Reported Decision : (2006) NSW ConvR 56-171 New South Wales Court of Appeal CITATION: Thompson v White & Ors [2006] NSWCA 350 HEARING DATE(S): 15 November 2006 JUDGMENT DATE: 12 December 2006 JUDGMENT OF: Ipp JA at 1; Tobias JA at 2; McColl JA at 153 DECISION: (a) Appeal allowed in part; (b) Set aside Declarations 1 and 2 made by Gzell J on 15 December 2005 but otherwise dismiss the appeal; (c) The appellant to pay the respondents' costs of the appeal CATCHWORDS: REAL PROPERTY – sale and development – agreement – construction – whether agreement in nature of joint venture – whether formation of "joint venture company" essential for finding of joint venture agreement to develop property – whether sufficient indicia of joint venture agreement – CONTRACT – intention to contract – uncertainty – incompleteness – principles Conveyancing Act 1919, s23C LEGISLATION CITED: Property Law Act 1969 (WA) Real Property Act 1900, s 74MA Abjornson v Urban Newspapers Ltd [1989] WAR 191 Adamson v Hayes (1973) 130 CLR 276 Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101 Baloglow v Konstanidis (2001) 11 BPR 20,721; [2001] NSWCA 451 Brambles Holdings Pty Ltd v Bathurst City Council (2001) 53 NSWLR 153 Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1 Fox v Percy (2003) 214 CLR 118 Gibson Motor Sport Merchandise Pty Ltd v Forbes [2005] FCA 749 Hagan v Waterhouse (1991) 34 NSWLR 308 CASES CITED: Halloran v Minister Administering National Parks and Wildlife Act 1974 [2006] 80 ALJR 519 Industrial Rollformers Pty Ltd v Ingersoll-Rand (Australia) Ltd (2001) Aust Contract R 90-129 Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Aust) Pty Ltd (1988) 5 BPR 11,110 Khoury v Khoury [2006] NSWCA 184 Secretary, Department of Social Security v James (1990) 85 ALR 615 Sorna Pty Ltd v Flint [2000] WASCA 22 Terrex Resources NL v Magnet Petroleum Pty Limited [1998] 1 WAR 144 Theodore v Mistford Pty Ltd (2005) 79 ALJR 1503 Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1 Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32 Byron Ward Thompson PARTIES: Julian John White Romeo Medina Libut Aerated Concrete, Design and Construction Pty Ltd FILE NUMBER(S): CA 40013/06 A: D E Grieve QC / F Hicks COUNSEL: 1R: In person 2&3R: G George A: SBA Lawyers, Rozelle SOLICITORS: 1R: Julian White, Warriewood 2&3R: Forsters, Solicitors, Manly LOWER COURT JURISDICTION: Supreme Court - Equity Division LOWER COURT FILE NUMBER(S): SC 2685/03 (incorporating 5929/03) LOWER COURT JUDICIAL OFFICER: Gzell J LOWER COURT DATE OF DECISION: 15 December 2005 LOWER COURT MEDIUM NEUTRAL CITATION: Thompson v White & Anor; ACDC v Thompson [2005] NSWSC 1257 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40013/06 SC 2685/03 SC 5929/03 IPP JA TOBIAS JA McCOLL JA Tuesday 12 December 2006 BYRON WARD THOMPSON v JULIAN JOHN WHITE & ORS Judgment 1 IPP JA: I agree with Tobias JA. 2 TOBIAS JA: At all material times the appellant Byron Ward Thompson (Thompson), was an employee of the third respondent Aerated Concrete, Design and Construction Pty Ltd (ACDC), whose directors and shareholders were the first respondent Julian John White (White), and the second respondent Romeo Medina Libut (Libut) and their wives. I shall refer to the parties without their honorific purely for ease of reference and without intending any disrespect. 3 In April 1997 Thompson purchased a vacant parcel of land known as No.65 Ellery Parade, Seaforth (the Seaforth property) for $495,000 and thereafter, over a period of some years, a substantial dwelling house was erected thereon generally by ACDC. On 24 April 2003 the Seaforth property was sold for $3.1 million. 4 It is reasonable to assume, although it is yet to be decided, that after repayment of all monies borrowed for the purpose of acquiring and developing the Seaforth property, there will be a not insignificant profit. 5 Thompson claims that he is entitled to that profit upon the basis that he purchased the Seaforth property in trust for his wife for the purpose of erecting a dwelling thereon which was to be their home. 6 On the other hand, White and Libut claim that they and Thompson agreed that the Seaforth property would be purchased and developed and then sold pursuant to a joint venture agreement entered into for the purpose of commercial gain and pursuant to which they were to share the profit from the sale equally. 7 On 15 December 2005, the primary judge, Gzell J, upheld their claim and made the following declarations, against which Thompson now appeals to this Court: "1. Declares that [Thompson] and [White] and [Libut] agreed to form a joint venture company ('the company') in which each of the plaintiff and the first and second defendants would hold a one third interest ('the joint venture'). 2. Declares that [Thompson} and [White] and [Libut] intended the company to purchase, develop and sell properties with a combination of third party finance and profits generated I Aerated Concrete Design and Construction Pty Ltd 9ACN 070 297 291) ('ACDC'). 3. Declares that the land known as 65 Ellery Parade Seaforth, being all of the land contained in folio identifier 276/4889 ('the land'), was purchased in the plaintiff's name with the intention that it would be a joint venture asset. 4. Declares that [Thompson], [White and Libut] agreed in September 2000, that: a. [Thompson] would receive 50% of the profits from the sale of the land up to $500,000 and [White] and [Libut] would share 50% of the profits from the sale of the land up to $500,000 between them; and b. [Thompson], [White] and [Libut] would share equally the profits from the sale of the land in excess of $500,000." 8 At the commencement of the hearing the primary judge considered that as the central issue in the proceedings was the determination of what was the agreement, if any, between the parties with respect to the Seaforth property, issues of quantification of claims depended upon that determination. Accordingly, he made an order pursuant to the Uniform Civil Procedure Rules (2005) r.28.2 that issues other than those specified by his Honour in [3] of his judgment be heard and determined. Those were as follows: a) What was the total amount spent on the construction of the house at Seaforth by ACDC? b) What was the total amount spent on the construction by Mr Thompson? c) Was the amount spent on the construction by ACDC reasonable? d) Was the amount spent on the construction by Mr Thompson reasonable? e) What was the value of the work undertaken on the construction by Mr Libut? f) What was the net purchase price of the property? g) What was the net profit, or loss, made from the purchase, development and sale of the property? h) What amount is payable to ACDC for the work undertaken by him on the construction? i) What amount is payable to Mr Thompson for the work undertaken by him on the construction? j) What amount is payable to Mr Libut for the work undertaken by him on the construction? k) What loans: (i) Were advanced by Mr Thompson? (ii) Were advanced by Mr White? (iii) Were advanced by Mr Libut? (iv) Were advanced by ACDC? l) What was the net sale price of the property? m) What are the respective shares of any profit, or loss, from the purchase, development and sale of the property due to Messrs Thompson, White and Libut? n) What is the amount of any profit, or loss, made from the purchase, development and sale of the property due to Messrs Thompson, White and Libut? 9 Having made the declarations referred to, his Honour then referred the separate questions in [3] of his judgment to a referee for determination. However, we were informed that that reference has been cancelled and that the matters in question will now be determined by an Associate Judge, assuming that the appeal is dismissed. The essential issues on the appeal 10 One of the difficulties facing the parties in advancing their respective cases before the primary judge was that, as his Honour noted in [5] of his judgment, there were no contemporaneous documents which provided any relevant evidence of whatever agreement there might have been between the parties. Nevertheless, there was, as his Honour noted, "a plethora of documents" to most of which no reference was made either in oral evidence or written submissions. Given the wide-ranging cross-examination of the critical witnesses directed predominantly to credit, it follows that the primary judge's determination of the central issue of agreement or no agreement was, to a very significant extent, credit-based. 11 In this respect, it would be fair to say that the relevant conversations relied upon by White and Libut as establishing a joint venture agreement with respect to the purchase, development and sale of the Seaforth property for profit were denied by Thompson. The issue between them was therefore stark. Apart from the evidence of some independent witnesses upon which the primary judge relied as supportive of White's version, his Honour's acceptance of the latter's evidence and his implicit rejection of Thompson's evidence could only have been credit based. So much was recognised by senior counsel for Thompson who accepted that he could only displace the primary judge's findings with respect to his acceptance of White's evidence to the extent that they were either glaringly improbable or inconsistent with incontrovertible facts or uncontested testimony: Fox v Percy (2003) 214 CLR 118 at 128 [29]. 12 Thus in the joint judgment of Gleeson CJ, Gummow and Kirby JJ in Fox v Percy at 127 [26], their Honours observed: "After Warren v Coombes , a series of cases was decided in which this Court reiterated its earlier statements concerning the need for appellate respect for the advantages of trial judges, and especially where their decisions might be affected by their impression about the credibility of witnesses whom the trial judge sees but the appellate Court does not." 13 It was no doubt for the foregoing reasons that, in essence, Thompson's case on the appeal centred upon the submission that White's evidence, even if accepted, did not reveal an intention to create legal relations between the parties or to be immediately bound and was too vague and uncertain with respect to a number of fundamental matters relevant to any putative joint venture agreement in respect of the purchase, development and sale of the Seaforth property. In other words, it was submitted that there was a failure to agree on a number of fundamental matters or essential terms without which a concluded agreement in the nature of the joint venture asserted by White and Libut could not be established. The background facts taken from the primary judge's judgment 14 ACDC was established in about 1995 to carry out subcontracting work in the building industry specialising in concrete panel construction. As I have indicated, its primary directors and shareholders were White and Libut. Thompson was a licensed builder and in October 1995 he was employed by ACDC on an hourly rate plus an expense allowance together with a 10% share of any profits made by the company. Neither White nor Libut held any qualifications or licences to undertake residential building work. 15 Subsequent to his employment by ACDC, discussions took place between White and Thompson to the effect that the former and Libut were keen to develop properties as part of a joint venture through the use of a joint venture vehicle being a company in which he, Libut and Thompson would be equal shareholders and which would be named Australian Hebel House Pty Ltd (AHH). In cross-examination Thompson agreed that discussions about a joint venture development on an equal basis utilising external finance was discussed on a number of occasions from shortly after his employment by ACDC and that various properties were inspected for that purpose. 16 The foregoing discussions were still occurring between February and May 1997. One of the difficulties was that neither Thompson, White nor Libut had any funds of their own. The only way, apart from external borrowings, that funds could be generated for the purpose of any joint venture would be if ACDC was able to obtain major building contracts and thereby make profits which could be utilised for the purpose of any joint venture proposal. 17 As at April 1997 (when the Seaforth property was purchased), Thompson had accumulated debts through his activities prior to his employment by ACDC. He and his wife were forced to sell their Palm Beach property in February 1997. After paying out creditors, there was a balance of approximately $285,000 which, it was agreed, belonged to Mrs Thompson. White located the Seaforth property and, according to his evidence, discussed it with Libut and Thompson who agreed that it would be a good joint venture site and ideal for the construction of a dwelling house utilising ACDC's aerated concrete construction system. It was suggested, apparently, that part of the purchase price would be contributed by Mrs Thompson advancing the $285,000 which she had received from the sale of the Palm Beach property. 18 According to White, in March 1997 at a meeting between himself, Thompson and Libut on site, Thompson informed the others that he would not accept that the Seaforth property should be purchased by AHH (which had apparently not been acquired at that point). Rather, after speaking to his wife, they wished for the property to be acquired in their names as security for the advance of initial capital by Mrs Thompson. White and Libut agreed with this proposal for although White and his wife anticipated receiving some funds, this would not occur until some time in the future. White indicated that ACDC could provide its services for the construction of the development and also provide loans from its profits to finance the venture. 