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Hill v Love

Hill v Love

Case [2018] VSC 29 9 February 2018

Mortgages & Security Interests

Unjust Enrichment

Constructive Trust

Admissibility of Evidence

Res Judicata

Property Law

Equity

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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…

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.

Continue reading Hill v Love

Details

AGLC: Hill v Love and Another [2018] VSC 29
Case: [2018] VSC 29
Decision Date: 9 February 2018

CaseChat Overview and Summary

Hill v Love was a case before the Supreme Court of Victoria. The primary dispute revolved around the rights and obligations of the parties in relation to two properties, 275 O'Hearns Road and 460 Cooper Street. The plaintiff, Hill, sought to enforce a second-ranking mortgage over 275 O'Hearns Road, arguing for marshalling of assets to recover debts from the defendant, Love, who held a first-ranking mortgage over the same property. Hill also claimed that Love was subrogated to the rights of the Commonwealth Bank of Australia (CBA) in respect of 460 Cooper Street, a property that had been sold prior to Hill's debt arising. The court had to determine whether Hill's debt arose after the sale of 275 O'Hearns Road and if there was any agreement or binding arrangement concerning the order of sale between the parties.

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