Shepherd v Lawson

Case [2019] QSC 174


SUPREME COURT OF QUEENSLAND

CITATION:

Shepherd v Lawson & Anor [2019] QSC 174

PARTIES:

ANNE SHEPHERD

(plaintiff)

v

STEPHEN JAMES LAWSON
SUZANNE DENISE LAWSON  

(defendants)

FILE NO/S:

BS No 10405 of 2015

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

16 July 2019

DELIVERED AT:

Brisbane

HEARING DATE:

23, 24 & 26 April 2019, further written submissions 17 May 2019 and 23 May 2019

JUDGE:

Lyons SJA

ORDER:

The orders of the court are:

1.   Judgment for the plaintiff in the amount of $135,988 plus interest.

2.   I will hear from the parties as to the form of the orders including orders in relation to the removal of the caveat and as to costs.

CATCHWORDS:

CONVEYANCING – BREACH OF CONTRACT FOR SALE AND REMEDIES – ENTITLEMENT TO DEPOSIT – OTHER CASES – where the plaintiff entered into a contract to purchase property from the defendants on a rent to buy basis – where the plaintiff paid a deposit and occupied the property by paying weekly licence fees – where the plaintiff made renovations to the property – where settlement did not proceed – where the plaintiff lodged a caveat over the property – where the plaintiff claims part of the purchase price of the property and the value of improvements made to the property – where the defendants seek removal of the caveat and counterclaims damages for breach of contract – whether the plaintiff is entitled to a return of the deposit – whether the plaintiff is entitled to equitable compensation for the increase in the value of the property as a consequence of the renovations and improvements – whether the defendants are entitled to damages for breach of contract

EQUITY – TRUSTS AND TRUSTEES – IMPLIED TRUSTS – CONSTRUCTIVE TRUSTS – where the plaintiff claims the defendants hold the property on constructive trust – where the plaintiff seeks a declaration of equitable interest as purchaser – whether the alleged defects of the property have the effect of denying the plaintiff an interest as the beneficiary of a constructive trust – whether the plaintiff is entitled to a declaration of equitable interest as purchaser of estate in fee simple

Civil Proceedings Act 2011 (Qld), s 58
Property Law Act 1974 (Qld), s 72
Residential Tenancies and Rooming Accommodation Act 2008 (Qld)

Equuscorp P/L v Glengallan Investments P/L (2004) 218 CLR 471
Freedom v AHR Constructions Pty Ltd [1987] 1 Qd R 59
Lexane Pty Limited v Highfern Pty Ltd [1985] 1 Qd R 446
Stern v McArthur (1988) 165 CLR 489

COUNSEL:

S Fisher for the plaintiff
D Morgan for the defendants

SOLICITORS:

No appearance for the plaintiff
Colville Johnstone Lawyers for the defendants

Background

  1. The defendants have been the registered proprietors of residential land at Akala Street, Camp Hill since 1999.  As it was an investment property it was rented out to a number of tenants between 1999 and early 2012. In early 2012, the defendants rented the property out for $350 per week…

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Details
AGLC
Shepherd v Lawson [2019] QSC 174
Case
[2019] QSC 174
Decision Date

CaseChat Overview and Summary

In the case of Shepherd v Lawson, the plaintiff, Ms Shepherd, brought an action against the defendants, Mr and Mrs Lawson, seeking a return of the deposit paid under a rent-to-buy contract, compensation for improvements made to the property, and a declaration that the defendants held the property on constructive trust for her benefit. The dispute arose when the settlement of the property purchase did not proceed, and Ms Shepherd subsequently lodged a caveat over the property. The defendants counterclaimed for damages for breach of contract.

The primary legal issues before the court were whether Ms Shepherd was entitled to a return of her deposit, whether she was entitled to equitable compensation for the value of the improvements made to the property, and whether the defendants were entitled to damages for breach of contract. Additionally, the court had to determine whether Ms Shepherd was entitled to a declaration that the defendants held the property on constructive trust and whether she was entitled to a declaration of equitable interest as the purchaser of the estate in fee simple.

