Leane v Dalbon

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST

S ECI 2019 03947

WENDY ALICE LEANE	Plaintiff
v
HUGO JOSEPH DALBON	Defendant

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	18 June 2020
DATE OF JUDGMENT:	29 July 2020
CASE MAY BE CITED AS:	Leane v Dalbon
MEDIUM NEUTRAL CITATION:	[2020] VSC 461

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PRACTICE AND PROCEDURE – Setting aside judgment obtained in the absence of the defendant – Extending time within which to do so – Summary order of the Court that the plaintiff recover possession of property – Defendant failed to attend trial – Whether time should be extended – Whether order for possession should be set aside – Time extended and order set aside – Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 49.02, r 3.02 – Rosing v Ben Shemesh [1960] VR 1738, Xiao Hui Ying v Perpetual Trustees Victoria Ltd [2012] VSCA 316 applied – Vimplane Pty Ltd v Cirss [2005] VSC 45 considered.

PROPERTY LAW AND TRUSTS – Resulting or constructive trust and proprietary estoppel – Whether facts support a prima facie case for the recognition of a resulting or constructive trust or a proprietary estoppel – Prima facie case established – Muschinski v Dodds (1985) 160 CLR 583; Baumgartner v Baumgartner (1985) 160 CLR 583; Giumelli v Giumelli (1999) 196 CLR 101; Sidhu v Van Dyke (2014) 251 CLR 505 Donis v Donis (2007) 19 VR 577 referred to.

ESTOPPEL – Former adjudication – Whether summary order for recovery of possession of land on basis that occupier is a trespasser creates an issue estoppel precluding defendant from claiming a proprietary interest in the land in proceedings in the County Court – Whether the existence of the issue estoppel warrants the setting aside of the order for possession – Blair v Curran (1939) 62 CLR 464; Ramsay v Pigram (1968) 118 CLR 271; Linprint Pty Ltd v Hexham Textiles Pty Ltd (1991) 23 NSWLR 508 referred to.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms M Rozner	Palmer Stevens & Rennick
For the Defendant	Mr G Lubofsky	Catcher Legal Pty Ltd

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Principles under r 49.02..................................................................................................................... 3

Mr Dalbon’s evidence and submissions....................................................................................... 6

Prima facie case in defence of the claim.................................................................................... 6
Reason for absence and delay..................................................................................................... 9
Prejudice....................................................................................................................................... 12

Plaintiff’s evidence before Mukhtar AsJ..................................................................................... 14

The Order and the reasons............................................................................................................. 16

Evidence since the Order of Mukhtar AsJ.................................................................................. 18

Plaintiff’s submissions................................................................................................................... 21

Res judicata and issue estoppel................................................................................................. 22
Prima Facie Case on the merits................................................................................................. 23
Reason for absence and delay................................................................................................... 25
Prejudice....................................................................................................................................... 27

Consideration.................................................................................................................................... 29

Issue estoppel............................................................................................................................... 29
Prima facie case in defence of the claim.................................................................................. 34
Resulting trust.................................................................................................................... 34
Constructive trust.............................................................................................................. 37
Common intention constructive trust............................................................................ 38
Proprietary estoppel.......................................................................................................... 39
Consideration – arguable defence to the claim for possession................................... 42

Reason for absence and delay................................................................................................... 44
Prejudice....................................................................................................................................... 47

The discretion................................................................................................................................... 48

Costs.................................................................................................................................................... 49

Conclusion......................................................................................................................................... 50

HIS HONOUR:

Introduction

The defendant applies pursuant to r 49.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) to set aside the order of Mukhtar AsJ that the plaintiff recover possession of a property from the defendant (Order).[1] The defendant also seeks an extension of time in which to file his application.
[1]The Order was made pursuant to Order 53 of the Rules.

The Order was made on 26 September 2019, and enabled the plaintiff (‘Ms Leane’) to recover possession of the property at 160 Cranneys Lane, Trentham (‘Property’) pursuant to Order 53 of the Rules. The Order was made in the absence of the defendant (‘Mr Dalbon’) and of any evidence filed on behalf of Mr Dalbon. The reasons for the Order were set out in a Statement of Reasons attached to it (Reasons).

Mr Dalbon’s summons, dated 4 June 2020, seeks to set aside ‘the Ruling’, which I take to mean the Reasons, pursuant to r 49.02(2) of the Rules, and for that purpose seeks an order extending the time within which he is permitted to apply to do so under r 3.02. The Reasons, however, are just that: the reasons for the Order. They are not capable of being set aside. It is the Order that must be set aside. This was acknowledged by Counsel for Mr Dalbon in the course of the hearing.

Mr Dalbon relies on his affidavit sworn 4 June 2020 (First Dalbon Affidavit) which sets out the basis for Mr Dalbon’s asserted interest in the Property, the reasons for his absence from the hearing before Mukhtar AsJ, the background to this application, as well as the purpose of this application in the context of the sale of the Property and the ownership of the proceeds of sale. He also relies on his affidavit made on 17 June 2020 in answer to an affidavit of Ms Leane (Second Dalbon affidavit).

The application is opposed by Ms Leane, who relies on her affidavit made on 22 August 2019 in support of the original application to recover possession (First Leane affidavit), and a second affidavit in opposition to this application made on 12 June 2020 (Second Leane affidavit).

The express purpose of this application is to enable Mr Dalbon to claim an entitlement to the proceeds of the sale of the Property, which was due to settle on 26 June 2020, in proceedings commenced by him in the County Court in the following circumstances:

(a) on 26 February 2020, following the Order for possession, Mr Dalbon was evicted by the Sheriff from the Property. That day Mr Dalbon lodged a caveat over the Property asserting an interest as beneficiary under an implied, resulting or constructive trust;[2]
[2]First Dalbon affidavit, [23]; Exhibit HJD-3.

(b) on 16 March 2020, Mr Dalbon received a notice under s 89A of the Transfer of Land Act 1958 (Vic) requiring him to bring proceedings to enforce his interest or the caveat would lapse;

(c) on 20 April 2020, pursuant to that notice, Mr Dalbon brought proceeding CI‑20-01707 in the County Court of Victoria seeking a declaration regarding his ownership of the Property.[3] In truth it seeks a great deal more than that, but it was acknowledged by Counsel for Mr Dalbon at the hearing that the statement of claim must be amended to limit the claim to an interest in the Property and the proceeds of its sale;[4]

(d) on 15 May 2020, Ms Leane entered into a contract to sell the Property for $430,000.[5] On 26 May 2020, she sought summary judgment against Mr Dalbon in the County Court proceedings. On 1 June 2020, that application was stayed pending determination of this application and on the condition that Mr Dalbon withdraw the caveat from the title;[6] and

(e) the settlement of the sale of the Property was scheduled to take place on 26 June 2020 (and presumably has settled by now), following which Ms Leane’s solicitors will hold the proceeds of sale on trust.

[3]First Dalbon affidavit, [24]; Exhibit HJD-4.

[4]The plaintiff submitted that Mr Dalbon’s claim that he no longer seeks possession of the Property is inconsistent with the claim in the County Court writ and statement of claim, as undoubtedly it is.

[5]First Dalbon affidavit, [26]; Exhibit HJD-5.

[6]First Dalbon affidavit, [27]-[28]; Exhibit HJD-6.

Mr Dalbon does not seek to set aside the Warrant of Possession granted by the Court on 14 February 2019, nor does he seek that possession of the Property be reinstated to him. Instead, he seeks that the Order be set aside so that he is not estopped or otherwise prevented from seeking a declaration in the County Court proceedings regarding the nature of his interest in the Property (and, consequently, his entitlement to the proceeds of sale of the Property).[7]
[7]First Dalbon affidavit, [30].

Although the Order was made summarily and without Mr Dalbon’s appearance, his contention is that it involves a final finding of law concerning the parties’ respective interests and will therefore operate to prevent Mr Dalbon from asserting a contrary interest in the County Court proceeding.[8] I will return to this issue as it needs further elucidation.
[8]See Linprint Pty Ltd v Hexham Textiles Pty Ltd (1991) 23 NSWLR 508, 518 (Linprint).

Principles under r 49.02

Rule 49.02(2) permits the Court to set aside a judgment, order or verdict obtained where a party is absent at trial. Rule 49.02(3) requires such an application to be made within 14 days of the date of the trial, although the Court retains a residual discretion to extend that time period pursuant to r 3.02(1).[9]
[9]Crotty v Clarke (1896) 22 VLR 594, 606; Vimplane Pty Ltd v Cirss [2005] VSC 45 at [29] (Vimplane).

The Court has a broad discretion under r 49.02 to set aside a judgment or order made at a trial in the absence of a party. Although the Court is not confined in its assessment of whether to set aside its decision, the Victorian Court of Appeal in Rosing v Ben Shemesh,[10] following the decision of the United Kingdom Court of Appeal in Grimshaw v Dunbar[11] set out four considerations as being relevant to the Court’s exercise of discretion. I will adopt the summary given by Habersberger J in Vimplane as follows:[12]
[10][1960] VR 1738, and affirmed in Xiao Hui Ying v Perpetual Trustees Victoria Ltd [2012] VSCA 316 (Xiao).
[11][1953] 1 QB 408.
[12][2005] VSC 45 at [34].

(a) the reason why the party failed to appear when the case was heard;

(b) whether there has been any delay by the absent party in making the application;

(c) whether the other party would be prejudiced by a new trial in any respect which could not be adequately compensated by a suitable award of costs and the giving of security; and

(d) a prima facie case on the merits.[13]

[13][1960] VR 173 at 176 per Herring CJ, O'Bryan and Dean JJ. See also Vacuum Oil Pty Co Ltd v Stockdale (1942) 42 SRNSW 239 at 243 per Jordan CJ with whom Davidson and Roper JJ concurred; Vimplane [2005] VSC 45 at [34].

The exercise of the discretion under r 49.02 is necessarily based on the facts of the individual case.[14] As such, the exercise of discretion in other similar cases can be used as a general guide only. In addition, the Court of Appeal in Xiao Hui Ying v Perpetual Trustees Victoria Ltd[15] noted that placing too much emphasis on one of the factors listed in Rosing, and not on the others, can result in an error.[16] In this connection the Court referred to what was said by the Full Court in Kostokanellis v Allen,[17] quoting Smith J in Shepperdson v Lewis,[18] that:

…the adoption of a formula created by erecting what are merely relevant factors into arbitrary principles so as to allow the automatic production of a solution in all but the exceptional case, is a quite fallacious approach to the exercise of a discretion.

[14]See generally Xiao [2012] VSCA 316.

[15][2012] VSCA 316.

[16]Xiao [2012] VSCA 316, [58], [61].

[17][1974] VR 596 at 605; Ying [70].

[18][1966] VR 418 at pp. 423-4.

It is thus important to recognise that although the Courts have laid down for themselves rules to guide them in the normal exercise of their discretion, the discretion is in terms unconditional.[19] The question in the end is whether, upon the material advanced by the defendant, there is a real likelihood that it would be unjust to the defendant to allow the judgment to stand. If so, it should be set aside on such terms as will minimise the possibility of injustice to the plaintiff.[20] This involves weighing up the extent to which the defendant is prejudiced by allowing the order or judgment to stand and the prejudice to the plaintiff in setting them aside. In many cases the situation will be that the plaintiff will not suffer any prejudice that cannot be remedied by an appropriate order as to costs.[21]
[19]See Evans v Bartlam, [1937] AC 473, 479-80 (Atkin LJ); Kostakanellis v Allen [1974] VR 596, 603.
[20]Vacuum Oil Pty. Co. Ltd. v Stockdale (1942) 42 SR (NSW) 239, 243-4 (Jordan CJ).
[21]Kostakanellis v Allen [1974] VR 596, 605 (Gowans, Crockett and Harris JJ).

