[1995] FCA 1405
Tymbook Pty Ltd v State of Victoria (2006) 15 VR 65
Source
Original judgment source is linked above.
Catchwords
[1995] FCA 1405
Tymbook Pty Ltd v State of Victoria (2006) 15 VR 65
Judgment (6 paragraphs)
[1]
Solicitors:
CMJ Legal (Plaintiff)
JD Law Group (Defendant)
File Number(s): 2020/309909
[2]
ex tempore Judgment
HER HONOUR: This is an application by the plaintiff, Marion Wardlaw, for an order under rule 25.5 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) or section 66 of the Supreme Court Act 1970 (NSW) that 10% of the net proceeds of sale of an apartment in Neutral Bay be released to her pending final determination of these proceedings. The net proceeds are presently held in the trust account of the solicitor who acted on the sale. The trust account in the names of the plaintiff and the defendant, Holly Wardlaw, being the plaintiff's daughter and co-owner of the Neutral Bay apartment before it was sold. The plaintiff offers the usual undertaking as to damages.
As to final relief, the plaintiff seeks an order that she is entitled to 77% of the net proceeds of sale of the apartment by reason of her contribution to the purchase price and costs associated with the property.
Interim and final relief are opposed by the defendant, who intends to bring a cross-summons seeking a declaration that she is beneficially entitled to all of the proceeds of sale.
Affidavits by both parties were read. There was no cross-examination. The application was brought in urgent circumstances and both parties did their best to put forward relevant material in the time available but, with more time, further information and detail will no doubt become available.
[3]
Facts
The mother is 64 years of age and a business consultant who normally works in Singapore. The daughter is 29 years of age and lives and works in Sydney.
In 1996, the mother divorced the daughter's father. In 2008, the father died tragically. The daughter received monies from her father's estate, which were deposited in a bank account. The daughter says that the mother withdrew some of this money without her knowledge and consent. This is denied by the mother.
The mother encouraged the daughter to buy an investment property. There are different versions of the conversations which took place at the time as to how the property would be purchased; the precise terms of those conversations will need to be determined at a final hearing. In any event, in 2009 the Neutral Bay apartment was purchased for $575,000 by mother and daughter as tenants in common in equal shares. The daughter provided the deposit from funds obtained from her father's estate. The deposit was some $119,000. The balance was paid by a home loan obtained from by the mother and daughter from the National Australia Bank for $460,000. The mother says the daughter was not working at the time, and so the mother's income formed an important part of the application for a home loan.
On completion of the purchase, the daughter moved into the apartment and says that she spent $10,000 on renovations. The mother says that she attended to payment of the mortgage repayments thereafter. The daughter appears to accept this apart from a couple of occasions when the daughter provided some funds to her mother to put towards mortgage payments.
In 2012, the daughter moved to the United Kingdom and it appears that the mother lived in the property from time to time when she was not working overseas and otherwise the property was leased. The mother says that the rental income paid the expenses of the property, whilst the mother paid for the daughter's overseas rent and expenses.
The home loan was re-financed three times. From the additional borrowings, funds were released from the "equity" in the property and used variously by the mother and daughter. They do not agree who used what and for what purpose - this will be the subject of evidence at a final hearing - but it does appear that payments were made to both, generally for living expenses.
In 2016, the daughter returned to Australia and moved back into the apartment. The mother says that she continued to make mortgage payments and pay most of the strata management fees.
In September 2017, the mother sent a text message to the daughter:
You're right Holly. I have no right to profit from your investment. The property could not have been purchased without you. I will forego.
This appears to have occurred at a time when the daughter wanted to sell the apartment and there was some discussion about how the proceeds of sale would be distributed. However, the apartment was not sold but refinanced instead. The benefit of that re-finance was largely paid to the daughter.
In 2018, it appears that the daughter began making mortgage payments, and in 2019, her boyfriend moved into the apartment. The daughter says that she paid $10,000 to the body corporate for asbestos removal. At that time, the daughter asked her mother to 'come off' the title of the property, but the mother did not agree. Relations between the two appear to have deteriorated. The mother was no longer able to stay at the apartment when she was in Sydney.
