Goldberg v Campbell and Shaw
[2021] VSC 647
•8 October 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2021 02523
| BRIAN MORRIS GOLDBERG (who sues as Executor of the Estate of Alexander Joseph McColley (also known as Alexander John McColley)) | Plaintiff |
| v | |
| CAMPBELL AND SHAW (A Firm) | First Defendant |
| NORMAN LESLIE MATHERS | Second Defendant |
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JUDGE: | Matthews AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 2 September 2021 |
DATE OF JUDGMENT: | 8 October 2021 |
CASE MAY BE CITED AS: | Goldberg v Campbell and Shaw & Anor |
MEDIUM NEUTRAL CITATION: | [2021] VSC 647 |
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REAL PROPERTY — Caveats — Application by plaintiff for order directing removal of caveat lodged by second defendant on title — Application for removal of a caveat under s 90(3) of the Transfer of Land Act 1958 (Vic) — Whether there is a prima facie case to be tried — Whether the balance of convenience favours the removal of the caveat — Order for removal of caveat to be made but stayed pending an application to amend caveat — Application for sale of co-owned land and division of proceeds under Part IV of the Property Law Act 1958 (Vic) — Sale not ordered but application adjourned.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Antill | Casey Business Lawyers |
| For the First and Second Defendants | Mr P D Reynolds | Campbell & Shaw Lawyers |
HER HONOUR:
Introduction
By its originating motion dated 19 July 2021 (‘Application’), the plaintiff seeks the following orders against the second defendant:[1]
(a) an order pursuant to s 90(3) of the Transfer of Land Act 1958 (Vic) (‘TLA’) that the second defendant remove caveat AN634457G (‘Caveat’) from the property located at Bemersyde Drive, Berwick, being the land described in Certificate of Title volume 9299 folio 729 (‘Property’); and
(b) an order pursuant to Part IV of the Property Law Act 1958 (Vic) (‘PLA’) that the Property be sold and the proceeds divided between the plaintiff and second defendant.
[1]By the originating motion and summons, the plaintiff also sought orders regarding production of the Certificate of Title for the Property against both the first and second defendants, which orders were no longer necessary by the time the matter came on for hearing.
On 1 September 2021 on the Court’s own motion, the Honourable Justice McDonald made an order pursuant to r 77.05 of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’) that the plaintiff’s Application be referred to me for hearing and determination.
In support of the Application, the plaintiff relies upon: the affidavits Marylyn Gilberthorpe sworn 18 July 2021 and 18 August 2021 and the exhibits thereto; and the written submissions of his counsel, Mr Richard Antill, dated 24 August 2021.
In opposition to the Application, the second defendant relies upon: the affidavits of Norman Leslie Mathers sworn 13 August 2021 and 1 September and the exhibits thereto; the affidavit of David Henry Shaw sworn 27 August 2021; and the written submissions of the second defendant’s counsel, Mr Paul Reynolds, dated 27 August 2021.
In addition, both parties relied on the oral submissions made by their respective counsel at the hearing on 2 September 2021.
While not all of these materials may be specifically referred to in these reasons, all of them have been read and taken into account in the course of coming to this decision.
For the reasons set out below, I consider that the Caveat should be removed. However, I will stay the operation of that order for a short period of time so as to give the second defendant time to make an application to amend the Caveat, should he be so advised. I will not make orders for the sale of the Property at this stage, however I consider that part of the Application should be adjourned for the time being.
Background
This proceeding arises out of a dispute over the estate of the late Alexander Joseph McColley (also known as Alexander John McColley) who, as at the time of his death on 7 December 2019, was the registered proprietor as tenant in common of one of two equal undivided shares in the Property. The plaintiff, Brian Morris Goldberg, is the executor of Mr McColley’s deceased estate. The second defendant, Norman Leslie Mathers, is the registered proprietor of the remaining undivided share of the Property. Campbell and Shaw Lawyers (a firm), named as the first defendant, are the second defendant’s legal representatives.
