Demar Holdings Pty Ltd v Bluerise Enterprises Pty Ltd - [2024] WASC 299

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   DEMAR HOLDINGS PTY LTD -v- BLUERISE ENTERPRISES PTY LTD [2024] WASC 299
CORAM:   MASTER RUSSELL
HEARD:   22 MAY 2024, FURTHER EVIDENCE & SUBMISSIONS FILED ON 12 & 13 AUGUST 2024
DELIVERED          :   20 AUGUST 2024
FILE NO/S:   CIV 2304 of 2023
BETWEEN:   DEMAR HOLDINGS PTY LTD (ACN 081 301 813)
Plaintiff
AND
BLUERISE ENTERPRISES PTY LTD (ACN 081 694 608)
Defendant

Catchwords:

Summary judgment - Application for sale of land under s 126(1) Property Law Act 1969 (WA) - Sale of land in lieu of partition - Parties agree land should be sold - Which party to have conduct of sale - Orders as to conduct of sale - Turns on own facts

Legislation:

Property Law Act 1969 (WA), s 126(1)
Rules of the Supreme Court 1971 (WA), O 14
Transfer of Land Act 1893 (WA), s 68(1), s 68(1A)

Result:

Order for sale of land made pursuant to s 126(1) of the Property Law Act 1969 (WA)

Plaintiff to have conduct of sale

Category: B

Representation:

Counsel:

Plaintiff	:	Ms K Woods
Defendant	:	Mr G Douglas

Solicitors:

Plaintiff	:	Billington Legal
Defendant	:	Douglas Cheveralls Lawyers

Case(s) referred to in decision(s):

Bombara v Bombara [2010] WASC 314
Crocombe v Pine Forests of Australia Pty Ltd [2005] NSWSC 151
Dale v Hamilton (1853) 68 ER 1116
Dixon v Pyner (1850) 68 ER 135
Elanel Pty Ltd (as trustee for the Marvellous Property Trust) v MJK Properties Pty Ltd (as trustee of the MJK Investment Trust) [2013] WASC 292
Gray v Gray [2023] WASC 70
Manifis v Mouzalidis [2021] WASC 454
Murray v Geoffroy (1918) 18 SR (NSW) 259
Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635
Stevens v Wright [2021] WASC 36
Trainor v Trainor [2021] WASC 40

MASTER RUSSELL:

Introduction

The plaintiff, Demar Holdings Pty Ltd (Demar), commenced this proceeding by writ of summons filed on 17 November 2023 seeking orders for the sale of property in lieu of partition pursuant to s 126(1) of the Property Law Act 1969 (WA) (Act).
The property the subject of the application is known as 72 Baile Road, Canning Vale, in the State of Western Australia, being lot 996 on deposited plan 77084 and being the whole of the land in certificate of title volume 2814 folio 875 (Property).
Demar and the defendant, Bluerise Enterprises Pty Ltd (Bluerise), own the Property as tenants in common in equal shares.
By chamber summons filed on 29 January 2024, Demar applies for summary judgment pursuant to O 14 of the Rules of the Supreme Court 1971 (WA) for an order pursuant to s 126(1) of the Act that the Property be sold (Application).
Bluerise accepts that summary judgment should be entered for Demar and orders made for the sale of the Property. It disputes that Demar should have conduct of the sale and Demar's proposed orders as to the terms of the sale.
There are essentially three issues in dispute between the parties:
1.Whether Demar or Bluerise should have the conduct of the sale of the Property.
2.Whether the sale of the Property should be with vacant possession or subject to equitable leases Bluerise contends for.
3.How the reserve price for the Property should be determined.
The second issue arises because Bluerise claims that there are two equitable leases of the Property and contends the Property should be sold subject to those leases. Demar disputes this.
For the reasons that follow, I have determined that Demar should have conduct of the sale of the Property, which is to be sold free from encumbrances and with vacant possession, unless the purchaser agrees otherwise. The reserve price will be determined by the real estate agent appointed to market and sell the Property.
Subject to hearing from the parties as to the final form of the orders to be made, I will make orders substantially in terms of Demar's revised minute of proposed orders filed on 6 June 2024, modified as set out in the draft orders provided to the parties with these reasons.

