Sullivan v. Sullivan (No.2) [2007] NSWCA 11 (15 February 2007)

Last Updated: 19 February 2007

NEW SOUTH WALES COURT OF APPEAL

CITATION: Sullivan v. Sullivan (No.2) [2007] NSWCA 11
This decision has been amended. Please see the end of the judgment for a list of the amendments.

FILE NUMBER(S):
40116/05

HEARING DATE(S): Matter dealt with on written submissions in Chambers

JUDGMENT DATE: 15 February 2007

PARTIES:
Julie Ann Sullivan - appellant
Robert Brian Sullivan - 1st respondent
Donna Sullivan - 2nd respondent
Spiralling Coil Pty. Limited - 3rd respondent

JUDGMENT OF: Hodgson JA McColl JA Handley AJA

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): SC2476/04

LOWER COURT JUDICIAL OFFICER: Campbell J

LOWER COURT DATE OF DECISION: 7 February 2005

LOWER COURT MEDIUM NEUTRAL CITATION:
[2005] NSWSC 10

COUNSEL:
Ms. S. Hill for appellant
Mr. R. Harper SC with Mr. T.T. Bors for respondents

SOLICITORS:
CBD Law for appellant
Blunden Law, Pennant Hills for respondents

CATCHWORDS:
EQUITY
ESTOPPEL
COSTS - Form of order following finding of proprietary estoppel - Appropriate order for costs.

LEGISLATION CITED:


CASES CITED:


DECISION:
1. The appeal be allowed. 2. That the orders of Justice Campbell made on 7 February 2005 in Supreme Court Proceedings 2476/04 be set aside, and in lieu thereof: (a) An order that the Third Respondent hold the property situated at and known as 24 Greenvale Road, Green Point in the State of New South Wales (being the whole of the land contained in Folio Identifier 354/806338) (the "Property") on trust for the Appellant, in priority to any of its obligations under any discretionary trust, until 14th November 2013 on terms that: (i) the Appellant keep the Property in good repair, bearing in mind the condition of the premises at the date of these Orders, but need not carry out: (A) any structural work, unless it has become necessary because of any actions, whether negligent or deliberate, of the Appellant or those for whom the Appellant is responsible; (B) repairs that are necessary because of fair wear and tear; or (C) repairs that are necessary because of a natural disaster or other serious event that is out of the Appellant's control; and (ii) the Appellant pay rent in the amount of $65.00 per week indexed on the 1st January each year commencing 2007 in line with the Australian Consumer Price Index (Sydney all groups). (b) An order that the First, Second and Third Respondents be restrained from disturbing or otherwise interfering with the Appellant's quiet enjoyment of the Property until 14 November 2013. 3. That the First, Second and Third Respondents pay the Appellant's costs of Supreme Court Proceedings 2476/04. 4. That the First, Second and Third Respondents pay the Appellant's costs of this appeal, including the application for leave to appeal, and have certificates under the Suitors’ Fund Act if otherwise eligible. 5. Liberty to apply to the Supreme Court should any question arise about default under the mortgage over the property.


JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40116/05

HODGSON JA

McCOLL JA

HANDLEY AJA

Thursday 15 February 2007

SULLIVAN V. SULLIVAN & ORS. (NO.2)

Judgment

1 THE COURT: The principal judgment in this matter was delivered on 14 November 2006. Written submissions concerning orders to be made raise two matters for determination. First, whether relief should be by way of a constructive trust, or by way of injunction; and second, what order for costs should be made.

2 On the first matter, the respondent submits that relief should be by way of injunctions only, because that would protect the appellant against all persons entitled to deal with the land, apart from the registered mortgagee; because a constructive trust would conflict with the third respondent’s obligation to hold the property on discretionary trust; and because of possible adverse tax consequences.

3 In our opinion, it is appropriate to declare a constructive trust, binding the third respondent in priority to its obligations as discretionary trustee. We are not satisfied that this would amount to a dutiable transaction. A question has been raised concerning the mortgagee. No remedy has been sought in terms of requiring the third respondent not to default on the mortgage, and we would propose to reserve liberty to apply in case some questions arise about this. A constructive trust gives the appellant some quantifiable interest in the land, which would leave her with some remedy in the event that there was default under the mortgage and the mortgagee sold the land.

4 On the second matter, in our opinion the appellant’s success was sufficiently substantial to carry costs at first instance and on appeal. There was no suggestion that there was a severable issue on which the appellant lost, that added to the costs. There was no suggestion that any relevant offer was made. The circumstance that respondents were prepared not to seek an order for costs in their favour, if they were successful, is not material to this question.

5 Accordingly, we make the following orders:

1. The appeal be allowed.
2. That the orders of Justice Campbell made on 7 February 2005 in Supreme Court Proceedings 2476/04 be set aside, and in lieu thereof:

(a) An order that the Third Respondent hold the property situated at and known as 24 Greenvale Road, Green Point in the State of New South Wales (being the whole of the land contained in Folio Identifier 354/806338) (the "Property") on trust for the Appellant, in priority to any of its obligations under any discretionary trust, until 14th November 2013 on terms that:

(i) the Appellant keep the Property in good repair, bearing in mind the condition of the premises at the date of these Orders, but need not carry out:

(A) any structural work, unless it has become necessary because of any actions, whether negligent or deliberate, of the Appellant or those for whom the Appellant is responsible;

(B) repairs that are necessary because of fair wear and tear; or

(C) repairs that are necessary because of a natural disaster or other serious event that is out of the Appellant's control; and

(ii) the Appellant pay rent in the amount of $65.00 per week indexed on the 1st January each year commencing 2007 in line with the Australian Consumer Price Index (Sydney all groups).

(b) An order that the First, Second and Third Respondents be restrained from disturbing or otherwise interfering with the Appellant's quiet enjoyment of the Property until 14 November 2013.

3. That the First, Second and Third Respondents pay the Appellant's costs of Supreme Court Proceedings 2476/04.
4. That the First, Second and Third Respondents pay the Appellant's costs of this appeal, including the application for leave to appeal, and have certificates under the Suitors’ Fund Act if otherwise eligible.
5. Liberty to apply to the Supreme Court should any question arise about default under the mortgage over the property.

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AMENDMENTS:


16/02/2007 - Amendment of name of appellant's solicitors - Paragraph(s) Coversheet


LAST UPDATED: 16 February 2007