contract at purchase. Although not conclusive, the presence of these terms is an important consideration as it was in the case of Patel. There are no matters of significance that have been left out.
55Secondly, the document contains a recital noting that the parties are in a 50/50 partnership and that the plaintiff wishes to exit the partnership, which provides the context for the matters then agreed. The use of a recital followed by the language that “it was agreed that …” and “agreed price $4 million” indicates the parties had concluded a bargain and had intended to be bound by it.
56Thirdly, the use of the heading “Payment Terms” and the language “to be clear no interest to be paid for the terms” is indicative of a concluded bargain. If the exit agreement was not intended to be binding, why would the parties have addressed the question of interest on payment in it?
57Fourthly, there is no language in the document indicating it is not binding. The reference to the contract of sale is only to fix the point in time for payment and was not, as was the case in Niesmann, a pre-condition to it being a legally binding agreement. There was no suggestion that the terms of that contract would be at large or the subject of a further round of negotiations.
58Fifthly, the fact that the parties signed the document is itself indicative of its intention to constitute a binding agreement.[29] This is in the context where the parties have conducted their partnership almost exclusively orally, there had been no written partnership agreement and no written building contract with Schildkraut, yet the parties saw fit to reduce the terms of the exit agreement to writing which indicates a significant level of relative formality attending the transaction.
[29]Patel, [73]
59The fact that the preparation and execution of contract of sale does not, of itself, preclude a conclusion that the exit agreement constitutes a legally binding contract. The argument put forward by the plaintiff that neither party is subject to any obligation nor gains any rights until a formal contract is executed proceeds on a false assumption. The defendant contends there was an immediate obligation in the exit agreement on the plaintiff, as the vendor, to prepare and execute the contract of sale. Alternatively, there was an implied obligation on the parties to join in bringing the formal contract into existence and to carry it into execution.[30]
[30]Masters v Cameron, 360
60In Niesmann, the contract that was held to be binding contained no more than the identity of the parties, the property, the price, the date of payment of instalments and the balance of the price and interest rate. The defendant submitted the exit agreement contains all these things, plus a recital and additional matters, including details as to GST, the treatment of outgoings prior to the settlement and the release of deposit monies on payment. Therefore, the defendant argues the exit agreement falls within the second, or at least fourth, Masters v Cameron category.
61The defendant says nothing can be placed on the fact that there is no s32 vendor’s statement. In Molonglo, the court was not troubled by the absence of a vendor’s statement. The lack of any vendor’s statement is not relevant here where the purchaser and vendor are former partners in relation to the property itself and each is intimate with it. The defendant had already received a s32 statement barely four years before when making the original purchase of the property.
62As a sub-issue under Issue 1, there is a debate as to whether the exit agreement contains a term requiring the plaintiff to prepare and execute a formal contract for the sale of its interests to the defendant. In Masters v Cameron, the court considered that in the second category of cases there is a binding contract obliging the parties to join in bringing the formal contract into existence and then carrying it into execution.
63In Niesmann, the court found that where the parties make the signing of a contract a term of their bargain, there is no difficulty in decreeing specific performance of the agreement and compelling the performance of a stipulation of the agreement necessary to its carrying out and due completion.
64Similarly in Molonglo, the written contract did not expressly state who was to prepare the contract of sale, but the Court of Appeal said that an order for specific performance of an agreement for the sale of land can provide that, as a first step, the parties execute a formal contract incorporating the mutually agreed terms. Therefore, the defendant submits that whether there is an express or implied term obliging the plaintiff to prepare a contract of sale is an arid debate. At the very least, there is an implication that the parties will sign a contract in accordance with the terms of the exit agreement and specific performance can be ordered to that effect.[31]
[31]Stoneypint otherwise relies on paragraph 16 of its opening submissions dated 29 May 2025
65The second sub-issue under Issue 1 is whether the exit agreement contains the so-called “completion term”. This refers to the term whereby it is stated the parties would complete the project as partners. However, according to the defendant, this term does not make that a condition precedent to the parties’ performance of the obligations in the exit agreement. Such a term is not necessary for any business efficacy. The express terms of the contract were that the contract of sale was to be prepared and executed, notwithstanding there remained some outstanding work on the project. Therefore, the exit agreement did not contain the completion term as alleged by the plaintiff.