On 10 March 2017, the second defendant lodged the Caveat on the title of the Property. The certificate of title of the Property records the Caveat in the following terms:
Caveator
NORMAN LESLIE MATHERS
Grounds of claim
AGREEMENT WITH THE FOLLOWING PARTIES AND DATE
Parties
ALEXANDER JOHN MCCOLLEY
Date
05/08/2016
Estate or Interest
FREEHOLD ESTATE
Prohibition
ABSOLUTELY
Thus the claim which the second defendant sought to protect by lodging the Caveat is a “freehold interest”, with the grounds for that claim being an “Agreement with…Alexander John McColley”, said to be dated 5 August 2016 (‘Agreement’).
In respect of the Agreement, the second defendant deposes that he and Mr McColley agreed that Mr McColley would be able to reside in the Property rent‑free for the rest of his life or until he permanently vacated it on the proviso that he execute a will which left his half-share in the Property to the second defendant. The second defendant says that he and Mr McColley entered into a deed of arrangement to this effect, which they both executed on 29 March 2005 (‘DOA’).
Mr McColley continued to reside at the Property until August 2016, when he transferred to a nursing home after experiencing a decline in health. The Property has remained vacant since that time, with the second defendant attending to the payment of rates and outgoings in the intervening period. It is common ground that Mr McColley never made the will contemplated by the DOA.
Mr McColley died on 7 December 2019. As at the time of his death, Mr McColley and the second defendant continued to hold their respective half-shares in the Property as tenants in common.
Mr McColley’s last and unrevoked will was executed on 18 February 2008 (‘Will’). In the event that Mr McColley predeceased the plaintiff, the Will appointed the plaintiff as executor of Mr McColley’s will and trustee of his estate. No specific bequests were included in the Will. After payment of the usual debts, expenses, duties and taxes, Mr McColley left the residuary of his estate to the plaintiff.[2] Probate was granted to the plaintiff on 7 October 2020. On 20 August 2021, the transfer of Mr McColley’s share of the Property into the plaintiff’s name as the legal personal representative of Mr McColley’s estate was registered on the title to the Property.
[2]First Gilberthorpe Affidavit, [5]; Exhibit MG-4.
Mr McColley’s half-interest in the Property is the principal asset of his deceased estate.
On 19 March 2021, Julie Ann Strawbridge, Mr McColley’s daughter, filed an originating motion pursuant to Part IV of the Administration and Probate Act 1958 (Vic) in the Testators Family Maintenance List in this Court against the plaintiff, seeking provision from Mr McColley’s estate (‘the TFM Proceeding’).
Applicable law and principles
The legal principles regarding applications pursuant to s 90(3) of the TLA for the removal of a caveat are well known and have been summarised in a number of cases: for example see AAGG Developments Pty Ltd v Saafin Constructions Pty Ltd,[3] and Chan & Anor v Liu & Anor.[4] I have followed and applied these principles in coming to this decision. The parties were not in dispute as to the applicable principles governing applications to remove caveats; rather, it was the application of these principles to this case which was in dispute.
[3][2020] VSC 768 (‘Saafin’), [8]–[9].
[4][2020] VSCA 28 (‘Chan’).
The second defendant bears the onus of establishing both a prima facie case to justify the Caveat and that the balance of convenience favours its maintenance on the title to the Property.
Application to remove the Caveat
Second defendant’s submissions
The second defendant submits that he has a prima facie case as the plaintiff holds the deceased’s half-interest in the Property on constructive trust for him.
The second defendant submits that he complied with the DOA as he allowed Mr McColley to reside at the Property rent-free, but Mr McColley breached the DOA by not devising his half-share of the Property to the second defendant. The second defendant also contends that there is no evidence before the Court that would tend to undermine the authenticity of the DOA or that suggests it is void, voidable or otherwise unenforceable.
