Van Der Wolff v Van Der Wolff

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
VAN DER WOLFF & ORS v VAN DER WOLFF
[2024] SASC 80
Judgment of the Honourable Auxiliary Justice Dart
REAL PROPERTY - PARTITION OF LAND - PARTITION OR SALE IN PARTITION ACTIONS
Joint owners seek sale of real property - consideration of s 70 of the Law of Property Act 1936 - whether good reason to the contrary - no reasonable basis for the respondent to oppose order for sale.
Development Act 1993 (SA); Fire and Emergency Services Act 2005 (SA); Law of Property Act 1936 (SA) s 69, s 70, s 71; Planning, Development and Infrastructure Act 2016 (SA), referred to.
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; DKL v LYK [2019] SASC 100; Kasewieter v Galligan [2015] SASC 5; Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, considered.

VAN DER WOLFF & ORS v VAN DER WOLFF
[2024] SASC 80

The five litigants in this matter are brothers. They jointly own two titles of land at Old Mount Barker Road, Aldgate as tenants in common in equal shares. Four of the brothers wish to sell the land. One brother is opposed and thus this litigation was commenced. The facts and circumstances are such that it is appropriate to order the sale of the land.
Background
The larger portion of land is that contained in Certificate of Title Register Book Volume 6142 Folio 941. It fronts onto Old Mount Barker Road and is about five hectares in size. The other title is the land comprised and described in Certificate of Title Register Book Volume 6156 Folio 327. It is less than one hectare in size and is landlocked but contiguous with the larger block.
The two titles were previously owned by the mother of the litigants. The larger title was transferred to them as tenants in common in 2005 as part of the administration of their mother’s deceased estate. It appears that for some reason the smaller title was not transferred until 2014.
The respondent, who opposes sale, resides on the land and has done so for a very long time. He does not pay rent and there have been a few issues between the brothers along the way. They are not strictly relevant for present purposes but some should be mentioned.
In 2013 the respondent was back burning on the property and lost control of that process. A fire spread to adjoining properties causing significant damage. About 160 firefighters and 30 appliances were called to the fire to try and control it.
There was also a dispute with the Adelaide Hills Council. Apparently the respondent stored a lot of material on the land. The applicants would say it was junk. The respondent disagrees with that description. The Adelaide Hills Council served a Development Act 1993 (SA) notice on the parties on or about 30 April 2014. The notice alleged the land was being used for “a junkyard” and said there was no development approval to use the land for that purpose. The notice required the removal of property from the land. Considerable expense was incurred in complying with the notice and tidying up the property.
On one of the titles there is located a telecommunications tower. A number of telecommunications companies pay rent for the use of that tower. The brothers fell into dispute about distribution of the rent. Proceedings were issued in the Magistrates Court in 2017 by the respondent. The dispute between the parties resolved and a deed was executed on 12 April 2019 which recorded the terms of settlement.
These various issues have been the subject of ongoing friction between the brothers. As recently as 13 November 2023, the Adelaide Hills Council served a notice under the Fire and Emergency Services Act 2005. It required the parties to reduce vegetation and undergrowth on the property to minimise the fire risk.
The legal issue
This is an application under the Law of Property Act 1936 (SA). The first relevant provision is:
69—Power to order partition or sale instead of partition
(1) On any application for partition the court may order a partition of the said land or other property, and may give all necessary or proper consequential directions.
(2) On any such application if it appears to the court that, by reason of the nature of the property, or of the number of the parties interested or presumptively interested therein, or of the absence or disability of some of those parties, or of any other circumstance, a sale of the property and a distribution of the proceeds would be more beneficial for the parties interested than a division of the property between or among them, the court may, if it thinks fit, on the request of any of the parties interested, and notwithstanding the absence, dissent or disability of any others of them, direct a sale of the property accordingly, and may give all necessary or proper consequential directions.
It is rare for the Court to order partition. The Court can only order partition where it is permissible under the Planning,Development and Infrastructure Act 2016 (SA) to subdivide the land. There is no request for a partition in this matter.
The usual order is for the sale of property. The relevant provision is the following:
70—Sale on application of certain proportion of parties interested
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 section provides that if a party or parties interested to the extent of one moiety request the Court to direct a sale, the Court may direct. A moiety means a half interest. Here the four applicants jointly have an interest amounting to 80% of the properties.
In Kasewieter v Galligan[1] I explained the situation provided for in s 70 in the following manner:[2]
