Luxury Homes Pty Limited v Margaret Patricia Lanham [2009] NSWSC 873

New South Wales Supreme Court

CITATION : Luxury Homes Pty Limited v Margaret Patricia Lanham [2009] NSWSC 873

HEARING DATE(S) : 10, 11, 12 and 13 August 2009

JUDGMENT DATE : 14 September 2009

JURISDICTION : Equity Division

JUDGMENT OF : Bergin CJ in Eq

DECISION : Plaintiff's claim is dismissed. Defendant's Cross-Claim is dismissed.

CATCHWORDS : CONTRACTS - whether contract void for uncertainty - whether implied term - whether breaches entitling defendant to terminate contract - claim for damages

Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 G Scammell & Nephew Ltd v HC & JG Ouston [1941] AC 251 CASES CITED : Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 Luxury Homes Pty Ltd v Danieli & Anor [2005] NSWSC 379 McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 Meehan v Jones (1982) 149 CLR 571 Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 Thorby v Goldberg (1964) 112 CLR 597

PARTIES : Luxury Homes Pty Limited (Plaintiff) Margaret Patricia Lanham (Defendant)

FILE NUMBER(S) : SC 55022 of 2008

COUNSEL : VRW Gray (Plaintiff) VF Kerr (Defendant)

SOLICITORS : McCoy, Grove & Atkinson (Plaintiff) Phillip A Biber (Defendant)

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY & CONSTRUCTION LIST

BERGIN CJ in EQ

14 SEPTEMBER 2009

55022 of 2008 LUXURY HOMES PTY LIMITED v MARGARET PATRICIA LANHAM JUDGMENT 1 The plaintiff, Luxury Homes Pty Ltd, and the defendant, Margaret Patricia Lanham, entered into a Joint Venture Agreement (the Agreement) in March 2004 to develop land in Frenchs Forest, a northern suburb of Sydney, New South Wales (the Project). The plaintiff claims that the defendant wrongfully repudiated the Agreement for which it is entitled to $1,418,821 in damages. 2 The defendant alleges that the Agreement is void for uncertainty, but if it is not, claims that the plaintiff was in breach of its obligations under the Agreement entitling her to terminate it. The defendant, by Cross-Claim, claims damages for the loss of profit she would have derived from the Project if it had been completed. There is an alternative claim for the costs incurred by the defendant during the Project. Background 3 The managing director of the plaintiff is Barry George Alcock (Mr Alcock) whose son, Jay Justin Alcock (J Alcock), was at all relevant times employed with the plaintiff. Mr Alcock has been involved in property development projects for approximately 34 years and the plaintiff has been similarly involved for the last 6 or 7 years. The plaintiff's involvement has been more in the nature of project management and development than development of land. However the plaintiff developed and completed three sites in the Frenchs Forest and nearby Killarney Heights area in 2004. 4 The defendant owned three properties in the Frenchs Forest area being, 19 Sturt Street and 75 Forest Way outright and 17 Sturt Street as a joint tenant with her husband. In about 2001 the defendant had a conversation with the owners of 77 Forest Way, Barry and Jenny Nolan (the Nolans), in which she asked them if they would be interested in joining with her to develop the four blocks, being her three properties and the Nolans' property. The Nolans said they were interested but would prefer to give the defendant an option over their property rather than being a "partner" with the defendant. In about 2001 the defendant had a conversation with J Alcock (whom she had met socially in 1997) in which he informed her that Mr Alcock was doing some property development in the Frenchs Forest area and would be interested in doing a development with the defendant. At about this time the defendant spoke briefly with Mr Alcock but decided she would try to do the development herself. Her plan was to develop her properties and the Nolans' property by demolishing all existing buildings and constructing 19 home units for "over 55" purchasers. After 18 months and $60,000 in costs, the defendant decided it was "not worth" pursuing the development any further. 5 Mr Alcock became aware of the defendant's abandonment of her development plans and met with her in January 2004. The following conversation took place: