Sweeney v Sweeney (No 2)
[2016] VSC 550
•5 September 2016
| IN THE SUPREME COURT OF VICTORIA AT MELBOURNE COMMERCIAL COURT | Not Restricted |
S ECI 2016 0061
| WILLIAM JOSEPH SWEENEY and CATHERINE MARY WALTER (who apply in their capacity as Trustees of the Bacchus Marsh Land Trust) | Plaintiffs |
| v | |
| CHARLES AUGUSTINE SWEENEY | First Defendant |
| FRANCIS JOHN SWEENEY | Second Defendant |
| CATHERINE MARY WALTER (in her own capacity and in her capacity as Executor of the Will of Elizabeth Coral Sweeney) | Third Defendant |
| WILLIAM JOSEPH SWEENEY (in his own capacity and in his capacity as Executor of the Will of Elizabeth Coral Sweeney) | Fourth Defendant |
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JUDGE: | Digby J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 5 September 2016 |
DATE OF JUDGMENT: | 5 September 2016 |
CASE MAY BE CITED AS: | Sweeney & anor v Sweeney & ors (No 2) |
MEDIUM NEUTRAL CITATION: | [2016] VSC 550 |
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PRACTICE AND PROCEDURE – Originating Motion – Application under Order 54 Supreme Court (General Civil Procedure) Rules 2005 – Section 63 of the Trustee Act 1958 –Trustees’ powers to dispose of Land the subject of a trust – Contract of Sale of trust Land – Special Condition of Contract of Sale that such contract be conditional upon the Vendors obtaining a Court order establishing that the Vendors have full and exclusive legal authority to enter into that contract.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr M Costello with Ms G Coleman | Tolhurst Druce & Emmerson |
| For the Defendants | No appearance |
HIS HONOUR:
The Proceeding
In this matter the plaintiffs are Trustees of what is known as the Bacchus Marsh Land Trust. The defendants, who include the plaintiffs, appear in their personal capacity as beneficiaries of that trust.
This proceeding, which has been commenced by way of Originating Process, principally concerns the proposed sale of the sole asset of the Bacchus Marsh Land Trust which is a 45 hectare property known as Lot 1 Buckleys Road, Merrimu, at Bacchus Marsh, more particularly described in Certificate of Title Volume 11585 Folio 062 ( the Bacchus Marsh Land).
The relief sought by the plaintiffs in this proceeding relates to the power to sell the Bacchus Marsh Land by a conditional Contract of Sale dated 30 October 2015 (the Contract of Sale), entered into between the plaintiffs, in their capacity as Trustees of the Bacchus Marsh Land Trust, and a company known as Bacchus Marsh Developments Pty Ltd. The subject Contract of Sale is Exhibit “WJS-3”to the affidavit of William Joseph Sweeney sworn 19 March 2016 (William Sweeney’s first affidavit). The relief sought by the plaintiffs also concerns the defendants' respective entitlements to the purchase price payable pursuant to that conditional Contract of Sale.
The conditional Contract of Sale contains certain relevant Special Conditions, in particular Special Conditions 2.1, 3.1, 3.2, 3.3 and 3.4. These Special Conditions provide as follows –
2.1 Definitions
Condition Precedent Event means the obtaining, by the Vendors, of either
(a) a court order, or
(b) consents by the beneficiaries for whom the Vendors hold the Land in trust establishing that the Vendors have full and exclusive legal authority to enter into this contract.
Sunset Date means the date that is forty eight (48) months after the Day of Sale.
3. Condition Precedent Event
3.1 Notwithstanding any other provision of this Contract, the Purchaser’s obligations under this Contract and the settlement of this Contract are subject to and conditional upon the Condition Precedent Event being achieved by the Vendors prior to the Sunset Date.
3.2 From the Day of Sale, the Vendors must use their best endeavours to achieve the Condition Precedent Event prior to the Sunset Date.
3.3 If the Vendors do not achieve the Condition Precedent Event by the Sunset date, then either party may in its sole discretion rescind this Contract by written notice to the other party at any time after the Sunset Date but before the Condition Precedent Event is achieved.