19 At a later meeting it was agreed that AHH would be established at a later date when White's funds came through but in the meantime the Seaforth property would be purchased in Thompson's name. 20 In April 1997 there was a further meeting when White accepted that Thompson should hold the property in trust until White and his wife received their anticipated funds and then AHH would be established and the title to the Seaforth property transferred to it. According to White he said to Thompson that as had been originally agreed, any ventures between the parties would be on a third/third/third basis. Thompson's response according to White was "Yes, we will proceed with it in my name and, yes, we will still divide it as a joint venture property 30/30/30." 21 At a later meeting in April 1997 White reminded Thompson again that he and Libut had agreed to the Seaforth property being placed in Thompson's name as he was putting up the initial capital for the venture. However, White reminded Thompson again that it would be the same as already discussed in that the venture would still be 30/30/30 to which Thompson agreed. Although White suggested that the title to the property could be transferred to AHH at a later date, Thompson pointed out that such a transfer would attract stamp duty. Thompson and White then agreed that they could easily draw up agreements to protect the parties' interests. 22 In April 1997 Thompson exchanged contracts for the purchase of the Seaforth property. Further conversations to the effect of the foregoing took place later in April 1997 and in early May 1997 before the purchase was settled. As a result of further discussions, White and Libut agreed that Thompson's profit share in ACDC should increase from 10% to 20%. 23 Thompson's version of events was entirely at odds with that of White. He said that following a site meeting with White he negotiated the purchase of the Seaforth property at a price of $495,000 and, having informed White of this, asked whether ACDC would build a house for he and his wife at a good rate. White responded that ACDC would build the house at a reasonable rate and that he and Libut would get some money together so that ACDC could build houses for them as well. If the house proposed by Thompson was "like the one at Sans Souci", White considered it would cost between $270,000 and $290,000 and that ACDC would be able to start construction within six months of planning approval being obtained from Manly Council. 24 In May or June 1997 at an on-site meeting with Thompson and Libut, White suggested to the others than in order to maximise the profits from ACDC which could then be put directly into the Seaforth venture, they should all accept a minimum wage of $25 per hour. Libut agreed because, he said, it was important to sacrifice to obtain money to put into the venture. Thompson also agreed, but said he would not be able to survive on $800 a week and would have to do other work. 25 White then introduced Thompson to Anthony Tomazin, a financial broker, who arranged a loan in the sum of $270,000 for Thompson from Advance Bank Ltd. That loan, together with Mrs Thompson's $285,000, was used to complete the purchase of the Seaforth property. The Advance Bank then offered a further loan facility in the sum of $270,000 for the construction of a house upon the property. However, that was subject to the condition that the house be completed for no more than that sum, but by June 1997 that was no longer possible. 26 In June 1997 Thompson had retained his son-in-law, Stephen Stinton, who was an architect, to draw up a new design for the house. White considered the design to be excellent and Thompson estimated that the cost of construction in accordance with Stinton's design would be $520,000. White considered that it would cost around $500,000. White drew up a building application in Thompson's name to Manly Council seeking consent to the house designed by Stinton. 27 AHH was established in September 1997 with an issued capital of $30,000 to which each of White and Libut contributed $10,000 and shared a further contribution of $10,000 on behalf of Thompson and his wife. In the meantime, Advance Bank Ltd had been taken over by St George Bank Ltd, which in July 1998 offered Thompson a construction loan facility of $270,000 on the same terms and conditions as those of the Advance Bank facility. The offer was declined. However, the St George Bank was owed $270,000 in relation to the initial acquisition of the Seaforth property upon which interest was payable. From January 1999 moneys were paid to the Bank to discharge that obligation. According to the primary judge, there was some confusion in the evidence as to the source of those funds, Libut indicating that he had made the payments and that the source of funds was ACDC. His Honour considered that he did not need to resolve that issue. 28 During 1999 some preliminary work was undertaken on the site but it was not until February 2000 that ACDC commenced full time work on the construction of the house. 29 In January 2000 ACDC was to receive funds in the vicinity of $280,000 to $300,000. At that time White had informed Libut and Thompson that ACDC could commence work on the Seaforth project full-time. White said that he would record all wages of he, Libut and Thompson as loans to the Seaforth project and would record all materials and contractors paid in a loan account from ACDC to the venture, a proposal with which Thompson agreed. White suggested a 15% margin on wage and material costs to cover overheads which was subsequently agreed at 10%. It was not suggested in the submissions on the appeal that ACDC's books did not record the matters referred to. 30 Around February 2000 Thompson informed White that he and his wife had been renting for some time and that they hoped to occupy the Seaforth house and pay rent towards the venture. It was alleged that White agreed that when they moved in they should pay rent of $500 per week, to which Thompson and Libut agreed. It was further agreed that Thompson and Libut would work on the site and that White would be involved in office management and general co-ordination of the project. 31 Ultimately, of the funds that White and his wife received they lent a total of $305,500 to Thompson at 15% interest by way of various instalments made between June and August 2000. Thompson paid ACDC's progress claims with those funds. Accordingly, at this point ACDC was carrying out construction work upon the property, invoicing Thompson by way of progress payments in respect of the cost of construction which were paid by Thompson utilising the $305,500 lent to him by Mr and Mrs White. One of the arguments advanced by Thompson on the appeal was that this arrangement was inconsistent with there having been some form of joint venture agreement between the parties as, if there had been such an agreement, Mr and Mrs White would have advanced the $305,500 as a capital contribution towards the venture rather than as a personal loan to Thompson to enable him to make the progress payments to ACDC relating to the cost of construction of the house. 32 In August 2000 White drew up four draft agreements said to record the relationship between the parties and requested Thompson and his wife to sign those to which either or both were a proposed party. They refused to do so. The documents comprised a Deed of Agreement and three Deeds of Loan. The first recited that Mr and Mrs Thompson were to purchase the Seaforth property in Thompson's name and that Mrs Thompson was to provide $285,000 towards its purchase and Thompson was to provide $270,000 to complete the purchase by raising a first mortgage loan from St George Bank. The deed provided that White, Libut and ACDC agreed to provide monies to Mr and Mrs Thompson by whatever means in order that the Seaforth property could be developed as an upmarket residential property worth upwards of an estimated $2 million. It further provided that all parties agreed that the developed property would be sold as soon as possible with due regard to maximising the profit realisable on the development. 33 The deed further provided that the parties agreed that prior to calculating the profit of the venture, all monies provided by each party to the venture would be calculated, totalled and paid a dividend at an interest rate of 10% per annum simple interest for the duration of their respective loans. Thereafter all parties agreed that after all venture costs and disbursements were repaid, the remaining profit of the venture would be divided into three equal shares between the Thompsons, White and Libut. 34 The first Deed of Loan was between Mr and Mrs Thompson and ACDC. It recited that the Thompsons had approached ACDC for a loan in order to build a house on the Seaforth property and that ACDC had agreed to lend them up to $350,000 for that purpose by way of a line of credit. The loan was to attract an interest rate of 15% per annum simple interest until repaid. Mr and Mrs Thompson also agreed that ACDC were entitled to place a caveat or mortgage upon the title to the property at any time in order to protect and secure its loans. 35 The second Deed of Loan was between Mrs Thompson, White and Libut. It provided that Libut and White each agreed to lend Mrs Thompson $33,500 and place those amounts into her superannuation fund account. Those monies would be repaid as priority payments from certain stated sources including her share in the sale of the Seaforth property held in trust in her husband's name. 36 The third Deed of Loan was between Mr and Mrs Thompson and Mr and Mrs White. It recited that Mr and Mrs Thompson owned the Seaforth property with the title in Thompson's name and that they had approached Mr and Mrs White for a loan in order that they might build a house on the property. Mr and Mrs White agreed to lend Mr and Mrs Thompson up to $350,000 for that purpose at an interest rate of 15% per annum simple interest until repaid. 37 On 29 September 2000 a meeting took place between Thompson, White and Libut at the Dee Why Hotel which I regard as critical to the primary judge's acceptance of White's evidence over that of Thompson. It is appropriate to set out the relevant paragraphs of his Honour's judgment with respect to that meeting: "45. By September 2000, neither Mr Thompson, nor Mr White, nor Mr Libut nor ACDC had any further funds and work at Seaforth ceased. According to Mr White, Mr Thompson informed him that he had spoken with Mrs Thompson, they had rented for a long time and they thought they should be reimbursed from the venture for that and they thought the profit share arrangement should be changed so that they received 50%. Mr White said that a meeting was held at the Dee Why hotel on 29 September 2000 between Mr Thompson, Mr White and Mr Libut and to discuss this issue. 46. Mr White said that at the meeting at the hotel, Mr Thompson said he and Mrs Thompson wanted a 50% share of the venture as they had rented for a long time and it was costing them money. Mr White argued for the continuance of a third profit share to each participant. Mr Thompson persisted with his 50% request. Mr Libut suggested that Mr Thompson could be reimbursed for the rent by getting 50% of the first $500,000.00 profit and any balance should be split one third to each. Mr Thompson accepted this proposal, as did Mr White. He and Mr Libut had already discussed Mr Thompson's request and had agreed that if they agreed to Mr Thompson have a 50% share, they would split the balance 25% to each. 47. Mr Thompson denied that any conversation about profit sharing took place at the Dee Why hotel. Mr Thompson said that the meeting jobs for which ACDC had quoted, work coming up and the attitude of CSR Hebel towards to ACDC were discussed." 38 To interpolate, to observe that the effect of this meeting from White and Libut's perspective was that they were agreeing to a variation of the original agreement that they would share the profit from the sale of the Seaforth property equally in a manner which favoured Thompson. Instead of receiving only one third of the total profit, he was now to receive 50% of the first $500,000 of profit and one third of any balance. The effect of White's evidence was that it was against his and Libut's interests which, in my opinion, renders it more credible and it is apparent that his Honour was of a similar view. 39 In December 2000 Mr Tomazin arranged a loan of $600,000 in Thompson's name which was then used to repay the loan of approximately $270,000 to the St George Bank, and to pay a District Court judgment in the sum of $110,000 (which I assume included costs) secured by the Fair Trading Administration Corporation (the Corporation) against Thompson. According to White's evidence, the parties considered that this liability should be discharged because ACDC had ceased trading for lack of funds and there was no other source with which to repay Thompson's debt. It was necessary, if the Seaforth property was to be retained as a joint venture account, that Thompson not be bankrupted by the Corporation as a consequence of non-payment of that debt. 40 Again I interpolate to observe that this was not an insignificant fact. There was no dispute that a bankruptcy notice had been issued against Thompson by the Corporation on 3 July 2000 claiming a total amount owing of $92,442.68. Other evidence indicated that a creditor's petition had been issued on that notice but which disposed of on 7 February 2001 when the amount owing was repaid. 