Dyne & Anor v Brake & Carey [2006] QSC 255

State Reporting Bureau [pooTI ^sc <255 Queensland Government Department of Justice and Attorney-General Transcript of Proceedings Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION MACKENZIE J No 6358 of 2006 KENNETH IAN DYNE AND LYNETTE GAIL DYNE and PAUL NEWTON BRAKE AND BRIAN NEVILLE CAREY BRISBANE . .DATE 14/08/2006 JUDGMENT REVISED COPIES ISSUED State Reporting Bureau Date: 14 August, 2006 Applicants Respondents YARNING: The publication of information or details likely to lead to the identification of persons in some proceedings is a criminal iffence. This is so particularly in relation to the identification of children who are involved in criminal proceedings or proceedings for heir protection under the Child Protection Act 1999, and complainants in criminal sexual offences, but is not limited to those :ategories. You may wish to seek legal advice before giving others access to the details of any person named in these proceedings. 1 th Floor, The Law Courts, George Street, Brisbane, Q. 4000 Telephone: (07) 3247 4360 Fax: (07) 3247 5532 -- 1 of 7 -- HIS HONOUR: This is an application pursuant to Section 8 of 1 the Trusts Act 1973 to review the conduct and decisions of the respondents who are trustees for sale of real property. On 9th September 2005, the respondents were appointed by order 10 of Judge O'Brien in the District Court, Southport, as trustees of a statutory trust under Section 38 of the Property Law Act 1974 for sale of real property of which the applicants and Jon Thomas Green and Lynette Helen Green held one quarter shares as tenants in common. Judge O'Brien's order vested the land 20 in the trustees to be held by them on trust to sell it, and, relevantly: "To stand possessed of the net proceeds after sale after payment of costs and expenses... for the applicants and respondents in equal shares." 30 There is also an issue raised about outgoings paid by the Dynes for which they claim a right to be reimbursed or at least to set off. Having regard to the view I take, I will put that aside. 40 Clause 3 of the order permitted each of the applicants and the respondents to be at liberty to purchase the land upon terms that they not be required to pay any deposit and that they may set off against the purchase price the value of the whole of their share in the land. By clause 5, the applicants and the 50 respondents were given the right to tender prior to the offer of the property to the general public. If a tender from either of them was satisfactory to the trustees, the trustees 14082006 T01/BC4 M/T 1/2006 (Mackenzie J) 2 JUDGMENT 60 -- 2 of 7 -- were at liberty to sell the property to the successful tenderer . On 23rd May 2006, Justice Fryberg made orders that the respondents forthwith offer the property for sale by private treaty or auction to the public subject to the proviso that should either the applicants or the Greens deliver a tender for the purchase of the property by 30th May 2006 the respondents would determine whether any tender was suitable to them and if so whether to sell the property by private treaty to that tenderer. On 11th July 2006 a contract for sale was entered in, the purchasers being the applicants and Gai Maree Hayes, and the price was $662,000. Who Ms Hayes is and the extent of the respective interests of the Dynes and. her are not, as far as I can see, clearly set out in the material. It was a term of the contract that a deposit of 10 per cent be paid. The completion date was to be 14 days from the date of the contract . Justice Fryberg !s reasons set out the unusual course initially taken by the applicants whose task under the original order was essentially a simple one of selling the property by offering to sell it to the public by private treaty or auction if there was not a prior tender, satisfactory to the Trustees, by the applicants or the Greens before the offer to the public was made. 14082006 T01/BC4 M/T 1/2006 (Mackenzie J) 3 JUDGMENT -- 3 of 7 -- Determining whether or not an offer by tender was satisfactory might reasonably require obtaining expert evidence as to the value of the property. There is also reference to obtaining a private ruling from the ATO presumably with regard to capital gains tax. Whatever expenses in implementing the order are necessarily or reasonably incurred is ultimately a matter of fact. The material before me is insufficient to form any final conclusion, but it may be confidently said that the applicant's complaint about the detail concerning the quantum of fees and expenses involved cannot at this point be dismissed as unreasonable given the course the Trustees have . followed. It is noted that in Exhibit PNB4 to the affidavit of Paul Newton Brake there is a reference in item 7 to excluding remuneration of statutory trustees governed by the order of Justice Fryberg. Whether that implies that the remuneration actually incurred was more than $22,000 and the absence of entitlement to the difference referred in light of Justice Fryberg 's comments is conceded, is not wholly clear. One of the other problems, and I think a more significant problem about this whole matter and which to some extent impacts on the expense issue in a way, is whether the contract entered into is in accordance with either the order of Judge O'Brien or Justice Fryberg. As is pointed out in the correspondence, the contract is one which involved acceptance of an offer not from the applicants 14082006 T01/BC4 M/T 1/2006 (Mackenzie J) 1 10 20 30 40 50 4 JUDGMENT 60 -- 4 of 7 -- 1 but from three purchasers of whom the applicants are two. There seems to be a serious question whether under the right of pre-emption to either the applicants or the Greens under the orders, it is within the authority of the Trustees to enter into a contract which involves a party other than the 10 applicants or the Greens. The power to enter into that kind of contract was not really argued in detail in the hearing before me. 14082006 T01/BC4 M/T 1/2006 (Mackenzie J) It may be that such an arrangement is suitable to both the 20 applicants and the Greens since the argument, so far as the issue has been raised, focuses on whether the contract over rides the order with regard to the liberty given under paragraph 3 of Judge O'Brien's order with respect to set off of the value of the Dynes' interest in the property. However, since the case involves trustees for sale under a Court order, I do not think that the Court should give its imprimatur to a particular interpretation of a contract where it is not entirely clearly shown to have been entered into in circumstances compliant with the order for sale. If the contentious issues cannot be resolved in the present proceedings, how the issue concerning the authority to enter into the contract is to be resolved is a matter for the parties by which I mean the Trustees, the Dynes, the Greens and Ms Hayes . 40 50 Section 96 of the Trusts Act 1973 perhaps supplies one mechanism for doing so on a proper substratum of facts. There 5 JUDGMENT 60 -- 5 of 7 -- 14082006 T01/BC4 M/T 1/2006 (Mackenzie J). may be others. There is an inadequate evidentiary basis for 1 me to make any finding on the issue in the present proceedings. Since that issue of the authority to enter into a contract of a pre-emptive kind which involved the party who is not within the group of the applicants or the respondents 10 was not explored in detail at the hearing, it seems fair that I should give the parties leave to make submissions on the issue, to be delivered to my Associate at a time which I will nominate after discussion with the legal representatives. 20 Otherwise, I would have been inclined to think that the appropriate course would have been to dismiss the application; with regard to costs, it would have been probably appropriate to make no order as to costs. In the interests of clarity, I should say that recoverability by the Trustees of costs 30 associated with this application as an expense incurred in executing their statutory duty ought to be resolved in the context of whether the contract entered into is a valid exercise of their statutory obligations under the orders and what evolves from that. 40 So, what I propose to do is to invite the parties to make further, submissions on the issue that I have isolated concerning the contract and whether it is within the authority of the Trustees to enter into a pre-emptive contract where one party is not either the Dynes or the Greens. 50 6 JUDGMENT 80 -- 6 of 7 -- HIS HONOUR: So, in effect, I have delivered the reasons. I will adjourn the matter to a date to be fixed and reserve costs . 14082006 T01/BC4 M/T 1/2006 (Mackenzie J) 1 10 20 *?n 40 50 7 JUDGMENT 60 -- 7 of 7 --