Adler v Adler [2023] QDC 30

DISTRICT COURT OF QUEENSLAND CITATION: Adler v Adler [2023] QDC 30 PARTIES: JOHN FRANCIS ADLER (applicant) v KLARISSA LOUETT ADLER (respondent) FILE NO: D8/2023 DIVISION: Civil PROCEEDING: Originating Application ORIGINATING COURT: Maroochydore District Court DELIVERED ON: 3 March 2023 DELIVERED AT: Maroochydore HEARING DATE: 24 February 2023 JUDGE: Long SC, DCJ ORDER: The applicant is granted orders for the appointment of trustees for sale of real property pursuant to s 38(1) of the Property Law Act 1994 (Qld). CATCHWORDS: CIVIL – REAL PROPERTY – STATUTORY TRUST FOR SALE OR PARTITION – DISCRETION IN RELATION TO ORDERS – Application for the appointment of trustees for sale of real property held in co-ownership pursuant to s 38(1) of the Property Law Act – Where the power to appoint a trustee for the sale of property is an incident of co-ownership – Where the power to appoint a trustee is discretionary in nature and may only be properly refused in limited circumstances. LEGISLATION: Property Law Act 1994 (Qld) s 38 CASES: Bray v Bray (1926) 38 CLR 542 Coshott v Prentice (2014) 221 FCR 450 Ex Parte Eimbart Pty Ltd [1982] Qd R 398 Foundas v Ambatzis [2020] NSWCA 43 Mulherin v Quinn Villages Pty Ltd [2006] QSC 338 Proietti v Proietti [2022] NSWCA 875 Ranger & Anor v Ranger [2009] QCA 226 Wilson v Strzelcykowski & Ors [2016] QCA 227 -- 1 of 7 -- 2 COUNSEL: G Barr for the Applicant L Moore (sol) for the Respondent SOLICITORS: Argon Law for the Applicant Archibald & Brown Lawyers for the Respondent [1] By originating application filed 23 January 2023 the applicant seeks the appointment of trustees for the sale of a property held in co-ownership, pursuant to s 38 of the Property Law Act 1994 (“PLA”). [2] The property includes a residence situated at 3 Pelican Place, Bli Bli, which since February 1995 has been held by the parties, the applicant and his daughter, initially as joint tenants and more recently (from 9 November 2022) as tenants in common in equal shares. [3] There is evidence of the current value of the property, as determined under the Land Valuation Act 2010, establishing that the application is within the jurisdiction of this Court, having regard to the “monetary limit” in s 68 of the District Court of Queensland Act 1967. [4] The applicant seeks the sale of the property and equal division of the proceeds in accordance with the legal ownership of the parties, in circumstances where, in broad terms, the history of that ownership of the property is that: (a) the property was originally purchased by the applicant and his now estranged wife and mother of the respondent, with the assistance of the Queensland Housing Commission in about 1983; (b) the applicant and his wife separated in 1992 and in 1994, the matrimonial property was divided by a Family Court order, with the applicant deposing that he retained the residential property; (c) the applicant then refers to arrangements, in 1995, to refinance the property through a “Rental Purchase Plan Agreement with the Queensland Housing Commission”, which included making provision for his daughter’s interest in the property, as a place of residence for her; -- 2 of 7 -- 2 (d) there is evidence that the rental purchase plan arrangements were completed in 1999 with the re-transfer of legal ownership to the parties as joint tenants, until the applicant caused that to be severed in November 2022, so that the legal ownership is currently held as tenants in common in equal shares, after a failed attempt at mediation of the dispute which had emerged between the parties; (e) the applicant deposes to having worked and lived away from the property and also to living there on and off since 1983 but that he never “actually moved out”, in the sense of keeping his belongings there until November 2021. In the interim and by agreement, the applicant’s estranged wife had moved into the property to live with her daughter; and (f) as the applicant deposes, on 25 January 2022, a varied protection order was made pursuant to the Domestic and Family Violence Protection Act 2012, to which the applicant is the respondent and his former wife the named aggrieved, with the effect of, as it was referenced, “ousting” the applicant from the property. That is primarily because of the inclusion of the following order: “(2) the respondent is prohibited from remaining at; entering or attempting to enter; approaching to within 50 metres of the premises where the aggrieved lives”.1 [5] It is convenient to note that upon the hearing of this application, objection was upheld to testimonial reliance upon the contents of an attachment to the affidavit of the