Plaintiff’s submissions
66The plaintiff argues the terms of the exit agreement do not support a finding that the parties ever intended the document to be legally binding. A number of matters are relied upon in support of that submission.
67First, the expressions used in the document are expressed in the future tense and are not couched in terms of offer and acceptance. Rather, the highest the expression used is that Stoneypint “will buy” Pallak’s interest in the property at some time in the future.
68Secondly, there are no mandatory requirements which crystalise upon the execution of the exit agreement. No money is payable by Stoneypint as the putative purchaser until such time as a contract of sale is executed. The exit agreement contains no express term requiring either party to even prepare a contract of sale, much less require such preparation within a specific timeframe.
69Thirdly and relatedly, the parties’ respective rights and obligations do not change at all upon the execution of the exit agreement but rather expressly stated as only being altered upon the signing of a contract of sale. In light of the text, the court should find there is no objective manifestation to enter a binding agreement. Nor can it be said that the surrounding circumstances cause that position to change in any meaningful way. Konstantinidis had accepted the purpose of the meeting was to work out the price, as he wanted to leave the partnership agreement. He knew the best way for that to happen was for Schildkraut to purchase his share.
70The plaintiff submitted there was nothing unusual about that and it can be expected that any vendor who entered into a heads of agreement was at least in part desirous of selling that property. The reason for the meeting was the need to agree a price so that the parties “could start from somewhere”.[32]
[32]T113, L12
71There was no express term that Pallak, as vendor had to provide a contract of sale. Nor was there any need to imply such a term – the defendant could always have done so.
72The plaintiff argues the exit agreement falls within the third Masters v Cameron category as there was no intention from either side that the exit agreement was to be binding. There was an agreed price but that was as far as it went – it was an unenforceable agreement to agree.
73The plaintiff also relies heavily upon the defendant’s subsequent conduct which it argues constitutes an admission against interest and therefore, can be relied upon on the question of whether there was an intention to be bound.[33] Four matters were identified, namely:
(a) the letter of 12 May 2023 from Ascot Solicitors to Konstantinidis;
(b) the letter of 14 July 2023 from Ascot Solicitors to Comlaw;
(c) the offer made by Schildkraut in the week or weeks immediately after the November meeting to effectively “swap properties”; and
(d) the failure by Schildkraut to ever press Konstantinidis for the production of a contract of sale to give effect to what Schildkraut says was a binding obligation on the part of the vendor to give effect to the terms of the exit agreement.
[33] Relying on Nurisvan, [110]-[111]
74When viewed in isolation or together, each of the four matters referred to above provide sufficient support for the position that the parties did not intend to be legally bound by the exit agreement.
75The letter of 12 May 2023 assumed that the partnership agreement was still on foot and had been breached by the plaintiff.
76The letter of 14 July 2023 contained a threat to sue for breach of the partnership agreement which could not sit with the suggestion that the exit agreement was binding. It was inconsistent or in direct contradiction that the latter was binding.
77The plaintiff accepted the offer to swap was not as clear cut an admission as the statements contained in the two letters relied upon.[34]
[34] T18, L17-22
78In response to the question of admissions against interest, the defendant contended the letters did not say the exit agreement was not binding – quite the opposite. The discussions about a swap of properties was made in the context of trying to reach a commercial solution to the dispute, as was the case with the letters sent by the defendant’s solicitors.
Consideration
79Applying the relevant legal principles, the question of intention to enter into a binding contract is to be determined objectively from the text of the document, construed in the context of the surrounding circumstances in which each of the parties signed.[35]
[35] cf Patel, [46]
80As a matter of construction, I find the exit agreement did create an immediately binding agreement for the sale of the plaintiff’s share in the property to the defendant. In my view, a reasonable business person construing the text of the exit agreement in the circumstances in which it came into being would have believed the parties did intend to create binding relations. My reasons for reaching this conclusion are as follows.
81First, the exit agreement uses the past tense. In what the parties said was the recital or preamble, the words used were “it was agreed”. The plaintiff then relied on the words “will pay” in support of a construction that a future tense was used. However, these words come after the words it was agreed. In my view, the words “it was agreed” clearly support a construction that an agreement had already been made. Similarly, the price was referred to as “agreed”, being past tense.
