Eliana Construction and Developing Group v Assad [2014] VSC 143

A builder and developer, both friends purchased land as tenants in common in equal shares and built a block of units financed by the bank and also from their own funds in the amount of $400,000 and $1.3m respectively.

Incomplete transfer of land forms and contracts of sale were signed by the builder, reflecting the sale of three units to the developer and one to the builder and the documentation was given to the developer’s wife, who was acting as the lawyer for both of them.

A dispute arose between the developer and builder as to whether the developer’s payments were loans or not. The builder argued that the payments were made pursuant to a joint venture. The developer argued that his payments were loans and sought repayment.

The transfers were registered by the developer and the builder argued this occurred without his approval or knowledge and should not have been lodged unless their dispute had been resolved and he authorised it. The builder lodged caveats over the units transferred to the developer and sought an order transferring the units to himself and the developer as tenants in common, a declaration that they were in a joint venture, and an account as to their respective contributions.

The court found a joint venture on the basis of what was documented in the developer’s financial accounts, albeit no formal written agreement was entered into, which indicated a profit share and ordered that the ownership and profit sharing be governed by the relative contributions of each party and be referred to a special referee to determine.

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