With respect to the extension of time in which to bring the summons, such a decision is also discretionary – and the overriding principle is what the interests of justice require.[22] The recognised factors with respect to the exercise of that discretion broadly overlap with those to be taken into account by the Court in determining its discretion under r 49.02, being the length of the delay, the reason for the delay, whether there is an arguable case and the extent of any prejudice to the other party.[23] In practice, Courts have considered the two aspects as part of the same exercise of discretion.[24]
[22]Jackamarra v Krakouer (1998) 195 CLR 516, 527 (Gummow and Hayne JJ); 539 (Kirby J).
[23]Palata Investments Ltd v Burt & Sinfield Ltd [1985] 1 WLR 942; Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196; Jackamarra v Krakouer (1998) 195 CLR 516 at 542-543 per Kirby J and State of Victoria v Davies (2003) 6 VR 245 at [23] per Batt JA; Vimplane [2005] VSC 45 at [29].
[24]Vimplane [2005] VSC 45 at [29].

It is clear law that there is no point in granting the defendants’ application if the case is untenable or hopeless. Conversely, that conclusion cannot be reached on a mere conflict of affidavits.[25] The appropriate test (given the changes brought about to the test for applications for summary judgment by the CPA) is whether the merit of the absent parties’ case can be described as one having a real as opposed to fanciful prospect of success.[26]
[25]Vimplane [2005] VSC 45 [38].
[26]Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158.

Mr Dalbon’s evidence and submissions[27]
[27]This summary and references to the evidence are adopted from the written submission of Counsel for Mr Dalbon which proved accurate and helpful.
Prima facie case in defence of the claim

Mr Dalbon’s submits that the evidence raises a bona fide claim in respect of his beneficial interest in the Property. He maintains the interest is as to 50 per cent, alternatively 100 per cent, of the Property.[28] He has deposed to the following facts:
[28]Mr Dalbon’s submissions dated 15 June 2020, [12].

(a) the Property was purchased in 1989 and was intended to be his and Ms Leane’s ‘matrimonial’ home (albeit, in the context of a de facto relationship) in which Mr Dalbon and Ms Leane would raise Ms Leane’s two young children;[29]
[29]First Dalbon affidavit, [3].

(b) the Property was registered in Ms Leane’s name only so that the couple could take advantage of the first home buyers’ grant, and not because of any intention that the Property belong to Ms Leane absolutely;[30]
[30]First Dalbon affidavit, [4].

(c) Mr Dalbon and Ms Leane contributed approximately equally to the purchase price of the Property (Mr Dalbon from his savings and Ms Leane from her entitlement under the home buyers’ grant);[31]
[31]First Dalbon affidavit, [5].

(d) during their relationship he says they both paid the mortgage and all rates and outgoings together, and together looked after the Property. He says Ms Leane never said anything about the house belonging to her alone, and he continued to believe that it belonged to them both as ‘partners’;[32]
[32]First Dalbon affidavit [6].

(e) although Ms Leane was originally named solely on the CBA loan and mortgage (because she was to be the sole legal owner), Mr Dalbon was subsequently added as a joint borrower because of two neighbouring properties purchased jointly by Mr Dalbon and Ms Leane.[33] Ms Leane and Mr Dalbon continued to pay down the loan together, as they had before;[34]
[33]First Dalbon affidavit, [7].
[34]First Dalbon affidavit, [7].

(f) Mr Dalbon and Ms Leane both lived in a domestic relationship and raised Ms Leane’s children in the Property for the next 20 or so years, between 1987 and 2009.[35] Ms Leane says that they separated in 1997 but continued to live under the same roof. That is not correct. They stayed together as a couple until 2009;[36]
[35]First Dalbon affidavit, [6]-[8].
[36]First Dalbon affidavit, [8].

(g) after their relationship ceased in 2009, Ms Leane vacated the Property and left Mr Dalbon with the mortgage obligations and said to Mr Dalbon that ‘you can have the lot, I am going’;[37]
[37]First Dalbon affidavit, [10]-[12].

(h) at the time that Ms Leane and Mr Dalbon separated, they were heavily in debt and the monthly mortgage payments were approximately $2,200 per month. Ms Leane left that to Mr Dalbon to pay and did not contribute to the mortgage after she left. Mr Dalbon was not able to meet the mortgage payments by himself and later that year, they agreed to sell the adjoining land that they had together purchased (comprising 104 and 154 Cranneys Lane) (referred to below as the Adjoining Block) and to use the proceeds to pay down the CBA loan. Mr Dalbon then alone made the mortgage repayments, and maintained the Property, on the understanding that he was the sole owner of the Property, until he was evicted by the Sheriff in February 2020;[38]

[38]First Dalbon affidavit, [13].

(i) he denies the evidence by Ms Leane that they reached an oral agreement that he could continue to live at the Property after their separation as a licensee and on the condition that he paid the mortgage and all outgoings. He denies that any such conversation took place. At all times from 2009, he understood that the Property belonged to him alone;[39]

(j) a few years after Ms Leane left the Property, she asked Mr Dalbon whether they should transfer the Property into his name. She said that she wanted to take out a loan in her name but because Mr Dalbon was behind in payments to the CBA on their joint loan and mortgage, it was difficult for her to do so. Mr Dalbon said to her that he was happy to leave the Property in her name and trusted that she would not take advantage of that. Mr Dalbon thought he would be able to live out his days at the Property;[40] and

(k) from time to time in 2016 and 2017, Mr Dalbon received letters from Ms Leane’s lawyers about not having paid the mortgage and rates on the Property. Mr Dalbon would generally call Ms Leane in response to those letters and tell her that he would be able to catch up on those payments, as he always did. Although Ms Leane’s lawyers said that she was the owner of the Property, Mr Dalbon did not think that was the case because of their conversations and the fact that he had been paying the mortgage for so long. Mr Dalbon did not think that she was going to try and take the Property from him.[41]

[39]First Dalbon affidavit, [14].

[40]First Dalbon affidavit, [15].

[41]First Dalbon affidavit, [16].

The parties’ relationship ended in 2009 and it is now highly unlikely that Mr Dalbon would be entitled to a division of the Property pursuant to s 79 of the Family Law Act 1975 (Cth). However his evidence, if accepted, is sufficient to give rise to:

(a) a common intention constructive trust on the basis of the parties’ common intention that the Property would belong to both of them, which intention was relied upon by Mr Dalbon in not seeking to register the Property in his name and in paying the mortgage for such a considerable period;[42] or

(b) a resulting trust arising from Mr Dalbon’s contributions to the purchase price of the Property which were not reflected in his share of ownership of the Property.[43]

[42]Ogilvie v Ryan [1976] 2 NSWLR 504; Hohol v Hohol [1981] VR 221, 225.

[43]Calverley v Green (1984) 155 CLR 242, 246.

Ms Leane’s evidence before Mukhtar AsJ[44] contradicts a number of aspects of Mr Dalbon’s evidence. But even on Ms Leane’s evidence she accepts that:
[44]Which is found in her affidavit sworn in the proceeding on 22 August 2019.

(a) the Property was purchased seven years after Ms Leane and Mr Dalbon commenced their relationship;

(b) Mr Dalbon lived in the Property for approximately 30 years;

(c) Ms Leane left the Property in 2009 and left the mortgage obligations to Mr Dalbon; and

(d) between 2009 and Mr Dalbon’s eviction in February 2020, Mr Dalbon made all mortgage repayments, as well as the payment of all rates and outgoings, and Ms Leane did not contribute to those payments.

Although there is plainly a dispute over the beneficial ownership of the Property, the circumstances set out above—together with the admissions made by Ms Leane—give rise to a serious case to be tried as to Mr Dalbon’s interest in the Property.

Reason for absence and delay

In October 2018, Mr Dalbon was served with an application by Ms Leane in the Victorian Civil and Administrative Tribunal (VCAT) in which she sought to take possession of the Property. Mr Dalbon did not seek legal advice at the time of the VCAT hearings. He went to the VCAT hearing in Ballarat, the first time Ms Leane’s application was listed to be heard. Ms Leane and her solicitors did not come to that hearing. The VCAT member adjourned the application. On the next date, he went again to Ballarat to VCAT, but the application was adjourned because there was not enough time left to hear the matter. He did not appear at the final hearing but VCAT sent him a notification that it had dismissed the application.[45]
[45]First Dalbon affidavit [17]-[18].

Mr Dalbon was aware that Ms Leane was having financial difficulties and wanted to sell the Property, but thought that if she succeeded in doing so he would receive from the sale of the Property the money he was entitled to. He did not want the Property to be sold but did not have any money to engage solicitors.[46]
[46]First Dalbon affidavit [19].

On 4 September 2019, Mr Dalbon was served with the originating motion and affidavit in support by which Ms Leane sought the recovery of possession of the Property. Mr Dalbon did not seek legal advice about the proceeding or file evidence or participate in the proceeding because he believed that the proceeding, like the application before VCAT, would be dismissed on the basis that he owned or had an interest in the Property. He had never been involved in legal proceedings of this kind before the VCAT application and did not understand how the process worked. He thought that because Ms Leane moved out so long ago and he had kept up the Property for so long, that the Court would not agree with the application. He left school after Form 5 and is not a sophisticated person. He is now aware that he was naive about the legal process and what would happen.[47]
[47]First Dalbon affidavit [20].

He received a copy of the Court’s Orders on 7 October 2019 and a copy of the Warrant of Possession the following month. He understood that there was a chance that he was going to lose the Property. He spoke to a neighbour, Richard Hobson, who is a solicitor, and asked him for advice about what he should do. Mr Hobson told him that this was not his area of practice and he spent some time trying to find somebody that was able to help him. Mr Dalbon is not familiar with the legal process and did not know what he needed to do in response to the Warrant.[48]
[48]First Dalbon affidavit [22].

He was evicted by the Sheriff from the Property on 26 February 2020. On that day, Mr Hobson made arrangements for a caveat to be lodged on the title of the Property on the basis that Mr Dalbon owned the Property. On 16 March 2020, he received a notice under s 89A of the Transfer of Land Act 1958 (Vic) which required him to either bring proceedings to enforce his interest claimed in the Caveat or it would lapse. Shortly after receiving this notice, Mr Hobson put him in touch with his present solicitors, Catcher Legal. He instructed that firm to commence the County Court proceeding.

The reasons for Mr Dalbon not appearing at the trial before Mukhtar AsJ are broadly threefold:

(a) he did not understand the significance of either the original VCAT hearing or the Supreme Court proceeding, nor what the potential repercussions of those hearings were. Mr Dalbon is not sophisticated and did not complete high school, and was not familiar with the legal system. He understood that the Court would ensure that he obtained funds from any sale of the Property given his assumed entitlement;

(b) he did not have the funds to engage solicitors to provide him with advice with respect to the proceedings or the requirement that he appear at the applications.[49] This left Mr Dalbon in the dark as to what the consequences of the proceeding were and the fact that his non-participation might lead to him losing the Property in its entirety; and

(c) the previous proceedings which Ms Leane brought in VCAT had been struck out without Mr Dalbon’s participation at the hearing on 8 February 2019.[50] This led Mr Dalbon to believe that the Supreme Court proceedings would likewise be dismissed.[51] Ms Leane notes in her affidavit that the VCAT proceeding was dismissed on a technicality, namely, lack of compliance of the Notice to Vacate with s 506(3) of the Residential Tenancies Act 1996 (Vic).

[49]First Dalbon affidavit, [19].

