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A Case Analysis And Reflection On Property La

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Question:

Discuss about the Case Analysis and Reflection on Property Law Fleming v Fleming & Anor [2016] QSC.
 
 

Answer:

Parties and their Interests

The parties to the case, Fleming v Fleming & Anor [2016] QSC 215, were siblings; they held the land under a tenancy in common. The applicant, Lawrence Fleming, had been the one of the executors to the estate after his father’s demise. They were to hold the property in trust for his mother and the other siblings. The first respondent, Eric Fleming, had agreed, after a discussion with his mother and the other three siblings, to move back onto the property and act as its caretaker. He was to receive wages and allowances for this. The third respondent is a sister to the other two parties; Marie Lucille Newman. After their mother’ passing, the property was transferred to the three parties under a tenancy in common.

Tenancy in common is one of the forms of co-ownership in property law (Esmaeili & Grigg, 2016, p. 148). Co-owners under this agreement have specified shares and interest on the property or assets in question; it may be divided in equal or other percentages (Hoelscher, 2014). However, the land or property in itself is not subdivided, only the right of possession is shared (FindLaw). On this right, co-owners are free to do as they please with their share; it can be sold, leased or even passed on through succession unlike with a joint tenancy (Queensland Government, 2016). As such, the legal interests of the parties in this case were the same; they owned Plot 20 and Plot 30 on equal shares under a tenancy in common, as such each has equal rights over the land.

Issues arising in the case

The main issue arising is that, the applicant wishes to dispose of the land and the chattels on it by sale to which the two respondents refused. The applicant brought the application before court praying that the court would have the property, Plots no 20 and 30 collectively known as “Rathkeale”, placed under statutory trust pending sale as per s 38 (1) of the Property Law Act (PLA) 1974 (Qld). He also proposed, guided by s 41 (1), that the chattels also be placed under statutory trust pending sale as well (Fleming v Fleming & Anor, 2016). The law, under these provisions, provides that where lan or any chattel is under a co-ownership, jointly or by a tenancy in common, then either of the owners can apply for the property to be held in trust for sale.

However, subsequent issues arose from this application. The respondents, challenging the sale of the property, presented a counter proposal for a statutory trust on the property for partition; this is provided for under s 38 (1) and (4) of the PLA 1974. Two issues arose from this counter application; firstly, the court had to determine that a partition would be more beneficial to the parties than sale. However, as per the provisions of the PLA 1974 s 38 (4), the onus is on the party proposing a partition to prove that it would benefit the parties more than a sale. Secondly, having determined whether a partition would suffice, the court, empowered with the discretion to grant either application, had to determine whether it would exercise its discretion in this regard. Additionally, in determining this case, the court was also faced with the issue of establishing whether the case in question fell under the lawfully accepted definition of partition.

 

The Applicant’s Case: Defence for Application for Sale

On whether a sale would be better suited than a partition, the applicant defended his position on the basis of Section 38 (1) of the PLA 1974. Through his counsel the applicant averred that as per this provision he had the right to apply to court for the appointment of statutory trustees prior to the sale of the land. Additionally, he deposed that the court had discretion to determine whether to rule in favour the property being placed under trust for either sale or a partition. Guided by the findings in Ex parte Eimbart Pty Ltd (1982) and Goodwin v Goodwin (20004), the applicant stated that there was no defence for such an application. In Goodwin v Goodwin (2004) the applicants in question were relatives, a mother, her son and his wife, who owned property under a tenancy in common. The mother wished to sale the property so as to support herself and had brought an application under s 38 to petition that the land be placed under statutory trust for sale; this was challenged by the other co-owners. In the matter before court McPherson J A held that an application brought under section 38 had no defence and a judge had the discretion to decide for or against it.

