Ross v Byrne

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5675/01 CATHERINE JANE ROSS -V- DONNA BYRNE & 2 ORS JUDGMENT 1 MASTER: This is the hearing of a summons filed on 23 November 2001 by Catherine Jane Ross, the plaintiff. The defendants named in the summons are Donna Byrne, the first defendant, Glenn Peter Byrne, the second defendant, and Matthew Neil Byrne, the third defendant. The plaintiff seeks substantively relief pursuant to the provisions of Division 6 of Part 4 of the Conveyancing Act 1919, and, in particular, the appointment of a statutory trustee for the sale pursuant to section 66G of that Act. 2 The plaintiff and the second defendant are the registered proprietors, as joint tenants, of a one half interest in certain premises being situate and part of 58 Kellett Street, Potts Point. The first defendant and the third defendant are registered proprietors, as joint tenants, of the other one half interest in the subject property. As between themselves, the plaintiff and the second defendant as to their one half interest, and the first defendant and the third defendant as to their one half interest, hold those respective one half interests as tenants in common. 3 The defendants do not oppose the relief sought in respect to the appointment of a trustee for sale. They do not object to the identity of the proposed trustee being the Permanent Trustee Company Limited which has given its consent to being so appointed. It is desirable that orders for the appointment of the statutory trustee be made without further delay, having regard to the dispute (to which I shall shortly refer) which has arisen between the plaintiff on the one hand and the defendants on the other hand. 4 Amongst the items of relief which are sought in the summons is prayer 5, which seeks an order pursuant to Part 48 rule 3 of the Supreme Court Rules, that accounts be taken inter partes by the said trustee under the provisions of section 40 of the Trustee Act 1925. The basis upon which the plaintiff seeks that relief is that there is an assertion on the part of the defendants that the plaintiff is liable as to a one quarter share of certain expenditure which has been performed upon the subject premises. 5 The plaintiff disputes that liability. She denies that she was informed of most of the items of expenditure before they were incurred and she disputes that she consented to or approved of such expenditure. Further, the plaintiff points to the fact that she and the second defendant conjointly are liable for only a one half share of any legitimately incurred liabilities in respect to the property, and submits that as between the plaintiff and the second defendant the totality of any one half share of such liabilities should be borne by her co-joint tenant, the second defendant. 6 There has already been instituted in the Local Court at the Downing Centre proceedings 8606 of 2000, in which the three present defendants are the plaintiffs and the present plaintiff is the defendant. In those proceedings the present defendants claim a one quarter share of the expenses incurred by them in respect to the subject premises, basing that claim upon what is described in the amended Statement of Liquidated Claim filed in the Local Court on 6 October 2000 as being "in accordance with the oral agreements between the plaintiff and the defendant dated 20 January 1999". The present plaintiff, as I have already observed, disputes any such oral agreement. 7 I am informed that the proceedings in the Local Court, to which the present plaintiff has filed a defence, have been stood over generally with liberty to any party to restore. The present plaintiff in the present proceedings seeks, by prayer 6 of the summons, an order that the proceedings between the plaintiff and the defendant in the Local Court at the Downing Centre, being file 8606 of 2000, be stayed. 8 The present defendants, through their Counsel, during the course of today's hearing foreshadowed an application for leave to file in Court a Notice of Motion seeking leave for the defendants to file a cross claim in the present proceedings. Inquiries by me of Counsel for the defendants elicited the information that, at least to an extent, the proposed cross claim would overlap the relief sought by the defendants in the proceedings which are currently on foot in the Local Court. Certainly any relief in the cross claim as to the extent of the liability of the plaintiff for a one quarter share in the expenditure incurred in respect to the subject property would overlap with the relief sought by the defendants in the Local Court proceedings. 9 No explanation was offered on behalf of the defendants firstly as to why any proposed cross claim had not been filed within the time limited by the Supreme Court rules, that time having expired some four weeks ago in the latter part of January. Neither was any explanation offered as to how it came about that the proposed application for leave to file a cross claim out of time was firstly communicated to the solicitors for the plaintiff only within the last few days, or secondly, why the Notice of Motion seeking such leave had not been filed at an earlier stage. 