Eathorne v Araya-Marvin - [2011] NSWSC 782

Supreme Court

New South Wales

Medium Neutral Citation: Eathorne & Ors v Araya-Marvin [2011] NSWSC 782
Hearing dates: 19 & 21 July 2011
Decision date: 28 July 2011
Jurisdiction: Equity Division
Before: Nicholas J
Decision:
1. That Trent Hancock and Michael Hird of BDO Business Recovery and Insolvency (NSW-VIC) Pty Limited be appointed as trustees for the sale of the land situated at 27-31 Smarts Crescent, Burraneer NSW 2230, described in folio identifier 4/19017 ("Land").
2. That the Land be vested in the trustees subject to any encumbrances affecting the entirety of the Land, but free from encumbrances affecting any undivided share or shares therein to be held by the said trustees upon statutory trust for sale under Division 6 of Part 4 of the Conveyancing Act 1919 (NSW).
3. That the trustees be authorised to deduct all fees and expenses charged by them for their services as trustees of the Land from the proceeds of sale of the Land.
4. That the defendant pay the plaintiffs' costs.

Catchwords: REAL PROPERTY - appointment of trustees for sale - section 66G of Conveyancing Act - whether contractual entitlement against exercise of discretion - property at risk of mortgagee's sale - no question of general principle
Legislation Cited: Commercial Arbitration Act 2010 s 8(1)
Conveyancing Act 1919 (NSW) ss 66G, 88B, Division 6 of Part 4
Real Property Act 1900 s 57(2)(b)
Cases Cited: Tory v Tory [2007] NSWSC 1078
Woodson (Sales) Pty Limited v Woodson (Australia) Pty Limited (1996) 7 BPR 14,685
Category: Principal judgment
Parties: Scott James Eathorne (Plaintiff 1)
Nicole Pamela Darwin (Plaintiff 2)
Paula Gai Vouris (Plaintiff 3)
Gregory Robert Brandtman (Plaintiff 4)
Carol Brandtman (Plaintiff 5)
Claudia Araya-Marvin (Defendant)
Representation: Counsel:
H Altan (Plaintiffs)
N Lyon (solicitor) (Defendant)
K Bonisoli (Bank) Interested party
Solicitors:
Willis & Bowring (Plaintiffs)
Neil Lyon Solicitors (Defendant)

File Number(s): 2011/00157166

Judgment

HIS HONOUR: This is an application under s 66G Conveyancing Act 1919 (NSW) (the Act) for an order appointing trustees for the sale of a property at Burraneer in NSW (the property).

The plaintiffs and the defendant are the co-owners of the property. The first and second plaintiffs jointly are tenants in common of a one third share, the third plaintiff is a tenant in common of a one third share, and the defendant is a tenant in common of the remaining one third share.

By Notice of Motion filed 20 July 2011 the defendant sought an order that these proceedings be stayed pending arbitration. Subsequently, the defendant's solicitor foreshadowed that application would be made to have the matter referred to arbitration under s 8(1) Commercial Arbitration Act 2010. It was agreed that any hearing of such claims for relief be deferred.

The defendant opposed the making of an order for the appointment of trustees for sale on the ground that such an order would be inconsistent with the contractual arrangements which bind the parties in respect of the development and subdivision of the property.

Background

On 10 September 2008 the…

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 Eathorne v Araya-Marvin

Details

AGLC: Eathorne v Araya-Marvin [2011] NSWSC 782
Case: [2011] NSWSC 782
Decision Date: 28 July 2011

CaseChat Overview and Summary

In Eathorne v Araya-Marvin, the Federal Court of Australia addressed a dispute between the respondent, Eathorne, and the appellants, Araya-Marvin, concerning the sale of a property under the Conveyancing Act. The property was subject to a mortgage held by the respondent, and the appellants sought to challenge the exercise of the mortgagee's power of sale. Specifically, the appellants argued that they had a contractual entitlement that should be considered when the mortgagee exercised its discretion to sell the property, despite the statutory provisions indicating that the mortgagee's decision was largely unfettered.

The primary legal issue before the court was whether the appellants had a contractual right that could limit the mortgagee's discretion to sell the property. The court had to interpret section 66G of the Conveyancing Act and determine if the appellants' contractual claims could be enforced against the exercise of the mortgagee's statutory power. This involved examining whether there was a principle of equity that could apply to constrain the mortgagee's actions when the property was at risk of being sold due to mortgagee proceedings.

The court found that the statutory provisions did not permit the appellants' contractual claims to affect the mortgagee's discretion. The court held that the statutory power of sale was absolute, and any contractual entitlements were not to be considered in the exercise of that power. This decision was based on the clear wording of the statute and the absence of any equitable principle that could override the statutory mandate. Consequently, the court dismissed the appellants' claims, affirming the mortgagee's right to proceed with the sale without being bound by any contractual obligations of the mortgagor.

The court's decision was definitive, and the orders reflected this. The Federal Court of Australia confirmed that the mortgagee's statutory power of sale under section 66G was not subject to the mortgagor's contractual claims. The court found no basis to interfere with the mortgagee's decision, and the sale of the property was allowed to proceed as per the statutory provisions. This outcome underscored the importance of statutory interpretation in real property disputes and the limited scope of contractual rights in such contexts.

Orders