Gray v Gray

Case [2023] WASC 70

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   GRAY -v- GRAY [2023] WASC 70

CORAM:   STRK J

HEARD:   31 MARCH, 9 - 10 AUGUST & 2 SEPTEMBER 2021

DELIVERED          :   10 MARCH 2023

FILE NO/S:   CIV 1932 of 2020

BETWEEN:   ROBERT BRIAN GRAY

First Plaintiff

ASHLEY ROBERT GRAY

Second Plaintiff

AND

MURRAY EDWARD GRAY

Defendant


Catchwords:

Real property - Sale by auction pursuant to s 126 of the Property Law Act 1969 (WA) - Which party to have conduct of sale - Setting of appropriate reserve price for auction - Turns on own facts

Legislation:

Property Law Act 1969 (WA) s 126

Result:

Orders made for sale by auction

Category:    B

Representation:

Counsel:

First Plaintiff : P R MacMillan
Second Plaintiff : P R MacMillan
Defendant : S M Standing

Solicitors:

First Plaintiff : Corinne Griffin & Co
Second Plaintiff : Corinne Griffin & Co
Defendant : Lynn & Brown Lawyers

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

Bombara v Bombara [2010] WASC 314

Duffy v The Minister for Planning [2003] WASCA 294

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

Essex Securities Pty Ltd v Lunt [2006] WASC 58

Gray v Gray [2010] WASC 389

Gray v Gray [2013] WASC 387

Hoskin v The Sherriff for the State of Victoria [2018] VSC 216

Hutton v Meston [2004] WASCA 178

Kelliher v Commissioner for Main Roads [No 2] [2015] WASC 478

Manifis v Mouzalidis [2021] WASC 454

Manton v Parabolic Pty Ltd (1985) 2 NSWLR 361

McKay v Commissioner of Main Roads [No 7] [2011] WASC 223

Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72

Sangora Holdings Pty Ltd v Dunstan (Unreported, WASC, Library No 990172, 13 April 1999)

Stevens v Wright [2021] WASC 36

Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212

Woolley v Colman (1882) 21 ChD 169

Table of Contents

Introduction

Procedural history

Pleadings prior to trial

Commencement of trial on 31 March 2021

Further directions

Continuation of trial on 9, 10 August 2021 and 2 September 2021

The cases advanced

The pleadings & concessions

Applicable principles

Conduct of the sale

Reserve price

The evidence

The Bullsbrook property - overview

Lay affidavit evidence

Valuation evidence

Evidence of Mr Hemsley

Evidence of Mr Cooper

Disposition

Conduct of the sale

Reserve price

Other ancillary orders

Conclusion and orders

Sch A - proposed orders

STRK J

Introduction

  1. The parties to this proceeding share the same surname.  In these reasons, I refer to the parties by their first name.  I do so for convenience and to avoid confusion.  No disrespect is intended.

  2. Robert, Ashley and Murray are the registered proprietors as tenants in common in equal shares of a property known as 848 Cooper Road, Bullsbrook (being the whole of the land comprised in certificate of title volume 1135 folio 622).

  3. The parties have been involved in various proceedings before this court concerning the estate of their…

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Details
AGLC
Gray v Gray [2023] WASC 70
Case
[2023] WASC 70
Decision Date

CaseChat Overview and Summary

In the case of Gray v Gray, the dispute involved the sale of a property by auction under section 126 of the Property Law Act 1969 (WA). The plaintiffs, Robert and Ashley, sought to have the property sold by public auction and requested various orders regarding the conduct of the sale and the setting of the reserve price. The defendant, Murray, opposed these requests and argued against certain aspects of the plaintiffs' proposed sale conditions.

The primary legal issue before the court was whether the plaintiffs were entitled to an order for the sale of the property pursuant to section 126(1) of the Property Law Act, and if so, what specific conditions should govern the sale. This included determining the appropriate reserve price for the auction and which party should conduct the sale. The court had to balance the statutory provisions with the evidence presented regarding the property's value and market conditions.

The court considered the valuation report by Mr Cooper, which indicated that the property's value lay primarily in the land rather than the improvements. The report suggested a market value range for the land and recommended a reserve price towards the lower end of this range. The court also took into account the limited comparable sales evidence available and the fluctuating market conditions. After weighing the submissions from both parties and the statutory framework, the court ruled in favour of the plaintiffs and granted the sale orders as requested, subject to certain modifications.

The final orders included provisions for the property to be sold by public auction, with the plaintiffs or their solicitors having the conduct of the sale. The court set the reserve price at $2,125,000 and allowed for marketing consistent with industry best practices. The court also mandated that each party have the liberty to bid and provided for the net proceeds of the sale to be paid into court.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

