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Elderly Citizens Homes of SA Inc v Balnaves No. Scgrg-97-1008 Judgment No. S6855

Elderly Citizens Homes of SA Inc v Balnaves No. Scgrg-97-1008 Judgment No. S6855

Case [1998] SASC 6855 18 September 1998

Equitable Mortgages

Equitable Lien

Priority of Interests

Specific Performance

Property Law

Equity & Trusts

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ELDERLY CITIZENS HOMES OF SA INC v BALNAVES
[1998] SASC S6855

Civil

Debelle J

This is an application for distribution of funds remaining after the sale by the first mortgagee of a substantial house property. The house property is situated at 100 East Terrace, Adelaide. It is called “Rymill House”. The land is comprised and described in Certificate of Title Register Book Volume 5315 Folio 383. Rymill House was sold by the first mortgagee, Elderly Citizens Homes of SA Inc (“Elderly Citizens Homes”), for the sum of $1,320,000. Elderly Citizens Homes has been paid all moneys due to it. There is a balance of $368,696.93 remaining. There are competing claims for the balance. Elderly Citizens Homes has paid the total sum of $368,696.93 into court to abide the order of the court.

The Claimants

There were initially eight competing claimants. They were JAD International Pty Ltd, Melbourne Projects Pty Ltd, the estate of William Burton deceased, F Moir Management Services Pty Ltd, Mrs Jean Balnaves, Mr John Parsons, Mr Brian Warming and the Child Support Agency. The claim by the Child Support Agency is for a debt due to the Commonwealth for unpaid child maintenance. Mr Warming and the Child Support Agency have decided not to prosecute their respective claims. Thus, six claimants compete for the sum of $368,696.93. Each claims an equitable interest in the land. Those interests were created at different times. The questions to be determined are whether all of the parties have an equitable interest and the priority of the respective interests. Before examining those issues, I set out the circumstances leading to the claims.

The Balnaves Family Trust

These proceedings stem from dealings in Rymill House during the past 18 months by the Balnaves Family Trust and from loans made by that Trust. The primary beneficiaries of the trust were Peter John Balnaves and Jane Teresa Cummings and their children and grandchildren. I will refer to Peter John Balnaves as “Peter Balnaves” or “Balnaves”. In 1995 the trustee of the Balnaves Family Trust was a company called Cummings Corporation Pty Ltd (“Cummings Corporation”). The settlor of the trust was Mrs Jean Balnaves, one of the claimants. She is the mother of Peter Balnaves. On 1 December 1995 Cummings Corporation ceased to act as trustee and Peter Balnaves was appointed as the new trustee. The appointment was not registered at the Lands Titles Office until 13 May 1996. Peter Balnaves was also a director of Cummings Corporation. At all material times since December 1995 Peter Balnaves has been the trustee of the Balnaves Family Trust. The documents evidencing the appointment of Peter Balnaves as the new trustee appear to have a number of deficiencies. However, no party has questioned the validity of the appointment and I do not think anything turns on the deficiencies. The appointment of the new trustee has been registered. I proceed on the footing that the appointment was valid.
The appointment of Balnaves as the new trustee does not affect any of…

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

AGLC: Elderly Citizens Homes of SA Inc v Balnaves No. Scgrg-97-1008 Judgment No. S6855 [1998] SASC 6855
Case: [1998] SASC 6855
Decision Date: 18 September 1998

CaseChat Overview and Summary

This is an application for distribution of funds remaining after the sale by the first mortgagee of a substantial house property. The house property is situated at 100 East Terrace, Adelaide. It is called “Rymill House.” The land is comprised and described in Certificate of Title Register Book Volume 5315 Folio 383. Rymill House was sold by the first mortgagee, Elderly Citizens Homes of SA Inc (“Elderly Citizens Homes”), for the sum of $1,320,000. Elderly Citizens Homes has been paid all moneys due to it. There is a balance of $368,696.93 remaining. There are competing claims for the balance. Elderly Citizens Homes has paid the total sum of $368,696.93 into court to abide the order of the court. The legal issues to be decided were whether all of the parties have an equitable interest in the land and the priority of the respective interests. The court found that there were competing equitable interests. The court considered the principles for determining the priority of competing equitable interests. The court found that the interest of Melbourne Projects was not an equitable interest in the land. The court found that the interest of JAD was an equitable interest in the land but that it ranked after the interest of Elderly Citizens Homes. The court found that the interest of Mr Burton was an equitable interest in the land but that it ranked after the interest of Moir Management. The court found that the interest of Moir Management was an equitable interest in the land and that it ranked ahead of the interest of Mr Parsons and Mrs Balnaves. The court found that the interests of Mr Parsons and Mrs Balnaves did not rank in priority to any other interest.

Orders