Djordjevich v Peter Djeka Pty Ltd - [2024] VSCA 60

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2023 0015

DAVID DJORDJEVICH	Applicant
v
PETER DJEKA PTY LTD	First Respondent
AND
ATTORNEY-GENERAL FOR THE STATE OF VICTORIA	Second Respondent

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JUDGES:	McLEISH, WALKER and MACAULAY JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	21 March 2024
DATE OF JUDGMENT:	11 April 2024
MEDIUM NEUTRAL CITATION:	[2024] VSCA 60
JUDGMENT APPEALED FROM:	[2022] VSC 732 (Garde J)

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STATUTORY CONSTRUCTION – VCAT made orders for sale of property and ancillary orders conferring functions on Principal Registrar – Powers conferred on VCAT by pt IV of Property Law Act 1958 – Purpose of relevant provisions to give VCAT broad and flexible powers to resolve disputes between co-owners – No basis on which to read down provisions – No general principle that VCAT cannot enforce own orders – Whether orders impermissibly conferred functions on Principal Registrar – Functions fell within s 32(2) of Victorian Civil and Administrative Tribunal Act 1998 because they were conferred under Property Law Act – Appeal dismissed.

PRACTICE AND PROCEDURE – Whether VCAT provided adequate reasons – Whether VCAT failed to examine evidence as a whole – Whether errors in certain VCAT findings – Substance of submissions directed to factual findings rather than questions of law.

Property Law Act 1958 ss 228, 232; Victorian Civil and Administrative Tribunal Act 1998 s 32; Supreme Court Act 1986 s 122.

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Counsel
Applicant:		Mr J Levine
First Respondent:		Mr B Guzzo
Second Respondent:		Mr L Brown SC with Ms E Smith
Solicitors
Applicants:	Maciel Pizzorno & Co
First Respondent:	Aniston Lawyers
Second Respondent:	Victorian Government Solicitor

TABLE OF CONTENTS

INTRODUCTION
KEY FACTS
THE VCAT DECISION
THE GROUNDS OF APPEAL BELOW, THE PROPOSED GROUNDS OF APPEAL IN THIS COURT, AND THE GROUNDS OF CONTENTION
(1).... The grounds of appeal in the Trial Division
(2).... The proposed grounds of appeal in this Court
(3).... The notice of contention
(4).... The relationship between the grounds of appeal below and the proposed grounds of appeal in this Court and the notice of contention
PROPOSED GROUNDS 1 AND 2: DID THE ORDERS FALL WITHIN VCAT’S POWERS?
(1).... The judge’s decision on VCAT’s powers
(2).... The parties’ submissions
(3).... Consideration
PROPOSED GROUNDS 4 TO 6: DID THE ORDERS CONFER ON THE REGISTRAR PERMISSIBLE FUNCTIONS?
(1).... The judge’s decision on the Registrar’s functions
(2).... The parties’ submissions
(3).... Consideration
PROPOSED GROUNDS 7, 8 AND 9: WERE VCAT’S REASONS ADEQUATE?
(1).... The judge’s decision on the adequacy of VCAT’s reasons
(2).... The parties’ submissions
(3).... Consideration
PROPOSED GROUND 11: DID VCAT CONSIDER WHETHER THE PARTIES ENTERED INTO A PARTNERSHIP?
(1).... The judge’s decision concerning the partnership issue
(2).... The parties’ submissions
(3).... Consideration
PROPOSED GROUND 12: DID VCAT ERR IN SETTING A RESERVE PRICE OF $2,000,000?
(1).... The judge’s decision on the reserve price issue
(2).... The parties’ submissions
(3).... Consideration
CONCLUSION

MCLEISH JA
WALKER JA
MACAULAY JA:

INTRODUCTION

The applicant, Mr Djordjevich, and the first respondent, Peter Djeka Pty Ltd (‘Djeka’), are the co-owners of land in Keilor.[1]…

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.

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Details

Case: [2024] VSCA 60
Decision Date: 11 April 2024

CaseChat Overview and Summary

The case of Djordjevich v Peter Djeka Pty Ltd involved a dispute between Mr Djordjevich and Djeka, who were co-owners of six contiguous allotments of land. Mr Djordjevich had purchased the land in 2002, while Djeka had acquired a half interest in the land in 2002. In 2019, Djeka applied to the Victorian Civil and Administrative Tribunal (VCAT) for orders to sell the land, which Mr Djordjevich opposed. The dispute before the Court of Appeal was whether the orders made by VCAT were valid and enforceable, and whether they impermissibly conferred functions on the Principal Registrar. The appeal was dismissed by the Court of Appeal.