41 Given that the lockup stage of the house was not reached until September 2001, it may well be that White and Libut were concerned that Thompson's indebtedness to the Corporation, particularly once it had issued a creditor's petition, was to be avoided if the Seaforth property together with its improvements were to be sold for an amount which would at least cover Thompson's indebtedness to Mr and Mrs White on the one hand, and ACDC on the other. On the other hand, it is equally consistent with the desire on the part of White and Libut to protect an asset which they no doubt perceived, when eventually the building works were completed, could be sold by way of a voluntary, rather than a forced, sale in order to maximise the profit from any such sale for their mutual benefit. 42 During 2001, approximately $190,000 was drawn from the ACDC Superannuation Fund (the company having ceased trading through lack of funds in the meantime) in order to enable the house to be brought to lockup stage which, as I have indicated, was reached in September 2001. Mr and Mrs Thompson then occupied the house from October 2001 until its sale in May 2003. According to White, Thompson agreed to pay rent of $600 per week in respect of the occupation of the house by he and his wife, which would be brought to account when the property was sold. 43 It would appear that Thompson denied that he had agreed to pay rent, it being his original intention to occupy the house with his wife as their personal residence. The latter changed when he realised he could not afford to service the various loans that he had incurred and that the property would therefore need to be sold in order to discharge his obligations. 44 Thereafter the relationship between the parties became strained with the result that neither White nor ACDC performed any further works on the Seaforth property after October 2001. However, in December 2001 Mr Tomazin arranged an increase of $150,000 on the loan of $600,000 which he had arranged in December 2000. Further, during April or May 2002, Libut continued to work on the property constructing a swimming pool. In June 2002 Mr Tomazin arranged a second mortgage for $152,000 to be advanced to Thompson for the purpose of completing the house between lockup stage and sale. In February 2003 Thompson arranged a further loan of $250,000, which he used to redeem the second mortgage on the Seaforth property and to provide himself with further funds of $98,000. In the meantime in December 2002 Mr and Mrs Thompson exchanged contracts to purchase a property at Somersby. In April 2003, contracts to sell the Seaforth property for $3.1 million were exchanged. 45 As at the time of the sale of the Seaforth property, the monies lent to Thompson by ACDC and Mr and Mrs White as well as any monies lent to Thompson by Libut remained unpaid. White and Libut then lodged caveats against the title to the Seaforth property. On 6 May 2003 Thompson commenced proceedings No.2685/03 in the Equity Division of the Supreme Court, joining White and Libut as defendants and seeking an order pursuant to s.74MA of the Real Property Act 1900 for withdrawal of those caveats. I note that White represented himself during both the trial and on appeal. 46 On 9 May 2003 Barrett J ordered by consent that the caveats be withdrawn and that Thompson pay from the proceeds of sale of the Seaforth property $800,000 into a controlled moneys account in the joint names of the solicitors for Thompson and Libut; and that Thompson further pay from the proceeds of sale $100,000 to White and Libut. 47 On 13 May 2003 Hamilton J ordered Thompson to pay a further $200,000 from the sale proceeds into the controlled moneys account and restrained Thompson from selling or disposing of any interest in the Somersby property until further order. Apparently this was because Thompson had used part of the proceeds of sale of the Seaforth property to settle his purchase of the Somersby property. The pleadings 48 As I have indicated, the litigation commenced with Thompson instituting proceedings by way summons No.2685/03 against White and Libut seeking an order for the withdrawal of the caveats which they had lodged against the title to the Seaforth property thus holding up its sale. On 3 June 2003 White and Libut filed separate cross-claims in those proceedings in which each claimed a declaration that Thompson held the Seaforth property as a constructive trustee and subject to a trust in which Thompson, White and Libut each had a one third interest. Consequential orders with respect to loan monies and contributions made by the parties and the payment to each of White and Libut of his share in the profits owed pursuant to a joint venture between the parties to develop and sell the Seaforth property were also claimed. 49 Points of Cross-Claim were also apparently filed by each of White and Libut in support of their cross-claims alleging an agreement between the parties made in February 1997 in respect of the purchase or construction of new homes or renovations of or extensions to existing homes for sale for profit. This included an agreement to acquire, develop and sell the Seaforth property for that purpose. In Points of Defence to the cross-claim filed on 29 August 2003 Thompson denied that there were any such agreements including with respect to the Seaforth property. In particular he denied the allegations in the Points of Cross-Claim as to what occurred at the meeting of the parties on 29 September 2001 at the Dee Why Hotel, although admitting that such a meeting took place. 50 Amended Points of Cross-Claim were filed by White and Libut on 7 November 2005 in which it was alleged that in around February 1997 White, Thompson and Libut agreed to enter into an agreement to purchase land, construct new homes or renovate or extend existing homes and to sell such property for profit (the agreement). Particulars of the agreement alleged that any property purchased would be owned in equal shares, that profits from the sale of any property so purchased would be shared equally by the parties, that funds for the first property purchased (which was the Seaforth property) would be provided in part by Thompson from the sale of a home owned by he and his wife; that it was an express or implied term of the agreement that improvements to properties purchased pursuant to the agreement would be performed by one or all of the parties or by a company controlled by them; and that it was an express or implied term that each party or a company controlled by them would make contributions to the costs of owning and improving properties purchased pursuant to the agreement as loans to the venture and that each party would provide his services and labour to permit improvements to be constructed and undertaken on the properties so purchased. 51 Paragraph 2 of the Amended Points of Cross-Claim then recited the purchase of the Seaforth property in or around April 1997 "in performance of the Agreement". By para.3 it was alleged that at some time after contracts to purchase the Seaforth property were exchanged, the parties agreed to vary or amend the agreement by expressly agreeing that that property would be purchased in Thompson's name and that he would hold the property on trust for the benefit of himself, White and Libut. 52 It was further alleged that it was expressly agreed or implied that Thompson would mortgage the Seaforth property to finance construction of improvements thereon on behalf of all parties who would give verbal guarantees with respect to any such borrowings. Further, the particulars alleged that it was agreed that ACDC would undertake building work for third parties and that the profits and cashflow from such work would be loaned to the parties to provide the source of capital to finance the construction of improvements on the Seaforth property and to pay the financial costs of owning and holding that property. ACDC employees would complete the various building works on the property on a "cost plus 10% overheads" basis which would be recorded as a loan from ACDC to the parties to be repaid when the property was sold. Further, ACDC would pay for other improvements to the property which would also be recorded as a loan to the parties from ACDC and accrue interest at the rate of 15% per annum. 53 The Amended Points of Cross-Claim then alleged in para.5 that the Seaforth property was purchased in performance of the agreement and, in par.6, that Thompson held the property on trust for the benefit of himself, White and Libut "subject to the trust imposed by the agreement". It was then alleged in par.9 that on or around 29 September 2000 the agreement was further varied at the meeting at the Dee Why Hotel in the manner to which I have already referred. 54 Paragraph 10 of the Amended Points of Cross-Claim alleged that White made contributions to the Seaforth property and received funds from ACDC in lieu of wages, particulars of which included the making of loans to Thompson between January 1999 and September 2000 of $18,225 by paying those monies into a St George Bank Account in Thompson's name to enable him to pay the monthly mortgage loan repayments on the property; providing loan funds/capital in the amount of $140,000 on 5 June 2000 and $100,000 on 6 July 2000, $2,750 on 17 July 2000 and other amounts on 9 August 2000, 21 August 2000 and 24 May 2001. 55 In an Amended Defence filed on 9 November 2005 to the Amended Points of Cross-Claim, Thompson denied the making of any agreement in February 1997 and denied that there was any agreement or arrangement at any time with respect to the Seaforth property. 56 In answer to par 6 of the Amended Points of Cross-Claim (which alleged that at all material times Thompson held the Seaforth property on trust for the benefit of himself, White and Libut), Thompson asserted that no express trust could arise by reference to the agreement as pleaded by reason of s23C of the Conveyancing Act 1919, a defence which was pursued on the appeal and to which I shall later refer. 57 It follows from the above summary of the pleadings in proceedings No 2685/03 that, relevantly, by 29 August 2003 Thompson was denying that there was any joint venture type agreement with respect to the purchase, development and sale of the Seaforth property and that the allegation that there was such an agreement and Thompson's denial thereof was carried through into the amended pleadings filed on 9 November 2005. 58 On the hearing of the appeal, Thompson placed significant reliance upon proceedings No.5929/03 instituted on 25 November 2003 by ACDC against Thompson in which it was alleged (in par.3) that in April 1997 ACDC and Thompson agreed that ACDC would provide building works to Thompson in order to construct a house on the Seaforth property. The Statement of Claim further alleged a variation of that agreement in February 2000 whereby ACDC would lend all amounts charged for its services to Thompson at an interest rate of 10% and that the loan would be repaid from other loan monies advanced to Thompson or from the profits of the sale of the Seaforth property. The document pleaded that ACDC undertook building works during the period February 2000 until September 2001 amounting to $664,581.35 in respect of which it had only received payment in the sum of $410,900 with the result that it was still owed $253,681.35 together with interest at 10% per annum. 59 On 2 August 2004 Thompson filed a defence to that Statement of Claim in which he admitted that ACDC undertook certain building works between February 1999 and 10 September 2001 and further admitted having paid $589,400 to ACDC and, in addition, a further $89,075 during the period 14 February 1997 to 10 September 2001. Paragraph 8 of the defence further alleged that Thompson "notes" that the amounts as set out in the Schedule to the Points of Claim as having been paid by Thompson to ACDC totalled $1,489,400. Thompson denied, therefore, that it owed any monies to ACDC in respect of the development of the Seaforth property. He further alleged that although he had paid $678,475 to ACDC in relation to the services provided by it in relation to the construction of the house on the Seaforth property, the fair value of those services was not more than $399,500. 60 A Further Amended Statement of Claim in proceedings No.5929/03 was filed on 9 November 2005 which relevantly contained similar allegations to those in the original Statement of Claim. In par.13 of the amended pleading it was alleged that the amount owing by Thompson to ACDC was $256,806.35 in respect of the building works carried out by it together with the sum of $191,767.60 being loan monies advanced to Thompson which remained unpaid. 61 On 18 November 2005 Thompson filed a defence to the Amended Statement of Claim which was not relevantly different from his original defence in which he denied that he owed any monies to ACDC. 62 The point sought to be made by Thompson on the appeal was that the institution of proceedings No.5929/03 by ACDC against him claiming monies owing with respect to the carrying out by ACDC of building works upon the Seaforth property was inconsistent with the claims of White and Libut that there was a joint venture agreement with respect to the purchase, development and sale of that property. This was not a matter that was dealt with by the primary judge, but nevertheless in my opinion it is of no substance. Although on its face there is the inconsistency which Thompson asserts, the proceedings by ACDC instituted on 25 November 2003 were clearly defensive given that in proceedings No.2685/03 Thompson in his defence to the cross-claims of White and Libut alleging a joint venture agreement with respect to the Seaforth property had denied any such agreement. 