KELTON v Brownrigg - [2004] SASC 408

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
KELTON v BROWNRIGG
Judgment of The Honourable Justice Perry
7 December 2004
REAL PROPERTY - GENERAL PRINCIPLES - INCIDENTS OF ESTATES AND INTERESTS IN LAND - JOINT TENANCY AND TENANCY IN COMMON
REAL PROPERTY - PARTITION OF LAND - PARTITION OR SALE IN PARTITION ACTION OR SUIT
The plaintiff claimed an order for sale of a suburban house property owned by him and the defendant as tenants in common, and division of the proceeds between them - the parties contributed in unequal amounts towards the purchase of the property, and financed the balance of the purchase price by way of an unsecured loan from a friend - the parties cohabited in the property for less than two months before separating, and the defendant has had exclusive occupation of the property since then - a third party has offered to buy the property for $180,000, which is more than the parties paid to buy it - discussion of the nature of the equitable jurisdiction pursuant to which orders for partition or sale may be made under Part 8 of the Law of Property Act 1936 - held that in the circumstances the appropriate order was that the defendant be given an opportunity to purchase the plaintiff’s share of the property for the amount which he contributed to the purchase of it, together with one half of the net equity in the property, assuming a notional value of $180,000, and that in default of purchase by her on those terms, that the property be sold to the third party who had offered to buy it, or if he was no longer willing to do so, that the property be put up for sale by public auction and the net proceeds divided on the same basis.
Law of Property Act 1936, Part 8, s 71 and s 83, referred to.
Chatterton v Chatterton and Anor (1989) 52 SASR 337; Sidney Smith, Principles of Equity page 210; Story, Equity Jurisprudence 14th ed, 1918, Ch xiv ; Croghan v Grosvenor (1991) 57 SASR 545; Story v Johnson 160 ER 529; Leigh v Dickeson (1884) 15 QBD 60; Brickwood v Young (1905) 2 CLR 387; Waite v Bingley (1882) 21 Ch D 674, considered.

KELTON v BROWNRIGG
[2004] SASC 408
Civil

PERRY J. The plaintiff and the defendant own a house property at 9A Marlow Road, Keswick, as tenants in common. The plaintiff claims an order for sale of the property and division of the proceeds between them.
The claim is brought pursuant to Part 8 of the Law of Property Act 1936 (“the Act”) which deals with proceedings for partition or sale.
As will be seen, the plaintiff claims to be entitled to more than an equal share of the proceeds of sale, should sale be ordered.
For a time, the plaintiff and the defendant cohabited together in the subject property. They parted in circumstances which were less than harmonious.
The case proceeded on…

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 KELTON v Brownrigg

Details

AGLC: KELTON v Brownrigg [2004] SASC 408
Case: [2004] SASC 408
Decision Date: 7 December 2004

CaseChat Overview and Summary

The case of Kelton v Brownrigg involved a dispute between two tenants in common of a suburban house property. The plaintiff sought an order for the sale of the property and division of the proceeds between them, as the parties had contributed unequal amounts towards the purchase of the property and financed the balance through an unsecured loan. The defendant had exclusive occupation of the property since the parties separated, and a third party offered to buy the property for $180,000, which was more than the parties initially paid. The court had to decide on the appropriate order for the sale of the property and division of the proceeds, considering the equitable jurisdiction under Part 8 of the Law of Property Act 1936.

The court considered the nature of the equitable jurisdiction, which allows for orders for partition or sale, and whether it was appropriate to fashion an order that gave the defendant an opportunity to purchase the plaintiff’s share of the property. The court also had to determine whether any increase in the notional value of the property over and above the parties’ cash contributions to its purchase should be shared equally between them. The court had to weigh the parties’ contributions, the repayment of the loan, and the short period of time the parties had cohabited in the property.

The court concluded that the appropriate order was for the defendant to be given an opportunity to purchase the plaintiff’s share of the property for the amount she contributed to the purchase of it, together with one half of the net equity in the property, assuming a notional value of $180,000. If the defendant did not purchase the plaintiff’s share on these terms, the property should be sold to the third party who had offered to buy it, or if he was no longer willing to do so, the property should be put up for sale by public auction and the net proceeds divided on the same basis. The court also considered the contributions of the parties towards the purchase of the property, the repayment of the loan, and the short period of time the parties had cohabited in the property.

The court ordered that the defendant be given an opportunity to purchase the plaintiff’s share of the property for the amount she contributed to the purchase of it, together with one half of the net equity in the property, assuming a notional value of $180,000. If the defendant did not purchase the plaintiff’s share on these terms, the property should be sold to the third party who had offered to buy it, or if he was no longer willing to do so, the property should be put up for sale by public auction and the net proceeds divided on the same basis.