Common Remedy

Additionally, in his proposal, the applicant argued that applications granted under s 38 PLA 1974 for sale are more common; they are also the most preferred remedy for settling disputes among co-owners (Wallace, McCrimmon, & Weir, 2014, p. 257). This reigns true as courts, as seen in Pannizutti v Trask (1987), have commonly exercised their discretion under this provision in favour of sale rather than partition (Duncan W. D., 2012).  In most cases, where a co-ownership dispute arises under s 38, courts have been noted to rule in favour of a sale rather than partition; the applicant hoped to rely on this common approach so as to successfully apply for statutory trustees for sale.

Onus and Discretion

Citing Goodwin v Goodwin (2004), the applicant averred that the court had the discretion to allow for the application under s 38.  This application is usually accorded some primacy over the application for partition. Where an application for partition is made in an effort to counter an application for sale, the onus is on the party proposing the partition to prove why a partition would be better suited for all parties. On this argument, the case relied on was Segal v Barel (2013) where it was held that, if there are competing claims over whether to appoint trustees for sale or partition, guided by s 66G(4) of the Conveyancing Act 1919, a claim for partition would not succeed unless the applicant proved it was significantly more beneficial to the parties. However, the court recognised that the discretion of the judges still stands regardless of the applicants proof.

 

The Respondent’s Case: Definition

The respondent, in their arguments first endeavoured to prove that their case did in fact fall under the definition of a partition. A compulsory partition is one of the ways parties can terminate a co-ownership relationship (Conway, 2013, p. 227); however, to rely on this remedy one must prove that their circumstance allows for partition. With this in mind the respondents relied on Comptroller of Stamps (Vic)v Christian & Anor (1992), in which the court approved the Halsbury’s Laws of England definition of a partition being the division of property under a co-ownership; be it a joint tenancy or a tenancy in common, so as to terminate the co-ownership relationship between the parties. Guided by this definition and the illustration in the case cited, the respondents were able to prove to court that their claim sufficed as a partition application.

The Case for Partitioning

As previously mentioned, where a party raises a counter claim for appointment of trustees for partition under s 38 of the PLA 1974, the onus is on them to prove that partitioning the land would be more beneficial for all the parties, and most especially the minority ownership party in the case (Segal v Barel, 2013).  The respondents in this case endeavoured to argue for a partition by providing a sworn affidavit from a valuer that the values of the plots separately were higher than that of the joint property. The valuer averred that, the current real estate market was not favourable to rural properties at the moment and if put up for sale there was no guaranteeing that the property would sell immediately or at a good price. In valuing the property, the respondents relied on Globo analysis; they argued that this analysis had been approved in Hayward v Skinner (1981) in showing the valuation of property for partition or sale. With the findings they presented the respondents were of the opinion that, guided by the Globo analysis, the properties were more valuable when divided and also that a sale might not occur as fast or yield as good a proceed as the applicant stipulated.

Costs

One of the issues arising in partition claims is the costs and equality money; the costs to be paid to the trustee and the equality money paid to each co-owner as described in Segal v Barel (2013). It is expected that a partition of property between co-owners who had equal shares on the property would require that they get a proportion of equal value when the land is partitioned. If the partitioning is note equal, then the party has a right to receive monetary compensation to the tune of the value they have relinquished. Additionally, with regard to costs the costs incurred by trustees, these costs are covered by proceeds from the sale of land or chattels. The first respondent argued that he would not pray for orders of equality money, on costs they averred that the costs would be covered by the proceeds from the sale of chattels a position the second respondent agreed to. However, the second responded argued that the applicant would bear costs with regard to the appointment of trustees on the sale of the chattels if these costs were not covered in their entirety by the proceeds from this sale.

 

The Court’s finding

In its findings, the court accepted the definition of a partition as proposed by the respondent and found that the claim for partition would amount to good partition (Comptroller of Stamps (Vic) v Christian & Anor, 1991). This holds true as the situation described met the criteria for a partition; there was an application for division of property, property which was owned by tenants in common, said tenants who wanted to terminate the current relationship. Having determined this, the court was tasked with identifying whether the partition would be more beneficial. Guided by the valuer’s affidavit and previous case law, the court was convinced that where trustees were appointed for sale, there was no guarantee that the property would actually sell or that a good price could be fetched given the current market status.