10 In all the circumstances therefore, and in the light of the opposition expressed on behalf of the plaintiff to the filing of such a Notice of Motion, I refused to the defendants leave to file the Notice of Motion and declined to entertain any application on behalf of the defendants for leave to file a cross claim out of time. 11 During the course of submissions I raised with Counsel for the plaintiff my concern that the nature of the relief which the plaintiff was seeking in prayer 5 of the summons, being an order for the taking of accounts inter partes by the trustee whose appointment for the sale of the property I will shortly order, appeared to me to be a somewhat inappropriate course. I do not consider that the trustee would be willing, or indeed would be qualified, to determine what appears to be the essential issue between the parties to these proceedings. That is whether there exists an oral agreement between the parties that the plaintiff would be liable for one quarter of the expenditure incurred upon the subject property. That issue is squarely raised in the proceedings in the Local Court. A determination of that issue, which is a factual issue based on the asserted oral agreement referred to in the amended Statement of Liquidated Claim filed in the Local Court, can be determined in that court. 12 As I have already indicated, I consider that it is important that the trustee should be appointed and that it should proceed to the sale of the subject property. The disbursement of the net proceeds of that sale can then await the determination of the liability which the defendants assert exists in the plaintiff. 13 I propose to reserve to all parties, and to the trustee, liberty to approach the Court with a view to a determination by this Court of the manner in which the net proceeds of sale should be disbursed. As I say, if there has already been a determination by the Local Court as to the liability of the plaintiff in that regard, that will remove the necessity for this Court to make that determination. It is quite probable that a decision of the Local Court would be obtained well before a decision of this Court in that regard and possibly before the subject property is even sold. 14 The taking of the accounts, which is sought by the plaintiff, is an exercise which probably will become unnecessary. As I understand the situation, there is no great dispute between the parties that the various items of expenditure were in fact incurred, and in the amounts asserted by the defendants. The essential question in issue is the asserted existence of the liability of the plaintiff to bear one quarter of that liability in accordance with the alleged oral agreement to which I have already referred. 15 I should also record that during the course of correspondence between the respective solicitors for the parties there was sent on 18 February 2002 (that is, only last Monday) a letter from the solicitors for the defendants, to the solicitors for the plaintiff in which it was stated that the defendants "Do not object to orders 1, 2, 3, 5, 6 and 7 of the plaintiff's summons." The plaintiff is no longer pursuing the relief sought in order 4, which is in the nature of ancillary relief. However, at today's hearing the defendants, through their Counsel, stated that, whilst they did not oppose the relief sought in orders 1, 2 and 3 of the summons, they did oppose the relief sought in orders 5 and 6 of the summons. 16 No explanation was offered on behalf of the defendants as to why the attitude which had been expressed in a letter by their solicitors only three days ago and which seemingly had been prepared on instructions and after consideration had now changed, and why there had not been any formal communication of that change of attitude by the defendants by way of a letter addressed to the solicitors for the plaintiff. 17 It will be appreciated from the views which I have already expressed that I do not propose to make orders sought in prayers 5 and 6 in the summons. I would however comment in respect to order 6 that, even if I had been disposed to grant relief of the nature sought therein, I do not consider that it would be appropriate for me to make an order that the proceedings in the Local Court be stayed. As I understand it, the Supreme Court does not have the power to make an order in such terms. The appropriate form of the order would be that the present defendants be ordered not to proceed with the proceedings which they have instituted in the Local Court. 18 There remains only to be decided the question of the cost of the proceedings to the present time. The plaintiff, by prayer 8 of the summons, seeks an order that the defendants pay her costs. Counsel for the defendants has foreshadowed that that order is opposed. I will, accordingly, after I have formulated my orders in respect to the substantive relief sought, hear Counsel on costs. 19 I make the following orders:

(1). I make orders as in Prayers 1, 2 and 3 in the summons.

(2). I reserve to the parties and to the Permanent Trustee Company Limited liberty to apply with respect to the disbursement of the net proceeds of sale of the land referred to in prayer 1 of the summons. 20 (Addressing on costs.) 21 I consider that the interests of justice will be appropriately served if I make an order the effect of which will be that the defendants pay one half of the costs of the plaintiff up to and including today and that the balance of the costs of the plaintiff up to and including today be paid out of the net proceeds of sale of the subject property and that the costs of the defendants up to and including today be payable out of the respective shares in the net proceeds of sale of the subject property to which the defendants be found ultimately to be entitled. 22 Accordingly, I add to my earlier orders the following:

(3). I order that the defendants pay one half of the costs of the plaintiff up to and including today and that the balance of the costs of the plaintiff be paid out of the net proceeds of sale of the subject property.

(4). I order that the costs of the defendant up to and including today be payable out of the respective shares in the net proceeds of sale of the subject property to which the defendants be ultimately found to be entitled. **********

Last Modified: 05/01/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.