82Secondly, all the essential terms for the purchase of a property were agreed upon, being the parties, the identity of the property, the price, the amount of deposit payable, the times for payment of the subsequent amounts due and a cut-off date for the final payment in settlement. The fact that these important and significant terms were included lends itself to the conclusion that the parties intended to be bound. There are no terms of significance which have been left out. Although not necessarily determinative, there is no “subject to execution of contract” clause in the exit agreement, unlike in The Edge. The exit agreement does not contain any wording to suggest that it was not legally binding or that the contract of sale would be subject to further negotiation. The mere fact that the exit agreement contemplated a further contract of sale for the property does not of itself preclude a construction that the exit agreement is a legally binding contract.[36]
[36] Molonglo, [149]; Masters v Cameron, [360]
83Thirdly, the fact that there was to be no interest payable showed the parties had turned their minds to what would be the position would be down the track when the payments fell due.
84Fourthly, the payments to be made were to be the subject of tax invoices on or before payment. This requirement indicates that the parties had turned their minds to the need for a formal documentary record, which is consistent with an intention to be bound.
85Fifthly, some weight should be placed on the fact that the parties saw the need to reduce their agreement to writing when their prior dealings relating to the establishment and running of the partnership were all oral.
86It is true that the exit agreement imposes no express term to the effect that the plaintiff was required to prepare a contract of sale. However, the absence of such a term does not mean the contract is not binding. As was the case in Masters v Cameron, the court held the parties were under an implied obligation to carry out the terms of the agreement, which would include the preparation of a contract of sale. The same obligation applies here. Having regard to all these matters, I find that the exit agreement is one which falls within the second Masters v Cameron category.
87As for context, the relevant context is that the plaintiff wished to leave the partnership and sell its share in the property to the defendant. There is no dispute about this being the case, other than the plaintiff saying it is consistent with this being an agreement to agree.[37] In my view, a reasonable business person would regard the purpose of the exit agreement was to finalise the exit of the plaintiff from the partnership, being a commercially rational outcome.
[37] T167, L20-29
88The plaintiff’s contention that subsequent conduct by the defendant demonstrated a lack of intention to be contractually bound was not made out in the evidence. I was not persuaded that the matters relied upon by the plaintiff amounted to admissions against interest on the part of the defendant.
89The so called “swap” evidence relied upon by the plaintiff was not particularly compelling. I accept the defendant’s submission that the offer to swap another property was made in the context when the parties were already in dispute and the defendant was trying to reach a commercial resolution. Given these circumstances, I was not persuaded the offer to swap properties amounts to post contractual conduct which is admissible to show a lack of intention to be bound, contrary to the case advanced by the plaintiff.
90The plaintiff relied upon two letters sent by the defendant’s solicitors in May and July 2023. The May letter specifically said that the exit agreement was intended to be binding. The letter did say that the defendant wished to continue with the partnership agreement on certain conditions, including a written partnership agreement that would include a buyout of the plaintiff’s share on the same price as in the exit agreement. It was foreshadowed that if the plaintiff did not agree to the defendant’s requests, the defendant would commence proceedings to seek specific performance of the exit agreement. The July letter noted, among other things, that the exit agreement was intended to be the arrangement for the parties to terminate the partnership. Whilst the letters put forward commercial alternatives as a means to resolve the dispute that had arisen, both letters contain statements which are consistent with the defendant treating the exit agreement as being binding.
91Overall, I am not persuaded that the contents of the two letters, when each is read as a whole, amounts to conduct which demonstrates the defendant did not intend to be bound by the exit agreement. Consequently, I find that the plaintiff’s reliance upon these two letters is misplaced as they do not support a finding that the defendant did not intend to be contractually bound – quite the reverse.
92The final act relied upon was the alleged failure on the part of Schildkraut to ask Konstantinidis for a contract of sale of land. Schildkraut gave evidence that he asked Konstantinidis for a copy contract some three weeks after the exit agreement was signed. This conversation was disputed by Konstantinidis who said it did not happen. I prefer and accept Schildkraut’s evidence that he did ask for a copy contract on that occasion. Thereafter, he did not pursue it any further as Konstantinidis had refused to go through with the sale and the parties were in dispute. It can hardly be said this state of affairs amounted to an admission against interest on the part of Schildkraut to the effect that he did not intend to be contractually bound by the exit agreement.
93The plaintiff had pleaded in its amended reply that if the court were to find the exit agreement was binding, some of its terms were at variance with what was said to have been agreed on 11 November 2022. This issue largely fell away at trial due to a lack of evidence about these matters from Konstantinidis.