3.4 Upon the rescission of this Contract pursuant to Special Condition 3.3, all monies paid by the Purchaser to the Vendors under this Contract, including the deposit and any interest thereon, must immediately be refunded to the Purchaser.
By Originating Process dated 16 March 2016 the plaintiffs seek the following relief:
2.A declaration that the Land described in paragraph 5 of the first plaintiff’s affidavit filed herein (‘the Land’) is held on trust for:
(a)the first defendant as to 8/42 undivided parts or shares;
(b)the second defendant as to 8/42 undivided parts or shares;
(c)the third defendant as to 8/42 undivided parts or shares;
(d)the fourth defendant as to 8/42 undivided parts or shares;
(e)the third and fourth defendants (in their capacity as Executors of the Will and Codicil of Elizabeth Coral Sweeney) as to 10/42 undivided parts or shares.
3.An order conferring upon the plaintiffs the power to enter a contract dated 30 October 2015 for the sale of the Land, such contract being exhibited as Exhibit WJS-3 to the first plaintiff’s affidavit.
4.An order that the plaintiffs are entitled to pay or retain out of the trust fund, and have recourse to the proceeds of sale of the Land, to pay their costs of this application and their costs of perfecting title to the Land on an indemnity basis.
5.Such further or other orders as the Court considers just and appropriate to give effect to any declarations of right or howsoever otherwise.
The four defendants are siblings. William Sweeney and his sister Catherine Mary Walter are the legal representatives of the estate of their father, the Honourable Charles Augustine Sweeney (Mr Sweeney Snr), as well as being executors of the Will and Codicil of Elizabeth Coral Sweeney (Mrs Sweeney), the deceased wife of Mr Sweeney Snr and mother of the defendants.[1]
[1]William Sweeney’s first affidavit, [4] and [5].
The circumstances which give rise to the Bacchus Marsh Trust, the proposed sale of the Bacchus Marsh Land pursuant to the Contract of Sale and the proceedings are described in William Sweeney’s first affidavit and his subsequent affidavit sworn 30 August 2016 (William Sweeney’s second affidavit) relied on by the plaintiffs in this proceeding.[2]
[2]There appears to be no dispute in this proceeding as to the accuracy of the plaintiffs' summary of the background of the Bacchus Marsh Land and other factual circumstances and subsequent relevant events as set out in William Sweeney’s first and second affidavits.
Ultimately, the first defendant did not rely upon any affidavit material in the proceedings.[3] Neither did the first defendant appear at trial to tender any material or press any arguments or in any other way advance his case.
[3]William Sweeney’s first and second affidavits are marked as Exhibit “1”.
Except for the first defendant, Mr Charles Sweeney QC, all other defendants to this proceeding consent to the orders sought by the plaintiffs in this proceeding.
The Facts
The Bacchus Marsh Land
The Bacchus Marsh Land was originally general law title land. On 19 August 1951, Mr Sweeney Snr acquired a quarter share in that land, as a tenant in common. That land was part of a larger holding, with the remaining three quarters of the land owned by James Ryan and his sons, James and Arthur Ryan (the Ryans). At about this time and thereafter the subject land was used for agricultural purposes, including grazing stock.
In 1962 Mr Sweeney Snr conveyed his interest in the Bacchus Marsh Land to a related company called C.A.S. Pty Ltd. This company went into voluntary liquidation in 1974, and its interest in that land was conveyed back to Mr Sweeney Snr in 1977.
There are several facts and circumstances which indicate that by about 1977, Mr Sweeney Snr held this holding in the Bacchus Marsh Land on trust for the benefit of his wife and children.
When part of the Bacchus Marsh Land was re-conveyed to Mr Sweeney Snr in 1977, no consideration is recorded as having been paid to the vendor, and the General Law Search Extraction sheet summarising this transaction notes that that conveyance was on the basis of what is summarised as an "entitled in equity".[4] Consistently with a non-beneficial transfer, the Memorial recorded nominal stamp duty as payable on the registration of the conveyance.
[4]William Sweeney’s first affidavit, exhibit “WJS-6”.