Additionally, the court saw it fit to rely in the Globo analysis as evidence that a partition would likely benefit the parties more than a sale. Although what is beneficial is usually construed as what is economically more befitting to both parties, courts have held that emotional and other factors may be considered as well as illustrated in Pemberton v Barnes (1871) L.R 6 Ch. App 685 (Hocking, 2016). The court was alive to the fact that one of the reasons that drove the second respondent to be party to the claim was the desire to ensure her brother remained living on the land he has called home for twenty years. As such, on costs, guided by the position in Kardos v Sarbutt (No 2) (2006), and the propositions by Neville Ashe (1981), the court agreed that the costs for the trustees would come from the proceeds of the chattels and directed that the applicant prepare draft showing their value. The courts in previous cases have been guided by the position of the law as to how costs in partnerships disputes are paid out of the assets of the dissolved partnership (Hammer v Giles , 1879); this position has been reiterated in cases where termination of co-ownership of property by sale is carried out. Since most courts favour sale over partition (Duncan & Wallace, 2017), there remains little authority on the distribution of costs in partition cases.

Reflection on Outcome and Remedy

Research shows that most courts favour sale over partition as a remedy where co-owners wish to terminate their relationship (Duncan & Wallace, 2017). Where a party brings a claim for partition against a claim for sale, it is up to them to prove to court that the partition will be significantly more beneficial to the parties. However, the court still has the discretion to grant the orders for the appointment of trustees for partition regardless. In the case study, the respondents provided sufficient evidence to show that partitioning would be more beneficial to all parties. On portioning the parties were able to demonstrate that the individual pieces of land would be more valuable than as a whole. Additionally, the costs for undertaking a partition would be significantly less expensive. Economic factors aside, a partition would also serve as a fair choice as the respondent who had spent his time and effort living, caring and developing the land would also be considered. As such the remedy, although rare, was appropriate for this case.

 

Reflection

The key topic areas covered in this course, especially with the analysis of Fleming v Fleming & Anor [2016] QSC 215, were the nature and creation of legal interests in land and secondly the remedies available to various parties should a dispute arise. Under the nature and creation of interests in property; students were able to identify the various types of properties, for example land and chattels, and how interests in these properties vary. Additionally, as a key topic, one was able to identify how interests in land can vary; for example with a joint tenancy and a tenancy in common the interest over the land for the parties is different depending on the agreement. Furthermore, the concepts of easements and adverse possession expounded on how third parties can gain interest over property under the ownership of another. Under property law, students were able to determine how disputes can arise among parties with varying interests in the same property; this course illuminated how courts have dealt, and continue to deal, with these disputes and the remedies available under law. As such, the nature and creation of interest in property and the legal remedies arising suffice as the key topic areas as they address the day to day challenges that property owners are faced with.

The material derived from this course is valuable to any student who aims to pursue a career in property management, real estate, business or law. This is because, it first and foremost sets out the key legislation to consider in any property transaction either as an individual or a corporation. This ensures that ownership and transfer of property will be handled according to the law, having considered all interest of any parties involved so as to avoid future unnecessary dispute. Additionally, as aforementioned, the course illuminated the legal rights and remedies available to property owners; this information is material in the chosen career field as one is aware of the recourse they can take should their rights or those of their clients over property be challenged. Additionally, apart from assisting in embarking on a successful career, the material received from this course equips students with the knowledge to tackle various issues in the other units undertaken under the program of study. This is because, it has enable them to broaden their spectrum of thinking and enlightened them on various issues of property law; property, property rights and property disputes are issues that arise in various areas of life and study and not just under the property law unit. Additionally, the study skills cultivated from undertaking this unit will be beneficial to other units as well.