The provisions of s 70 make it clear that the court shall direct the sale of the property unless it sees good reason to the contrary. Interstate authority in respect of equivalently worded legislation makes clear that an eligible applicant is entitled to an order for sale almost as of right. The onus is on the defendant to establish good reason to the contrary such as to persuade the Court not to order a sale. The court’s discretion pursuant to s 70 is properly described as limited. The court cannot refuse an application merely on the grounds of hardship or unfairness.
(footnotes omitted)
[1] [2015] SASC 5.
[2] [2015] SASC 5 at [16].
More recently in DKL v LYK[3] Doyle J observed the following about s 70:[4]
In the circumstances, s 70 provides that the Court shall direct a sale of the property “unless it sees good reason to the contrary”. Authority suggests that a person with standing under s 70 is entitled to an order almost as of right; that the Court’s discretion not to order a sale may be described as limited. The onus is on the party resisting the order to persuade the Court not to order sale. The application will not be refused merely on the grounds that it is opposed, on the grounds that the party resisting sale does not wish to the sale to proceed for sentimental reasons, or because they wish to purchase the property. Indeed, even the likelihood of hardship or unfairness may not suffice.
(footnotes omitted)
[3] [2019] SASC 100.
[4] [2019] SASC 100 at [534].
The issue for the Court is simply whether good reason exists to decline to order a sale of the properties.
The relevant issues
The respondent is self-represented. He opposes the application for a sale of the land. Accordingly, he bears the onus of establishing good reason to the contrary. He gave oral evidence at trial. The applicants filed written submissions and supplemented their position with oral submissions at the end of the hearing. The respondent made some submissions. I gave him permission to file further written submissions. They were filed on 8 April 2024.
The respondent’s written submissions are a little difficult to follow but are primarily based on the fact that in 2000 the parties executed a document called “Heads of Agreement”. The written submissions annex some further documents. I have not considered any of the documents which were not tendered at trial. There has been no request to reopen to adduce further evidence. There is also no cross claim seeking to enforce the Heads of Agreement.
It appears that there has long been a dispute between the respondent and his brothers about the land. They attended a mediation in 2000 for the purpose of trying to resolve their differences. Prior to the mediation, in January 1999, one of the applicants obtained a formal valuation of the subject land. The land and improvements were valued in the amount of $187,500.
The outcome of the mediation was that a document titled “Heads of Agreement” was executed. It contains a number of operative provisions. The key ones are as follows:
1.That the agreement is subject to Symmonds Ryan & Cornish Surveyors (or some other agreed surveyor) confirming that there can be a strata title created in relation to the land on which the telecommunications tower is located. (In recitals.)
2.In the event that the land could be divided, the respondent was to pay $35,000 to each of his brothers other than Richard, to whom he was to pay $55,000. The monies were to be paid three months after the distribution of the estate of their mother.
3.In consideration of the payments, the brothers were to transfer their interest in the subject land to the respondent.
4.If the respondent was unable to make the specified payments, the third applicant (Richard) was to take a transfer of the land upon paying the sum of $35,000 to each of his four brothers within 60 days of the settlement date.
5.The agreement is subject to the strata titled land being effected. (In a separate clause.)
The evidence before the Court shows that the estate of their mother was fully distributed by January 2005. Accordingly, the payments referred to in the agreement should have been made in the first half of 2005.
The agreement was never carried into effect. The respondent has not paid any money to his brothers to effect a transfer of the land. Nor has the third applicant who had the secondary right to purchase. It appears that the land was not able to be divided as anticipated in the agreement. It should be noted that the amounts agreed to be paid to the brothers roughly approximated the value of their interest in the land based on the valuation obtained in 1999.
The Heads of Agreement, in two places, refers to creating a strata title in relation to land on which the telecommunications tower was located. In both places where there is a reference to the creation of strata titles being created, it is said that the agreement is subject to that requirement being satisfied. It was intended that the area of land where the telecommunications tower was located was to be separated from the other two titles and to remain registered in the names of all of the brothers. Various telecommunications companies had signed long term leases and those leases were producing an income which the brothers continue to share.
A reference in an agreement to it being subject to the performance of an obligation is a condition precedent. Sometimes it may be a condition precedent to formation of a binding contract or it may be a condition precedent to the obligation to perform the contract. More generally it is the latter.
In Perri v Coolangatta Investments Pty Ltd[5] Mason J said as follows:[6]