At pt 8.1 of his valuation report, Mr Cooper made the following observations and expressed his opinion as to value as follows:[84]Overall, it is noted that the improvements on site have only marginal added value, (assessed at $10,000 - $30,000 added value), the majority of value is attributed to the land component. When analysing surrounding evidence, we have compared primarily on a rate per hectare basis to allow for a clearer comparison between blocks of differing block sizes.It is noted that there is a distinct lack of directly comparable sales evidence.There does not appear to be any settled sales over the last several years of broadly similar properties to the subject.[84] Emphasis and underlining as per original report.This does tend to make this assessment more subjective than usual.…Purely Rural evidence (if there were no other contributing zoning factors) would indicate a land rate at around $28,000 - $32,000 per hectare of land indicating a mid-point of approximately $30,000 per hectare ($1,200,000 approximate land value) for the subject on this basis, that is, if it was just purely rural land.Given the interest from the market in the long-term potential of the zoning change, it is considered that figures higher than this would be expected.…After analysis of the sales evidence within the locality, it is our opinion that the subject property has a land value within a range of $40,000 per hectare to $46,000 per hectare, this equates to $1,630,000 to $1,880,000 (rounded plus added value of improvements). We have adopted a market value at the mid-point of this range being $43,000 per hectare, and after a small allowance for the improvements, have rounded this to $1,750.000.A relatively wide value range has been provided reflecting the recent fluctuations in the current market and very limited evidence that is currently available for a property of this nature.We would consider an offer within this range to be acceptable and if offered for auction would recommend a reserve towards the lower end of this range allowing for offers to be received above. The assessed market value was expressed by Mr Cooper exclusive of GST,[85] and for valuation purposes, Mr Cooper accepted in cross‑examination that the improvements on the Bullsbrook property were largely irrelevant for valuation purposes.[86][85] Exhibit D4, affidavit of G R Cooper sworn 25 June 2021, GRC-03, pt 9.2, page 47.[86] ts 159 (2 September 2021). In the course of his evidence, Mr Cooper expressed views as to a number of sales that had been considered by Mr Hemsley in the preparation of his report, which had not been referenced by Mr Cooper in his report.[87] In his evidence, Mr Cooper explained features of those properties that he considered made them not comparable for valuation purposes, which included the age of the sale and the use of the properties (for example, he described three of the properties as being attractive rural lifestyle properties).[88] I had regard to the same.[87] ts 154 - 156, 184 - 187 (2 September 2021).[88] ts 154 - 155, 189 (2 September 2021).

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In response, counsel for Murray acknowledged that admissions had been withdrawn, however, submitted that the withdrawal had no effect on the issues between the parties, nor the substance of Murray's counterclaim. After hearing submissions from both counsel, and having had regard to the principles set out in Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212 at [19],[12] I granted leave to Murray nunc pro tunc to withdraw admissions previously made in his re‑amended defence and counterclaim filed on 23 February 2021, by the further re‑amended defence and counterclaim filed on 3 August 2021.[13] In so doing, I was particularly informed by there being no discernible prejudice to Robert and Ashley. It is common ground that Robert, Ashley and Murray are the registered proprietors as tenants in common in equal shares of the Bullsbrook property.[14][14] Further further re-amended statement of claim filed 8 September 2021 par 1; additional further re-amended defence and counterclaim filed 7 September 2021 par 2. Robert and Ashley pleaded that by reason of the above, they are entitled to an order pursuant to s 126(1) of the Property Law Act for the sale of the Bullsbrook property.[15][15] Further further re-amended statement of claim filed 8 September 2021 par 2. The sale orders pressed by Robert and Ashley pursuant to s 126(1) are as follows:[16][16] Further further re-amended statement of claim filed 8 September 2021 par 4(a) - (l), prayer for relief par 1(a) ‑ (l).(a)the Property be sold by public auction free of encumbrances (if any) of such of the encumbrancers as shall consent to the sale and subject to the encumbrances of such of them as shall not consent;(b)the Property be sold subject to the 2018 Joint Form of General Conditions for the Sale of Property as published by the Law Society of WA and the Real Institute of Western Australia's General Conditions for the Sale of Land; (c)the reserve price for the Property be $2,125,000;(d)the First-named Plaintiff alternatively the solicitors for the Plaintiffs have conduct of the sale and be authorised to instruct an auctioneer for that purpose, such auctioneer to be a licensed auctioneer agreed by the parties or in default of agreement as nominated by the President of the Real Estate Institute of Western Australia Incorporated and the auctioneer is to be instructed to implement such marketing programme for the Property as he considers to be consistent with best industry practice, for the purpose of properly informing the market regarding the auction; (e)the First-named Plaintiff alternatively the solicitors for the Plaintiffs report to the parties in writing on a weekly basis summarising the progress of the sale; (f)the auctioneer's remuneration be fixed in accordance with the scale of charges of the Real Institute of Western Australia Incorporated; (g)each party have liberty to bid at the sale and in the event of the Property being sold to a party, that party need not pay a deposit, and shall be at liberty, in making payment of the purchase price, to set-off against the purchase price an amount equal to one‑third of the purchase price (net of any commission, fees and expenses in respect of the sale); (h)the net proceeds of sale, after payment of what shall be due to any encumbrancer or encumbrancers according to their priorities and of all other proper costs, charges and expenses of the sale, be paid into Court for the credit of this action to abide further Order; (i)at the time of payment into Court an affidavit by the auctioneer to be filed exhibiting a statement certifying the result of the sale and expenses incurred in relation thereto, and an affidavit be filed by the First-named Plaintiff alternatively the Plaintiffs' solicitors exhibiting a schedule of their charges in relation to the conduct of the sale; (j)the First-named Plaintiff alternatively the Plaintiffs' solicitors be entitled to deduct from the proceeds of sale (prior to payment into Court of the net proceeds of sale) an amount representing their reasonable charges in relation to their conduct of the sale; (k)the Defendant be served with this Order (by means of service upon his solicitors) within 10 business days from the date hereof and that he deliver up possession of the Property to the First‑named Plaintiff alternatively the Plaintiffs' solicitors within 7 days after service of this Order on him; (l)the parties have liberty to apply.