The Court of Appeal was required to decide whether the orders made by VCAT were valid and whether they impermissibly conferred functions on the Principal Registrar. The Court had to examine the relevant statutory provisions, including sections 228 and 232 of the Property Law Act 1958, section 32 of the Victorian Civil and Administrative Tribunal Act 1998, and section 122 of the Supreme Court Act 1986. The Court had to determine whether the orders fell within the broad and flexible powers conferred on VCAT by the relevant provisions of the Property Law Act, and whether there was any basis to read down those provisions. The Court also had to consider whether the orders impermissibly conferred functions on the Principal Registrar.

The Court of Appeal found that the orders made by VCAT were valid and enforceable, and that they did not impermissibly confer functions on the Principal Registrar. The Court held that the purpose of the relevant provisions of the Property Law Act was to give VCAT broad and flexible powers to resolve disputes between co-owners. The Court found that there was no basis on which to read down those provisions, and that there was no general principle that VCAT could not enforce its own orders. The Court held that the functions conferred on the Principal Registrar fell within section 32(2) of the Victorian Civil and Administrative Tribunal Act because they were conferred under the Property Law Act. The Court dismissed the appeal.

The Court of Appeal found that the orders made by VCAT were valid and enforceable, and that they did not impermissibly confer functions on the Principal Registrar. The Court held that the purpose of the relevant provisions of the Property Law Act was to give VCAT broad and flexible powers to resolve disputes between co-owners. The Court found that there was no basis on which to read down those provisions, and that there was no general principle that VCAT could not enforce its own orders. The Court held that the functions conferred on the Principal Registrar fell within section 32(2) of the Victorian Civil and Administrative Tribunal Act because they were conferred under the Property Law Act. The Court dismissed the appeal.

The Court of Appeal dismissed the appeal and affirmed the orders made by VCAT. The Court held that the orders were valid and enforceable, and that they did not impermissibly confer functions on the Principal Registrar. The Court found that the purpose of the relevant provisions of the Property Law Act was to give VCAT broad and flexible powers to resolve disputes between co-owners. The Court held that there was no basis on which to read down those provisions, and that there was no general principle that VCAT could not enforce its own orders. The Court held that the functions conferred on the Principal Registrar fell within section 32(2) of the Victorian Civil and Administrative Tribunal Act because they were conferred under the Property Law Act.

Orders

Orders of the court

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Background

Background to the litigation

Our reasons for these conclusions are set out below.KEY FACTS The parties agreed the following facts for the purpose of the application for leave to appeal:(a)Mr Djordjevich and Djeka are registered as proprietors of the land.(b)On 9 July 2002, Mr Djordjevich purchased the land for the sum of $280,000.(c)In late July 2002, Djeka purchased a half interest in the land.(d)In 2016, Mr Djordjevich initiated a Magistrates’ Court proceeding for the sum of $23,842.73. That proceeding was resolved by a Magistrates’ Court judgment of $10,000.(e)In 2019, Djeka applied to VCAT for orders for the sale of the land. Mr Djordjevich opposed such orders. The land comprises six contiguous allotments. When Mr Djordjevich purchased the land, there was a planning overlay which prevented five of the allotments from being developed. That overlay has since been removed.THE VCAT DECISION The VCAT proceeding concerned the following issues:(a)whether Mr Djordjevich and Djeka entered into a partnership in or about July 2002;(b)what Mr Djordjevich and Djeka agreed as to the purchase price of the half interest in the land;(c)how Djeka became registered on the title of the land;(d)how Djeka procured Mr Djordjevich’s signature to the transfer of land forms for the land;(e)whether Djeka or its agent committed fraud or unconscionable conduct in relation to Mr Djordjevich;(f)whether there should be an adjustment to the amount distributed to the parties from the net proceeds of sale for the amounts of outgoings paid by Mr Djordjevich or Djeka;(g)whether Mr Djordjevich’s claim for a contribution for outgoings merged in the Magistrates’ Court judgment. VCAT heard evidence from Djeka’s director, Mr Krickic, from Mr Djordjevich, and from Mr Poljakovic. (a)Mr Krickic worked for the real estate agency that had arranged the purchase of the land by Mr Djordjevich. Mr Djordjevich had previously bought a number of properties referred to him by Mr Krickic. (b)Mr Poljakovic was a builder who, Mr Djordjevich said, had offered to purchase a half interest in the land and redevelop it with Mr Djordjevich. In relation to the issues identified above, VCAT held as follows:(a)Mr Djordjevich and Djeka had not entered into a partnership in or about July 2002, because there was no evidence that they had carried on any business in common with a view to profit. Indeed, it appeared that they had not done anything in common, other than co-own the land and share expenses. The Tribunal observed that the mere fact that they owned the land as tenants in common was insufficient to create a partnership.[5](b)Mr Djordjevich and Djeka had agreed to a purchase price of $160,000 for the half interest in the land.[6] (c)On 10 November 2003, six certificates of title were issued to the parties showing Mr Djordjevich and Djeka as the registered proprietors. Each transfer document bore what appeared to be Mr Djordjevich’s signature and Mr Djordjevich acknowledged in evidence that the signatures were his.[7] (d)VCAT accepted that Mr Djordjevich had signed the documents at Mr Krickic’s office. It rejected Mr Djordjevich’s claim that he thought he was signing a ‘heads of agreement’ document for the partnership.[8](e)VCAT rejected Mr Djordjevich’s claim that Djeka had procured the registration of its interest by fraud.[9] As to Mr Djordevich’s claim of unconscionable conduct, it was premised on his asserted lack of proficiency in English. The Tribunal implicitly rejected that assertion.[10] (f)As to whether there should be an adjustment to the amount distributed to the parties to reflect the outgoings paid by either Mr Djordjevich or Djeka, VCAT said that ‘most of these alleged payments were made many years ago and, if recovery were now sought by court action, the claim would be statute barred’. Thus the Tribunal concluded that there should be no adjustment of rights by reason of such payments.[11] VCAT further found that the evidence in relation to alleged outgoings by Djeka was unsatisfactory and that was a further reason for not making an order for adjustment in favour of Djeka.[12](g)In relation to Mr Djordjevich’s claim for a contribution for outgoings, VCAT again observed that most of the claims in question were statute barred. The Tribunal further held that Mr Djordjevich had already received an order from the Magistrates’ Court in the amount of approximately $10,000 for contribution to expenses incurred with respect of the land. All of the amounts now claimed were incurred before the date of the Magistrates’ Court order, and thus the claim with respect to those amounts had merged in the judgment.[13][5]VCAT Reasons, [61]–[62], referring to s 6 of the Partnership Act 1958 and to Jafari v 23 Developments Pty Ltd [2018] VSC 404.[6]VCAT Reasons, [51].[7]VCAT Reasons, [28], [33].[8]VCAT Reasons, [36]–[37], [42].[9]VCAT Reasons, [64].[10]VCAT Reasons, [38]. The Tribunal said that ‘although [Mr Djordjevich] claimed that his English was poor, he was an experienced property developer, having bought and sold numerous properties, and was very familiar with buying and selling land and the forms that were used’.[11]VCAT Reasons, [67].[12]VCAT Reasons, [70].[13]VCAT Reasons, [71]–[73].