63 Quite clearly, if Thompson succeeded on that denial so that White and Libut's cross-claim alleging a joint venture agreement with respect to the acquisition, development and sale of the Seaforth property failed, then ACDC had no choice but to institute its own proceedings claiming the monies allegedly owed to it as a consequence of the building works which it undertook with respect to the development of that property. 64 Interestingly, after denying that he was in a "joint venture situation" with White and Libut, when asked in cross-examination whether he terminated ACDC's contract (to construct the house on the Seaforth property), Thompson answered "I didn't have a contract with them". If this is so and given that there was no suggestion that ACDC did not construct the house to, or close to, lock up stage, then if it did not have a contract with Thompson personally to construct the house, it could only have been doing so as part of a joint venture agreement to develop the property. Only in this way could Thompson avoid liability to pay ACDC the whole of the construction costs incurred by it. 65 Accordingly, in my opinion, Thompson gains no support for his argument that the primary judge was in error in finding a joint venture agreement between the parties on the ground that such a finding was inconsistent with the separate proceedings instituted by ACDC (which was controlled by White and Libut) claiming that Thompson was indebted to the company in respect of building works carried out by it upon the Seaforth property. Corroborating evidence 66 Apart from the evidence of Thompson, White and Libut, a number of other witnesses gave evidence upon which the primary judge relied in reaching his conclusion to accept White's evidence and to reject that of Thompson. The first such witness was David John Glover. The primary judge (at [66]) considered that that evidence was consistent with the case being put by White and Libut but from a consideration of the evidence, I would conclude that it was neutral. The same cannot be said with respect to the other witnesses. The first of these was Sam Safetli (Safetli) who owned the land next door to the Seaforth property. At about the time Thompson purchased the Seaforth property, Safetli had a conversation with him in which Thompson told him how much he paid for the property and that "it's a business venture between him and his partners". He agreed that they were the exact words which Thompson had used. 67 The second witness was Patrick Swart (Swart) who gave evidence with respect to a discussion with Messrs Thompson, White and Libut at a site at Glebe Island where some cranes were displayed in which the parties were interested. When asked by White whether there were discussions as to how the purchase of the cranes would be financed, Swart responded that the money was to come from "Yourself, Byron [Thompson] and Romy [Libut]" "to have the joint venture". When asked whether there were discussions as to where they were going to get that money, Swart responded "from the property in Seaforth". There was no suggestion put to Swart that Thompson at that meeting denied that this would be so. 68 The next witness was Leonard Dudley Gibbons (Gibbons), who was employed by CSR Hebel during 2000. ACDC was one of his accounts. He said that in July/August 2000 there was a discussion between himself and White in the presence of Thompson and Libut. The following exchange took place: "HIS HONOUR: Q Was anything said about the relationship between the three? A. Yes. Q. What was said? A. That – that they were partners. Q. Who said it? A. Mr White. WHITE: Q Was Mr Thompson present at that conversation? A. Yes Q. Did Mr Thompson nod or acknowledge that that was the case? A. Yes. Q. Did he dispute the case? A. No. … WHITE: Q In terms of the Seaforth property development did you have any conversations or were you present at any conversations between myself, Mr Libut and Mr Thompson? A. Yes. Q. Could you please say to the best of your recollection what those conversations were? A. In the first person? HIS HONOUR: Q. As much as you can yes. A. Firstly I was shown the project and I was told that it was a business venture between the three. WHITE: Q. Were there specific words to that effect used by Mr Thompson? OBJECTION HIS HONOUR: We are actually trying to find the words that were used. I will allow the question. WHITE: Q. Can you remember a specific conversation by Mr Thompson? A. No, but Mr Thompson joined in the conversation." 69 It was submitted that Gibbons's evidence was vague and had been elevated by his Honour to a level which was unsustainable. I do not think this is so. His Honour acknowledged (at [71]) that although it had been submitted that Gibbons had no real recollection of events and conversations when cross-examined he did not depart from his evidence as to the conversation which I have set out above. Accordingly, as with Safetli and Swart, both of whom had been cross-examined, his Honour saw no reason to reject their evidence. 70 There was then Robert Zol's evidence (Zol) who was also employed by CSR Hebel. He was called by White with whom he had had discussions in the presence of Libut and Thompson. The following exchange took place: "WHITE: Q. Regarding the development of the land at Seaforth were you involved in discussions with Mr Thompson, Mr Libut and myself? A. Only with relation to an idea you gentlemen had in relation to doing a joint venture development at Seaforth. HIS HONOUR: Q. What was said? A. That they intended – the lead up to it was that I would often request ACDC to price projects in the city of a major size project. Often the comments would be: We're not interested in doing work for others, we're going to - the project they were always talking about was this development at Seaforth. There was some time leading up to that project, a number of years I would imagine." 71 It was submitted that Zol had given no evidence as to any direct conversation involving Thompson and the property at Seaforth suggesting a joint venture. However, his Honour considered (at [73]) that his evidence did implicate Thompson in conversations regarding a joint venture development at Seaforth. 72 Finally, White called Alfredo Aban (Aban) who gave evidence with respect to a discussion in about February 1997 at the site of the Seaforth property and in the presence of Libut and Thompson. The discussion related mainly to the type of residential building that was proposed for the site. Aban expressed the view that White, Thompson and Libut were "quite excited" about the subject of the meeting at the time. When asked what words were used by the parties to express that excitement the witness responded, "I remember just the beginning of a fruitful joint venture". When asked by his Honour as to who used the words "joint venture", the witness responded: "The three of them your Honour were discussing at the time and the objective of that discussions were mainly about a joint venture". The exchange continued: "HIS HONOUR: Q What was said about a joint venture? A. It's about a fruitful beginning of a joint venture". 73 It was also submitted that Aban had no real recollection of individual conversations, a submission with which his Honour agreed. However, he considered (at [75]) that Aban was firm in his evidence that each of the persons at that meeting had used the phrase "joint venture" during the course of discussions. Accordingly, his evidence was consistent with those of the other witnesses to which his Honour had referred and should, therefore, in his view be accepted. 74 In giving his evidence in chief, Thompson denied ever discussing any business dealing with Safetli. However, a little later in his examination in chief, the following exchange took place: "HICKS: Q. Mr Thompson, you were in court this morning when Mr Gibbons gave his evidence about discussions at Seaforth? A. Yes. Q. And you heard what he said about those discussions? A. Yes. Q. Do you have anything to say in reply to that evidence? A. No. Q. Mr Thompson, you were in court this morning when Mr Safetli gave evidence about certain discussions that he said he had with you? A. Yes. Q. Do you have anything that you wish to say in reply to Mr Safetli's evidence as you heard it this morning? A. No." 75 Subject to the foregoing, Thompson was cross-examined in detail particularly as to his credit. In the circumstances, it is unnecessary to deal with that evidence in terms. Suffice it to say that it established that at the time of the acquisition of the Seaforth property, Thompson had no funds to contribute apart from those his wife in the sum of $285,000. 76 Furthermore, given the necessity to borrow $270,000 to complete the acquisition of the Seaforth property and the approximately $500,000 it was going to cost to construct the proposed dwelling house thereon, which monies would need to be borrowed by Thompson and which he would be personally liable to repay if his claim that there was no joint venture agreement was accepted, the evidence established through his tax returns was that his taxable income was totally inadequate to enable him to service those loans. 77 In fact, the evidence established that, albeit with the connivance of White and Libut, letters were written under White and Libut's hand to the knowledge of Thompson to Royal Guardian Mortgage Corporation on 26 September 2000 and to Campsie Home Loan Centre on 21 March 1997 (both being marked to the attention of Tomazin) in which it was represented that Thompson had been employed by ACDC since September 1995 on a gross salary of $6,000 per month, a figure which was palpably false to both Thompson's and White's knowledge. 78 Although as White submitted, his signature to those letters did him no credit, the letters are indicative of the fact that Thompson's financial position was so parlous that it was necessary for him, in order to obtain finance or to refinance the loans with respect to the construction of the dwelling on the Seaforth property, to misrepresent his income position so as to persuade any potential lender that he had the capacity to service any loans when it was clear that he did not. 79 If this be so, then it tends against the case made by Thompson that these were his personal debts as he was building the house for himself and his wife with no intention, until his obligations got the better of him, of selling the property for profit. On the other hand, his parlous financial position at all material times does corroborate that there may have been an agreement between the parties of the nature of that advanced by White and Libut that the Seaforth property was to be acquired, developed and sold for a profit to be shared equally between the three partners. The primary judge's conclusions 80 The primary judge resolved the conflict between the evidence of Thompson on the one hand and that of White and the witnesses called by him on the other in the following terms: "77. The consistent evidence of those who heard the conversations about the Seaforth property in the presence of Mr Thompson that the relationship between parties was described by them as a joint venture, leads me to reject the evidence of Mr Thompson that no such venture existed. 78. In my view, Messrs. Thompson, White and Libut agreed, shortly after Mr Thompson was employed by ACDC, that they would form a joint venture company in which each held a one third interest and they would purchase, develop and sell suitable properties with a combination of third party finance and profits generated in ACDC. 79. I accept the evidence that Mr Thompson was to cause $285,000.00 to be contributed to the purchase of the Seaforth property in order that it became the parties' first joint venture. I accept the evidence that Mr Thompson required the property to be registered in his name as he was to contribute, or cause Mrs Thompson to contribute, the only initial funds. Nonetheless, the property was to be developed as a joint venture with Mr Thompson, Mr White and Mr Libut to share the profits equally. 80. That relationship was varied at the Dee Why hotel in September 2000 with Mr Thompson to have 50% of the profit up to $500,000.00, but any profit over and above that figure was to be shared equally by the three participants. 81. It was submitted that the loans made by ACDC and by Mr White to Mr Thompson belied such a relationship. On the contrary, the draft agreements of August 2000 indicate that the contributions of each were to be treated as interest bearing loans that were to be repaid before the profit on the venture was calculated." 81 His Honour (at [82]) rejected a submission that the arrangement was too vague to be enforced as there was no mention of how losses, if any, might be treated. He considered that the inescapable inference was that in the event of losses, then like the position with profits, each of the parties would bear an equal share. 82 His Honour further rejected a submission (at [83]) that the arrangement was unenforceable because there was no indemnification or guarantee given by Messrs. White and Libut to Thompson who, as registered proprietor of the Seaforth property and the person to whom all loans were made, bore all risks with respect to the purchase of the property and the performance of the construction works. 