No trust deed has been located. However, a letter found amongst Mr Sweeney Snr's papers dated 20 December 1985 from Darvall McCutcheon Solicitors to Mr Sweeney Snr refers to a statement of adjustments in relation to the sale of Lerderderg Park Land abutting O'Connell Road.[5] The letter encloses cheques for distribution "to the beneficiaries", being Mrs Sweeney and each of the four defendants. By reference to the amount of each cheque, Mrs Sweeney received a sum equivalent to 10/42 (viz. $4,760.63 of a total of $19,994.67), and each of the defendants a sum equivalent to 8/42 (viz. $3,808.51 each of $19,994.67).
[5]William Sweeney’s first affidavit, [11] and [17], exhibit “WJS-11”; the Bacchus Marsh Land was also known as Lerderderg Park (William Sweeney’s first affidavit [11]).
These amounts correspond to the records which the plaintiffs have been able to locate relating to the shareholdings in C.A.S. Pty Ltd. A Deed entered into by the voluntary liquidators of C.A.S. Pty Ltd in December 1974 records that there were five shareholders of C.A.S. Pty Ltd: Mrs Sweeney who held 10 of 42 shares, and each of Mr Sweeney Snr's four children (the defendants to this proceeding) who each held eight shares.[6]
[6]William Sweeney’s first affidavit, exhibit “WJS-8”.
Following Mr Sweeney Snr's death in December 2007, Catherine Walter's husband, John Walter, managed the maintenance of, and made improvements to, the Bacchus Marsh Land, including attending to replacement of boundary fences, removal of surface rocks and weeds, and by organising some cropping. John Walter and Mrs Sweeney paid for the costs of the work. After deduction of proceeds from cropping, these works cost not less than $135,000.
In 2014, William Sweeney and Catherine Walter applied to bring Mr Sweeney Snr’s part of the Bacchus Marsh Land under the Torrens system, and also acquired by adverse possession the remaining three quarters of the Bacchus Marsh Land. Thereby, William Sweeney and Catherine Walter became the joint registered proprietors of the Bacchus Marsh Land in March 2015.[7]
[7]William Sweeney’s first affidavit, Exhibit “WJS-14”.
I observe that it is obvious that, the title conversion and adverse possession claim referred to above were to the advantage of all the defendant beneficiaries.
Conclusions as to the existence of the Trust
In this proceeding the first defendant does not refute the existence of the trust which the plaintiffs assert is to be inferred from the facts and circumstances referred to above.
On the above bases, particularly the facts and circumstances which I have highlighted in paragraphs [10] to [15] above, I am satisfied that Charles Sweeney Snr intended to, and did, establish a trust in respect of his portion of the Bacchus Marsh Land for the benefit of the plaintiffs in the proportions referred to in paragraph [5(2(a) to (e))] above.
Although at an earlier stage the first defendant sought to raise criticisms as to the suitability of the plaintiffs as Trustees the appropriateness of the appointment of the plaintiffs as Trustees does not now appear to be in contest.
Further, I note that by a letter to his then solicitors, the first defendant was notified in December 2014 of the plaintiffs' intention (in their capacity as their father's representatives) to appoint themselves as Trustees, and that the trust would be for the benefit of the former shareholders of C.A.S. Pty Ltd in relative proportions to their shareholdings. The first defendant was, at that time, asked to advise the plaintiffs as to his attitude to these matters. The first defendant did not respond.
Offers for the Bacchus Marsh Land
On 12 February 2014, John Walter received an expression of interest for the purchase of the Bacchus Marsh Land from an agent, Andrew Cowper (Cowper) who declined to disclose the identity of the potential purchaser. However, Cowper did disclose that the purchaser would be "prepared to consider" paying $1.75 million for the Bacchus Marsh Land. On 5 March 2014 Cowper again communicated that "prospective purchasers" "would consider" $1.95 million for the Bacchus March Land.
In early March 2014 , John Walter notified each of the beneficiaries of the offer which had been received, and discussed the offer with William Sweeney and Catherine Walter. He wrote to the first defendant and the second defendant, Francis Sweeney, on 20 May 2014, and invited each of them to let him know if they had any views on the potential transaction.[8]
[8]William Sweeney second affidavit, [8], Exhibit “WJS-20”.