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The land comprises six contiguous allotments. When Mr Djordjevich purchased the land, there was a planning overlay which prevented five of the allotments from being developed. That overlay has since been removed.THE VCAT DECISION The VCAT proceeding concerned the following issues:(a)whether Mr Djordjevich and Djeka entered into a partnership in or about July 2002;(b)what Mr Djordjevich and Djeka agreed as to the purchase price of the half interest in the land;(c)how Djeka became registered on the title of the land;(d)how Djeka procured Mr Djordjevich’s signature to the transfer of land forms for the land;(e)whether Djeka or its agent committed fraud or unconscionable conduct in relation to Mr Djordjevich;(f)whether there should be an adjustment to the amount distributed to the parties from the net proceeds of sale for the amounts of outgoings paid by Mr Djordjevich or Djeka;(g)whether Mr Djordjevich’s claim for a contribution for outgoings merged in the Magistrates’ Court judgment. VCAT heard evidence from Djeka’s director, Mr Krickic, from Mr Djordjevich, and from Mr Poljakovic. (a)Mr Krickic worked for the real estate agency that had arranged the purchase of the land by Mr Djordjevich. Mr Djordjevich had previously bought a number of properties referred to him by Mr Krickic. (b)Mr Poljakovic was a builder who, Mr Djordjevich said, had offered to purchase a half interest in the land and redevelop it with Mr Djordjevich. In relation to the issues identified above, VCAT held as follows:(a)Mr Djordjevich and Djeka had not entered into a partnership in or about July 2002, because there was no evidence that they had carried on any business in common with a view to profit. Indeed, it appeared that they had not done anything in common, other than co-own the land and share expenses. The Tribunal observed that the mere fact that they owned the land as tenants in common was insufficient to create a partnership.[5](b)Mr Djordjevich and Djeka had agreed to a purchase price of $160,000 for the half interest in the land.[6] (c)On 10 November 2003, six certificates of title were issued to the parties showing Mr Djordjevich and Djeka as the registered proprietors. Each transfer document bore what appeared to be Mr Djordjevich’s signature and Mr Djordjevich acknowledged in evidence that the signatures were his.[7] (d)VCAT accepted that Mr Djordjevich had signed the documents at Mr Krickic’s office. It rejected Mr Djordjevich’s claim that he thought he was signing a ‘heads of agreement’ document for the partnership.[8](e)VCAT rejected Mr Djordjevich’s claim that Djeka had procured the registration of its interest by fraud.[9] As to Mr Djordevich’s claim of unconscionable conduct, it was premised on his asserted lack of proficiency in English. The Tribunal implicitly rejected that assertion.[10] (f)As to whether there should be an adjustment to the amount distributed to the parties to reflect the outgoings paid by either Mr Djordjevich or Djeka, VCAT said that ‘most of these alleged payments were made many years ago and, if recovery were now sought by court action, the claim would be statute barred’. Thus the Tribunal concluded that there should be no adjustment of rights by reason of such payments.[11] VCAT further found that the evidence in relation to alleged outgoings by Djeka was unsatisfactory and that was a further reason for not making an order for adjustment in favour of Djeka.[12](g)In relation to Mr Djordjevich’s claim for a contribution for outgoings, VCAT again observed that most of the claims in question were statute barred. The Tribunal further held that Mr Djordjevich had already received an order from the Magistrates’ Court in the amount of approximately $10,000 for contribution to expenses incurred with respect of the land. All of the amounts now claimed were incurred before the date of the Magistrates’ Court order, and thus the claim with respect to those amounts had merged in the judgment.[13][5]VCAT Reasons, [61]–[62], referring to s 6 of the Partnership Act 1958 and to Jafari v 23 Developments Pty Ltd [2018] VSC 404.[6]VCAT Reasons, [51].[7]VCAT Reasons, [28], [33].[8]VCAT Reasons, [36]–[37], [42].[9]VCAT Reasons, [64].[10]VCAT Reasons, [38]. The Tribunal said that ‘although [Mr Djordjevich] claimed that his English was poor, he was an experienced property developer, having bought and sold numerous properties, and was very familiar with buying and selling land and the forms that were used’.[11]VCAT Reasons, [67].[12]VCAT Reasons, [70].[13]VCAT Reasons, [71]–[73].