[50]Leane affidavit; Exhibit WAL-8; Dalbon affidavit, [18].

[51]First Dalbon affidavit, [20].

Mr Dalbon submits that these explanations must be given weight by the Court. Clearly, Mr Dalbon ought to have attended the trial, but the Court must also take into account Mr Dalbon’s background and the circumstances in which he found himself. His actions must be considered having regard to his personal circumstances, degree of sophistication and financial resources, and not by how sophisticated litigants would be expected to act.

As for delay, it is accepted that Mr Dalbon did not take steps to either assert his interest in the Property or set aside the Order until such time as he was evicted from the Property. Mr Dalbon sought advice in November 2019, but was not provided with any advice for some time and was not directed to his present solicitors until April 2020.[52] Mr Dalbon lodged a caveat immediately upon his eviction and brought the County Court proceedings not long afterwards. Although those steps were not directed specifically towards setting aside the Order, they were directed to asserting and determining his interest in the Property and bringing the parties’ dispute before the Court. That the Order needs to be set aside as a procedural precondition does not change the character of those actions.
[52]First Dalbon affidavit, [22].

Although the delay is not insignificant, it is explicable by its context. Mr Dalbon was not informed of the procedure that was taking place, the consequences of his inaction or the steps needed to be undertaken to remedy his situation. He acted promptly upon his eviction once those matters became clear to him and he received more targeted advice.

Prejudice

Mr Dalbon submits that there is no prejudice to Ms Leane by this application insofar as Mr Dalbon is not seeking a rehearing of Ms Leane’s underlying Order 53 application. Instead, the Order is being set aside for the sole purpose of enabling Mr Dalbon to seek a declaration regarding his interest in the Property in the County Court.

Because the Order 53 procedure is a summary procedure, had Mr Dalbon raised the issues set out in his affidavit before Mukhtar AsJ, it is likely that Ms Leane’s application would either have been dismissed or ordered pursuant to r 4.07 of the Rules to proceed as if commenced by Writ so that the claim to possession and a counterclaim for a proprietary interest in the Property could be determined after pleadings and discovery and according to the usual trial procedure. The mechanism by which Ms Leane sought to seek possession—an application pursuant to Order 53—would not have been an appropriate means of resolving the parties’ respective interests because it is reserved for clear or undisputed cases where there is no question to try.[53] Accordingly, had Mr Dalbon participated in the original proceeding, the parties would have been in the same situation that they are now, and would be forced to undertake pre-trial processes and participate in a full trial so as to determine their respective interests.
[53]Framlingham Aboriginal Trust v McGuiness and Chatfield [2014] VSC 241.

Mr Dalbon accepts that Ms Leane will be somewhat delayed in her ability to enjoy any proceeds of sale to which the Court might determine she is entitled. However, that is not prejudice of the kind to which the relevant test is directed. The original hearing was undertaken summarily, on a single day, without Ms Leane having given evidence in person. There was not, therefore, a lengthy, expensive or challenging trial that may now need to take place again. Further, a trial on the merits is the same process that Ms Leane would have been required to have undertaken in any event.

In short, Ms Leane will suffer no prejudice by having the Order set aside other than the costs of appearing at the hearing before Mukhtar AsJ, and a period of delay. By contrast, the prejudice to Mr Dalbon is extreme. Mr Dalbon has deposed to his financial circumstances in his affidavit and has sworn that he has effectively no assets outside of his equity in the Property.[54] His evidence is that if he is not permitted to enforce his interest in the Property in the County Court proceedings, he will be penniless and will need to rely on the goodwill of friends to subsist.[55] Mr Dalbon is now 65 and although he still earns an income from fencing, that income is not reliable and Mr Dalbon suffers back issues which will make it difficult to continue that work.[56] That constitutes significant prejudice for the purposes of the Court’s exercise of discretion.
[54]First Dalbon affidavit, [31]-[32].
[55]First Dalbon affidavit, [31].
[56]First Dalbon affidavit, [32].

The proper course for the Court to take is to set aside the Order and permit the parties to determine the extent of their interests in the Property in the County Court.

Plaintiff’s evidence before Mukhtar AsJ

In her first affidavit, Ms Leane gave evidence to the following effect:

(a) she purchased the Property in about October 1988 for $24,000 in the name Wendy Alice Notley-Dalbon. The name ‘Notley-Dalbon’ was a combination of her married name from her first marriage (which had ended by the time she met Mr Dalbon), and Mr Dalbon’s surname, which she took whilst they were together in a relationship. Her maiden name was ‘Leane’ which she now uses;

(b) she paid the deposit of $2,300.00 to purchase the Property from her savings and borrowed $21,700.00 from the State Savings Bank of Victoria (“SSBV”). The loan from SSBV was secured by a mortgage over the Property. In 1990 the SSBV was purchased by the Commonwealth Bank of Australia (CBA) and the mortgage was transferred to CBA;

(c) she moved into the Property in 1989 and lived there with her two children;

(d) she began a relationship with Mr Dalbon in about 1982. They intended to marry;

(e) on about 1 July 1991 Mr Dalbon moved into the Property with Ms Leane and her children as her de-facto partner. The relationship did not work out and they declared themselves separated under the same roof on about 19 June 1997 and Ms Leane went back to using her maiden name;

(f) she was working as a nurse at that time and supporting herself and helping her children financially. Mr Dalbon contributed to household expenses and some maintenance costs. Ms Leane paid the majority of the mortgage, the rates and maintenance costs for the Property;

(g) in about April 2005 Ms Leane and Mr Dalbon borrowed further funds from the CBA to purchase the block of land in Trentham adjoining the Property (the Adjoining Block). It was secured by a mortgage dated 20 April 2005 (over the Property and the Adjoining Block).[57] Her daughter and son moved into the Adjoining Block;
[57]Although this unclear in the First Leane affidavit it is made clearer by the Second Leane affidavit.

(h) by 2007 Mr Dalbon’s drinking had become more excessive and his behavior had become more emotionally abusive and threatening toward Ms Dalbon and she moved out of the Property and into her son’s shed where she lived until April 2008;

(i) at about this time Ms Leane entered into an oral agreement with Mr Dalbon that he could continue to live at the Property and he would pay all mortgage payments, council rates and any other outgoings for the Property whilst he lived there;

(j) after moving out of the Property she resigned from nursing, following an assault at work by a patient, to look after her daughter and was very short of money. She gave away a Cafe she had purchased with an inheritance from her mother and sold the Adjoining Block and the proceeds were used to reduce the mortgage to the CBA;[58]
[58]The First Leane affidavit is unclear as to this point, as there appears to be a passage omitted from the paragraph: [12]. It is made clearer by the Second Leane affidavit, as to which see below.

(k) at the end of 2009, Ms Leane purchased a motorhome and drove to Queensland where she has lived ever since;

(l) Ms Leane has been contacted by the CBA and the Hepburn Shire Council from time to time since 2007 (most recently in January of 2019) advising that mortgage payments or council rates for the Property have not been paid by Mr Dalbon as agreed;

(m) as at 30 June 2019, the total amount owing to the CBA under the mortgage was $65,261.74. The mortgage payments that have been made by Mr Dalbon pursuant to the agreement are about $668 per month;

(n) Ms Leane had been in periodic contact with Mr Dalbon by telephone since 2010. During their conversations she has told Mr Dalbon that she wants to sell the Property as she needed the money and wanted to be free of the debt to CBA. She asked him to vacate the Property to allow agents to value and market the Property. Her efforts to convince Mr Dalbon to vacate the Property were unsuccessful; and

(o) in 2016, she engaged solicitors in Queensland to act on her behalf to obtain Mr Dalbon’s agreement to moving out of the Property so that she could list it for sale. That was unsuccessful. She then engaged Victorian solicitors in February 2018 and they wrote and spoke to Mr Dalbon seeking his agreement to vacate the Property to allow it to be sold. Mr Dalbon refused to do so. In April 2019 the solicitors wrote to Mr Dalbon requesting that he move out of the Property so that Ms Leane could sell it. There was no response from Mr Dalbon.

The Order and the reasons

The Order made by Mukhtar AsJ was in the conventional form prescribed by the Rules[59] and simply entitled Ms Leane to recover possession of the Property. The Order was accompanied by the Reasons which, omitting references to the content of the First Leane affidavit (set out above), in substance concluded that there is no reason or apparent injustice to deny Ms Leane the availability of Order 53 and the making of an order for possession because:
[59]Rule 53.07 and Form 53A.

(a) there was sufficient evidence for the Court to conclude that Mr Dalbon, who was a former de facto partner of Ms Leane, was permitted by her in 2007 to remain living at her property on terms and in circumstances that made him a licensee;

(b) the defendant was given a final request to vacate on 23 April 2019, which he ignored. He acknowledged to the plaintiff’s solicitor receiving the originating motion and he acknowledged the date of the hearing. His stated position was that he may ‘possibly’ be attending the hearing, and ‘may contact a barrister mate’. He did appear nor make any other communication with the Court. The plaintiff was entitled to proceed in his absence;

(c) the last conversation with the defendant showed him to be indifferent about this proceeding. There are no responses from him asserting a proprietary interest or equity in the land to sustain a legal right to remain in possession of land of which the plaintiff is legal owner. As he has not appeared, the Court can only act upon the evidence as adduced in support of the application by the plaintiff;

(d) Order 53 is a summary procedure designed, on its terms, to enable summary recovery of land which is occupied by a person ‘who entered into occupation or, having been a licensee ... remained in occupation without the plaintiff’s licence or consent’. As the order permits a summary determination, it is meant to be used only for cases where there is no disputed questions of fact or substantial questions of law to be investigated;

(e) the defendant has been given every opportunity to state the grounds upon which he would claim an entitlement to remain on the property, but he has simply not done so. What the Court looks for in this situation is a basis for possibly concluding that the rights of the occupant were something more than as a licensee but were maintainable on the basis of some equity giving rise to a proprietary interest to remain on the property. But there is no such evidence here;

(f) in the circumstances, there was no intention to confer a proprietary interest. The obligation incurred by the defendant to pay the mortgage and the rates was the price to be paid for his use and occupation of the property; and

(g) the circumstances come to create a context because of the breakup of the domestic relationship, but there is no evidence that he has ever asserted a proprietary right and he has not appeared in court to do so. Whilst there is always the prospect in these types of cases for a de facto partner to assert an equity in a property the legal ownership of which is in the other partner, the defendant has not taken the opportunity in this case to assert one. His failure to meet his obligation to pay the rent and rates has led to a situation where the mortgagor or the Council are ready to take possession proceedings. The plaintiff wishes to satisfy that distress situation by making her own sale of her land.

Evidence since the Order of Mukhtar AsJ

I have referred above to the evidence given initially by Mr Dalbon in support of this application ([15]-[27]).[60]
[60]The summary and references to the evidence are adopted from the written submission of Counsel for Mr Dalbon which proved accurate and helpful.