The evidence and submissions relied on

At the hearing of the Application:
1.Demar relied upon:
(a)an affidavit sworn by Marie Ila Violet Novak on 11 December 2023 (Novak Affidavit);
(b)affidavits sworn by Neale Douglas Billington on 6 March 2024 (First Billington Affidavit) and 16 May 2024 (Second Bilington Affidavit);
(c)an outline of submissions filed on 6 March 2024;[1] and
(d)an outline of responsive submissions filed on 16 May 2024.[2]
2.Bluerise relied upon:
(a)an affidavit sworn by Aaron Peter Mitchell-Bathgate sworn on 20 February 2024 (Mitchell-Bathgate Affidavit); and
(b)an outline of submissions filed on 12 March 2024.
[1] Amended as outlined by counsel for the plaintiff at the hearing of the Application, ts 4 - 7.
[2] No objection was raised by the defendant to the late filing of the Second Billington Affidavit or the plaintiff's outline of responsive submissions, ts 3 - 4.
On 16 August 2024, orders were made by consent that each of the parties have leave to file the following further submissions and affidavits, which are taken as read:
(a)an outline of supplementary submissions filed by Bluerise on 12 August 2024;
(b)an affidavit of Tahnee Michelle Watson sworn on 12 August 2024 (Watson Affidavit);
(c)an outline of supplementary submissions filed by Demar on 13 August 2024; and
(d)an affidavit of Neale Douglas Billington sworn on 13 August 2024 (Third Billington Affidavit).
I refer to the circumstances in which the further evidence and submissions were filed later in these reasons.

Applicable principles

Section 126(1) of the Act provides:
Where in an action for partition the party or parties interested, individually or collectively, to the extent of a half share or upwards in the land to which the action relates request the Court to direct a sale of the land and a distribution of the proceeds, instead of a division of the land between or among the parties interested, the Court shall, unless it sees good reason to the contrary, direct a sale accordingly.
The purpose of s 126(1) (and of the legislation which preceded it) is to provide a remedy for a joint tenant or tenant in common who, in the event of a dispute with another co-tenant, may otherwise be without an adequate remedy to protect his share or interest in the land.[3]
[3] Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635, 650 (Brennan J), 656 - 657 (Deane, Dawson & Gaudron JJ).
As observed by Master Sanderson in Trainor v Trainor,[4] s 126(1) of the Act does not embody a broad discretion in the court to grant or refuse an order for sale. What the section anticipates is an order for sale or an order for partition of the property. There is no other alternative available.
[4] Trainor v Trainor [2021] WASC 40 [4] - [6].
In this case, the parties are agreed that the appropriate order is an order for sale. It is only the orders that flow from that as to who is to have conduct of the sale and on what terms that are in dispute.
As observed by Allanson J in Bombara v Bombara,[5] the court has a complete discretion as to who it will appoint to conduct a sale:[6]
80.The court has a complete discretion as to who it will appoint to conduct a sale: Crocombe v Pine Forests of Australia Pty Ltd [2005] NSWSC 151 [88]. As a matter of practice, ordinarily the conduct of the sale is given to the plaintiff: Crocombe v Pine Forests of Australia Pty Ltd [88] citing Dixon v Pyner (1850) 68 ER 135; Dale v Hamilton (1853) 68 ER 1116 and Murray v Geoffroy (1918) 18 SR (NSW) 259.
81.In exercising such a discretion, the court must have regard to matters which are consistent with the objects of the Act. …
[5] Bombara v Bombara [2010] WASC 314 [80] - [81].
[6] Bombara v Bombara [80] citing Crocombe v Pine Forests of Australia Pty Ltd [2005] NSWSC 151 [88].
As a matter of practice, ordinarily the conduct of the sale is given to the plaintiff.[7] However, as noted in Bombara v Bombara, that will not always be the case.[8] As observed by Strk J in Gray v Gray,[9] in exercising its discretion, the court is expected to have regard to a broad range of factors and good reasons might be shown to displace the ordinary course.[10]
[7] Crocombe v Pine Forests of Australia Pty Ltd [88] citing Dixon v Pyner (1850) 68 ER 135; Dale v Hamilton (1853) 68 ER 1116 and Murray v Geoffroy (1918) 18 SR (NSW) 259.
[8] See also Manifis v Mouzalidis [2021] WASC 454 (Manifis) [3] (Sanderson M).
[9] Gray v Gray [2023] WASC 70 [37].
[10] Referring to Bombara v Bombara [79] - [81]; Elanel Pty Ltd (as trustee for the Marvellous Property Trust) v MJK Properties Pty Ltd (as trustee of the MJK Investment Trust) [2013] WASC 292 [12] (McKechnie J); Stevens v Wright [2021] WASC 36 [66] (Strk AM).

