The owner of a property succeeds in obtaining an order for possession against a claimant who alleged an unwritten sale agreement …

In 1998 Mrs Marguerita Strauss (“Mrs Strauss”) purchased a one tenth share of a property in Mullumbimby in NSW for $67,000. By agreement between all of the owners Mrs Strauss occupied site 4.

Lara Strauss, the daughter of Mrs Strauss, lived on the property between January 1999 and June 2014 and between mid 1999 and February 2005. Mr Ian Bennett (who at that time was Lara’s husband) (“Mr Bennett”) also lived on the property.

When Lara moved out of the property in June 2014 Mr Bennett moved back in.

Mrs Strauss started proceedings for the eviction of Mr Bennett in 2016. Mr Bennett claimed that:
• there was an unwritten agreement in June 2014 for the sale of the property to him; and
• in the alternative, that he is entitled to a proportion of the property because of the work that he did on the property while he was there.
As to the second claim, Mr Bennett argued that he made substantial improvements to the property as part of a joint endeavor between himself, Mrs Strauss and Lara, which endeavor ultimately failed. However, it was never intended that Mrs Strauss should retain the benefit of those improvements. He argued that he made the contributions because of an expectation that he owned the property with Lara at the time or would in the future.

Mr Bennett gave evidence that Ms Strauss led Lara and himself to believe that the property was theirs. Mrs Strauss denied Mr Bennett’s statements and in fact gave evidence that for a period Lara paid rent to reside on the property.

As to the agreement for the sale to Mr Bennett, a lot of evidence was before the court and it was clear that initially, it would have suited Lara to see the property sold to Mr Bennett. In July 2014, Mr Bennett paid $60,000 to Lara (for Mrs Strauss) as part of the purchase price. Lara gave half of this money to her new partner and half to Mrs Strauss.

The relationship between Lara and her new partner ended in September 2014. Mrs Strauss gave Lara the $30,000 she had received and asked her to return it to Mr Bennett. When Lara did that she told Mr Bennett that he could recover the balance of the $60,000 from her former partner.

The money that Mrs Strauss originally received was returned to her. She did however deny to Mr Bennett that they had a deal for the sale of the property and took steps to evict him.

In the Supreme Court of NSW, Justice R Darke rejected the argument of Mr Bennett that the property was for Lara and himself. He also found that the building works carried out by Mr Bennett were largely paid for by Mrs Strauss and her husband.

His Honour accepted that Mr Bennett did landscaping work and contributed some of his own money to the improvement of the property. However, His Honour rejected that these contributions were part of a joint endeavour with Mrs Strauss and Lara on the expectation that he owned the property with Lara.

As to the agreement that Ian alleged for the sale of the property. Mrs Strauss was not a party to the conversations that Ian relied on. Mr Bennett said that Lara had told him that Lara was speaking for her mother, however, Lara denied this. His Honour accepted the evidence of Mrs Strauss that she did not know the value of the property and wanted to think about Mr Bennett’s proposal to buy the property for $240,000.

Ultimately, His Honour’s conclusion was that no agreement was reached between Mrs Strauss and Ian.

Mrs Strauss was however ordered to pay back to Ian the $60,000 plus interest that he paid.

Mr Bennett was ordered to pay damages to Mrs Strauss for lost rent for the period 6 November 2014 until the time he vacated.

An order for possession of the property was made in favour of Mrs Strauss.

A bank customer fails in a claim that the bank wrongfully paid loan monies into the wrong account causing him loss …

Murray Willson and his wife, Barbara Willson, agreed in family law proceedings to settle the financial matters between them by, in part, the sale of property at 90 Jutland St in Brisbane by Mrs Willson. At settlement, Mr Willson was to receive $312,500 from the sale proceeds as part of the family law settlement agreement.

In separate proceedings in the Supreme Court of Queensland the Bank of Queensland commenced proceedings against Mr Willson as the guarantor of a debt owed by Prestige Pools Paving and Landscapes Pty Ltd. Mr Willson defended the proceedings claiming that the money advanced by the bank was paid into the wrong account in breach of duties that the bank owed himself and his company and thereby preventing him from being in a position to pay the debt that he had guaranteed.

The account into which the bank paid the money was a joint account opened by Mr Willson and his wife, Mrs Willson on 30th October 2008. Mr Willson claimed that the joint account was opened for Mrs Willson’s benefit and he had no obligation to repay any of this money. He further claimed that the bank had no authority to pay the money into the joint account. Mr Willson also claimed that his business collapsed because of the bank’s actions in paying the money into what he claimed was the wrong account.

The court did not accept the evidence of Mr Willson and found that the joint account where the money was paid by the bank had been opened at the request of Mr Willson to advance an investment opportunity of his own.

The court held that the bank had not breached any duty owed to Mr Willson.

IT IS POSSIBLE TO CLAIM OWNERSHIP OF LAND EVEN IF YOU ARE NOT REGISTERED ON THE TITLE …

In Western Australia. the successors in title to their father Hadley George Bowman, sued Gary Tremaine for trespass of land that was in their name following the death of their father. The strip of land was approximately 134 sqm in size, extended along the boundary of the properties owned by the parties and was of varying width.