The course, from the beginning, aimed to improve the students problem solving, critical thinking and information literacy skills. That is the ability to analyse situations and apply creativity and the necessary resources to solve the issues arising from these situations. Through the analysis of case studies such as the one tackled above, students were able to cultivate these skills. Analysis different scenarios enabled students to apply their knowledge and identify possible legal issues arising in the situations provided. Additionally, the course availed the students an opportunity to hone their research skills by requiring them to rely in various resources such as cases, statutes, books and articles so as to find solutions to the issues identified. As such, it is evident that the course did improve these academic skills.

However, the course fell short in the area of improving students’ academic writing skills. That is the ability to develop their own writing style; this is inclusive of the approach to answering questions and how to structure answers, how to evidence findings and generally how to present the ideas derived from research and critical thinking in a manner that conveys the intended message. The course failed in this area as little effort was exerted in honing these skills in contrast to the previously mentioned skills. It is recommended that future course plans incorporate academic writing as a learning objective together with problem solving, information literacy and creative writing.

 

References

Comptroller of Stamps (Vic) v Christian & Anor, 2 VR 129 (Supreme Court of Victoria October 22, 1991).

Conveyancing Act 1919 (NSW)

Conway, H. (2013). 'All Good Things Must Come to an End': Terminating Co-Ownership Under the 'Old' Partition and Sale Rules. Australian Property Law Journal, 227-250.

Duncan, W. D. (2012). Joint Ventures Law in Australia. Sydney: The Federation Press.

Duncan, W., & Wallace, A. (2017, February). Update Summary: Property Law and Practice Queensland. Retrieved from Thomson Reuters: https://livepages.thomsonreuters.com.au/media/14160/plpqld-u151-summary.pdf

Esmaeili, H., & Grigg, B. (2016). The Boundaries of Australian Property Law. Melbourne: CUP.

Ex parte Eimbart Pty Ltd, Qd R 398 (1982).

FindLaw. (n.d.). Co-ownership of property: The law, features and elements of joint ownership of property. Retrieved from FindLaw Australia: https://www.findlaw.com.au/articles/4498/co-ownership-of-property-the-law-features-and-elem.aspx

Fleming v Fleming & Anor, QSC 215 (Supreme Court of Queensland September 2, 2016).

Goodwin v Goodwin, QCA 50 (Supreme Court of Queensland February 27, 2004).

Hammer v Giles , 11 Ch D 942 (1879).

Hayward v Skinner, 1 NSWLR 590 (1981).

Hepburn, S. (2015). Principles of Property Law. Newport: Cavendish Publishing.

Hocking, M. (2016, October). Appointing a statutory trustee for partition. Retrieved from Dowd & Co: https://www.dowdandco.com.au/assets/pdf/Appointing%20a%20statutory%20trustee%20for%20partition%20-%20October%202016.pdf

Hoelscher, F. (2014, September 4). Joint tenancy v tenants in common. Retrieved from Andersons Solicitors: https://www.andersons.com.au/lawtalk/2014/september/joint-tenancy-v-tenants-in-common/

Kardos v Sarbutt , NSWCA 11 (New South Wales Court of Appeal 2006).

Larkham v Barber, NSW Conv R 56 (1998).

Nevill, A. G. (1981). Equity proceeedings with precedents. Sydney: Butterworths.

Pannizutti v Trask, 10 NSWLR 531 (1987).

Property Law Act 1974 (Qld)

Queensland Government. (2016, July 8). Property ownership laws. Retrieved from Queensland Government: https://www.qld.gov.au/law/your-rights/legal-and-property-rights/property-ownership-laws/

Segal v Barel, NSWCA 92 (New South Wales Court of Appeal 2013).

Wallace, A. E., McCrimmon, L. A., & Weir, M. (2014). Real Property in Queensland. Thomas Reuters Australia.

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