| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 7788 of 2006
| MUHARREM (“HARRY”) SIVRITAS | Plaintiff |
| v | |
| ALI SIVRITAS | First Defendant |
| and | |
| MUZEYYEN SIVRITAS | Second Defendant |
| and | |
| BULLER MCLEOD PTY (ACN 073 207 137) | Third Defendant |
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JUDGE: | Kyrou J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 27 November 2008; written submissions filed on 5 and 12 December 2008 | |
DATE OF JUDGMENT: | 19 December 2008 | |
CASE MAY BE CITED AS: | Sivritas v Sivritas (No 2) | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 580 | |
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Set-off of a party’s entitlement to costs against another party’s entitlement to the proceeds of sale of a property in which the parties have been held to have equitable interests pursuant to a constructive trust.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff (and Defendant by Counterclaim) | Mr P Cawthorn SC with Mr T Sedal | FLA Partners |
| For the First and Second Defendants (and Plaintiffs by Counterclaim) | Mr P Barton | Buller McLeod Pty |
| For the Third Defendant | Mr R H Miller | Buller McLeod Pty |
HIS HONOUR:
Introduction and summary
In Sivritas v Sivritas,[1] I made a declaration that the first and second defendants hold the land located at 25 Glencairn Drive, Greenvale and more particularly described in Certificate of Title Volume 9536 Folio 890 (“Land”) on a constructive trust pursuant to which their son, the plaintiff, is a tenant in common with a 73.61 percent equitable interest and the first and second defendants are tenants in common with a 26.39 percent joint equitable interest.
[1][2008] VSC 374.
On 10 October 2008, I ordered that the first and second defendants pay two-thirds of the plaintiff’s costs of the proceeding. On 27 November 2008, I ordered that the Land be sold by auction pursuant to Part IV of the Property Law Act 1958 (Vic) and that, subject to further order, the net proceeds of sale be distributed to the plaintiff and the first and second defendants in accordance with their equitable interests in the Land. The auction is scheduled to take place no later than 28 February 2009.
The plaintiff has applied for an order that his costs of the proceeding be set off against any funds flowing to the first and second defendants from the sale of the Land. The solicitor for the first and second defendants, Buller McLeod Pty, applied to be added as a defendant in order to oppose the plaintiff’s application. It did so because it took a charge from the first and second defendants on 24 October 2006 and registered a caveat on the Land to support that charge. On 27 November 2008, I made an order adding Buller McLeod Pty as the third defendant.
It is common ground between the parties that the first and second defendants’ share of the net proceeds of sale of the Land will be insufficient to pay the fees of Buller McLeod Pty and two-thirds of the plaintiff’s costs. Buller McLeod Pty has estimated that its costs are approximately $120,000–$140,000. The plaintiff’s…
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- Case
- [2008] VSC 580
- Decision Date
CaseChat Overview and Summary
The central legal issue before the court was whether the party entitled to costs could set those costs off against the other party's entitlement to the proceeds of sale of the property. The court had to consider whether the equitable interests of the parties in the property were sufficiently distinct to allow for such a set-off. Additionally, the court had to determine the appropriate division of the proceeds of sale between the parties.
The court found that the equitable interests of the parties were distinct enough to permit the set-off of the party's entitlement to costs against the other party's entitlement to the proceeds of sale. The court reasoned that the constructive trust did not preclude the set-off, as the interests of the parties were separate and could be quantified independently. The court further held that the proceeds of sale should be divided between the parties in proportion to their respective equitable interests. The court ordered that the party's entitlement to costs be set off against the other party's entitlement to the proceeds of sale, with the remaining proceeds to be divided in accordance with the court's determination of the parties' equitable interests.
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