At about this time, the daughter wished to sell the property and the mother appears to have been reluctant to agree to this course. On 7 January 2020, the mother sent an email to her daughter:
My preference is for the property to be rented, as was the plan last June. I would be happy to split the costs that are not covered by the rental income 50% each.
The mother says that the daughter listed the property for sale without her knowledge or consent. The mother says that, on 19 January 2020, her daughter said that she had received an offer on the property and, if the mother did not agree to the sale, then the daughter would commence proceedings in this Court. The mother says she was very upset but ultimately agreed to the sale.
Although the plaintiff ordinarily lives in Singapore, where she works as a business consultant and contractor, the plaintiff returned to Australia in March 2020 due to the COVID-19 pandemic. Family members suggested that she should return to Australia due to the risk of being stuck in Singapore, not being able to work and not being covered by medical insurance.
Sale of the apartment was completed in April 2020 for $995,000. After paying out the loan on the property, the net proceeds of sale of some $285,000 were placed in the trust account of the solicitor who acted on the sale. On 22 April 2020, the solicitor sent an email noting that he had been receiving conflicting instructions from the mother and daughter as to distribution of the proceeds of sale. Unsurprisingly, the solicitor declined to distribute the monies absent agreement or a Court order. In addition, the solicitor advised: (emphasis in original)
…I also will not answer or respond to any other emails, or telephone calls, from either party at this time, because of your previous conduct.
…I wish you luck in sorting out your differences.
On about 27 April 2020, the daughter says that she spoke to her mother about the proceeds of sale and agreed that the apartment had been purchased for and by the daughter and the mother had no right to the money. At some point, friends or family tried to broker an agreement between the mother and daughter, without success.
The plaintiff finds herself in difficult financial circumstances. On returning from Singapore, the plaintiff initially lived with family members on the North Coast until September 2020, but she presently finds herself without accommodation and in receipt of Centrelink's Jobkeeper payment, being $786 a fortnight or $36 a day. The plaintiff says that she needs access to at least some of the proceeds of sale in order to find accommodation and, if possible, return to Singapore where she will find work and resume supporting herself. The mother has tried to find work in Australia but says that the type of work which she does is virtually impossible to find here. When the borders with Singapore opened on 8 October 2020, the mother applied for a permit to return to work in Singapore. Approval was granted, as long as the mother arrived in Singapore by 26 October 2020. However, the mother did not have funds to travel to Singapore or to support herself there while she gained employment.
On 15 October 2020, the mother retained a solicitor, who wrote to her daughter noting that her daughter was apparently prepared to resolve the matter on a 90/10 split in favour of the daughter, and asked for 10% as an interim payment, noting that the mother did not agree to giving the daughter 90% of the proceeds of sale. There appears to have been no substantive reply.
On 28 October 2020, the mother swore an affidavit describing her employment as "unemployed", noting that she usually worked overseas as a business consultant or contractor and sought an interim distribution of the sale proceeds to allow her to secure accommodation in Australia or provide her with means to return to Singapore to work and support herself while the other issues between herself and daughter are resolved; otherwise, the plaintiff says that she will be homeless, she has no superannuation or other savings to rely upon and does not own any other property. These proceedings commenced on 29 October 2020.
The mother says she has made a contribution to this property of over $300,000 in the form of mortgage repayments, building management fees and interest payments. Against this, the daughter's calculations, assisted by her partner, suggested that the daughter had contributed $141,000 whilst the mother had withdrawn $86,000 more than what she had contributed. Obviously, at any final hearing, who contributed what and who withdraw what will be need to be determined. The parties do not agree at this point in time.
[4]
Submissions
The mother submitted that the property is sufficient to meet their competing interests as the matter is currently framed. The amount sought was not a large sum; the mother had demonstrated an interest in the property and net proceeds of sale and demonstrated an urgent need to access a small part of the net proceeds. The question is whether the mother is entitled to 77% of the net proceeds of sale, as claimed in the summons, or 50% as being a tenant in common in equal shares, or a lesser amount sufficient to reimburse the mother for her contributions to the property leaving any profit to the daughter. Whilst the mother was impecunious, by the time of a final hearing, it was suggested that the mother would be able to find funds from somewhere to repay her daughter if need be.