Orders

Orders of the court

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Background

Background to the litigation

Having regard to the defendant’s demeanour when giving evidence and the manner in which she conducted her case, and my view of the plaintiff’s credit, I prefer the evidence of the plaintiff where it is necessary to choose between the account given by each of the parties. In reaching that view, I take into account also the nature of the very extensive correspondence which passed between the parties before the proceedings were instituted.Background The parties met in 1998 and cohabited together in Melbourne between September of that year and January 2000, when the plaintiff moved to Adelaide. The defendant came to Adelaide in December 2002, after she had asked the plaintiff to give their relationship a second chance. For the next twelve months the defendant lived with the plaintiff in a property which the plaintiff was renting. In December 2003, despite some tensions which had arisen in their relationship, the parties agreed to buy the subject house property. It was purchased by them at auction on 10 December 2003 for a price of $163,750. Settlement of the purchase took place on about 12 January 2004. The parties moved in a few days later. Including stamp duty and other fees and adjustments, the total amount paid by the parties on settlement of the sale was $170,775.64. The plaintiff paid $59,282.82 from his own moneys, and the defendant contributed $51,500.32. To make up the balance of the amount due at settlement, the parties borrowed $60,000 from a friend of the defendant, Alan Herriman. At times, the defendant has said that the loan was to her rather than to both of the parties. Nothing turns on that issue, as both parties agree that if the property is sold, the loan should be repaid from the proceeds. The loan was unsecured. Furthermore, according to the evidence of both the plaintiff and the defendant (I have not heard from Mr Herriman), the loan was interest free for one year, that is, until January 2005. The parties were registered on the title as tenants in common. The search copy of the Certificate of Title tendered in evidence, records the plaintiff and the defendant each as registered proprietors of one undivided second part. The title search does not indicate that the title describes them in as many words as tenants in common, which historically was the way in which the Registrar General would record such an interest on the title. I accept the intimation of Mr Jamison, of counsel for the plaintiff, that the words used on the title reflect current conveyancing jargon for a tenancy in common. The parties’ cohabitation in the subject premises was short lived. On 1 April 2004 in the Magistrates Court sitting at Adelaide, the defendant obtained an apprehended domestic violence restraining order directed to the plaintiff, which, amongst other things, restrained the plaintiff from being on the subject premises. He left the premises on or about that date. He has not cohabited with the defendant since then. I accept the evidence of the plaintiff that on 8 April 2004 he offered to sell his share in the house to the defendant for $65,000, and that the offer was refused.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

PERRY J

Confirmation of the breadth of the equitable jurisdiction which may be exercised under Part 8 of the Act appears from the decision of Debelle J in Croghan v Grosvenor.[5] In that case, Debelle J said:“… equity did not regard itself as bound by the interests of the parties. It had regard also to what the parties had respectively expended when determining the partition or, if that could not be done, by ordering compensation. As was said in Story v Johnson,[6] a court of equity will, on a bill for partition, adjust the equitable rights of all the parties interested in the estate. …Thus, in a suit for partition, it was usual to have an inquiry, if necessary, as to the respective rights and interests of the parties, and regard would be had to what had been expended including expenditure on improvement or repair: see also Leigh v Dickeson[7] cited with approval in Brickwood v Young.[8] For an example of a case where inquiries were conducted on a number of matters including inquiries as to the persons interested, their respective shares and proportions, and whether it was desirable to sell the subject property, see Waite v Bingley.[9] The jurisdiction exercised by the Courts of Equity to determine, where the parties did not agree, the share to which each party was entitled and to achieve equality of partition by decreeing pecuniary compensation to one of the parties is a jurisdiction which, of course, has survived to be exercised by the Supreme Court as a court of law and equity.”[5] (1991) 57 SASR 545.[6] (1837) 2 Y & C Ex 586; 160 ER 529.[7] (1884) 15 QBD 60 at 67.[8] (1905) 2 CLR 387 at 394.[9] (1882) 21 Ch D 674.Conclusion I have already indicated that in my view it is within the power of the court to fashion an order which would give to the defendant an opportunity to purchase the plaintiff’s share in the property, on the footing that if she failed to do so, Mr Kaplan would have the right to buy the property. The case is unusual in that no evidence as to the present value of the property was led by either party. The reason is that both parties have proceeded on the basis that the offer by Mr Kaplan of $180,000 represents a fair value for the property. Bearing in mind the relatively short period of time which has elapsed since the property was purchased, the even shorter period of time during which the parties cohabited in the property, and the other relevant circumstances, it seems to me that an equitable result would be an order which in the first place reimbursed the parties for the moneys which were actually contributed by them towards the purchase of the property. If the parties’ contributions to the purchase were to be satisfied, and an allowance made for repayment of the loan advanced by Mr Herriman, there would be a balance of the order of $9,000, assuming a value of $180,000. In my view, any increase in the notional value of the property over and above the parties’ cash contributions to its purchase, should be shared equally between them.

Ratio Decidendi

Legal Principle Established

Established by: PERRY J

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