Marica Sovova v Niko Ojvan [1987] ACTSC 37 (1 June 1987)

SUPREME COURT OF THE ACT

MARICA SOVOVA v. NIKO OJVAN
S.C. No. 542 of 1985
Real Property - Courts

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Miles C.J.(1)

CATCHWORDS

Real Property - parties in de facto relationship - tenants in common in equal shares of leasehold interest under City Area Leases Ordinance 1936 - application for sale and distribution of proceeds under Partition Act 1900 (NSW) in its application to the ACT, s.4 - jurisdiction of court to order - City Area Leases Ordinance 1936 s.29(1) - onus on defendant in opposing application to show "good reason to the contrary" - New South Wales Acts Ordinance 1936 - Squire v. Rogers.

Courts - jurisdiction - sale and distribution of proceeds - jurisdiction of court to order - Partition Act 1900 (NSW) in its application to the ACT, s.4 - City Area Leases Ordinance 1936 s.29(1).

Patel v. Premabhai (1953) 3 WLR 836

Witchard v. Witchard (1975) 6 ACTR 31 at p.35

Squire v. Rogers (1979) 27 ALR 330

Blennerhasset v. Blennerhasset (1957) VR 214

HEARING

CANBERRA
1:6:1987

ORDER

That the interest of the plaintiff and the defendant in the lease over land being Block 11 Section 45, Rivett in the Australian Capital Territory and entered in the register book Volume 601, Folio 55 and known as 30 Goodenia Street, Rivett, be sold.

That the gross proceeds of the said sale after payment of the balance, if any, owing to the Commonwealth of Australia as mortgagee and of agents' and autioneers' commission, if appropriate, be paid into Court to be dealt with according to the further terms of this order.

That from the gross proceeds of the sale there be paid

(a) the ordinary costs, charges and expenses of the
said sale not already provided for;

(b) the plaintiff's costs of this application as
agreed or taxed;

(c) such other sum as is agreed or ordered to be
paid.

That after payment of the amounts above referred to, the balance shall be

paid in equal shares to the plaintiff and to the defendant.

That the defendant join in the sale and/or execute all documents and do all things necessary to give effect to the transfer of the said property and in the event of the defendant neglecting or refusing to execute any such documents presented to him for execution then the Registrar be allowed to execute those documents in the name of the defendant.

Liberty to apply on two days notice.

DECISION

The plaintiff seeks an order of the Court directing a sale of certain land and a distribution of the proceeds between herself and the defendant. The plaintiff and the defendant are lessees of the land from the Commonwealth under a lease granted under the City Area Leases Ordinance 1936. They hold their respective interests as tenants in common in equal shares.

2. The plaintiff relies on s.4(1) of the Partition Act 1900. The New South Wales Acts Ordinance 1986 which was made by the Governor General in Council on 18 December 1986 and notified in the Gazette on 12 January 1987 provides for the continuation in the Australian Capital Territory of a number of New South Wales statutes including the Partition Act 1900. The text of the Partition Act 1900 in its application in the Territory is set out in Part I of Schedule 2 of the Ordinance. The somewhat chequered history of the Partition Act 1900 in its application in the Territory is the subject of some notes appearing at the foot of the text of the Act in the Commonwealth Government Printer's copy of the Ordinance. I do not propose to trace that history. I think it is sufficient to say that although the present application was commenced by originating summons dated 3 June 1985 nothing turns on the amendments to the Partition Act 1900 which were made by the 1986 Ordinance.

3. The relevant terms of s.4(1) of the Partition Act 1900 are as follows:

"Power of Court to Order Sale Instead of Division
4(1) In a suit for partition, where, but for
this Act or the Act hereby repealed, a decree
for partition might have been made -
(a) . . . . .
(b) If parties interested collectively to the
extent of one moiety or upwards, or some
persons as hereinafter provided on their
behalf, request the Court to direct a sale
of the property and a distribution of the
proceeds instead of a division of the
property between or among the parties
interested, the Court shall, unless it
sees good reason to the contrary, order a
sale of the property accordingly; and
(c) . . . . . "

4. The terms of the sub-section make it clear that the Court has no power to direct a sale unless it can be shown that "but for this Act or the Act hereby repealed a decree for partition might have been made". The notes to the Act state that the Act repealed by the Partition Act 1900 of New South Wales was Act 41 Vic No. 17. The Partition Act 1900 bears the heading "an Act to consolidate enactments relating to Partition". It appears that the repealed statute was in terms substantially identical to the Partition Act 1900 itself, and both New South Wales statutes appear to be in terms substantially identical with those of an English statute of 1868.