On 3 June 2014, the first defendant emailed John Walter in response to his letter and he asked a series of questions. These questions by the first defendant did not include questions on any dispute in relation to the purchase price.[9]
[9]William Sweeney second affidavit, [9], Exhibit “WJS-21”.
On 17 June 2014, Gadens, acting on behalf of the plaintiffs in their capacities as executors of the will and codicil of Mrs Sweeney, replied to the first defendant’s email of 3 June 2014, noting, amongst other things, that the plaintiffs held "tentative views" that one quarter of the Bacchus Marsh Land appears to have been held in portions of 10/42 for Mrs Sweeney, and 8/42 each for each of the siblings.
It was not known to the plaintiffs, or John Walter, that at about the time John Walter was notifying the beneficiaries of the expression of interest he had received in early March 2014 , the first defendant was corresponding with another interested party in respect of the sale of the land.
Sometime prior to June 2014, the first defendant corresponded in relation to the land with David Hodge (Hodge) and George Petsinis (Petsinis), consultants on behalf of the Stamoulis Property Group. It appears that Hodge may have made an offer to the first defendant of $3.8 million for the Bacchus Marsh Land.[10] In about June and July 2014, a series of emails passed between the first defendant and Nick Parthimos (Parthimos) of the Stamoulis Property Group, including an email dated 4 July 2014 in which the Stamoulis Property Group offered Charles Sweeney $4.3 million for the Bacchus Marsh Land.[11]
[10]William Sweeney’s second affidavit, [15], Exhibit “WJS-24” (email dated 4 July 2014 Parthimos to the first defendant).
[11]William Sweeney’s first affidavit, Exhibit “WJS-24”.
The first defendant did not notify the plaintiffs of any of the aforementioned dealings directed to a possible sale of the trust land.
In mid-2014, a contractor undertaking land husbandry work on the Bacchus Marsh Land expressed surprise to John Walter that he had not been contacted by a developer who was acquiring a significant amount of the land near the Bacchus Marsh Land.
In due course, the contractor mentioned John Walter's contact details to Parthimos, who then got in touch with John Walter on 19 September 2014. Parthimos emailed John Walter to say the Stamoulis Property Group would be interested in discussing the Land with him, and that his company had not known that he was the relevant person to talk to, and also stated that "for some time, we have endeavoured to discuss this matter with Mr Charles Sweeney, without any success".[12]
[12]William Sweeney’s second affidavit, [13].
Notification to the beneficiaries of the intended sale and sale price
After negotiating with the Stamoulis Group, the plaintiffs ultimately accepted a purchase price of $5 million for the Land.[13]
[13]William Sweeney’s second affidavit, [33]-[42].
All beneficiaries were notified of the negotiations with respect to the sale, and the proposed purchase price, and other steps in the sale process, and:
(a) on 27 October 2014, by way of letter from Gadens to ABL,[14] the first defendant's views were sought by the plaintiffs on the price at which he would be prepared to sell were sought. The first defendant did not reply to this letter.
(b) on 30 March 2015 Charles Sweeney was notified of a likely offer from the Stamoulis Group of $5 million and the plaintiffs' wish to accept the offer. The first defendant was asked to provide his urgent response with respect to the proposed sale. Charles Sweeney did not respond.[15]
[14]William Sweeney’s second affidavit, [26] and Exhibit “WJS-25”.
[15]William Sweeney’s second affidavit, [24]–[25] and Exhibit “WJS-28”.
Reasons for entry into the contract of sale
The plaintiffs’ sworn material[16] explained their several reasons for considering the price for the sale of the Land to be a reasonable one, namely that:
[16]Cross–referenced in the Plaintiffs’ written submissions, dated 2 September 2016 [27].