The second defendant submits that the plaintiff’s repudiation of the DOA gives rise to a constructive trust over Mr McColley’s share in the Property in two ways: first, by virtue of the doctrine of proprietary estoppel; and secondly, by analogy with mutual wills cases.
In relation to the existence of a constructive trust by operation of the doctrine of proprietary estoppel, the second defendant submits that:
(a) the second defendant held an expectation or belief that Mr McColley would give his interest in the Property to him;
(b) by executing the DOA, Mr McColley encouraged or induced the second defendant to adopt the expectation that, if he allowed Mr McColley to live in the Property rent-free, the second defendant would inherit Mr McColley’s interest in the Property;
(c) Mr McColley was aware that the second defendant had adopted the expectation;
(d) the second defendant acted in reliance on the expectation by foregoing his use and enjoyment of the Property and allowing Mr McColley to live there rent‑free;
(e) should Mr McColley depart from the expectation, the second defendant will suffer a detriment by losing the half-interest in the Property promised to him under the DOA; and
(f) it would be unconscionable to allow Mr McColley to depart from the expectation created by the DOA, and would warrant the intervention of equity to hold him to his promise.[5]
[5]Transcript, 2 September 2021, 7.17-27.
In support of this argument the second defendant relies on McNab v Graham[6] where Tate JA stated that a constructive trust based upon the principles of proprietary estoppel is “treated as coming into existence at the time of the conduct which gives rise to the trust”.[7] The second defendant thus submits that the constructive trust came into existence when the second defendant relied on Mr McColley’s promise to leave his interest in the Property to him in his will to his detriment, namely when he granted Mr McColley permission to live in the Property rent-free, or at least when Mr McColley took up residence in the Property consistently with that promise.
[6](2017) 53 VR 311 (‘McNab’).
[7]McNab, [6] (Tate JA, with whom Santamaria JA and Keogh AJA agreed), quoting Varma v Varma (2010) 6 ASTLR 152, 259 [507] (NSW Supreme Court (Equity)) (Ward J).
The second defendant further submits that there is no occasion to depart from the prima facie position that Mr McColley ought to be kept to his promise by the imposition of a constructive trust.
It is also said that the plaintiff is a volunteer under a will, and equity will not assist a volunteer.
With regard to the imposition of a constructive trust by way of analogy with mutual wills cases, the second defendant relies on the case of Birmingham v Renfrew,[8] in which the High Court held that in an instance where a husband and wife agreed to make mutual wills and not to revoke them, such that after the wife died the husband received her estate under her will (as intended by the mutual wills agreement) and the husband subsequently made a new will with different provisions, the husband’s estate should be distributed in accordance with the first will. The second defendant submits that in that instance, a constructive trust arose on the death of the first to die (the wife) because she made her will in reliance upon the promise of the survivor (the husband) and by her death she could no longer revoke it, with the terms of the trust being those of the will which the survivor undertook would be his last will.
[8](1937) 57 CLR 666 (‘Birmingham’).
The second defendant says Birmingham supports his contention that a constructive trust arose when Mr McColley vacated the Property as it was unconscientious for him to have taken the benefit of the promise of living in the Property rent-free and to make a will inconsistent with the DOA. It is said that Mr McColley’s obligation to leave his share in the Property to the second defendant is specifically enforceable and he holds his share in the Property on constructive trust for the second defendant.
Plaintiff’s submissions
The plaintiff does not concede that the DOA is valid and enforceable against Mr McColley or his estate. The plaintiff submits that his solicitor continues to carry out investigations around the circumstances in which Mr McColley executed the DOA, and says that even if the DOA is valid and enforceable against Mr McColley’s estate, it does not constitute a reason to deny an order for the removal of the Caveat and the sale of the Property and division of proceeds. The plaintiff submits that, in analysing the DOA through the ordinary principles of contract law, the DOA does not provide for any inter vivos transfer of Mr McColley’s half-interest in the Property from Mr McColley to the second defendant. If the DOA is enforceable, it is said that the second defendant’s only recourse lies in a claim for breach of contract which may sound in an award of damages from the deceased estate. The plaintiff submits that this does not give the second defendant a proprietary interest in Mr McColley’s share of the Property, such that the second defendant has no interest capable of founding a proper ground for a caveat.
