The Supreme Court of Western Australia has ruled over a dispute on the $21.5 million sale of a Perth CBD site that was formerly earmarked for the first Holiday Inn Express in Australia.
The Supreme Court of Western Australia has ruled over a dispute on the $21.5 million sale of a Perth CBD site that was formerly earmarked for the first Holiday Inn Express in Australia.
RP data on Corelogic shows the land on 257 Adelaide Terrace, which houses a heritage-listed building, was sold to Sunny Mile Pty Ltd for $21.5 million in November 2015.
After the property was sold, issues emerged between the parties involved on whether the consultant they engaged for the sale should be paid a commission fee of $3 million as per an agreement.
Supreme Court of Western Australia Justice Sam Vandongen today dismissed Ralph Nunis’s application to be refunded $488,038, which he claimed was his portion of a wrongful commission fee paid by the defendants, who are his former co-directors and parents-in-law Phung Tran Do and Tuyet Chau Huynh.
In his judgment, Justice Vandongen found Mr Nunis has failed in his claim that the consultancy agreement signed in November 2015 was unlawful.
Property developer Sunfire Asset, owned by Mr Nunis and his former partner Lee Lee Do, struck an agreement with InterContinental Hotel Group to manage a Holiday Inn Express at the Adelaide Terrace site in 2013.
The proposed $35 million 20-storey, 224-room development was to be the first Holiday Inn Express development in the country and was expected to be completed in early 2015.
The project was spearheaded by an entity named Hotel Development Pty Ltd, of which the directors were Mr Nunis, Ms Do, and the defendants.
According to Justice Vandongen's judgment, Hotel Development was a trustee company of 257 Adelaide Terrace Trust, an entity established in 2007 to develop and sell land at 257 Adelaide Terrace.
However, the judgment said the board of the 257 Trust decided to sell the land in 2015 and engaged Huirong Sun to find Chinese buyers for the property after initial attempts to secure a buyer were unsuccessful.
In November 2015, Hotel Development entered into a consultant agreement to pay Mr Sun $3 million upon settlement of the sale.
According to the judgment, the defendants paid the $3 million fee directly to Mr Sun and issued Mr Nunis an invoice for their share commission of the land sale, being $488,038.
Mr Nunis started legal proceedings in May 2022, claiming the $488,038 that was paid from a Sunfire Asset bank account was recoverable because the consultant agreement with Mr Sun was unlawful.
“Although the plaintiff's argument is not entirely clear, the contention that appears to be at the centre of what is left of the plaintiff's pleaded case is that Mr Sun was not entitled to demand or receive any commission under the November 2015 consultancy agreement because that agreement, and any demand or receipt made under that agreement, contravened certain provisions in the [relevant] Act,” Justice Vandongen said in his judgment.
“The defendants' case is that they were not enriched. They submit that they received the sum of $488,038.28 having taken responsibility for, and then paying, the whole of the $3 million fee to Mr Sun on behalf of Hotel Development.”
“In the end … I find that the plaintiff has failed to establish that the defendants were enriched by their receipt of the impugned payment by reason of a total failure of consideration.
“The defendants were therefore not unjustly enriched, and the plaintiff's claim in restitution must be dismissed.”
Business News previously reported that Hotel Development Pty Ltd was deregistered as a business name by the Australian Securities and Investments Commission in August 2016.