In the Second Leane affidavit, Ms Leane address in greater detail the VCAT proceeding, the purchase and financing of the Adjoining Block, the sale of that land and the balance owing on the loan to the CBA secured by the Property and some details of family violence she suffered at the hands of Mr Dalbon. Much of the detail relating to the Adjoining Block, its financing and sale is important to the prospects of Mr Dalbon establishing his entitlement to an equitable interest in the Property. The evidence by Ms Leane in this affidavit is revealing:

(a) the Adjoining Block comprised two lots at 104 and 154 Cranney’s Lan Trentham on the one title. The land was purchased by both Ms Leane (in her name Notley-Dalbon) and Mr Dalbon in May 2001 for $135,000 using a loan from the CBA. From the subsequent evidence relating to the sale of the land, the loan was apparently secured by mortgage over the Adjoining Block and the Property;

(b) in August 2008 application was made to divide the two lots into separate titles. At this time Ms Leane used her maiden name;

(c) in April 2009 Ms Leane received two notices to pay from the solicitors for the CBA in respect of the loan secured by the Adjoining Block and the loan secured by the Property. This lead to a decision to sell the Adjoining Block. They engaged an agent to sell 104 and 154 Cranney’s Lane in March and April 2009, respectively;

(d) in March 2010 154 Cranney’s Lane was transferred to a purchaser for $215,000, and May 2010 104 Cranney’s Lane was transferred for $220,000. The net proceeds of the sales was $420,147.50;

(e) on 17 March 2010, the CBA obtained judgment in the County Court in default of appearance, against Ms Leane and Mr Dalbon, for the recovery of possession of the Property together with the outstanding principal, interest and costs amounting to about $292,000; and

(f) the proceeds of sale of the two titles comprising the Adjoining Block were applied in their entirety to the loans due to the CBA, completely paying out the loan secured against the Adjoining Block and substantially reducing the debt on the Property.

I note that Ms Leane includes in her Second affidavit evidence of allegations of domestic violence by Mr Dalbon against her. The allegations are not relevant to the claim by Mr Dalbon to an equitable interest in the Property and are in any event denied in Mr Dalbon’s responsive affidavit – the Second Dalbon affidavit.[61] Because they are disputed it would be inappropriate to set them out in detail in these reasons, save to note that they are mainly allegations of verbal threats of violence and controlling conduct. Were they established they may be relevant to the exercise of the discretion under r 3.02 and r 49.02 of the Rules. It is not, however, possible or appropriate to resolve conflicting evidence given by affidavit in an application of this kind.
[61]Second Dalbon affidavit, [1], [6].

There is no doubt, however, that Ms Leane filed for a Temporary Protection Order under the Queensland Domestic Family Violence Protection Act 2012, which was granted in December 2019.[62] Mr Dalbon sought amendments to the Order, including that the contact and distance restrictions contained within it be removed.[63] The Magistrate refused this application. The matter was listed for mention on 22 June 2020.
[62]Second Leane affidavit, [37]; Exhibit WAL-19.
[63]Leane affidavit, sworn 12 June 2020, 5 [39].

Ms Leane deposed that she wants to have Mr Dalbon ‘out of her life’, and is concerned that if these proceedings continue it will give Mr Dalbon a reason to continue communicating with her, continue his pattern of abuse against her and maintain an element of control over her.[64]
[64]Leane affidavit, sworn 12 June 2020, 6 [45].

I also note that Richard Lander (‘Mr Lander’), who is a Director of RT Edgar Macedon Ranges, and was instructed by Ms Leane to sell the Property filed an affidavit in support of Ms Leane. Mr Lander deposed when he entered the Property on 26 February 2020 it was ‘in a serious state of disrepair, was filthy and junk had been left throughout the house, carport, garden and sheds. It looked like it hadn’t been cleaned for over a decade.’[65] The Property was without power, and was not possible to sell in the condition it was in when Mr Dalbon was evicted.[66] Six weeks of cleaning work was completed on the Property before it was ready for sale, and even then it was in a run-down state.[67]
[65]Lander affidavit, sworn 15 June 2020, 1 [8].
[66]Lander affidavit, 2 [12]-[13].
[67]Lander affidavit, sworn 15 June 2020, 2 [17].

As I have said, Mr Dalbon responded to the Second Leane affidavit. Relevantly for present purposes he corrects various allegations made by Ms Leane as to the balance owing to the CBA after the sale of the Adjoining Block, with supporting bank statements, and verifies that he paid the monthly mortgage loan repayments to the CBA ‘as regularly as possible between 2010 until I was evicted from the Property in February 2020’.[68] He says that he has no intention of contacting Ms Leane any further with respect to the Property, having engaged solicitors to act on his behalf. He says he will not have any reason to be in contact with Ms Leane once the Property is sold, and nor will she with him.[69]
[68]Second Dalbon affidavit, [4].
[69]Second Dalbon affidavit, [8].

Plaintiff’s submissions

Ms Leane submits that Mr Dalbon’s submission that he no longer seeks possession of the Property and limits his claim to an entitlement to the proceeds after settlement of the sale of the Property on 26 June 2019 is inconsistent with the way his case is pleaded in his statement of claim in the County Court. In that claim he seeks 100% of the value of the Property on constructive or resulting trust and to have ownership of the Property transferred into his name. As I have said, Counsel for Mr Dalbon concedes that if the Order is set aside it will be necessary, having regard to the events that have happened, particularly the sale of the Property, to amend the statement of claim in the County Court proceeding.

In Vimplane, Habersberger J considered an application under Rule 49.02(2) of the Supreme Court Rules to set aside a possession order made under Order 53 of the Rules in the absence of the defendant. One of the grounds on which he refused to set aside the order was that even on the best outcome of the proceedings for the applicant, the property would have to be sold and she would not be returned to possession. He found that: ‘in the circumstances, in my opinion, there is no injustice in confining the defendant to a claim for damages, should she choose to commence litigation.’[70]
[70][2005] VSC 45, [42].

Mr Dalbon does not give any reason why he elected to commence proceedings challenging the findings of Mukhtar AJ in the County Court rather than challenging His Honour’s Order in this Court. He gives no reason why the County Court is the appropriate jurisdiction to hear his claim for an interest in the proceeds of sale of the Property if the Order is set aside.

Res judicata and issue estoppel

Mr Dalbon submits that he must set aside the Order of Mukhtar AsJ so that he is not estopped or otherwise prevented from seeking a declaration in the County Court proceedings regarding the nature of his interest in the Property (and consequently his entitlement to the proceeds of sale of the Property).

Ms Leane submits, however, that the decision of Mukhtar AsJ would not stand in the way of a claim under the Family Law Act 1975 (Cth) (FLA) or the Relationships Act 2008 (Vic) (RA). In support of that submission she submits that:

(a) the dispute is essentially about the division of de facto property. The date that the parties separated (early 2009) is relevant to whether the dispute could be decided under the FLA or the RA;

(b) if the parties separated before 1 March 2009 then the RA applies; if the parties separated after 1 March 2009 then the FLA applies;

(c) Mr Dalbon has not brought an application for a division of de facto property under the FLA or the RA. He concedes that it is now highly unlikely that he would be entitled to a division of property pursuant to s 79 of the FLA. The submission does not set out any reason for that proposition, but it is not disputed that Mr Dalbon would have to apply for a lengthy extension of time to bring such an application because by s 43 of the RA and s 44(5) of the FLA a party to a de facto relationship has 2 years after the end of the de facto relationship to apply for an order for division of de facto property;

(d) Mr Dalbon does not give any explanation why he did not pursue a division of de facto property with Ms Leane after 2009 when she left the Property, even though he believed that as a result of a division of de facto property between them the Property would belong to him; and

(e) under s 90SM of the FLA and s 40 of the RA the Court has power to vary existing title or rights in respect of a property. The Orders made by Mukhtar AsJ in the absence of Mr Dalbon and his finding that Mr Dalbon occupied the Property as a licensee would not prevent an order for division of the proceeds of sale of the Property after settlement being made by the Court as a division of de facto property under the FLA or the RA.

The test applied by the Court in respect of whether to exercise discretion to extend the time for commencing proceedings for a division of de facto property under the FLA or the RA is not delay, but hardship to the plaintiff if the opportunity to commence such proceedings is denied.[71] Mr Dalbon has provided evidence as to hardship in his affidavit in support of this application. Ms Leane submitted that such evidence is sufficient to give him grounds to support an application for extension of time to bring proceedings for division of de facto property under the FLA or the RA if he chooses to do so.
[71]Section 44(6) of the Family Law Act and s 43 of the Relationships Act.

Prima Facie Case on the merits

In relation to the alleged common intention constructive trust, and the submission that he acted to his detriment in reliance on that common intention in not seeking to register the Property in his name and in paying the mortgage for a considerable period, Ms Leane points to an inconsistency between this submission and the evidence in his affidavit.

He said in his affidavit that a few years after Ms Leane left the Property, she asked him whether they should transfer the Property into Mr Dalbon’s name. Ms Leane apparently said that she wanted to take out a loan in her name but because Mr Dalbon was behind in payments to the bank on their joint loan secured by mortgage on the Property, it was difficult for her to do so. Mr Dalbon said to Ms Leane that he was happy to leave the Property in her name and trusted that she would not take advantage of that.[72]
[72]First Dalbon affidavit [15].

The Court should infer that it was never his intention to take full beneficial and legal ownership of the Property. He wanted the benefit of exclusive possession of the Property but did not want to relieve Ms Leane of liability for the loan repayments under the mortgage.

Ms Leane submitted that Mr Dalbon’s refusal to accept a transfer of the Property when it was offered to him gives rise to an estoppel by conduct.[73] Ms Leane was entitled to rely on the defendant’s refusal to accept her offer to transfer legal and beneficial ownership of the Property to him in making an assumption that he did not seek to assert an interest in the Property and was content to remain living there as a licensee. She relied on this assumption in bringing these proceedings seeking possession of the Property under Order 53 so that it could be sold and her liability under the joint loan from the Commonwealth Bank be paid out.
[73]Waltons Stores (interstate) Ltd v Maher (1988) 164 CLR 384; Commonwealth v Verwayen (1990) 170 CLR 394.

In relation to both the common intention constructive trust and the alleged resulting trust, Ms Leane submitted:

(a) Ms Leane disputes Mr Dalbon’s evidence that he paid half of the deposit on the purchase of the Property;[74]
[74]First Leane affidavit, [3].

(b) Mr Dalbon’s evidence that he and Ms Leane agreed in 1988 to purchase the Property together is contradicted by his refusal to accept a transfer of the full legal and beneficial ownership in the Property from Ms Leane in 2015;

(c) Mr Dalbon’s evidence of contributions made to loan payments due under the mortgage by himself until February 2020 was during his exclusive occupation of the Property. That is consistent with Ms Leane’s evidence of an oral licence agreement;

(d) Mr Dalbon’s allegation that he contributed all of the loan repayments under the mortgage is incorrect. In 2010 Ms Leane contributed her half share of the proceeds of sale of 104 and 154 Cranney’s Lane, Trentham to reduce the loan amount payable under the mortgage for the Property;

(e) as a result of the failure of Mr Dalbon to keep up the monthly loan instalments payable to the CBA, the amount due under the CBA mortgage was greater than it otherwise would have been. Mr Dalbon has provided no explanation why he could not make these payments on time. This has reduced the equity in the Property rather than contributed to or enhanced it; and

(f) the evidence of Mr Lander shows that Mr Dalbon did not maintain the property and that has reduced the value of the Property rather than contributed to or enhanced it.

Reason for absence and delay

In relation to Mr Dalbon’s explanation for his non-attendance before Mukhtar AsJ and delay in applying to set aside the Order, Ms Leane submits:

(a) Mr Dalbon asserts ignorance about the legal system and his lack of education as his primary reasons for failing to appear at the hearing before Mukhtar AsJ on 26 September 2019 and for his delay in bringing this application. He does not allege that he is illiterate and could not read or understand the court documents served on him on 4 September 2019 including the First Leane affidavit;

(b) Mr Dalbon does not dispute the finding of Mukhtar AsJ that:

(i) his last contact with the plaintiff’s solicitor was on 23 September 2019, when he acknowledged receipt of the originating motion and acknowledged the date of the hearing;

(ii) his stated position was that he may ‘possibly’ be attending the hearing, and ‘may contact a barrister mate’; and

(iii) he did not appear nor made any other communication with the Court.