Further, the plaintiff submits that even if Mr McColley had left the second defendant his interest in the Property in his Will, this still would not grant the second defendant a caveatable interest in Mr McColley’s half-share of the Property. This is because the second defendant would not have a proprietary interest in the Property. In support of this argument the plaintiff relies on the High Court’s decision in Official Receiver in Bankruptcy v Schultz,[9] submitting that the High Court made it clear that a beneficiary of even a specific bequest or devise has no proprietary interest in the property of the deceased.
[9](1990) 170 CLR 306 (‘Schultz’).
The plaintiff submits that even if the DOA was enforceable, and even if there had been no breach of contract, the second defendant would only be a beneficiary of Mr McColley’s estate. In that circumstance, the second defendant would not have a proprietary interest in Mr McColley’s interest in the Property and he would have no grounds to maintain the Caveat. Rather, he would merely have a legal right to secure the proper administration of Mr McColley’s estate.
The plaintiff contends that the second defendant, by asserting he is currently entitled to Mr McColley’s half-interest in the Property and is entitled to maintain the Caveat before the estate has been properly administered, is asserting that he is in a better position as a result of the alleged breach of contract than the position he would be in if there had been no breach of contract. This position, it is submitted, must be rejected. The plaintiff says that even if the DOA is valid and enforceable, the second defendant has never had any proprietary interest in Mr McColley’s half-interest in the Property and that there was never any basis for him to have lodged the Caveat.
The plaintiff contends that Birmingham is to be distinguished because it was not a claim in contract. He relies on Barns v Barns[10] in addressing the submissions made by the second defendant about the analogy with mutual wills cases. In Barns v Barns, the husband and wife agreed to make mutual wills, which they did. The husband died and the wife survived, so she was in a position to enforce the contract. The husband’s daughter made a claim on the husband’s estate under the legislation in South Australia similar to Part IV of the Administration and Probate Act 1958 (Vic). The question in that case was whether the property left to the wife in the husband’s will was part of the deceased estate, and the High Court concluded that it was, such that it was available to meet any orders made in respect of the daughter’s claim.
[10](2003) 214 CLR 169 (‘Barns’).
Consideration
By their submissions, the parties were effectively addressing two different claims. The plaintiff’s submissions addressed the interest claimed through the DOA, whereas the second defendant’s submissions primarily addressed a constructive trust claim. The parties’ focus was on whether the second defendant had a prima facie case to a proprietary interest, rather than whether he had a prima facie case to the interest claimed in the Caveat.
The starting point for the Application is the interest claimed by the second defendant in the Caveat and the grounds stated in the Caveat for that interest. Therefore, the grounds for the freehold interest that is claimed is the Agreement. This presents two problems for the second defendant: there is no evidence as to an agreement with Mr McColley dated 5 August 2016, rather, the evidence adduced on his behalf is all as to the DOA; and if it is contended that the DOA is the Agreement referred to in the Caveat, that does not give rise to a proprietary interest in Mr McColley’s share of the Property.
When I raised the issue of the date of the Agreement as cited in the Caveat at the hearing, Counsel for the second defendant submitted that if this date was wrong then the Caveat could be amended so as to record the correct date. Counsel for the plaintiff submitted that even if the date in the Caveat was the date of the DOA, that would not assist the second defendant.
It is important to note that there was, and is, no application before me to amend the Caveat. In any event, I accept the plaintiff’s submission that amending the date would not assist the second defendant, as I will now explain.
