Groom v Leafbusters Pty Ltd (in liq) - [2021] VSC 765

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S CI 2018 01820

PAUL ANTHONY GROOM	Plaintiff
and
LEAFBUSTERS PTY LTD (in liquidation) (ACN 059 092 214)	Defendant
AND BETWEEN:
LEAFBUSTERS PTY LTD (in liquidation) (ACN 059 092 214)	Plaintiff by Counterclaim
And
PAUL ANTHONY GROOM	Defendant by Counterclaim

---

JUDGE:	Cavanough J
WHERE HELD:	Melbourne
DATE OF HEARING:	4, 5, 6, 7 February and 20 March 2020. Last written submissions filed 27 March 2020
DATE OF JUDGMENT:	20 November 2021
CASE MAY BE CITED AS:	Groom v Leafbusters Pty Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2021] VSC 765

---

EQUITY – Real property – Claim for declaration of common intention constructive trust over house property on principles of proprietary estoppel – Principles – Credibility and reliability of the witnesses – Claim not made out on the facts and the evidence – Claim dismissed – Counterclaim for removal of caveat successful.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	J Evans QC	DSA Law
For the Defendant	SL Friere	Kalus Kenny Intelex

HIS HONOUR:

Overview

The defendant, Leafbusters Pty Ltd (in liquidation), is the registered proprietor of a residential property at 64 Olinda-Monbulk Road, Olinda. The defendant acquired the Olinda property in 1996 in its capacity as the corporate trustee of a discretionary family trust that operated as a trading trust (‘the Leafbusters Trust’). The trust estate has apparently been insolvent since late 2016 or earlier, the defendant (as trustee) owing many thousands of dollars to creditors.[1] The defendant, which had no function other than as trustee of the Leafbusters Trust, was made the subject of a winding up order in January 2017 at the instance of one of the creditors. The Olinda property is subject to a mortgage to a bank, but the remaining equity in it is the only surviving worthwhile asset of the defendant. The liquidators wish to sell the property on behalf of the defendant and to distribute the proceeds in accordance with the scheme of priorities set out in the Corporations Act 2001 (Cth).
[1]A letter dated 7 October 2016 from a firm of insolvency accountants then engaged on behalf of the defendant company stated that the company had ceased trading, had unsecured debt totalling in excess of $450,000 and had only one asset (this was a reference to the Olinda property) with approximately $200,000 available in equity: Court Book (CB) 77. It seems that the quoted figures of $450,000 and $200,000 may not have been accurate, but the insolvency of the company, then and now, is not in dispute.

The plaintiff, Paul Groom, lives in the Olinda property. He says that the defendant should not be allowed to sell it. Rather, he says, the Court should require the defendant to transfer the property (subject to the mortgage) to him. He relies on matters said to arise from an alleged ‘separation agreement’ claimed to have been made, or finalised, on or about 11 September 2009. He says that the parties…

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.

Keep reading for free

Create a free CaseChat account to read Groom v Leafbusters Pty Ltd (in liq) and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2021] VSC 765
Decision Date: 20 November 2021

CaseChat Overview and Summary

The case of Groom v Leafbusters Pty Ltd (in liq) involved a dispute over the ownership of a house, with Groom seeking a declaration of a common intention constructive trust based on the principles of proprietary estoppel. Leafbusters Pty Ltd, in liquidation, was the defendant. Groom claimed that he had been led to believe he would have an interest in the property based on representations made by the representatives of Leafbusters. The Federal Circuit and Family Court of Australia was tasked with determining whether Groom's claim was substantiated.

The court needed to decide whether Groom's claim was credible and reliable, considering the principles of proprietary estoppel. This required an assessment of whether Groom had a clear and unequivocal expectation of acquiring an interest in the property, whether such expectation was reasonable, and whether there had been any reliance on those expectations that led to Groom's detriment. The court also had to weigh the credibility of the witnesses and the evidence presented by both parties.

The court found Groom's claim not to be made out on the facts and the evidence. The court held that Groom had not demonstrated a clear and unequivocal expectation of acquiring an interest in the property, nor had he shown that his reliance on any such expectation had led to his detriment. The court also found that Groom's evidence was not credible and reliable. Consequently, Groom's claim was dismissed. However, Leafbusters' counterclaim for the removal of the caveat was successful.

The court ordered that the caveat be removed and directed that Groom bear Leafbusters' costs of the proceedings.

Orders