Does it matter in terms of the intention to create legal relations, that the parties to a commercial enterprise are also intimate partners?

That was the issue in a dispute between estranged lovers who had taken financial steps towards the development of vacant land in Far North Queensland.

Matthew Yates – an electrical engineer – and his company Yatesey Pty Ltd owned properties at Kamerunga on the outskirts of Cairns and Speewah near Mareeba when he met and began a personal relationship with Alisson Hutchinson in August 2018.

Alisson was attracted by Yates not least by the imagination of his plans to develop the two properties for tourist cabins and walking tracks.

To facilitate the “joint-venture” and provide Yates with some mortgage relief, they entered into real estate contracts for transfer of the two properties into Alisson’s name.

At the time of settlement of the Kamerunga property in October 2018 at the sale price of $140k, Yates agreed to “waive” payment of $67k of the contract price so the settlement could occur on the completion date.

The amount “waived” in respect of the Speewah sale at settlement was $68k.

A dispute ultimately arose between the parties after their relationship failed by May 2019 where Yates alleged that the “waiver” was not a forgiveness of debt but rather constituted a beneficial interest in the respective properties or alternatively a debt payable by Alisson for the unpaid portion of the purchase price.

It was a lawsuit concerning those unpaid sums that brought the matter before Judge Dean Morzone QC in the District Court in Cairns.

Alisson contended that the contract price was arbitrary and was “negotiated for convenience to satisfy financiers” and that no further money was payable in respect of the transfers.

In considering whether there was a genuine attempt to into legal relations, His Honour considered text messages in which Alisson asked “Can I invest in you”?

Yates’ response “You should think like an investor and fu*k me like a lover” prompted Judge Morzone to conclude “I am unable to discern any thread of an enforceable joint venture” between the erstwhile paramours.

In any event there was insufficient evidence for him to conclude what the terms of such venture might have been.

That said, the parties had signed enforceable contracts relating to the land transfers.

His Honour declined to accept that the unpaid purchase prices created an implied or resulting trust to give rise to a beneficial interest in the land.

Rather, he found that Yates “merely waived the strict time for payment and the unpaid amounts are simple debts”.

As a consequence, Yates had no interest in the land to support his caveat on the land as a result of which it was ordered to be removed.

The judge declined to order damages in relation to the wrongfully lodged caveat because the land had “likely appreciated in value over time”.

Yates secured judgement for the unpaid purchase price on both properties plus interest. It was also ordered that Alisson pay his legal costs of and incidental to the proceedings.

Yates & Anor v Hutchinson [2022] QDC 54 Morzone QC DCJ 7 March 2022