I accept the plaintiff’s primary argument that the second defendant does not have a proprietary interest in Mr McColley’s share of the Property arising from the DOA, relying on Schultz. If there is no proprietary interest, then there is no interest which is caveatable such that the Caveat should be removed. It is worth quoting the passage in full from Schultz that is relied upon by the plaintiff in this regard:[11]
Not only does the legal ownership in the property not vest in the named beneficiary at the time of death of the testator, nor does the equitable ownership. That emerges from the Privy Council’s decision in Commissioner of Stamp Duties (Q) v Livingston. The reason for this is that, prior to administration of the deceased estate, there is no specific property capable of constituting the subject property of any trust in favour of the beneficiary. It could not be said at that stage what part or parts of the testator’s property would need to be realized for the purposes of administration. So it was held that the beneficiary does not have a proprietary interest in each of the assets which are the subject of the devise or bequest such that he or she can say “this is mine” or “this belongs to me”. Although Livingston was concerned with a residuary estate, the observations it contains apply with equal force in the case of a specific bequest or devise. ...
[11]Schultz, 312. Confirmed in Barns v Barns, [50] (citations omitted).
If Mr McColley had left his share of the Property in his will to the second defendant, then I think it is highly likely that Schultz applies such that it could not be said that the second defendant has a proprietary interest in Mr McColley’s share of the Property. In that instance, the second defendant would have a right to due administration of the estate. Further and also in that instance, I think it is also highly likely that Barns v Barns applies such that a claim pursuant to Part IV of the Administration and Probate Act 1958 (Vic) would be dealt with as though Mr McColley’s share of the Property was part of his estate and available to be dealt with under the powers given to the Court in s 96 of that Act.
Even if the DOA is valid and enforceable, all that the second defendant would gain through enforcement of the DOA is to be named as the beneficiary of Mr McColley’s interest in the Property in Mr McColley’s will. It is said that if the second defendant had sued Mr McColley for breach of contract then the remedy had he been successful would have been to place him in the position he would have been had the contract been performed, that is, a beneficiary of a specific devise under the will. Since Mr McColley’s death, any remedy the second defendant has against Mr McColley for breach of contract is against his estate, which would be a damages claim. Thus, it is said, the second defendant ought to be in no better position than he would have been in but for the breach of the DOA.
So much is likely to be accepted in respect of a breach of contract claim.
I do not accept that the DOA itself creates or gives rise to the constructive trust: that is the mistaken premise of the second defendant’s submissions. Rather, the DOA is merely evidence of the promise (or representation or assumption) that if Mr McColley was able to reside in the Property rent-free for life or until he permanently vacated it, then he would leave in his will his share of the Property to the second defendant.
Further, I do not find the analogy with mutual wills cases as urged upon me by the second defendant to be particularly apt or helpful. In Flocas v Carlson,[12] McMillan J expressed doubts about the unique nature of a ‘mutual wills’ claim and instead analysed the factual matrix in that case in terms of a contractual claim and in terms of a proprietary estoppel. I agree with her Honour’s approach, and would also add that even if there were a special ‘mutual wills’ claim which was not a species of a contractual or estoppel claim, the present case involves only one will and is not usefully analysed by analogy to such a claim.
[12][2015] VSC 221.
Accordingly, I do not consider that the second defendant has a prima facie case to the interest as claimed in the Caveat on the grounds stated therein, as I do not consider it to be a proprietary interest. That being the case, I do not consider that the balance of convenience favours the maintenance of the Caveat.
However, I do not think that that is the end of the matter, as it is highly likely that the second defendant does have a prima facie case that he has a freehold estate in Mr McColley’s half-share of the Property on the grounds of a constructive trust arising from the doctrine of proprietary estoppel. I also think that in that instance, the balance of convenience would favour the maintenance of the Caveat.
I consider that the second defendant ought be given an opportunity to make an application for the amendment of the Caveat, if he be advised to do so, such that the order for the removal of the Caveat ought be stayed for a short period of time so as to permit that application to be made. If the application is not made, then the order removing the Caveat will be operative. If the application is made, then the stay will continue until the amendment application is determined or until further order.
I will briefly explain my reasons as to the alternate prima facie case.
