Brown v Brown - [1999] NSWSC 383

CITATION: Brown v Brown [1999] NSWSC 383

CURRENT JURISDICTION: EQUITY

FILE NUMBER(S): 2107/90

HEARING DATE(S): 16-18/2/98
3-4/8/98

JUDGMENT DATE:
29 April 1999

PARTIES :

Mary Patricia NELSON and Jean FARRELL as Executrices of the Estate of Alice Veronica BROWN v Raymond BROWN & Anor

JUDGMENT OF: Bryson J

COUNSEL : M.S. Willmott for the Plaintiff
Ms J. Sanford for the Defendant

SOLICITORS: Lees & Givney for the Plaintiff
Ronald S. Czinner & Co for the Defendant

CATCHWORDS: TRUSTS and TRUSTEES - trustees sold land which was trust property in one line with land which they owned beneficially: consolidating two parcels enhanced their value - trustees were held accountable for the proceeds in the same proportion as the value of each lot separately - it was not appropriate to attribute all enhancement to the trust property - where trustees allowed one trustee to occupy another trust property rent free for over 8 years after existence of resulting trust had been declared by the Court they were ordered to account to trust for rental value - trustees for sale of that trust property were appointed. Issues of valuation on differing expert evidence.

ACTS CITED: s 66G of Conveyancing Act, 1919

CASES CITED: Keech v Sandford (1726) Se l Ca t. King 61,25 ER 223
Brown v Brown (1992-1993) 31 NSWLR 582
Scott v Scott (1964) VR 300 at 307
Scott v Scott (1963) 109 CLR 649 at 658-659
Paul A. Davies (Aust) Pty Ltd (in Liq) v Davies & Anor [1983] 1 NSWLR 440
Warman International Ltd v Dwyer (1995) 182 CLR 544 at 556-562
Ngatoa v Ford (1990) 19 NSWLR 172
Williams v Legg (1993) 23 NSWLR 687 (CA)
Forgeard v Shanahan (1994) 35 NSWLR 206 at 219-220
Cordingley (deceased) (1948) 48 SR 248
Hagan v Waterhouse (1992) 34 NSWLR 308 at 391-393
Patman v Heyen 33 NSWLR 188 at 200

DECISION: See Paragraph 67.

- 42 -
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
BRYSON J
THURSDAY, 29 APRIL, 1999

2107/90 MARY PATRICIA NELSON and JEAN FARRELL as Executrices of the Estate of ALICE VERONICA BROWN v RAYMOND BROWN & ANOR.

JUDGMENT
1 HIS HONOUR: On 29 October 1990 I made orders disposing in principle of the claims in these proceedings and on 29 September 1993 an appeal against those orders was dismissed: Brown v Brown (1992-1993) 31 NSWLR 582. When the Summons was issued on 5 April 1990 the late Mrs Alice Veronica Brown was the plaintiff. She died on 29 August 1990, during the hearing. On 21 September 1990 I appointed her daughters to conduct the proceedings as representing her estate and they have since obtained a grant of Probate which confirms their standing to be plaintiffs. The proceedings relate to the beneficial ownership of the house property with surrounding land at Nos. 118-120 Morrison Road, Gladesville, formerly the land in Certificate of Title Volume 4919 Folio 227 of which the defendants were registered proprietors. The house and land were Lots 12 and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Brown v Brown

Details

AGLC: Brown v Brown [1999] NSWSC 383
Case: [1999] NSWSC 383
Decision Date: 29 April 1999

CaseChat Overview and Summary

The case of Brown v Brown involved the trustees of a family trust who sold land that was subject to the trust. The dispute arose from the sale of two parcels of land: one that was trust property and the other that was owned beneficially by the trustees. The trustees argued that consolidating the two parcels into one enhanced the overall value, but the beneficiaries contended that the enhancement should be attributed solely to the trust property. The Court of Appeal was tasked with determining how the proceeds from the sale should be allocated between the trust and the individual trustees.

The primary legal issues revolved around the proper accounting for the proceeds of the sale and the valuation of the property. The court had to decide whether the enhancement in value was attributable solely to the trust property or if it should be shared between the trust and the trustees. Furthermore, the court had to determine the rental value of trust property that had been occupied rent-free by one trustee for over eight years following the declaration of a resulting trust. The court also needed to address the issue of valuation, given the conflicting expert evidence presented.

The Court of Appeal held that the enhancement in value from consolidating the two parcels of land should not be attributed entirely to the trust property. Instead, it was appropriate to allocate the enhancement in proportion to the value of each lot separately. Consequently, the trustees were required to account for the proceeds of the sale in the same proportion as the individual values of each parcel. Regarding the rental value, the court found that the trustees were accountable for the rent that would have been charged if the property had been leased to a third party. The court ordered the trustees to account to the trust for the rental value of the property that had been occupied rent-free. Finally, the court appointed trustees for the sale of the remaining trust property. The valuation disputes were resolved by considering the most reliable evidence available.

The Court of Appeal ordered the trustees to account for the proceeds of the sale in the proportion of the individual values of each parcel of land and to compensate the trust for the rental value of the property that was occupied rent-free. The court also appointed new trustees to handle the sale of the remaining trust property.

Orders