Chan v Chan
[2020] VSCA 40
•5 March 2020
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2018 0135
| CHING LUNG CHAN and YING LIN | Applicants |
| v | |
| CHING HA CHAN | Respondent |
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| JUDGES: | MAXWELL P, TATE and FORREST JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 29 October 2019 |
| DATE OF JUDGMENT: | 5 March 2020 |
| MEDIUM NEUTRAL CITATION: | [2020] VSCA 40 |
| JUDGMENT APPEALED FROM: | Chan v Chan (Unreported, County Court of Victoria, Judge A Ryan, 2 October 2018) |
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LAND – Recovery of possession – Whether summary procedure for recovery of land under Order 53 County Court Civil Procedure Rules 2018 available or appropriate – Dispute between sister and brother about ownership of land – Whether brother a tenant at will or a licensee – Significant issues of fact in dispute – Proprietary estoppel – Whether sister held property on constructive trust for brother – Leave to appeal granted – Appeal allowed.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicants | Mr J D S Barber | Juris Nexus Lawyers |
| For the Respondent | In person |
MAXWELL P:
I have had the advantage of reading in draft the reasons for judgment of Tate JA. I agree with the orders which her Honour proposes, for the reasons which she gives.
TATE JA:
TABLE OF CONTENTS
Introduction and summary................................................................................
1
Dispute over ownership of Unit 1....................................................................
3
Commencement of County Court proceedings...............................................
4
The affidavit evidence........................................................................................
5
The judge’s reasons.............................................................................................
9
Grounds of appeal...............................................................................................
11
The history, purpose, and scope of Order 53...................................................
13
Was the summary procedure available and appropriate here?...................
25
(1) Are Michael and Lisa tenants at will or licensees?................................
25
(2) Does Carol hold Unit 1 on trust for Michael?.........................................
29
Conclusion...........................................................................................................
32
Introduction and summary
This matter arises from a dispute between a brother and sister over the ownership of land in Victoria. Ching Ha Chan (‘Carol’) is the registered proprietor of Units 1 and 2, 1256 Plenty Road, Bundoora. Carol paid the deposit on each unit using money given to her from her parents. Carol and her brother, Ching Lung Chan (‘Michael’), lived in Unit 2 while Carol rented out a number of other bedrooms in Unit 2 and all of the bedrooms in Unit 1. Carol used the rental income to service the mortgage repayments. When Michael married Ying Lin (‘Lisa’) he moved to Unit 1 with his wife and eventually collected the rent from the other tenants in Unit 1
for himself. Michael claims that the money their parents gave to Carol was to purchase Unit 2 for herself and to hold Unit 1 on trust for him.
Carol brought summary proceedings in the County Court to evict Michael and Lisa. She denied that she held Unit 1 on trust for Michael. A County Court judge made orders under Order 53 of the County Court Civil Procedure Rules 2018 in favour of Carol for the summary recovery of land.[1] Michael and Lisa, as the first and second applicants, now apply for leave to appeal from the orders of the County Court. Carol is the respondent.
[1]Judgment was delivered orally on 2 October 2018.
For the reasons that follow, I would grant leave to appeal and allow the appeal.[2]
[2]For convenience, in what follows I refer simply to ‘the appeal’.
The purpose of proceedings for the summary recovery of land is to protect against trespassers, that is, those who enter land without lawful authority or those who, having had lawful authority to enter land, remain in occupation when the licence or consent to that occupation has been withdrawn. The procedure is only appropriate in a clear case, although it may be available where there is a minor factual dispute providing the dispute can be readily and fairly resolved by the judge.
The dispute between Carol, and Michael and Lisa, as to whether Unit 1 was held on trust by Carol for Michael, is not minor. The issue was not resolved by the judge, nor could it be without a trial. The judge, quite properly, determined not to hear the application until the parties had been given an opportunity to adduce evidence by affidavit. The evidence filed established a relevant contest of fact between the parties that could not be fairly and readily resolved summarily.
In the circumstances, I consider that the summary procedure for the recovery of land is neither available nor appropriate.
Moreover, it is arguable that Michael and Lisa were not licensees to whom Order 53 could apply but rather tenants at will and the summary procedure does not apply to a tenant, including a tenant holding over after the determination of the tenancy. This issue was not raised below. Whether Michael and Lisa had a right to exclusive possession of Unit 1, the distinguishing feature between licensees and tenants is a question of fact that has not been determined. It is unclear whether this question of fact could have been resolved in the context of the summary procedure. In any event, there is a serious question whether the arrangement created a tenancy at will and, for that reason alone, the dispute fell outside the scope of Order 53.
Dispute over ownership of Unit 1
Carol purchased Units 1 and 2, 1256 Plenty Road, Bundoora, pursuant to contracts of sale dated 23 June 2014. Carol took out registered mortgages with Westpac Banking Corporation (‘Westpac’) for each of the units. Both mortgages are registered in her name only. Carol is an Australian citizen.
The settlement of Unit 2 took place on 23 July 2014. After settlement, Carol and her husband lived in Unit 2 as did Michael. The settlement of Unit 1 took place on 22 August 2014. Each unit has five bedrooms. From August 2014, three of the bedrooms in Unit 2 were rented out and the five bedrooms in Unit 1 were rented out. Carol managed the tenants of both units and collected the rental income. Carol’s evidence was that the mortgage repayments for both units have been funded through rental income. The arrangement was that Michael could live rent-free, initially in Unit 2 and then, with Lisa, in Unit 1. Michael says that he did repairs, renovations, cleaning and maintenance in respect of both units.
In August 2014, Michael was introduced to Lisa at church by a friend of Michael and Carol’s parents. The introduction was made with a view that they might marry. Michael and Lisa allege that at that first meeting at the church, Michael and Carol’s parents, Yung Chan and Fung Chu Ng (‘the parents’), told Lisa that Michael was the owner of one of the units, knowing that it is very impressive in Chinese culture to have a son who owns property before being married.
Michael and Lisa married on 6 October 2017 at St Francis Xavier Church in Box Hill. They then moved into one of the bedrooms in Unit 1. Carol and her husband continued to live in Unit 2.
Michael and Lisa allege that before the wedding the parents told them that they could move into Unit 1 and collect rent from the tenants at Unit 1 provided they paid all bills. More generally, they were to manage the tenants at Unit 1. They were to pay the monthly mortgage repayment for Unit 1 into Carol’s account for convenience. Unit 1 was Michael’s, and Carol was to take care of her own unit, Unit 2.
Since late 2017 Michael and Lisa have been in dispute with Carol about the ownership of Unit 1.
Commencement of County Court proceedings
Carol commenced the summary proceeding for the recovery of land in the County Court by originating motion under Order 53 filed on 30 July 2018. She sought possession of Unit 1 as against Michael and Lisa and the other occupants of Unit 1.
The matter came before the Court on 17 September 2018. At the hearing Carol was represented by counsel and Michael and Lisa were self-represented. Carol relied on her affidavit sworn 28 July 2018 and an affidavit of her solicitor, Douglas Parker (‘Parker’), sworn 29 July 2018. No material was received in opposition.
Lisa spoke for her and Michael. The judge asked Lisa if she understood what the proceeding was about, and explained that Carol was seeking to recover possession of Unit 1 saying that Michael and Lisa were not entitled to live there any longer. She ascertained that Lisa and Michael sought to oppose the application. The judge asked if they had spoken to lawyers. Lisa said she had written evidence that her husband was the owner of Unit 1.