If the second defendant is successful in respect of his proprietary estoppel claim, then the conclusion that this results in Mr McColley’s share of the Property being the subject of a constructive trust in his favour means that in such an instance he has a proprietary claim in respect of Mr McColley’s share of the Property.
It is clear from McNab that a constructive trust that is proprietary in nature is “based upon an equity founded upon assumptions as to future ownership of property in respect of which there has been detrimental reliance”.[13]
[13]McNab, [73].
In this instance Mr McColley makes a promise as to the future acquisition of ownership of his half-share in the Property by the second defendant, in respect of which there has been detrimental reliance by the second defendant.
Key to the second defendant’s argument is the question of when the constructive trust came into existence. McNab makes it clear that in a case of proprietary estoppel, the constructive trust arises where there is reliance by the promisee to their detriment on the promise/assumption that has been induced by the promisor. It is at this point that equity intervenes to impose a constructive trust due to it being unconscionable for the promisor to resile from the promise. In this type of constructive trust, while it is for a court to determine whether to declare a constructive trust, the date it comes into existence is the date from which the equitable interest in the land arises, being the date when the detrimental reliance renders it unconscionable to depart from the promise.[14]
[14]McNab, [102], [107]–[108].
Therefore, in this instance, there is a credible argument that the constructive trust came into existence at the time Mr McColley commenced residing in the Property rent‑free after entering into the DOA with the second defendant. That is the point in time where the second defendant submits that he relied on the promise to his detriment. It is possible that the constructive trust may have arisen later, for example, when Mr McColley made the Will in terms which indicated he was resiling from the promise, or when he vacated the Property. None of that matters for these purposes: what is relevant is that there may be a prima facie case that prior to his death and at his death, Mr McColley held his half-share in the Property on constructive trust for the second defendant.
If Mr McColley held his half-share in the Property on constructive trust for the second defendant at the time of his death, then upon the grant of probate to the plaintiff, the plaintiff also holds Mr McColley’s half-share in the Property on constructive trust for the second defendant. This is because the plaintiff, as executor of the estate, takes the same interest as that which Mr McColley had at the time of his death.[15]
[15]Barns v Barns, [18].
Applying this analysis, the second defendant’s proprietary interest in Mr McColley’s half-share in the Property derives from the constructive trust arising from the proprietary estoppel claim and not from the proposition that under the DOA he was meant to be left that property in the Will. Such an analysis is consistent with Schultz.
While it is clear from Schultz that neither legal nor equitable ownership vests in the beneficiary under the will at the time of the death of the testator by reason of the devise or bequest in the will, the High Court was considering the situation of where the testator had legal and beneficial ownership of property at the time of their death. That decision does not consider the situation applicable where the testator had legal, but not beneficial, ownership of the subject property at the time of their death.
Analysed in this way, Barns v Barns is also of limited utility to the plaintiff, since it too was considering the situation where the deceased had legal and beneficial ownership at the time of death. [16]
[16]Barns v Barns, [4], [5], [7], [18], [32]-[33], [82].
For the sake of completeness, insofar as the second defendant relies on his submission that the plaintiff is a volunteer such that there is no countervailing equity here, I accept the plaintiff’s submission that he is not a volunteer under a will. He is suing in his capacity as the executor of Mr McColley’s estate, not as a beneficiary under the Will. However, the above analysis means that this is not relevant.
It is appropriate that I say something further about the balance of convenience, having already noted that unless and until the Caveat is amended, the balance of convenience does not favour maintenance of the Caveat.
The second defendant submits that the balance of convenience favours the maintenance of the Caveat until trial in the TFM Proceeding because the second defendant holds a “special” interest in the Property, namely that it belonged to his mother. On the contrary, the second defendant submits that the plaintiff’s only interest in the Property involves selling it for profit.
