Working with a neighbour to subdivide land can be a profitable strategy, but a recent Court of Appeal decision shows that goodwill alone won’t protect your investment. In Mead Property Investments v P&M Galea Pty Ltd, the Court made it clear: if you pay for subdivision costs without a proper written agreement, you may not recover those costs—even if your neighbour benefits significantly. Julian and Renee at Flash Conveyancing use this case to highlight the importance of watertight contracts in joint development projects.
The dispute arose between neighbours in Box Hill, NSW, who agreed to a “land swap” and joint subdivision that ultimately created 50 residential lots. Mead Property Investments (MPI) managed the project and funded all costs, including council fees, consultants, and infrastructure. After completion, MPI argued that P&M Galea (PMG) had been unjustly enriched as their land had increased in value.
The Court of Appeal rejected MPI’s claim:
- Commercial risk: MPI undertook the work primarily for its own commercial benefit; any gain to PMG was incidental.
- No implied request: Mr Galea did not request or direct MPI to carry out the works.
- Free acceptance rule: Restitution does not apply unless a benefit is freely accepted in circumstances that create legal responsibility. As MPI would have proceeded regardless, PMG was not liable.
Mead v Galea offers practical lessons for developers and investors in 2026:
- Get it in writing: Always enter into a formal cost-sharing agreement before undertaking subdivision works involving neighbouring land.
- Don’t rely on fairness: Legal doctrines like unjust enrichment cannot replace clear contractual terms.
- Land swap deeds: Ensure agreements address both land transfers and cost allocation.
Flash Conveyancing recommends the following pre-project safeguards:
- Joint subdivision: Risk—neighbour benefits without contributing. Solution—register a clear cost-sharing agreement.
- Infrastructure costs: Risk—unexpected Section 7.11 contributions. Solution—include detailed disclosure in contracts.
- Land swaps: Risk—tax and duty implications. Solution—seek advice on Revenue NSW exemptions.
Quick Conveyancing Advice:
In property development, handshake deals are not enough. Before committing funds, ensure all agreements are documented clearly. Contracts that define responsibilities, costs, and approvals will prevent disputes and protect your investment.
Flash Conveyancing, led by Julian and Renee, specialises in property transactions across New South Wales. With extensive experience across councils including Blacktown, Hawkesbury, Blue Mountains, The Hills, Hornsby, and Parramatta, they deliver a clear, practical and personalised approach to every settlement.