The judge directed that Lisa and Michael have 14 days in which to file affidavits in opposition and directed that the matter should then return to her. Counsel for Carol accepted that he could not say anything sensibly against that course. Her Honour said to Lisa:
What you’ll need to do if you want to oppose it is either yourselves or get some assistance preparing an affidavit which sets out why you say the plaintiff’s position is wrong and why you say you’re entitled to ownership of unit 1.
The judge then adjourned the application to 2 October 2018.
The affidavit evidence
Carol, in her affidavit sworn 28 July 2018, exhibited title searches which showed her as the sole registered proprietor of Units 1 and 2. She exhibited the contract of sale for each unit. She said, relevantly, that the parents gave her the deposit money to buy Unit 1 and that the other monies required for settlement including transfer fees, stamp duty, and bank fees came from a loan she had obtained from Westpac for $360,000 and from her savings account. She said that the same was true in respect of Unit 2 but that the loan from Westpac was $388,000.
Carol alleged that before Michael and Lisa started living in Unit 1, she was told by her father that Michael and Lisa had asked the parents if they could move into Unit 1 and that the parents agreed on the basis that they collected rent from the tenants in Unit 1 and made sure all of the expenses and Carol’s loan from Westpac were paid. She said she accepted the parents’ decision because she respects her parents and Michael is her brother. Thus, with regard to Order 53, it is not in contest that Michael and Lisa entered into occupation of Unit 1 with Carol’s consent.
Carol said that when she was overseas in December 2017 she first realised that payments were not being made into her Westpac bank account in respect of her loan for Unit 1. When she returned from Hong Kong in January 2018 she discovered that the passcode for the lock on the door of Unit 1 had been changed. She was told by one of her tenants, Jimmy Chen, that in late October 2017 Lisa had sent text messages to all the tenants in Unit 1 to say that Michael and Lisa were now the owners of Unit 1 and to pay rent to a different Westpac account in the name of ‘Chan’ (not Carol’s account) from 3 November 2017. Jimmy said that Michael and Lisa had changed the passcode for the front door of Unit 1. Jimmy moved out in March 2018. He sent Carol screenshots of Lisa’s text messages advising of the new rent arrangements and the new passcode. Carol exhibited copies of these to her affidavit.
Carol said further that from 3 November 2017 she had not received rental payments from anyone living at Unit 1, and that anybody who had been living in Unit 1 as her tenant was no longer living there. She alleged that Michael and Lisa had not been paying any part of the rental income they have been collecting from Unit 1 to her nor paying any of the expenses for the Westpac loan for Unit 1.
Carol said that she made efforts to ‘work things out’ between her and Michael and Lisa. After returning to Melbourne, she was still prepared to allow them to live in Unit 1 provided that the rental income from Unit 1 was paid into the relevant Westpac loan account in her name. Without that income she would not be able to continue to meet her loan obligations. She said that her efforts were unsuccessful because Michael and Lisa insisted that they own Unit 1; are entitled to live there by reason of their ownership; and are entitled to rent out rooms and keep the money they receive.
Carol instructed her solicitor, Parker, who sent a ‘without prejudice’ letter to Michael and Lisa, dated 4 June 2018, alleging that they had misappropriated the rental income from Unit 1. He also drafted a letter to the other people living in Unit 1 explaining that Carol was the owner of Unit 1 and they should stop paying rent to Michael and Lisa and contact Carol to make arrangements for an ongoing tenancy. Carol said that when she went to Unit 1 on 7 June 2018 to deliver copies of her lawyer’s letter to the people living there, Lisa attacked her from behind and the police were called. Carol was pregnant at the time. Intervention orders were later sought by Carol and Lisa against each other.
Parker, in his affidavit sworn 29 July 2018, reports on a telephone conversation he had with Lisa on 7 June 2018 in which Lisa repeatedly stated that Unit 1 was promised to her and Michael and that they would not pay any money until they had legal papers that recognised their ownership of Unit 1, after which they would pay for Unit 1 themselves. On instructions Parker sent a further letter to Michael and Lisa, dated 12 July 2018, denying that Michael ‘has any legal, equitable or beneficial ownership of Unit 1 or any part of it’. It further stated that due to Lisa having physically assaulted Carol, Carol ‘is no longer prepared to allow either of you to live in her unit’. The letter demanded that Michael and Lisa vacate Unit 1 by 19 July 2018 or legal proceedings would be brought for its recovery. The letter also strongly recommended that they seek legal advice.
He sent a letter to the other people living at Unit 1, also dated 12 July 2018, telling them that Michael and Lisa had been told to vacate the property; explaining that they (the other occupants of Unit 1) did not have the permission of the owner of Unit 1 to occupy it; expressly revoking any licences previously granted by Carol; and telling them to vacate Unit 1 by 19 July 2018 or legal proceedings would be commenced for its recovery. He exhibits to his affidavit the relevant correspondence.
On the same day as the first hearing, 17 September 2018, and in response to the opportunity provided by the judge, Michael and Lisa jointly swore an affidavit in which they deposed that Unit 1 was purchased for Michael, but in Carol’s name as she was an Australian citizen. Critically they stated:
My parents paid full deposit to purchase the two units on June 2014. The rest balance are paid by Westpac bank loan. My parents tell me and elder sister [Carol], one unit is for me and only one unit is for my elder sister because two units are both registered under my elder sister’s name, because only my elder sister she has Australian citizenship can purchase and be registered under old property.[3]
[3]Emphasis added.
Michael said, in effect, that on the understanding that one unit was to be his, he did repairs and gave the rental income he collected to Carol to pay the mortgage for his unit on his behalf. He also stated, significantly, that the arrangement was entered into pursuant to an agreement with Carol whereby she agreed to use the rental income from the other tenants of Unit 1, on Michael’s behalf, to pay the mortgage on his unit:
Therefore, from June 2014, I start working on my unit, I do clean and repairs to maintenance my unit properly. Also, I work to rent out my unit’s 4 en-suite bedrooms to earn income to pay my unit’s monthly mortgage to bank. My elder sister suggest to collect my income from my tenants and help me to pay to my mortgage on my behalf. I agreed her.
He complained that he received no receipts for the money he paid over to Carol:
But, until Sept 2017, my fiancée Lin realize my house ownership is complicated, she request to stop my elder sister to pay my mortgage on my behalf without giving me any legal writing agreement or receipt. She request me to pay mortgage directly by myself and stop my elder sister to collect my income on my behalf.
…
But on Nov 2017 my elder sister provide her bank account to my wife to ask my wife to pay my mortgage to her account. My wife reject her and argument starts. My wife reject to give mortgage money to my elder sister until she agree to provide us writing agreement or receipt on receive my money.
He said that from November 2017 to May 2018 the parents, Carol, and other relatives sought to persuade Lisa ‘to just trust families that my parents and elder sister promise then, one unit is owned by me, only one for elder sister; they promise unit 1 is 100% sure for me as my parents and elder sister’s promise to them’. The efforts were unsuccessful. He alleged that Carol then started to lie about the ownership of Unit 1.
Michael also claimed that Carol ought refund to him the income she had received from Unit 1; pay him for the work he had done on repairs and maintenance; and return to him the wages he had handed over to her to manage from 2014 to 2017.[4]
[4]On the appeal all of the parties sought to adduce additional evidence to expand upon the facts that were before the judge and to report on matters that had taken place between the parties or other members of the family since the orders were made. The Court declined to receive the additional evidence and heard the appeal on the basis of the material that was before the judge.