Relevant factual background

The following factual background and the context in which the proceeding and the Application are brought are derived from the affidavits, as read at the hearing of the Application.
Demar and Bluerise purchased the Property as tenants in common in equal shares in May 2014.[11]
[11] Novak Affidavit [6], Attachment 'D'.
At that time:
(a)Marie Novak and her husband, Dennis Novak, were the directors of Demar;[12]
(b)Mr Mitchell-Bathgate was, and still is, the sole director of Bluerise;[13]
(c)Mr Novak and Mr Mitchell-Bathgate were also directors of Western Peeled Pty Ltd (Western Peeled) and Gemranch Pty Ltd (Gemranch).[14]
[12] Mitchell-Bathgate Affidavit [10], APM-12.
[13] Mitchell-Bathgate Affidavit [10], APM-11.
[14] Mitchell-Bathgate Affidavit [10], APM-10, APM-13.
Mr Novak died on 6 August 2022.[15] Since then, Marie Novak has been the sole director of Demar and Mr Mitchell-Bathgate has remained a director of Western Peeled and Gemranch.[16]
[15] Mitchell-Bathgate Affidavit [11].
[16] Mitchell-Bathgate Affidavit, APM-10, APM-12, APM-13.
Demar and Bluerise are each 30% shareholders in Western Peeled.[17] Mr Novak's estate and Mr Mitchell-Bathgate each hold 25% of the shares in Gemranch.[18]
[17] Mitchell-Bathgate Affidavit, APM-10.
[18] Mitchell-Bathgate Affidavit, APM-13.
Bluerise contends that Western Peeled, as trustee for the Western Peeled Unit Trust, and Gemranch, as trustee for the Gemranch Unit Trust, have both leased the Property since May 2014 (the Leases).
Bluerise submits that the Leases exist by reason of an oral agreement between Demar and Bluerise (as landlords) and Western Peeled and Gemranch (as tenants), commencing in around May 2014. Mr Mitchell‑Bathgate deposed in the Mitchell-Bathgate Affidavit that:
(a)Western Peeled operates a food processing business from the Property and, in 2015, it purchased and installed a cool room and refrigeration equipment at the Property;[19]
(b)Gemranch carries on a fruit and vegetable wholesaling business from the Property;[20] and
(c)they each pay rent[21] and do not agree to termination of their respective leases.[22]
[19] Mitchell-Bathgate Affidavit [14], [17] - [18].
[20] Mitchell-Bathgate Affidavit [21].
[21] Mitchell-Bathgate Affidavit [16], [23], APM-14, APM-15.
[22] Mitchell-Bathgate Affidavit [25].
Demar disputes the Leases and that the Property should be sold subject to them.
On 6 August 2024, before delivering my reserved decision in relation to the Application, orders were made that Western Peeled be wound up and liquidators were appointed.
My associate contacted the parties to enquire on my behalf if the parties wished to make submissions as to the effect, if any, of the winding up of Western Peeled and its alleged lease of the Property.
The parties each filed further submissions and affidavits, as set out in [11]. I address the further submissions and evidence, as relevant, in my consideration of the issues in dispute.

The issues in dispute

As outlined, the key issues in dispute relate to which party should have conduct of the sale of the Property, whether the Property should be sold with vacant possession or subject to the Leases, and how the reserve price is to be determined. I will deal first with the issue of whether the Property should be sold with vacant possession or subject to the Leases, and then each of the other issues.