5. An initial difficulty arises from the terms of s.29(1) of the City Area Leases Ordinance 1936. That section provides that each parcel of land included in a lease shall at all times be held and occupied by the lessee under the lease as one undivided parcel. An immediate question arises whether, but for the Partition Act 1900, a decree for partition might have been made of land subject to the City Area Leases Ordinance 1936, since a parcel of land could not have been divided in accordance with a decree for partition whilst the several lessees held and occupied the land as one undivided parcel. However, in Patel v. Premabhai (1953) 3 WLR 836, the Judicial Committee of the Privy Council held that a statutory prohibition against the subdivision of land without approval of a Board did not prevent the making of a decree of partition of the land notwithstanding the lack of the Board's approval. In Witchard v. Witchard (1975) 6 ACTR 31 at p 35 Blackburn J., as he then was, expressed difficulty in understanding the decision of the Privy Council and considered that it conflicted with "the multitude of cases in which courts have refused to make orders the execution of which would be unlawful". I accept his Honour's reservations. There are inevitable difficulties in reconciling principles of property law which evolved in nineteenth century England with the statutory system of land tenure in the Australian Capital Territory.

6. The decision of the Privy Council in Patel v. Premabhai was referred to with approval by Dean J. (with whom Forster J. wholly agreed and Brennan J. agreed on the point) in a Full Court of the Federal Court of Australia in Squire v. Rogers (1979) 27 ALR 330. In that case the appellant had contended that a decree of partition was precluded by the operation of s.29 of the Darwin Town Area Leases Ordinances 1947 (Northern Territory). That section is in terms similar to s.29(1) of the City Area Leases Ordinance 1936. His Honour observed at p.341 that the requirement of the Northern Territory Ordinance that land be held and occupied as one undivided parcel would not preclude the actual making of a decree for partition and continued as follows:

"The making of such a decree would not, in
itself, involve a division of the holding or
occupation of the land in respect of which the
decree was made. The existence of the
provisions of s.29 might lead the court either
to frame a decree for partition in such a way as
to ensure that the necessary approval for
subdivision was obtained before the decree could
be carried into effect by actual division of the
property or to provide, by ancillary orders, for
the actual making of an application for approval
of the necessary subdivision (see, for example,
the form of order made in Dougan v. Ley [1946] HCA 3; (1946)
71 CLR 142 at 145, 152 and 154). Those
provisions might, in certain circumstances, lead
the court to decline to make an order for
partition on the grounds that it would be futile
to do so: North v. Guinan (1829) Beat 342.
There is nothing, however, in the provisions of
s.29 of the Ordinance which deprives the court
of its jurisdiction to make a decree for
partition or which operates to deprive the
present proceedings of their character as an
action for partition where, if the relevant
Partition Act had not been passed, a decree for
partition "might have been made".

7. Dean J. concluded on p.342 that the decision of the Privy Council in Patel's case supported the proposition that the provisions of the Ordinance did not preclude the making of a decree of partition. His Honour further said that the decision was in accordance with the decisions of various single Justices of State Supreme Courts that a legislative provision prohibiting or rendering ineffective a transfer or sale without consent does not, as a matter of jurisdiction, preclude the making of an order for sale in a case where the necessary consent has not been obtained for the reason that the making of the order for sale, as distinct from carrying it into effect, does not involve any breach of the relevant legislative prohibition, e.g. Blennerhasset v. Blennerhasset (1957) VR 214. His Honour referred also to the judgment of Blackburn J. in Witchard's case. I regard the Federal Court decision relating to a Northern Territory Ordinance in terms almost identical with those in the City Area Leases Ordinance 1936 as binding on me.

8. I therefore hold that the Court has jurisdiction to make the order sought.

9. I turn now to the merits of the application. Section 41(b) of the Partition Act 1900 casts an onus on the defendant to show "good reason to the contrary" where the owner of a moiety requests the Court to direct a sale of the property and a distribution of the proceeds.