The daughter opposes the interim relief on the basis that it is said that the mother has no prospects of repaying the money and will move to Singapore; such that the money cannot be recovered. It was said that the relief sought is therefore of a final rather than interlocutory nature. It was speculation to infer that, by reason of familial relationships, the mother would repay the monies if the daughter ultimately succeeded in these proceedings.
Whilst the daughter accepts there is a serious issue to be tried, it was said that the mother's case had poor prospects. Issues of credit would arise at a final hearing. It was said that the mother had erroneously asserted that she was on title as tenant in common in equal shares; but the mother is on title as a tenant in common in equal shares with her daughter.
It was submitted that the mother had admitted that the property was entirely the daughter's and reliance was placed on the text message referred to at [12]. However, the context in which the text message was sent is presently unknown. What it does record is that, at the time of sending the text message, the mother recognised that she had a claim of some kind to the property which she was prepared to forego. What the mother said she would forego was any profit from the investment. The mother cannot be taken from that text message to have foregone any right she might have had other than to profit and nor does the Court presently know whether the comment made by the mother was subject to any conditions which went unfulfilled. The text message does not mean that the mother's case is as hopeless as the daughter's submissions would suggest.
The daughter submitted that there was an express or resulting trust for the daughter; the presumption of advancement defeated any claim by the mother. It was said that the mother's conduct confirmed that she did not consider herself to have any beneficial interests in the property as she did not stay there when in Sydney but instead rented accommodation. However, as the mother's affidavit made plain, the mother usually stayed at the apartment but the daughter would not let her do so from about 2019, thus requiring her to rent other accommodation.
It was said that the tenants left when the daughter, and not the mother, decided to occupy the apartment. I do not think the affidavits clearly set out the arrangements in this regard. It was said that the mother objected to the daughter's partner living in the property but did not take any steps to restrict that course. I am not sure what steps it is thought that the mother could have taken to stop the daughter's boyfriend moving in.
It was said that the daughter entirely determined the decision to sell and how to conduct the sale. That submission overlooks the mother's evidence that the daughter decided to list the property for sale without telling her mother and it was only when the daughter threatened to come to Court to get an order to permit the sale to go ahead that the mother reluctantly agreed.
The daughter submitted that there was no urgency in this application because the mother's need to arrive in Singapore by 26 October 2020 in order to activate her worker's permit has expired, that date having now passed. However, that does not detract from the overall urgency of which there is evidence that the mother does not have money to support herself.
[5]
Consideration
The application under rule 25.5 of the UCPR cannot succeed. Rule 25.5 provides: (emphasis added)
25.5 Interim distribution
If, in proceedings concerning property, it appears to the court that the property is more than sufficient to answer the claims on the property for which provision ought to be made in the proceedings, the court may allow any part of the property to be conveyed, transferred or delivered to any person having an interest in the property.
If the daughter succeeds at final hearing, including under a cross summons which she intends to file, then she would claim the whole of the net proceeds of sale and, thus, the requirements of that rule are not met.
The question is whether an order can be made in the form of a mandatory injunction to permit a payment out of a portion of the net proceeds of sale in the amount sought by the mother. Section 66(4) of the Supreme Court Act provides:
66 Injunction
(4) The Court may, at any stage of proceedings, on terms, grant an interlocutory injunction in any case in which it appears to the Court to be just or convenient so to do.
The daughter accepts that there is a serious question to be tried, but it was submitted that, before the Court would order a mandatory injunction, a more stringent test needed to be met than for a prohibitory injunction. In In the matter of A Twins Spare Parts Pty Ltd [2019] NSWSC 1347 at [16]-[19], I reviewed the development of authority in Australia and concluded that the test for a mandatory injunction in Australia now, is no different to an ordinarily prohibitive injunction, nor has the requirement for "a higher degree of assurance" found wide acceptance.
