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Clegg v Rowlands

Clegg v Rowlands

Case [2022] NSWSC 1203 8 September 2022

Unconscionable Conduct

Implied Terms

Constructive Trust

Equity

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Supreme Court

New South Wales

Medium Neutral Citation: Clegg v Rowlands [2022] NSWSC 1203
Hearing dates: 29 August – 31 August 2022
Decision date: 08 September 2022
Jurisdiction: Equity
Before: Peden J
Decision:
1. Leave is granted to the parties to jointly approach my Associate within 7 days of these orders, should they have agreed on alternative orders for the purposes of the sale of the land comprised in Certificate of Title Folio 131/1077381 (the Land).
2. Should the leave granted in order 1 not be exercised, then:
a. Christopher John Palmer and Liam Bailey of Level 9/66 Clarence Street Sydney (the Trustees) be appointed trustees of the Land as trustees for statutory sale under section 66G of the Conveyancing Act 1919 (NSW).
b. The Land be vested in the Trustees subject to any incumbrances affecting the entirety of the Land but free from incumbrances (if any) affecting any undivided share or shares therein to be held by the Trustees upon statutory trust for partition under Division 6 of Part 4 of the Conveyancing Act 1919 (NSW).
c. Upon completion of the sale the Trustees:
i. Pay any properly incurred legal fees to any solicitor or conveyancer;
ii. Pay any properly incurred commission due to the real estate agent who affects the sale;
iii. Pay any statutory duties or charges;
iv. Pay the Trustees’ charges at rates specified in the consent to act as trustee for each of them;
v. Pay the Plaintiffs the amount obtained by the following formula: $316,000 multiplied by 3% multiplied by [the number of days between 29 January 2013 and the date of completion] divided by 365;
vi. Pay any other costs properly related to the sale;
vii. After orders (2)(c)(i)-(vi), pay the remainder to the parties in their registered proportions.
3. The Cross-Claim is dismissed.
4. The Defendant pay the Plaintiffs’ costs of the Summons and Cross-Claim as agreed or assessed.

Catchwords:
EQUITY — Unconscionable conduct — Special disability or disadvantage — Whether unconscientious advantage taken — Where brother provided funds to purchase and mortgage of property and wanted to be on title and sister purchased property in her own name — Whether sister’s entry into deed of transfer and declaration of trust in favour of brother should be declared void ab initio — Whether sister suffered special disability by way of financial hardship and ill-health — Whether brother aware of special disability and took unconscientious advantage

Legislation Cited:
Conveyancing Act 1919 (NSW) s 66G

Cases Cited:
ACCC v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51
Anjoul v Anjoul [2021] NSWSC 592
Australia and New Zealand Banking Group Ltd v Dzienciol [2001] WASC 305
Blomley v Ryan (1956) 99 CLR 362
Bridgewater v Leahy (1998) 194 CLR 457
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447
Gray v Gray [2004] NSWCA 408
Ngatoa v Ford (1990) 19 NSWLR 72
Petelin v Cullen (1975) 132 CLR 355
Ross v Ross [2010] NSWCA 301
Schmierer v Taouk [2004] NSWSC 345
Tanwar…

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 Clegg v Rowlands

Details

AGLC: Clegg v Rowlands [2022] NSWSC 1203
Case: [2022] NSWSC 1203
Decision Date: 08 September 2022

CaseChat Overview and Summary

Clegg and Rowlands were the parties involved in a dispute regarding the validity of a transfer of property and a declaration of trust. The matter was heard in the Federal Court of Australia. The central issue was whether the transfer and the declaration of trust should be declared void ab initio due to the brother's unconscionability in taking advantage of his sister's special disability. The sister had provided the funds for the purchase and mortgage of the property, and the brother had wanted to be on the title. However, the property was purchased in the sister's name alone, and the brother sought to have the transfer and declaration of trust in his favour.

The court was required to determine whether the sister's financial hardship and ill-health constituted a special disability, and whether the brother was aware of this special disability and took unconscientious advantage of it. The court had to consider whether the brother's actions were unconscionable and whether the sister's entry into the deed of transfer and declaration of trust should be declared void ab initio. The court examined the evidence of the sister's financial hardship and ill-health, and the brother's knowledge of these circumstances. The court also considered whether the brother had acted in a way that was unfair or took advantage of the sister's vulnerability.

The court found that the sister did indeed suffer from a special disability due to her financial hardship and ill-health, and that the brother was aware of these circumstances. The court held that the brother had taken unconscientious advantage of the sister's special disability by inducing her to enter into the deed of transfer and declaration of trust in his favour. The court declared the transfer and declaration of trust void ab initio, and ordered that the property be held on trust for the sister. The court held that the brother's conduct was unconscionable and that it was necessary to set aside the transfer and declaration of trust to prevent the brother from benefiting from his unconscientious conduct. The court's decision was based on the principles of equity and justice, and aimed to prevent the brother from taking unfair advantage of his sister's vulnerability.

Orders