| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S CI 2014 02749
| BETWEEN: | |
| ANTONY CHRISTOPHER HILL | Plaintiff |
| -and- | |
| PAUL ANDREW BURNESS AND MATTHEW JAMES JESS (IN THEIR CAPACITY AS TRUSTEES OF THE BANKRUPT ESTATE OF THOMAS JAMES LOVE) & ANOR | Defendants |
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JUDGE: | Sifris J |
WHERE HELD: | Melbourne |
DATES OF HEARING: | 5 – 7 September 2017, 11 – 12 September 2017 |
DATE OF JUDGMENT: | 9 February 2018 |
CASE MAY BE CITED AS: | Hill v Love |
MEDIUM NEUTRAL CITATION: | [2018] VSC 29 |
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EQUITY – Marshalling – Whether holder of second-ranking mortgage over 275 O’Hearns Road subrogated to CBA’s rights in respect of 460 Cooper Street – Whether debt in favour of plaintiff arose after sale of 275 O’Hearns Road – Whether any agreement or binding arrangement as to order of sale.
CONTRACT – Release – Construction – Whether the right to marshal a claim ‘arising out of the Retainer’ – Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112.
EQUITY – Whether equity should assist – Whether plaintiff precluded from recovering more than he bargained for – Whether mortgagor gave fully informed consent – Whether grant of second-ranking mortgage in breach of terms of first-ranking mortgage – Effect of alleged non-compliance by plaintiff with obligations under Legal Practice Act 1996 (Vic) – Whether plaintiff otherwise engaged in disentitling conduct.
EQUITY – Whether unreasonable for plaintiff not to have advanced marshalling claim in previous County Court proceeding – Port of Melbourne Authority v Anshun (1981) 147 CLR 589.
MORTGAGES – Construction of mortgage and variation – Whether variation effects rescission or release of original mortgage.
EQUITY – Trusts – Declaration of Trust – Requirement of declaration evidenced in writing – s53(1)(c) Property Law Act 1958 (Vic) – Not capable of declaring trust on account of bankruptcy – s 58 Bankruptcy Act 1966 (Cth).
EQUITY – Trusts – Constructive Trust – Muschinski v Dodds (1985) HCA 78 – Baumgartner v Baumgartner (1987) HCA 59 – Failure of substratum on account of bankruptcy – Non-financial contributions – Where contributions enable partner to acquire, maintain or improve property – lack of evidence to support pleaded assertions.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D G Robertson QC with Mr D C Morgan | Earl & Associates |
| For the First Defendants | Mr J Delany QC with Ms C Van Proctor | Cornwall Stoddart |
| For the Third Defendant | Appeared in person |
HIS HONOUR:
A Introduction
In this proceeding, two claims are made in relation to the net proceeds of sale of a property at 460 Cooper Street, Epping (460 Cooper Street or the Property), one of four properties owned by the late Thomas James Love (Love) and mortgaged to the Commonwealth Bank of Australia (CBA).[1]
[1]See Commonwealth Bank of Australia v Love & Anor [2015] VCC 1653 at [7]-[19] (CB657); Love Affidavit [4]-[11] (CB84-85). For convenience I have retained all relevant references to the Court Book.
On 29 December 2009, the CBA…
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- AGLC
- Hill v Love and Another [2018] VSC 29
- Case
- [2018] VSC 29
- Decision Date
CaseChat Overview and Summary
The legal issues before the court included the interpretation of the right to marshal claims under equity, whether the plaintiff was precluded from recovering more than he bargained for, and whether there was a breach of the terms of the first-ranking mortgage. The court also had to consider whether equity should assist Hill, particularly given the plaintiff's alleged non-compliance with obligations under the Legal Practice Act 1996 (Vic) and whether such conduct was disentitling. Furthermore, the court examined whether it was unreasonable for Hill not to have advanced his marshalling claim in a previous proceeding, and the construction of the mortgage and any variations that might have affected the original mortgage.
The court found that Hill's debt did not arise after the sale of 275 O'Hearns Road, and there was no agreement or binding arrangement concerning the order of sale. The court held that Hill's claim to marshal assets was not a claim 'arising out of the retainer' and thus was not precluded. The court also found that equity would not assist Hill, given his lack of informed consent to the second-ranking mortgage and his disentitling conduct. The court held that Hill's failure to raise the marshalling claim in the previous proceeding was unreasonable. The court further found that the variation of the mortgage did not result in a rescission or release of the original mortgage. Finally, the court concluded that there was insufficient evidence to support a constructive trust in favour of Hill.
The final orders of the court were that Hill's claims against Love were dismissed, and Love was entitled to costs.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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