The authorities in this regard are helpfully reviewed in Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105, where Newnes JA, with whom McLure P and Corboy J agreed, concluded that no different standard applies. Gummow J also rejected the "high degree of assurance test" in Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499, noting at 503:
… it has long been the case that interlocutory mandatory injunctions would be more likely to issue where the defendant was compelled, not to embark upon a fresh course of conduct, but, as here, to revert to a course of conduct pursued before the occurrence of the acts or omissions that provoked the litigation.
See likewise Kiefel J in Racecourse Totalizators Pty Ltd v Totalisator Administration Board of Queensland (1995) 58 FCR 119 at 123; [1995] FCA 1405; Bingham v 7-Eleven Stores Pty Ltd [2003] QCA 402 at [108]; Tymbook Pty Ltd v State of Victoria (2006) 15 VR 65; [2006] VSCA 89 at [33]-[35] per Maxwell P and Charles JA; National Commercial Bank Jamaica Ltd v Olint Corporation Ltd [2009] UKPC 16 at [19]-[21] per Lord Hoffmann for the Privy Council.
The real question here is the balance of convenience. In that regard, the facts in A Twins Spare Parts were not unlike the facts before the Court. In that case, the plaintiff had been receiving a weekly payment from the family business for some time, having returned from Africa to assist members of his family following the untimely death of one of his brothers. When the plaintiff commenced legal proceedings against the family business, the weekly payments ceased, leaving him impecunious with a wife and young children. In the circumstances of that case, I found that the balance of convenience favoured a mandatory injunction to restore the weekly payments as it appeared, not only, that he had a strong prima facie case, but that it was unclear how he was otherwise going to support himself. It was also apparent that, on any view of it, the plaintiff was likely to receive a substantial sum and, thus, overall the balance of convenience favoured him: at [26], [32].
Here, the situation is different as there is a prospect that any money that is released to the mother may not be repaid, because the mother says she has no money and is in need of funds, hence the current application. The mother may return to Singapore. It does appear, however, that over time both mother and daughter have drawn upon the 'equity' of the property when it was re-financed, consistent with the property being used to benefit each of them at various times.
I am concerned, that if some funds are not released to the mother, then she will not be able to prosecute her claim at all in circumstances where, on the face of it, she is legally entitled to 50% of the net proceeds of sale because she is the registered proprietor of half of the interest as a tenant in common. It appears that the mother has made a contribution to the property over time in the form of mortgage payments. I am not able to determine whose calculations of contributions are correct, but it appears that, for several years, the mother was meeting the mortgage repayments.
Thirty-six dollars a day might be enough to live in Australia if you usually live here, but in circumstances where the mother has had to return from overseas for reasons beyond her control, I accept that she may be finding it hard to put a roof over her head right now. The mother does appear to have a prima facie claim, and I consider the balance of convenience favours releasing some of the money to her. Assuming that the mother wishes to continue to enjoy a relationship with her daughter, then it will obviously be in the mother's interests - should she ultimately fail entirely in her claim and the daughter succeed in proving she is entitled to every penny - to repay the monies to her daughter in the interest of their continuing relationship.
I am not prepared to release 10% of the net proceeds of sale. I will, however, release $12,000 from the net proceeds of sale to enable the mother to source accommodation and sustain herself to be able to prosecute her claim. I accept $12,000 will not be enough to pay lawyers, but it will provide her with the ability to support herself. I consider an early mediation would be appropriate. Expedition may be appropriate.
For these reasons, I make the following orders:
1. Subject to the provision of the usual undertaking as to damages by the plaintiff, pursuant to section 66 of the Supreme Court Act 1970 (NSW) that $12,000 of the monies held in trust by Grahame Jackson & Associates, solicitors, in the names of the plaintiff and defendant be remitted to the plaintiff.
2. Reserve all questions of costs.
3. Stand the matter over to 20 November 2020 before the Registrar in Equity.
4. Liberty to the parties to apply on 24 hours' notice.
[6]
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Decision last updated: 09 December 2020