Barangaroo Delivery Authority v Lend Lease (Millers Point) Pty Ltd [2014] NSWCA 279

Barangaroo Delivery Authority v Lend Lease (Millers Point) Pty Ltd [2014] NSWCA 279

The CFA payments made by the Nominee to the Developer are not to be included in the cash flow analysis for determining the Current Market Value under the contractual regime. The contract’s text, structure, and commercial purpose direct that Current Market Value is to be determined with reference to specified development costs (per assumption (e)) and an ungeared project IRR (assumption (g)), not payments made to the Developer for nomination rights. Inclusion of such payments is unsupported by the contract, would produce commercial nonsense, and is not mandated by the language or worked example attached to the contract.

Jurisdiction
Australia
Judgment Date
21 August 2014
Procedural Posture
Appeal / Judgment Appeal Determination
Outcome
Appeal dismissed with costs.
Legal Topics
['construction of Commercial Contract' 'definition of Current Market Value' 'discounted Cash Flow Analysis' 'worked Example Interpretation' 'value Sharing Payment Clause']
['contract'] ['construction of Commercial Contract' 'definition of Current Market Value' 'discounted Cash Flow Analysis' 'worked Example Interpretation' 'value Sharing Payment Clause']

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Procedural Posture

Appeal / Judgment Appeal Determination

Legal Issues

  1. 1 ['Whether payments made by the Nominee (CFA payments) should be included in the calculation of the Current Market Value under the PDA contract between the parties' "Correct construction of the 'Current Market Value' clause, specifically assumption (g)"]

Ratio Decidendi

The CFA payments made by the Nominee to the Developer are not to be included in the cash flow analysis for determining the Current Market Value under the contractual regime. The contract’s text, structure, and commercial purpose direct that Current Market Value is to be determined with reference to specified development costs (per assumption (e)) and an ungeared project IRR (assumption (g)), not payments made to the Developer for nomination rights. Inclusion of such payments is unsupported by the contract, would produce commercial nonsense, and is not mandated by the language or worked example attached to the contract.

Court Disposition

Appeal dismissed with costs.

Orders

  • ['The appeal is dismissed.' 'The appellant is to pay the respondents’ costs.']