Able v Philip[2008] QDC 316

DISTRICT COURT OF QUEENSLAND

1. [1]
   On 8 October 2008 Pamela Ann Abel (“the applicant”) brought an application for the appointment of a trustee pursuant to provisions in s 38 of the Property Law Act 1974 to sell a property that she holds as a tenant in common with Benjamin Alexander Philip (“the respondent”) at lot 33 on RP 179874, County of Fitzroy, Parish of Kunioon, title reference 16277077 which is located at 184 Allen Road, Nanango, Qld, 4615 (“the Allen Road property”).

2. [2]
   Title reference 16277077 indicates that the parties each have a half interest in the Allen Road property.

3. [3]
   Mr Bousgas in his affidavit^[1] swears that the value of the Allen Road property is approximately $200000.00. 

4. [4]
   On the morning of the hearing of this application the respondent made an application and sought orders for the filing and serving of a statement of claim.

5. [5]
   In oral argument before me, Ms Martin for the respondent indicated that it is her client’s assertion that the applicant holds a portion of her interest in the Allen Road property for the respondent.

6. [6]
   The starting points of the parties are so divergent as to make it difficult to reach a satisfactory conclusion.

7. [7]
   That difficulty has been aggravated by the fact that the respondent served its material on the applicant shortly before the hearing and the applicant has not had a proper opportunity to respond to that material.

8. [8]
   The applicant seeks an order which would result in the sale of the property and distribution of the proceeds in accordance with the registered interests of the parties.

9. [9]
   The respondent in essence seeks an assessment of the interests of the parties asserting that he has a greater interest than that reflected in the parties registered interests.

10. [10]
    It is common ground that the parties had not lived in a de facto relationship and that their interests cannot be assessed by the Court pursuant to Part 19 of the Property Law Act 1974.

11. [11]
    The applicant and the respondent purchased the property in July of 1996.

12. [12]
    Initially the parties held the Allen Road Property as joint tenants; it is not clear on the materials when the parties’ interests were converted to a tenancy in common.

13. [13]
    It is common ground that the parties intended to live in a de facto relationship and the purpose of buying the block of land was to develop a flower business which was to be run by the respondent.

14. [14]
    In March of 2003 the respondent moved on to the block permanently.

15. [15]
    In or about December of 2005 the relationship between the respondent and the applicant ceased.

16. [16]
    Throughout the relationship the applicant lived in a housing commission house at Bracken Ridge.

17. [17]
    On 23 November 2007 the Department of Housing informed the applicant that she would have to seek alternative accommodation because she owned or part owned property.^[2] 

18. [18]
    The applicant’s solicitors wrote to the respondent on 18 October 2007 informing him of the applicant’s desire to ‘realise her asset in the property”.

19. [19]
    The respondent replied personally on 23 October 2007. On 4 November 2007 he made a “without prejudice” offer to purchase “your client’s perceived interest in the above property for the sum of thirty thousand dollars”.^[3]

20. [20]
    The negotiations between the parties have continued.

21. [21]
    His Honour Judge O'Brien in Ward v Gulliver D279 of 2000 made a helpful examination and analysis of the relevant authorities and the discretion which is granted to a court by s 38 of the Property Law Act. 

22. [22]
    His Honour held “it is apparent from these authorities that the discretion vested in the court by s 38 is a very limited one and one which does not depend upon a simple balancing of the personal circumstances of the respective party. In this case there is no suggestion of the existence of any proprietary right inconsistent with the order of sale and in my view there is no proper basis for the exercise of discretion against such an order”.

23. [23]
    His Honour relied upon the comments of Justice McPherson (as he then was) in Ex parte Einbart Pty Ltd (1982) Qd R 398 at 402 where his Honour held:

“in such cases (where co-ownership of land subsists in law), where there is no trust or perhaps other fiduciary obligation, it is difficult to conceive of circumstances in which the discretion, if any, conferred by the words “may” in s 38(1) of the Property Law Act ….. would ever be exercised against the appointment of a statutory trustee.  As was said by Kearney J in Hayward v Skinner (1981) 1 NSWLR 590, the right to petition, and now sale, is an incident of the property of  a co-owner. And because of this it is also difficult to imagine that the existence of a mere contract or agreement to the contrary would ordinarily constitute a bar to the court’s discretion to appoint statutory trustees in the case of the co-owners at law”.  

24. [24]
    In the present case the respondent asserts that there is such a trust obligation.

25. [25]
    However, it would seem from an examination of the correspondence between the parties that the greater limiting factor is the respondent’s capacity to raise sufficient funds to make an offer which the applicant would accept.

26. [26]
    The difficulty in dealing with this matter is that the applicant has not been given a proper opportunity to respond to the assertions made by the respondent in his application. The respondent’s oral application was in effect to allow for the respondent to file a statement of claim and thus progress this matter; it was also common ground that both parties were impecunious.

27. [27]
    Indeed it appears on the face of the material that the respondent claims to be unable to raise more than $50,000 by way of purchase of the applicant’s interest in the property.

28. [28]
    Mr Cook in his submissions suggested that the better course was to follow a course adopted by His Honour Judge Robin QC in H v M [2005] QDC 283 where his Honour made an order under s 38 of the Property Law Act but stayed its operation to allow for other matters to be resolved.

29. [29]
    While that is an unsatisfactory resolution to the present situation in the absence of material in response from the applicant, it is difficult to make the declaration which the respondent would seek.

30. [30]
    It is equally difficult to ignore the assertions the respondent makes without an examination of more complete material.

31. [31]
    Doing the best I can to progress this matter I propose to make orders in terms of both applications.

32. [32]
    My purpose is to provide mechanism whereby costs can be limited.

33. [33]
    I accept Mr. Cook’s submission that the orders he seeks be made but delayed to allow the respondent to file its materials.

34. [34]
    I will not make an order in the terms of paragraph 5 of the application because at the core of the present dispute is the question as to what proceeds each party should receive.

35. [35]
    The respondent is to file a claim and statement of claim.

36. [36]
    Each party will have liberty to apply.

37. [37]
    In my view in light of the fact that the respondent seeks and has gained an indulgence of the court by bringing his application late it is appropriate that the respondent pay the applicant’s cost of and incidental to the application.

38. [38]
    I make the following orders:

• Pursuant to section 38 of the Property Law Act I order that Mr Andrew Wheldon be appointed as a trustee of the land described as lot 33 on rp179874 County of Fitzroy, Parish Of Kunioon, Title Reference 16277077, Situated At 184 Allen Road, Nanango, Qld, 4615.
• That such lands vest in Andrew Wheldon subject to encumbrances effecting the entirety to be held by him upon trust to sell the same and to stand possessed of the nett proceeds of sale, after payment of costs and expenses and of nett income until after payment of rates, taxes, costs of insurance repairs properly payable out of income and other outgoings.
• that the property be sold by the trustee on a date not before 31 March 2009.
• that the applicant or the respondent be at liberty to purchase such property upon terms that he or she shall not be required to pay any deposit and that he or she may be set off against the purchase price, the value of the whole of his or her share in the property.
• That the respondent shall file and serve upon the applicant a claim and statement of claim by close of business 17 January 2009
• that the applicant file and serve an notice of intention to defend and any defence by 14 February 2009; and
• that the parties have liberty to apply on three days notice to the other party.
• that Mr Andrew Wheldon’s fees as trustee are approved at an hourly rate of $300.00.
• that the respondent pays the applicants cost of and incidental to the application as agreed failing agreement to be assessed on the standard basis by G R Ryan Costs Consultant.
• that orders 1,2,3,4 and 8 be stayed until 31 March 2009.