83 The basis of his Honour's rejection of this submission (at [84]) was that if a liability was incurred by Thompson which could not be discharged when the property was sold or by further mortgaging the property, then because the parties were obliged to share any losses equally, Thompson would have been entitled to equal contribution from each of White and Libut in respect of any such liability. 84 It was finally submitted that the relationship was not one that gave rise to a binding contract of the nature of a joint venture because neither White nor Libut made any direct contribution to the purchase price of the property or the cost of construction of the house. In other words, Thompson (or at least Mrs Thompson) contributed capital in the sum of $285,000, which was used as part payment of the purchase price of the Seaforth property. White and his wife advanced in excess of $300,000 to the project by way of loan. However, there was no evidence that Libut personally advanced any funds whether by way of capital contribution or loan. Rather, the evidence indicated that moneys were advanced from the ACDC superannuation fund to which, I would assume, Libut had an entitlement. Furthermore, Libut performed labouring work in the development of the property. 85 The primary judge (at [85]) concluded that the fact that Mr and Mrs White advanced those funds to Thompson by way of loan did not exclude them as a contribution to the joint venture. Its structure, his Honour held, required funds to be provided by way of loans to be discharged from the proceeds of sale of the Seaforth property before the profit of the venture was calculated. The grounds of appeal 86 Originally, there were 24 grounds of appeal but at the commencement of the hearing Thompson was given leave to file an Amended Notice of Appeal in which the grounds of appeal were confined to the following: "1. The primary judge's conclusions that the appellant and the first and second respondents made an agreement or agreements to the effect set out in declarations 1 and 4 made on 15 December 2005 and that the appellant acquired the land known as 65 Ellery Parade, Seaforth ('the land') with the intention that it would be a joint-venture asset were erroneous as irreconcilable with the following incontrovertibly established facts: · that the appellant held the land in trust for his wife; · that the appellant alone entered into a construction contract with the third respondent to have a house built on the land; and · that the first respondent made loans to the appellant to enable him to pay progress payments due to the third respondent under the construction contract. 2. The primary judge erred in making declarations 1 and 2 on 15 December 2005 because those declarations are [f]utile given the fact that the parties did not carry the agreement said to have been made into effect and that, in any event, if any such agreement had been made so as to affect the property referred to in the third declaration made on 15 December 2005, that agreement was unenforceable for want of consideration, certainty, express agreement upon or performance of essential terms and writing. 3. The primary judge erred in declaring that the land was purchased 'in the appellant's name' with the intention that it would be a joint-venture asset because, first, the supposed agreement to constitute the joint-venture was not carried into effect, secondly, neither of the first or second respondents contributed any money to the cost of acquiring and improving the land otherwise (in the case of the first respondent) than by way of loan to the appellant and, thirdly, there was no evidence to support any finding (whether implicitly made or not) that the appellant intended to make a gift of the land or any interest in it to either of the first or second respondents. 4. The primary judge erred in making declaration 4 made on 15 December 2005 because any such supposed agreement was unenforceable for want of consideration, certainty, express agreement upon or performance of essential terms and writing." The submissions on the appeal 87 Essentially, Thompson's submissions in support of these grounds of appeal fell into three categories. The first was that even accepting the primary judge's findings of fact and, in particular, his acceptance of the evidence of White over that of Thompson, nonetheless, his conclusion that the relationship between the parties was that of a joint venture, was illusory in the absence of a finding of a concluded agreement between the parties that they intended to be immediately contractually bound. It was submitted that the "arrangement" or "relationship" found by his Honour was too vague and uncertain as to give rise to a concluded contract or agreement between the parties particularly in the absence of any agreement with respect to its essential terms. 88 The second, which was a variant of the first, was that White and Libut failed to contribute capital (as distinct from Thompson who did) to the acquisition and development of the Seaforth property and, on the contrary, only provided loans to Thompson himself. This was said to be inconsistent with there having been an agreement between the parties in the nature of a joint venture and instead supported Thompson's case that the development of the Seaforth property was for his and his wife's own purposes. This development was being financed in the normal way through loans, albeit loans arranged or provided by Mr and Mrs White and/or ACDC as well as from external sources. 89 The third category was that his Honour's findings as reflected in the third declaration constituted a finding that Thompson held the Seaforth property upon express trust for himself, White and Libut which was unenforceable in that it did not create any interest of White and Libut in the Seaforth property due to the failure to comply with s.23C(1) of the Conveyancing Act 1919. It was further submitted that the consequence of no interest in the Seaforth property being created in favour of White and Libut was that any agreement pursuant to which that purported interest was intended to be created, itself was unenforceable. The first and second categories of challenge 90 It is convenient to deal with these categories together for they tend to overlap. Thompson submitted, correctly, that the term "joint venture" was neither a technical one nor a term of art. It was an expression which had no settled meaning at law and was not capable of conveying or implying a legal or equitable arrangement or relationship beyond describing that which is to be otherwise ascertained by an examination of the facts: United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1 at 10. In that case, Mason, Brennan and Deane JJ observed: "The term 'joint venture' is not a technical one with a settled common law meaning. As a matter of ordinary language, it connotes an association of persons for the purpose of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill. …The term is, however, apposite to refer to a joint undertaking or activity carried out through a medium other than a partnership: such as a company, a trust, an agency or joint ownership. The borderline between what can properly described as a 'joint venture' and what should more properly be seen as no more than a simple contractual relationship may on occasion be blurred. Thus, where one party contributes only money or other property, it may sometimes be difficult to determine whether a relationship is a joint venture in which both parties are entitled to a share of profits or a simple contract of loan or a lease under which the interest or rent payable to the party providing the money or property is determined by reference to the profits made by the other." 91 More recently, in Gibson Motor Sport Merchandise Pty Ltd v Forbes [2005] FCA 749, Crennan J discussed the term "joint venture" in some detail. Her Honour noted, given the context of the matter she was considering, that questions of whether or not a joint venture involves specific partnership duties or more generally identified fiduciary duties depends very much on the facts of each individual joint venture. 92 After referring to the passage from United Dominions which I have set out above, her Honour relevantly continued (generally omitting citations): "77. Whilst the term 'joint venture' has no settled common law meaning in Australian law, and there is no separate body of law dealing with special features of joint ventures, like the well-developed jurisprudence in respect of partnership, some legal incidents of joint ventures were dealt with in United Dominions at 12-13 (per Mason, Brennan and Deane JJ) and at 14-16 (per Dawson J). 78. Distinctions that can be made between a joint venture and a partnership are not always simple or without controversy. The term 'joint venture' has conventionally and commonly been used to refer to an association for the purposes of a single undertaking rather than for the continuous 'carrying on (of a) business' characterising a partnership. … 79. While joint venture agreements are generally governed by the principles applicable to contract and property, equity, through the mechanism of a constructive trust, may be called in aid in circumstances of incomplete agreement … or called in aid because of a breach of fiduciary duty … Agreed contractual duties of joint ventures are not necessarily routinely subject to any implied duty to act in good faith. … 80. Recognisable and common characteristics of joint ventures include: 1. Participants hold proprietary interests in the assets of the joint undertaking often, but not necessarily, as tenants in common. 2. Participants exercise joint control of the undertaking. 3. Participants contribute to the joint undertaking, not necessarily equally; such contributions may be disparate, 4. Participants in the joint undertaking enjoy rights and assume obligations, which are often several and calculated by reference to ownership of shares and/or contributions made. 5. Participants have a joint (or community of) interest in the performance of the undertaking's purpose. 6. Participants associate in the undertaking for mutual commercial gain which can be mutual profits. 81. These recognisable and common characteristics can be found in various permutations and constellations such that it is not appropriate to attempt to isolate which characteristics would be both necessary and sufficient for the constitution of a joint venture agreement. It is always a question of fact whether any particular undertaking constitutes a joint undertaking for mutual commercial gain." 93 After dealing with the facts before her, her Honour concluded with respect to the question of whether those facts established a joint venture agreement in these terms (omitting citations): "177. On the facts of this case, there was no agreement on either of the dates contended for, for a joint undertaking for mutual commercial gain in a motor sport business. In passing, it should be mentioned that the applicants relied on a single instance use of the word 'partner' and a single instance of use of the word 'venture' by Mr Forbes in certain documents as evidencing a joint venture agreement. Such isolated uses by a non-lawyer cannot bear on the legal consequences of the facts as analysed in detail above. 178. To the extent that it was argued that conduct between 7 December 2000 and 26 February 2001 was conduct from which a joint venture agreement could be inferred, such conduct must be capable of providing all the essential elements of an express contract. 179. A joint venture as contended for would have required what is sometimes called 'a suite of agreements'. The parties all have their own advisers, accountants and lawyers. Dicta of Kirby P in Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1 at 20 is apt for the facts here: 'Courts are not well equipped, drawing on their own experience, to fill out the detail of such contracts [contracts between parties for a joint venture in the exploration of a coal mining lease] where the parties leave gaps in their own agreement. The fact that this may result in wasted time and money is a risk which parties to negotiation must always weigh up. Courts cannot enforce such agreements because they are incapable of judging where the negotiations of particular points would have taken the parties, acting bona fide but legitimately in their own interests.' " 94 What the foregoing establishes is that although the term "joint venture" has no settled common law meaning, it is conventionally and commonly used to refer to an association between persons for the purpose of a single undertaking for mutual commercial gain. Furthermore, the common characteristics of joint ventures identified by Crennan J cannot be said to be either severally or jointly both necessary and sufficient to constitute a joint venture agreement, it being a question of fact whether any particular undertaking constitutes a joint undertaking for mutual commercial gain. 95 As is apparent from the passage from United Dominions referred to above, the question is whether the facts establish an association of persons for the purpose of a particular commercial undertaking with a view to mutual profit with each participant usually, but not necessarily, contributing money, property or skill. 