(c) Mr Dalbon was aware of the need to obtain legal advice but failed to do so until April 2020, nearly two months after possession of the Property had been obtained by Ms Leane and after the Property had been sold. Up to that time he was self-represented;

(d) as the Court of Appeal noted in Karam v Palmone Shoes Pty Ltd & Anor[75]:
[75][2012] VSCA 97 [36].

…a self- represented litigant cannot be allowed forever to stand behind the shield of his own ignorance; especially when it continues to subject other parties to cost and inconvenience and to add pointlessly to the load on the court’s already limited resources. There comes a point at which a self-represented litigant must be required to take responsibility for his choices …

(e) in the first hearing of Ms Leane’s application for vacant possession of the Property before VCAT, Mr Dalbon said would obtain legal advice and appear at the next hearing and this was accepted by the Member as a reason to grant Mr Dalbon an adjournment. But he did not and the application was dismissed for failure to effect valid service on him;

(f) in light of the findings made by Mukhtar AJ about the circumstances of Mr Dalbon’s non-appearance and the representations made by Mr Dalbon and recorded by VCAT, Mr Dalbon’s evidence about his reasons for his non‑appearance before Mukhtar AsJ on 26 September 2019 and his significant delay in bringing this application under Rule 49.02(2) should be given no weight and should not be accepted by the Court as honestly given;

(g) Mr Dalbon was served with the Order on 7 October 2019 and says that a month after being served with the Order he was served with the Warrant of Possession. During that month he did nothing. After he was served with the Warrant of Possession he deposes that: ‘I understood that there was a chance that I was going to lose the Property’. Despite this understanding he still did nothing apart from speaking with a neighbour who is a solicitor who told him this was not his area of practice. There is no evidence that Mr Dalbon followed up his neighbour regarding somebody who was able to help him; and

(h) Mr Dalbon’s failure to apply quickly to set aside the Order was part of a consistent pattern of delay and obfuscation designed to secure for himself as long a period of exclusive possession of the Property as possible. A defendant who genuinely perceived that there had been an injustice as a result of the Court entering judgment in his absence would have applied to set aside the judgment at the earliest practicable opportunity after service of the Order.

Prejudice

In relation to prejudice to Ms Leane if the Order is set aside, she submitted that:

(a) after the time she says she left the Property, 2007, Ms Leane continued to be liable for repayment of the loan secured by the mortgage over the Property. She received no benefit from her ownership of the Property and wanted to be relieved of her liability for loan repayments. Mr Dalbon was aware that Ms Leane was having financial difficulties and wanted to sell the Property, but thought that if she succeeded in doing so he would receive money from the sale of the Property that he was entitled to. He did not want the Property to be sold but did not have any money to engage solicitors;[76]
[76]First Dalbon affidavit [19].

(b) there is no evidence that Mr Dalbon told Ms Leane that he believed himself to be entitled to a share of the proceeds of sale of the Property if it was sold. From 2016 he simply ignored correspondence from her solicitors and did not respond to service of proceedings in VCAT or to her application to this Court for the Order. Despite being behind in repayments of the loan and being aware that Ms Leane wanted to sell the Property, Mr Dalbon continued to refuse to vacate the Property to enable a sale to proceed;

(c) after Mr Dalbon refused to accept a transfer of legal and beneficial ownership of the Property from Ms Leane in 2015, she had little choice but to commence proceedings against Mr Dalbon to seek possession of the Property so that it could be sold. In consequence Ms Leane has suffered considerable delay, incurred costs and occupied court time to obtain possession of the Property so that it can be sold. Mr Dalbon has now withdrawn his opposition to the sale of the Property, and claims instead an entitlement to a share of the proceeds of sale;

(d) wasted public resources and undue delay with the concomitant strain and uncertainty imposed on litigants should be taken into account in the exercise of interlocutory discretions by the Court;[77]
[77]AON Risk Services Australia Limited v Australian National University [2009] HCA 27, [30] (French CJ).

(e) but for Mr Dalbon’s failure to co-operate with Ms Leane in accepting a transfer of the Property to him in 2015, his continued failure to pay the loan repayments on time and his refusal to vacate the Property so that it could be sold, it would not have been necessary for Ms Leane to make application to the Court for orders for Possession of the Property;

(f) Mr Dalbon did not at any time want to relieve the plaintiff of legal liability in respect of the Property. He wanted Ms Leane to remain liable for repayments of the loan in their joint names but the benefits of ownership of the Property including exclusive possession to be held by him;

(g) it would be unconscionable now for the Court to exercise its discretion to allow Mr Dalbon to bring a claim for a beneficial interest in the proceeds of sale of the Property in circumstances where the evidence demonstrates that he opposed the sale and did everything he could to delay it;

(h) Ms Leane lives in Nanango Queensland and would incur costs and inconvenience in attending a hearing in Melbourne, Victoria;

(i) in light of domestic violence order, the Court should accept that Ms Leane is likely to be distressed and traumatised by having to continue litigation with and appear in Court against Mr Dalbon. It is likely that she would be required to make a similar application for protection orders in Victoria if she was to travel to Victoria and remain in Melbourne for the hearing; and

(j) if this Court exercises its discretion to extend time for Mr Dalbon to bring his application under Rule 49.02(2) and sets aside the Order, the ensuing legal proceeding whether in the County or Supreme Court will give Mr Dalbon reason to continue to engage with Ms Leane against her wishes.

In relation to the prejudice to Mr Dalbon if the Order is not set aside, Ms Leane submits Mr Dalbon does not provide any proof of his financial position to support his evidence, or assertion, that if the Order is not set aside he will be deprived of his right to a share of the proceeds of sale of the Property and that this would cause him financial hardship.

Consideration
Issue estoppel

At the heart of the application, and the dispute between the parties, is the proposition that the Order gives rise to an issue estoppel or is a res judicata that stands in the way of Mr Dalbon’s pursuit in the County Court of an equitable interest in the Property arising out of a resulting or constructive trust. Insofar as the terms of the Order are concerned, that Ms Leane recover possession of the Property, it is spent. But the very basis of that order must be considered, as it was by Mukhtar AsJ in his Reasons (see above at [34(d)]).

Order 53 creates a special procedure for the summary recovery of land in certain restricted circumstances. The pre-requisites to the application of the Order are that the person in occupation of the land is–

(a) a person who entered into occupation without the plaintiff’s licence or consent or that of any predecessor in title of the plaintiff; or

(b) persons who, having been a licensee or licensees, remained in occupation without the plaintiff’s licence or consent or that of any predecessor in title of the plaintiff.[78]

[78]See Pappas v Bowmark Pty Ltd [1998] VSCA 120, [13] (Pappas).

I have summarised the law applicable to the summary recovery of land in a number of earlier decisions.[79] For present purposes it sufficient to note:
[79]Framlingham Aboriginal Trust v McGuiness and Chatfield [2014] VSC 241, [34]-[45]; upheld on appeal in Framlingham Aboriginal Trust v McGuiness and Chatfield [2014] VSC 354; Tajon Pty Ltd v Arvanitis and Anor [2017] VSC 130, [27]-[34].

(a) the procedure is intended to enable a speedy resolution in favour of the proprietor of land of a dispute whereby ‘trespassers’ are keeping the proprietor out,[80] and is intended to apply only in clear cases where there is no issue to try;[81]
[80]Pappas [1998] VSCA 120, [13].
[81]Palazzo v Pullen (Supreme Court of Victoria, Brooking J, 24 July 1992, BC9200663).

(b) the existence of a factual dispute does not deny the applicability of Order 53 where it is possible to resolve the dispute readily and fairly;[82]

(c) where an issue does emerge, the judge has discretion whether simply to dismiss the proceeding, to determine the issue or cause the issue to be subsequently tried. This includes giving directions as to the further conduct of the proceeding or ordering the proceeding to continue as if begun by writ pursuant to Rule 4.07 of the Rules;[83] and

(d) if the Court, in its discretion, decides to exercise the jurisdiction to resolve the issue, it should be undertaken with great care.[84]

[82]Pappas [1998] VSCA 120, [13]; Melbourne Anglican Trust Corporation v Greentree (Supreme Court of Victoria, Vincent J, 29 May 1997); Tolhurst Druce & Emerson v Maryvell Investments Pty Ltd [2007] VSC 271, [193]–[195]; Byrne v Ritchie [2009] VSC 114, [17].

[83]Palazzo v Pullen (Supreme Court of Victoria, Brooking J, 24 July 1992, BC9200663).

[84]Melbourne Anglican Trust Corporation v Greentree (Supreme Court of Victoria, Vincent J, 29 May 1997); Max Moar & Quuenbridge Pty Ltd v Shazia Duman [2007] VSC 266, [2].

Had the issue of an equitable interest arising from a resulting or constructive trust been raised and the material that is before me now been put before Mukhtar AsJ the result must have been that either the application was dismissed or orders made for the proceeding to continue as if commenced by writ. That is because the case for an equitable interest in the land giving rise to possessory rights, combined with actual possession, must, if successfully prosecuted, negate the essential basis for the recovery of possession Order. That is, if Mr Dalbon had established a viable claim to an equitable proprietary interest in the Property he could not be a trespasser, having neither entered into occupation without Ms Leane’s licence or consent nor having been a licensee, remained in occupation without the plaintiff’s licence or consent.

The ‘legal foundation or justification of its conclusion’ of the decision of Mukhtar AsJ is clearly that Mr Dalbon was a licensee whose licence had been terminated. That basis is inconsistent with his occupation being as of right as a person having a proprietary interest entitling him, prima facie, to a right to occupy and ‘possess’ the Property, albeit that right may be found to be one he shared with Ms Leane.

The requirements for an issue estoppel are that:[85]
[85]Carl Zeiss Stiftung v Rayner & Keeler Ltd [No 2] [1967] 1 AC 853 at 935, Kuligowski v Metrobus (2004) 220 CLR 363, 373 [21] (Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ).

(a) the same question has been decided;

(b) the judicial decision which is said to create the estoppel was final; and

(c) the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.

In Blair v Curran, Dixon J, in an oft quoted passage, explained the doctrine of issue estoppel as follows:[86]

A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.
Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order. In the phraseology of Coleridge J. in R. v. Inhabitants of the Township of Hartington Middle Quarter, the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous.
In the phraseology of Lord Shaw, “a fact fundamental to the decision arrived at” in the former proceedings and “the legal quality of the fact” must be taken as finally and conclusively established (Hoystead v. Commissioner of Taxation). But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion. Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation.
The difficulty in the actual application of these conceptions is to distinguish the matters fundamental or cardinal to the prior decision or judgment, decree or order or necessarily involved in it as its legal justification or foundation from matters which even though actually raised and decided as being in the circumstances of the case the determining considerations, yet are not in point of law the essential foundation or groundwork of the judgment, decree or order.

[86](1939) 62 CLR 464, 531-533.

The essential foundation or groundwork of the Order for possession of the Property in this case was that Mr Dalbon was a mere licensee who had remained in occupation without the plaintiff’s licence or consent. These findings are clear in the Reasons, but more importantly, are fundamental to the jurisdiction and power of the Court to make the Order pursuant to Order 53.

Another essential ingredient of issue estoppel is that the decision expressed by the Order is final. There is no doubt that the order of an Associate Judge made pursuant to Order 53 is final.[87] Finality for this purpose means that the decision is one which does not leave something to be judicially determined or ascertained before the decision can become effective or enforceable.[88]
[87]Linprint (1991) 23 NSWLR 508.
[88]Ibid, (1991) 23 NSWLR 508, 517 – 521 (Kirby P).