(a) the price was significantly higher than any other previous offer, including Cowper's expression of interest of $1.95 million, which later increased to $2.3 million;
(b) it represented a marked increase in previous estimated values of the Land, including a Council valuation of the Land as at 1 January 2014 in the sum of $568,000;
(c) the plaintiffs received a valuation of the Land, stating that $5 million represented market value for that Land as at 27 July 2015. I add that the valuer was aware of the price in the proposed Contract of Sale at the time of making this valuation;
(d) the plaintiffs considered that the Stamoulis Group was best placed to offer the highest price, given the Group's recent purchases of surrounding properties, which limited the capacity of a third party developer to benefit from the economies of scale that Stamoulis Group appeared to be able to avail themselves of;
(e) the Stamoulis Group had indicated that the earlier price of $4.3 million which they had offered, represented a significant premium to the rate per hectare that the Group had paid for neighbouring blocks; and
(f) the sale of the Land would obviate the need to develop any scheme for the future management of the Land, including any obligations to pay substantial outgoings, which would be above receipts, associated with the apparently rapid increase in value of the Land.
The Court’s power to make the orders sought
In substance, the Trustees seek a power of sale from the Court. The Court's powers in this regard are reposed in s 63(1) of the Trustee Act 1958 (Vic) (Trustee Act).
Section 63(1) of the Trustee Act provides as follows.
Power of Court to authorize dealings with trust property
(1)Where in the management or administration of any property vested in Trustees, any sale, lease, mortgage, surrender, release or other disposition, or any purchase, investment, acquisition, expenditure or other transaction, is in the opinion of the Court expedient, but the same cannot be effected by reason of the absence of any power for that purpose vested in the Trustees by the trust instrument (if any) or by law, the Court may by order confer upon the Trustees, either generally or in any particular instance, the necessary power for the purpose on such terms and subject to such provisions and conditions (if any) as the Court thinks fit and may direct in what manner any money authorized to be expended, and the costs of any transaction are to be paid or borne as between capital and income.
Section 63(1) of the Trustee Act provides a wide power on the Court to confer upon Trustees, by means of an appropriate order, the necessary power to effect a purpose which is otherwise not enabled by the express powers vested in the Trustees. The Court’s power in this regard, and its breadth, is the subject of exposition and explanation in the judgment of the High Court of Australia in Riddle v Riddle.[17]
[17](1952) 85 CLR 202
The Court will exercise the power in s 63 of the Trustee Act if it is of the view that it is expedient in the management or administration of any property vested in a Trustee that there be a sale or other expedient transaction, dealing or action.
In my view it is clear that unless the Trustees in this matter are by appropriate orders promptly empowered to sell the subject land, then it is unlikely that the land will be disposed of, and concomitantly it is unlikely that the best interests of the beneficiaries will be served.
I consider that in the circumstances I have earlier summarised, the subject Land is held on trust as detailed in paragraph [2] of the Originating Process herein, dated 16 March 2016. I also consider that because of the abovementioned informalities in relation to the establishment of the Bacchus Marsh Land Trust by Charles Sweeney Snr, there is an absence of clear express power vested in the Trustees by any trust instrument, or otherwise, to sell the Land.[18]
[18]The provisions of the Settled Land Act 1958 are inapplicable here because the pre-conditions of s 8 of that Act are not made out.
I am also persuaded by the material which has been filed by the plaintiffs, and by their submissions, that it is expedient and in the interests of the property as a whole, and in the best interests of the beneficiaries, and otherwise in all respects appropriate, to make such orders as are necessary to confer upon the Trustees the power to sell the subject Land and take all necessary steps to complete that sale.
Finally, I note in this regard that William Sweeney’s first affidavit[19] states the Trustees intend to distribute the net proceeds of sale of the land between those with claims on the Trust, namely the first to fourth defendants.
[19]William Sweeney’s first affidavit, [6].
In the circumstances of this case, in my view, it is in the best interests of all the beneficiaries that the subject Land be sold as the one parcel of land and distributed in the proportions referred to in paragraph 5 (2(a)-(e)) above.
There is no principal of law or rule of public policy which would support an outcome of the type referred to earlier in these proceedings by the first defendant, namely that the property must be dealt with in some way referrable to what is contended to be the specific individual trusts which the first defendant asserts were established in relation to the Land. Indeed, on the first defendant's interpretation of the powers of the Trustees, the subject Land would probably be unsaleable, or saleable at below optimum price because it would, on the first defendant’s assertion, need to be sold in numerous small parcels.