In a counterclaim, Mr Tremaine claimed ownership of the land by adverse possession. Mr Tremaine gave evidence that the disputed land was physically incorporated as part of his property when a limestone retaining wall was constructed in about 1957. Other things were done on the disputed land since the early 1950s such as, the planting of trees and the erection of water tanks. It was claimed that the plaintiffs’ family were never granted use or possession of the land.

The plaintiffs disputed the evidence of the defendant on the counterclaim. They said that the retaining wall was erected without permission or authority and that Mr Bowman regularly visited the land doing repairs and the like. The evidence was that Mr Bowman complained of the use of the land by Mt Tremaine’s family.

In the 1990s, the plaintiffs asserted entitlement to the whole of the land including by erecting a ring lock fence .

The defendant had to prove actual possession of the land and also an intention to possess the land. Having considered the history of how the land was dealt with by the parties, His Honour found the actions of Mr Hugill, the predecessor in title to Mr Tremaine, made it clear that he had taken possession of the land and intended to retain it. Mr Hugill’s possession started in the early 1950s and continued without any complaint by Mr Bowman. His Honour pointed out that by the time the complaint was made in the 1990s any challenge to possession by Mr Hugill was statute barred.

The claim by Mr Bowman’s family for trespass by Mr Tremaine was dismissed and Mr Tremaine was successful in his claim for ownership of the disputed land.

Depositing the certificate of title with the lender’s solicitor can create an equitable mortgage…

In some instances, the Supreme Court can order the sale of a property to repay the debt. This was examined in the case of Hatala v Graglee Pastoral Company Pty Ltd [2017] NSWSC 155.
In May 2013 Mr Hatala and Mr Daniel lent Grag Group Pty Ltd the sum of $300,000 and a property at Sutton Forest was used as security for the loan.

At that time, the husband (Mr Coady) was the sole director, secretary and shareholder of the borrower company (Grag Group Pty Ltd) while his wife (Mrs Coady) was the sole director, secretary and shareholder of Graglee Pastoral Company Pty Ltd who was the registered proprietor of the Sutton Forest property.

Shortly before the loan was advanced, the husband delivered the loan agreement signed on behalf of the borrower company together with the certificate of title of the Sutton Forest property to his solicitor, Mr Silk. Mrs Coady did not sign the loan agreement. A day later, the lenders visited Mr Silk’s office and the latter showed each of them the certificate of title of the Sutton Forest Property. The lenders then signed the loan agreement and they each transferred $150,000 into the bank account of Grag Group Pty Ltd.

Grag Group Pty Ltd defaulted on the loan and the lenders commenced recovery proceedings. The lenders claimed that by depositing the certificate of title an equitable mortgage was created and they were entitled to ask the court to appoint a receiver to sell the property and recover the money owing to them.
The evidence was that Mr Silk, the solicitor, told the husband, Mr Coady that the certificate of title for the Suttons Forest property would be held as security for the loan. Furthermore, the loan agreement prepared by Mr Silk said that the certificate of title was to be held as security.

In his judgment, Justice R Darke referred to earlier cases and said that an equitable mortgage can be created by lodging the certificate of title even if there is no writing. The one difficulty that the lenders had was that the wife, never signed the loan document. However, based on the evidence before him, His Honour was satisfied that Mr Coady was acting with the knowledge and consent of his wife.
His Honour made a declaration that the lenders had an equitable mortgage over the Sutton Forest property and ordered that a receiver be appointed to sell the property in order to repay the debt.

The COVID-19 pandemic and business interference insurance …

Many business operators had taken out business interference insurance and claimed on those policies after they suffered loss because of lockdowns imposed by state governments during the COVID-19 pandemic. The insurance companies are denying liability and it is now for the courts to determine the issue of responsibility.

The most recent decision followed proceedings brought by the owner and operator of the Vanilla Lounge cafe. In this action, the Federal Court was asked to answer a specific question: can liability be excluded (under the particular insurance policy) if the claim arises directly or indirectly or contributed by a human disease specified in a declaration of a human bio security emergency made under the Biosecurity Act 2015 (Cth.). The insurance company argued that the reason for the lockdown (and therefore the loss) was the state governments declaration under the state law not the declaration made by the Commonwealth government. The Judges answer was “no”, that liability cannot be excluded.

It is understood that leave will be sought to appeal the decision to the High Court.

There have been other decisions that similarly are opening the door for business owners to claim on their policies.

For more information about your rights, contact Peter Jackson at pjackson@jacksonassoc.com.au or Costin Stan at cstan@jackasonassoc.com.au

Peter Jackson, Costin Stan and Jason Tran from Jackson & Associates, Solicitors wish our friends, clients and readers of our newsletter the best wishes for the holiday season and the coming year.

Our offices will be closed between 23 December 2020 and 4 January 2021.

For urgent matters during the holiday period please contact Peter Jackson at pjackson@jacksonassoc.com.au or Costin Stan at cstan@jacksonassoc.com.au