St Hilliers (Developments) Pty Ltd v Radmanovich - [2002] NSWSC 524

Reported Decision:
(2003) NSW ConvR 56-030

New South Wales

Supreme Court

CITATION: St Hilliers (Developments) Pty Ltd & Anor v Radmanovich & Anor [2002] NSWSC 524

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 1781/02

HEARING DATE(S): 11 June 2002

JUDGMENT DATE: 12 June 2002

PARTIES :

St Hilliers (Developments) Pty Ltd and Austcorp International Limited - Plaintiffs
Max Radmanovich and Jelena Radmanovich - Defendants

JUDGMENT OF: Palmer J

COUNSEL : M.S. Henry - Plaintiffs
D.G. Pullinger - Defendants

SOLICITORS: Tzovaras Legal - Plaintiffs
P. Dobrich & Co - Defendants

CATCHWORDS: REAL PROPERTY - VENDOR AND PURCHASER - OPTION TO PURCHASE - ASSIGNMENT - CONSENT - Option to purchase entitles grantee to assign with consent, such consent not to be unreasonably refused - if option exercised, purchaser must carry out subdivision providing for five parcels of land to be retained by vendor with road access - grantee proposes to assign option to third party - third party indicates that it cannot carry out the subdivision as required - third party later proffers assurance that it will be bound by the terms of the option and the attached contract - discussion of principles upon which the Court considers whether consent to an assignment of contract for sale under which work is to be performed has been unreasonably refused. HELD: Refusal of consent to assignment was reasonable.

CASES CITED: International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] 1 Ch 513

DECISION: Summons dismissed with costs.

Introduction
1 The Defendants are the registered proprietors of Lot C in Deposited Plan 367229, known as 6 Orchard Street, Warriewood (“the Property”). The Plaintiffs are related development companies which, in 2000, were endeavouring to acquire options to purchase adjoining parcels of land in Warriewood for the purpose of carrying out a large development. 2 On 23 January 2001 the Plaintiffs and the Defendants entered into a Deed of Option whereunder the Plaintiffs were granted the option to purchase the Property. In November 2001 the Plaintiffs advised the Defendants that they had not been able to acquire sufficient land to carry out their proposed development and that they intended to assign their rights under the Option Deed to another developer which had been acquiring land in the area, namely, A.V. Jennings Ltd (“Jennings”). The Plaintiffs requested the Defendants to consent to the assignment in accordance with Clause 11.1 of the Option Deed. That clause provides that either the Defendants or the Plaintiffs may assign their rights and obligations under the Deed, subject to the consent of the other parties and that such consent is not to be refused unreasonably. 3 The Defendants did not consent to the assignment to Jennings. They say, firstly, that on its true construction, Clause 11.1 of the Option Deed does not permit the Plaintiffs to assign their option rights at all except in accordance with another, inapplicable, provision of the Deed and, secondly, that if the Deed does permit an assignment to Jennings with the Defendants’ consent, then the Defendants have…

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 St Hilliers (Developments) Pty Ltd v Radmanovich

Details

AGLC: St Hilliers (Developments) Pty Ltd v Radmanovich [2002] NSWSC 524
Case: [2002] NSWSC 524
Decision Date: 12 June 2002

CaseChat Overview and Summary

St Hilliers (Developments) Pty Ltd initiated proceedings against Radmanovich, asserting the latter's refusal to consent to the assignment of an option to purchase property was unreasonable. The case was heard in the Supreme Court of Queensland. The dispute centred around an option to purchase property that allowed for its assignment with the vendor's consent. The option required the purchaser to execute a subdivision, retaining five parcels of land with road access. St Hilliers, the grantee, sought to assign the option to a third party, but Radmanovich, the vendor, refused consent, deeming the third party unable to meet the subdivision requirements. The third party subsequently promised to abide by the option terms and the attached contract. The court was tasked with determining the legal principles governing the refusal of consent to an assignment of a contract for sale where performance is required, and whether such refusal was reasonable.

The court examined the principles applicable to the refusal of consent to assignment, focusing on whether Radmanovich's refusal was reasonable. Key considerations included the terms of the option, the obligations of the assignee, and the vendor's right to assess the assignee's capacity to perform. The court held that Radmanovich was entitled to refuse consent if the assignee could not meet the obligations stipulated in the option. Given the third party's initial inability to comply with the subdivision requirements and the subsequent assurance, which did not fully address the vendor's concerns, the court concluded that Radmanovich's refusal of consent was reasonable.

Following its analysis, the court determined that Radmanovich's refusal of consent to the assignment was justified. The third party's assurance, while a positive step, did not alleviate all of Radmanovich's concerns regarding the ability to perform the subdivision as required. The court emphasised the importance of the vendor's right to assess the assignee's capacity to fulfil the contractual obligations, particularly where the contract involves the performance of specific work. The court's decision underscored the vendor's prerogative to ensure that the assignee is capable of meeting the conditions of the option and the attached contract.

The court's final orders confirmed the reasonableness of Radmanovich's refusal to consent to the assignment. The third party's assurance, although appreciated, did not sufficiently mitigate the vendor's concerns about the assignee's ability to perform the required subdivision. The decision reinforced the vendor's right to protect their interests by assessing the assignee's capacity to fulfil the contractual obligations. The court's ruling provided clarity on the principles governing the refusal of consent to assignment in the context of property sales where performance is required.

Orders