Kirby P observed in Linprint that the fact that a judgment or order may be set aside on application pursuant to r 49.02 does not detract from the finality of the Order. The mere fact that a party has a privilege to apply to have that judgment or order set aside cannot convert it to a contingent or provisional judgment forever flawed and incapable of giving rise to res judicata or issue estoppel.[89]
[89]Ibid, (1991) 23 NSWLR 508, 518 (Kirby P).

It seems to me that it is not a case of res judicata because the very right or cause of action claimed in the County Court proceedings was not in this proceeding any part of the reasoning leading to the Order, except in the sense that as a trespasser Mr Dalbon could not have an equitable proprietary right entitling him to possession. It is issue estoppel because the legal foundation for the Order prevents the assertion in the County Court proceedings of a matter of fact or of law contrary to that necessarily and directly decided in this proceeding in resolving rights or obligations between the same parties.[90]
[90]Ramsay v Pigram (1968) 118 CLR 271, 276 (Barwick CJ).

A subsidiary matter not in issue between the parties is the applicability of r 49.02 of the Rules to the summary procedure for the recovery of land under Order 53. There is no definition of a ‘trial’ in the Rules. For the purposes of the Rules however, it is reasonably clear that the summary procedure under Order 53 does lead to a trial for the purposed of r 49.02. That is because, by r 77.02(1) of the Rules, an Associate Judge has no power or authority to hear a trial, subject to some specified exceptions. The specified exceptions include the specific conferral of power given by r 77.01(2)(e) for an Associate Judge to hear and determine any proceeding for the recovery of land under Order 53. It is also relevant that in Vimplane Habersberger J entertained an application under r 49.02 in respect of an order for the recovery of possession made pursuant to Order 53.

Prima facie case in defence of the claim
Resulting trust

A resulting trust may have arisen upon the purchase of the Property in the name of Ms Leane with moneys partly advanced by Mr Dalbon. This is because it is clearly established that where two or more persons contribute to the purchase price and the property is conveyed into the name of one only, the property is presumed to be held on trust for those who contributed in shares proportionate to their respective contributions.[91] This is often called a ‘purchase money resulting trust’.[92] But it is sometimes intimately connected with a common intention constructive trust because of the evidentiary requirements, as I point out below.
[91]Calverly v Green (1984) 155 CLR 242, 246 (Gibbs CJ), 255 (Mason and Brennan JJ), and 266 (Deane J); DKL v LYK [2019] SASC 100, [230]-[236].
[92]See for example Sivritas v Sivritas [2008] VSC 374, [118] (Kyrou J).

The Court in Calverley v Green[93] also held that the extent of the parties’ contributions, and hence their presumed beneficial interests, must be determined at the time the property was purchased and the trust created.[94] It is the ‘purchase price’, or what was paid in order to acquire the property, that matters, and not any subsequent contributions that might be made to the maintenance or improvement of the property.[95]
[93]Ibid, 257 (Mason and Brennan JJ); DKL v LYK [2019] SASC 100, [236].
[94]Calverley v Green (1984) 155 CLR 242 at 252 (Gibbs CJ); DKL v LYK [2019] SASC 100, [236].
[95]Calverley v Green (1984) 155 CLR 242 at 257 (Mason and Brennan JJ); Sivritas v Sivritas [2008] VSC 374, [126]; DKL v LYK [2019] SASC 100, [230]-[236].

When a presumption of resulting trust arises, it performs a similar function to the civil onus of proof.[96] A presumption of resulting trust can be rebutted by evidence of contrary intention.[97] Where a presumption of resulting trust as equitable tenants in common arises following unequal contributions to a purchase price, that presumption can be rebutted by evidence of a shared intention or agreement to the contrary.[98] The presumption can be rebutted by, among other things, evidence of intention to make a gift of the property. The strength of any presumption of resulting trust will vary from case to case, as will the weight of evidence required to rebut the presumption.[99]
[96]Muschinski (1985) 160 CLR 583, 612; Sivritas v Sivritas [2008] VSC 374, [119].
[97]Calverley (1984) 155 CLR 242, 251, 255, 258, 261, 269; Muschinski (1985) 160 CLR 583, 590; Sivritas v Sivritas [2008] VSC 374, [119].
[98]Calverley (1984) 155 CLR 242, 258, 261, 269; Sivritas v Sivritas [2008] VSC 374, [119].
[99]Calverley (1984) 155 CLR 242, 255, 270, Sivritas v Sivritas [2008] VSC 374, [119].

The presumption of a resulting trust in these circumstances is, of course subject to the presumption of advancement. The presumption of advancement operates in cases involving certain recognised categories of cases to displace the presumption of a resulting trust. It operates on the basis that there are certain relationships in which equity infers that any benefit which was provided to one party at the cost of the other has been so provided by way of ‘advancement’, with the result that the prima facie position remains that the equitable interest is presumed to follow the legal estate and remain with the legal title. On one view, this ‘presumption’ of advancement is not a presumption at all, but rather merely a situation in which there is an absence of any reason for presuming that a resulting trust arose.[100]
[100]Calverley v Green (1984) 155 CLR 242 at 247 (Gibbs CJ), 256 (Mason and Brennan JJ), and 267 (Deane J), citing Martin v Martin (1959) 110 CLR 297 at 303; DKL v LYK [2019] SASC 100, [240].

The presumption of advancement arises in cases involving a husband contributing to property purchased in the name of his wife, and a man purchasing in the name of his child (or some other person to whom he stands in loco parentis). The presumption is generally said to arise in these categories of case not by reason of a presumption of actual love or affection, but because equity treats these relationships as involving an obligation of support owed by the person providing the purchase consideration.[101] However, there has also been some recognition that while this may explain the historical inception of the presumption of advancement, it has over time obtained a foundation or justification in the greater probability of the conferral of a beneficial interest being intended (and hence the appropriateness of inferring this to be so) in the situations to which the presumption applies.[102]
[101]Calverley v Green (1984) 155 CLR 242 at 247 (Gibbs CJ, noting that the obligation may also be described as a ‘natural obligation to provide’ or a ‘moral obligation to give’), 259 (Mason and Brennan JJ), and 268 (Deane J); DKL v LYK [2019] SASC 100, [241].
[102]Calverley v Green (1984) 155 CLR 242 at 249-250 (Gibbs CJ), and 267 (Deane J); DKL v LYK [2019] SASC 100, [241].

The categories of relationships that might give rise to the presumption or inference of advancement are not, however, closed. In Nelson v Nelson[103] the High Court supported the extension of the presumption to the relationship of mother to adult daughter. The majority of the Court in Calverley v Green declined to extend it to de facto relationships.[104] The majority reasoned that while the relationship of marriage was a sufficient basis to presume or infer that the purchasing husband intended that his wife be conferred with a beneficial interest, a de facto relationship (while relevant to the weight to be given to the presumption of a resulting trust, and any evidence rebutting it) was not considered to be a sufficient basis for a general presumption or inference of advancement.
[103](1995) 184 CLR 538.
[104]Calverley v Green (1984) 155 CLR 242 at 260 (Mason and Brennan JJ), 268-269 (Deane J); cf at 250-251 (Gibbs CJ); DKL v LYK [2019] SASC 100, [242].

In the area of resulting trusts, whether a resulting trust will be found will depend on the evidence of the contributions made by each of Ms Leane and Mr Dalbon and, as well their common intention (as ascertained primarily from their words and acts before and at the time of purchase), and not the unexpressed actual or subjective intention of one or other of the contributors.[105] This is where a resulting trust and a common intention constructive trust intersect. Ms Leane and Mr Dalbon are presently in dispute as to their contributions to the initial purchase price. If Mr Dalbon’s evidence is accepted, there is in my view a real prospect of him establishing a resulting trust in his favour.
[105]Calverley v Green (1984) 155 CLR 242 at 251 (Gibbs CJ), 261-262 (Mason and Brennan JJ), 269-270 (Deane J); DKL v LYK [2019] SASC 100, [245]-[248].

Constructive trust

A constructive trust may be imposed upon a legal entitlement to property in order to prevent a person from asserting or exercising his or her legal right in respect of that property in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct.[106] In this case, the ‘legal entitlement’ is the legal ownership of the Property from which the proceeds of sale, presumably now held in trust, are derived.
[106]Muschinski v Dodds (1985) 160 CLR 583 at 620, 623.

In Baumgartner v Baumgartner,[107] the majority (Mason CJ, Wilson and Deane JJ) referred to the result reached by Deane J in Muschinski v Dodds[108] as an application of the general equitable principle which restores to a party contributions which he or she has made to a joint venture which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them. Their Honours cited what Deane J had said in Muschinski:

… the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do…

[107](1987) 164 CLR 137, 148.

[108](1985) 160 CLR 583, 620.

The constructive trust based on unconscionable conduct has been most commonly imposed in the context of the breakdown of a de facto relationship where the legal interests in property are not commensurate with the respective parties’ contributions to the property or relationship.[109]
[109]Muschinski v Dodds (1985) 160 CLR 583; Baumgartner v Baumgartner (1987) 164 CLR 137; see also Cressy vJohnson (2009) VSC 52 at [183] – [202] per Kaye J.

A constructive trust will be imposed where the substratum of a joint relationship or endeavour ends without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances where it would be unconscionable for that other party to retain a benefit with respect to the relevant property not commensurate with his or her contribution.[110]
[110]Muschinski v Dodds (1985) 160 CLR 583 at 620 per Deane J (see also at 599 per Mason J); Baumgartner v Baumgartner (1987) 164 CLR 137 at 149-50; per Mason CJ, Wilson and Deane JJ; National Australia Bank Ltd v Maher [1995] 1 VR 318 at 321 per Fullagar J, CA(VIC); Australian Building & Technical Solutions Pty Ltd v Boumelhem [2009] NSWSC 460; at [107] per Ward J.

The contributions which the court may take into account in determining the scope of constructive trusteeship extend beyond financial contributions to the purchase price of the property in issue.[111] The contributions need not necessarily have been made directly to the acquisition or improvement of the property in issue,[112] but it is not sufficient that one person has merely benefited from the contributions of another; those contributions must be linked, albeit indirectly, to the purchase, maintenance and improvement of the property.[113]
[111]Baumgartner v Baumgartner (1987) 164 CLR 137
[112]Green v Green (1989) 17 NSWLR 343 at 369; per Mahoney JA, CA(NSW); Lloyd v Tedesco (2002) 25 WAR 360 at 364; [2002] WASCA 63; per Murray J; See Halsbury’s Laws of Australia, online edition, paragraph [430-630] (as at 20 April 2012);
[113]Engwirda v Engwirda [2000] QCA 61; at [23]-[30]; Lloyd v Tedesco (2002) 25 WAR 360 at 365, 379-80; [2002] WASCA 63; per Murray J; Cressy v Johnson [2009] VSC 52; at [197]-[200] per Kaye J.

The necessity that there be unconscionable conduct means that a constructive trust will not be imposed on the ground of mere fairness.[114] There is no jurisdiction in an Australian court of equity to declare an owner of property to be a trustee of that property for another merely on the ground that, having regard to all the circumstances, it would be fair so to declare.[115]
[114]Muschinski v Dodds (1985) 160 CLR 583 at 594-5 per Gibbs CJ, at 608 per Brennan J, at 615-16 per Deane J; See Halsbury’s Laws of Australia, online edition, paragraph [430-635] (as at 20 April 2012);
[115]Muschinski v Dodds (1985) 160 CLR 583 at 608 (Brennan J).