94The first variance alleged was that the defendant had agreed to make an immediate payment of $200,000 and not on signing the contract of sale. The second variance was that the defendant would pay $1,800,000 on signing a contract of sale. The third was the last payment due of $2,000,000 would attract interest, not without interest as stated in the exit agreement. The defendant noted that none of these matters were put to Schildkraut in cross-examination. Konstantinidis gave no evidence about the second and third claimed variances. In paragraph 62 of the defendant’s closing submissions, reference is made to the somewhat inconclusive evidence given by Konstantinidis about the first variance. Additionally, there was no evidence from Konstantinidis that he ever sought payment of this sum after he had signed the agreement. Overall, I am not persuaded that the term recorded in the exit agreement about the payment of $200,000 upon signing of the contract of sale is an error and should be varied.
95The final matter to note is that the plaintiff did not contend the exit agreement was unenforceable because a s32 statement under the Sale of Land Act 1962 had not been provided. Counsel for the plaintiff said that he had not pressed the s32 issue as this was not a vendor/purchaser of sale – it was effectively a tenant in common buying out a partner.[38] The defendant dealt with this aspect in paragraphs 21 – 24 in its written closing submissions, noting that in Molonglo, the absence of a s32 statement is not fatal in and of itself. Although mentioned in submissions, the court was not asked to determine any issue relating to the requirement, if any, to provide a s32 statement.
Issue 2: If there is a legally enforceable exit agreement:
(a) was it agreed, alternatively, represented by Stoneypint, that the exit agreement would not be enforced?
[38] T178, L16-31, T179, L1-3
96Resolution of this issue turns on whether there was a statement by Schildkraut to Konstantinidis that Konstantinidis did not have to worry about the exit agreement. Schildkraut could not recall saying such a thing to Konstantinidis
97For the reasons given earlier regarding the evidence from the two men, I accept and prefer Schildkraut’s account that he did not say those words to Konstantinidis and find that this representation was not made by him. Even if he had, it could hardly be said that such a statement could give rise to any enforceable rights such as abandonment. It was simply pleaded that by reason of this alleged statement the exit agreement came to an end.
(b) if the answer to 2(a) is “no”, is Pallak otherwise entitled to an order that:
(i) the exit agreement is void ab initio by reason of contraventions of s 18 of the ACL?; and or
(ii) that the exit agreement is rescinded for breach of the alleged “Fiduciary duties”?
98Issue 2(b) has fallen away given the concession made by counsel for the plaintiff during final oral submissions that the ACL and breach of fiduciary duties claims were no longer pressed.
(c) if the exit agreement remains on foot and includes the completion term, has Stoneypint breached the completion term and/or has Pallak prevented the partnership from completing the project?
99On a plain reading of the exit agreement, it does not state, as alleged by the plaintiff, that the contract of sale is subject to the completion of the project. Nor can such a term be implied in my view. I find the exit agreement did not contain the so called completion term pleaded by the plaintiff with the result that any breach of this alleged term by the defendant does not fall for consideration.
100The remaining question under this issue is whether the plaintiff prevented the partnership from completing the project. Konstantinidis refused to authorise payment from the partnership bank which required joint approval. Payments were made by electronic transfer although Schildkraut accepted he may have been able to sign cheques himself but that was not the way the business was conducted. Because of the stalemate between the parties the project is still not completed. The rental income from the only unit rented so far is in the partnership account and cannot be distributed according to Konstantinidis, because the partnership no longer exists. The evidence led showed that the completion of the project had stalled because of Konstantinidis’ conduct.
(d) if the exit agreement remains on foot, has Pallak breached the exit agreement?
101Paragraph 2(d) raises the issue of whether the plaintiff has breached the exit agreement. The defendant says that the plaintiff is in breach because it had continued to deny the validity of the exit agreement. The plaintiff is still required to execute a formal contract of sale and to raise tax invoices to facilitate payment of the agreed purchase price.
102Having found the exit agreement is legally binding, then it follows that the plaintiff is and remains in breach of the terms as identified above by the defendant.
Issue 3: Should there be an order for specific performance of the exit agreement?