96 Accordingly, subject to there being sufficient certainty with respect to the essential terms upon which the particular undertaking is to be pursued, the ordinary rules of contract relating to whether the parties intend to enter into a contractual relationship apply. Relevantly to the present case, there is no necessary legal requirement that each participant must contribute capital: there is no reason why, for instance, it should not be agreed between the parties that if a particular participant cannot or does not wish to contribute capital, then that participant shall contribute their labour, as did Libut, or monies by way of loans (as did Mr and Mrs White). 97 Thompson submitted that the fundamental matters relevant to any putative "joint venture" in respect of the purchase, development and sale of the Seaforth property and which were not the subject of any agreement, were as follows: "a. the form of the arrangement – whether a partnership, trading entity or some other structure; b. the keeping and maintenance of accounts and records in respect of the purchase, development and sale of the Seaforth property; c. how and in what form property and assets of the putative ' joint venture ' were to be held; d. how decisions were to be made or matters determined as between Messrs Thompson, White and Libut; e. how and in what form financial contributions were to be made by the parties for the purposes of undertaking the purchase, development and sale of the Seaforth property, including: i. how monies were to be provided; ii. when monies were to be provided; iii. whether any party could make a 'call' for the provision of monies by the other parties: A. for the purposes of the purchase, development and sale of the Seaforth property; and/or B. for the reimbursement of costs, expense or losses personally incurred in the course of the purchase, development and sale of the Seaforth property; iv. whether expenses paid directly by any party would be treated as debt finance or equity finance advanced to the putative ' joint venture '; f. how, in what form and by whom third party finance would be raised; g. the provision of personal security or guarantees in respect of the purchase, development and sale of the Seaforth property, including such guarantees and personal security as was required by third party financiers; h. what was to constitute 'profit' as between the parties, in circumstances where: i. certain residential building works were being performed by another company controlled by Messrs White and Libut which itself was claiming and receiving progress payments from Mr and Mrs Thompson for the performance of the works, which payments included margins an amounts in excess of direct or actual cost of materials, trades and labour; ii. certain residential building works were undertaken, arranged or supervised by Mr and Mrs Thompson without fee, wage or reward; i. the sharing of the costs and expenses incurred, whether in the course of the purchase, development and sale of the Seaforth property or as the ultimate commercial result; j. the sharing of any loss, whether in the course of the purchase, development and sale of the Seaforth property or as the ultimate commercial result; and k. an indemnity or guarantee of Mr and Mrs Thompson by Messrs White and Libut as to the risks, liabilities, expenses and obligations personally accepted and/or to be incurred by Mr and Mrs Thompson in respect of the purchase, development and sale of the Seaforth property." 98 He submitted that it was the fact of express agreement upon sufficient and essential or vital terms that admits of the objective conclusion that the parties intended to create legal relations and intended to be immediately bound. I would not disagree with that proposition. But it does not follow that each and every one of the 11 items listed in [97] above were all fundamental or essential matters which were required to be the subject of express agreement before a joint venture agreement could have been concluded between the parties. Such a submission in my view is contrary to the authorities to which I have referred and upon which Thompson expressly relied. 99 The general principles relating to intention to contract, uncertainty and incompleteness have been expounded in a number of judgments of this court. Some recognition has now been given to the proposition that a contract may exist even where offer and acceptance cannot be readily located: see, eg, Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32 at 81; Brambles Holdings Pty Ltd v Bathurst City Council (2001) 53 NSWLR 153 at 177 [74], per Heydon JA; Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117–18, per McHugh JA (Hope and Mahoney JJA agreeing). 100 I note that the question was also given particular consideration by Ipp J (as he then was), with whom Pidgeon J agreed, in Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101. The following propositions can, I think, be distilled from his Honour's discussion of those principles and the other relevant authorities: (a) Whether the parties intend to enter into a contract binding at law is a question of fact to be determined objectively, that is, according to the standard of a reasonable bystander: Industrial Rollformers Pty Ltd v Ingersoll-Rand (Australia) Ltd (2001) Aust Contract R ¶90-129 at [136]–[138], Anaconda Nickel at 110 [24]; (b) So long as a manifestation of mutual assent is present, a concluded bargain can be found to exist: Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 178 per Tadgell J, quoting Williston on Contracts Vol 1, para 4.3, p258; Brambles at 179 [81]; (c) It is well recognised that parties may enter into a valid contract containing a limited number of terms comprising those terms essential to the bargain that they wish to conclude, in the expectation that at a later date a further contract will be arrived at containing additional terms to facilitate and clarify the initial contract. That is to say, a binding contract may be arrived at even though it leaves unresolved many matters which might arise in the future: Anaconda Nickel at 110 [25]; (d) Where parties have executed an instrument in writing but it is uncertain whether in so doing they intended to create legal relations, the court may have regard to all the relevant circumstances to determine, objectively, what the party's intention was. " Intention " in this sense means intention to contract, not what the parties intended by the terms of the contract. The relevant circumstances may include prior negotiations or subsequent conduct although direct expressions of intent made after the contract was arrived at are not admissible: Anaconda Nickel at 110 [26]; (e) The context in which the contract is arrived at and, in particular, the conduct of the parties may be relevant to questions of incompleteness. However, once the court has determined that the requisite intention of the parties is present, it is then necessary to go onto to consider whether the contract is so incomplete or uncertain as to be void: Anaconda Nickel at 111 [27] and [28]; (f) It does not follow that any omission will make a contract incomplete or uncertain in the sense of rendering it invalid. It is true that the omission of an essential term will have that effect; and that all the essential elements of an express contract must be present: Integrated Computer Services at 11,117. However, in this context the meaning of " essential " is ambiguous. If it means a term without which the contract cannot be enforced, then the statement that the parties must agree on the essential terms of the contract is true. However, it is not for the court to determine which terms are " essential " in the sense that it regards them as important as opposed to a term which it regards as less important or a matter of detail. It is for the parties to decide whether they wish to be bound and, if so, by what terms, whether they are important or unimportant. They are " the masters of their contractual fate ": Anaconda Nickel at 112 [29]; (g) In determining whether essential terms are uncertain, it is important to bear in mind that ambiguity does not mean uncertainty. Further, in determining whether contracts are void for uncertainty, courts should be astute to adopt a construction which will preserve their validity as they are the upholders of bargains and not their destroyers: Anaconda Nickel at 112–113 [30] and [33]. 101 Bearing these principles in mind, I would draw the following conclusions from the findings of the primary judge: (a) Although in or about February 1997 conversations took place between Messrs Thompson, White and Libut to the effect that they should, through a joint venture company in which they would be equal shareholders, acquire properties and develop them by way of outside finance and then share the net profits equally, unless and until a particular property was found which would be suitable for the purpose, in all probability the parties did not intend contractual relations between them to have been created. However, once the Seaforth property was located, the parties agreed that it would be acquired for the purpose of its development and sale and that the profits earned would be shared equally. This agreement was one in respect of which they intended to be contractually bound. (b) I interpolate that although his Honour found (in [78]) that the parties had agreed that they would form a joint venture company in which each held a one third interest and that they would purchase, develop and sell suitable properties with contribution of third party finance and profits generated in ACDC, an agreement reflected in the first and second declarations made by his Honour, in my opinion no binding agreement intended to thereupon create binding legal relations came into existence at that time. Therefore, those declarations ought not to have been made. They have no practical utility in any event. (c) Because none of the parties, apart from Mrs Thompson, had any funds, she agreed to provide to her husband the sum of $285,000 as his capital contribution towards the purchase of the Seaforth property. The parties then agreed that the balance of the purchase price and the costs of the development would be provided by way of loans. Furthermore, they agreed that ACDC would construct the development at a reasonable price. (d) At the time that ACDC was able to proceed with the construction of the development on a full-time basis, it was to receive approximately $280,000 to $300,000. It was further agreed that each of Messrs. White, Thompson and Libut would contribute their wages as employees of ACDC as loans to the Seaforth project and that ACDC would record all materials and contractors paid by it in a loan account from ACDC to the venture subject to the addition of a 10% margin on wage and material costs to cover overheads. (e) A further term of the agreement was that the Seaforth property would be purchased in the name of Thompson given that only he, through his wife, was contributing capital but that he would hold the property for the purpose of the joint undertaking of its development and ultimate sale for profit. (f) The agreement between the parties was varied on 29 September 2000 with respect to the split of profits in favour of Thompson who was to receive 50% of the profit up to $500,000 but any profit above that figure was to be shared equally between the three participants. 102 In the foregoing circumstances, in my opinion his Honour was correct to find that the parties entered into a joint venture arrangement pursuant to which they were to be contractually bound to acquire and develop the Seaforth property for the purpose of mutual commercial gain. They had agreed on the manner in which the property was to be acquired, that Thompson was to contribute capital whereas the balance of the purchase price and the construction costs were to be financed by way of loans, that the construction would be carried out by ACDC and that when the property was sold, any profit would be shared initially equally and later upon the basis agreed at the meeting of 29 September 2000. In other words, they had agreed upon the essential or fundamental terms which were to govern their relationship. 103 Although Thompson submitted that there was no agreement as to how the profit was to be calculated or how losses were to be shared, there could be little doubt that in what was a reasonably straight forward transaction, it should be inferred that the profit on sale was to be ascertained by deducting from the gross sale price all expenses incurred in the acquisition of the property, the construction of the development, the repayment to Thompson of the capital contributed by him and the repayment to any lenders of their loans together with interest: cf Vroon BV v Foster's Brewing Group Ltd at 69–70. So far as losses were concerned, which were not anticipated, as his Honour found they were to be borne equally as were the profits. 104 It was further submitted that Mr and Mrs White had advanced in excess of $300,000 by way of loan to the project, which told against it being a joint venture as those funds were not contributed as capital. In my view, his Honour correctly (at [85]) determined that the fact that those funds were advanced to Thompson by way of loan did not exclude them as a contribution to the joint venture. As his Honour observed, the joint venture structure required funds to be provided by way of loans and to be discharged from the gross proceeds of sale of the Seaforth property before the profit of the venture was calculated. This is consistent with the observation in the passage from the joint judgment of United Dominions which I have recorded in [90] above that each participant in a joint venture usually, but not necessarily, contributes money, property or skill. There is no reason in principle why the contribution of money must be by way of capital rather than by way of loan. 105 Accordingly, in my opinion, the first category of challenge to his Honour's conclusions should be rejected. 