The judge’s reasons
The matter returned to the County Court on 2 October 2018 before the same judge. Carol continued to be represented by counsel and Michael and Lisa remained self-represented. The judge below heard arguments from the parties.
Counsel for Carol submitted that it was a clear case for the application of Order 53. He noted that Michael and Lisa resisted the application on the basis that Michael ‘is the true owner of Unit 1’. He observed that they were not asserting that they were tenants or that there was a licence or some other alternative lawful basis for their continued occupation. Insofar as Michael’s right was argued to be derived from an agreement with the parents, counsel said that the father ‘wasn’t in a position to create possessory rights in respect of the property. All the father did was to provide the deposit moneys … That creates no rights against my client’. He relied on the indefeasibility provisions of the Transfer of Land Act 1958 to support the proposition that as registered proprietor, Carol held Unit 1 free of any encumbrance not recorded in the register, in particular, the claimed interest of Michael as beneficiary under a trust.
The judge queried whether there was any evidence that Michael contributed financially towards the purchase price.[5] Counsel responded by saying that there no evidence of any contribution by Michael that might create an in personam right against Carol as an exception against indefeasibility. He submitted that Michael and Lisa, having no lawful right of occupation, had become trespassers in Unit 1 and the purpose of the Order 53 was to provide an owner with a procedure by which they can remove trespassers from their property.
[5]See [83] below.
The judge heard from Lisa, who submitted that the father paid all of the deposit and Carol paid nothing. She said that the rental income from which the mortgage was paid on Unit 1 over four years was Michael’s income and that he also engaged in cleaning and maintenance in order for Unit 1 to be rented. Lisa also alleged, repeatedly and belligerently, that Carol was a liar and had frequently changed her story.
The judge queried whether Michael and Lisa had filed an affidavit and, on being told of the 17 September affidavit, she took the time to read the affidavit and again ensured that Michael and Lisa fully understood what Carol was seeking. When her Honour asked Lisa why it was she said Michael was the owner of Unit 1, Lisa said because ‘parents and Carol say because for your traditional — for Chinese traditional marriage after adults marry, they need to move to their own property’ and also because ‘we also made agreement with Carol. She will stop collecting Michael’s home income and pay to Michael’s unit on his behalf, and Carol agreed that, and we made a verbal agreement’. She claimed to have a ‘voice record’ of the agreement with Carol.
In reply, counsel for Carol submitted that nothing had been said at the hearing by Lisa that displaced the presumption of indefeasibility under the Transfer of Land Act. As discussed below, I consider that counsel was wrong to submit that nothing had emerged either from Michael’s and Lisa’s affidavit, or Lisa’s oral submissions, to support an arguable case for the recognition of an equitable interest that might attract an exception to indefeasibility.[6] In any event, the focus of Order 53 does not fall on the plaintiff’s interest in the land, whether as the holder of an indefeasible title or not, but on the status or character of the occupants of the land; relevantly, whether the occupants are merely licensees who no longer have the licence or consent of the plaintiff to occupy the property.
[6]See, for example, Mathieson Nominees Pty Ltd v Aero Developments Pty Ltd [2016] VSC 131, [128]–[130].
The judge immediately delivered an oral judgment expressing her satisfaction that Carol had made out a clear case for an order for the recovery of land. She said:
[T]his is an application by way of summary proceedings for recovery of land under Order 53 brought on behalf of the plaintiff …
I am satisfied that the plaintiff has established a clear case for an order for possession under Order 53. It is clear that she is the registered proprietor of the property, and in that case that the indefeasibility provisions pursuant to the Transfer of Land [Act] … take place.
…
[T]he materials which have been filed on behalf of the defendants do not in any way challenge the claim that the plaintiff has in any meaningful way or substantive way to the order of possession. I am satisfied that as registered proprietor that she is entitled to possession of the land, and that none of the exceptions to indefeasibility come into play, such as fraud or in personam claims are made out in the circumstances of this case. In particular, the evidence which has been put forward by the defendant in the affidavit, and in addition with the matters which have been raised before the Court this morning.
Accordingly, I am satisfied that an order for possession should be granted in the form of the summons filed on behalf of the plaintiff, and I will make that order.
The judge made orders granting Carol possession of Unit 1 and ordered that Michael and Lisa pay Carol’s costs of the proceeding.
On 3 October 2018 Carol issued a warrant for possession of Unit 1 with the Sheriff’s Office.
Grounds of appeal
Michael and Lisa seek leave to appeal the orders granting Carol possession of Unit 1 primarily on the basis that this matter is not an appropriate case for the summary procedure for which Order 53 provides because they were tenants. As noted,[7] their occupation of Unit 1 was not argued before her Honour on this basis.[8] They also submit that in the circumstances there were disputed facts and legal contentions in respect of their equitable interest in Unit 1 that warrant a trial.
[7]See [8] above.
[8]On the appeal, this Court heard argument on this issue despite it not being raised below given that the orders were made summarily and it was therefore not a case of identifying what evidence might otherwise have been led had the issue been raised below. The context for raising the issue is to demonstrate that the summary procedure is inapplicable and that there are questions of fact that would have to be resolved at trial.
They rely on four grounds of appeal:
Ground 1:The learned judge erred in allowing the respondent’s application to proceed under Order 53 when on the respondent’s own case there were tenants in the property and therefore Rule 53.01(1) was not engaged.
Ground 2:Further, and alternatively, in the circumstances the respondent’s application for possession should have been commenced by a writ, with a statement of claim, and should have proceeded to a trial for the Court to hear and determine the conflicting factual and legal contentions.
Ground 3:Further, and alternatively, in the circumstances the learned judge should not have granted the respondent’s application for possession of the property but should have exercised her discretion to make directions for the trial of the proceeding.
Ground 4:Further, and alternatively, in the circumstances the learned judge erred in not allowing the applicants to present their case that they had an equitable interest in the property and therefore should not be evicted under Order 53.
Grounds 2 and 3 were dealt with together and Ground 4 was treated as in effect a repetition of Grounds 2 and 3. In substance Michael and Lisa submit that the summary procedure was not available nor appropriate because:
(1) Michael and Lisa were tenants at will, and not licensees, and therefore Order 53 did not apply to them; and
(2) There were significant issues of fact that were in contest as to whether Carol holds Unit 1 on trust for Michael and this could only be resolved at trial.
Before considering the issues raised by the grounds of appeal it is convenient to consider the history, purpose, and scope of Order 53.
The history, purpose, and scope of Order 53
Order 53 of the County Court Civil Procedure Rules 2018 relevantly provides:
53.01 Application of Order
(1)Subject to paragraph (2), this Order applies where the plaintiff claims the recovery of land which is occupied solely by a person or persons who entered into occupation or, having been a licensee or licensees, remained in occupation without the plaintiff’s licence or consent or that of any predecessor in title of the plaintiff.
(2)This Order does not apply where the land is occupied by a mortgagor or successor in title and the claim is made by the mortgagee or successor in title.
…
53.03Who to be defendant
(1)Each person in occupation of the land whose name the plaintiff knows shall be a defendant.
(2)If the plaintiff does not know the name of any person in occupation the proceeding may be commenced without naming any person as defendant.
53.04Affidavit in support
At the time the proceeding is commenced an affidavit shall be filed stating—
(a)the interest of the plaintiff in the land;
(b)the circumstances in which the land has been occupied without licence or consent and in which the claim for recovery of the land arises; and
(c)that the plaintiff does not know the name of any person occupying the land who is not a defendant. [9]
…
[9]Order 53 of the Supreme Court (General Civil Procedure) Rules 2015 is almost identical, except that r 53.07 and r 53.08 are formulated slightly differently.