10. The facts as I find them may be simply stated. The plaintiff and the defendant commenced living in a de facto relationship in 1970. The plaintiff had a child by a former marriage born on 17 November 1963. Two children were born to the union of the plaintiff and the defendant, one on 23 May 1970 and the other on 18 March 1972. In September 1971 the family moved to premises on the subject land at 30 Goodenia Street, Rivett under a tenancy agreement with the then Department of the Capital Territory. Pursuant to the provisions of the City Area Leases Ordinance 1936 a ninety-nine year lease was granted to the defendant by the Commonwealth from 21 June 1973. The purchase price or premium was $16,900, of which $16,050 was secured by mortgage back to the Commonwealth. The rest (called the "deposit") was paid either by the defendant himself or by each party contributing a share. Unhappy differences arose between the parties and proceedings were commenced in this Court on 4 January 1978 in which the plaintiff sought, amongst other forms of relief, a declaration that the defendant held the property in trust for himself and herself. These proceedings were terminated by consent on 27 October 1978 without court order when the defendant agreed to transfer a one half interest in the lease to the plaintiff as tenant in common. A memorandum of transfer was executed by the defendant on that date. On 22 December 1978 the Registrar of Titles endorsed the title with notification of a transfer to the plaintiff and defendant as tenants in common in equal shares. The plaintiff and the defendant together with the children continued to live in the house, but the differences between them continued. In 1981 the plaintiff moved out of the house taking the children and the contents of the house with her. The defendant has continued to live there. As at 20 May 1985 there was about $14,927.65 owing to the Commonwealth under the terms of the mortgage. I accept that such instalments due on the mortgage as were paid were paid by the defendant.

11. The plaintiff says that she wishes the property to be sold so that part of the net proceeds representing her net interest in the property may be used for herself and for the children. The defendant opposes the orders upon the following grounds:

"(a) During the course of our relationship the
plaintiff never contributed anything to
the home and all of the payments were made
by me. We shared the costs of
housekeeping,
children's clothing and
purchasing furniture.
(b) At the time that the property was
transferred
into the joint names of the
plaintiff and I, it was agreed that if she
broke her promises to me, the agreement
would be terminated and she would not
claim anything further from me. She broke
her promise and instead of working for the
benefit of the family, took the family
away."

12. In his oral evidence the defendant stated that the transfer on 27 October 1978 was made subject to an oral agreement that if the plaintiff went out with other men she would forfeit her half share in the property to the defendant.

13. There are several reasons why the contention by and on behalf of the defendant should fail, but the major reason is that having seen and heard both the plaintiff and the defendant in the witness box, I have no hesitation in rejecting the defendant's account of the alleged conversations between himself and the plaintiff by which the alleged agreement was made. Furthermore, I am not satisfied that the plaintiff never contributed anything to the home. On the contrary, I am satisfied that she worked for substantial periods during the period of cohabitation and that part of her earnings was spent for the benefit of the children at least. I also find that she contributed her own services to the home and to the welfare and maintenance of the children. As I have already said, the onus is upon the defendant to show good cause why the order for sale should not be made, and I find that the defendant has not discharged that onus.

14. I make the following orders:

1. That the interest of the plaintiff and the
defendant in the lease over land being Block 11
Section 45, Rivett in the Australian Capital
Territory and entered in the register book
Volume 601, Folio 55 and known as 30 Goodenia
Street, Rivett, be sold.
2. That the gross proceeds of the said sale after
payment of the balance, if any, owing to the
Commonwealth of Australia as mortgagee and of
agents' and autioneers' commission, if
appropriate, be paid into Court to be dealt
with according to the further terms of this
order.
3. That from the gross proceeds of the sale there be paid.

(a) the ordinary costs, charges and expenses

of the said sale not already provided
for;

(b) the plaintiff's costs of this application

as agreed or taxed;

(c) such other sum as is agreed or ordered to

be paid.
4. That after payment of the amounts above
referred to, the balance shall be paid in equal
shares to the plaintiff and to the defendant.
5. That the defendant join in the sale and/or
execute all documents and do all things
necessary to give effect to the transfer of the
said property and in the event of the defendant
neglecting or refusing to execute any such
documents presented to him for execution then
the Registrar be allowed to execute those
documents in the name of the defendant.
6. Liberty to apply on two days notice.