Common intention constructive trust

Although the High Court of Australia has authoritatively stated that the basis of constructive trusteeship in cases of contributions to property or a relationship rests in unconscionable conduct, Australian courts continue to entertain arguments, usually as an alternative to the argument based on unconscionable conduct, based on the previous approach of imposing a constructive trust according to the actual or inferred (but not imputed) common intention of the parties.[116] The relevant common intention may be derived from the evidence of express agreement or the making of admissions, or it can be inferred from, for example, the making of contributions to the cost of property, or meeting expenses in maintaining it.[117] The latter highlights that a common intention constructive trust may arise from an agreement or common intention arising after acquisition of the relevant property.[118]
[116]See for example Green v Green (1989) 17 NSWLR 343; per Gleeson CJ, CA(NSW);
[117]Allen v Snyder [1977] 2 NSWLR 685 at 690-1 per Glass JA, at 698 per Samuels JA; CA(NSW); Vedejs v Public Trustee [1985] VR 569 at 572-3 per Nicholson J; Shepherd v Doolan [2005] NSWSC 42; at [37], [38] per White J; Williams v Parris [2008] All ER (D) 235.
[118]Director of Public Prosecutions v Ali (No 2) [2010] VSC 503; at [75] per Hargrave J.

Even with the proof of the requisite intention, equity will not intervene by means of constructive trusteeship in the absence of detriment or material disadvantage to the claimant such that it would be fraud on the claimant for the other party to assert that the claimant has no beneficial interest in the property.[119] The requirements of a common intention or a common assumption as to a state of affairs, and reliance upon that intention or assumption to one’s detriment, serve to characterise this form of ‘constructive trust’ as a form of proprietary estoppel.[120]
[119]Ogilvie v Ryan [1976] 2 NSWLR 504; Hohol v Hohol [1981] VR 221 at 225; per O'Bryan J; Cooke v Cooke [1987] VR 625; Higgins v Wingfield [1987] VR 689 at 694-6 per McGarvie J; Loone v Tasmanian Trustees Ltd 1987 Tas R 146; Green v Green (1989) 17 NSWLR 343 at 354-6; per Gleeson CJ, CA(NSW);
[120]Higgins v Wingfield [1987] VR 689 at 695-6 per McGarvie J; Austin v Keele (1987) 10 NSWLR 283 at 290; Australian Building & Technical Solutions Pty Ltd v Boumelhem [2009] NSWSC 460; at [111]-[118] per Ward J.

Proprietary estoppel

Prima facie, the expenditure of money by a person on someone else’s land does not of itself entitle the person paying the money to acquire a proprietary interest in that land: Pettit v Pettit.[121] The exception to this principle is established by the line of cases following on from Dillwyn v Llewellyn[122] and Ramsden v Dyson.^[123] Proprietary estoppel can prevent the owner of an interest in property from asserting her rights against another party whom she has allowed or encouraged to deal with that interest, or act in relation to that property, as if the latter had rights to the property.[124]
[121][1970] AC 777.
[122](1862) 45 ER 1285.
[123][1866] LR 1 HL 129.
[124]See Generally Professor G E Dal Pont, Equity and Trusts in Australia, 5^th Ed., at [10.60].

The forms of proprietary estoppel that could potentially apply on the facts of this case are estoppel by encouragement or estoppel by acquiescence. Estoppel by encouragement follows from the leading case of Dillwyn v Llewellyn[125] and turns on the owner encouraging expenditure by some representation (usually an assurance or promise) that the claimant would receive an interest in the land by way of a benefit in return. Estoppel by acquiescence arises where the owner by acquiescence induces the expenditure by the claimant in the expectation that an interest in the property will be conferred.
[125](1862) 4 De GF & J 517; 45 ER 1285.

In Sidhu v Van Dyke[126] the High Court reiterated the requirements of proprietary estoppel as analysed in Giumelli v Giumelli:[127]

In Giumelli v Giumelli, it was said that the category of equitable estoppel that is usually traced back to the decisions in Dillwyn v Llewelyn and Ramsden v Dyson is now a ‘well recognised variety of estoppel as understood in equity’, which affords relief ‘found in an assumption as to the future acquisition of ownership of property … induced by representations upon which there had been detrimental reliance by the plaintiff’.[128]

[126](2014) 251 CLR 505 (Sidhu).

[127](1999) 196 CLR 101 (Giumelli).

[128]Sidhu (2014) 251 CLR 505, 511 [2] (French CJ, Kiefel, Bell and Keane JJ) (citations omitted); McNab v Graham (2017) 53 VR 311, [66].

What the Court may order in any particular matter depends on all the circumstances of the case.[129] Before a constructive trust is imposed, the court should first decide whether, having regard to the issues in the litigation, there is an appropriate equitable remedy which falls short of the imposition of a trust.[130] In cases of this kind, however, the High Court noted in Giumelli and reinforced in Sidhu, prima facie the estopped party can only fulfil their equitable obligation by making good the expectation which they have encouraged.[131] If, however, the promisee has been induced to make a relatively small, readily quantifiable monetary outlay on the faith of the appellant’s assurances, then it might not be unconscionable for the estopped party to resile from the promise on condition that reimbursement be provided to the promisee for that outlay.[132]
[129]Giumelli (1999) 196 CLR 101, 113 [10].
[130]Ibid.
[131]Giumelli (1999) 196 CLR 101, 112 [6], 123-125 [40]-[48]; Sidhu (2014) 251 CLR 505, 530 [85].
[132]Sidhu (2014) 251 CLR 505, 529 [84]; McNab v Graham (2017) 53 VR 311, [70].

In Donis v Donis[133] Nettle JA observed, in relation to what was often called the ‘minimum equity’, that is, where equitable estoppel permits a court to do what is required in order to avoid detriment to the party who has relied on the assumption induced by the party estopped, but no more:[134]

As the more recent decision in Giumelli v Giumelli shows, however, there is no such restriction in cases where the expectation which is encouraged is the acquisition of an interest in property. In such cases the remedy relates to the understanding of the parties and the expectation that has been encouraged. Prima facie the estopped party can only fulfil his or her equitable obligation by making good the expectation which he or she has encouraged. The estopped party, having promised to confer a proprietary interest on the party entitled to the benefit of the estoppel, and the latter having acted upon the promise to his or her detriment, is bound in conscience to make good the expectation. It follows that the detrimental reliance that supports the estoppel need not constitute in any sense a consideration moving to the party bound. It is a unilateral element of the estoppel and not the price paid for it.

The prima facie position will yield to individual circumstances. Principle and authority compel the view that where a plaintiff’s expectation or assumption is uncertain or extravagant or out of all proportion to the detriment which the plaintiff has suffered, the court should recognise that the claimant’s equity may be better satisfied in another and possibly more limited way. Thus, as was also said in Giumelli, before granting relief the court is required to consider all of the circumstances of the case, including the possible effects on third parties, and to avoid going beyond what is required for conscientious conduct or would do injustice to others. But that does not mean that the court is required to be “constitutionally parsimonious” or that it is necessary for there to be substantial correspondence between expectation and the monetary value of the detriment suffered, or which but for the relief to be accorded would be suffered. The object of the exercise is to do equity and for that purpose “detriment” is no narrow or technical concept. It need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether departure from a promise would be unconscionable in all the circumstances. [emphasis added]

[133](2007) 19 VR 577 (Donis).

[134]Ibid, [19]-[20] (footnotes omitted).

Consideration – arguable defence to the claim for possession

It is not possible in an application of this kind to resolve disputes of fact arising from conflicting affidavits. The claims made by Mr Dalbon must be assessed on the basis that he establishes the facts that he advances in his affidavits. If those facts will, if accepted at trial, give rise to a claim to an equitable proprietary interest in the Property that has a real prospect of success, then that is sufficient to establish the ‘prima facie case on the merits’ element of the application to set aside the Order.

There is no doubt that Mr Dalbon has a viable claim to an equitable interest in the Property arising from a resulting trust, if he establishes his initial contribution to the cost of acquisition of the Property, a common intention constructive trust or a constructive trust arising from a proprietary estoppel. Further, there may be a combined resulting trust and a common intention constructive trust.

The facts I have summarised above at para [15] support all of these as viable claims. His evidence, if accepted, supports his contribution to the initial acquisition of the Property (as he says they contributed approximately equally to the purchase price of the Property) whilst he was in a de facto relationship with Ms Leane, and the Property was intended to be his and Ms Leane’s ‘matrimonial’ home in which they would raise Ms Leane’s two young children. During their relationship he says they both paid the mortgage and all rates and outgoings together, and together looked after the Property. He says Ms Leane never said anything about the house belonging to her alone, and he continued to believe that it belonged to them both as ‘partners’.

It is noteworthy that when Mr Dalbon appeared before VCAT on 5 December 2018, the Member recorded in the order that Mr Dalbon stated that he was not a tenant of Ms Leane ‘but has an interest in the property’.[135] Properly advised, Ms Leane could not have been under any misapprehension that Mr Dalbon had good grounds to claim an interest in the Property. Her affidavit in support of the application for the possession order seems to me to deliberately down play Mr Dalbon’s contributions to the acquisition of the Property. There is no mention of the contribution to the reduction of the mortgage loan secured over the Property from the proceeds of sale of the Adjoining Block – which she details in her second affidavit. Buried in the verbiage of her first affidavit, however, is an admission that Mr Dalbon paid at least some of the instalments under the mortgage during their joint occupation of the Property (see above at [33(f)]).
[135]Exhibit WAL-7 to the Dalbon affidavit.

Ms Leane does not dispute (in her second affidavit) Mr Dalbon’s statement in his first affidavit that ‘We both paid the mortgage and all rates and outgoings together, and together looked after the Property.’[136] She does say that Mr Dalbon contributed to household expenses and some maintenance costs.[137] One of the difficulties in the working out of contributions to the acquisition, and maintenance of land by de facto couples is the inevitable conflict that arises after the relationship ends. Whilst it is ongoing, couples commonly share in different ways household expenses that must be met. After the end of the relationship, it is easy, in the absence of detailed records and their detailed investigation, to lean in one’s own favour in the memory stakes of who paid what and when. The usual outcome of these disputes, when both partners are working and earning, is a fairly even outcome after all contributions are taken into account, including when the role of caring for children and household duties are taken into account. I think in this case that is a possible, even likely outcome. If it is then Mr Dalbon’s interest will be commensurate with Ms Leane’s interest.
[136]First Dalbon affidavit [6].
[137]First Leane affidavit [6].

They acquired the land in the Adjoining Block together as a result of which there were two joint loan accounts, including the loan with respect to the Property. The evidence of the acquisition of the Adjoining Block by Ms Leane and Mr Dalbon together is undisputed, as, I gather, is evidence of the payment together of the mortgage payments due in respect of the mortgage loan secured against that land and the sale and use of the proceeds of sale to reduce the debt on the Property. This is strong evidence, in the circumstances, of substantial contribution to the acquisition of the Property by Mr Dalbon.

As Counsel for Mr Dalbon said, Ms Leane’s evidence accepts that the Property was purchased during the relationship between them. Mr Dalbon lived in the Property with her, and after she left, on his own for approximately 30 years, when Ms Leane left the Property in 2009 she left the mortgage obligations to Mr Dalbon and between 2009 and Mr Dalbon’s eviction in February 2020, Mr Dalbon made the mortgage repayments, as well as paying the rates and outgoings, and Ms Leane did not contribute to those payments.

This is therefore a case where, at the least, there is a viable claim for the recognition, or imposition, of a constructive trust as a consequence of the substratum of a joint relationship ending, without attributable blame, and where the benefit of money contributed by Mr Dalbon on the basis and for the purposes of the relationship would otherwise be enjoyed by Ms Leane in circumstances where it would be unconscionable for her to retain the whole of the Property when that is not commensurate with her contributions.