Order 53 is based on what was Order 113 in the English Rules of the Supreme Court (‘RSC’).[10] Order 113 was inserted into the RSC in 1970.[11] It relevantly provided:
[10]LexisNexis, Civil Procedure – Victoria, vol 1 (at Service 316) [I 53.01.0]. The RSC were the civil procedure rules of the Supreme Court of Judicature of England and Wales from its formation in 1883 until 1999. They were superseded by the Civil Procedure Rules 1998 (‘CPR’) in 1999.
[11]Order 113 was inserted into the RSC by the Rules of the Supreme Court (Amendment No 2) 1970 (UK) SI 1970/944, r 9.
Summary Proceedings for Possession of Land
Proceedings to be brought by originating summons
1.Where a person claims possession of land which he alleges is occupied solely by a person or persons (not being a tenant or tenants holding over after the termination of the tenancy) who entered into or remained in occupation without his licence or consent or that of any predecessor in title of his, the proceedings may be brought by originating summons in accordance with the provisions of this Order.
…
Affidavit in support
3.The plaintiff shall file in support of the originating summons an affidavit stating—
(a) his interest in the land;
(b)the circumstances in which the land has been occupied without licence or consent and in which his claim to possession arises; and
(c)where the summons is in Form No. 11A, that he has taken all reasonable steps (describing them) to identify the persons occupying the land who are not named in the summons.
…
The explanatory note at the end of the amending legislation that inserted Order 113 into the RSC states: ‘These Rules introduce a rapid new procedure for the recovery of possession of land against trespassers (Rules 6, 9 and 10)’.[12]
[12]Explanatory Note, Rules of the Supreme Court (Amendment No 2) 1970 (UK) SI 1970/944.
The summary procedure in Order 113 was introduced specifically as a response to decisions in cases involving squatters. The absence of any requirement for the plaintiff to name the defendant reflects the history of the summary procedure as a process available for the eviction of squatters, the names of whom may not be known to the plaintiff. However, the summary procedure applies to circumstances beyond squatters.[13]
[13]See Tajon Pty Ltd v Arvanitis [2017] VSC 130 (Derham AsJ). See [70] below.
In Manchester Corporation v Connolly[14] it was held that it was not within the power of the court to make an order for recovery of possession of land other than in a final judgment. The RSC did not provide for a summary procedure. The Court upheld an interlocutory injunction made by the Vice-Chancellor but set aside an interlocutory order he had made for possession in favour of the plaintiff corporation against a number of defendants living in caravans on the plaintiff’s vacant site. This was despite the ‘suggested defences [being] fanciful’.[15]
[14][1970] Ch 420 (‘Manchester Corporation’).
[15]Ibid 426 (Lord Diplock).
In In re Wykeham Terrace, Brighton, Sussex, Ex parte Territorial Auxiliary and Volunteer Reserve Association for the South East[16] the Court found that proceedings could not be commenced for recovery of possession unless the squatters were named as defendants. This meant that recovery proceedings could not be brought where the squatters refused to give their names or where the squatters occupying the property changed from time to time, making it difficult to identify the appropriate people to name as defendants.
[16][1971] Ch 204 (‘In re Wykeham’).
By the time McPhail v Persons Unknown[17] was decided, where squatters had broken into empty houses and started to live in them without any authority from the respective owners, Order 113 of the RSC had been introduced. Lord Denning MR doubted the correctness of Manchester Corporation and In re Wykeham Terrace but held that, in any event, Order 113 put the court’s power beyond doubt:
When some squatters entered on vacant land belonging to the Manchester Corporation, this court granted an injunction against them, but held that it could not make an order for recovery of possession except in a final judgment: see Manchester Corporation v Connolly [1970] Ch 420. And when some squatters occupied houses in Brighton, Stamp J held that no proceedings could be taken for recovery of possession unless they were named as defendants: see In re Wykeham Terrace, Brighton, Sussex, Ex parte Territorial Auxiliary and Volunteer Reserve Association for the South East [1971] Ch 204. The result was that if the squatters did not give their names, or if one squatter followed another in quick succession, no order for possession could be made. I must confess that I doubt the correctness of that decision. But it does not matter. The position was soon put right by new rules of court. RSC, Order 113, of the High Court and Ord 26 in the county court are quite clear. A summons can be issued for possession against squatters even though they cannot be identified by name and even though, as one squatter goes, another comes in. Judgment can be obtained summarily. It is an order that the plaintiffs ‘do recover’ possession. That order can be enforced by a writ of possession immediately. It is an authority under which any one who is squatting on the premises can be turned out at once. There is no provision for giving any time. The court cannot give any time. It must, at the behest of the owner, make an order for recovery of possession. …[18]
[17][1973] 1 Ch 447.
[18]Ibid 458.
He acknowledged, as the terms of Order 113 reflect,[19] that the summary procedure does not apply to tenants who hold over after the expiry of the tenancy.
[19]See [47] above.
Unlike Order 113, Order 53 does not expressly preclude its application to tenants. However, the statutory language focuses upon ‘licensees’; it is directed at those who enter into occupation without the plaintiff’s licence or consent or those who enter into occupation with the plaintiff’s licence or consent but remain in occupation after that licence or consent has been withdrawn or otherwise brought to an end. It does not apply to those occupants who enter as tenants or hold over after the tenancy has been terminated. So much was confirmed by Derham AsJ in Framlingham Aboriginal Trust v McGuiness[20] who said:
[20][2014] VSC 241 (‘Framlingham Trust’). This was upheld on appeal in Framlingham Aboriginal Trust v McGuiness [2014] VSC 354 (Ginnane J).
The words of Rule 53.01(1) make it plain that the pre-requisites to the application of Order 53 are that the person or persons in occupation of the land are—
(a) a person or persons who entered into occupation without the plaintiff’s licence or consent or that of any predecessor in title of the plaintiff; or
(b) a person or persons who, having been a license or licensees, remained in occupation without the plaintiff’s licence or consent or that of any predecessor in title of the plaintiff.
Thus, a tenant holding over after the termination of the tenancy is not within either category and the service of a notice on the tenant purporting to determine the holding over does not alter that position. That is because … paragraph (b) does not apply because the tenant is not a person who was once a licensee.[21]
[21]Framlingham Trust [2014] VSC 241 [39]–[40].
Derham AsJ went on to summarise the principles that govern the application of Order 53:
The authorities establish the following matters in relation to the operation of Order 53:
(a)It is intended to enable a speedy resolution in favour of the proprietor of land of a dispute whereby trespassers are keeping the proprietor out;
(b)It is intended to apply only in clear cases where there is no question to try;
(c)The existence of a factual dispute does not deny the applicability of Order 53 where it is possible to resolve the dispute readily and fairly;
(d)While an order for possession may be made notwithstanding that there is a factual dispute between the parties, such an order will only be appropriate if the Court is able to satisfy itself as to the material facts that bring the case within Order 53;
(e) The jurisdiction should be exercised with great care;
(f)Where an issue does emerge, the judge has discretion whether simply to dismiss the proceeding, to determine the issue or cause the issue to be subsequently tried. This includes giving directions as to the further conduct of the proceeding or ordering the proceeding to continue as if begun by writ pursuant to Rule 4.07 of the Rules; and
(g)Where the Court gives judgment for possession under Order 53, it may grant a stay of execution.