103The defendant seeks an order for specific performance. Schildkraut gave evidence that the defendant is ready, willing and able to complete the exit agreement. The defendant says this order should be made in circumstances where damages would not be an adequate remedy. The property in question is unique and the defendant is already a half owner. It is usually the case that where real property is involved, an order for damages will not be an adequate remedy.[39] The plaintiff contends that damages would be an adequate remedy. I disagree for the reasons advanced by the defendant – namely, that the property is a unique commercial development of which the defendant is already a half owner.
[39] See paragraph 92 of the defendant’s closing submissions and the authorities relied upon
104The plaintiff argued the defendant was not entitled to an order for specific performance because the defendant breached the terms of the exit agreement by not complying with the completion term. As has already been seen, I have rejected the plaintiff’s submission that the exit agreement contained the so called completion term.
105Paragraph 39 of the plaintiff’s opening submission stated that the alleged breach was demonstrated by the defendant not signing documents for the purposes of the subdivision. The defendant pointed out there was no evidence that subdivision was a contractually agreed aspect of the project. All the evidence pointed the other way.[40] That submission is correct. Consequently, the plaintiff has not established there was any disentitling breach on the part of the defendant.
[40] Paragraph 94 of the defendant’s closing submissions and the transcript references identified
106No other grounds or discretionary factors that might militate against an order for specific performance of the exit agreement being made were raised by the plaintiff. That being so, I am satisfied that the defendant is entitled to the order sought.
Issue 4: Was the partnership dissolved on 11 November 2022 or 1 August 2023?
107The defendant’s case is that the partnership was dissolved on 11 November 2022 on execution of the exit agreement. The property is the main asset of the partnership and once it went to the defendant, the partnership effectively came to an end according to the defendant. Consequently, the plaintiff’s purported notice of dissolution dated 1 August 2023 is ineffectual because the partnership had already been dissolved.
108There is no express term in the exit agreement to the effect the partnership is dissolved upon signing the agreement. In fact, it was a term of the exit agreement that the parties would complete the project as partners. After the contract of sale was signed, the defendant was to have full control of the property and would be responsible for all outgoings and be entitled to all the income related to the property. The practical effect would be that once the contract of sale was signed, then the plaintiff’s involvement in the project would cease in keeping with the terms of the exit agreement. Had the plaintiff complied with its contractual obligations, the partnership would have come to an end once the contract of sale was signed.
109It follows then that the notice of dissolution served by the plaintiff in 1 August 2023 was otiose. Had the plaintiff complied with its contractual obligations, then the partnership would have already ended under the terms of the exit agreement once the contract of sale was signed.
Issue 5: Should there be an order that the affairs of the partnership be wound up and that a receiver be appointed?
110The defendant submits that by the exit agreement, the partnership regulated its winding up through the defendant’s purchase of the plaintiff’s interest in the property. If the court were to order specific performance of the sale of the plaintiff’s share in the property, then the partnership would have no valuable assets. Consequently, the appointment of a receiver would be disproportionate and inappropriate.
111There is no evidence of any misappropriation of the partnership property or other conduct which endanger partnership assets. Whatever the outcome of the court’s decision relating to the sale of the property, it is not suggested that the parties will be unable to effect an orderly winding up of the partnership by agreement, without being burdened by the costs and disruption of a receiver. The appointment of a receiver would be wholly premature according to the defendant.[41] I agree. It seems to me that the parties (the directors of which are very experienced commercial businessmen), should be capable of winding up their affairs without the need for external assistance and incurring the costs associated with the appointment of a receiver. In the event that the parties could not agree on the process for winding up, then the issue of the appointment of a receiver could be revisited at a later stage.
[41] See paragraphs 96 and 97 of the defendant’s closing submissions and the authorities relied
upon
(6) Conclusion
112I find that the exit agreement is a legally binding contract. The defendant remains willing and able to perform its side of the exit agreement. An order for specific performance should be made in circumstances where damages would not be an adequate remedy.
113I will order that the plaintiff’s claim be dismissed and there be judgment for the defendant on its counterclaim. Unless the parties wish to propose otherwise, costs should follow the event.
114I will hear from the parties regarding the forms of orders to be made consequent upon these reasons, including costs.
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Certificate
I certify that these 32 pages are a true copy of the Reasons for Judgment of Her Honour Judge A Ryan delivered on 6 November 2025.
Dated: 6 November 2025
Associate to Her Honour Judge A Ryan
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