Whether the sale of the Property should be with vacant possession or subject to any lease

The plaintiff seeks orders that the Property be sold with vacant possession. It disputes that the Property should be sold subject to the Leases, which it states were not made by deed or otherwise in writing and are, at best, tenancies at will or periodic tenancies.
Demar proposes orders in the following terms:
3.The Property be sold with vacant possession.
4.The Plaintiff and the Defendant are to take all reasonable steps to effect vacant possession of the Property.
5.For the purpose of effecting vacant possession of the Property, the Plaintiff is authorised to sign on behalf of the Plaintiff and the Defendant any document required to obtain vacant possession of the Property.
Bluerise contends that the sale of the Property should be subject to the Leases. It proposes an order in the following terms:
3.The Property be sold and purchased subject to:
(a)an equitable lease pursuant to an oral agreement between Demar Holdings Pty Ltd and Bluerise Enterprises Pty Ltd as landlords ("Landlord") and Western Peeled Pty Ltd as trustee for the Western Peeled Unit Trust as tenant, commencing in or about May 2014; and
(b)an equitable lease pursuant to an oral agreement between the Landlord and Gemranch Pty Ltd as trustee for the Gemranch Unit Trust, commencing in or about May 2014,
("Leases").
Mr Mitchell-Bathgate's evidence about the Leases is in very general terms. He says the Leases were entered into orally in May 2014 with Demar and Bluerise as landlords. It was submitted on behalf of Bluerise that the business formerly operated by Mr Novak and Mr Mitchell‑Bathgate, and the Leases, developed over time in the spirit of co-operation and goodwill.
A submission was made on behalf of Bluerise, by reference to Manifis v Mouzalidis,[23] to the effect that the Property should be sold 'as is', that is subject to the Leases, with Western Peeled and Gemranch operating from the Property.[24] I do not accept that the decision referred to supports the submission that the Property should be sold 'as is' and subject to the Leases contended for by Bluerise.
[23] Manifis [8].
[24] ts 35 -36.
In Manfis, Master Sanderson was dealing with a situation where one of the parties was seeking an order that the parties seek advice from a real estate agent and undertake minor repairs and maintenance of the property with a view to maximising the sale price. The Master did not refer to the property being sold 'as is'. Rather, the Master said that, in the absence of agreement between the parties, an order of the kind sought in that case will not generally be made, stating:[25]
8The orders made under s 126 of the Act are for the sale of property. They are not orders for sale 'at the best possible price'. If the parties are unable to agree on what needs to be done to the property to obtain the maximum return, then they simply have to live with the consequences. That may be seen as unfair to the party who wants to spend the money and maximise the return. All that can be said in response is that the outcome is due to the fact of joint ownership and the mechanism available under s 126.
[25] Manifis [8].
In any event, although Western Peeled and Gemranch may occupy or have occupied the Property, there is no clear evidence as to the terms of the alleged Leases, both as to duration and generally. There is no evidence as to what part or parts of the Property are occupied by each of Western Peeled and Gemranch. Nor is it clear what rent is payable under the Leases, whether it is a market rent, and when it is payable by each of Western Peeled and Gemranch - whether weekly, monthly or on some other basis.
Mr Mitchell-Bathgate deposes that in the financial year ended 30 June 2022, Western Peeled paid $108,000 in rent.[26] He does not say to whom the rent was paid. He refers to the financial statements of each company for the year ended 30 June 2022. Copies of which are attached to his affidavit.[27]
[26] Mitchell-Bathgate Affidavit [16].
[27] Mitchell-Bathgate Affidavit, APM-14, APM-15.
The financial statements for Western Peeled contain a line item under 'Expenses' for Rent in the amount of $108,000. There is no evidence as to any rent paid by Western Peeled since that time, and no evidence to verify payment of rent by Western Peeled to Demar or Bluerise at any time.
The financial statements for Gemranch also contain a line item under 'Expenses' for Rent in the amount of $477,963. Mr Mitchell-Bathgate deposes that $72,000 of that amount was paid by Gemranch for rent for the Property. He states that the balance relates to rent for other premises from which Gemranch runs its business.[28]
[28] Mitchell-Bathgate Affidavit [23].
There is no evidence as to any rent paid by Gemranch since that time, and no evidence to verify payment of rent by Gemranch to Demar or Bluerise at any time.
The limited evidence before the court does not support the existence of enforceable leases of the Property. In the absence of a formal lease agreement, as submitted on behalf of Demar, at best, any lease of the Property in favour of Western Peeled or Gemranch, would be a tenancy at will or a periodic lease terminable on notice.
The lack of certainty is such that, even if the Property were to be offered for sale subject to the Leases, it is unlikely any arm's length purchaser would agree to purchase the Property on that basis.
A copy of a valuation of the Property undertaken on 7 December 2023, obtained by Bluerise, is attached to the Mitchell-Bathgate Affidavit.[29] The purpose of the valuation is stated to be for first registered mortgage security. It appears that the valuation was obtained in connection with Bluerise making an offer to Demar to purchase Demar's share of the Property.[30] That offer was not accepted.
[29] Mitchell-Bathgate Affidavit [6], APM-3, pages 39 - 76.
[30] Mitchell-Bathgate Affidavit, APM-3.
It is noted that a valuation of the Property was conducted on the basis of market value with vacant possession, and described its occupancy status as 'currently occupied by related parties'. The report states that, in accordance with valuation standards, a valuation for mortgage security purposes assumes party related arrangements are null and void, and the value has been assessed on a vacant possession basis.[31]
[31] Mitchell-Bathgate Affidavit, APM-3 pages 39, 40, 47.
Mr Mitchell-Bathgate, the sole director and shareholder of Bluerise, is also a director of each of Western Peeled and Gemranch. He deposed in the Mitchell-Bathgate Affidavit that he believes if the Property is not sold subject to the Western Peeled lease, the most likely outcome is that Western Peeled will be wound up as it will be unable to continue to operate and trade on the terms of the Lease.[32]
[32] Mitchell-Bathgate Affidavit [20].
At the time of the hearing of the Application, Demar submitted that Western Peeled was presumed insolvent for failing to satisfy a statutory demand issued by Demar for payment of a judgment debt obtained in the District Court, and faced an application that it be wound up.[33]
[33] Referring to the Second Billington Affidavit [11].
On 6 August 2024, subsequent to the hearing of the Application, orders were made for the winding up of Western Peeled and the appointment of liquidators, in separate winding up proceedings on the application of Demar.
As referred to, the parties were given the opportunity to file submissions as to the effect, if any, of the winding up of Western Peeled and its alleged lease of the Property. The parties each filed further submissions. They also filed further affidavits, which they agreed they each have leave to file and rely upon, and are taken as read.