106 It follows from the foregoing that I would also reject Thompson's submission that no concluded agreement came into existence between the parties in the absence of agreement with respect to each and every item to which I have referred in [97] above. In any event, most of those matters were agreed in one form or another. Thus, the form of the "arrangement" was not intended as a partnership or a trading entity but simply the undertaking of a development project by the acquisition of the Seaforth property, the construction of a substantial dwelling house thereon and the sale of the property for the purpose of mutual profit: a typical joint venture undertaking. Again, there was agreement as to the keeping and maintenance of accounts and records in that ACDC was to maintain a loan account (see [97(d)] and otherwise the records of the purchase, the making of loans and the payment of interest were all the subject of documentation. 107 After the conclusion of the hearing and with the leave of the Court, both Thompson and White provided the Court with documents which had been tendered before the primary judge and, in particular, which had been exhibited to affidavits of Thompson and which included in the latter's statement of account with St George Bank Ltd. Other exhibits to Thompson's affidavits included his loan agreement with Royal Guardian Mortgage Corporation Pty Ltd as well as the various statements of account between he and that lender over the period of the loan. It was not suggested that the money borrowed from Royal Guardian was used otherwise than for the purpose of the construction of the development of the Seaforth property. 108 As White submitted, it is apparent that the parties agreed that Thompson's account with St George Bank Ltd should be utilised for the purpose of the joint venture in that loan monies would be credited to that account and monies paid from the account for the purpose of meeting interest payments as well as construction costs. This is not surprising given that the title to the Seaforth property was solely in Thompson's name. 109 Thompson also provided to the Court additional documents to those provided by White which were also before the primary judge and which, so it was submitted, demonstrated that payments with respect to the expenditure and performance of the works upon the Seaforth property were made from sources other than Thompson's loan account. It was also submitted that his loan account statements with the St George Bank did not of themselves establish that all monies received or spent related solely to the Seaforth property project. 110 White conceded that Thompson had made personal deductions from his loan accounts with the St George Bank inferring that those deductions occurred without his or Libut's authority. He submitted that the purpose of the reference by his Honour to the referee was to enable a reconciliation of those accounts for the purpose of determining precisely which receipts or payments did not relate to the project. 111 However, it is clear that Thompson did not rely upon these factors in the issue tendered before the primary judge for his decision, namely, whether or not there was a concluded joint venture agreement. Nevertheless, it is apparent that the parties had agreed to what they considered to be a form of account and record keeping which was sufficient for present purposes and it matters not that, during the course of the project, one or other of the parties may have departed from what had been agreed. 112 As to the form in which the property and assets of the joint venture were to be held, in my opinion this factor is relevant only to the Seaforth property and in respect of that property it was agreed that Thompson would hold it for the purposes of the joint venture proper. Although there was no express agreement as to how decisions would be made as between the three participants, such as one under which the majority decision would prevail, I would not regard that as a fundamental issue which would tell against the conclusion of contractual relations between the parties. 113 As to the form in which financial contributions were to be made for the purpose of undertaking the purchase, development and sale of the Seaforth property, again in my view there was agreement as to how those moneys would be provided and when. It is true that there was no agreement as to whether a party could make a "call" for the provision of monies for the other parties, but that was no doubt because the parties had agreed as to the method of financing which needed no further elaboration. 114 I need not go on. Most if not all of the other items referred to in [97] have been covered by what I have already written. It is sufficient to justify the conclusion that the essential and fundamental terms upon which the parties proposed that their relationship should be governed were determined by them with sufficient certainty as to constitute an agreement by which the parties intended to be immediately contractually bound upon the acquisition of the Seaforth property. 115 Accordingly, I would reject the challenges to the primary judge's conclusion based upon the first two categories referred to in [87] and [88] above. The third category of challenge 116 Although Ipp J's observations in Anaconda Nickel related to written heads of agreement, the general propositions which I have sought to summarise are, relevantly, applicable to what is a totally oral agreement. The question for the primary judge in the present case was whether, objectively, having regard to all the relevant circumstances, the parties intended to create legal relationships operative forthwith. Further, having decided that they wished to be contractually bound, had they determined the terms which they regarded as essential for the purpose of concluding a binding contract between them? The primary judge having accepted the evidence of White over Thompson answered these questions in the affirmative and in my opinion he was correct to do so. 117 Thompson submitted that the primary judge erred in making the third and fourth declarations consequential upon the first and second. Thompson also submitted that the primary judge erred in making the third declaration, in effect, a declaration that Thompson held the Seaforth property in trust for himself, White and Libut. To the extent to which that declaration purported to evidence the creation of an interest in that property of White and Libut and/or to constitute a declaration of trust, the failure to comply with s.23C(1)(a) or (b) of the Conveyancing Act 1919 resulted in no such interest in the property, whether by way of trust or otherwise, being created. 118 It was further submitted that the agreement found by the primary judge and pursuant to which the interests of White and Libut in the Seaforth property were purportedly created, was unenforceable downstream, as it were, as a result of the effect of the section. 119 Section 23C is, relevantly, in the following terms: "(1) Subject to the provisions of this Act with respect to the creation of interests in land by parol: (a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person's agent thereunto lawfully authorised in writing, or by will, or by operation of law, (b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person's will, (c) … (2) This section does not affect the creation or operation of resulting, implied, or constructive trusts." 120 Section 23C is to be contrasted with s54A(1) which relevantly provides: "No action or proceeding may be brought upon any contract for the sale or other disposition of land or any interest in land, unless the agreement upon which such action or proceedings is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged or by some other person thereunto lawfully authorised by the party to be charged." 121 The difference between ss.23C and 54A was recently emphasised in the joint judgment of Gleeson CJ, Gummow, Kirby and Hayne JJ in Halloran v Minister Administering National Parks and Wildlife Act 1974 [2006] 80 ALJR 519 at 528 [45] where, after referring to s.23C, their Honours said: "Section 54A is a distinct provision. It is concerned not with dispositions but with the bringing of actions upon contracts for the sale or other disposition of land or any interest in land." See also, Theodore v Mistford Pty Ltd (2005) 79 ALJR 1503 at 1508 [29]. In the present case, the sole focus of Thompson's submissions was on s.23C and not s.54A. Only the former and not the latter was pleaded. 122 As Ipp J observed in Sorna Pty Ltd v Flint [2000] WASCA 22 at [7], citing Kennedy J in Abjornson v Urban Newspapers Ltd [1989] WAR 191 at 200, s.34 of the Property Law Act 1969 (WA), which is relevantly in identical terms to s.23C, is essentially directed to the creation of interests in land and not directed to agreements as such. 123 The difference between ss.23C and 54A was also referred to by Giles JA, with whom Mason P agreed, in Baloglow v Konstanidis (2001) 11 BPR 20,721; [2001] NSWCA 451. At [158] his Honour observed that if s.23C applied, the purported creation or disposition of an interest in land would be ineffective. 124 At [162] Giles JA observed that s.54A arises at the stage of agreement to create or dispose of an interest in land and has its own requirements of writing which are less stringent than those of s.23C. The latter arises at the stage of performance of an agreement and in keeping with the importance attached to property rights, has a more stringent requirement of writing in that the creative or dispositive instrument itself must be in writing and the signing agent must be authorised in writing. 125 Section 23C is in a Part of the Conveyancing Act dealing with property and a Division of that Part dealing with assurances and otherwise concentrates on property rights. There is no encouragement in its language, his Honour noted, "to make it apply to executory agreements under which property rights are to be created or disposed of when the agreement is performed." 126 Giles JA then analysed the various judgments of the High Court in Adamson v Hayes (1973) 130 CLR 276. Different opinions were expressed by the justices on the application of s.34 of the Property Law Act 1969 (WA) which, as I have said, is a provision equivalent to s.23C. The different opinions expressed by their Honours in that case were due to differences with respect to the operation of the agreement in question. Whether an interest in land in that case was created depended upon the view of the individual justices as to whether or not as a matter of construction the agreement was immediately operative to create such an interest which did not exist before or was an immediately operative declaration of trust. 127 Giles JA noted in Baloglow (at [167]) that the distinction was evident in Adamson between an agreement to assure property in the future and the future assurance. The agreement in that case created or disposed of interests in the relevant mining claims if the parties agreed immediately to hold their beneficial interest for different persons from before. An agreement only to alter the beneficial interests at a future time did not create or dispose of those interests in which case s.34 had no application. 128 His Honour at [167] regarded the views in Adamson (other than that of Gibbs J) as supporting the following analysis of the application of s.23C (which was, in turn, set out at [161]): (a) So far as land was the subject of a step, but the only interest in land created within s.23C(1)(a) was an equitable interest arising because equity would specifically enforce the contract, s.23C(1)(a) did not apply to such an interest; (b) Again, so far as land was the subject of a step, but there was agreement to dispose of an interest in land, with the disposition to come when the agreement was performed, no interest in land was disposed of within s.23C(1)(a); and (c) So far as an equitable interest subsisting at the time was the subject of a step, and again there was agreement to dispose of that interest with the disposition to come when the agreement was performed, the interest was not disposed of within s.23C(1)(c). 129 His Honour's above analysis of the case with which he was then dealing draws the distinction evidenced by the judgments in Adamson that s.23C(1)(a) only applies to render the purported creation of an interest in land ineffective where the agreement in question purports to create that interest immediately upon the agreement being concluded. The same approach applies to s.23C(1)(b). In other words, the subsection only renders ineffective a declaration of trust respecting any land or any interest therein where the agreement in question takes immediate effect as a declaration of trust. 130 Baloglow was concerned in particular with s.23C(1)(c) so that the question which arose was whether the agreement there in question operated immediately to alter equitable rights in the relevant land. If it did, then it was ineffective to create those rights; if it did not, then the section had no application. In other words, the question was whether the agreement disposed of an existing equitable interest so that the parties agreed immediately to hold their beneficial interests for different persons from before. Agreements only to do so at a future time did not dispose of an existing equitable interest in which event it was not caught by the section (see at [172]). 