Lofthouse v Baxter and Anor (No2)

Case [2007] FMCA 1481

FEDERAL MAGISTRATES COURT OF AUSTRALIA

LOFTHOUSE v BAXTER & ANOR (No.2) [2007] FMCA 1481
BANKRUPTCY – Application by Trustee pursuant to ss.58 and 116 of the Bankruptcy Act 1966 – whether valid trust – equitable principles – relevance of evidence of Bankrupt in other proceeding claiming ownership of property and no reference to trust.
Bankruptcy Act 1966, ss.58, 116, 188
Transfer of Land Act 1958
Property Law Act 1958 (Vic), s.53(1)(b)

Corin v Patton (1990) 169 CLR 540
Hyhonie Holdings Pty Ltd v Leroy (2003) NSWSC 624
Hyhonie Holdings Pty Ltd v Leroy (2004) NSWCA 72
Arthur v Public Trustee (1988) 90 FLR 203
Re Cozens (1913) 2 Ch 478
Marchesi v Apostoulou [2006] FCA 1122
Tito v Waddell (No 2) (1977) Ch 106
Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265
Milroy v Lord (1862) DeGF and J 264
Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449

Applicant: DAVID JAMES LOFTHOUSE
First Respondent: PAULINE ANN BAXTER
Second Respondent: SUZANN JANET OWENS
File number: MLG 1231 of 2006
Judgment of: McInnis FM
Hearing dates: 19, 20 and 23 March 2007
Delivered at: Melbourne
Delivered on: 30 August 2007

REPRESENTATION

Counsel for the Applicant: Mr S.P. Gardiner
Solicitors for the Applicant: Aitken Walker & Strachan
First Respondent: In Person
Counsel for the Second Respondent: Dr J. Glover
Solicitors for the Second Respondent: Owens Lawyers

ORDERS

  1. IT IS DECLARED that the beneficial title to each of the following properties has vested in the applicant pursuant to ss.58 and 116 of the Bankruptcy Act 1966 (Cth) (the Act):

    (a)94 Richardson Street, Middle Park, Victoria, being the property more particularly described in Certificate of Title Volume 3584, Folio 687;

    (b)235 Richardson Street, Middle Park, Victoria, being the property more particularly described in Certificate of Title Volume 10074, Folio 251;

    (c)24 Hill Street, Hawthorn, Victoria, being the property more particularly described in Certificate of Title Volume 8615, Folio 308, and

    (d)78 Wattle Road, Hawthorn, Victoria, being the property more particularly described in Certificate of Title Volume 9239, Folio 723 and Volume 8039, Folio 848.

    (the Properties)

  2. IT IS DECLARED that the second respondent has no caveatable interest in the Properties.

  1. IT IS ORDERED that the second respondent:

    (a)forthwith execute and deliver to the applicant all documents necessary to transfer to the applicant, the title to the Properties; and

    (b)withdraw all caveats lodged against any of the Properties.

  2. IT IS DECLARED that the document commencing ‘THIS DECLARATION OF TRUST is made on 20th day of December 2000”;

    (a)was not effective to transfer the property or to settle the Properties on the trustee of the Richardson Trust;

    (b)was not effective to constitute the second respondent as trustee in respect of the Properties;

    (c)was not effective to dispose of the second respondent’s beneficial interest in the Properties.

IT IS FURTHER ORDERED:

  1. That the second respondent account to the applicant for all rent received from the Properties since the date of the sequestration order.

  2. That the second…

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Lofthouse v Baxter and Anor (No2) [2007] FMCA 1481
Case
[2007] FMCA 1481
Decision Date

CaseChat Overview and Summary

The case of Lofthouse v Baxter and Anor (No2) involved the applicant, Lofthouse, and two respondents, Baxter and another party. The dispute centred around the ownership and transfer of several properties located in Victoria. The matter was heard and determined by the Federal Court of Australia. Lofthouse sought a declaration that the beneficial title to specific properties had vested in them under sections 58 and 116 of the Bankruptcy Act 1966 (Cth). Additionally, they requested that the second respondent, Baxter, execute documents necessary for transferring title and withdraw any caveats lodged against the properties.

The court was required to address several legal issues, including whether the beneficial title to the specified properties had indeed vested in Lofthouse. Another critical issue was whether Baxter had a caveatable interest in the properties. Furthermore, the court needed to determine the validity of a declaration of trust dated 20 December 2000, which was purported to transfer the properties to a trustee of the Richardson Trust. The court also needed to decide whether Baxter could be constituted as a trustee and whether the trust document effectively disposed of Baxter's beneficial interest in the properties.

The court's reasoning was grounded in a detailed examination of the relevant statutory provisions and the evidence presented. It found that the beneficial title to the properties had vested in Lofthouse as per the Bankruptcy Act. The court concluded that Baxter had no caveatable interest in the properties. Regarding the declaration of trust, the court determined it was ineffective in transferring the property or settling it on the trustee, and it did not constitute Baxter as the trustee or dispose of their beneficial interest. The court ordered Baxter to execute necessary documents to transfer the title to Lofthouse and to withdraw all caveats against the properties. Additionally, Baxter was required to account for all rent received from the properties since the date of the sequestration order and to pay Lofthouse's costs of the application.

Orders

Orders of the court

1.

IT IS DECLARED that the beneficial title to each of the following properties has vested in the applicant pursuant to ss.58 and 116 of the Bankruptcy Act 1966 (Cth) (the Act):

(a) 94 Richardson Street, Middle Park, Victoria, being the property more particularly described in Certificate of Title Volume 3584, Folio 687;

(b) 235 Richardson Street, Middle Park, Victoria, being the property more particularly described in Certificate of Title Volume 10074, Folio 251;

(c) 24 Hill Street, Hawthorn, Victoria, being the property more particularly described in Certificate of Title Volume 8615, Folio 308, and

(d) 78 Wattle Road, Hawthorn, Victoria, being the property more particularly described in Certificate of Title Volume 9239, Folio 723 and Volume 8039, Folio 848.

(the Properties)

2.

IT IS DECLARED that the second respondent has no caveatable interest in the Properties.

3.

IT IS ORDERED that the second respondent:

(a) forthwith execute and deliver to the applicant all documents necessary to transfer to the applicant, the title to the Properties; and

(b) withdraw all caveats lodged against any of the Properties.

4.

IT IS DECLARED that the document commencing ‘THIS DECLARATION OF TRUST is made on 20th day of December 2000”;

(a) was not effective to transfer the property or to settle the Properties on the trustee of the Richardson Trust;

(b) was not effective to constitute the second respondent as trustee in respect of the Properties;

(c) was not effective to dispose of the second respondent’s beneficial interest in the Properties.

IT IS FURTHER ORDERED:

5.

That the second respondent account to the applicant for all rent received from the Properties since the date of the sequestration order.

6.

That the second respondent pay the applicant’s costs of and incidental to the Application, including reserved costs if any, to be taxed in default of agreement pursuant to Order 62 of the Federal Court Rules.

7.

Pursuant to Rule16.02 of the

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Evidence Before The Court

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Legal Principle Established

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