The power to give summary judgment for possession is similar in nature to the power to give summary final judgment under Rule 22.02 of the Rules. That power should be exercised with great care and should never be exercised unless it is clear that there is no question to be tried. The need for exceptional caution in exercising the power is the subject of numerous observations of courts in this country.[22]
[22]Ibid [41]–[42] (emphasis added) (citations omitted). With respect to the need to exercise caution before granting summary judgment, see Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27, 40 [35].
He refused to grant an order for the recovery of property within the lands under the Framlingham Aboriginal Trust (‘the Trust’) on the basis that the Court was in effect being invited to resolve seriously disputed questions in a summary application. Moreover, there was a lack of clarity as to the authority of the Trust to commence the proceeding and also with respect to the impact of customs and practices of the Framlingham Aboriginal community on the occupation of the property by the defendants, including whether a decision of the Elders of the community may have resulted in the occupants having been granted a licence for their occupation.
In Palazzo v Pullen[23] Brooking J engaged in the first recorded judicial consideration of Order 53. The defendant had been granted a written licence to occupy land on the Lower Esplanade at St Kilda for the purpose of hydrotherapy and sea baths until 1 November 1988. In 1992 the Minister for Conservation and Environment sought to recover possession of the land. Brooking J acknowledged that although it was anticipated that the summary procedure would normally be applied only in clear and uncontested cases there was authority to support the proposition that there was nothing in the rule which ‘disentitled the Court from trying an issue which emerged in the proceedings and that where the issue was clear and straightforward there was no reason why the Court should not deal with it.’[24] He continued:
In Henderson v Law (1984) 17 HLR 237 Lord Justice Griffiths, in whose judgment the Master of the Rolls agreed, dealt at 241 with what should be done when it became apparent in proceedings under the corresponding County Court Order that a substantial issue has to be tried: ‘There will obviously be cases in which, although proceedings are started by way of a summary procedure, it quickly becomes apparent that a substantial issue has to be tried. If it was apparent to the applicant that a serious issue was bound to arise as to whether a tenancy or a holding over existed, no doubt the judge would regard the use of the summary procedure as inappropriate, or even in an extreme case as an abuse of the process, and dismiss the application; but I would expect such cases to be rare, because I would not anticipate that solicitors would seek to steal a march by using an inappropriate procedure. From time to time there are bound to be cases such as this where, from the applicant’s point of view, an unexpected issue surfaces which raises the question of a tenancy or a holding over. In such cases, the judge must exercise his discretion and decide whether it is wiser to continue the summary hearing, or to adjourn it for a further hearing after the parties have had a chance to reconsider the position or possibly to dismiss the application and leave the applicant to have the issues determined in a subsequent action. But merely because a respondent chooses, without warning, to assert that there is either a tenancy or a holding over cannot of itself be a sufficient reason to say that the use of O 24 was an inappropriate procedure. In the present case, the assistant recorder was, in my view, entitled to determine the issue of surrender or a holding over in the O 24 proceedings’.[25]
[23]Supreme Court of Victoria, Brooking J, 24 July 1992 (‘Palazzo’).
[24]Ibid 2, referring to Shah v Givert (1980) 124 SJ 513.
[25]Ibid 2.
A triable issue did emerge in Palazzo, namely whether the licence had been renewed. The Department had sent accounts to the plaintiff which were explicable only on the basis that he was then the holder of a renewed licence but there was also evidence suggesting that there may have been no actual decision to renew on the part of a person authorised to grant a licence. There were questions whether particular statutory provisions under the Land Act 1958 applied. Brooking J considered that, in those circumstances, ‘it would be quite wrong to make an order for possession at this stage’.[26]
[26]Ibid 13.
The Court in Pappas v Bowmark Pty Ltd[27] also determined that the summary procedure under Order 53 was inappropriate due to a dispute of fact. Here the question was whether a lease had been terminated and replaced by a licence agreement. The dispute was between a landlord (‘Pappas’) and a tenant (Bowmark Pty Ltd (‘Bowmark’)) over possession of a shop in Sydney Road, Coburg. Bowmark fell into arrears on the rent payments and Pappas served a notice of default. There was a disagreement over how much rent had already been paid and what was owed, and the parties struggled to come to an agreement. Following negotiations, an agreement was reached but its terms were later contested, with Pappas contending that additional terms had been left out. Having formed the view that Bowmark had breached the agreement by not complying with the additional terms, Pappas entered the premises and changed the locks. Bowmark re-entered the premises and resumed conducting its business. Following a further exchange of letters, Pappas again took possession and Bowmark again re-entered the premises.
[27][1998] VSCA 120.
Pappas commenced proceedings for possession under Order 53. Bowmark opposed the application and brought its own claim for relief against forfeiture on the basis that it was in possession of the premises as a lessee. Pappas alleged that he had duly terminated the lease by re-entry and that any subsequent occupation of the premises by Bowmark was as a licensee pursuant to an express licence agreement contained within correspondence between the parties’ solicitors.
At first instance Pappas was granted possession of the premises under Order 53 and Bowmark’s claim for relief against forfeiture was dismissed. On appeal this Court held that it had been inappropriate to use the summary procedure provided for by Order 53 in this case, as there were disputed issues of fact that required resolution on which there was conflicting evidence, namely whether Bowmark was a lessee or licensee. The issues were not ones that could be resolved ‘readily and fairly’[28] and nor had the judge purported to resolve them. Tadgell JA (with whom Callaway and Chernov JJA agreed) observed:
Order 53 is intended to enable a speedy resolution, in favour of a proprietor of land, of a dispute whereby trespassers are keeping the proprietor out. It is a prerequisite to the application of Order 53 that the persons who are in possession and whom it is desired to have removed should have gone into occupation as licensees or without the plaintiff’s consent and remain in occupation without the plaintiff’s consent. In this case the appellant initially went into possession as a tenant and the question which was presented to the Court was whether she was entitled to continue in possession as a tenant or whether she was not. In those circumstances it seems to me that Order 53 was unavailable to provide jurisdiction. That is not to say that the mere existence of a factual dispute will deny the application of Order 53. It may be possible to resolve such a dispute quite readily and fairly so that the summary jurisdiction afforded by Order 53 can conscientiously be available. This is not a case of that kind. The matter required resolution at least of the questions whether the agreement that the parties had reached on 5 December 1997 was as the respondent asserted or as the appellant asserted, and whether the appellant was in breach of it when the respondent re-entered on 22 January this year. The judge does not appear to have resolved these disputed questions of fact which were presented to him. What was appropriate when it became evident – as it did not until the very day on which the matters were heard – that there was a dispute of this kind, was to send the matter off for trial with or without pleadings. As it was, it seems to me, pleadings in this case were necessary in order that the several issues that were raised should have been properly exposed and dealt with.[29]
[28]Ibid [13].
[29]Ibid (emphasis added). The Court ordered that the matter proceed by writ.