131 His Honour returned to the distinction between an agreement to assure property in the future and the future assurance – a distinction which he considered of significance to disposal of an interest in land and disposal of a subsisting equitable interest as well as creation of an equity in land (at [190]). In observing that the purchaser under the agreement to assure can sue at law for damages for breach of contract although the contract is not in writing (subject to s.54A where it applies), his Honour referred with approval to what Kennedy J had said in Abjornsen that s.23C: "is essentially directed to creation of interests in land" and "is not directed to agreements as such". 132 Accordingly, as his Honour observed at [192], it will always come down to the agreement; hence the differences in views in Adamson, but if there is no more than an agreement to assure property, s.23C is not attracted. In other words, as I have noted above, the section is only attracted to an agreement which is intended to have immediate dispositive or creative effect. That this is so was recently confirmed by this court in Khoury v Khoury [2006] NSWCA 184 at [51]–[53]. 133 In the present case par.6 of Thompson's defence to par.6 of the Amended Points of Cross-Claim of each of White and Libut asserts that no express trust could arise by reference to the agreement as pleaded pursuant to s.23C. 134 Paragraph 6 of the Amended Points of Cross-Claim pleaded that Thompson held the Seaforth property on trust for the benefit of himself, White and Libut and that that trust was imposed by the agreement. Given that it has been held that the interest created by declaration of trust of land is not an interest in land within s.23C(1)(a) (see Secretary, Department of Social Security v James (1990) 85 ALR 615 at 621–2; Hagan v Waterhouse (1991) 34 NSWLR 308 at 385–6; Bagalow at [185]), it would appear that although the pleadings are not clear, if anything White and Libut were alleging in par.6 of their respective Amended Points of Cross-Claim that their agreement with Thompson constituted a declaration of trust by Thompson that he held the beneficial interest in the Seaforth property for himself and the other two parties. 135 The primary judge did not deal with Thompson's s.23C defence. It is not mentioned in his Honour's judgment at all. Furthermore, out of 180 paragraphs of Thompson's written submissions on the appeal, s.23C is mentioned only in par.143 which is in the following terms: "A written instrument as to a ' joint venture agreement ' in respect of the Seaforth property would be consistent with the requirements of s.23C of the Conveyancing Act (NSW) 1919." 136 The suggestion in that paragraph is the very antithesis of the defence that was mounted by Thompson in oral argument on the appeal. It is apparent to me that it simply was not addressed before the primary judge. It is not mentioned in the transcript of the oral argument before his Honour and although there were extensive written submissions, the Court was not referred to any part of those submissions and, in particular, those of Thompson, which raised the issue of s.23C. 137 In any event, it is apparent from Thompson's written submissions in reply to the supplementary submissions of White on the issue of 23C that his "central contention" is that "Section 23C of the Conveyancing Act applies to render the joint venture agreement asserted by [White and Libut] to be unenforceable because by that agreement [Thompson] is said to have declared himself to be a trustee of the Seaforth property or to have disposed of an equitable interest in it." 138 As I have noted, White and Libut pleaded in par.6 of their respect Amended Points of Cross-Claim that at all material times Thompson held the Seaforth property on trust for the benefit of himself and the other two parties "subject to the trust imposed by the agreement". However, there was no express finding by the primary judge that the agreement which he found to have been concluded between the parties had the effect now contended for by Thompson or, for that matter, as pleaded in par 6 of the Amended Points of Cross-Claim. 139 The third declaration made by his Honour was that the Seaforth property was purchased in Thompson's name with the intention that it would be a joint venture asset. This declaration purported to be no more than a reflection of [79] of his Honour's judgment which I repeat for the sake of convenience: "I accept the evidence that Mr Thompson was to cause $285,000 to be contributed to the purchase of the Seaforth property in order that it became the parties' first joint venture. I accept the evidence that Mr Thompson required the property to be registered in his name as he was to contribute, or cause Mrs Thompson to contribute, the only initial funds. Nonetheless, the property was developed as a joint venture with Mr Thompson, Mr White and Mr Libut to share the profits equally." In [80], the primary judge found that the agreement was varied as a consequence of what occurred at the Dee Why Hotel in December 2000 and that is reflected in the fourth declaration. 140 In my opinion, the agreement as found by the primary judge did not purport to constitute an express declaration of trust by Thompson that he held the Seaforth property for the benefit of himself and the other two parties. Nor in my opinion did the agreement purport to immediately create in White and Libut an interest in that property. On the contrary, the agreement between the parties as found by the primary judge was that the Seaforth property would be acquired in the name of Thompson; it would then be developed and ultimately sold and the profits divided between the parties in accordance with their amended agreement. 141 Although being a joint venture Thompson may have owed fiduciary duties to White and Libut not to use the property otherwise than for the purpose for which the joint venture was created, the effect of the joint venture agreement in terms of the acquisition, development and sale of the property did not call for, and therefore did not purport to immediately create, any legal or equitable interest in the property in favour of White or Libut. There was no express finding by the primary judge to suggest that the agreement immediately created any such interest; nor was the creation of any such interest or any declaration of trust necessary to give effect to the undertaking upon which the parties had agreed. Neither the expression "interest in land" or "declaration of trust" appears in the language adopted by the primary judge and, in my opinion, rightly so. 142 Thompson did not point to any evidence on the part of White which would have justified or supported a finding that the agreement which his Honour found to have been concluded, was intended to create a legal or equitable interest in the property in favour of White and Libut or otherwise that Thompson agreed to hold the land in trust for his co-participants in the venture. The simple fact was that the language of trust was not employed. 143 I accept that in their Amended Points of Cross-Claim White and Libut alleged such a trust but, as I understand the primary judge's findings, the evidence did not establish that such a trust was created or intended to be created. As I have indicated, we were not referred to any evidence on the part of White which would have supported a finding in terms of par.6 of the Amended Points of Cross-Claim; nor was such a finding necessary for White and Libut to succeed in establishing the joint venture agreement otherwise pleaded. 144 Before departing from the issue relating to s.23C it may be helpful to elaborate upon my remarks in [122] above. In Terrex Resources NL v Magnet Petroleum Pty Limited [1998] 1 WAR 144, Kennedy J observed (at [162]) that the "purpose of s.80 [of the Petroleum (Submerged Lands) Act 1967 which was relevantly in the same terms as s.23C] is to prevent legal or equitable interests in permits from being created, assigned, affected or dealt with, whether directly or indirectly, except by an instrument in writing. It does not provide that oral agreements shall be of no force - cf s.81(2). Accordingly, although an oral agreement may not, for example, assign an interest in a permit, that is not to say that it does not create a personal right in contract. I consider that it does – cf Adamson v Hayes (1973) 130 CLR 276 at 297, 304, 306, 319-320 …" 145 To similar effect, Burt CJ in the same case observed (at [150]) that although the relevant agreement in that case was an oral agreement and therefore could not create any interest in the permit (because it was not in writing), it did not necessarily follow that as an oral agreement it was of "no force or effect" as between the parties to it or that repudiation of it by, in that case, the purchaser while the contract was still executory would not sound in damages at the suit of the vendor. 146 Kennedy J returned to this subject in Abjornson (at [200]) when dealing with s.34(1)(a) of the Property Law Act 1969 (WA) which, as I noted in [122] above, was relevantly in identical terms to s.23C. As observed in that paragraph, his Honour regarded that provision as essentially directed to the creation of interests in land, not to agreements as such. He considered that a number of the judgments in Adamson made that distinction. In that case, specific performance had been sought of an oral agreement whereby, inter alia, the parties agreed that, as between themselves, certain mineral claims should be held in specified shares. By a variety of routes, the majority of the High Court reached the conclusion that the oral agreement did not create an interest in the mineral claims. 147 According to an analysis by Kennedy J of the individual judgments in Adamson, the consequences were variously expressed. Thus Menzies J (at [295]) said that s.34 rendered the pooling agreement ineffective and unenforceable. Walsh J (at [297]) said that the agreement was rendered ineffective by s.34(1)(a). Gibbs J (at [306]) said that the agreement, not being in writing, was ineffective to create an equitable estate in the mining claims and that it could not be specifically enforced. Stephen J (at [320]) said that the pooling arrangements had never come into effect since they were not in writing, and that without it the subject matter of later provisions of the agreement and of the whole of the later agreement did not exist. Barwick CJ dissented. Walsh J (at [a]), Gibbs J (at [306]-[307]) and Stephen J (at [320]) did not, however, deny the possibility of a claim for damages being maintained. Kennedy J therefore did not consider that s.34 as construed by the High Court in Adamson should be regarded as overturning the established principles to which he had referred. 148 In my opinion, the views of Kennedy J are consistent with those of Giles JA in Baloglow. Relevantly, they establish, correctly in my respectful opinion, that although an agreement (such as, for example, the grant of a lease) which is immediately operative to create an interest in land or is immediately operative as a declaration of trust thereby creating an equitable interest in land, is unenforceable by specific performance by virtue of s.23C(1). It is therefore ineffective in creating the relevant interest and that result does not affect the agreement insofar as it creates rights and liabilities between the parties sounding in damages in the event of a breach of its terms. The agreement is still of "force or effect" for that limited purpose. 149 Accordingly, in the present case, if the agreement as found by the primary judge had purported to constitute an express declaration of trust by Thompson that he held the Seaforth property for the benefit of himself and the other two parties, the legal effect of s.23C would be that that declaration of trust was ineffective to create an equitable estate or interest in the property in favour of White and Libut. However, that consequence would not render the agreement ineffective or unenforceable insofar as it constituted an agreement to purchase, develop and sell the Seaforth property for mutual profit. White and Libut would still be entitled to the third and fourth declarations made by the primary judge together with an account of the profits earned from the sale and an entitlement to their agreed share thereof. 150 Accordingly, for the foregoing reasons I would reject Thompson's challenge based upon s.23C of the Conveyancing Act. Conclusion 151 For the reasons I have given, in my opinion, Declarations 1 and 2 should not have been made and ought to be set aside. However, the primary issue in the appeal was whether Declarations 3 and 4 should have been made, which depended upon Thompson demonstrating that the primary judge erred in his conclusion that a joint venture agreement creating legal relations between the parties had been established with respect to the acquisition, development and sale of the Seaforth property. This he has failed to do. In these circumstances, although the appeal should be allowed in part for the purposes of setting aside Declarations 1 and 2, essentially Thompson has failed in his challenge to the primary judge's findings with respect to the Seaforth property. 152 Accordingly, I would propose the following orders: (a) Appeal allowed in part. (b) Set aside Declarations 1 and 2 made by Gzell J on 15 December 2005 but otherwise dismiss the appeal. (c) The appellant to pay the respondents' costs of the appeal. 153 McCOLL JA: I agree with Tobias JA. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.