Risland in win over Bradcorp over abandoned $297 million North Wilton sale

Risland in win over Bradcorp over abandoned $297 million North Wilton sale
Risland in win over Bradcorp over abandoned $297 million North Wilton sale

Risland Australia has been successful in its case before the NSW Supreme Court against Bradcorp, after Risland elected not to exercise its option in 2018 to acquire land at North Wilton in South-West Sydney.

Bradcorp took Risland to court.

Bradcorp challenged Risland’s decision that Bradcorp had failed to satisfy a range of conditions precedent to enable the land to be developed.  

The Supreme Court dismissed Bradcorp’s claim, which was taken against Risland, the Chinese backed developer then known as Country Garden.

Bradcorp had owned the land since 1999.

It is located about 80 kilometres south west of the Sydney CBD.

The court found Bradcorp had failed to satisfy all of the conditions necessary to exercise the option, and that Bradcorp otherwise repudiated the option deed by its own conduct.  

The court case came down to a legal debate on the required time and date, and whether a post 5pm COB advisory was within the required time.

The court even heard legal precedent on birth dates, age, and fractions of the day.

Counsel for Bradcorp claimed one notification was received after 5.00 pm on the required day, so they viewed it as received on the following business day. 

But the Supreme Court judge ruled the cancellation was effective on the required day, 30 November 2018.

Bradcorp will be required to pay damages to Risland which, together with costs and interest charges, is likely to exceed $30 million.

“We are disappointed that Bradcorp was unable to present the land in a way which would have enabled it to be developed in accordance with the required approvals and our vision," a Risland spokesperson said.

“We remain very interested in investing and developing areas around Australia, including the Wilton region”, he concluded.

The proceedings concerned an 870 hectare parcel, currently rural, but is to be developed as part of the expansion of Wilton into a large satellite town.

It was in February 2017 that Bradcorp entered into put and call option agreements over the land with Country Garden.

The aggregate purchase price under the option agreements was $297 million.

Bradcorp purported to exercise the put option early in December 2018, but CG refused to execute the contract of sale, on the ground that conditions precedent to the exercise of the put option had not been satisfied.

Bradcorp claimed damages.

Call option fees of $29.7 million had been paid by CG, and in accordance with the option agreements, $9 million had been released to Bradcorp.

The remaining $20.7 million was held by HWL Ebsworth, the solicitors for Bradcorp on the transaction.

There was a dispute over three conditions including the requirement that the land be rezoned so that at least 5,350 residential lots could be produced by subdivision.

The land was rezoned in November 2018 however there was an issue between the parties on whether the rezoning satisfied the minimum lot requirement.

The second condition concerned an existing mining lease which extended under the land. The condition required that certain rights under the lease be surrendered.

It happened, but the steps to make it happen only took place at the last minute with the dispute on whether it happened in the required time.

Bradcorp had negotiated an agreement with Endeavour to surrender its rights in exchange for payment of $40 million, the court heard.

The third condition concerned access to the property from the Hume Motorway with the parties in dispute also about whether this condition was satisfied.

Bradcorp has issued a press release advising it intends to appeal the judgement.

 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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Court Proceedings South West Sydney

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