In Moar v Duman,[30] Pagone J found that it was inappropriate to use the summary procedure in Order 53 due to the complex nature of the factual and legal questions involved in the dispute. The registered proprietor of land in Toorak, Queenbridge Pty Ltd, sought the recovery of land against Shazia Duman (‘Duman’). Duman asserted an entitlement to the disputed property by way of either an express or constructive trust for her benefit, or a gift of the property to her. The property had been purchased by the Queenbridge Pty Ltd as nominee for Max Moar (‘Moar’). The property was purchased in the context of a loving domestic relationship between Duman and Moar. Pagone J noted that there was no instrument in writing as required by s 53 of the Property Law Act 1958 to support the claim of an express trust. However, he noted that a ‘constructive trust may arise where the assertion of a legal right to a property would constitute unconscionable conduct where, for instance, the party asserting a legal right to property would deny the other party’s contribution to a joint endeavour which fails’.[31] He noted that the evidence available supporting the existence of either trust was ‘not great … [but] the contrary evidence is far from satisfactory or persuasive’.[32] He observed:
[T]here is some evidence to establish an express intention to benefit Ms Duman that needs to be tested before it can confidently be said that there was not an express intention at least as between Mr Moar and Ms Duman that the property was acquired at least in some part for her benefit sufficient to create an equitable interest in her favour.[33]
[30][2007] VSC 266 (‘Moar’).
[31]Ibid [4].
[32]Ibid [5].
[33]Ibid [6].
He concluded that ‘it is a matter that requires investigation and is unsuitable for resolution in Order 53 proceedings’.[34] He said:
In these circumstances I cannot confidently conclude that neither an express trust nor a constructive trust could be found against Queenbridge at a trial hearing of the proceeding. It follows that I do not consider the procedure available under Order 53 to be an appropriate means by which the issues should be determined.[35]
[34]Ibid [7].
[35]Ibid [13].
In Remar Australia Inc v Dayspring Community Ltd[36] Emerton J concluded that it was not possible readily and fairly to use the Order 53 procedure to resolve a dispute between the parties where representations were alleged to be made by the owner of land that gave rise to a proprietary estoppel. It was arguable that Remar had an equitable interest in the land and ‘the nature of that defence [made] it inappropriate for the proceedings to continue by way of summary process’.[37]
[36][2010] VSC 352.
[37]Ibid [32].
Alderuccio v Alderuccio[38] also involved the assertion of a constructive trust in the relevant property based upon proprietary estoppel. The plaintiff’s son and daughter-in-law had been living at a property for many years and had spent significant time and money renovating and making improvements to the property. They claimed they had done so on the understanding that title in the property was to be transferred to them, an understanding based on repeated representations to that effect. The father and son had a falling out when the son attempted to put the father into a nursing home. Derham AsJ held that the son was arguably entitled to an interest in fee simple in the land pursuant to an equitable proprietary estoppel of the type recognised in Sidhu v Van Dyke.[39] He held that the complexity of the factual issues indicated that the summary procedure under Order 53 was inappropriate, particularly given that the defendants were self-represented litigants because ‘it is incumbent on the court to allow [self-represented litigants] some latitude, particularly in respect of the identification of what their rights at law or in equity might be.’[40]
[38][2019] VSC 404 (‘Alderuccio’).
[39](2014) 251 CLR 505 (‘Sidhu’). See also McNab v Graham (2017) 53 VR 311 (‘McNab’).
[40]Alderuccio [2019] VCS 404, [51]. See also Byrne v Ritchie [2009] VSC 114 where Kyrou J considered it inappropriate to make an order under Order 53 where the plaintiffs were relying on hypothetical facts as to whether a Heads of Agreement document constituted the contract between the parties; and V & O Princi Pty Ltd v Prestige Holdings Group Pty Ltd [2010] VSC 627 where Mukhtar AsJ observed that the landlord should not have brought proceedings under Order 53 as there was clearly a dispute between the parties that should have been brought under the Retail Leases Act 2003.
There have also been cases where the Court has been prepared to make an order for the summary possession of land in a contested case. By way of illustration, the Court made an order under Order 53 in Melbourne Anglican Trust Corporation v Greentree.[41]The case concerned an internal dispute within the Anglican church. The plaintiff was the registered proprietor of the land, which it held as trustee on behalf of the Melbourne Diocese of the Anglican Church of Australia. The defendant was the incumbent vicar of a parish in Melbourne’s eastern suburbs and was living at the parish vicarage. There were issues within the church community and some members were unhappy with the defendant’s appointment, leading some to form a breakaway congregation in an adjoining parish. On the basis that there had been an ‘irretrievable breakdown in pastoral relationships’ the Archbishop purported to revoke the vicar’s licence as the incumbent of a Church parish. The plaintiff brought an Order 53 application to recover possession of the vicarage. The vicar submitted that the purported revocation of his licence as the incumbent vicar of the parish was invalid, as it contravened provisions governing the structure and operations of the Anglican Church in Australia, and therefore he could not be required to quit the vicarage and the summary procedure under Order 53 was unavailable.
[41]Supreme Court of Victoria, Vincent J, 29 May 1997.
Vincent J considered the nature of the rights possessed by an incumbent of a parish and found that the defendant occupied the vicarage only as a contractual licensee during the period of his incumbency. The licence was in fact revoked and the plaintiff was entitled to recover possession. He reiterated that whether the licence had been rightly or wrongly revoked was irrelevant to the question of the availability of the summary procedure under Order 53. A grant of a contractual licence creates no interest in land; the vicar had no possessory rights. Accordingly, he made an order for the plaintiff to recover possession of the vicarage.
In Williams v Rampino[42] Nettle J resolved a small factual dispute that arose in an Order 53 application and made an order for recovery of possession. The parties had entered into a licence agreement that provided for occupation pending completion of a contract of sale. It contained a clause allowing the licensor to terminate the agreement at any time after ‘the date of settlement’ by giving two days’ notice in writing to the licensee. Nettle J held that the licence stood separate and apart from the contract of sale and that it had been open to the plaintiffs to bring the licence agreement to an end when they had. The dispute was readily resolvable and did not affect the availability of the summary procedure.
[42][2002] VSC 343.
In Tajon Pty Ltd v Arvanitis[43] Derham AsJ was able fairly and readily to resolve a factual dispute and satisfy himself that the material facts brought the case within Order 53. Relevantly, the elements for an enforceable tenancy agreement or lease were absent, any other agreement was vague and unenforceable, and the defendants had at best a ‘bare licence, not coupled with a grant, terminable at will’.[44] He observed that ‘a licence may be determined and the licensee transformed into a trespasser even if the determination involves a breach of contract’.[45] In this context he referred to Cowell v Rosehill Racecourse Co Ltd[46] where Dixon J said:
A licence which is not coupled with or granted in aid of an interest is revocable at law. It operates as a bare permission to do what would otherwise be an invasion of the licensor’s rights. If the permission is terminated, further continuance of the acts it authorized becomes wrongful. A licensee does not become a trespasser until he has received notice that the licence is countermanded and until a reasonable time has elapsed in which he may withdraw from the land and remove whatever property he has brought in pursuance of the licence … But, if he then refuse to leave the premises, he cannot complain of his forcible removal.[47]
[43][2017] VSC 130 (‘Tajon’).
[44]Ibid [51].
[45]Ibid [52], referring to Adrian J Bradbrook, Clyde E Croft and Robert S Hay, Commercial Tenancy Law, (LexisNexis, 3rd ed, 2009) 19 [3.8].
[46](1937) 56 CLR 605.
[47]Ibid 630–1.
Derham AsJ also reiterated that the summary procedure is not confined to cases of squatters (regardless of the history behind its introduction). As he said, referring to remarks made by Tadgell JA in Pappas v Bowmark Pty Ltd:[48]
[H]is Honour’s reference to ‘trespassers’ conjures up images of squatters entering the land and refusing to leave or give up possession to the person with the rightful claim to possession. But in law, a person who remains in occupation of land without the licence or consent of the person immediately entitled to possession is a trespasser as against that person from the time the entitlement arose, once the person has entered onto the land.[49]
[48]See [61] above.