respondent, being a copy of the application made to vary the domestic violence order, which precipitated the making of the order on 25 January 2022.2 In short and in circumstances where there was no express reference to the inclusion of the application form in the respondent’s affidavit and the express notation that the order made on 25 January 2022 was “ordered by consent without admissions” and the necessary understanding that the application form is not a document created by or on behalf of the respondent and therefore effectively containing hearsay, the effective ruling was that the contents of the document could not be relied upon in any testimonial sense. That is, apart from any relevance the document may have to establish the fact of the application and the consequent making of the order. 1 The material filed for the respondent did not raise any particular challenge to this history, save for contention of contributions made by her to the value of the property entitling her to an equitable interest in excess of her legal entitlement. 2 Affidavit of K L Adler, filed 20/2/23, at [18] and KLA-11. -- 3 of 7 -- 3 [6] For the applicant, reliance is placed upon the well-recognised notion that the right that he seeks to enforce is an “incident of co-ownership of property”.3 [7] Whilst there is, for the respondent, opposition to the orders sought by the applicant, that does not extend to opposition to the sale of the property. Nor does it extend to opposition of the proposed retention of the proceeds of that sale, pending determination of the respondent’s notified claim to an equitable entitlement to greater than 50 per cent of those proceeds. Rather, the opposition is to the mechanism to be engaged, with the respondent’s alternative contention being the adoption of a form of order “regularly made in Family Court proceedings”, described as having “machinery which accounts for the relevant factors of sale (such as a declining market) and the acrimony between the parties”.4 [8] As the applicant contends, despite the inability of the parties to have previously reached agreement and the acrimony, to which reference is made, being particularly raised by the respondent as arising from the conduct alleged against him in the context of the making of the varied protection order, in underpinning the suggested motivations of the applicant, nevertheless the basic contention of the respondent is that the parties should work together to sell the property and preserve the proceeds, in order to avoid the costs of the involvement of independent trustees. [9] When pressed, on the hearing of the application, to identify the source of the power of this Court to make the proposed orders, as opposed to those available under the Family Law Act, the respondent pointed to s 38(3) of the PLA. However, that would necessarily require orders somewhat different to those which had been proposed and at least have the benefit of what is statutorily anticipated as the engagement and protection of the fiduciary obligations of trustees, including the engagement of the relevant provisions of the Trusts Act 1973 in the execution of any orders of the Court. It is to be noted that particularly where the co-owners of property are in dispute, the desirability of ensuring the appointment of independent trustees, has been recognised.5 3 Applicant’s Outline of Submissions at [5], where there is specific reference to Bray v Bray (1926) 38 CLR 542 and Ex Parte Eimbart Pty Ltd [1982] Qd R 398 at 402. See also: Ranger & Anor v Ranger [2009] QCA 226 at [14]. 4 Respondent’s Outline of Submissions at [26(c)]. 5 Coshott v Prentice (2014) 221 FCR 450 at [130]. -- 4 of 7 -- 4 [10] As is correctly contended here for the applicant, that concern clearly arises here in the context of the reliance of the respondent upon some broad assertion as to there being a malevolent motivation of the applicant, based upon some continued inappropriate attempts to rely upon inadmissible evidence and also some interactions between the parties’ lawyers in respect of the valuation of the property. It is not necessary to dwell upon the suggested evidential basis for the contended conclusion that the applicant is motivated to waste the jointly owned asset, by insisting upon the engagement of the independent trustees and an expectation of their appropriate entitlement to recover their costs and expenses from the proceeds. Appropriate consents to act have been provided by the trustees proposed by the applicant,6 and this is not a dispute about the potential costs implications of the engagement of alternatively proposed independent trustees. [11] There are a number of apparent