Generally speaking the court will tend to favour that construction which leads to the conclusion that a particular stipulation is a condition precedent to performance as against that which leads to the conclusion that the stipulation is a condition precedent to the formation or existence of a contract. In most cases it is artificial to say, in the face of the details settled upon by the parties, that there is no binding contract unless the event in question happens. Instead, it is appropriate in conformity with the mutual intention of the parties to say that there is a binding contract which makes the stipulated event a condition precedent to the duty of one party, or perhaps of both parties, to perform. Furthermore, it gives the courts greater scope in determining and adjusting the rights of the parties. For these reasons the condition will not be construed as a condition precedent to the formation of a contract unless the contract read as a whole plainly compels this conclusion.
[5] (1982) 149 CLR 537.
[6] (1982) 149 CLR 537 at 552.
The requirement to subdivide was a condition precedent to performance. There is limited evidence before the Court about the ability to subdivide the land to create a separate title. The references to creating a strata title can be read as creating a separate title for the area where the telecommunications tower is located.
The third respondent, after the execution of the Heads of Agreement, retained a well-known firm of planning lawyers to provide advice. They did so in writing on 2 May 2001. The summary of the advice was that it would be unlikely that any application for a land division would be successful. It seems that, because of that advice, none of the parties ever pursued an application to subdivide the land, nor did any of the parties attempt to perform any of the obligations under the Heads of Agreement. There is no evidence before the Court about the present position with respect to subdivision.
Where a condition precedent to performance cannot be progressed, the obligations under the contract have most likely lapsed given the effluxion of time. The applicants’ position is the contract is simply no longer enforceable. They did not articulate a basis for that submission. It may be as simple as the contract is frustrated.
The doctrine of frustration was considered by the High Court in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales[7]. The principles were outlined by Brennan J when he said:[8]
It was not contended by Codelfa that that mistake affected the formation of the contract. Codelfa contended that the granting of an injunction on 28 June 1972 was a supervening frustrating event. It is well to recall the limits upon the doctrine of frustration. In British Movietonews Ltd v London and District Cinemas Ltd Viscount Simon said:
“It is of the utmost importance that the action of a court, when it decides that in view of a supervening situation the rights and obligations under a contract have automatically ceased, should not be misunderstood. The suggestion that an ‘uncontemplated turn of events’ is enough to enable a court to substitute its notion of what is ‘just and reasonable’ for the contract as it stands, even though there is no ‘frustrating event,’ appears to be likely to lead to some misunderstanding. The parties to an executory contract are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate — a wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to execution, or the like. Yet this does not in itself affect the bargain they have made. If, on the other hand, a consideration of the terms of the contract, in the light of the circumstances existing when it was made, shows that they never agreed to be bound in a fundamentally different situation which has now unexpectedly emerged, the contract ceases to bind at that point — not because the court in its discretion thinks it just and reasonable to qualify the terms of the contract, but because on its true construction it does not apply in that situation.”
Frustration occurs, as Lord Radcliffe said in Davis Contractors Ltd v Fareham Urban District Council:
“ … whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. Non haec in foedera veni. It was not this that I promised to do.”
(footnotes omitted)
[7] (1982) 149 CLR 337.
[8] (1982) 149 CLR 337 at 407-408.
If the parties were obliged to proceed with the Heads of Agreement, it would be a radically different thing from that which was agreed in 2000. The agreement provided for each party to receive an amount of money roughly equivalent to the value of their interest in the land. That would no longer be the case. Nearly 24 years have passed since the agreement was entered into. Although there is no present valuation of the land before the Court, it can be assumed that the value of the land is much greater than it was in 2000. To proceed with the agreement now would oblige the applicants to transfer their interest in the properties for a substantial undervalue. The contract should be regarded as frustrated.
It is for the respondent to establish good reason to have the Court not order sale of the land. The respondent has not done so. He is upset with his brothers for seeking to sell the land and says that their mother would not have wanted that. Overall, he regards the position of his brothers as unfair. That is not a good reason to decline a sale of the properties. It is appropriate to make an order for the sale of the land.
The third applicant has indicated he wishes to purchase the land. The Court may permit an owner to purchase the share of another owner.[9] The respondent gave the Court the same indication. If that remains the position, the Court will order that the land be sold at public auction and permit the third applicant and the respondent to bid for the property at any such auction. I will hear the parties as to the form of the orders.
[9] Law of Property Act 1936 s 71.

[2024] SASC 80

11 June 2024