[49]Tajon [2017] VSC 130, [72]. See also Parker v Mielicki [2003] VSC 263 where Teague J granted an order for possession finding that a family member had occupied the family home as a licensee and the licence had been revoked by the administrator of the mother’s estate; Tolhurst Druce & Emmerson v Maryvell Investments Pty Ltd [2007] VSC 271 where Dodds-Streeton J held that the uncertainties relating to whether a company held land on trust, and, if so, what trusts, resulted from a failure to keep proper records, were unlikely to be clarified or resolved by a full trial, and did not create a reasonable doubt that the company was entitled to recover possession; Suncorp-Metway Ltd v Sunlongsolar Pty Ltd [2014] VSC 580 where Derham AsJ held that there was no factual dispute as to the giving of consent, waiver or estoppel that stood in the way of the plaintiff’s entitlement to possession; Baird v Baird [2019] VSC 59 where Keogh J made an order for the recovery of land in favour of the executor of the mother’s estate against a brother who was a residuary beneficiary under the will who refused to vacate the property — Keogh J found that the brother did not have a legal or equitable interest in a specific asset of the estate during the course of administration and he had been living in the property pursuant to a licence that had been revoked.
Was the summary procedure available and appropriate here?
The two issues raised by the grounds of appeal relate to the status of Michael and Lisa as tenants at will or licensees and whether Carol holds Unit 1 on trust for Michael.
(1)Are Michael and Lisa tenants at will or licensees?
On appeal, Michael and Lisa submit that the summary procedure under Order 53 is not available as the procedure does not apply to tenants. They accept that there is no formal tenancy here because there is no lease between Carol and Michael and Lisa, nor any agreement for a lease. Rather, they submit that they entered into occupation as tenants at will. As Order 53 does not apply to tenants it is argued not to apply to them. As mentioned,[50] this submission was not made in the court below.
[50]See [8] and n 8 above.
When a person is given an uncertain interest in premises, the law may presume a tenancy at will.[51] A tenancy at will may come into existence when, for example, the tenant takes possession of the property in question with the landlord’s consent without paying rent.[52] Michael and Lisa submit that these are exactly the circumstances in which they took possession of Unit 1. They further submit that a tenancy at will is different from a licence because a tenant at will has exclusive possession.[53] This is the essential characteristic of a leasehold interest.[54] The right of a tenant at will is possessory.[55] They contend that from the time they moved into Unit 1, they had exclusive possession (subject only to the rights of the tenants to their individual rooms and the tenants’ use of the common areas) as Carol had no right to re-enter Unit 1 without their consent. It should be noted that this assertion is contested and there has been no finding on the issue, not least because no reliance was placed on a tenancy at will before the judge. It was conceded by Michael and Lisa that the evidence was unclear in either direction on this issue.
[51]Buck v Howarth [1947] 1 All ER 342, 343.
[52]Ibid. Some payment by way of compensation for the use of premises is not inconsistent with a tenancy at will but the payment and receipt of periodical rent is evidence of the creation of a leasehold interest for a periodic term: Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd (2008) 35 WAR 520, 565–6 [200].
[53]Radaich v Smith (1959) 101 CLR 209, 218: ‘If he was let into exclusive possession, he was said to be a tenant, albeit only a tenant at will’.
[54]Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1946) 46 SR (NSW) 47, 49: ‘[T]he only essential characteristic of any lease is that it should give the right of exclusive possession of premises to a tenant’. See also Greco v Swinburne Ltd [1991] 1 VR 304, 312. A tenant at will can also bring an action against third parties but a licensee cannot: Brendan Edgeworth et al, Sackville & Neave: Australian Property Law (LexisNexis Butterworths, 10th ed, 2016), 172 [3.19] (‘Sackville & Neave’).
[55]EH Burn and J Cartwright, Cheshire and Burn’s Modern Law of Real Property (Oxford University Press, 18th ed, 2011) 201–3.
It may be accepted that a tenant at will has a right to exclusive possession during the currency of the tenancy. It may also be accepted that a tenancy at will is a form of leasehold interest albeit that, ‘[a]rguably, a tenancy at will should not be classified as a leasehold estate since it has no defined duration, although conventionally it is classified in this way’.[56] At common law there is no notice period required for the valid termination of a tenancy at will. Either the tenant or the landlord may terminate the tenancy at any time. It is terminable by demand of possession, express or implied.[57] It is acknowledged that a tenant at will ‘holds a position somewhere between a lessee and a licensee’.[58]
[56]Sackville & Neave, 172 [3.19].
[57]Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1946) 46 SR (NSW) 47, 49.
[58]EH Burn and J Cartwright, Cheshire and Burn’s Modern Law of Real Property (Oxford University Press, 18th ed, 2011) 203.
In Commonwealth Life (Amalgamated) Assurance Ltd v Anderson[59] Jordan CJ said of tenancies at will:
A tenancy at will exists whenever, by virtue of an express or implied agreement between the land-owner and another person, the other is in exclusive possession of the land, otherwise than as servant or agent of the owner, for an estate which is not of freehold or for a term. A tenancy at will is subject to many inconveniences. It is necessarily terminable at the will of either party by demand of possession, express or implied. It differs in this respect, as in others, from a licence: Minister of Health v Bellotti, in that no period of notice is necessary for its termination; although, on termination by the owner, the tenant has a reasonable time to enter and remove his goods, but not a right to exclusive possession for the purpose: Doe d Nicholl v M’Kaeg. … The estate created by the tenancy is unassignable, because a purported assignment terminates it as soon as it comes to the notice of the owner: Pinhorn v Souster.[60]
[59](1946) 46 SR (NSW) 47.
[60]Ibid 49–50 (citations omitted) (emphasis added). It is noteworthy that Jordan CJ refers to the interest of a tenant at will as ‘an estate’ as do the authors in Sackville & Neave although they query the correctness of that classification: see [74] above. A tenancy at will has been treated as an interest in land for the purpose of compensation: see Greco v Swinburne Ltd [1991] 1 VR 304, 312–13 (Gobbo J) referring to CM Collins, The Valuation of Property Compensation and Land Tax (Law Book Co, 3rd ed, 1949) and to Halsbury’s Statutes in the context of entitlements to compensation under statute. However, see EH Burn and J Cartwright, Cheshire and Burn’s Modern Law of Real Property (Oxford University Press, 18th ed, 2011) 203 who state: ‘Like the licensee, [the tenant at will] has no estate: no interest in the land to which his possession can be referred, and therefore has no property right to assign to another, nor anything that can bind a successor of the landlord. … On the other hand, unlike the licensee, he has possession’ (citations omitted).
As mentioned, Michael and Lisa entered into occupation of Unit 1 lawfully. They were permitted to occupy Unit 1 rent-free. There is no evidence to suggest that the occupation was for any defined term. There was no relevant lease. Their interest in Unit 1 is uncertain. If they had exclusive possession of Unit 1 by reason of an express or implied agreement with Carol, the law would likely presume a tenancy at will. While the position of a tenant at will has been described as somewhere between a lessee and a licensee, it is accepted that tenants at will are not licensees, licensees not being entitled to exclusive possession.