difficulties with the respondent’s position, in addition to the continued and impermissible reliance upon the inadmissible content of the application form for the varied protection order. In particular, the incidence of trustee obligations and entitlement to remuneration, necessarily follows from the desirability as has been recognised of the independent engagement of the fiduciary obligations of trustees in such circumstances. Moreover, there is a sense of fundamental difficulty in discerning any sense of unconscionability, as was sought to be attributed to the applicant’s application in terms of raising what was described as a “resulting proprietary estoppel” to that application, in his effecting a result which will fall upon him also, albeit rateably according to the yet to be finally determined respective interests in the proceeds of sale. [12] The discretionary nature of the exercise of the power in s 38(1) of the PLA has been recognised in terms that the exercise of discretion may only be properly refused in limited circumstances, even if the limits are not finally established. For instance, it is recognised that there is no general discretion to refuse an application on grounds of hardship or unfairness.7 In Foundas v Ambatzis, and in respect of the analogous provisions of s 66G of the Conveyancing Act 1919 (NSW), the New South Wales Court of Appeal observed: 6 Affidavits of J S Cronan and D M Stimpson, each filed 23/1/23 7 For instance, in a decision relied upon by the Respondent; Proietti v Proietti [2022] NSWCA 875 at [32] in Foundas v Ambatzis [2020] NSWCA 47 at [62]-[63]. -- 5 of 7 -- 5 [62] The primary judge observed that the grounds upon which a court may decline to make an order under s 66G are limited (citing Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411 at [36] and Tory v Tory [2007] NSWSC 1078 at [42]). [63] Although an order under s 66G is discretionary, such an order is almost as of right, unless on settled principles it would be inequitable to make the order. An order may be refused if the appointment of trustees for sale would be inconsistent with a proprietary right, or the applicant for the order is acting in breach of contract or fiduciary duty, or is estopped from seeking or obtaining the order (Re McNamara and the Conveyancing Act (1961) 78 WN (NSW) 1068 at 1068; Ngatoa v Ford (1990) 19 NSWLR 72 at 77; Williams v Legg (1993) 29 NSWLR 687 at 693; Hogan v Baseden (1997) 8 BPR 15, 723 at 15 ,726–15, 727; Tory v Tory at [42]). Hardship or general unfairness is not a sufficient ground for declining relief under s 66G (Hogan v Baseden (1997) 8 BPR 15, 723 at 723; Ferella v Official Trustee in Bankruptcy at [36] –[40]).8 [13] The respondent sought to adopt the terminology of “proprietary estoppel; being concerned with the recognition of interests in property by way of relief against unconscionable conduct”, as drawn from the decision in Proietti v Proietti.9 And made specific reference to Mulherin v Quinn Villages Pty Ltd,10 as supporting a conclusion that the erosion of the value of the asset may be a relevant factor. [14] Neither decision assists with the position of the respondent. Whilst the Mulherin decision is concerned with the implications of the costs to be incurred in a forced sale, that only arose in the context of what was identified as inconsistent positions taken by the applicant, in the context of other related litigation between the parties, as to whether or not the applicant had an interest in the land. There, any such implications did not prevent the making of the order. [15] The Proietti decision is not at all concerned with any such issue and provides no support for the respondent’s contention, including in respect of any discussion of principles relating to equitable, including proprietary, estoppel (whether or not based on any concept of unconscionability). Notably here, those contentions are not premised on any particular circumstances of the past relationship or dealings of the parties giving rise to any form of equitable estoppel. On the contrary, the essential force of the applicant’s position is that the consequence, upon which the respondent 8 [2020] NSWCA 47 at [62]-[63]. 9 [2022] NSWCA 875 at [53] and [55]. 10 [2006] QSC 338. -- 6 of 7 -- 6 fixes, is an inevitable consequence of what is recognised as an incident of co- ownership of property, as it may be enforced pursuant to s 38 of the PLA. [16] Accordingly and subject to the opportunity of the parties to be further heard as to the costs of the application, and any additional orders, will be granted in terms of the orders sought by the applicant pursuant to s 38(1) of the PLA. -- 7 of 7 --