Further, as Mr Costello has submitted on behalf of the plaintiffs, there is here no basis arising from the terms or circumstances of the creation of the subject trust, or otherwise, that would suggest, let alone establish, that the trust is comprised of several separate different trusts which are incapable of overall disposal.
In addition, I note the plaintiffs make the further point, which I also accept, that the cost of maintaining the Land now exceeds the income generated by it. This is one of the circumstances which apparently resulted in the Trustees (on terms) permitting the intending purchaser to enter into possession and use of the land while the Contract of Sale remains on foot. The continued cost of maintaining the Land provides considerable additional practical support for the plaintiffs' application and, in my view, the timing of that application.
Decision
In these circumstances, I am persuaded that the orders sought conferring a clear express power of sale by the Trustees, and conferring a clear and express power to complete that contract of sale will in this case be for the benefit of all the beneficiaries and is expedient, and appropriate, in all the circumstances.
Further, in my view, no serious issue arises in this proceeding as to the appropriateness of the terms of sale or the purchase price under the conditional Contract of Sale that is the subject of the orders sought by the plaintiffs. The first defendant does not press any argument to the contrary and the plaintiffs have tendered valuation evidence in support of the $5 million sale price. That evidence is not contradicted by the first defendant.
I again note that the first defendant has not appeared at trial to press his case. However, in the context of an earlier interlocutory application in this proceeding, the first defendant flagged a number of his contentions including that, were the Court to agree to the orders sought by the plaintiffs, the Court would be sanctioning a sale by Trustees of land of which they were bare Trustees, without any notice to the first defendant as a beneficiary, and in a way which was contrary to the first defendant’s wishes and, on contractual terms, deliberately designed to disadvantage the first defendant by stripping him of his ownership interests, and his right to bargain with the proposed purchaser for a fairer or higher price.
Although not pressed, I consider it to be appropriate for completeness to record that I am not persuaded on the material before me that the Trustees were obliged to consult the beneficiaries or permit a beneficiary to “bargain with the proposed purchaser”. Nor , in my view, were the Trustees obliged to act in accordance with the wishes of a beneficiary.[20] I am likewise not persuaded that the Trustees here failed to notify the beneficiaries, including the first defendant of their intention to sell the Land,[21] or have acted in any way contrary to the true nature of the trust.[22]
[20]X v A & ors [2000] 1 all ER 490, at 496.
[21]See paragraphs [23] and [33] hereof.
[22]It was not pressed at this trial by the first defendant that the Trustees have acted inappropriately because of they did not recognise what the first defendant asserted was the separate nature of each of the beneficial interests.
Finally, on the material before me, I am unpersuaded that the first defendant has in any way been “stripped of his ownership interests” or that there is anything unfair or inappropriate, or contradictory to the best interests of the beneficiaries, in relation to the conditional Contract of Sale or the purchase price reflected in that Contract of Sale.
It is supportive of the above conclusions as to the sale price and indeed, by inference, corroborative of the appropriateness of the valuation put forward by the plaintiffs that the first defendant, in his endeavours to ascertain the best price for which the Land could be sold, elicited an offer of only $4.3 million for the Bacchus Marsh Land.[23]
[23]William Sweeney’s second affidavit, [15], Exhibit “WJS-24”.
Objections by the first defendant to William Sweeney’s second affidavit
The first defendant has taken objection to William Sweeney’s second affidavit. During the trial, I admitted William Sweeney’s second affidavit, in its entirety, into evidence.
The first defendant's objections to the admissibility and appropriateness of that affidavit are set out in his written submissions of 31 August 2016.
The first defendant’s objection submissions, dated 31 August 2016, were the subject of responsive submissions by the plaintiffs dated 2 September 2016. However, no reply submissions have been filed by the first defendant in relation to the plaintiffs’ submissions of 2 September 2016. Nor has the first defendant sought to put on any affidavit in response to William Sweeney’s second affidavit.
Similarly, the first defendant has filed no submissions in response to the plaintiffs’ substantive submissions as to the overall issues, which were also dated 2 September 2016.
