Szymanska v Szymanski - [2015] SASC 126

SUPREME COURT OF SOUTH AUSTRALIA
(Land and Valuation Division)
SZYMANSKA v SZYMANSKI
[2015] SASC 126
Judgment of The Honourable Justice Blue
27 August 2015
REAL PROPERTY - GENERAL PRINCIPLES - INCIDENTS OF ESTATES AND INTERESTS IN LAND - JOINT TENANCY AND TENANTS IN COMMON - TENANTS IN COMMON - OTHER MATTERS
Action for partition and sale.
The plaintiff and defendant are co-owners of a house property at Kilburn. The defendant lives in the house and has limited income and assets. The plaintiff seeks an order for sale, which the defendant opposes on the ground of hardship.
Held:
1. Under section 70 of the Law of Property Act 1936 (SA), on an application for partition and sale if the pre-requisites are established, the only question for the Court is whether to order partition or sale (at [16]-[18]).
2. Partition is impractical. In the circumstances, the plaintiff is entitled to an order for sale (at [19]).
Law of Property Act 1936 (SA) ss 69, 70, 83; Partition Act 1900 (NSW) s 4(1)(b), referred to.
Bray v Bray (1926) CLR 542; Peck v Peck [1965] SASR 293, discussed.
Patel v Premabhai [1954] AC 35; Warner v Baynes (1750) Amb 589, considered.

SZYMANSKA v SZYMANSKI
[2015] SASC 126
Land and Valuation Division:
BLUE J:

The plaintiff, Joanna Szymanska, seeks an order against the defendant, her brother Tomasz Szymanski, under sections 69 and 70 of the Law of Property Act 1936 (SA) (the Act) for sale of their property situated at 74 Way Street, Kilburn.
Tomasz opposes the order on the ground of hardship.
Background
The property was originally owned by the parties’ father Marian Matysiak and was the family home. Mr Matysiak died in 1989, leaving his estate to his two children. Joanna and Thomasz, together with their mother, continued to live in the property after Mr Matysiak’s death. Their mother moved into a retirement village in about 1999.
In February 1999, probate of Mr Matysiak’s will was granted. The property was subsequently transferred to Joanna and Thomasz as tenants in common in December 2000.
In 1999, Joanna decided to look to buy her own house or to buy land and build a house on it. Joanna told Tomasz that she needed money for this purpose and inquired whether he would and could buy out her interest in the Kilburn property or whether alternatively he would agree to sell it. Joanna suggested that Tomasz buy her interest in the property for $50,000 on the basis of her estimate of its value at $100,000. Joanna and Tomasz had several discussions on this topic but it is common ground that they were unable to reach agreement on the sale of their interests in the property to each other or of the property itself.
In February 2000, Joanna signed a contract to buy land and have a house built at Walkley Heights. Tomasz paid to her $16,810.39 which she used towards payment for furnishings and effects for the new house. There is a contest between Joanna and Tomasz as to the characterisation as a matter of law of the transaction involving that payment. Tomasz contends that as a result of the transaction he acquired a pro rata interest in the Kilburn property of 19 percent. Joanna contends that the transaction was a loan repayable out of the proceeds of sale of the Kilburn property whenever it should be sold. This dispute will need to be determined after a separate hearing.
In May 2001, Joanna moved out of the Kilburn property into her new house at Walkley Heights. Tomasz has continued to live in the property since that time. Tomasz has paid the rates and taxes and undertaken whatever maintenance has been undertaken to the property. Tomasz has not paid rent to Joanna in respect of the property.
In April 2014, Joanna and Tomasz had a discussion about the property. Joanna said that she wanted the property sold and the proceeds divided between them. Tomasz said that he did not want to sell the property. There was discussion about the prospect of Tomasz purchasing Joanna’s interest in the property but no agreement was reached. There was discussion about whether Tomasz should be paying rent of $100 per week to Joanna but no agreement was reached.
In May 2014, Joanna asked Graham Brown, a land agent, for a drive by appraisal of the value of the property. He appraised it without seeing inside the house as having a value of between $330,000 and $350,000. He assessed the rental value on the same basis as being between $275 and $290 per week.
In June 2014, Joanna’s solicitors wrote to Tomasz offering to sell her interest based on a valuation to be obtained of the property and alternatively proposing that the property be sold. They said that until the property was sold Joanna required that rent be paid to her of $100 per week commencing forthwith. Correspondence ensued between the parties without any resolution.
In October 2014, Joanna issued the summons in this action seeking partition and sale of the property.
Tomasz opposes the order sought by Joanna on the ground of hardship. Tomasz’ only income is a Centrelink disability pension and his only asset apart from his interest in the Kilburn property is savings of approximately $40,000. If the Kilburn property is sold, Tomasz does not believe that he would be able to purchase an alternative residence.
Partition and sale
Section 69(1) of the Act recognises the power of the Court to order partition of land.[1] Section 69(2) empowers the Court to direct a sale of the land instead of partition whenever a partition can be sought and section 83 provides that a sale can be sought without seeking partition.
[1] Common law courts historically had power to order partition in an action for partition: Halsbury's Laws of England, 5th edition (2012) vol 87 para 224 footnote 8; Patel v Premabhai [1954] AC 35 at 45-47 per Lord Porter delivering the judgment of the Privy Council. The Court of Chancery exercised concurrent jurisdiction to order partition: Halsbury's Laws of England, 5th edition (2012) vol 87 para 224 footnote 8. Partition was a matter of right and the court had no discretion to refuse partition: Warner v Baynes (1750) Amb 589; Bray v Bray (1926) 38 CLR 542 at 545 per Knox CJ (with whom Isaacs, Higgins, Powers and Rich JJ agreed).
Section 70 of the Act provides:
On any application for partition, if the party or parties interested individually or collectively, to the extent of one moiety or upwards in the property, request the court to direct a sale of the property and a distribution of the proceeds, instead of a division of the property between or among the parties interested, the court shall, unless it sees good reason to the contrary, direct a sale of the property accordingly, and shall give all necessary or proper consequential directions.
The preconditions specified by section 70 are met in the present case. Joanna makes application for partition, is interested to the extent of one moiety in the property and requests the Court to direct the sale of the property and distribution of the proceeds. It follows that the Court is required to direct the sale of the property unless “it sees good reason to the contrary”.
In Bray v Bray,[2] the High Court considered in the meaning of section 4(1)(b) of the Partition Act 1900 (NSW) which was then identical terms to section 70 of the Act. John Bray and James Bray were co-owners (in equity) of land in Pitt Street, Sydney. John Bray sought an order for sale, which was opposed by James Bray on the ground that it would be injurious to the best interests of the co-owners. Partition was impractical and was not sought by either party. The High Court held that the only question for the court was whether to order partition or sale. Knox CJ (with whom Isaacs, Higgins, Powers and Rich JJ agreed) said:
So far as I can see, the object of the Act was to provide an alternative remedy to partition. Recognizing the absolute right of a tenant to partition, and seeing that it might be disastrous for all parties to have a partition, Parliament provided [section 4(1) was then summarised] ... I think that it is clear that under sec. 4(1)(b) what the Court has to consider is which is the better course for all parties between two alternatives, namely, is it better that there should be a partition or that there should be a sale, and the onus of showing that partition is better, where the owners of more than one half of the property desire a sale, is upon the person opposing a sale. In that view the decision of the learned Judge was clearly right.[3]
Higgins J added:
I regard a sale as an alternative to a partition and not to the status quo.[4]
[2] (1926) 38 CLR 542.
[3] At 545.
[4] At 546.
In Peck v Peck,[5] Mrs Peck opposed an order for the sale of the former matrimonial home on the ground that she was a deserted wife. Bright J ordered a sale on the application of Mr Peck. Bright J said:
In my opinion, therefore, partition proceedings are to be determined according to the strict legal rights of the parties.… It is true that the Court may, and frequently does, in ejectment proceedings, defer the issue of a warrant for a limited period as a matter of mercy. So also, I suppose that an order for sale may be deferred for a limited period in partition proceedings. But this is merely the deferment of enforcement: it does not go to the right to an order. The fact that a wife is a deserted wife does not deprive her spouse of his right as co-owner to partition or sale.
Except, therefore, insofar as there is an ad misericordiam discretion to defer enforcement of an order, I would deal with partition proceedings between husband and wife in the same way as any other partition proceedings. I think, therefore, that Bray v Bray is completely in point. There is an absolute right to partition, however inconvenient, unless, as a strict alternative, sale is ordered.[6]
[5] [1965] SASR 293.
[6] At 299-300.
In the present case, the Kilburn property comprises a single house and partition is impractical. Neither party seeks partition. It follows that Joanna has a right under section 70 of the Act to an order for sale.
Conclusion
Joanna is entitled to an order for sale of the property. I will hear the parties as to the terms upon which the property should be marketed and sold, as to their respective interests in the property and as to an accounting between them a reference to the use and maintenance of the property and payment of outgoings since 2001.