The court considered the terms of the contract, particularly Clause 9, which allowed either party to terminate the contract in the event of a breach. The court found that Ms Shepherd was entitled to a return of her deposit, as the defendants had terminated the contract without just cause. Regarding the improvements, the court held that Ms Shepherd was entitled to equitable compensation for the increase in the value of the property due to the renovations and improvements she made. The court did not find sufficient evidence to support a declaration of a constructive trust or an equitable interest in the property.

The orders of the court were that judgment be entered in favour of Ms Shepherd for the amount of $135,988 plus interest. The court also indicated it would hear from the parties regarding the form of orders for the removal of the caveat and the allocation of costs.

Orders

Orders of the court

The orders of the court are:

1. Judgment for the plaintiff in the amount of $135,988 plus interest.

2. I will hear from the parties as to the form of the orders including orders in relation to the removal of the caveat and as to costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Clause 9 ‘Parties’ Default’ was as follows;9.1 Seller and Buyer May Affirm or TerminateWithout limiting any other right or remedy of the parties including those under this contract or any right at common law, if the Seller or Buyer, as this case may be, fails to comply with an Essential Term, or makes a fundamental breach of an intermediate term, the Seller (in the case of the Buyer’s default) or the Buyer (in the case of the Seller’s default) may affirm or terminate this contract.9.2 If Seller AffirmsIf the Seller affirms this contract under clause 9.1, it may sue the buyer for:1) damages;2) specific performance; or3) damages and specific performance.9.3 If Buyer AffirmsIf the Buyer affirms this contract under clause 9.1, it may sue the Seller for:1) damages;2) specific performance; or 3) damages and specific performance.9.4 If Seller TerminatesIf the Seller terminates this contract under clause 9.1, it may do all or any of the following:1) resume possession of the Property;2) forfeit the Deposit and any interest earned; 3) sue the Buyer for damages;4) resell the Property.9.5 If Buyer TerminatesIf the Buyer terminates this contract under clause 9.1, it may do all or any of the following:1) recover the Deposit and any interest earned;2) sue the Seller for damages.The plaintiff’s evidence Ms Shepherd gave evidence that she was separated from her husband and in emergency accommodation in early 2012.[3] She was looking for a home to live in with her children when she came across an advertisement on the internet which indicated she could rent a house and the payments would go towards the purchase of the property. She states she phoned Mark Kelly on the number in the advertisement and had a long discussion with him about the proposal and was told that what they were offering would be ‘perfect’ for her. [4] They discussed the deposit which needed to be paid and she was told to bring that deposit to the property the next day. [3] Transcript 1-59 ll 21-22. [4] Transcript 1-18 ll 44-45. Ms Shepherd states she then met Mark Kelly at the property the next day with a woman called Lisa Johnson who also featured in the advertisement, and inspected the property. The advertisement she saw on the internet was in the same terms as the document she was given by Mark Kelly on 1 March 2012 which was headed “No bank! is needed”. That advertisement included a photograph of the property at Akala Street, Camp Hill and contained the following words:[5][5] Affidavit of A Shepherd filed 5 October 2015, Exhibit AS 3.“No Bank! Is NeededTo Own This 3 Bed Home Today! whereU Fix it and U Keep The ProfitsThis Puts You In Your OwnHome Where You Don’t need a loan to make some Money,You keep it Instead of the Bank…In a Central location in Camp Hill BrisbaneWe will Give the Right person the opportunity to Own this Home Today, without the Need of a Bank.You just need something to put down towards the Home, which comes off the price! from Today, You can pay the Rest later……..We supply the house at a fixed price like normal, you supply the labour and everything over that going forward is Yours(You Don’t Have To Pay Us Back until you finish)All You Need is to be able to afford the weekly payments! and then cash in on your effectsIf this is You!!! and you can handle the Repayments of about $797 per week for the chance to Own Today and make some money without the need of a bank in Camp Hill”

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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