However, the first defendant contended, in his submissions of 31 August 2016, that William Sweeney’s second affidavit ought not be admitted into evidence. The first defendant submitted that William Sweeney’s second affidavit presented a new case for the plaintiffs and came too late. The first defendant’s submissions also raised a number of further specific objections to the admissibility of William Sweeney’s second affidavit.
The background to the filing of that affidavit is of some relevance. On 6 May 2016, the first defendant identified a number of areas of concern in his opposition to the plaintiffs’ application in this proceeding. However, the first defendant’s submissions in objection to William Sweeney’s second affidavit do not address the concerns which had earlier been raised before Judd J on 6 May 2016.
Further, the first defendant, prior to trial, informed the Court that he did not intend to file a further affidavit, nor did he intend to appear at this trial. The first defendant's intentions in respect of his planned non-attendance at trial was again confirmed in the last 48 hours.
Pursuant to the orders of 6 May 2016, the Trustees had been ordered to file an affidavit in reply to any affidavit filed by the first defendant. The plaintiffs elected not to file such an affidavit because, as explained in the plaintiffs' submissions, given that the plaintiffs had issued a strike out application in respect of the first defendant's substantive affidavit in the proceeding of 3 July 2016, and that application was yet to be determined, the plaintiffs had held off filing any reply affidavit.
The Trustees further explained in their submissions in response to the first defendant’s submission of 31 August 2016, that notwithstanding the first defendant’s election not to file any evidence, and his election not to participate in trial, the Trustees thought it appropriate to address those matters outlined by the first defendant as his concerns at the hearing before Judd J on 6 May 2016.
The plaintiffs explained in their submissions of 2 September 2016 that they had hoped that further elaboration of the matters concerning the sale and, in particular, the price, negotiated and ultimately agreed for the Land, would demonstrate to both the first defendant, and to the Court, that the Trustees' conduct has been appropriate, and that the orders sought are reasonable and necessary. I accept the above explanations by the plaintiffs for the late service of William Sweeney’s second affidavit and, further, I consider it is appropriate that, in a proceeding of this nature, and in particular where a beneficiary has, albeit somewhat informally, raised matters which at least at one point in time concerned him about the Trustees’ conduct and the proposed sale of the Land, the plaintiffs address the matters which they have ultimately dealt with in William Sweeney’s second affidavit.
The first defendant also submitted that William Sweeney’s second affidavit substantially altered the basis upon which the orders sought in the summons were supported. I reject that submission by the first defendant. In my view, the basis of the Trustees' application has always been, in substance, that it was clearly in the interests of all the individual beneficiaries that the land concerned be sold, and that any such sale be of the whole of the land.
The first defendant's argument that the disclosure of negotiations in William Sweeney’s second affidavit concerning the sale price and related matters changed this case is, in my view, not substantiated. These surrounding facts have not, in my view, changed the central issues in the case.
Very early in the proceeding, William Sweeney’s first affidavit set out the basis of the plaintiffs' application and identified the central issues concerning the power of the Trustees to sell the subject Land. William Sweeney’s first affidavit explained matters relating to the antecedents of the trust, the nature and the origin of the trust's property, the details of the history of the Land, the price paid for the Land, referred to the negotiations in connection with the sale of the Land, and detailed the contract terms of sale.
William Sweeney’s second affidavit, objected to by the first defendant, provides no more, in my view, than a more detailed exposition of aspects of facts leading to the execution of the conditional Contract of Sale.
In my view, William Sweeney’s second affidavit is relevant and appropriate. I consider that the relatively late service of that affidavit has been sufficiently explained by the plaintiffs, as outlined above. Further, given that the first defendant was afforded sufficient time to file detailed objections to William Sweeney’s second affidavit, but has not sought to file either submissions in reply to the plaintiffs’ submissions responding to the first defendant’s detailed objections, or file a responsive affidavit, I am of the view that the plaintiffs’ reliance on William Sweeney’s second affidavit does not in any way prejudice the first defendant. The first defendant has not attended the hearing of this trial to deal with the prosecution of these complaints or to prosecute his interests.