The plaintiff submits that even if the second defendant had a prima facie case, which is denied, then the balance of convenience would favour removal of the Caveat. It is said that if the Caveat is not removed, the plaintiff will not be able to perform his duty to get in the assets of the estate, the TFM Proceeding will not be able to proceed and there will be no further administration of Mr McColley’s estate. He says that it is after the assets are got in, the TFM Proceeding is dealt with and the expenses associated with the estate and its administration are paid that the argument between the plaintiff and the second defendant can occur. If the Property is not sold, then there are no assets in the estate and its administration would be stuck in limbo.
I do not find the second defendant’s submissions in this regard to be compelling. I find it difficult to accept that he holds a “special” interest in the Property, as opposed to perhaps a sentimental one. There is no evidence that he has ever lived in the Property, either alone or with his mother, and it is many years since his mother lived in the Property. Further, there is no evidence that the plaintiff’s interest is in selling the Property at a “profit”, although if it is sold at a profit then that would benefit the second defendant since presumably his share would also be sold at a profit. Rather, the plaintiff’s interest is in selling the Property so as to administer the estate, consistent with his duties as executor.
However, if the second defendant is able to establish, through proceedings properly brought by him, that he has a proprietary interest in Mr McColley’s half-share in the Property via a constructive trust based on proprietary estoppel, then the “lower risk of injustice”[17] is the maintenance of the Caveat. This is because he may then be entitled to an order that Mr McColley’s half-share be transferred to him,[18] in which case he would be the sole registered proprietor of the Property. If that were the case, then if the Caveat had already been removed the second defendant would not be able to be placed in that position.
[17]Bradto Pty Ltd v State of Victoria (2006) 15 VR 65, 73 [35].
[18]In this regard, this application is not the appropriate vehicle for determining whether a Court may determine that equity requires some lesser remedy, as was discussed but not applied, in McNab, [108]‑[113].
Application for sale of co-owned land
Part IV of the PLA provides that a co-owner of land may apply under Division 2 of Part IV for an order for the sale of the land and the division of the proceeds among the co-owners.
The plaintiff submits that this Court has jurisdiction to hear this application pursuant to Part IV of the PLA due to the fact that the Property is both the subject matter of this application and the principal asset of the TFM Proceeding.
The plaintiff submits that he is justified in seeking a sale of the Property so that he can obtain funds to meet the expenses of administration and to administer the estate. The plaintiff submits that the sale funds will be part of the estate and will be available to meet any order the Court might make in the TFM Proceeding. In support of this submission the plaintiff relies on Barns v Barns.
The plaintiff submits that because the administration of Mr McColley’s estate is not yet at the stage of being able to make a distribution to beneficiaries, the plaintiff, as executor, must first get in the assets of the estate. On this basis, it is submitted that the Court ought to grant the relief sought by the plaintiff and order a sale of the Property.
Finally, the plaintiff submits that the second defendant has failed to provide details of payments made in respect of rates and other outgoings on the Property, and that any such expenditure, if made out, ought to be taken into account by way of an adjustment pursuant to s 233 of the PLA.
The second defendant submits that orders cannot be made under to Part IV of the PLA until it is determined whether the plaintiff is a co-owner of the Property. It is submitted that this will turn on whether or not the second defendant can establish the claims outlined above.
The application for sale of co-owned land is separate and distinct from the application to remove the Caveat, as different principles and considerations apply.
For the reasons I have referred to above when discussing the balance of convenience in respect of a constructive trust claim based on proprietary estoppel, I do not consider it appropriate to make orders at this stage for the sale of the Property pursuant to Part IV of the PLA. If proceedings are not commenced by the second defendant to substantiate his claim, then the application for sale of co-owned land should be re‑listed for hearing before me.
Conclusion
For all of the above reasons, I will make orders that:
(a) the Caveat be removed;
(b) the Caveat removal order be stayed for a short period of time, so that the second defendant has time to make an application to amend the Caveat if he decides to do so; and
(c) the application for sale of the Property be adjourned.
I will hear from the parties as to an appropriate form of orders and as to costs.
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