McPaul v Massignani

Case [2023] QSC 98

SUPREME COURT OF QUEENSLAND

CITATION:

McPaul v Massignani & Anor [2023] QSC 98

PARTIES:

AMANDA LOUISE McPAUL

(applicant)

v

ENZO TONY MASSIGNANI and LOUISA CATHERINE MASSIGNANI

(respondents)

FILE NO/S:

BS 4219 of 2023

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

11 May 2023

DELIVERED AT:

Brisbane

HEARING DATE:

27 April 2023

JUDGE:

Bowskill CJ

ORDERS:

The application for the appointment of statutory trustees for sale under s 38 of the Property Law Act 1974 (Qld) is allowed. The court will hear further from the parties as to the terms of the order to be made, as foreshadowed in paragraph [58] of these reasons.

CATCHWORDS:

REAL PROPERTY – PARTITION OF LAND – STATUTORY TRUST FOR SALE OR PARTITION – OTHER MATTERS – TRUSTEES – where the parties became co-owners of a property as tenants in common, with a half interest owned by each of the applicant and the respondents – where the applicant’s expectations about what could be done with and on the property were subsequently thwarted, when the parties learned, after becoming owners of the property, that the property could not be further subdivided and had limited options for building development – where the applicant consequently sought to sell her interest in the property and, being unable to reach agreement with the respondents, applied under s 38 of the Property Law Act 1974 (Qld) for the appointment of a statutory trustee to sell the property – where the respondents opposed the appointment of a statutory trustee, arguing that the applicant was estopped from bringing the application on the basis of conversations they had prior to the purchase as to the property being perfect for their respective interests and a place they could all live during their lifetimes – where the respondents also contended the application was defective because it only sought the appointment of one trustee – whether the Court should make an order for appointment of statutory trustees pursuant to s 38 of the Property Law Act 1974 – whether more than one trustee should be appointed pursuant to s 38(3) of that Act

Property Law Act 1974 (Qld), s 37A, s 38(1), s 38(3), s 40

Barport Pty Ltd v Baum [2019] VSCA 167, considered
Bunnings Group Ltd v Asden Developments Pty Ltd [2014] 1 Qd R 493; [2013] QCA 347, considered
Ex parte Eimbart Pty Ltd [1982] Qd R 398, cited
Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411, cited
Foundas v Arambatzis [2020] NSWCA 47, considered
Goodwin v Goodwin & Anor [2004] QCA 50, considered
Hogan v Baseden (1997) 8 BPR 15,723, considered
Ngatoa v Ford (1990) 19 NSWLR 72, cited
Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635; [1993] HCA 45, cited
Re Permanent Trustee Nominees (Canberra) Ltd v Coral Sea Resort Motel Pty Ltd [1989] 1 Qd R 314; [1988] QSCFC 3, considered
Tory v Tory [2007] NSWSC 1078, considered

Wilson v Strzelcykowski & Ors [2016] QCA 227

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AGLC
McPaul v Massignani [2023] QSC 98
Case
[2023] QSC 98
Decision Date

CaseChat Overview and Summary

In the matter of McPaul v Massignani, the applicants sought to partition their jointly held property by appointing a statutory trustee for sale. The parties became co-owners of the property as tenants in common, each holding a half interest. However, subsequent to their purchase, they learned that the property could not be further subdivided and had limited options for building development. This revelation thwarted the applicants' expectations about what could be done with and on the property. Consequently, the applicants sought to sell their interest in the property but could not reach an agreement with the respondents.

The court had to determine whether the applicant could be estopped from bringing the application for the appointment of a statutory trustee, based on the conversations they had prior to the purchase. The respondents also contended that the application was defective because it only sought the appointment of one trustee, whereas two trustees were required under the Property Law Act 1974 (Qld). The applicants sought to address this contention by proposing a second trustee, Ms Kate Muller, a solicitor employed in Mr Mitchell’s firm. However, the respondents argued that neither trustee was appropriate due to their limited experience and Ms Muller’s lack of independence from Mr Mitchell.

The court dismissed the respondents' argument that the application was defective because it only sought the appointment of one trustee, noting that the applicants had proposed a second trustee. However, the court also noted that Ms Muller was not independent of Mr Mitchell and that another person should be nominated as a trustee. The court proposed to allow the application and make an order under s 38(1) of the Property Law Act, appointing two named persons as trustees of the property, to be held by them on statutory trust for sale. The court will hear further from the parties as to the terms of the order to be made, including the identity of the two named persons to be appointed as trustees, whether any provision should be made in the order for the respondents to have the first right to purchase the applicants' interest, whether the operation of the order should be stayed for a period of time, and any other practical matters in relation to the order.