In essence, Demar maintains its submissions to the effect that Bluerise has not established that either Western Peeled or Gemranch has any leasehold interest in the Property. It says that, in any event, any lease would be extinguished on a sale of the Property to a third party, as provided in s 68(1) and s 68(1A) of the Transfer of Land Act 1893 (WA).
Demar submits that neither the winding up of Western Peeled nor the 'Licence Agreement' (referred to below) has any bearing on Demar's right to an order for sale of the Property with vacant possession.
Bluerise also submits that the winding up of Western Peeled does not have any effect on the Leases. It is submitted on Bluerise's behalf that the Leases have not been terminated by Western Peeled or Gemranch and, to the best of Bluerise's knowledge, Western Peeled's lease has not been terminated by the liquidators of Western Peeled.
Further, evidence has been adduced that, before orders were made that Western Peeled be wound up, Western Peeled granted a licence to another company, Western Peeled WA Pty Ltd (Western Peeled WA) to access the Property. Bluerise says that Western Peeled WA is conducting the business of Western Peeled from the Property and, to the best of its knowledge, that licence has not been terminated by the liquidator of Western Peeled.
In the Third Billington Affidavit, Mr Billington deposes, amongst other things, to undertaking an ASIC search on 8 August 2024, which he attaches to his affidavit.[34] The search records that, on 1 August 2024, Mr Mitchell-Bathgate became the sole director and secretary of Western Peeled WA Pty Ltd (ACN 679 593 670), which was registered on that date. Bluerise is recorded as the sole shareholder of Western Peeled WA.
[34] Third Billington Affidavit, attachment 'B'.
In the Watson Affidavit, Ms Watson deposes that she is informed by Mr Mitchell-Bathgate, and believes, that Western Peeled as trustee for the Western Peeled Unit Trust granted an exclusive licence to Western Peeled WA to access the Property. A copy of the 'Licence Agreement' referred to is attached to the Watson Affidavit.[35]
[35] Watson Affidavit [2], TMW-1.
The cover page of the 'Licence Agreement' states it is between Western Peeled as trustee for the Western Peeled Trust (as Licensor) and Western Peeled WA (as Licensee), though the agreement is stated to be between Western Peeled as trustee for the Western Peeled Trust and '[TBC] of [address]'. It is stated to have been executed as a deed on 1 August 2024 by Mr Mitchell-Bathgate and Giulio Breglia on behalf of Western Peeled and by Mr Mitchell-Bathgate on behalf of Western Peeled WA.
The recitals to the 'Licence Agreement' state that the Licensor, Western Peeled, carries on the business of food processing (defined as the Business), the Licensee wishes to carry on the Business with a view to possibly acquiring it from the Licensor, and the Licensor agrees to grant the Licensee a licence to conduct the Business.
Clause 2.1 of the 'Licence Agreement' states that ' … the Licensor grants the Licensee an exclusive license to access the Premises and use the Assets to conduct the Business on its own account during the Term (Licence).'
Clause 2.2 of the 'Licence Agreement' states that '[t]he Licensee acknowledges that the grant of the Licence does not create or confer on the Licensee any tenancy or other estate or interest in respect of the Business, the Premises ... .' The 'Premises' are defined as 'the premises where the Licensor conducts the Business'[36] but are not specifically identified.
[36] Clause 1.1.
Clause 5.1 of the 'Licence Agreement' states that '[t]he Licensee acknowledges that the Premises are subject to the Premises Leases and agrees to make use of the Premises only in strict accordance with the terms and conditions of the Premises Leases.' 'Premises Leases' are defined in very broad terms as 'the leases in relation to the Premises'.[37]
[37] Clause 1.1.
Clause 5.3 of the 'Licence Agreement' states that '[t]he Licensee agrees that it may not object, claim any compensation or seek other relief by reason of any reduction to the Licensee's ability to conduct the Business should the owner of the Premises exercise any of its rights under the Premises Leases'.
Before receiving and considering the further evidence and submissions, I was not persuaded that it was appropriate to make orders that the sale of the Property be subject to the Leases. For the reasons outlined, the evidence adduced does not support the existence of enforceable leases. Nor is it clear which part or parts of the Property are occupied by Western Peeled and Gemranch. There is no evidence of any security of tenure. At best, Western Peeled and Gemranch occupy the Property, or parts of it, as tenants at will or on a periodic tenancy.
The further evidence adduced does not change my view. Leaving aside the uncertainty as to the terms of the 'Licence Agreement', any rights of access granted by Western Peeled to Western Peeled WA are subject to Western Peeled's own right of occupation of the Property.
In the circumstances, there is no basis, in my view, to make orders that the Property be sold subject to the Leases, as contended by Bluerise. However, the orders proposed by Demar should be modified so that the Property is to be sold free from encumbrances and with vacant possession, unless otherwise agreed with the purchaser.