If Michael and Lisa occupied Unit 1 as tenants at will they did not enter or remain in Unit 1 as licensees. Any tenancy was terminated by the letter from Carol’s solicitor, Parker, of 12 July 2018, demanding that they vacate Unit 1.[61] Upon termination, Michael and Lisa no longer had Carol’s consent or licence to remain in occupation. They never became licensees. Thus, if they are tenants at will who are holding over after the expiry of the tenancy, they are not, and never have been, licensees. As the discussion of the history, purpose, and scope of Order 53 reveals, the summary procedure is directed relevantly at ‘licensees’ who remain in occupation after the licence or consent has come to an end. Having never been nor become licensees, Michael and Lisa would fall outside the scope of Order 53.
[61]See [26] above.
There is an arguable case that Michael and Lisa enjoyed a tenancy at will. This is sufficient to displace the operation of Order 53. Had this issue been raised below the judge could have taken the opportunity to explore whether Michael and Lisa had exclusive possession of Unit 1. This issue may have been able to be fairly and readily resolved. If I were confident that it could so resolved, and were it not for the remaining issues concerning an equitable interest that Michael and Lisa may have in Unit 1, I would remit the matter of the application of Order 53 to the County Court to be decided according to law. However, the evidence relied on does not provide that necessary confidence. The question of whether Michael and Lisa were tenants at will or licensees would require significant exploration of the facts and, like the disputed status of the occupant in Pappas v Bowmark Pty Ltd as either a lessee or a licensee,[62] would warrant the matter being sent off to trial.
[62]See [61] above.
In any event, the remaining issues support the view that the circumstances of the dispute between Michael, Lisa and Carol are not appropriately dealt with by a summary procedure.
(2)Does Carol hold Unit 1 on trust for Michael?
Michael and Lisa submit that they, or at least Michael, has an equitable interest in Unit 1. They submit that there are alternative bases for their claim that Carol holds Unit 1 on trust for Michael.
They submit that a constructive trust arises in favour of Michael in accordance with the doctrine of proprietary estoppel. They rely upon what they say was the acknowledgement by Carol that, in accordance with the parent’s wishes, Unit 1 would be held on trust by Carol for Michael. They rely further upon Carol’s alleged agreement that she would act on Michael’s behalf in using the rental income to pay the mortgage for Unit 1.[63]
[63]See [28]–[29] above.
Alternatively, they submit that a constructive trust arises by reason of there being a joint endeavour between the parents, Carol, and Michael (or Michael and Lisa), with respect to the use and management of Unit 1.
Some tentative reliance was also placed on the existence of a resulting trust. This was referred to on the appeal in Michael and Lisa’s Written Case[64] where the statement was made that Michael had transferred $28,000 to Carol for the balance of the settlement monies for Unit 1. This contribution to the purchase price was argued to entitle Michael to a partial beneficial interest based on a resulting trust in accordance with Calverley v Green.[65] However, there was no evidence of this contribution before the judge. Given the limitations on the evidence below, no further reliance was placed on the proposition that there was a resulting trust on the hearing of the appeal.
[64]This was signed by counsel who was not the counsel who appeared on the appeal.
[65](1984) 155 CLR 242.
In Sidhu the High Court reiterated the requirements for proprietary estoppel as analysed in Giumelli v Giumelli:[66]
In Giumelli v Giumelli, it was said that the category of equitable estoppel that is usually traced back to the decisions in Dillwyn v Llewelyn and Ramsden v Dyson is now a ‘well recognised variety of estoppel as understood in equity’, which affords relief ‘found in an assumption as to the future acquisition of ownership of property … induced by representations upon which there had been detrimental reliance by the plaintiff’.[67]
[66](1999) 196 CLR 101.
[67](2014) 251 CLR 505, 511 [2] (citations omitted).
It is ‘the promisor’s responsibility for the detrimental reliance by the promisee, which makes it unconscionable for the promisor to resile from his or her promise’.[68] Property is impressed with a constructive trust from the time when there is reasonable reliance upon a promise which renders it unconscionable for the owner of land to resile from the promise.[69]
[68]Ibid 522–3 [58].
[69]McNab (2017) 53 VR 311, 314 [6].
Here there is some evidence that Michael and Lisa (or Michael alone) was induced to spend time and effort, over a period of years, in carrying out repairs, cleaning and maintenance on Unit 1 (and Unit 2) in reliance on the acceptance and agreement of Carol that Unit 1 was acquired for Michael. There is some evidence that, in effect, Carol adopted the alleged representation made by the father (or by the parents) that Unit 1 was to be purchased for Michael with a deposit provided by the father (or the parents) while Unit 2 was to be purchased for her. This is supported by Carol’s evidence that she permitted Michael and Lisa to move into occupation at Unit 1 because she accepted, and complied with, her father’s (or the parents’) wishes.[70]
[70]See [21] above.
While the evidence may seem somewhat scant to found a constructive trust based on principles of proprietary estoppel, in my view it is sufficient to indicate that the matter ought to have been directed to proceed by way of trial. The approach taken in Remar Australia Inc v Dayspring Community Ltd[71] and Alderuccio[72] would have been appropriate. This was especially so given that Michael and Lisa were self-represented below and the identification of a relevant equitable interest is a complex matter.[73]
[71][2010] VSC 352. See [64] above.
[72][2019] VSC 404. See [65] above.
[73]See the approach of Derham AsJ in Alderuccio [2019] VSC 404 at [65] above. See also Roberts v Harkness (2018) (2018) 57 VR 334, 356–7 [53]–[56].
While Carol denies the truth of Michael and Lisa’s evidence, this is in the context of a regrettable and ever-deepening family dispute. The real circumstances of the payment of the deposit for both units, the question of what representations were made or adopted, and the extent of any detrimental reliance were all untested before the judge. The hearing before her Honour did not allow for a proper assessment of the credibility or reliability of any of the parties.
I also consider that there is some evidence in support of the proposition that there was a common intention between Carol and Michael to develop a commercial joint venture (supported by the parents) of acquiring Unit 1 and Unit 2 as a means of providing both residential accommodation for themselves and regular rental payments from tenants. The rent was designed to assist in servicing the mortgage repayments and ultimately to lead to the unencumbered ownership of the units. While Carol contributed money, Michael contributed his labour. Equity may intervene where a joint venture fails, without attributable blame, and where it was not intended that the benefit of the contribution made by one party for the purposes of the joint endeavour
be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do.[74]
[74]Muschinski v Dodds (1985) 160 CLR 583, 620 (Deane J).
This was not an issue that could be resolved in a summary context. Its resolution, as in Moar,[75] required that the question of a common intention, or joint endeavour, be properly tried.[76]
[75][2007] VSC 266.
[76]See [62]–[63] above.
Perhaps the overall position here is best described negatively, in the manner in which Pagone J described the position in Moar. His Honour said that he ‘cannot confidently conclude that neither an express trust nor a constructive trust could be found against Queenbridge at a trial hearing of the proceeding’.[77] Similarly, I cannot confidently conclude that a constructive trust could not be found against Carol at a trial hearing of this proceeding. In those circumstances, the summary procedure under Order 53 is neither available nor appropriate.
[77][2007] VSC 266, [13]. See [63] above.
Conclusion
I consider that Order 53 is not available nor appropriate in the circumstances of the case.
I would grant leave to appeal and allow the appeal.
The matter, if it is to proceed, ought to proceed to trial and be commenced by a writ with a statement of claim.
FORREST JA:
I have had the advantage of reading in draft form the reasons of Tate JA and I agree with them in total. I also agree with the orders her Honour proposes.
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