The first defendant also contends that the Trustees have not informed him of their intention to sell the Land. I reject this submission as unsupported by the uncontested facts as established by the plaintiffs via William Sweeney’s first and second affidavits, summarised in the plaintiffs’ outline of submissions dated 2 September 2016, in particular in paragraphs [18]-[23] of those submissions.
The first defendant asserts that the Trustees had failed to comply with the orders of Judd J made 6 May 2016, and that the Trustees had put forward a case which is advanced by a deponent who is inappropriate because he is said to be a person only peripherally involved in the events deposed to and because he is said to rely upon hearsay and inadmissible material. However, the first defendant does not support these objections by identifying the specific parts of William Sweeney’s second affidavit which he criticises in this way, nor has he established any breach of earlier Court orders to my satisfaction. Accordingly, I reject both of those contentions by the first defendant.
Further, the submission by the first defendant in paragraphs [9]-[12] as to his objection submissions is rejected for the reasons I have summarised in paragraph [66] and [67] hereof. The first defendant also contends that this trial should have been vacated. However, there has been no response by the first defendant to the plaintiffs' responses to that contention in the plaintiffs' submissions of 2 September 2016, nor was the first defendant present at trial to put forward any proper basis for the hearing to be vacated. As the plaintiffs point out, the first defendant has made no application in this regard.
Likewise, the first defendant's submission that he has been ambushed, or that there should be pleadings ordered in this case, are not submissions that, in my view, have been explained. Nor has the first defendant sought to respond to the responses that have in turn been provided by the plaintiffs to those complaints. The first defendant has not sought to explain why there should be pleadings ordered, or precisely how he has been ambushed in this proceeding. The first defendant has not appeared to prosecute such vague and general complaints, let alone made application for orders to address such matters.
For these reasons, I reject each of the matters relied upon by the first defendant in his objection submissions dated 31 August 2016. There is no basis, in my view, to exclude any part of William Sweeney’s second affidavit.
Orders
For the reasons that I have outlined, in my view, the draft orders provided by the plaintiffs during the course of argument today, and in substance also outlined in the plaintiffs' submissions dated 2 September 2016, paragraph [30]-[44], appear to be appropriate and justified.
Accordingly, subject to paragraph [75] below I propose to order that –
1.Pursuant to Rule 45.05 of the Supreme Court (General Civil Procedure) Rules 2015, the plaintiffs have leave to:
(a) dispense with the requirements of Rules 5.03(1) and 8.02; and
(b) proceed by Originating Motion in Form 5C.
2.Pursuant to s 63 of the Trustee Act 1958 (Vic), the plaintiffs are conferred with power to sell the property known as Lot 1, Buckleys Road, Merrimu and described in Certificate of Title Volume 11585 Folio 062 (Bacchus Marsh Land).
3.The plaintiffs’ costs of this application and of perfecting the title to the Bacchus Marsh Land be paid from the trust estate on an indemnity basis.
4.The first defendant pay the plaintiffs’ costs of the Summons dated 22 July 2016 on the standard basis, to be taxed in default of agreement.
THE COURT DECLARES THAT:
5.The Bacchus Marsh Land is held by the plaintiffs on trust for:
(a)the first defendant as to 8/42 undivided parts or shares;
(b)the second defendant as to 8/42 undivided parts or shares;
(c)the third defendant as to 8/42 undivided parts or shares;
(d)the fourth defendant as to 8/42 undivided parts or shares;
(e)the third and fourth Defendants as to 10/42 undivided parts or shares.
6.The Plaintiffs:
(a)were justified in entering into the contract for the sale of the Bacchus Marsh Land exhibited to the affidavit of William Joseph Sweeney sworn 19 March 2016 (Contract of Sale); and
(b)are justified in performing their obligations under Contract of Sale.
I shall however defer making final orders until after the parties have had the opportunity to consider the terms of the orders outlined above, and have also had the opportunity to make any submissions as to the final terms of the foreshadowed orders.
I direct that any submissions as to the final terms of the foreshadowed orders above be filed and served by 4.00pm on Friday 16 September 2016.
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