Which party should have conduct of the sale of the Property?

Each of the parties contend that they should have the conduct of the sale of the Property.
As outlined, as a matter of practice, ordinarily the conduct of the sale is given to the plaintiff, as the party who initiated the action and has sought an order for sale. However, that will not always be the case and good reasons might be shown to displace the ordinary course.
Bluerise submitted, in essence, that it should have conduct of the sale because of its involvement in the businesses operating from the Property. Alternatively, it was submitted that if Demar was to have conduct of the sale it should be through a solicitor, not Demar or Ms Novak on its behalf, with the associated costs being costs of the sale.
There was a suggestion, in very general terms, of malice or some ulterior purpose on the part of Demar (or Ms Novak). This was denied by Demar and it was submitted on Demar's behalf that it is just exercising its legal rights.
This dispute arises in the context of shareholder disputes between Ms Novak and Mr Mitchell-Bathgate and between Demar, Western Peeled and Gemranch. It is clear that the parties to this action and related parties have been engaged in disputes and litigation. However, there is no evidence before me to support any suggestion to the effect that this proceeding is borne out of malice or any ulterior purpose on the part of Demar or Ms Novak.
Demar maintains that it should have conduct of the sale of the Property. It commenced the proceeding seeking an order for sale. Demar submits that Bluerise ought not have conduct of the sale. It points to the apparent conflict of interest given Mr Mitchell-Bathgate's position as a director of Bluerise, Western Peeled and Gemranch, his and Bluerise's wishes that those entities continue in possession of the Property, and Bluerise's desire to acquire the Property.
Demar says, in effect, that the further evidence adduced demonstrates the pressing need for someone to take control of the Property and that it should be Demar that has conduct of the sale, not Bluerise.
There is no evidence that suggests any reason why Demar, as the plaintiff, should not have conduct of the sale. Before the further evidence was filed, I had formed the view that, on balance, and given the potential for conflict between Bluerise's desire for the related parties, Western Peeled and Gemranch, to continue in possession of the Property the preferable course was for Demar to have the conduct of the sale of the Property.
The further evidence adduced reinforces my view that the interests of both parties will be best served by the sale being conducted by Demar, which has no interest other than to achieve a sale of the Property at a reasonable price, and as expeditiously as possible.
In the circumstances, and in light of Mr Mitchell-Bathgate's actions of registering a new company, Western Peeled WA, days before the hearing of the application to wind up Western Peeled, it appears with a view to being able to carry on the business of Western Peeled despite its insolvency, and the steps taken to allow Western Peeled WA to occupy the Premises, I share Demar's concern as to whether the controlling mind of Bluerise will act solely in the interests of the parties to this proceeding.
Demar will have the conduct of the sale of the Property. There is no reason, in my view, why the sale should be conducted by a solicitor on behalf of Demar. It will be incumbent on Demar to act in good faith and in the interests of both parties in the conduct of the sale.