Orders

Orders of the court

The application for the appointment of statutory trustees for sale under s 38 of the Property Law Act 1974 (Qld) is allowed. The court will hear further from the parties as to the terms of the order to be made, as foreshadowed in paragraph [58] of these reasons.

Background

Background to the litigation

Mr and Mrs Massignani oppose the making of the order, on the basis that Ms McPaul is estopped from bringing the application under s 38. They also contend the application was “defective” from the outset, because it contemplates the appointment of only one trustee, when two are required. Ms McPaul sought to answer the latter argument by proposing, at the hearing, a second trustee, Ms Kate Muller, a solicitor employed in Mr Mitchell’s firm. The Massignanis do not accept that either trustee is appropriate, having regard to their limited experience and the fact that Ms Muller is not independent of Mr Mitchell.Background Ms McPaul and Mr and Mrs Massignani signed the contract for the purchase of the property on 18 January 2022. The purchase price was $2,600,000. The sisters financed the majority of their respective shares of the purchase price from money they inherited from their aunt, who died in September 2021. They have each received $1,200,000 from that estate, which was put into the purchase of the property. There remain residuary assets of the estate (mainly shares) to be distributed, valued at just under $700,000. Mr and Mrs Massignani contributed $1,200,000 to the purchase; and Ms McPaul contributed $1,536,478.83 (including the stamp duty and other purchase costs). There is an issue about how the additional money contributed by Ms McPaul should be dealt with. Despite the different contributions, as already noted, upon the completion of the purchase, the parties were registered as owners as tenants in common in equal shares. Ms McPaul says that the “main reason I purchased the property with Louisa and Enzo was to build a house and art studio on the property, where I intended to live and work”. She says, and Mrs Massignani does not dispute, that when they inspected the property in December 2021, Mrs Massignani said “[t]he land is so big. You can build your dream house and art studio at the back of the property with the view”. Having acquired the property in March 2022, in August 2022 Ms McPaul and Mr and Mrs Massignani sought advice regarding the potential subdivision of the property, and other alternatives to deal with their interests in the property upon their respective deaths. It was in this context that they learned that the property could not be further subdivided and also that the options for further development on the property were limited (at best, it was said, “a Secondary Dwelling (ie granny flat/family accommodation) could be developed; however, such must remain on the same title as the primary dwelling”).[1][1]Affidavit of Crilly, at p 34 of the exhibits. Ms McPaul was disappointed about this, as it meant she could not build her house and art studio, as had been the plan. She has considered various other options, but ultimately decided that she wanted to sell her interest in the property. It was only in the context of being told the land could not be subdivided that advice was obtained in relation to options for formalising their co-ownership. There was no such agreement reached prior to acquiring the property, nor has one been entered into subsequently. The material goes no further than the emailed advice from a solicitor, in September 2022.[2][2]Affidavit of McPaul, at pp 3-4 of the exhibits (email from Mortimore & Associates); affidavit of Massignani at [30].

Evidence

Evidence Before The Court

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Decision

Reasons for decision

As to whether Ms Muller is an appropriate second trustee, as the point has been taken by the respondents, that Ms Muller is not independent of Mr Mitchell, I consider it would be appropriate for another person to be nominated. But I do not accept that either Mr Mitchell or Ms Muller are inadequately qualified to perform the task. I will hear further from the parties as to this at the time of delivering judgment.Conclusions For those reasons, I propose to allow the application, and make an order under s 38(1) of the Property Law Act, appointing two named persons as trustees of the property, to be held by them on statutory trust for sale, with the proceeds (after the trustees’ costs and any costs of sale or other encumbrance on the property) to be distributed equally to Ms McPaul, on the one hand, and Mr and Mrs Massignani, on the other. I will hear further from the parties as to:(a)the identity of the two named persons to be appointed as trustees;(b)whether any provision should be made in the order for the respondents to have the first right to purchase Ms McPaul’s interest, before any other form of sale is undertaken;(c)whether the operation of the order should be stayed for a period of time, to give effect to (b), without incurring the costs of the trustees – for example, the order could be stayed for 30 days, to allow an independent valuation to be obtained and an offer made; (d)any other practical matters in relation to the order; and(e)costs.

Ratio Decidendi

Legal Principle Established

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