Ratio Decidendi

Legal Principle Established

Finally, the Attorney-General submitted that the fact that the Property Law Act does not contain the equivalent of s 22 of the Supreme Court Act is beside the point. Section 228 of the Property Law Act must be construed on its own terms and in its own context. The Supreme Court Act does not provide a statutory conferral of jurisdiction on a Tribunal that is intended to provide a fast, fair, simple and cost-effective process to resolve disputes between co-owners of land. For that reason, any comparison between s 228(1) of the Property Law Act and s 22 of the Supreme Court Act is inapt and does not assist the resolution of the question of the proper interpretation of s 228(1).(3)Consideration Proposed grounds 1 and 2 raise interesting questions of statutory construction. They are to be resolved on the basis of the correctness standard, not on the basis of the House v The King standard.[22] We grant leave to appeal on these proposed grounds, but dismiss the appeal. [22](1936) 55 CLR 499; [1936] HCA 40. As the Attorney-General submitted, and the judge found, the impugned orders fall within the literal terms of s 228(1) of the Property Law Act, which provides for the Tribunal to make ‘any order it thinks fit to ensure that a just and fair sale of land occurs’ (emphasis added). The real question is whether there is any basis on which to read down those broad terms. In this Court, Mr Djordjevich advanced, as the principal basis for reading down that broad power, the proposition that VCAT does not have power to enforce its orders. The source of that proposition was not clearly identified. However, Mr Djordjevich pointed to the fact that neither the VCAT Act nor the Property Law Act contain an equivalent to s 22 of the Supreme Court Act, which provides as follows: Execution of instruments by order of Court (1)If a person fails or refuses to comply with a judgment directing that person to execute a document or indorse a negotiable instrument, the Court may, on such terms and conditions as it considers just, order that the document be executed or that the instrument be indorsed by a person nominated by the Court. (2)A document or instrument executed and indorsed under subsection (1) operates and is for all purposes available as if it had been executed or indorsed by the person originally directed to do so. He contended that if VCAT made an order for sale, the appropriate mechanism to enforce that order would be to make an application to the Supreme Court pursuant to s 122 of the VCAT Act,[23] and to make an application for an order under s 22 of the Supreme Court Act.[23]That section provides as follows:(1) A person in whose favour a non-monetary order is made may enforce the order in the Supreme Court.(2) For the purposes of the enforcement of a non-monetary order under subsection (1), the order is taken to be an order of the Supreme Court. In our opinion, Mr Djordjevich’s arguments are misguided. First, the terms of different legislation — namely the Supreme Court Act — provide no basis on which to construe, and to read down, the relevant provisions of the Property Law Act. At its highest, s 22(c) of the Supreme Court Act demonstrates that, in a different statutory regime, an express power of the kind in question has been conferred on a Court, and the express consequences of the exercise of such a power spelled out.