How should the reserve price for the Property be determined?

Demar proposes orders in the following terms relating to the reserve price for the sale of the Property:
14.The reserve price for the Property shall be as recommended by the Real Estate Agent appointed to sell the Property.
15.The Real Estate Agent may, at the Real Estate Agent's discretion, engage an independent valuer to determine the reserve price of the Property based on sale of the Property with vacant possession, the cost of which is to be borne equally by the Plaintiff and the Defendant.
The defendant proposes orders in the following terms:
12.The reserve price for the Property shall be determined by agreement between the parties. ("Reserve Price").
13.Failing agreement between the parties as to the reserve price for the property, the reserve price shall be determined by a licenced valuer appointed by the Real Estate Agent, and the latter shall notify the parties of the Reserve Price at least 14 days before the auction or date of consideration of the expressions of interest.
14.The cost of the licensed valuer shall be borne equally by the parties.
15.If a party objects to the Reserve Price by notice in writing to the other party and the Real Estate Agent within 2 business days of receiving notice of the valuation, a second licenced valuer shall be appointed by the Real Estate Agent to give an opinion on a Reserve Price and the cost of that valuer shall be paid by the objecting party.
16.If the second valuer's Reserve Price differs from the first valuer's price, the two valuers shall confer and try to reach agreement on a Reserve Price.
17.If no agreement can be reached, the Reserve Price shall be the midpoint between the two prices, unless the parties subsequently agree on a Reserve Price.
I have no confidence on the evidence before me, and the parties' inability to agree matters to date, that they will be able to reach agreement as to the reserve price for the Property.
As has often been observed in similar applications coming before the court, that an application has been made under s 126 of the Act, the parties have been unable to agree and it is necessary for the court to determine the orders to facilitate the sale, it is likely there will continue to be a lack of cooperation, disagreement, and further dispute between the parties after the sale order is made.[38]
[38] See for example, Manifis [3].
Further, in my view, the orders proposed by Bluerise to take effect if the parties cannot agree a reserve price add unnecessary complexity and cost.
Demar's proposed orders in relation to determination of the reserve price for the Property are to be preferred. There is no reason to suggest that the real estate agent appointed by Demar would recommend a reserve price for the Property other than one that reflects a reasonable price. There will also be provision for the real estate agent, in their discretion, to appoint an independent, licensed valuer to determine the reserve price, as proposed by Demar.

Conclusion and orders

For these reasons, Demar is to have conduct of the sale of the Property, which is to be sold free from encumbrances and with vacant possession, unless the purchaser agrees otherwise. The reserve price will be determined by the real estate agent appointed to market and sell the Property.
Subject to hearing from the parties as to the final form of the orders to deal with any practical matters, I will make orders substantially in terms of Demar's revised minute of proposed orders filed on 6 June 2024, modified as set out in the draft orders provided to the parties with these reasons.
I will also hear from the parties in relation to the costs of the proceeding, including the costs of the Application.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AP
Associate to Master Russell
20 AUGUST 2024