It may also be a case for the recognition of an interest arising from a proprietary estoppel by encouragement on the basis that Ms Leane left saying “you can have the lot, I am going”. This may be found to have encouraging expenditure by Mr Dalbon on the basis that he had the ownership of the whole of the Property. Similarly it may be a case of estoppel by acquiescence which may arise from Ms Leane’s acquiescence inducing the expenditure by Mr Dalbon in the expectation that ownership, or an interest, in the property would be the outcome.

Reason for absence and delay

I have set out a summary of the evidence and submissions for Mr Dalbon’s absence at the hearing before Mukhtar AsJ (above at [19] –[27]) and Ms Lean’s arguments that those reasons are unsatisfactory and insufficient (above at [53). I will not repeat them.

The application before me was issued on 4 June 2020, and the total period between the date of the Order (26 September 2019) and the commencement of this application is over 8 months. That is a significant delay. But it needs to be tempered by the fact of the lodging of the Caveat on 26 February 2020 and commencement of the County Court proceedings on 20 April 2020. The lodging of the caveat or the commencement of the County Court proceeding is the effective date of the application for an unusual reason. On the face of the Order, there is no reason for the reasonable person or lawyer to conclude that it stands in the way of Mr Dalbon prosecuting his application in the County Court. To come to that conclusion some deeper knowledge of the jurisdiction under Order 53 and the law of issue estoppel is necessary. The conclusion to which the County Court Judge apparently came, and which I have reasoned-out above (at [58]- [66]) is not obvious at first blush. That reduces the effective delay to between 5 and 7 months.

Mr Dalbon’s actions should be judged having regard to his personal circumstances, degree of knowledge of the legal system and financial resources. He is a fencing contractor of 65 years of age. He left school after Form 5 and says he is not a ‘sophisticated’ person, meaning I think knowledgeable and worldly wise. The evidence is clear, and not disputed by countervailing evidence, that before the VCAT application he had never been involved in legal proceedings of this kind and did not understand how the process worked. He thought that because Ms Leane moved out so long ago and he had kept up the Property for so long, that the Court would not agree with her application.

When he received the warrant for possession he made enquiries of a neighbour, Richard Hobson, a solicitor, and asked him for advice about what he should do. Mr Hobson said that this was not his area of practice and Mr Dalbon understands that he spent some time trying to find somebody that was able to help him. He is not familiar with the legal process so did not know what he needed to do in response to the Warrant.

I am satisfied that, as counsel for Mr Dalbon submitted, there are three reasons for his non-attendance at the hearing before Mukhtar AsJ and for the delay in making this application. First, he did not understand the significance of either the original VCAT hearing or the Supreme Court proceeding, nor what the potential repercussions of those hearings were. Second, he did not have the funds to engage solicitors to provide him with advice with respect to the proceedings or the requirement that he appear at the applications. Third, the VCAT proceeding had been struck out without Mr Dalbon’s participation at the hearing on 8 February 2019. This led Mr Dalbon to believe that the Supreme Court proceedings would likewise be dismissed.

Despite the trenchant criticisms of the evidence given by Mr Dalbon, there is not a word said in the second Leane affidavit against his explanation. The unchallenged evidence of his lack of education, ignorance of the law, lack of sophistication, impecuniosity and expectation that his interest would be recognised by the Court are persuasive explanations for his non-attendance at the hearing and his delay in making this application.

It is undoubtedly true that Mr Dalbon does not plead illiteracy as an explanation for his inaction at critical points of the process. Mr Dalbon’s evidence shows that he was aware of the need to obtain legal advice but failed to do so until April 2020, nearly two months after possession of the Property had been obtained. But for a person in his circumstances to understand his perilous position and truly appreciate what is happening often requires the personal involvement of the Sherriff’s officers, as apparently happened when he was evicted from the Property. That event plainly acted as a ‘wake-up call’ for him and galvanized him into action. That is not unusual in my experience of matters of this kind. It is also not necessarily indicative of a ‘consistent pattern of delay and obfuscation designed to secure for himself as long a period of exclusive possession of the Property as possible’, as submitted by Ms Leane. It seems to me to be indicative of ignorance and lack of resources combined with an unrealistic faith in the system of justice engendered by his good fortune in VCAT.

The criticism made of his conduct made by Ms Leane also needs to be viewed in the context of the strength of his claim to a proprietary interest in the Property arising under a constructive trust. As I have said, he has what at this stage appears to be a strong case for the recognition of such an proprietary interest and to deprive him of the opportunity to establish it is a factor that has to be brought into consideration in assessing his explanation for non-attendance and his delay in bring the matter to Court. In my view, the interests of justice to him support extending the time for the making of this application.

Prejudice

Further, the relative prejudice to him, on the one hand, and to Ms Leane on the other is such that I am persuaded that the Order should be set aside. It is significant in this respect that setting aside the order is for the purpose of preventing an issue estoppel in the County Court. The prejudice to Mr Dalbon arising from not setting aside the Order is extreme. Mr Dalbon has sworn that he has effectively no assets outside of his equity in the Property. His evidence is that if he is not permitted to enforce his interest in the Property in the County Court proceedings, he will be penniless and will need to rely on the goodwill of friends to subsist. Mr Dalbon is now 65 and although he still earns an income from fencing, that income is not reliable and he suffers back issues which will make it difficult to continue that work. That constitutes significant prejudice for the purposes of the Court’s exercise of discretion.

Even if I am wrong in my assessment that issue estoppel will prevent Mr Dalbon from pursuing his claim in the County Court proceedings, the very risk that it could stand in the way of Mr Dalbon establishing in the County Court that he has a proprietary interest arising out of a resulting, constructive or proprietary estoppel trust is enough to show profound prejudice to him.

The prejudice to Ms Leane in the circumstance that she has obtained possession and sold the Property lies in the costs that have been incurred by her in this proceeding to date, and the delay she will suffer in receiving whatever she is entitled to receive from the proceeds of its sale. The hearing before Mukhtar AsJ was undertaken summarily, on a single day, without Ms Leane having to give evidence in person. There was no, lengthy, expensive or challenging trial that must be repeated.

As Counsel for Mr Dalbon pointed out, had Mr Dalbon raised the issues set out in his affidavit before Mukhtar AsJ, it is likely that Ms Leane’s application would have been dismissed or, more likely, ordered pursuant to r 4.07 of the Rules to proceed as if commenced by Writ so that the claim to possession and a counterclaim for a proprietary interest in the Property could be determined after pleadings and discovery and according to the usual trial procedure. Thus, had Mr Dalbon participated in the original proceeding, the parties would have been in the same situation that they are now, and would be forced to undertake pre-trial processes and participate in a full trial so as to determine their respective interests.

Ms Leane submitted that there is no evidence that Mr Dalbon told Ms Leane that he believed himself to be entitled to a share of the proceeds of sale of the Property if it was sold. This is not correct. As I have pointed out, Mr Dalbon claimed an interest in the Property in the course of the VCAT hearing in December 2018. Further, as I have pointed out, properly advised Ms Leane ought to have known of the potential interest he has in the Property arising from both their failed relationship and his contributions to the acquisition, servicing of the mortgage, maintenance and from the sale of the Adjoining Block.

The discretion

Ms Leane submitted that it would be unconscionable now for the Court to exercise its discretion to allow Mr Dalbon to bring a claim for a beneficial interest in the proceeds of sale of the Property in circumstances where the evidence demonstrates that he opposed the sale and did everything he could to delay it. That in my view is a ‘long bow’. Primarily, Mr Dalbon’s alleged opposition to the sale is inaction and the attempted protection by the caveat and the County Court proceeding of the interest he claims in the Property.

In submissions, Ms Leane made much of the possible availability to Mr Dalbon of proceedings under the Family Law Act 1975 (Cth) or the Relationships Act 2008 (Vic). This can, in the circumstances, only affect the exercise of the discretion whether or not to set aside the Order. Given that the time for the making of an application for an order for division of de facto property is within two years after the end of the de facto relationship, and the relationship ended in 2009 at the latest, to throw Mr Dalbon back to that procedure now after he has brought both this application and the County Court proceeding would be harsh and unjust. I am not persuaded that it is an appropriate thing to do.

As I have said, in the end the question is whether, upon the material advanced by Mr Dalbon, there is a real likelihood that it would be unjust to him to allow the Order to stand. If so, it should be set aside on such terms as will minimise the possibility of injustice to him.[138] This involves weighing up the extent to which Mr Dalbon is prejudiced by allowing the Order to stand and the prejudice to Ms Leane in setting it aside. In this case Ms Leane will not suffer any significant prejudice that cannot be remedied by an appropriate order as to costs, whilst Mr Dalbon will be deprived of a prima face proprietary interest in the Property.
[138]Vacuum Oil Pty. Co. Ltd. v Stockdale (1942) 42 SR (NSW) 239, 243-4 (Jordan CJ).

Costs

By r 1.14(1) of the Rules it is provided:

(1) In exercising any power under these Rules the Court—
(a)shall endeavour to ensure that all questions in the proceeding are effectively, completely, promptly and economically determined;
(b)may give any direction or impose any term or condition it thinks fit.

It is usual in applications of this kind to order, as either condition or as a consequence of the setting aside of the judgment, that the applicant pay the costs of the other party thrown away by the setting aside of the judgment or order. In this case, however, the conditional setting aside of the Order is likely to frustrate the very thing that the setting aside is designed to accomplish: which is the opportunity for Mr Dalbon to establish his proprietary interest in the Property in the County Court proceedings.

That is because he has given evidence that he has no assets other than his work gear and has very little spare cash in the bank. He deposes that since he was evicted, he has been living in a friend’s abandoned cottage in Trentham relying on his friend’s goodwill. His income from fencing contracting is very erratic and weather dependent. He earns approximately $40,000 per year, he is 65 and has chronic back issues which make it very difficult for him to continue to work and to earn an income.[139]
[139]First Dalbon affidavit [31]-[32]

If he is not permitted to continue with the County Court proceeding and to obtain a declaration as to his interest in the Property (and the proceeds of sale of the Property), he will have no assets or savings and will need to rely on the goodwill of friends in order to make ends meet. Further, the contributions that he has made to the mortgage over the Property for the past 11 years, which is significantly more than the rental that he would have paid for an equivalent property, will have all been wasted.[140]
[140]First Dalbon affidavit [31].

This evidence shows that a conditional order setting aside the Order, one conditional on payment of costs, is very likely to defeat the purpose of the setting aside of the Order. Similarly an order that Ms Leane’s costs thrown away be paid now is likely to lead to stultification of the County Court proceeding, through Mr Dalbon’s inability to pay those costs and to conduct the proceeding, or resulting from his bankruptcy.

In this case, for these reason, the appropriate order is for the costs of Ms Leane of this proceeding and her costs thrown away by the setting aside of the Order be paid by Mr Dalbon, but that those costs are to be Ms Leane’s costs in proceeding CI-20-01707 in the County Court of Victoria.

Conclusion

For the reasons given above, in my opinion the appropriate orders to make are:

(a) pursuant to r 3.02 of the Rules, the time within which Mr Dalbon may make application pursuant to r 49.02(2) of the Rules is extended to 4 June 2020;

(b) pursuant to r 49.02(2) of the Rules, set aside the Order of Mukhtar AsJ made on 26 September 2019; and

(c) the costs of Ms Leane of this proceeding and the costs thrown away by the setting aside of the Order be paid by Mr Dalbon, such costs to be Ms Leane’s costs in proceeding CI-20-01707 in the County Court of Victoria.

[2020] VSC 461

29 July 2020